Higher Education Policy

Tristram Hunt Excerpts

Wednesday 27th April 2011 Commons Chamber

[Mr Willetts]

It was made perfectly clear—[Interruption.] Let me quote from the very first sentence of the terms of reference of Lord Browne’s report. It was to

“analyse the challenges and opportunities facing higher education and their implications for student financing and support. It will examine the balance of contributions to higher education funding by taxpayers, students, graduates and employers.”

So, the previous Government left us a deficit, recognised that they needed to make £14 billion of savings and set up an inquiry under Lord Browne to look at how universities should be financed in those circumstances—almost in the same month, incidentally, that we had the plan from the right hon. Member for Edinburgh South West (Mr Darling) for large reductions in public spending.

After considering Lord Browne’s report, which took him a year to produce and in which time he took a large amount of evidence, the coalition has adopted a strategy that, although not in every respect his strategy—[Hon. Members: “Ah!”] I do not know why Opposition Members react with such glee; in many ways, we have improved on the strategy that Lord Browne put forward. The fundamental proposal in the report that the previous Government commissioned is the one that we are now implementing in order to put the finances of higher education on a stable footing.

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

Will the right hon. Gentleman give way?

[Mr Willetts]

Let me just develop this point, because crucially the best way to save money is not to go for reductions in the teaching grant per student, as that simply means a lower-quality experience for students in our universities; instead, the aim is to provide universities, as the teaching grant is reduced, with an alternative source of income from fees and loans which does not involve students paying any money up front.

[Mr Willetts]

I am just going to carry on explaining the basic finances of the measure, because they are so important and the Opposition clearly do not understand them. The point is about lending students money to pay fees. For example, if we lend them £1,000, we can reasonably expect, on the basis of outside forecasts, about £700 of that to be repaid, so we account for the £300 of the loan that is written off—that will not be repaid—but know that we will get approximately £700 back. That is the financing model in Lord Browne’s report, which the Labour party commissioned, and that is what enables this coalition to save money for the Exchequer, to continue with high levels of finances and to ensure that students do not have to pay any money up front. That is an excellent combination of policies at a time when money is tight.

[Tristram Hunt]

I am grateful to the Minister for giving way as he digs himself ever deeper and reveals the fallacy of the sums involved. The whole point of the Browne review was that it would introduce a market in higher education, but, if we strip away the teaching grant and everyone charges £9,000, we do not have a market. That is why the policy is such a car crash.

[Mr Willetts]

I will move on to that stage of the argument in a moment, but let me just explain to the hon. Gentleman why this measure, which is not mine but that of the report commissioned by the Government whom he supported, is very straightforward, simple and absolutely the right way to tackle the challenge of financing higher education at a time of fiscal crisis. It enables us to save money for the Exchequer, because the money that goes into universities is lent to students and is not a grant, and at the same time we ensure that universities are well financed.

The shadow Secretary of State sounded as if he was willing to contemplate large reductions in the amount of resource going to universities, but that would affect the quality of students’ education. On our estimates, the cash going to universities rises from about £9.2 billion in 2010-11 to £10 billion in 2014-15, so we save money, there is more resource going into universities and, crucially, at the same time the money is accompanied by reform.

--- Later in debate ---

[Andrew Bridgen (North West Leicestershire) (Con)]

The future funding of higher education was one of the immediate issues, like that of the budget deficit, that had to be addressed after the months and years of drift at what I can only describe as the fag end of the previous Labour Administration. If we had not addressed it we would have risked reaching a point of decline in further education from which we would have been unable to climb back. Hon. Members should have no doubt that doing nothing was certainly not an option. The previous Government recognised that, which is why they commissioned the Browne review in November 2009. The review’s remit was to investigate the balance of contributions to universities by taxpayers, students, graduates and employers and to consider how much students should be charged for attending university.

If our universities are to compete in the global economy, they need to be well funded. With a huge budget deficit, one cannot argue that when other Departments are facing cuts, the further education budget could be in any way immune. However, the increase in tuition fees proposed by the coalition Government does not, as the shadow Secretary of State has claimed, signal a wholesale withdrawal of state support for higher education. Under the current system, higher education is funded 40% by the student and 60% by the state, and under the new regime it will be funded 60% by the student and 40% by the state. That is far from the wholesale withdrawal of state funding. The fact that fees are to be capped means that there will be no up-front payments for students. No one will pay anything back until they are earning at least £21,000.

[Tristram Hunt]

Will the hon. Gentleman confirm that that £21,000 figure is at 2016 money, so in current terms the figure is £15,900? Once someone earns more than £15,900, they begin to pay back.

[Andrew Bridgen]

I would need to check the hon. Gentleman’s figures, but the sum is considerably more than the current level. The bottom 20% of earners will pay back considerably less in total, and those earning less than £25,000 will pay back less than £1 per day for their university education. That is a progressive repayment system. The Government are working on ways to help students from the most economically disadvantaged backgrounds by reducing the fees that they will have to pay back.

In opposition to this, we have the puffed-up inaction of the Labour party and the support given by the Leader of the Opposition and the shadow Chancellor to the idea of a graduate tax, which is not a solution to higher education funding. It would provide no guarantee that universities would receive the additional funding raised. There is no mechanism for former students to repay early, and it would not allow any differentiation between a student from a lower income background and one from a higher income background.

--- Later in debate ---

[Tristram Hunt (Stoke-on-Trent Central) (Lab)]

First, I declare my interest as a part-time lecturer at Queen Mary, university of London. I therefore take a keen interest in universities and know slightly more about their workings than some Government Members who have contributed.

I am privileged to represent Stoke-on-Trent Central, in which Staffordshire university sits and many students from Keele university reside. In the university libraries of those great universities sits a book by Tony Travers and Andrew Adonis called “Failure in British Government: The Politics of the Poll Tax”. That wonderful text tells one how not to make Government policy from beginning to end. I am going to write to Andrew Adonis and Tony Travers to suggest a second volume on the introduction of the tuition fee fiasco that we see before us.

[Mr Gyimah]

When the hon. Gentleman speaks to Andrew Adonis, he should also discuss the graduate tax with him, which he looked at in detail and dismissed when Labour was in government, and which is now Labour policy.

--- Later in debate ---

[Tristram Hunt]

I thank the hon. Gentleman for that intervention. I am happy to look at that. Personally, I am no fan of the graduate tax.

I, too, am new here, but as I understand it, what happens in this place and in government is that people come up with ideas and then there is a Green Paper, a White Paper, some debate, a decision, and then a policy enactment. What we have here is the imposition of an arbitrary fee level, followed by the scurrying around for a justification, which we have seen over recent months, to make the figures add up.

The Government’s policy is driven by ideology. It is the ghost of Keith Joseph coming back to life. It is neo-liberalism rather than Liberal Democrat politics. However, let us be generous for a minute and argue, as the confused Minister for Universities and Science tried to, that some of it is driven by a desire for deficit reduction. We will leave aside for a second the fact that for every £1 million invested in universities £2.5 million comes back, and we will leave aside the fact, mentioned by my hon. Friend the Member for Sheffield Central (Paul Blomfield), that the only other country deciding to slash spending on universities and science during the recession is Romania. Clearly Ministers are using the Romanian model, when we thought they were interested in a knowledge-driven economy.

If deficit reduction is the strategy, why do the sums not add up? Why will the Government’s plans cost more, not less, over the coming years? Because the Government have got their sums wrong and do not understand how universities work. They thought fees would be £6,000 or £6,500, but why would universities charge that amount when it costs them £10,000, £11,000 or £12,000 to educate someone? At the university of Cambridge, it costs £14,000 to educate an undergraduate. Why on earth would it not charge £9,000 to recoup some of that cost? The incompetence of Ministers has been absolutely breathtaking, and the suggestion of the right hon. Member for Bermondsey and Old Southwark (Simon Hughes) that the problem was advice from civil servants was, I thought, rather grotesque.

And what fees they are! Nine thousand pounds. Every decent university will go for the top rate, so we will go from having some of the lowest fees to having some of the very highest. That represents an ideological decision to withdraw the state from higher education. Only that can explain the decision to cut 80% of the higher education teaching grant. The headline fees will put students off, and for all the guff that we heard about special provisions, when people see the figure of £9,000, it will be very hard to convince them.

[Jeremy Corbyn]

My hon. Friend must be aware, as I and many others are, that the cuts are wholly disproportionate. We are destroying humanities, arts and language courses all over the country, and we are denying the opportunity of education to many working-class youngsters, because the cuts are in favour of vocational courses rather than pure academic ones. Does he believe that that is selling the whole country short?

[Tristram Hunt]

I absolutely agree with my hon. Friend. The Government’s attack on humanities has been grotesque from the beginning. Their intervention to try to make the Arts and Humanities Research Council fund big society research could not have been more laughable. There will be an effect on history, French and humanities courses.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Design, as well.

[Tristram Hunt]

And on design courses.

I will wrap up so that some of my colleagues can deliver the coup de grâce to these terrible proposals. I end with a point that Government Members clearly have not got their heads around. The figure that people will only pay when they earn more than £21,000 is based on 2016 values. At today’s values, the figure is £15,900. In future, let us have a debate about people beginning to pay back their fees when they are earning that much.

Universities always suffer under Tory Governments. They did in the 1980s and they are again now. The Minister for Universities and Science is like a recherché Keith Joseph, and we need to finish off these terrible proposals.