Draft Higher Education (Fee Limits and Fee Limit Condition) (England) (Amendment) Regulations 2025

Rachael Maskell Excerpts

Monday 24th February 2025 General Committees

[Rachael Maskell (York Central) (Lab/Co-op)]

It is a pleasure to see you in the Chair, Ms Furniss. I speak as an MP with two universities in my constituency. Over the last few years, I have often talked with them about the new financial strains they have experienced. I have therefore followed this debate extremely closely.

Many universities have had a very difficult few years. We need to acknowledge that and congratulate them on the way they have put measures in place to control those costs, but for many it has been at a cost to their courses, with many staff, including academics, being made redundant. That means narrowing the offer at a time when we want our higher education sector to excel, as it is a sector of which we can be immensely proud.

I fully understand why the Government have gone down the path of raising tuition fees by 3.1% to a cap of £9,535, other adjustments aside. However, it would not be right to see this as a long-term solution, and I therefore seek an assurance from the Minister that we will not see further fee increases in this Parliament, and that we will instead look to address the quick succession of financial shocks to which the sector has been exposed.

The student visa changes have had a profound impact on York’s universities, decreasing the number of overseas students. The universities are therefore having to reschedule their costs. I very much hope the Minister will move to enable students to come with their dependents to study in the UK and put into our local economies, which depend on those students and their families making a wider, positive contribution, as well as helping the universities with their finances. I also hope the Minister will ensure that we can continue to have the excellence that comes with the academic study and research base that I see in York’s universities.

I know that universities are trying to plan for the long term. I disagree with what the shadow Minister says about universities overreaching, as the University of York and York St John University have placed themselves in the centre of our city, ensuring that they are part of our economic future. Investing in the technologies and jobs of the future is part of York’s inclusion agenda, which we need to facilitate. Universities are key anchor institutions in places like York, and they can help to address the inequality and huge regional divides we experience.

But we also know that there have been wider pressures. The national insurance obligations have had a real impact on the sector, as has the rise in the national minimum wage. I urge the Government to feed back to the Treasury in particular that the national insurance rises could have been more nuanced so as to assist the sector, particularly given the plans to raise student fees. I welcome the rise in the national living wage, but that of course has had a cumulative impact on universities’ income and expenditure.

As we all know, Brexit has had a real impact on universities. The loss of the Erasmus scheme has not been equalled by the Turing scheme, and there has been an impact on research relationships, academic work and the ability of students to come to the UK—the visa controls. It has also not been long since the covid shock and then the cost of living shock. That has all had a cumulative impact on the budgets of universities, which are trying very much to lead our communities and drive forward the economy of the future.

Despite universities’ excellence in demanding more from their finances, restricting their ability to offset costs has meant that the Minister has had to let those costs fall on students. I have real concerns about that, not least after discussing the issue with students in York. I understand the need for more income for universities, but the impact on students is considerable. Having met student unions in York, I know that the cost of housing there is absolutely astronomical and having a real impact on students. It is the same with travel costs, which are significantly more than in other places outside London.

As a result, students are having to work ever more hours in the local economy to offset the costs. They are being priced out of degrees; many who have started their studies in York have not been able to complete them as they are having to work more or less full time. Academic work is suffering as a result. I have a real concern that placing a greater financial burden on students particularly affects those from families with a lower socioeconomic background, and I note that page 27 of the relevant equality impact assessment says that the fee increase may deter students of lower socioeconomic status from coming to university and discusses the real cost of the increase on them.

I trust that the Minister will look at how to support hardship resourcing through the Office for Students so that no student is turned away. All in all, the tuition fee model is broken when it comes to funding education; the money risks ending up in the wrong places. Now that we are in power, I urge the Government to take a bigger view of funding for higher education. Education should be seen as the most significant investment in our economy. It fuels our research and innovation, drives economic benefit and transforms people’s lives. We need to make sure that no one is excluded. I regret that the failures of the last Administration have brought us to the point of raising fees today. I trust that we can find better solutions for tackling the wider funding of higher education and its broader ecosystem, not least as universities produce the research and innovation to drive our whole economy forward.

In closing, I ask the Minister whether he expects other rises in student fees during this Parliament. What steps are the Government taking to ensure that people of lower socioeconomic status are not impacted by this policy? I note the increase in the money that students will be able to access and what the Minister has said about the amount that students pay back. What future planning are he and his colleagues doing to ensure that there is a better account and better process for funding higher education in future?

[Stephen Morgan]

I thank the shadow Minister and my hon. Friend the Member for York Central for their contributions. First, I reiterate the importance of the statutory instrument in putting our higher education sector on a secure footing and ensuring that students receive value from their investment. Committee members will know the sector’s importance for economic growth. They will know about its world-leading research and contribution to local communities, as well as how it changes the lives of those who participate in it.

Providers have suffered a significant real-terms decline in their income, following seven years of frozen tuition fees, and we need to act now to ensure that future generations of students can benefit from our world-class higher education sector. However, we are clear that in universities, as across our public services, investment can come only with the promise of major reform. That was why my right hon. Friend the Secretary of State for Education announced in the House on 4 November last year that we will publish a plan for higher education reform in the summer.

The shadow Minister made a number of points about national insurance contributions. As the Chancellor set out in the Budget, raising the revenue needed to fund public services and restore economic stability requires difficult decisions on tax. That is why the Government are asking employers to contribute more. We strongly believe that that is the fairest choice to help to fund the NHS and wider national priorities. The higher education finance and funding system needs to work for students, taxpayers and providers. The fee increase represents a significant additional investment from students into the sector, and we will support higher education providers in managing the financial challenges that they are facing.

On student loan repayments, we understand that some students might worry about the impact that the increased fee limits will have on the size of their loan. We want to reassure students that, when they start repaying their loan, they will not see higher monthly repayments as a result of changes to fee and maintenance loans. That is because student loans are not like consumer loans; monthly repayments depend on earnings, not simply the amount borrowed or interest rates. At the end of any loan term, any remaining loan balance, including interest that has built up, will be cancelled.

The shadow Minister asked about graduate earnings. On average, graduates benefit from their university education by over £100,000 in their lifetime compared with someone who did not go through higher education. He also asked about the press coverage of the University of Greater Manchester. Of course, that is a matter for the university, but we understand that the Office for Students—the independent regulator for HE in England—has been notified of this case. The university is conducting its own investigation and it would not be appropriate to comment any further at this stage.

My hon. Friend the Member for York Central, who is a real champion of higher education for her constituents and her community, made helpful points about quality. Students and the taxpayer have a right to expect a good-quality education in return for their considerable investment in higher education. For their investment, students deserve excellent teaching that supports them to learn and develop the skills that they need to achieve their full potential. That was why we made a commitment to raise university teaching standards in our manifesto, and we want higher education providers to collaborate, share best practice and deliver continuous improvement in the quality of their provision. Students also deserve to know what to expect when making their investment in higher education. We want providers to be transparent about the things that matter to students, such as the number of contact hours that they can expect when studying specific courses.

On international higher education students, the Education Secretary, in her speech in July 2024, made it clear that we welcome international students who have a positive impact on UK higher education, and on our economy and society as a whole. International students enrich our university campuses, forge lifelong friendships with domestic students and become global ambassadors for the UK. Our universities have taught dozens of current and recent world leaders. This gives us an enormous amount of soft power and also builds strong relationships, which is why we offer international students who successfully complete their studies the opportunity to work, or look for work, in the UK on a graduate visa for two or three years after their studies finish, allowing them to live and work here, and to contribute to our society and economy.

[Rachael Maskell]

I am grateful for what the Minister says, but we know that the changes in visa requirements have had a major impact on higher education. I urge him to take that back to the Department and look at the changes again so that our universities can welcome students and their dependents into our country.

[Stephen Morgan]

My hon. Friend is being kind to me, as she knows I am not the Government spokesperson on higher education, but I will ensure that my colleague who does lead on it takes that point back to the Department.

My hon. Friend the Member for York Central made a number of helpful points about access and participation. Our mission is to break down the link between background and success that has hampered the life chances of too many in this country. We are committed to supporting the aspiration of every person who meets the requirements and wants to go to university. We know that there are stubborn and persistent inequalities within our education system, and those must be addressed. It is vital that all higher education providers play a stronger role in expanding access and improving outcomes for disadvantaged students.

By summer, we will set out our plan for higher education reform and the part that we expect providers to play in that. Through our reform, we are determined to ensure that universities are engines of opportunity, fairness and growth. I commend the regulations to the Committee.

Question put and agreed to.