Higher Education Funding

Debate between Paul Farrelly and Brian Binley

Thursday 8th January 2015 Commons Chamber

[Mr Binley]

No, not patriotism; I meant patronage, and I am glad that my right hon. Friend has pointed that out. I will now continue to speak according to the terms of the motion, Mr Deputy Speaker, which I am sure will delight you.

My colleague—indeed, I shall use the term “hon. Friend”—the Chairman of the Committee said that he would concentrate on wider issues than that of the money itself. I want to concentrate on the issue of the resource accounting and budgeting charge, the money and the black hole that the charge is producing for future generations.

[Paul Farrelly]

I realise that pinning down the RAB charge is rather like Phil Taylor—the legendary darts player who comes from my constituency of Newcastle-under-Lyme—throwing darts at a moving board, but does the hon. Gentleman agree that, with 45% of student debt expected to be written off in the future, the current system is really not working for students or for the taxpayer? Even in this age of austerity, lower fees would lead to the recovery of more debt, as well as wider potential economic benefits for students as they make their way in the world after university.

[Mr Binley]

I welcome the hon. Gentleman’s remarks. I shall say a little more about my views on the point he raises as my speech unfolds, but I will say now that every small business man in the land—I do not mean small in stature; I mean small in the sense of the size of the business—will know that if he lends money that he will not get back, he will have a cash flow problem that will create real trouble for him, if not now, then certainly in the future. I do not believe that Government money is any different in that respect.

The saga of higher education funding and support has rumbled on for a long time. Reforms in the 1990s created an expansion in higher education that widened participation, which, of course, is welcome. However, those reforms necessitated a change in the financial model for universities and those attending them. That is becoming increasingly unsustainable and could lead, as I have said, to a sizeable black hole in the Exchequer accounting, which the Government seem not to wish to recognise.

Many Government members are also my personal friends, and I am sure they are working on contingencies and do not have this in mind, because I would not ascribe to them the financial inadequacy that not recognising the problem would suggest. I hope my good friend the Minister will recognise that I do not think he is inadequate and I do think he will come up with the answers we require—that he will recognise the problems and consider very carefully the need for a proper review not only of the RAB charge itself and the loans surrounding it, but the way our universities work. I will talk about that as my speech unfolds.

--- Later in debate ---

[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.

[Paul Farrelly]

I take on board the hon. Gentleman’s points about engineering and vocational degrees. But does he also agree that at levels of £9,000 a year plus maintenance loans, many of those degrees at the likes of Imperial, which stretch over more than three years, make it less likely that people from more modest backgrounds will enter those professions, and therefore socially restrict the entry?

[Mr Binley]

That is absolutely correct, and it underlines the need for a proper review and perhaps the need to rebalance things. We should have not an across-the-piece £9,000 level of payment, but a rebalancing of the loans in association with what is required. This is a more complicated business than we first thought, and we need a review to take into account those factors to ensure that we have enough young people who can pay for my pension and the pensions of those who follow me and that this nation has the well-being to compete in an ever-more competitive world. That is what we are talking about. This arrogant view of universities as the place where we produce rounded men who talk with wonderful accents must end. These people who talk the Queen’s English sometimes do so to such an extent that they are not understood by those from a working-class background. I want all of our people to benefit. I want our nation to be serviced by people, from whatever background, with the skills and the ability to ensure that we maintain the well-being that I and other Members of this House have had the good fortune to enjoy.

Finally—you will be delighted to hear that, Mr Deputy Speaker—I want to mention the European dimension to this black hole. What prediction has the Minister made of changes and developments whereby equal access rights and obligations arise for EU nationals to borrow and study in the United Kingdom? If that is to be the case, will we find ourselves increasingly subsidising foreign nationals? I believe that charity and support must start at home.

I have every faith in my right hon. Friend the Minister. I know that he is an honest man and I look forward to his response with great interest, because I think that he might surprise us all and say that he agrees with many of our points.