Lord Stevenson of Balmacara
Main Page: Lord Stevenson of Balmacara (Labour - Life peer)Education (Student Support) (Amendment) Regulations 2015
Lord Stevenson of Balmacara Excerpts
Lord Stevenson of Balmacara
That this House regrets that the Education (Student Support) (Amendment) Regulations 2015, which change the existing student support arrangements so that new students starting full-time courses after 1 September 2016 will no longer qualify for a means-tested maintenance grant, will result in a significant decrease in participation in higher education by those in low-income groups, older students, female students, and students from ethnic minorities (SI 2015/1951).
Relevant document: 18th Report from the Secondary Legislation Scrutiny Committee
Lord Stevenson of Balmacara (Lab)
My Lords, I start by declaring an interest; I have two children currently enrolled in British universities. I think both attend, although I am not absolutely sure about the second one—but I want to make sure that that is on the record. I am also very grateful for the excellent work of the Secondary Legislation Scrutiny Committee, which alerted your Lordships’ House to the regulations that we are discussing in its 18th report.
The Government are proposing, under these regulations, to take grants away from around 500,000 of this country’s most disadvantaged students and replace them with maintenance loans, to be paid back when their earnings exceed £21,000 a year. The Government estimate that this will save £2.3 billion by 2020-21. My first point is that a change of this magnitude, which could affect more than 500,000 people, ought to have been made by primary legislation. According to the House of Commons Library, there were 395,000 students on full grant and 135,000 on partial grant in 2014-15. This SI affects a very significant number of people.
I checked with our Library over the weekend, and the last higher education Bill to go through your Lordships’ House was in the summer of 2004. Here we have Ministers trying to shut down parliamentary scrutiny by introducing major changes to the negative procedure, when we all know that SIs cannot be amended and that no formal approval is required in either House. It is not a proportionate way of proceeding, even if the powers are in the substantive legislation.
My second point is that this measure was not included in the Conservative Party manifesto. This U-turn comes just four years after grants for students from disadvantaged backgrounds were hailed by the Government as an essential element in their higher education strategy. Could the Minister explain the thinking behind this change of approach, given that the previous higher education Minister, the noble Lord, Lord Willetts, who unfortunately is not in his place, said that ever since tuition fees were raised in 2012, the Government had acknowledged that maintenance grants were central to ensuring that higher education was still accessible for poorer students? The noble Lord said that tuition fee rises were,
“progressive, because they help to encourage people from poorer backgrounds to go to university, because of the higher education maintenance grant”.—[Official Report, Commons, 3/11/10; col. 940.]
This is not of course an isolated proposal but part of a pattern. It mirrors, for example, changes that removed NHS bursaries for nurses and other staff. It has been foreshadowed by changes that the Government have made in the support for further education over the past three or four years.
We put down this regret Motion today to hold the Government to account over what I see as a major policy change. It seems to many observers that the Government have been on the defensive all the way through this process. There was very little detail to be had when the Chancellor first mooted this change in the summer Budget, and not much more in the Autumn Statement. It was only when the National Union of Students raised the alarm about the impact of the policy and threatened a judicial review over the lack of consultation and the failure to publish the equality assessment that we began to see what was going on.
The generation of students entering further and higher education from September 2016 are going to be saddled with even greater debts—or “income-contingent tax liabilities” as the Government like to call them—than they were already likely to be from their course fee loans of £9,000 per annum going up. The IFS said in a press release summarising its briefing note on the summer Budget 2015:
“Students from households with pre-tax incomes of up to £25,000 (those currently eligible for a full maintenance grant) will have a little more ‘cash in pocket’ … But they will also graduate with around £12,500 more debt, on average, from a three-year course. This means that students from the poorest backgrounds are now likely to leave university owing substantially more to the government than their better-off peers”.
The IFS also states:
“The poorest 40% of students going to university in England will now graduate with debts of up to £53,000 from a three-year course”.
Note the use of “debt” rather than “income-contingent tax liabilities”—the IFS certainly calls a spade a spade. All this is backed up by the Sutton Trust, which says:
“Shifting grants to loans may move them off the balance sheet, but it could also put off many low and middle income students and tip the balance against their going to university”.
In a recent publication, million+ says that research from the NUS published last week by Populus shows that parents are concerned that the Government’s plans to scrap the maintenance grant will discourage their children from applying to university. The change could also have a serious impact on postgraduate enrolment, since it is clear that the abolition of grants will increase individual student debt significantly. Indeed, the range of groups affected by these changes is daunting. The equality analysis published last November concedes that black and minority-ethnic students in particular will be disproportionately worse off. As for older learners, it says:
“Mature students will be disproportionately impacted by the policy proposals”.
The Government have also conceded that disabled people will be badly affected by this decision as well as by the decision to delegate responsibility for much of the disabled student allowances schemes to institutions.
The equality analysis also raised the question of discrimination because of concerns among some Muslim students about taking out interest-bearing loans. Can the Minister update us on the discussions which took place during the last Government on the introduction of sharia-compliant loans? Finally, it also states that female students will be particularly affected given their “significant overrepresentation”, as it is described, in populations currently receiving grants.
These damning details from the Government’s own equality analysis should surely give Ministers pause for thought. Does the Minister have anything to offer which might ameliorate these shocking findings? These issues need to be addressed urgently, otherwise any progress towards making higher education more diverse, particularly at postgraduate level, will be jeopardised.
Finally, it is also important to note that this policy does not exist in isolation. The cumulative impact of the rise in tuition fees, the scrapping of maintenance grants and the freezing of the repayment threshold all point towards a more hostile environment for those thinking about higher education. What is driving these panic measures from the Government? Is it a belated recognition that the whole set of financial assumptions about the repayments that underpin the trebling of student fees in 2012 is, as we predicted, producing a black hole for them and for future taxpayers?
Removing maintenance grants makes no economic sense. The IFS conclusion is that this change will not improve government finances in the long term. It states:
“The replacement of maintenance grants … will raise debt for the poorest students, but do little to improve government finances in the long run”.
The IFS points out that the rationale behind this is clearly political. The Government will gain in the short term because current spending on grants counts towards current borrowing—clearly bad—while current spending on loans does not impact on borrowing until the debt is written off at the end of the 30-year repayment period, which is good for current Treasury Ministers. The change helps the Chancellor to balance the books in this Parliament even though it will be at the cost of higher borrowing three decades or so into the future.
On 11 January this year, the Prime Minister gave a speech on life chances, referred to in the previous debate, explaining how the Government intend to transform the lives of the poorest in Britain. He said that his Government’s mission was to,
“look each … child in the eye and say, ‘Your dreams are our dreams. We’ll support you with everything we’ve got’”.
It is a good line and I sincerely wish it were true. But the reality is that there is a growing disconnect between the rhetoric and the action. Scrapping maintenance grants sends out a message that runs counter to any prospect of increased social mobility. This policy will impact heavily on women, the disabled, black and ethnic-minority students and older learners. To cap it all, it will end up being more expensive than the current grants system.
The Government should bring forward a higher education Bill. If we had it here today, we could have been discussing how to realise the wider benefits of having more people educated to degree level in our country and how best to fund that investment in our future prosperity and to properly support every young person in the country to develop themselves to the best of their ability. I challenge the Minister to convince us tonight that these regulations are the right thing to do and that her Government are supporting our young people with everything we have. I beg to move.
Baroness Garden of Frognal (LD)
My Lords, I welcome the noble Lord, Lord Stevenson, securing a debate on these regulations and join with him in his regrets.
There has been widespread concern at actions the Government are taking which place additional burdens on those least able to accommodate them. The Liberal Democrats will feel particularly outraged at these regulations. As the junior coalition partner, we were notoriously unable to implement our policy of no tuition fees, but we were able to use our influence in government to fend off some of the harsher proposals of our coalition partners, to produce a fairer system for students from lower-income backgrounds and to give incentives and support to those who might be deterred from further learning.
I was a Government Whip in the coalition Government, working for the noble Lord, Lord Willetts, as Universities Minister, who the noble Lord, Lord Stevenson, has already quoted. He understood fairness and we were delighted when he said that the proposals would,
“encourage people from poorer backgrounds to go to university, because of the higher education maintenance grant”.—[Official Report, Commons, 3/11/10; col. 940.]
The way in which these changes are being brought in—through the back door, as it were—seems to indicate that the Government are rather ashamed of them, and hoped to sneak them through without having to face the music of their impact. They are, indeed, a backward step.
Of course any additional support in the form of loans is welcome, but that really is not relevant to this argument. Maintenance grants have the great advantage of being non-repayable. The sums, of up to £3,387 a year, certainly do not allow students to live the life of Riley, but they can make all the difference to a student struggling to pay for the necessities of life and study—rent, food, other bills and the items they need for their learning. They have enabled some of the most disadvantaged to participate in higher education, many the first in their families to do so, without the burden of additional debt.
Changing grants to loans is a very significant move for those who will see their university debts soar. I, too, was startled at the Institute for Fiscal Studies warning that,
“The poorest 40% of students going to university in England will now graduate with debts of up to £53,000 from a three-year course, rather than … £40,500”,
which is already an eye-watering amount to this cohort.
Those who will be most deterred by additional debt include those the Government most need to engage in education. Women, for example, tend to be more debt averse than men as well as being a large proportion of this population. Disabled students have the additional deterrent of changes to the disabled students’ allowance, which we were debating only last week. Adult learners and black and minority ethnic learners are more aware of the burden of loans, which they are unlikely ever to be able to repay.
What benefit will this bring to government finances? It will be disproportionately little in comparison with the damage it will do to encouraging social mobility and building an inclusive graduate population. Many of these loans will never be repaid anyway, but for the students they will be there as a reminder of a debt instead of a grant that can be long forgotten.
The Government should be facing up to skills shortages in the population and tackling the increasing divisions between rich and poor. We need to encourage learners to improve their skills and knowledge, to be ambitious, to fulfil their potential and thus to make a greater contribution to the economy and to the well-being of themselves and the country.
These regulations will do nothing to encourage those from less advantaged parts of society to work hard and achieve. The Government did not need to do this. It was not a manifesto commitment. As the National Union of Students rightly said, the decision is “undemocratic and ill-considered”. There has been no effort at thorough consultation with those people and organisations most affected by the changes.
Would the Minister please clarify for the House the justification for saddling the poorest students with the greatest debt? In coalition, my party argued consistently for measures to encourage—not deter—women, adult learners, ethnic minorities and disabled people. What are this Government doing to encourage these learners? What consultation will be put in place before such a damaging change is inflicted on those learners we most wish to be helped to fulfil their potential?
I urge the Government to think again about these mean-spirited and harmful changes.
Lord Stevenson of Balmacara
I can answer that—no—but I would like to take a little longer.
I apologise to the noble Lord, Lord Willetts, for not spotting him in his place when I started my speech. He must have slipped in. Two brains are obviously much easier to hide than one. I am sorry that he was not there. We have had Hamlet without the prince. Where is the speech? Surely the architect of this wonderful policy, as we have heard it described, should have been there shouting from the rafters. Can I encourage him to rise? No.
We have had a good debate and I thank all those who have contributed. It could allow us to look forward to further discussions on higher education and, if it does so, allow us to probe some of the assertions of the noble Lord, Lord O’Shaughnessy, that somehow the garden is blooming, roses are flowering everywhere and higher education is in a good state. It certainly is not. It is time that we got some real discussion and debate going on this.
It was useful, in another sense, that we got some rather interesting insights into the internal debates under the last Conservative Government from my noble friend Lord Howarth and under the coalition Government from the noble Baronesses, Lady Sharp and Lady Garden, and others. I think there is more to come on that, and I look forward to hearing it as it dribbles out over the next few years.
This policy does not enhance social mobility; we have heard that echoed all around the Chamber. Despite the good points made by the noble Baroness, Lady Shephard, monitoring is not enough. We have heard that the golden ladder of opportunity that is represented by access to higher education will be destroyed, and life-changing opportunities will be removed. We are working on shaky constitutionality: the Minister skated over why we are doing it this way. We may well have fulfilled the letter of the law, but I do not think that we have fulfilled the spirit of it.
This policy does not save money in the long term, despite the Minister’s assertions. If it is, as seems to be the case, simply a bit of creative accounting, as the noble Baroness, Lady Sharp, called it—I could not possibly comment—to get away with changing the RAB charge in the short term, it is mean-spirited, and leaving it to the burden of future generations cannot be right. Indeed, we are talking about very long timescales, where we really cannot assert what is going to happen to earnings or people’s working lives. Therefore, we are talking about trust. Do we have sufficient ability in looking at this to trust our instincts about it?
The noble Lord, Lord Berkeley, and my noble friend Lord Howarth mentioned the intergenerational impact, and that is a real irony. Many of us were the beneficiaries of full fees and full maintenance grants. I would not be here if I had not had that benefit or that chance in my earlier life. I wonder whether the students of the generation that is being disadvantaged by this statutory instrument will ever forgive us for encouraging them to take out the loans and debts for a future that might be so different that it might eliminate the graduate premium that they were promised. Somebody said—I think it was my noble friend Lady Kennedy—that it was shaming to be associated with this policy. I do not wish to be so, and I wish to test the opinion of the House.