Education Bill

Lord Sutherland of Houndwood Excerpts

Tuesday 4th October 2011 Grand Committee

[Lord Peston]

My Lords, I am very puzzled by what the Government want to do. I thought they wanted people to “stand on their own two feet”—I think that is an exact quote from the Chancellor. The effect of raising the real cost of repaying loans must act for some people as a disincentive to going into the labour force. Otherwise, in my favourite remark, economics makes no sense at all—you may think economics makes no sense at all, but that is another matter. That is one bit that puzzles me. What do the Government think they are doing? Should they not be pursuing exactly the opposite policy and trying to encourage people where they can to re-enter the labour force?

The second thing, which goes back to the earlier amendment that we did not debate at great length but will on Report, is the gender bias question. Is it part of the Government’s view that they want women not to take out loans and go into higher education so they do not have this burden and therefore it does not act as a disincentive to marriage and family life? After all, if they go into higher education and carry this implicit cost with them, their ability to find a suitable partner, who may have to bear this cost at some point, might go down.

I thought the Government favoured families instead of the reverse. Equally, maybe it is much more subtle than that. Where there are lone parents, for example, who are graduates, maybe we do not want them to stand on their own two feet and take a job and hire a babysitter. Maybe we want them to stay at home, driving themselves round the bend trying to cope with the children, and so forth. My general point from all that, is that I can see no rationality in what the Government are doing, other than: “If we can get some more money from any route that we can find we will take it”. That is not a rational way to produce economic policy.

If I can revert to my 1960s Treasury experience, one of my thoughts listening to my noble friend’s speech was about when I wrote a hotshot paper on student loan schemes—nothing to do with fees, but about maintenance. One question that never occurred to me in what must have been a really bad paper—in those days you did not take home your work so I have no idea precisely what I wrote—was the rate of interest. It never came up in my mind. I just took it for granted that it would be the Treasury bill rate.

[Lord Sutherland of Houndwood]

My Lords, the noble Lord, Lord Stevenson, has made a powerful and cogent case, and I look forward with more than usual interest to the Minister’s response because there are some issues of real principle. I would add two points. One is that much of the odium for charging fees is falling on universities. I still remember sufficiently far back when that would have fallen on me, and it looks like there is an extra 3 per cent of odium being added. That is not a good principle.

More to the point, I have supported the principle of student fees on the basis that students pay for what they get in educational terms, not for an additional premium for whatever accounting reasons seem necessary to the Government at the time.

[Lord Knight of Weymouth]

My Lords, I wanted in part to make a contribution so that anyone reading the proceedings of this Committee did not feel there were one or two isolated voices concerned about these proposals. The strength with which the arguments were made by my noble friend Lord Stevenson in particular do not need many words to be added and I know that the Committee is keen to move on.

I would fully endorse what my noble friend said and emphasise two points. One is this move around RPI and CPI. The Chancellor was perfectly clear in his Budget of 2011 that the Government were moving to use CPI in respect of benefits and pensions uprating and it is certainly something that has been around for some time. I remember appearing before the STRB and arguing the use of CPI over RPI. I was very glad to have Ed Balls alongside me making the technical aspect of that argument when giving evidence on behalf of the Government against, I think, the teaching unions, who wanted RPI. I would be really interested in the Minister’s response about why we have gone with something different in this case. The second point is the final point that my noble friend Lord Stevenson made around the Students Loans Company. I ask for a direct answer whether in conversations about the Student Loan Company, it has been a condition of being able to sell it off that a commercial rate of interest is chargeable. A direct answer would be helpful.

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[Lord Sutherland of Houndwood]

I wish to support Amendment 148. I am afraid that I cannot support Amendment 145G, for reasons that I think are fairly obvious. If you have students in this position and you want a degree of equity they should be contributing pro rata to their colleagues in full-time education. However, I congratulate the Government on moving on this issue and moving part-time students into the arena of those who will be given loans against fees.

The arguments already put in favour of Amendment 148 are strong and powerful. I suspect there has been some oversight here; there is a much broader discussion to be had about the place and funding of part-time students, but that will come perhaps after the consultation on the White Paper is finished and it is brought back here. For the moment, we need as near an equitable position as we can and four and a half years as the period at which repayment is required seems to me a reasonable compromise for the moment.

[Baroness Howe of Idlicote]

I would also very much like to support Amendment 148. As has already been said, not only does it address the important move of part-timers into access to loans, which is crucial, but for me it also sets out in parts 1 and 2 the right way in which it can be sorted out so that students can have completed their studies. I am also aware from my own experience and from what the noble Lord, Lord Stevenson, has said that there will be a huge number of women in this situation. For those reasons too it is very important that they have this new opportunity to study at a later stage in life; to catch up after what was often bad or lack of the right information about the courses they might have thought of studying when they were younger.

So I hope very much that the Government will see the sense in Amendment 148 and will be able to accept it in its entirety. It certainly takes me back to the many occasions when I have discussed this, particularly with the noble Baroness, Lady Sharp. I will not go any further than that, but I hope the amendment can be supported.

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[Lord Sutherland of Houndwood]

My Lords, I am not rising to the bait of the noble Lord, Lord Foulkes, other than to add a fact that he may find interesting and so may the Committee. The Scottish Government’s budget presented roughly two weeks ago requires the universities to raise roughly £60 million in fees from students from the rest of the United Kingdom. On my own estimate, two years ago the cost of students from the European Union was £85 million a year. These are frightening figures and they raise a quite separate issue, but this is not the place to do it. I want to speak to the two amendments.

I appreciate the spirit of Amendment 147A: the spirit is openness and reassuring students that the money they pay for their education is actually being used for their education. That is absolutely right; as well as funding universities, that was the whole point of fees introduction. I support the principle, but I think the mechanism and the detail in subsection (2) would frighten the wits out of anyone running a university to provide that degree of information for every student.

I feel more strongly in support of Amendment 146. I simply want to add the fact that this is already in practice in a very select group of cases. The select group is of students who are taking a second degree, having already had the benefit of the first degree. The obvious case is veterinary studies, which was well represented in the university of which we have been speaking. The university found it possible to admit additional full-paying students on non state-funded places. Therefore, it seems the principle has been operating and has been conceded. In which case, there is a way of pushing it forward as in Clause 146.

[Lord Stevenson of Balmacara]

My Lords, these are two slightly different amendments, raising different points, which are slightly oddly grouped together. However, they raise good points and I look forward to hearing what the Minister will say about them. On the first point, following the noble Lord, Lord Sutherland, and stepping sideways around the noble Lord, Lord Foulkes—a difficult task I know—architecture is another subject where you would have the benefit of having done a first qualification and then come back in and done further study, for which again these would not count.

[Lord Sutherland of Houndwood]

On a point of information, it is not because veterinary studies required an earlier qualification, it is because many students want to take it, whose parents can afford to pay the extra fee. They take it, if they are admitted, whatever their background.

[Lord Stevenson of Balmacara]

Which is the point I was about to make. The sheer serendipity of being able to do this does not make it right. Earlier points on other amendments, which were about the need of the whole country to work out how we pay for higher education, and to make sure that those who benefit from it also contribute back, do not get caught by this amendment. However, it may be worth further discussion, and I look forward to hearing what the Minister says.

On Amendment 147A, as has already been said, this is presumably the first of a number of points to be discussed as we get more to the market that the students will be dominating in future places, because in order to do that they will need this sort of information. I agree with the noble Lord, Lord Sutherland, that this is a tad more difficult and complex than any standard university secretary would be able to respond to. However, it gets the right message across, which is that there is not very much information available for students to judge what sort of university they are going to. The courses are beyond their experience by their very definition, but as for the way in which they are taught and the amount of student contact, there is already enough circulating to make this an interesting area, which we will track with interest.

There has been a report in the papers today that comments from students that have been surveyed about what they thought about university courses in relation to fee levels of £9,000 were distinctly unflattering. If that is the way this is going, then this sort of amendment may well be something we need to discuss later.

[Baroness Verma]

My Lords, the recently published Higher Education White Paper places students at the very heart of the higher education system. Our goal is a system that offers students better information and opportunity, is more responsive to student choice and helps to improve social mobility. We will ensure funding follows the student, is progressive and fair, and better responds to their situation and choices.

The amendment of my noble friend, Amendment 146, seeks to allow home and EU students to opt out of their eligibility for student support. First, let me make it clear that there is no requirement for students who have already been offered a place in higher education to draw down their entitlement to student support. At the moment, we have to control student numbers overall because we must control the costs to the public purse.

This amendment would mean that students who could afford to pay up front the full cost of their courses would then be at an advantage because they could pay. In effect, it has bypassed our student number controls. On the face of it this may appear attractive, but there would be a strong perception that wealthier students or their families would be able to buy a university place.

The Prime Minister has made the Government’s position absolutely clear on this. University access is about the ability to learn and not the ability to pay. There is no question of people being able to buy their way into university, however attractive that proposal looks. The Government are interested in expanding employer or charity sponsored places outside the quota system and are committed to freeing up the controls on student numbers in general.

In the Higher Education White Paper, we have committed to increasing such opportunities, provided that they do not create a cost liability for Government and that they meet three key principles: there should be fair access for all students applying, regardless of their ability to pay; the places must be genuinely additional; and there must be no reduction in academic standards in recruitment. The Higher Education Funding Council for England is looking at options to incentivise more sponsorship and will include this in its consultation this winter. This is a sensitive issue and we will consider carefully the outcomes of both these consultations before introducing further changes to the system.

On Amendment 147, I absolutely agree with my noble friend Lord Lucas that students need accessible, accurate and reliable information that clearly shows what they expect from their courses, helping them to make informed choices. We are doing a great deal of work in this area. It is our intention that by September 2012 all higher education institutions will publish key information sets for each course on their website. These sets will provide the information that students request the most, together with information about course charges.

The White Paper encourages good practice in institutions to allow students to become more discerning in understanding how their tuition charge is spent. It recommends that institutions provide the sort of material that local councils offer their residents to demonstrate where council tax is being spent. We have therefore asked the Higher Education Public Information Steering Group to consider whether this sort of data should form part of the future wider set of information we ask institutions to provide for prospective students.

I hope that I have reassured noble Lords, but before I conclude I would like to respond to the question of the noble Lord, Lord Sutherland. He mentioned that students taking their second first degrees would be outside the student number controls and would be able to pay for their courses. He is correct, but the Government, like the previous one, is regulating students’ first degrees. I hope that answers the noble Lord.

[Lord Sutherland of Houndwood]

May I just ask what the point of the regulation is? Is it to save money, because the students in question will not cover the full cost of the fees; or is it because the Government have a pre-set notion on, for example, how many vets we need and how many should be eligible to take a veterinary studies degree?

[Baroness Verma]

I think the bottom line is, of course, that it is all down to affordability. We need to be clear on that. Universities have a finite budget too.

I will not fall into the eloquent spider’s web of the noble Lord, Lord Foulkes. I shall just say to him that Scotland has a devolved Administration and therefore sets its own agenda. Steering neatly away from that, I take this opportunity to thank all noble Lords for their contributions on this Bill today, given that this was my first outing in higher education. It has been quite a baptism, but I am hoping that when I come in on higher education matters in the future, I will be there from the beginning and will understand a little more clearly the temperaments of noble Lords.

This is the final group of amendments, but I understand very clearly that there will still be questions that remain outstanding. Therefore I am happy to meet noble Lords, be it after this meeting in Room 16 on the Principal Floor, or in future. I have very much an open-door approach to the way I do my business in the House.

I give this opportunity to all noble Lords to come and speak to us. We want to make sure that the legislation, when it goes from this House, is in its best form, and noble Lords are there to ensure that with me. The Welfare Reform Bill is about to commence, so on that note I will sit down and allow the noble Lord to withdraw.