Tuition Fees

Paul Blomfield Excerpts

Wednesday 19th July 2017 Commons Chamber

[Paul Blomfield (Sheffield Central) (Lab)]

I am pleased to follow the right hon. Member for Harlow (Robert Halfon), and I congratulate him on his election as Chair of the Select Committee and on his thoughtful contribution to the debate, which bodes well for the future. I represent more students—some 36,000 at the last count—than any other Member of this House, and consequently I chair the all-party parliamentary group on students. I represent many post-2012 graduates as well. They have been described as “generation rent” but we might also describe them as “generation debt”. The poorer the family they come from, the greater the debt as a result of the Government’s actions, as the Institute for Fiscal Studies has reported. We are talking about debts of up to £57,000.

It is five years since the coalition Government forced through the £9,000 fees, but the impact is only beginning to take effect. This recent election was the first to be held since students starting graduating with the debt as a consequence of £9,000 fees—in May 2015, they had not started to do so. As a consequence, the issue took centre stage in this election. It is an issue not just for generation debt, but for their parents and, apparently, for some senior members of the Government. Even the Prime Minister’s deputy, the First Secretary of State, says, in a way that contradicts the confidence of the Minister, that we need to have a national debate on the issue. He is right, because we do, and this is only an opening salvo. We need to examine how we can provide the funding that our universities need to maintain their world-leading position, but without burdening our young people with unsustainable debt. That is the big challenge.

There are some immediate things that the Government could do on this. First, they could scrap the proposed increase in interest rates to 6.1% from the current 4.6%. This will be 6.1% at a time when the base rate is 0.25% and rates for average mortgages are less than 4%. The Minister will say that this is an automatic rise based on the formula of RPI plus 3%, but that formula is wrong. It means, as the IFS estimated, that students are accruing an average of £5,800 of additional debt in interest during their studies—before they even have the chance to start paying it off. As the former skills Minister, the hon. Member for Grantham and Stamford (Nick Boles), has argued:

“It is unutterably depressing for hard-working students to see the amount they owe spiralling upwards, before they have even started paying it off.”

The greatest burden is on the students from the poorest homes. So will today’s Minister hear what his colleagues are saying, what students and parents are saying, and what this House is saying, and commit to press the Chancellor to scrap the proposed increase in the interest rate and to review the formula?

A second thing the Government should do immediately is reintroduce maintenance grants for students from lower-income households. The grants were a central part of the package put together in 2012 and without that commitment this House would probably not have passed the proposals that saw tuition fees rise, because the grants mitigated the impact of trebling the fees. Scrapping grants for the poorest at the first opportunity after the 2015 election says a lot about this Government’s priorities and went a long way towards undermining confidence in the system.

While we are on the question of confidence in the system, the Government should think again on their retrospective changes to the terms of repayment, which make graduates pay for the Government’s miscalculation of the cost of the funding system and the escalating RAB—resource accounting and budgeting—charge. The Minister says it was a conscious decision; he knows well enough that the conscious decision his predecessor talked to the House about involved a RAB charge of 28%. That got out of control—it rose into the 40% area, and it was even being modelled at more than 50%—and the Government made graduates pay for their miscalculation.

Anticipating that before the 2015 general election, I asked Ministers for assurances that they would not make students pay for the Government’s mistakes by changing the terms of the 2012 system, and the Minister’s predecessor told me there were no plans to do so. Running into the election, the promise to students was that there were no plans to change the terms of the repayments. However, no sooner were the votes counted than the plans were rolled out in the 2015 Budget, freezing the repayment threshold and making graduates pay more than they signed up for. Conservative Members talk about broken promises, but there could be no worse breach of faith, breach of promise and breach of contract than that retrospective change. It is, frankly, fraudulent, and if this had been any other organisation than the Government, the Financial Conduct Authority would get involved. This decision undermines confidence in the loans system, and it should be reversed.

Let me highlight one further thing, of many, that should change: the decision to scrap bursaries and to introduce fees and loans for nursing, midwifery and allied health courses. Back in January 2016, when we debated the issue in Westminster Hall, the then Health Minister, Ben Gummer, told Members that the Government wanted—listen to this—

“to spread to nurses the same benefits that have been realised in the rest of the student population.”—[Official Report, 11 January 2016; Vol. 604, c. 236WH.]

Some of us in the debate expressed some scepticism that nurses and midwives would see £50,000 of debt as a benefit. We warned that these courses, which still provided a route into professional careers for those who were put off university by fees—mature students and others from low-income backgrounds—would see applications fall, at a time when we need more nurses.

Those concerns were cavalierly dismissed by the Government, but the final numbers have been published in the last few days, and Sheffield Hallam University in my city has seen a 22% drop, with the drop across the country estimated at 26%. The Government were clearly wrong. Will they accept that and reverse their decision on bursaries? They have been wrong time and again. We need a fresh start in this whole policy area.