Education (Student Support) (Amendment) Regulations 2015

Lord Howarth of Newport Excerpts

Monday 25th January 2016 Lords Chamber

I regret that we have to discuss this now. I have to say to the noble Baroness, Lady Shephard, who was rightly regarded as an outstanding Secretary of State, that that change in the applications to many universities is happening now. Indeed, at Sheffield Hallam we are beginning to see that fewer students are applying. This is not unusual in many of the newer universities, and it may of course apply certainly to home students in some of our universities such as those in the Russell Group. So I urge the Government to think again and press them to have a proper debate on the future of higher education in the near future.

[Lord Howarth of Newport (Lab)]

My Lords, this policy of removing maintenance grants and replacing them with loans, whichever way you look at it, is reckless. It is reckless fiscally. In the early 1990s, I was Higher Education Minister when the Government of that time introduced the original system of maintenance loans for students in higher education, but we did so on a very carefully circumscribed basis. Looking across the Atlantic to the United States of America, where there was a very extensive system of student loans, we saw how unhappy were the consequences, both financially and in human terms. That approach, taken by that Conservative Government, was reasonable and responsible and is in strong contrast to the approach now being taken by this Conservative Government. The Institute for Fiscal Studies has explained to us how the policy we are now debating is a device to enable the Chancellor to achieve a modest additional reduction in his deficit by 2020—political window-dressing for him, but the price that will be paid is a much more significant increase in national indebtedness in years after that.

It is reckless financially: the Government are quite deliberately proposing to create bad loans. It would appear that their business model is that of the purveyors of sub-prime mortgages; the fact that they admit it does not make it any better. They intend to dump a poor-quality loan book on the financial system in the future. That is cynical. We expect a Government to act with prudence and integrity in such matters.

It is reckless in terms of the life chances of people who come from disadvantaged communities, in contradiction to the Prime Minister’s professions. This policy will be socially regressive: Ministers are setting out to tempt with additional cash in hand people who come from lower-income households, knowing very well that such people will leave university with larger debts than their peers from better-off households.

As the Minister who also introduced the disabled students’ allowance, I feel particularly strongly about the accompanying policy to freeze that allowance. In their equality impact assessment, the Government admit that this policy will bear disproportionately on disabled people, although they say that it will not do them that much harm. However, if you are disabled, a little goes a long way, and I would add that such a policy is surely discriminatory. The whole purpose of the disabled students’ allowance was to enable disabled people to experience higher education on a basis equal with non-disabled people, so it cannot be right to freeze the allowance for disabled students, who are increasingly disadvantaged.

Those who resist the cash bait will probably do so because they are deterred by the prospect of taking on a substantial additional personal debt. That is extraordinarily retrograde when we know that our economy urgently needs a higher level of skills across wider sections of the population so that we stand a chance of improving our national productivity and competitiveness. The noble Baroness, Lady Deech, made an important point about the retrogressive effect of confining to studying close to home students from poorer households who do not want the debt, thus making them unable, unlike their counterparts from better-off households, to avail themselves of the full range of opportunity in higher education.

The policy is contrary to the whole ethos and principle of the welfare state, which is to redistribute resources and opportunity across the lifespan, so that people contribute when they are able to do so but, when they need support, they get it in health, social security and education—precisely the support that this measure is going to reduce. That is part of the principle of fairness. That principle of the welfare state is what binds us together as a society and, as my noble friend Lady Kennedy said, it is shaming that the Government neglect such a principle.

The policy is reckless in terms of intergenerational fairness. The Government are intending to ask our children and our grandchildren to pick up the tab for it. They should not behave like that—it is a betrayal of the generations to come.

The policy is reckless, too, in terms of truth. The Conservative Party did not tell voters in its manifesto at the election last year that it intended to introduce this change. That was cowardly. In this measure the Conservatives are reneging on the commitments made by David Willetts, now the noble Lord, Lord Willetts, to Parliament in 2012—in good faith, I am absolutely certain. He assured Parliament that any financial hardships that might be created by the trebling of tuition fees would be mitigated by the continuing availability of maintenance grants. However, the Government are dishonouring that commitment and, in doing so, they are acting to the detriment of trust in government and respect for politicians.

The policy is also reckless constitutionally. Here they go again, introducing major change affecting a large number of people, with major expenditure implications, by way of a statutory instrument. That is in defiance of the conventions of Parliament. It is an abuse. The noble Lord, Lord Strathclyde, in the report of his review urged the Government not to leave too much in legislation to be provided for by way of statutory instruments. We know that the negative resolution procedure makes accountability of the Executive to Parliament almost non-existent, and we know—the noble Lord, Lord Strathclyde, has said this too—that the whole system of parliamentary scrutiny of statutory instruments needs to be overhauled.

Your Lordships’ House is, in one of its most important functions, a guardian of the constitution. We have not voted down this particular statutory instrument but I believe that, had we done so, we would have been well within our rights, because it is for us, again and again, to prevent as well as we can abuse of power by the Executive. The House of Commons, dominated by the Executive, will never do that reliably; we, at least, have to accept that that is part of our responsibility. The noble Baroness, when she seeks to defend this policy at the Dispatch Box, should blush.

[Baroness Evans of Bowes Park (Con)]

My Lords, I thank all noble Lords for their contributions to this debate. Let me briefly address the points raised about the parliamentary process for scrutinising statutory instruments before I come on to the substance of the debate.

The regulations were laid before both Houses on 2 December 2015 and were made under powers granted by the Teaching and Higher Education Act 1998. The instrument was prayed against in the other place and a debate took place in committee on 14 January, which was followed by a full opposition day debate on 19 January. So this SI has followed the procedure agreed by Parliament. But of course, as ever, we have had a further extremely valuable debate in your Lordships’ House today.

Let me start by placing this instrument in the context of the Government’s higher education policy. As noble Lords have said, we have a higher education system to be proud of and a worldwide reputation for excellence, with three universities in the world’s top 10 and the most productive research base in the G7. We have lifted the cap on student numbers, putting into practice Lord Robbins’s famous principle that university places,

“should be available for all those who are qualified by ability and attainment”.

We have seen record numbers entering higher education, including record numbers of students from disadvantaged backgrounds, as my noble friends Lady Shephard and Lord O’Shaughnessy highlighted. The OECD has said that England is,

“one of the few countries to have figured out a sustainable approach to higher education finance”.

When Lord Robbins set out his principle in the early 1960s, participation in higher education was around 5%. That figure is now approaching 50%, something that we should be proud of. However, in this context of rapidly growing student numbers, funding universities sustainably can be achieved only by asking students to meet a greater part of the cost of their education, paid not upfront but out of their future earnings. This reflects the principle that, if you benefit from higher education and secure higher lifetime earnings than taxpayers who do not go to university, you should contribute to the cost of your education. It is vital to the continuing success of the sector that the cost of higher education is sustainable for government and the taxpayer, so that more young people can undertake the transformational experience of going to university. In short, we cannot have social mobility without sustainability.

Offering increased loans for living costs instead of grants allows the Government to make significant progress against their fiscal mandate but offers more upfront support to students for their living costs: up to 10.3%, or £766, more additional support in 2016-17 for eligible students—money that they will then have to spend during their time at university on, for instance, rent and all the other things your Lordships have mentioned.

Noble Lords have referred to the equality analysis that the Government have published, and a number of issues it covers have been raised in the debate, in particular in relation to the potential impact on disadvantaged groups and those with protected characteristics. The Government carefully considered these before laying this instrument. That is why, alongside the potential risks that the equality analysis identified, a number of mitigating factors were also outlined, including, as I mentioned, the increase in living cost support in 2016-17 for students from some of the most disadvantaged backgrounds, the fact that graduates do not have to pay anything back until they earn over £21,000 and, of course, the fact that graduates earn considerably more over their lifetime.

This is far from all that the Government are doing to ensure the widest possible access to higher education. The Prime Minister has set out his ambition of doubling the proportion of people from disadvantaged backgrounds entering higher education and increasing the number of BME students at university by 20% by 2020. The sector is our partner in achieving these goals. In response to a request from the Government, Universities UK has set up a social mobility advisory group to report to the Universities Minister. It will provide advice and action to widen access to higher education, including on meeting the Prime Minister’s ambitions. I have absolutely no doubt that it will keep a very close eye on the broad effects of government policy in this area. To back this up, in 2016-17 universities expect to spend £745 million on measures to support the success of disadvantaged students. That is up significantly from £444 million in 2011-12.

Any higher education provider who wishes to charge above £6,000 for a full-time course must agree an access agreement with the Director of Fair Access and as part of this agreement the institution must devote a proportion of the fee income above £6,000—typically around 25%—on measures to support widening access and support for disadvantaged students.