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Opposition Day

Volume 407: debated on Wednesday 25 June 2003

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11Th Allotted Day

Tuition Fees

We now come to the first debate on the Opposition motions I inform the House that I have selected the amendment in the name of the Prime Minister.

12.45 pm

I beg to move,

That this House notes the views of the National Union of Students about university tuition fees; and believes that the consequence of the Government's proposal relating to tuition fees will be to act as a severe deterrent to many students from hardworking but less well-off families, who will not be eligible for the £1,000 maintenance grant, from applying to university.
As Conservative Members believe in inclusiveness, I should point out at the start that we are happy to mention in our motion the views of the National Union of Students, which has come out strongly against the Government's plans to make university education much more expensive. We also welcome the support of Members on both sides of the House who signed the early-day motion supporting the NUS campaign against fees. I am sure that, having publicly supported that early-day motion, they will welcome another chance to make that stance of principle clear to their constituents.

This is also my first opportunity to welcome formally the new Minister for Lifelong Learning, Further and Higher Education to his post. The Times Higher Education Supplement described his purpose as reinforcing the Prime Minister's assault on ivory towers. To continue the spirit of inclusiveness, may I plead with him not to go down that route? Our world-class universities deserve congratulation and support, not the sniping that they have occasionally received from parts of this Government, notably from the Chancellor of the Exchequer. I am confident that the Minister will not follow that ill-advised way of proceeding.

I shall divide my remarks between the effects of the Government's policy and those of our alternative: on students, on the issue of how to make access fairer and, finally, on the universities themselves. I also want to deal with some of the more serious critiques of our policy, as they deserve a considered response. There are some less considered critiques around, including one from the Labour party political communications unit, copies of which seemed to be widely available around the House yesterday. I am grateful to the large number of Labour Members who wanted to share their copies with us.

Let me first remind the House of the key difference between Conservative Members and the Government on this issue. The Government's proposals amount to a new tax on learning: £3,000 a year for students at some universities, leaving them with debts that will hang over them for many years to come. That, of course, is one in a long line of betrayals. Just before the 1997 election, Labour said:
"we have no plans to introduce tuition fees".
Just after the 1997 election, Labour introduced tuition fees. Just before the 2001 election, Labour said:
"We will not introduce top-up fees."
Just after the 2001 election, Labour introduced top-up fees. Now, the Government are saying that £3,000 will be kept as the upper limit for the next Parliament. With form like that, I am afraid that even the Secretary of State for Education at his most charmingly eloquent will not be believed.

I sympathise with those Labour MPs who have unwittingly deceived their constituents. They should stick to their convictions, however. They should not even be worried—if they are—about being branded as rebels. In a recent interesting speech on public services, the remark was made:
"The essence of our reforms is to keep true to the principle of your citizenship—not your wallet entitling you to decent services."
That quote sums up the Conservative approach to higher education and the approach of many on the Labour Back Benches and, I suspect, on the Liberal Democrat Benches. What it does not do, however, is reflect the Government's approach. It is therefore noteworthy that it is a quote from the Prime Minister in his latest relaunch of the Government. The gap between words and action is breathtaking. I agree with the Prime Minister's sentiment that it should not be our wallets that entitle us to decent services. I just wish that he would apply that to his own policy on higher education, with which he is marching firmly in the opposite direction.

By contrast, the next Conservative Government will scrap all tuition fees—not only the Government's new top-up fees, but all fees. We will save students £9,000 of the debt burden over the period of a normal university course. We will scrap the arbitrary 50 per cent. admission target. We will scrap the access regulator, which is the latest piece of bureaucracy to drain independence away from universities. The best way to make access to university free and fair is to make education free and for admission; to be fair and decided on merit and potential alone.

The hon. Gentleman says that he will scrap all tuition fees, but he knows that the majority of students in the United Kingdom study at further education colleges. Would he scrap tuition fees for further education colleges?

I shall deal with vocational education later in my speech, because I agree that it is important. One of this country's historic failures has been not to take vocational education sufficiently seriously for almost 50 years. I suspect that the hon. Gentleman would agree with one of the problems that I lay at the Government's door: the 50 per cent. target and overemphasis on higher education has had the precise effect of devaluing vocational qualifications and further education.

I shall give way to the hon. Lady, who I believe signed the early-day motion on which our motion is based.

I want to comment on the hon. Gentleman's proposal to abolish tuition fees. Is he aware that almost 50 per cent. of students do not pay tuition fees because they come from families with such a low income that they do not have to? Does he agree that his proposal is designed to benefit the better-off in society and not the poorer students whom he purports to support?

I agree with my hon. Friend: it was slightly perverse of the hon. Lady to sign the early-day motion if she opposed the sentiments behind it. She will know that there is some doubt about the Government's position on the top-up fees element. The Secretary of State wavers between saying that poorer students will be exempt from all fees and that they will be exempt only from the existing £1,100—noises have suggested one thing or another. If it turns out that even the poorest students must pay a top-up element, the hon. Lady should agree that her point becomes invalid. I hope that we will receive some reassurance from the Secretary of State during the debate.

The Secretary of State and the Government as a whole will be aware of the large and growing coalition that they have assembled against them on tuition fees. Let me explain why, first from the students' perspective. Barclays bank estimates that the average debt for students in 2002 will be £12,000, which is a rise of 28 per cent. on the previous year. A UNITE survey shows that debt among third-year students has increased by 61 per cent. The consequences of that are shown in a NatWest survey that says that the number of sixth formers who considered not going to university purely because of fees rose from 34 per cent. in 2000 to 50 per cent. in 2002. Half of all sixth formers consider not going to university only because of fees. That is the situation before the Government put up the fees even more.

Does the hon. Gentleman accept that the debt that he is quoting is to a large extent incurred on credit cards issued by the very banks that conducted the surveys?

That might be true, but a debt is a debt if a student has to pay it. The body to which the debt is owed does not especially matter to a student, although clearly different interest rates are involved. The essential point of the debate is that, irrespective of to whom students owe debt, they will owe £9,000 more under the Labour Government's proposal than under ours. That is the key fact that students and their parents and families will face when they decide at the next election.

Mr. David Rendel (Newbury) rose—

Clive Efford (Eltham) rose—

Will the hon. Gentleman confirm that his party would pay for eradicating fees by reducing the number of people who may go to university?

I have already said that we would abolish the 50 per cent. target—I am glad that the hon. Gentleman is paying attention. The university sector would be smaller and better focused under a Conservative Government than under the Labour Government.

I do not think that we should be apologetic on this point. Back in 1979, one in eight people went to university. By the time we left government in 1997, the figure was one in three. Our party has an incredibly good record on widening access. We should provide access for those who deserve the education.

Absolutely. We need fair access based on merit alone. I shall deal later with problems of access for poorer social groups that have persisted throughout the long period of expansion under both Governments. Those problems deserve serious attention. I know that the Government are trying to solve them simply by expanding the rate of participation and I shall demonstrate to the House that that is not working.

The hon. Gentleman is arguing that the main reason for abolishing tuition fees and top-up fees is that they discourage people from wanting to go to university. He also admitted that under his scheme there would be fewer university places than there are now. Surely it is perverse to encourage more people to go to university but to provide fewer places for them.

We will encourage everyone who has the potential and who will benefit from it to go to university. The rising drop-out rate makes it clear that some people being enticed to university do not benefit from it. It does not need politicians and planners to tell them that, because they drop out in rising numbers and know that they are not benefiting.

I half agree with the hon. Gentleman that the growing debt crisis is the reason why the Government have assembled such a powerful coalition in opposition to their proposals. Penny Hollings of the National Union of Students said:
"The Conservative Party has correctly identified just how unpopular tuition fees have been and the catastrophic effect that top-up fees would have".
A spokesperson for the Association of Teachers and Lecturers said:
"We would welcome the abolition of university tuition fees, which are particularly problematic for low-paid graduates going to make their careers in the public services".
Doug McAvoy of the National Union of Teachers said:
"The Conservatives' proposal to scrap university fees is a welcome move in the right direction".
I was especially delighted to receive a measure of support from the hon. Member for Norwich, North (Dr. Gibson), who is sadly not in the Chamber. He said in The Times that our policy was
"one that many people in the Labour party agree with".
I am grateful for that support.

Does my hon. Friend realise that this goes further? Is he aware of studies undertaken by Loughborough university, Warwick university, the university of London and many others that show that although the number of people from poorer middle-class backgrounds who go to university is increasing—I am sure that the Secretary of State will point that out—the number is decreasing as a percentage of the whole student cohort? As a percentage of the total number of people who go to university, people from poorer backgrounds are being deterred because of the debt that would arise.

My hon. Friend is right, and common sense suggests that that would be true. People who come from families that are not used to dealing with large debt are more likely to be discouraged by the prospect of long-term debt.

The Royal Academy of Engineering, which speaks for many of the professions, commented on the Government's proposals:
"There is a fear that proposals contained within the White Paper regarding student cebt and the setting of course fees will deter students from undertaking courses in more expensive subjects, including, particularly, science, engineering, and technology."
Although Ministers say that part of the reason for expanding the higher education sector to meet their 50 per cent. target is precisely to make British industry more competitive, they should listen to the experts. They are deterring people from undertaking more expensive courses: not only important courses for industry but, of course, medicine and other courses.

Why does the hon. Gentleman not include in his list of quotes what Professor Nicholas Barr of the London School of Economics said in May 2003:

"If places are rationed, then the middle class with their sharp elbows will monopolise them, so it is inequitable. If middle-class students go to university proportionately more than they do now, then they will be paid for by poor people"?

I am glad that we are joined by visitors from Scottish constituencies, to whom the debate does not apply. I am also glad that the hon. Gentleman got as far as page 20 of Labour's document. I shall deal with Professor Barr later on. His critique is serious and interesting, but it is also almost completely wrongheaded.

The debt problem is real, but the Government's response has always been that it is worth getting into debt because graduates earn so much more. In that context, the previous Minister for higher education, now the Minister for Children, whom I am delighted to see in the Chamber, came up with the risible figure of £400,000 extra. I would advise her successor to pay serious attention to a number of pieces of work carried out over the past few months, some of it by the Government themselves. The latest edition of an annual survey by High Fliers Research of 15,000 students graduating this summer shows that starting salaries, which have risen for the past decade, are now falling. The typical starting salary expected by a graduate has dropped from £18,700 in 2002 to £18,500 this year.

The Government's own Higher Education Statistics Agency says that more than a third of graduates last year could not find a job at all or had to settle for a low-skilled job. Some 40 per cent. of 2002 graduates thought that their degree was more or less a waste of time, money and effort. As I am going through Government publications, Ministers might also want to take a look at "Labour Market Trends" to see the variation in earnings of students who left school with two or more A-levels. Those with degrees in some subjects, like law, maths and economics, can expect earnings about 25 per cent. higher than average, but returns on other subjects are sharply lower. Social studies brings about a 10 per cent. premium, but education and languages have returns close to zero. On average, arts degrees show a negative return. Those graduates earn less than if they had not done a degree at all.

It seems likely that Government policy, which has pushed up the proportion of young people going to university—as I said, they plan to increase that by 50 per cent.—has also had an effect. At present, students leave university with debts on average of £12,000. If the Government have their way, that average debt will rise to £27,000, but if the returns on higher education continue to fall as the price of higher education rises, will people want more of it or less? The Government's policy is perverse even in their own terms. The idea that graduates should be uniquely penalised for their learning because a degree always and everywhere leads to future riches is nonsense.

Our policy is justified not east by its effect on reducing the burden of student debt. I was interested to read the work of the Institute for Fiscal Studies, which is publishing a report today showing that the average graduate with no career break would be relieved of the burden of debt three years earlier under our proposals than under the Government's proposals. That in itself will act as an encouragement to potential students from less well-off backgrounds to apply for university.

But is it not the case that that IFS report also criticises wholeheartedly the Conservative party's proposals precisely because they shift responsibility for financing higher education on to poorer people?

Is that on the basis of the assumption, which the IFS is clear about, that poor people will not be deterred by the extra burden of debt, because I disagree with the IFS on that? As my hon. Friend the Member for Lichfield (Michael Fabricant) explained, and as common sense would suggest to the hon. Gentleman, people who come from families with no tradition of dealing with mortgage debt or large debts are more likely to be deterred. I agree with some of the IFS report, but not all of it.

We need not believe my hon. Friend on that matter. We can take the advice of the former Secretary of State for Education and Skills, who said in her news release:

"for many lower income families"—
I am quoting, Mr. Speaker, so Hansard can take note—
"the fear of debt is a real worry and"
does
"act as a bar to higher education".
She made that very point before resigning.

The hon. Gentleman states the blindingly obvious.

I am glad the Minister agrees with us. In his new role, he has a chance to change his Government's policy so that it recognises the blindingly obvious.

I have given way enough.

The second issue that concerns me is access. One matter that unites hon. Members on both sides of the House is that anyone with the potential to benefit from a university degree should not be denied that because of their social or economic background. The question is whether the Government's policy of simply expanding the sector is the best way to achieve that.

If the Government were right in their contention that higher numbers mean wider access, they would have a case, but the evidence is absolutely plain that higher numbers do not change the social mix of universities. As my hon. Friend the Member for Lichfield said, there has been a huge expansion of numbers under successive Governments, but the social mix in universities, as the Secretary of State recognises, has not changed much over that period, despite the expansion in student numbers from something under 10 per cent. to something over 40 per cent.

Indeed, over the past six years, expansion has continued at a headlong rate under this Government, who are specifically committed to solving the problem, yet the participation rate among the poorer social groups has not changed. However, the key to that—and the key mistake that the Government are making—is that it is a problem not of our universities, but of our schools. The Minister for Lifelong Learning, Further and Higher Education himself made the crucial point on Monday when he said:
"once youngsters from working-class backgrounds get to the stage of acquiring two A-levels, nine out of 10 of them go on to a university education."[Official Report, 23 June 2003; Vol. 407, c. 738.]
That is exactly the right point to make. There is no point in fiddling with university admissions to allow fairer access; what we have to do is improve our secondary schools so that wherever people come from, they have a chance of getting A-levels and aspiring as high as they like.

The facts are plain, but the Government are choosing to ignore them and go off down the road of a new access regulator, who will tie universities up in red tape, make them sign agreements before they can charge the top-up fees, and generally threaten them until they replace admissions on academic merit with admissions on the grounds of political ideology. That is a gross interference in the freedom of universities and a straightforward attack on the principle of fairness. Indeed, that is already happening. I am sure that Ministers and many hon. Members on both sides of the House will have seen article inThe Sunday Times headlined "Top universities offer poor students lower entry grades". It says:
"Top universities are lowering A-level grade demands for
certain students
"to meet government targets, according to confidential papers."
The report reveals that a number of universities
"have responded to ministerial pressure with schemes that allow students to win places with as much as two grades below standard offers."
Ministers should consider what effect reading that story in the Sunday papers has on parents, students and sixth-formers in particular, from all social backgrounds. They know that ministerial intervention means that their entry to university is not on the basis of hard work and academic potential, but on the basis of what suits a Government who are trying to hit their targets. That political interference in university entrance is disgraceful. We all agree that university is one of the most important ladders for many people. I agree with Professor Alan Smithers, who said:
"Universities should be looking for students with potential and it is patronising to suggest they are more likely to be found in particular postcode areas."
The third thing that is worth noting is the effect on the university sector itself. The Government have a novel approach to university education: pile it high and sell it expensive. The effects of that are already becoming apparent. Drop-out rates are getting higher. Some universities are seeing more than 40 per cent. of their students drop out. Can those few Labour Members who support their Government's policy say how that is fair or compassionate? To encourage young people to get into debt and to start on a course that they rapidly realise is not going to do them any good is yet another example of the harmful effect of arbitrary targets in the education sector. Successive Education Secretaries have become addicted to those targets. The 50 per cent. university admission target is one of the most harmful, which is why we will get rid of it.

We need a university sector that is properly focused, offering degrees that mean something to those who can benefit from them. Bigger does not necessarily mean better. Does every current course provide proper value for the student? The previous Minister with responsibility for higher education made a notorious insult about "Mickey Mouse" degrees—a phrase that I have never used except when attributing it to her. The Secretary of State has cast aspersions on mediaeval history and classics, although on both occasions he retreated sharply and wisely in the face of opposition. We need proper, objective criteria for judging whether a course is worth while or not so that prejudices, whether against medieaval history or media studies, do not become the basis of policy. It is clearly sensible to look at drop-out rates, the qualifications required to take up a course and a range of other factors. However, it is clear that the university sector needs to be better focused.

We need to pay more attention to vocational qualifications, a point made in one of the multitude of interventions by the non. Member for Bury, North (Mr. Chaytor). I suspect that he and I would agree that this country has an historic problem in not taking high-level vocational education seriously enough and that there is not enough of it on offer. In many cases, vocational education will give people a better start in life and a better chance to realise their full potential than what the Minister for Children referred to as "Mickey Mouse" degrees. Professor Barr and others have asked how that vocational education is to be provided, a point that the hon. Member for Bury, North also made in an intervention.

The choice for many children who are left behind every year by the system is not university or vocational education but vocational education or nothing. The relevant financial calculation is not university versus vocational education costs but vocational education costs versus the cost of unemployment benefit, the new deal for young people, police and judicial actions, the impact of crime and economic dependency on others. On 9 June, David Bell, the head of Ofsted wrote wisely in the New Statesman that at 16
"you're looking at one in five people that we know really do not go anywhere at the end of compulsory schooling—neither to further schooling nor education."
The idea that all the money for vocational education has to come out of the higher education pot is therefore mistaken.

My hon. Friend is making a compelling case. Would he further agree that the figures that he gave earlier on graduates show that in many areas the economy does not need extra graduates? By contrast, the building industry and many other industries desperately need more trained tradesmen.

My hon. Friend is right, and I am grateful to him for allowing me to make the point that the CBI and the TUC estimate that the cost of the skills shortage to the British economy is £10 billion a year or about £170 for every man, woman and child. The idea that a lack of graduates is undermining skills is nonsense—the problem is actually poor vocational education. I want to address the point about money directly because business spends £23 billion of private sector money a year on training, more than three times the amount that the Government spend on equivalent education through the Learning and Skills Council. A change in the mix so that more importance is given to vocational education would greatly increase the potential for private sector money. The funding mix in higher education is 60 per cent. public: 40 per cent. private. If we increased the importance of vocational education in the educational mix, we would attract much more private sector money. My hon. Friend the Member for Canterbury (Mr. Brazier) made the point that by doing so we would improve the skills base and address directly a problem that has dogged our economy for years. It does not relate to the number of graduates but the long tail of completely unskilled people. That is not a charge against the present Government, as the problem has dogged us for 50 years. However, it is an area where the education system is still failing badly, and where the economy has failed badly. We should therefore pay attention to the long tail of completely unskilled people in this country.

I understand the hon. Gentleman's analysis of the need to attract further private sector resources, an initiative for which there would be a cross-party welcome. However, evidence suggests that that needs to be pump-primed by public sector resources, which would require an uplift. Is the hon. Gentleman planning for that in his programme?

The Government are already spending £5.3 billion on the learning and skills councils, so a very large pump is priming money—

The figure is £8.5 billion.

I am grateful to the Secretary of State. Somebody on the Learning and Skills Council board told me that it has a budget three times that of the Royal Navy. I do not know whether that is true, but if it is, or if the sum is anything like that, the pump is big enough. We need to spend money effectively and attract private sector money, because that sector will put money into things that it finds useful. The Minister for Lifelong Learning, Further and Higher Education would describe that as blindingly obviously, but Government policy appears to ignore it.

The Government are trying to push more and more people into something called degree courses, which are of no benefit to the student and have no merit in the eyes of private industry. We are therefore not improving the life chances of the young people who go on those courses. That is a mad route from the viewpoint of the Treasury, students, the university sector and the country.

I said that I would deal with serious educational critiques, notably that of Professor Barr. He is a distinguished economist, but his analysis reminds us that all economists are wrong some of the time, and most economists are wrong most of the time. The first problem in Professor Barr's analysis arises when he states that higher education is a general good for the economy and society and must be regarded as such. However, he also says that it is unfair to ask the general taxpayer, who may be a non-graduate, to bear the cost. One can hold one or other of those views but one cannot coherently hold both. If higher education is a general good, the taxpayer should subsidise it. The second problem arises when Professor Barr claims that student loans do not lead to debt, because they are paid back as a payroll deduction. One has to be a really clever economist to believe something as silly as that. If someone leaves university knowing that they have to pay back £20,000 or £25,000, they will feel that they have a very large debt to repay, whether it is going to a credit card company or coming out of their pay packet.

Earlier, the hon. Gentleman referred to mortgage debt, but most people would regard a mortgage as an investment. Clearly, debt is a bit like crime—the fear of debt is quite a lot worse than debt itself. Why does the hon. Gentleman not pursue his own analogy with mortgage debt and call student debt an investment?

Millions of graduates want to pay off their student debt and take out a mortgage to buy a house. The fact that the Government are imposing on them a colossal burden of debt prevents them from taking out a mortgage, often into their late 30s. It is not a question of choosing between the two—the choice to take out a mortgage is being taken away from people.

The third problem in Professor Barr's analysis arises when he claims that the universities need money, but ignores the effect of the fees. I would urge him and Government Members to read the HSBC study published earlier this week which says that fees could tip poorer, less prestigious universities over the edge into bankruptcy by making it harder for them to attract students. It is therefore not obvious that fees will attract more money into the sector. The fourth problem in Professor Barr's analysis is his claim, which Ministers like to repeat, that students get their higher education free—it is graduates who make repayments. That is sophistry. People cannot become graduates unless they have been students. To claim that students are a completely different group from future graduates is plain nonsense. I am afraid that the Minister for Lifelong Learning, Further and Higher Education attempted to repeat that canard on Monday, but I hope that he spares the House today.

Professor Barr's analysis is based on a series of deeply questionable assumptions, and I simply disagree with it. If it is the best that the Government can come up with— Professor Barr's analysis occupies five or six pages of the document that they handed out prior to the debate—I am afraid that they are skating on thin ice.

Students and their parents have been let down by the Government's proposals. Universities have been leaned on to meet political, not academic, priorities. We have tried tuition fees and they failed to give a fair deal to students or universities. Our policy of scrapping fees and making this vital part of our education system once again free for everyone offers them the fair deal that they need and deserve. I commend the motion to the House.

1.20 pm

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"rejects any proposal to abolish the existing fee of £1,100, which would lead to substantial reductions in the numbers of places in higher education and, as a consequence, fewer lecturers and a lower quality higher education experience; congratulates the Government on its plan to abolish up front tuition fees and to raise the threshold for repayment of loans from £10,000 to £15,000; welcomes the steps that the Government is taking to widen participation amongst students from deprived backgrounds, the establishment of the Office for Fair Access, the introduction from 2004–-05 of a £1,000 grant for students from the poorest backgrounds and better support for part-time students; condemns any proposal to withdraw the funding that is already being spent on widening participation, which would lead to fewer students from deprived backgrounds entering higher education and completing their degrees; and supports the continued expansion in participation planned by the Government and the part to be played by foundation degrees designed in collaboration with employers as an appropriate strategy to equip the UK workforce with the high level skills needed to compete in the global marketplace."
I welcome the debate, as it gives us the opportunity to scrutinise the proposals of the Conservative party. It is necessary to scrutinise those proposals, as Conservative Members have refused to attend the Select Committee to discuss the proposals in detail, as I and my ministerial colleagues have done and, to give credit to the hon. Member for Harrogate and Knaresborough (Mr. Willis), as he and his colleague in the upper House have done, so that there is proper full debate of the issues at an important time.

On a point of order, Mr. Speaker. Can you confirm that Select Committees are appointed to examine the Executive, not to examine other parties' policies? It is the Executive that the Select Committee is appointed to monitor. For the Secretary of State to make the accusation that he has just made shows his lack of understanding of the function of Select Committees.

It is up to a Select Committee to interpret the rules of the House, so it would be up to a Select Committee to decide what it would examine.

I understand that the hon. Member for Ashford (Mr. Green) declined the invitation of the Select Committee to discuss his proposals in detail. As I said, the hon. Member for Harrogate and Knaresborough deserves credit on behalf of his party for accepting.

I should put on the record what happened. At 2 pm on the relevant day, an e-mail arrived in my office inviting me to appear the following morning. Before I had even seen that e-mail, my office was rung up by the press, asking why I had declined. By any standards, the procedure was disgraceful and I have not yet had a satisfactory explanation of it from the Select Committee.

That clarification is helpful. I am grateful for it, though the Liberal Democrats deserve credit for coming to the Select Committee and discussing their proposals, even though I acknowledge that that gave rise to the comprehensive and forensic demolition—

On a point of order, Mr. Speaker. Can you advise me and other hon. Members whether it is normal practice in the House that when a Member accuses another Member of doing something, which is then proven to be wrong, and is acknowledged to be wrong, that person shows good behaviour in the House and withdraws the accusation that he made?

The whole point of a debate is that hon. Members can rebut any case that is made against them. There will be an opportunity to do so.

I began my speech by saying that I welcomed the debate because it gave us the chance to scrutinise the proposals of the Conservative party.

Does the Secretary of State agree that one of the best ways in which a Select Committee may be able to test out the policies of the Government would be to compare them with other, alternative policies?

I agree, but the comprehensive and forensic demolition of the Liberal Democrat proposals by my hon. Friend the Minister for Lifelong Learning, Further and Higher Education last Monday showed why the debate is so important.

With reference to the Conservative spokesman's invitation to the Select Committee, is it not the case that following the original invitation, which was on the same terms as that to the Liberal Democrat spokesman, there was a subsequent invitation, inviting him to come at a time of his choosing?

Order. We should go back to the main point of the debate. The Select Committee and who gives evidence is nothing to do with the debate.

The answer to the hon. Member for Bury, North (Mr. Chaytor) is no. He is—inadvertently, I am sure—seeking to mislead the House.

Let us move on. The main point that I sought to make is that it is critical that the whole House—all parties—Faces up to the issues concerning the future of higher education, as the Government tried to do in our proposals.

I am grateful to the right hon. Gentleman. Given that he is all in favour of information and scrutiny, would he care to tell the House why, in the opinion poll conducted by ICM, 36 per cent. of respondents said that education and schools had got worse under Labour, and the trend over the past three months represents a 17 per cent. deterioration? Is it his fault, or would he care to blame it on someone else?

I do not intend to blame anybody. I intend to debate the higher education question, which I thought the Conservative party wanted to debate this afternoon.

If we are looking for an authoritative assessment of the alternative proposals, we need to look no further than the report published today by the Institute for Fiscal Studies. I quote from its press release, which sets out the situation clearly:
"New research from the IFS compares the reforms proposed by the two parties"—
meaning the Conservative party and the Government—
"looking at the effect on student and graduate finances, the distributional impact on households with different incomes, and the cost to the Exchequer and taxpayers in general. We"—
that is, the IFS—
"find that:
Under both proposals, students would be better off while at university than under the current system."
That is important.

The press release goes on to state that, secondly,
"The overall cost to the taxpayer would be about the same under both systems";
thirdly,
"For a given amount of government spending, more students"—
more students—
"could go to university under the White Paper proposals because graduates would be contributing extra money";
and fourthly,
"The Conservative proposals"—
again, the words of the IFS—
"would benefit the richest households more than the Government proposals, while the poorest households would be worse off."
Same old Tories.

The press release goes on to say that if the Government's White Paper proposals were adopted, there would be
"A redistribution of income from poorer to richer households"
and
"Households in the poorest income decile would lose 1.5 per cent. of their income on average, while households in the top income decile would gain by around 0.4 per cent. from this switch in funding regimes."
It goes on to explain why. That is an authoritative assessment of the two proposals in terms of distribution and equity.

Apart from the fact that the Secretary of State omitted the middle paragraph, which he might like to share with the House, would he like to clarify his status in the matter today? Was it, for example, the IFS study that persuaded him to change his mind when, in common with five other right hon. and hon. Members who grace the Government Benches, he is a former president of the Nation al Union of Students? Was he wrong then and is he now persuaded, or why is there the difference now?

I shall come to the National Union of Students, but if the hon. Gentleman would like me to read out the middle paragraph of the IFS document, I shall do so. It deals with financial effects on students and graduates. It states:

"The financial impact on students while they are at university would be essentially the same under the two proposals. However, once they finish studying, the effects on graduates could differ significantly."
The document goes on to make the point that the hon. Member for Ashford made in his speech, that the IFS research indicates that what it calls the "average" graduate would make loan repayments for seven years under the current system, eight years under the Conservative proposals and 10 years under the White Paper proposals. [Interruption.] The figure on my press release is 10 years. Mine is the printed version.

The core point that I make in citing the analysis is that the explicit purpose of the Conservative proposal, as confirmed by the IFS, is to benefit the richest householders, while the poorest householders would be worse off. We should never forget that.

I now come to the National Union of Students. I was very interested—almost flattered—that the NUS was cited in the motion.

What is the NUS's view of the Conservative proposals. The NUS president, Mandy Telford, says:
"We"—
meaning the NUS—
"cannot endorse proposals that would shut the door on future generations and return higher education to the preserve of a privileged few. Nor should we accept a scheme that will continue to leave institutions bereft of cash and struggling to give students the quality of education they deserve."
She went on to say:
"The Tories would pay for abolishing fees by simply axing thousands on thousands of courses up and down the country. Further, they would abandon all the laudable attempts to reach out to people from backgrounds chronically under represented in further and higher education."
Those are the views of the NUS on the Conservatives' proposals, and I find it slightly extraordinary that they cite the NUS's views in their motion as the NUS is so bitterly critical of their proposals.

The truth of the Conservative proposals is that they mean less students, less resources for universities and less independence for universities from the state.

Would my right hon. Friend also agree that a reduction in graduates has an impact on the economy, and that fewer graduates mean that future economic growth will decline rather than increase?

My hon. Friend, characteristically, is correct. That is the situation and that is why the investment in this population is so critical.

As the right hon. Gentleman has quoted the NUS president, Mandy Telford, he might like to know that, according to the BBC today, she has also said:

"Neither the government nor the Conservatives have got it right with their plans to fund higher education. Neither of them are providing students with the support that they need to get through university."

She has indeed said that. She has criticisms of the White Paper, as she has made clear. What I wanted to point out as clearly as I could was that her criticisms of the Conservative party's proposals are very sharp and very direct.

The Secretary of State has just confirmed his view that the more graduates there are the more growth there is in the economy. If that is the case, will he explain why, using his own logic, he wants to restrict the target to 50 per cent.? Why not 60 per cent., 70 per cent. or even 100 per cent.?

The comparisons with other countries are instructive. New Zealand is on 70 per cent., Sweden is on 67 per cent., and Australia and Norway are on 59 per cent. Those are the investments that other countries are making because of the knowledge economy and the world to which we are moving. That is why we have to address the matter.

The key point that has not been appreciated enough in the country and which I want to ram home today is the impact of the Conservative proposals on the number of students. The hon. Member for Daventry (Mr. Boswell) said it in his subtle way last Monday when he said:
"Some of our less successful higher education activity might be curtailed."—[Official Report, 23 June 2003; Vol. 407, c. 748.]
The hon. Member for Ashford was rather blunter on 13 May. He said:
"The number of students will be reduced…Under the Conservatives the university sector will be smaller."
According to The Guardian today, he said:
"If the sector needs to be a bit smaller then it is no bad thing. We are not dogmatic about that".

Because I am making my speech and I shall continue to do so. We are going to get into an interesting logical philosophical debate about the nature of never and the meaning of meaning, which I look forward to. I shall discuss the meaning of hair and where it is.

There is no doubt that under the Conservative party's proposals there would be a significant reduction in the number of students in this country. Professor Barr, whose statements the hon. Member for Ashford does not like, estimated a figure between 79,000 and 150,000 less students. [HON. MEMBERS: "Fewer."] My estimate is that the effect of his proposals would be a reduction of about 90,000 places in higher education in Britain. That means about 50 places for every sixth form or sixth form college in the country. Every sixth form or sixth form college will have young people coming through unable to go to university if the hon. Gentleman's proposals were to be carried through. I would like to know whether the hon. Gentleman has the courage to go to the four sixth forms in his constituency in Ashford and say that in each there will be an average of 50 less people going on to university as a result of his proposals.

The hon. Lady says that she is happy to make such proposals, but she will not be in Ashford. She should go to her constituents and say that in each of her sixth forms less students will go to university. That is a key aspect of the debate that needs to be understood. It is the Labour party that wants to extend opportunity and give people the ability to move forward. It is the Conservatives—back to the old Conservatives—who say, "We are not going forward."

The Secretary of State is building a huge amount of his case on the importance of widened access to the university sector. Could he quote the evidence that leads him to the conclusion that the right number in terms of school leavers going on to university is 50 per cent.? What leads him to the conclusion that that is the right number, rather than some of the people in sixth forms in Ashford to whom he has just referred going into further education or other forms of tertiary education that may be more valuable to them and to the economy?

There has been a wide range of studies on the matter, as the right hon. Gentleman with his great experience very well knows. The one on which I draw most of all is the view that eight or nine jobs out of every 10 in the future will go to people with this level of skill, ability and talent in the knowledge economy. That has been carried through by a series of serious analyses. The 50 per cent. figure first arose some decades ago while the right hon. Gentleman was in Government, I think from the CBI first, saying that if we wanted to compete in business with other countries, we needed that level of university education—its assessment, not mine. We came to the view that that was where we should go, and I think that it is right. Its effect is right for the economy, for people in the economy and for young people coming through, and the effect of the Conservative Front-Bench proposals will be to cut out that opportunity for literally thousands and thousands of people in the country.

Is it not closer to the truth to say that it is politically convenient, particularly in view of some of the international comparisons that the right hon. Gentleman quoted, to dub a particular form of tertiary education as a degree and university education rather than addressing more accurately the needs of individuals and society at large?

No, that is not right. The fact is that there is substantial academic research about what is a degree and what is quality assured to obtain international comparability, and so on. Of course, arguments can be made, as he says, about whether those academic assertions are right, but the core point, which I need to come back to again and again because it needs to be understood in every household in this country with children, is that the Conservatives want to take away the chances of young people going to university, and that is their explicit policy.

Shall we do that one-two again? I will make a pledge that later in the debate I will give way to the hon. Gentleman, but at my convenience, not his, if he does not mind.

The key point that needs to be understood is that it is not simply a question of the Conservative policies reducing opportunities in the way that they do, but of them explicitly reducing opportunities for people from the poorest and most disadvantaged backgrounds. The Conservatives have said that they will take away the access proposals for support for poorer students, adding up to over £100 million, dealing with child care grant, travel, books and equipment, school meals, disabled students. They will just strip it all out. They will not simply take away opportunity for all students, but take them away specifically for students who most need the help in order to get into university and have the chance of such an education. That is why, as the hon. Member for Daventry announced in the House last Monday, they will also abolish the Office for Fair Access. They do not want fair access. They do not want people to have the right to go to university.

Could the Secretary of State please explain, as he has already told me in answer to questions, that as the Office for Fair Access is about the procedures in determining fair admission, why anything whatever to do with the access of disabled students, for example, or other disadvantaged, groups, should have any concern or remit in that office? Is that not an entirely different matter, and has he any evidence whatever that we are making a proposal, for example, as he suggested, to wind up the disabled students allowance?

All I can say is that the hon. Gentleman is quite right. They are two different things. The various funding channels that he wants to cut, and which were explicitly referred to by the hon. Member for Ashford, are those funding streams that encourage people to go to universities. The specific parallel approach for getting applications from all backgrounds is the Office for Fair Access, which is the right way forward. If the hon. Gentleman wishes to confirm absolutely that there will be no criticism or modification of the schemes for access by people with disabilities, I shall be delighted to hear it. Perhaps he can give that confirmation in his speech.

In the same way, the Opposition attack foundation degrees. The release given today in the interview in The Guardian made that clear. The hon. Member for Ashford said that the Tories' proposals on vocational training were due to be unveiled in the next few weeks—I am glad about that, as our skills White Paper is about to be issued and we will have another debate about that—setting out their belief that apprentices and practical courses will attract more private money than degrees. He can express that view, but the truth is that wide sections of those in industry, whether they are engineers, chemists or automotive specialists, want a foundation degree approach. They want universities to work with them to get the sort of skills that are necessary, but the Conservatives' approach is to take those away.

Is the Secretary of State aware that, by socially engineering university intake and setting quotas for the numbers of people who go to university, he is creating serious difficulties for employers? For example, the Engineering and Technology Board—I must declare an interest as an unpaid director—as well as Rolls Royce and many other employers have raised a problem in identifying which universities and courses are good and bad. A bachelor's degree no longer has the status that it once enjoyed, as a direct consequence of his Department's actions.

The whole presumption on which that intervention was based is wrong. We are not trying to socially engineer—I use his phrase—access to universities. What we are doing is completely the other way around. We are saying that people from all backgrounds in this country should have the opportunity to have a university education, and we seek to promote that.

The Conservatives do not, however, simply propose that there should be less students; they also propose that there should be less resources.

On a point of order, Madam Deputy Speaker. Is it in order for a Secretary of State for Education and Skills not to realise that the word "fewer" goes with the plural and that "less" goes with the singular?

The hon. Gentleman should keep his hair on—[Interruption.] I have no hair to share with anyone; perhaps shared hair is something for the future.

We also have to remember the state of affairs in respect of the universities themselves. Under the Conservatives, student-staff ratios went from 10:1 to 13:1 to 17:1; funding per student fell by 36 per cent. between 1989 and 1997; and an infrastructure backlog of almost £8 billion built up in universities. The Conservative proposals are equivalent to sacking 13,000 lecturers and taking out a further £740 million or more—money that the universities need to fund future growth and excellence.

Loth as I am to become involved in debating English-only legislation, may I ask the Secretary of State to confirm that there is an impact and consequence for Scottish education funding? If the Government take the route of charging students for funding, there will be a lower increase from central funding, which will have a significant impact on the Scottish allocation of education funding through the Barnett formula. Will he confirm that that is the case? Has he made any assessment of the cost to Scotland?

The funding of education in Scotland is a matter for the Scottish Parliament and Executive. None the less, I acknowledge that, as there is a UK system of higher education, whatever we do has very significant implications for universities in Scotland, as well as Wales. The answer to the hon. Gentleman's question is that I am discussing with Scottish Executive colleagues and others precisely how we can do these things in the most effective way.

Does my right hon. Friend remember that it was a Conservative Government who cut the budget of my university, which trains scientists and engineers, by a massive 42 per cent. in a single blow?

My hon. Friend is absolutely right.

The Conservatives' proposals would mean not only fewer resources and students, but less independence for universities, as they are saying that they will remove the independent funding stream that universities want in order to develop their operations in an effective way. That is why the Conservative proposals are opposed by almost every university leader in this country; those people know that the proposals are an arrow at the heart of their independence and their academic freedom in deciding how they move forward. It is extraordinary that the Conservatives should have made those proposals. Perhaps that is why so many Conservative Back Benchers and Members of the other place do not support what their Front Benchers are about.

The fundamental issue is equity. I shall give the House the figures. When we look at the amounts of money per student that we spend at different levels of education, we see some very revealing figures. In nursery education, the annual cost of a three-year-old place is about £1,750; for a four-year-old, the cost is about £3,500. In primary education, the figure is £3,230; in secondary education, £4,060; in first and second-year further education, £4,350; and in higher education, £5,360. That hierarchy of spending has been very well established for many years. It is based on saying that we should spend more money on people who are higher up the system in the educational hierarchy and less on those who are at the bottom.

That policy is socially divisive in many ways, which is why this Government have been trying to spend more on under-fives and primaries. As we make those spending commitments, we are putting more positive effort into allowing children from all backgrounds to succeed and move forward. The Government have made that commitment and we will continue with it. The very important appointment of my hon. Friend the Minister for Children is a recognition of the priority that we attach to that issue.

Every Secretary of State, whether from the Conservative party, the Liberal Democrats or elsewhere, will face resource allocation choices in deciding whether money should go to the youngest or oldest end of the age range. The fact is that the arithmetic that I have just given leads to a conclusion. The difference between what the state spends on a student who leaves school at 16 and does not do anything further in education and on somebody who graduates is almost £25,000. That is what the state puts in. I defend that position, as I think that the state should support it, and the overwhelming majority of support is for teaching costs. However, is it really so inequitable that individuals who have benefited from that education and will be able to earn on that basis later in life should make some contribution towards it?

The Conservatives propose to increase that differential even more, so the issue is whether a graduate should contribute to that situation. Our proposals say that parents do not have to pay, because the fees are going back afterwards. Students do not have to pay while they are in college. Graduates have to pay—this is what our proposals have in common with a graduate tax—from the extra resource that they have. If the hon. Member for Ashford thinks that it is inequitable that the state should pay the cost per student that is currently paid by the taxpayer and that it is unfair to ask graduates to contribute to the costs, I ask him how much more unfair it is for that money to be contributed by non-graduates for the education of those very same graduates. Is it just or fair for us to say that a non-graduate should pay for the education of such people, but that graduates themselves should not? I do not think that that is fair or that it is the right way for us to proceed.

I turn now to debt—a very serious issue to which the hon. Member for Ashford devoted some time. As I have said from the outset, there are genuine concerns about the fear of debt, as my hon. Friend the Member for Preston (Mr. Hendrick) pointed out. It is a fair subject of discussion; we have discussed it with the Select Committee and we will continue to take it forward. As Professor Barr argues, the issue is one of payroll deduction, but that does not mean that it is any less frightening. None the less, it is important to put the matter into some sort of perspective. Over a 40-year period, a current graduate will pay about £850,000 in income tax and national insurance contributions. That is a lot of money. They will also spend about £500,000 on food, and they pay those costs in a very direct way. Alternatively, somebody who stopped paying for 20 cigarettes a day would pay off £10,000 of student debt in 11 years with that money. Survey data show that single householders on average earnings spend an average of £36 a week on recreation and culture, which compares with the £8 or £9 a week that we are talking about in relation to the repayment.

I do not deny that the debt is a serious and frightening thing for some people, but it is important to get it into perspective in terms of lifetime costs and to ask whether such an investment is worthwhile. It is also important to put it in the context of the range of protections that we have placed in the system. The repayments are income-contingent, so nobody pays if they are earning less than £15,000 a year, and that moves up in a direct process. We have put in protections for students from the poorest families, for whom we are waiving the fees at their current level. We are discussing offering bursaries as part of the project for universities that charge higher fees. The hon. Member for Ashford would abolish that. We have established a £1,000 grant on top of the loan to enable students from the poorest families to go to university. There is no up-front fee. We have moved the situation forward. In a pretty substantial contribution, we have said that there is a zero real rate of interest on the debt, which means that, unlike a mortgage or a car loan, it does not grow. Will the hon. Member for Daventry clarify the Conservatives' position on that? The hon. Member for Ashford was reported inThe Guardian—I do not take it as gospel—as saying that they are going to remove the subsidy on the interest on student loans. In other words, the Treasury would no longer—

I can happily confirm to the Secretary of State that that part of the report was inaccurate.

Meanwhile, may I ask him to clarify his own position? He said that the poorest students will not pay the existing part of the fees. Does that mean that they will pay the top-up part of the fees?

On the hon. Gentleman's first point, I have never been misquoted in The Guardian myself, so I do not quite understand his problem, but I am grateful for his clarification. I was not sure what the policy was, and I thank him for setting it straight.

As for our position on fees, I repeat that it is our policy to waive the fees at their current level of £1,100 for students from the poorest families. That will continue. Through the Office for Fair Access, we are discussing with universities bursaries that would enable the balance between that £1,100 and a higher fee, if it were charged—say, £3,000—to be paid through a bursary regime. I am not in a position to make an announcement about that yet, but i t is an important and positive development that meets many of my hon. Friends' concerns.

We are observing a Tory policy shambles of the most extraordinary kind. Only just over a year ago, the hon. Member for Ashford said on the GMTV programme:
"I don't mind the principle of charging differential fees."
Why has his position changed? The only explanation comes in remarks by the vice-chancellor of Buckingham university, which is a private university set up by the hon. Gentleman's friend Margaret Thatcher when she was Prime Minister. The vice-chancellor asked:
"why are the Tories now sinking into louche popularism?"
That is the truth of it. They came up with a little stunt and thought that they would campaign on it, but they did not think it through or imagine that anybody would analyse it. I welcome the debate, as we want to analyse it. The truth is that the Conservative record is one of never facing up to the challenges that the British university system faces. We are facing up to those challenges. Although they involve difficult choices—I acknowledge that absolutely—we are laying a foundation for universities to expand and develop and to play their role in our national society and economy. The Conservatives are utterly failing to do so.

1.53 pm

The motion is something of an anti-climax. We thought that the debate was supposed to be on Conservative proposals for student finance. The provisional title that was supplied to our Whips Office—"A fair deal for students and parents"—is the very title that the Conservatives use for their proposals, yet the motion makes no mention at all of Conservative policy. Indeed, it does not even call for the abolition of tuition fees. The National Union of Students is in line with only one Conservative policy. Whatever the Conservatives may claim, the NUS certainly does not agree with the rest of their policies, whereas the policies of the NUS and the Liberal Democrats are remarkably close.

This is the third occasion on which the Conservatives have ducked an opportunity to deploy their thinking. First, they cancelled an Opposition day debate, then the hon. Member for Ashford (Mr. Green) refused to appear before the Select Committee on Education and Skills, and now we have today's motion. What on earth are they trying to hide? Could it be that they are worried that as soon as we get a real chance to take their new policy to pieces, as I hope to, it will be shown up as the unprincipled opportunism that it really is?

Will the hon. Gentleman take this opportunity to clarify an aspect of Liberal Democrat policy about which I am a little uncertain? In January, I read in The Guardian that Liberal Democrat policy was to abolish maintenance grants for the first two years of a university course, thus forcing poorer students to live and study at home. Is that still Liberal Democrat policy?

It is not, and it was not. As we have already heard today, it is perhaps unwise to believe everything that one reads in The Guardian.

Liberal Democrat Members at least have had a consistent and principled record of opposing all fees for tuition ever since they were first proposed, including top-up fees.

In a speech just two weeks ago, the Liberal Democrats' leader made it clear that under Liberal Democrat proposals an increasing proportion of students would study nearer to their homes. Is not the Liberal Democrats' budgeting based on that assumption?

We certainly believe that in future more people will choose to study closer to their homes as a result of the trend towards part-time studying. We do not intend to force that on anybody: it is happening naturally already.

Neither the Conservatives' nor the Government's proposals will work, because one cannot have a serious policy of widening participation to include more students from non-traditional backgrounds and charging for tuition, which places serious financial and psychological obstacles in the path of participation. Recent research by Professor Claire Callender of South Bank university could not be clearer. She says that
"one of the most significant findings of this study is that debt aversion deters entry into higher education…Debt aversion had the greatest impact on the participation of the very groups the government most wants to attract into higher education".
Of course, top-up fees, as a result of which debts will soar to £21,000 or more on graduation, will make the situation far worse.

We will support the Conservative motion—one could hardly do otherwise; there is nothing exceptionable in it—but the Government are right on two key points that the Conservatives have got badly wrong, and this is where Liberal Democrats part company fundamentally with the Conservatives. First, the Government are right that we need to increase participation. There is no doubt that that is what the British economy needs and what social justice demands. The Government are right to stress that objective and the Conservatives are wrong to oppose it. Liberal Democrats oppose fees because they are an obstacle to increasing participation. The Tories want to scrap fees at the cost of increasing participation.

Will the hon. Gentleman accept that the missing part of the jigsaw is what is to be done with vocational and technical training? My party will shortly introduce plans on that. He cannot criticise supposed reductions in participation without considering the vocational and technical sector.

All the Tory costings are based on there being no money for such an expansion of further education, so I do not see how his party would manage to increase participation in that way.

Research by Professor Barr shows that the Conservative proposals would not only end the proposed expansion of 182,000 additional places by 2010 but would lead to a cut of at least 79,000 existing places over five years. The research shows that if the Conservatives were to get their way, participation would fall from its current rate of 43 per cent. to, at the very best, 38 per cent. by 2010. Professor Barr concludes:
"The Tory proposals are also offensive to anyone who cares about fairness."
Far from increasing participation, the Conservatives would stop a quarter of a million young people—mainly from the least well-off families—going to university. Meanwhile, they are planning to cut £193 million earmarked to improve the recruitment and retention of poorer students, and they make no mention at all either of grants or—to take the point made by the hon. Member for South-West Bedfordshire (Andrew Selous)—of funding for vocational courses, despite saying that they expect many of the students who are denied a higher education place to take up vocational alternatives. Perhaps they have forgotten that a place on a vocational course is often more expensive than a place in higher education. The Conservatives' proposals could, in this area at least, be even more expensive than the Government's.

We should never forget that the Conservatives substantially cut the value of grants when they were in office. Interestingly, the hon. Member for Ashford pressed the Government to
"keep the maintenance grant in order to increase access to higher education, rather than damage it"—[Official Report, 19 November 1998; Vol. 319, c. 1097.]
Perhaps he would like to use this opportunity either to commit his party to reintroduce grants or to explain why it no longer supports them.

The second point is about funding. There is no question but that the universities need more money. The Government are right about that and the Conservatives are wrong. After all, the Conservatives presided over a 40 per cent. real-terms drop in funding per student.

Neither fees nor top-up fees can solve this funding problem. When the then Secretary of State introduced tuition fees, he said that the entire objective in taking the difficult decisions had been to put higher education on a firm footing for the next two decades. He also said that the new arrangements were introduced precisely to avoid the universities levying additional charges.

In reality, tuition fees have merely plugged the gap left by a cut in public funding, as was confirmed by the chairman of Universities UK at a meeting this morning. Why should the outcome of top-up fees be any different? Good government implies working out first what slice of the national cake should be spent on each public service, and only then working out how much of that slice can be financed from charges and how much must be met from taxation. Top-up fees will not expand the higher education cake; they will merely change the balance between the public and private ingredients.

In his reply to the debate on Monday, the Minister claimed that that would not be the case. He said that income from top-up fees
"will be additional money going into universities"—[Official, Report,23 June 2003; Vol. 407, c. 766.]
First, he must explain what provisions will be included in legislation to ensure that that happens. I cannot see how any provision could ensure that, but I should be interested to hear whether he has any of idea of the provisions he intends to include.

Secondly, the Minister must tell us why the Government are prepared to allow the universities, which have a very obvious interest in the matter, to determine how much of the national wealth should be spent on them, instead of retaining that decision in the hands of the Government, to be taken on behalf of all the citizens of the country. What an abrogation of good government that would be if we allowed that situation to be maintained!

At least the Government accept that there is a funding problem. The Conservatives are promising not more money for our universities, but less. Professor Barr's research identifies a cumulative deficit in the Conservative proposals, amounting to £1.6 billion over the first five years. Even taking the Conservatives' claims at face value, they are talking about merely a standstill position for our universities. In the face of all the evidence, they claim that funding at the status quo level is just fine, and that the universities can simply go into hibernation, unchanged in any way for the foreseeable future.

The reality is that the Conservative plans do not add up and their costings have been rubbished by Universities UK. In fact, the Conservatives had to withdraw the first version of their press release to announce their new proposals because they discovered, shortly after its launch, that they had completely misunderstood one of the figures that they had taken from a UUK report and used to support their costings.

Once they had been denied the cloak of credibility that they had hoped the vice-chancellors could provide, the Tories dreamt up an entirely different justification for the size of the saving that they claimed their policy would achieve. Sadly for them, their new calculation has been rubbished by the House of Commons Library, which has "difficulty understanding the logic". I do not know about you, Madam Deputy Speaker, but I have seldom heard the Library be quite so damning about anything as to say that it has difficulty in understanding the logic of the proposal.

Written parliamentary answers and the Library confirm that the Conservatives cannot possibly cost the Government's expansion plans with accuracy, for the simple reason that the figures are not yet available. We have asked the Government to cost their expansion plans, and we have been told that assessments of the costs for increasing and widening participation beyond 2005–06 will be made as part of the 2004 spending review, work on which "will commence shortly."

Even the £700 million price tag that the Conservatives place on abolishing all fees is open to question. They have hardly based the figure on a rigorous source—an online interview with the Secretary of State, in which he gave a range of figures, £700 million being the lowest. It is interesting that the Tories should pick up on the lowest figure. As the Library points out:
"There are very few figures in this area until the exact scheme and level of fees by individual institutions are decided."
The Tory proposal to scrap the Office of Fair Access is not a bad idea; it is one of the few with which we agree. How much does the Tory press release claim this will save? Oh dear, Madam Deputy Speaker; all I can see is a question mark. The Tories have no idea whether the saving will be significant or not; their figures simply do not add up.

The hon. Gentleman will be aware that the Government have not estimated OFFA's running costs, so it is impossible for us to provide an authoritative estimate. Furthermore, the university sector would incur substantial compliance costs in respect of OFFA, and no one has even made a start on calculating them.

The hon. Gentleman has just made the exact point that I was trying to make about his policies. He has come up with a proposal that he has not costed, partly because he cannot cost it. He simply does not know, as the figures have not yet been produced. His proposals cannot be relied on; the figures simply are not there.

The Conservative's figures do not add up. There are simply too many question marks, some of which are provided by the Conservatives themselves. Their analysis is based on shoddy research, incomplete data and a confused analysis. There is one thing of which we can be sure: we cannot trust the Tories. If we want to know whether the Tories are serious about the issue, it is not good enough to listen to their warm words; we have to look at their record.

Will the hon. Gentleman confirm that, in the debate on Monday, the House learned that his party leader had made a fundamental mistake about the number of students from the bottom two social classes who go to university, and had said something that the Labour and Conservative research departments confirmed was wrong?

I am unable to answer that at present, as the Government and my party leader are still corresponding about the issue. I have not been party to that correspondence, so I cannot answer the question.

If we want to know whether the Tories are serious, we have to look at their record. What did they do in government?

I am grateful to the hon. Gentleman for giving way, but this point is important to the debate. Is his position the same as that of his party leader—that the proportion of students from the two lowest economic groups going into higher education has fallen since the Government came to power? Is that still his party's position—yes or no?

If the Minister looks at the UNITE-Mori survey, he will see that the proportion of students who come from the C, D and E groups has fallen from 20 per cent. three years ago to 17 per cent. in the latest figures, which, I believe, come from last November.

This is important to the hon. Gentleman and to everyone else in the House because it is about widening participation. His party leader said that the number of students going into higher education from the two lowest groups, D and E, had fallen since 1997. Is that correct or not?

As I have already said, I understand that that is still a matter of some argument. I cannot answer that question, but the Minister has now given me the chance to look up the relevant figures. The graph makes it absolutely clear that the figures for the C2, D and E groups have fallen as a proportion of the total. Those are MORI's figures. I am not sure what figures he is referring to, but those are the figures that I have. They are absolutely plain in the MORI report; if the Minister wishes to check them, I have them here.

Not again. I am sorry, but I really must make some progress.

When I was interrupted, I was about to look at the Conservatives' record in government. In 1981, they abolished the repeat grant. In 1984, the minimum grant was halved, and in 1985 it was abolished. In 1986, students lost their entitlement to supplementary benefit or unemployment benefit, and to housing benefit for university halls of residence. In 1989, the equipment allowance was abolished. In 1990, vacation hardship allowances were abolished, student loans were introduced and the entitlement to state benefit was withdrawn. Also in 1990, the grant was frozen at £2,200. In 1994, the grant was cut by 10 per cent. In 1995, it was cut by another 10 per cent., and the mature student allowance was abolished. In 1996, the grant was cut by a further 10 per cent., and student loans were increased by 10 per cent. Finally, in 1997, just before the election, grants and loans were both increased, at last—but only by 1.2 per cent.

What have the Conservatives done more recently? They have tabled early-day motion 264 in the name of the hon. Member for Ashford, calling on the Government to stand by their manifesto pledge not to introduce top-up fees. Interestingly, six months on, only 47 out of the 166 Conservative MPs have signed it. Come to think of it, perhaps that is because the early-day motion also demands that
"any future system of university finance must resolve current funding issues",
yet the Conservatives' proposals do nothing to solve current funding issues. Why has the hon. Member for Ashford produced proposals that do not even meet the minimum requirements of his own early-day motion?

In July 2002, Conservative members of the Education and Skills Committee voted unanimously in support of top-up fees and tuition fees. My hon. Friend the Member for Chesterfield (Paul Holmes), who I am delighted to see in his place, was the only member of that Committee to oppose fees, and he issued a minority report in order to do so. It will be very interesting to see whether the three Conservatives on that Committee back my hon. Friend if he again supports the abolition of all fees in the Committee's next report, which I understand is due in a few days' time. Meanwhile the hon. Member for Ashford himself is on record as saying:
"I don't mind the principle of differential fees…If it's true the Government is going to abolish up-front fees and say that everything should be paid back by the individual student afterwards, that's fine by me".
Meanwhile, in Scotland, the presence of Liberal Democrats in the Government has ensured the abolition of tuition fees—no thanks to the Conservatives. The Scottish Conservative education spokesperson said on 31 October 2002 that the need for more income
"may require the best universities to charge top-up fees. There is no reason why this should not be allowed".

I want to make a point that might even be mildly supportive of the Government. If the hon. Gentleman continues to argue that Liberal participation in government in Scotland has led to the abolition of tuition fees, and if the Government in this country are going to abolish immediate tuition fees and collect them after graduation, why does he object to Government policy?

I did not think that I had objected. I have always said that it is better to collect fees after the event, if they are going to be charged, but it has been our policy all along that they should not be charged at all. There should be no tuition fees, either before or after the event. In Scotland, we have stuck by our word and abolished tuition fees, both before and after. No tuition fees are charged at all in Scotland now.

I might have got this wrong, but in Scotland do not students who graduate pay £2,000 towards an endowment, which pays for other students to go to university? What is the difference, from a student's point of view, between paying at that point and what the Government are now proposing?

We have had occasion to explain this many times in the past, and I am sorry to have to do it again. Let me see whether I can make it plain, even to those who find it difficult to understand. I might go into a grocer, buy some bread and butter and pay for it. If, when I came out, someone said to me, "Ah, I see you've just paid the council tax", I would say, "No, I have just paid for the bread and butter." Council tax is paid to the local authority. In the same way, tuition fees have to be paid for tuition. We cannot pay tuition fees to settle our council tax, or to buy bread and butter. We pay tuition fees for tuition, and the places that provide the tuition are the universities, so we pay the tuition fee to the universities. Not one penny of the £2,000 that graduates pay in Scotland goes to the universities.

Let me finish. I think that this will finally answer the point made by the hon. Member for Cambridge (Mrs. Campbell). I do not want to take any further interventions on this, because it is so clear and obvious that I cannot believe that hon. Members do not understand it.

The Education (Graduate Endowment and Student Support) (Scotland) Act 2001 states explicitly:
"Scottish Ministers shall, in making budget proposals to the Scottish Parliament, include provision that the income arising from the graduate endowment for the financial year to which the proposals relate be used for the purposes of student support."
It would be illegal for that money to be used for tuition fees. By law, it has to be used for student support.

We can welcome one fact at least, which is that, when the time comes, the Conservatives will join the Liberal Democrats in seeking to defeat top-up fees in this House. But if they were ever to be introduced, the Conservative policy would result not in a fairer and more inclusive higher education system but in a system that was less equal, less fair, and even more poorly funded. This is one bandwagon that the Tories are not only seeking to jump On, but doing their best to destroy, since their policy is simply not credible. Perhaps most significantly, their plans are so, well, Conservative. They have no positive vision of what our higher education system should look like in the future, or of the purposes it is there to serve. Instead, they hark back to a past age of elitism in which higher education was the preserve of the few. As ever, it is left to the Liberal Democrats to provide the only real and effective opposition.

2.17 pm

I should like to begin by welcoming my hon. Friend the Minister for Lifelong Learning, Further and Higher Education to his Front-Bench position, which, I have to say, some of my hon. Friends regard as a poisoned chalice. I know that he will treat it with his customary skill and charm, and I hope that he will make a real impact on higher education policy.

Conservative policy, which appears to propose paying for middle-class students to attend university by restricting opportunities for students from poorer backgrounds, is something that I find totally abhorrent and morally bankrupt. Many students have welcomed what the Conservatives have proposed, but when they start to understand the implications of that policy, things will start to unravel fairly quickly. Students will realise that the proposals are not about better access or better opportunities, but about restricting access and opportunities, and about cutting numbers, university funds and lecturers' jobs. We are back to the old Tory policies—and the reason that they were so resoundingly defeated in the 1997 general election.

I welcome a great deal of what this Government are trying to do in higher education. I welcome the extra Government money that is going into higher education—which has not been mentioned so far—which is being funded from general taxation and represents a 30 per cent. increase in cash terms over three years. That is an amazingly large increase that we have not seen the likes of since the 1970s, and it is very welcome. I do hope, however, that some of that money will be used to fund better academic salaries. I say that not because my husband is a Cambridge university professor, but because the sector generally is suffering from low salaries and low morale. I should like to see better salaries in the university sector.

I also welcome the measures designed to boost university endowments, in so far as they increase student support. But I am concerned that they may contribute to applicants making a choice based on the financial support that they can receive, rather than on the course that would best suit their needs and abilities. We need to look rather carefully at that issue, to which I shall return later in my speech.

I very much welcome the ending of up-front fees and the raising of the earnings threshold after which fees start to be repaid. It is true that families just above the threshold who still have to pay fees find paying up-front fees difficult. Some potential students may be deterred from entering higher education by the prospect of inflicting such a burden on their families. I should tell my hon. Friend the Minister that, many years ago when I was a student, that certainly would have deterred me from going to university. Raising the repayment threshold will ease considerably the financial burden on new graduates. The prospect of new graduates retaining a greater proportion of their earnings will reduce the deterrent to their entering higher education.

I also welcome the continuation of the Government's contribution of £1,100 in respect of fees for students from low-income backgrounds, and the reintroduction of a maintenance grant of up to £1,000 for some students. The use of the more inclusive definition of household income in determining whether Government fee contributions—and presumably grants—will be made is also a very positive move. And—need I say it—measures to improve support for part-time students are also to be warmly welcomed.

However, despite those paeans of praise for the Government's position, I should point out that differential fees will have an adverse effect on access. I note that differential fees are not mentioned in the Government amendment, which I hope means that they are beginning to think again as to whether they will remain part of their policy. When students decide which course to apply for, they should choose on the basis of their own abilities and the suitability of the course to their needs—and on those factors alone. Choices should not be influenced by the student's pocket or by their parents' finances. Brighter students, particularly from lower income backgrounds, should not be deterred from the best courses because the fees are more expensive. A clever student from a poor background who has the qualifications to attend a Russell group university—perhaps even Cambridge university, which I represent—will have to decide whether to go to such a university or to a university that, in essence, will prove £5,700 cheaper because it does not charge the top-up fee. That is too difficult a burden to put on a person of that age. That is not fair—

Is it not the case, however, that approximately 50 per cent. of the students at Cambridge university, for example, have been educated privately during either their secondary school career or their primary school career? Their parents have more or less cheerfully paid between £6,000 and £20,000 a year in school fees for either the previous seven or 11 years. Is my hon. Friend seriously suggesting that a fee to go to Cambridge university is unaffordable for that group of parents and students?

My hon. Friend and I disagree on this subject. Unlike the Conservatives, I am not proposing that tuition fees be abolished altogether, because they do have a role to play. But I also believe that, if we are going to encourage more people from poorer backgrounds to attend universities such as Cambridge and receive a first-class education—I am sure that that is his objective as well—they must not be put off by the prospect of the top-up fee for which they will be liable. It is that objective that is uppermost in my mind. At the moment, slightly under 50 per cent. of the students who attend Cambridge university are from public school backgrounds, but the university is working very hard to ensure that more state school students and students from poorer backgrounds attend. I want to support it in its endeavours.

Much has been said today about debt aversion. I have little to add to that, except perhaps to refer to a survey conducted by Universities UK in 2002, which confirmed that, to an extent, poorer students' course and institution choices are already determined by financial considerations. It is not unreasonable to suppose, therefore, that if top-up fees are imposed, Oxbridge's access problems will be exacerbated.

When we debated this issue on Monday, my hon. Friend the Minister mentioned science, engineering and medicine courses, which are of course more expensive to provide. However, if universities charge more for these courses, such differential fees could have a serious impact on the training of scientists, engineers and doctors. Many such courses last for four or more years, and the additional fee burden of the extra year would be a deterrent to studying these subjects, which are vital to our economic prosperity and quality of life. In addition, universities that are under pressure to improve their finances would be tempted to cut expensive subjects such as science, especially where student numbers are static or falling.

I should also like to mention the potential impact on women. On average, women have shorter working lives than men because they take time out to have children. Despite equal pay legislation, women graduates still, on average, earn less than men. So women have shorter working lives and lower overall earnings from which to pay off these significant debts. It follows that women are more likely than men to be deterred by higher fees, and that women's access to the best courses would be reduced by differential fees.

I accept that universities need extra money, but providing some leeway by cutting numbers is not the right answer. If extra money is needed through higher fees, I would prefer—although it would not be popular—that it be raised by increasing fees across the board, rather than by increasing them for certain courses or institutions only, simply to ensure that different fee levels do not affect students' choice of course or institution. The Government's contribution towards paying poorer students' fees could rise in proportion to any increase in fees, to ensure that higher fees across the board do not have a greater impact on the choice to enter higher education in the first place.

There are also other steps that we could take. Will my hon. Friend the Minister consider reintroducing state scholarships, for example, which were so effective when I was a student in helping people from lower income backgrounds to attend university? One problem with the endowment system to which I referred earlier is that students get such endowments only if they attend certain universities. State scholarships, which are based on both merit and need, could be assessed by means test, exam performance and recommendation by the school. That need not mean more exams for students at school, because our testing regime is comprehensive enough to provide a good idea of students' potential over their school years.

Organisations already set up, such as the National Endowment for Science, Technology and the Arts, which supports bright young people through their earlier years when earning potentials are low, could act as a part-public, part-private state scholarship foundation. That is worth considering because students who gained those scholarships would know that they could go to university without fear of getting into debt or suffering hardship while they are studying.

There are currently many misperceptions about university. One particular misperception, which I have mentioned before in the House and would like to clear up, is about the cost of going to a top university such as Cambridge. My constituency has two universities and, in fact, it is a good deal cheaper to attend Cambridge university than it is to attend the Anglia Polytechnic university. Cambridge university students have the advantage of subsidised accommodation, making their rents cheaper, and they do not have to pay rents all year round as the Anglia polytechnic university students do. Furthermore, Cambridge university has the benefit of a huge number of college bursaries, which means that students from poorer backgrounds, particularly those not paying the tuition fees, are eligible for several bursaries to help them with maintenance throughout their degree study. When people are considering what university to attend. I hope that they will bear in mind that some of our best universities are among our cheapest. I hope that that will help them make their choices accordingly.

I know that other hon. Members want to speak and I do not want to prolong my contribution. I thoroughly support the Government amendment to the motion and I shall vote for it this evening.

2.33 pm

It is a pleasure to follow the hon. Member for Cambridge (Mrs. Campbell). Without endorsing every aspect of her speech, I warmly endorse the generality of the sentiments that she expressed, particularly her point about the need to encourage clever children from low-income backgrounds to aim high and go for university education. In some meritorious cases, they should aim for the Russell group of universities and Cambridge university, which the hon. Lady represents. It is a shame that the hon. Member for Bury, North (Mr. Chaytor) who intervened on the hon. Lady's speech could not understand the point that she made about clever children from low-income families, because he wanted to make a point about the number of children from private schools going to Cambridge university. He could not see it, but it was a good point that stands on its merits.

I also agree with hon. Lady about the remuneration of university academics. Even for professors, it is low, in comparison with what others in comparable professions can earn. I suspect that our academics' remuneration is low even in comparison with what is earned in universities in other parts of the world. We should all think carefully about that.

An article by the former schools inspector, Mr. Chris Woodhead, in his The Sunday Times column, recently caught my eye. He was replying to someone who withheld their name and had written to him:
"My daughter is taking her GCSEs at our local comprehensive and is predicted to do well. Unfortunately, her school has no sixth form but two local schools have offered sixth form places with the subjects she wants. One of these is a top grammar school. Although its record is outstanding I am concerned that my daughter may subsequently be discriminated against by universities that are anxious to comply with the government's desire that they admit more pupils from 'ordinary' schools. Am I being paranoid?"

The Minister says "yes", but Chris Woodhead answers that inquiry from "Name withheld". The Minister also knows that Chris Woodhead was appointed and retained as schools inspector by the Government. I well remember the Minister's predecessors praying in aid Chris Woodhead's name and praising him from the same Front Bench on which the Minister now sits. Chris Woodhead said:

"Your fears are entirely reasonable. The government has created such a climate of uncertainty that nobody can feel confident about admission to university. That said, if your daughter has been offered a place at a top grammar school, you have no option. You must choose the best teaching and trust in fate and the courage of top universities to resist the political blackmail."
Those feelings of uncertainty and the quandary that that parent had to face is experienced by parents throughout the country, not least in my own constituency.

My constituency has several state schools that are outstanding on any criteria. Perhaps first in the firing line, however, are five independent secondary schools with very good academic records. They admit children from various backgrounds because of the scholarships available at those schools. It is fair to say that they are ethnically diverse and they include the only Jewish independent secondary school in the country that offers a distinctive Jewish education.

Many thousands of children attend those schools in my constituency. As a constituency Member, my first priority has always been the education of children in the state sector. I wish the independent schools well, but they are the choice of the parents concerned who pay the fees for their children to attend them. As I say, my first concern has been for the state schools and I have made representations on their behalf—for example, about the unfair local government funding formula, which distributed resources away from Hertfordshire.

On Wednesday next week, I shall visit a primary school in my constituency, which is concerned about the effects of Government funding policies and may have to reduce the number of teachers. I shall take with me a copy of the Secretary of State's speech today about primary school funding and see what the primary school governors and head teacher have to say about it when I meet them.

As to the independent sector, one cannot remain silent in the face of Government proposals in respect of the access regulator and other measures that seem likely to result in discrimination against pupils in those schools—and, let it be said, others—however hard they work, and however great their academic achievements.

No, the hon. Gentleman had three bites of the cherry against my hon. Friend the Member for Ashford (Mr. Green). We have heard enough of the hon. Gentleman in this debate, not least in respect of his unfortunate intervention on the hon. Member for Cambridge.

I may give way later. When the hon. Gentleman has heard the generality of my remarks, he may intervene again.

There is a risk of discrimination. Do Ministers intend that? It is an interesting question. Will the Minister's policies result in discrimination? Almost certainly, yes. How significant will the discrimination be? There is every reason for apprehension. It was no accident that the first act of the present Government was to abolish the assisted places scheme. That spoke volumes about the Government's attitude towards independent education. Never mind that the scheme gave choice and opportunity to children from lower-income families. It was an article of faith of leading new Labour figures that the scheme was a subsidy to public schools and that, without it, public schools would begin to crumble. Nobody in their right minds really believed that, but it did not stop Ministers from saying it.

In fact, the assisted places scheme was a subsidy for the child, not the school, and I am not aware of any public schools collapsing as a result of its withdrawal. I believe that I am right in saying that the number of applications for independent education is going up. That may be a comment on other aspects of the Government's policies on state secondary education. Let it be said that, notwithstanding the abolition of the assisted places scheme, today—

Order. We are debating two issues here and I would be grateful if the hon. Gentleman would return to them.

It will have caught your attention, Madam Deputy Speaker, that the Government amendment mentions the access regulator, and more than 100,000 children from low-income backgrounds attend independent schools as a result of the scholarships available at them. Under the proposals for the access regulator, the parents of those children have every reason to be afraid of being at risk of discrimination in the future when the time comes to apply for university. [HON. MEMBERS: "No."] Labour Members may say that, and no doubt the Government will try to convey the message that all is well. Indeed, on the first page of the Government's paper, "Widening participation in higher education", we are told that

"admissions to universities are a matter for universities themselves and generally they operate in a way that is fair. Admissions should always be on merit—irrespective of class, background or school attended—and based on an applicant's achievements and potential."
On the face of it, that is reassuring, and it is no doubt intended to reassure.

Well, university admissions are already fair, as it says explicitly in the Government's paper.

Perhaps then the Minister could explain why the Government intend to create the access regulator, and spend the vast amounts of public money that will be needed to do so. In my experience, universities bend over backwards to attract candidates who are well qualified to go to university, especially from lower income social backgrounds. if the system is fair now, why is the access regulator being created? We must look elsewhere for clues, and I will happily give way to the Minister if he wants to comment on that. He is certainly prepared to comment from a sedentary position.

The detail of how the system will operate may give us some more clues about the effect that it will have in practice, as opposed to the Government's statements. What is the message that the creation of the access regulator will send to universities? Those universities that wish to increase their fees above the current £1,100 level will need to draw up an access agreement. Among other things, the agreement will need to set out
"the milestones and indicators which a university will decide itself and against which it can measure progress towards its own ambitions of widening participation."
What are those milestones to be? The Minister had enough to say a moment ago, so perhaps he will tell us what the milestones are intended to be. Ministers refuse to speak about that because they do not want to get their hands dirty with setting targets or milestones.

As the Minister will be aware, his predecessor—now the Minister for Children, who was in her place earlier in the debate—let the cat out of the bag on a recent visit to China, of all places, where she must have felt safely out of the way. She made it clear that she wanted university admissions to be determined on class, and she wanted the Government to set a target to that effect. She said:
"I'm actually going to set a target, where we want to get to by 2010."
Before one could say "Laura Spence", she was forced to retract. We heard earlier from the Secretary of State about his reliance on press reports—he said that he had never been misquoted—and after the Minister's comments the press reported:
"But after a conversation with Mr. Clarke, Mrs. Hodge issued a statement saying approaches to widening access would vary from university to university."
She said:
"That is why an overall target would be inappropriate and we have no plans to introduce one."
The hon. Lady got into hot water on that. [Interruption.] The Minister is welcome to intervene if he wishes to clarify the position on targets and tell the House what the milestones are. I shall now give way to the hon. Member for Bury, North who gave us earlier some indication of the milestones that he would like to see.

Is not the hon. Gentleman aware of the research conducted by the Higher Education Funding Council that demonstrated conclusively that for any given A-level points score, graduates from state school backgrounds achieved a higher class of degree than graduates from private school backgrounds? Is not that a justification for the policies that Bristol university and others are now trying to implement to identify the best talent at the point of entry?

The hon. Gentleman's point would be stronger if Bristol university had not recently retreated on that policy. He has given us plenty of evidence of the targets that he wishes to set and the approach that he would wish to take. For my part, I want universities to admit children on merit, without discrimination according to which school they attended, which class they are perceived to belong to or any other facet of their background. The hon. Gentleman obviously disagrees and he is prepared to say so, but Ministers are not. However, they are sending out a clear message to the universities through the so-called Office for Fair Access and the letters that the Secretary of State will provide for guidance. No one should be in any doubt that the risk of discrimination against pupils will grow as universities feel under pressure to observe some sort of milestone or target to reduce the number of admissions of children who come from certain schools. There is a real risk that in the future, children will be discriminated against because of the school that they attended.

The hon. Member for Bury, North mentioned grades and university standards a moment ago. That sort of thinking carries the real risk that higher and higher grades will be demanded from children from particular types of school. Three A's from one school will be worth less than three C's from another, and many able pupils, who would be well suited to university education, would benefit from it and would contribute to society as a result, will not get an offer. They will not be wanted because their university fears exceeding the number of children admitted from a certain type of school. Universities will feel under pressure from the Government and fear losing funding if it exceeded its targets. That is where the real risk lies.

I shall give way to the hon. Gentleman if he will set out the milestones, because the hon. Member for Bury, North would not.

Discrimination is happening now. Students are finding that they did not go to the right school to get into the university that they want to attend. If the access regulator does his or her job properly, that will not happen.

That is right. There is tremendous uncertainty and the categorisation of types of school should not be an issue. Admissions to university should be determined by the quality of the child. Individual application should be determined on merit, and not in any other way. The real problem with attracting people of merit, especially from lower income backgrounds, will arise from the greater and greater levels of indebtedness that they will get into as a result of the Government's policies. Whatever the Secretary of State says, the average debt of £12,000 is a much more substantial amount of indebtedness for someone from a lower income family. The other problem with the Government's policies is the failings in state secondary education, especially in certain places, of which we have seen far too much evidence recently.

The debt will not be payable until after the student has graduated and earns more than £15,000. That debt should be considered an investment, because graduates are likely to earn far more over their working lives than people who do not go to university.

The terms that the hon. Gentleman uses will be understood by pupils from particular backgrounds, who will be used to professional, middle-class salaries and large financial transactions, such as mortgages. Those terms will not be so readily understood by people from lower income families, who will regard £12,000 as a daunting sum to owe. They will not be so easily persuadable. The Government's political interference in university admissions will combine with their financial policies to create serious discrimination with perverse results. Many people from lower income backgrounds will lose out, and others will lose out because they attend particular types of schools and are considered undesirable.

Does my hon. Friend agree that teachers do not only have the problem of lower incomes, even though they have had a university education? They also suffer if they happen to live in higher cost areas. The hon. Gentleman who has just intervened represents Preston, but I represent Orpington in Bromley, and the cost of housing for people in arts administration and teaching, for example, is huge. That is an additional stress, just at the time when they are trying to establish themselves in a career.

My hon. Friend is absolutely right, and the same applies to my constituency. The high cost of housing and of living there means that it is difficult to attract people into public-sector jobs. As I said at the outset, the matter will be of concern to the thousands of children who attend independent schools in my constituency, and to the substantial number of children who attend outstanding state schools—grammar schools and former grammar schools—in and around my area. Parents worry that they will be discriminated against because of where they live. They have suffered from that already as a result of the local government funding formula, and there is a risk that certain types of area and the people who will live in them will suffer further discrimination as a result of Government policies.

The problem is all part and parcel of the Government's muddled attack on the middle classes. The Government discriminate against people who they consider to be middle class.

The Minister may smile at that, but parents feel that there is a serious risk that their children will suffer discrimination because they live in the south-east and are middle class. At the same time, children from lower-income homes in my constituency will face rising levels of indebtedness as a result of the Government's financial policies. The Government's policies on state secondary education are failing to raise standards where they need to be raised.

I think that the terms of the debate as set out by my hon. Friend the Member for Ashford are entirely right. The Government are getting themselves into a fine old mess over university finance and admissions. There will be perverse and serious consequences for hundreds of thousands of families up and down the country. Ministers will have to face up to that. They may feel that certain people do not have the same right to a university education as others because of the schools that they tend to choose for their children, and the Government's financial policies may diminish the opportunities for other people. However, although the Government may feel that the middle classes do not have the same rights as others when it comes to higher education, everyone has the same right to exercise choice at the ballot box.

Order. A number of hon. Members are hoping to catch my eye. If those who speak can be concise in their remarks, more will be successful.

2.52 pm

Our universities do a good job. Higher education is no longer restricted to tiny and wealthy elites. Our top universities are, I believe, among the best in the world. More overseas students are coming to the UK for their education than ever before, and university research drives the hi-tech industries in my area and in the nation as a whole.

However, we face real challenges. Other countries already send more young people into higher education, boosting their economies. While an increasing number of people from all backgrounds go to university, the proportion coming from lower-income families has not increased sufficiently. Opposition Members argue otherwise, but I believe that the Government's policies will increase that proportion, despite the increase in top-up fees.

Universities warn that lack of resources is preventing them from employing the best and brightest academics, or funding the cutting-edge research that our economy needs to prosper. College facilities need upgrading, and the size of lecture and tutorial groups is increasing. To that end, the partial financing of education by students is a necessity.

As I said earlier, people who gain a university degree or further education qualifications have more opportunities, not just to command a higher income but to achieve personal fulfilment in their lives. The strategic review announced in October 2001 aims to widen participation. The hon. Member for Hertsmere (Mr. Clappison) said that it would discriminate against middle-class families, but that is not so. Wider participation in higher education means that more people from all social classes will be included in the Government's plans. I welcome the Government's plans to get half of the population under 30 into higher education.

The review also aims to simplify the education system, especially in the areas of hardship support; to provide more up-front support for students, and especially for those from less well off backgrounds; and to ensure that all students have access to sufficient financial support throughout their years of higher education. It will also tackle the problems of debt and the perceptions of debt—an important point because, as I said in an earlier intervention, debt is somewhat akin to crime, in that the fear of debt is far worse than the reality of the debt that students will face after they have graduated and entered full-time employment. The constant and deliberate emphasis on the word "debt" to describe what is really an investment in the future deters people from entering higher education. If the financial commitment were sold as an investment, it would be far more attractive, and the numbers entering higher education would increase rather than decrease.

In the decades since the 1960s, university education has changed. What was a preserve of the elite now supplies the mass market that the Government are trying to create through the rapid expansion of higher education. That expansion has occurred simultaneously with funding falling by 36 per cent. between 1989 and 1997.

The Government have taken a sensible look at the structure of the entire higher education system, and are addressing the problems that exist. Their aim is to deal with student finance in the longer term, and to open up access.

Demand for graduates is strong. A House of Commons Library paper on the future of higher education found that, by the end of the decade, 80 per cent. of new jobs will require higher education qualifications. We can achieve that only by widening access. Although 50 per cent. is the target, nobody is saying that we should stop there and, even if we do not reach that proportion, there will still have been a huge increase in the numbers of people going into higher education. Given that 80 per cent. of new jobs will require higher education, the target makes perfect sense. It would be wrong to remove it, and it is dishonest of the Liberal Democrats to claim that higher education need not cost more.

There needs to be fair access to higher education, which is a "gateway" to "opportunity and fulfilment". The social class gap among those entering higher education has widened. Young people from professional backgrounds are more than five times more likely to enter higher education than those from unskilled backgrounds. The White Paper describes the current position as "socially unjust" and says that it
"cannot be tolerated in a civilised society".
I am pleased that the Government are taking steps to address the financing of student education while tackling the wider issue of ensuring that we have an education system which will meet the needs of Britain in the 21st century. It is not a matter of saying that students should not pay fees, or that targets should not be set. The task is to educate people to meet the needs of the 21st century.

For the reasons that I have set out, it is regrettable that neither the Conservatives nor the Liberal Democrats want to open up the higher education system to make it more socially just and dynamic enough to compete in the modern world. The background of the Conservative party is one of cutting investment in public services. Since 1997, the Opposition have supported cutting spending levels to 35 per cent. of gross domestic product and have opposed every one of the Government's Budgets, pre-Budget reports and spending reviews, and they have refused to match Labour's spending plans.

We all know that the hon. Member for Arundel and South Downs (Mr. Flight) revealed plans to cut public spending by 20 per cent., and the Leader of the Opposition has talked about "across-the-board" cuts that would include cuts in the numbers of teachers and support staff. [Interruption.] Opposition Members say that that is not true, but on 31 December 2002 The Daily Telegraph stated:
"The Conservative education policy would be a poor deal for young people, a raw deal for our universities and a catastrophe for Britain in the global economy."
This is a real ideological issue. The choice for higher education is between the Government, who believe in greater equality of opportunity, choice and an education system that will boost the economy, and the Opposition, whose proposals would lead to cuts in funding and to an elite-driven higher education system.

That has not always been the case, however. On 19 January, on the GMTV programme, the Conservative spokesman, the hon. Member for Ashford (Mr. Green) said:
"I don't mind the principle of charging differential fees. What I think is important is the level of fees. If it's true that the Government is going back to abolish up front fees, and say that everything that should be paid by the individual student afterwards, that's fine by me."
The Tories' sums do not add up; they would starve universities of resources, cap opportunities for students and force universities to close. They underestimate the cost of scrapping fees, especially as they are committed to cutting spending by up to 20 per cent., as I said earlier.

The Tories are planning to revert to the time when university places were capped and the well-off benefited disproportionately. They openly admit that they want to cut the number of people in higher education; the hon. Member for Ashford said that earlier in the debate. Ninety thousand university places would go immediately, which is equivalent to 13,000 lecturers losing their jobs. A further 150,000 places would go, as universities would not have the additional income from the variable fee funding system.

I am grateful to the hon. Gentleman for having got as far as page four of the Labour party brief. Can he explain why, with the current ratio of university lecturers to students, there is a correlation between 90,000 students and 13,000 lecturers? Can he give a notional estimate of the top-up fee that would be required to generate an additional 150,000 university places—the number that he claims we are about to abolish?

The calculations were made by my researcher and I genuinely believe that I gave an accurate ratio.

The Tories have always believed in an education system that benefits the elite. That was their position in 1997 and it is their position now. They believe that Britain can flourish as a low skill, low investment economy. That is the view of a party that believed that unemployment was a "price worth paying" when they held power.

Expanding higher education widens access to university education and increases opportunity. It also helps UK p1c to stay competitive in today's global market.

Approximately half the higher education estate was built, to relatively low and inflexible specifications, in the 1960s and early 1970s. Much of it is nearing the end of its design life, and new requirements arise from scientific and technological advance, as well as from recent growth in research. Recent reports show an infrastructure backlog of about £8 billion, including a teaching infrastructure backlog of £4.6 billion, plus a need to double spending on maintenance.

The abolition of the current up-front fee is important, so that graduates themselves are responsible for paying for the cost of their course. It is not, as the hon. Member for Hertsmere said, an anti-middle-class policy. The parents of those children would not be paying the fees; after graduating, the students would pay the fees. That is an important step in achieving social justice in educational opportunity.

The Government have set out a sensible and practical policy to build an education system to meet the needs of students, employers and universities in the modern world. The policy is fair, and offers opportunity, social justice and choice for student financing in cost and repayment. It is a solution that will allow more people to realise the benefits of education and to fulfil their dreams, and will allow more students from lower income groups, as well as those from middle income groups, to attend university.

3.4 pm

It would be remiss of me to begin without welcoming the Minister for Lifelong Learning, Further and Higher Education to his new post. He will have noted that, so far, only 50 per cent. of the speeches from his Back Benchers have offered full support for his policies, as the hon. Member for Cambridge (Mrs. Campbell) had serious reservations about differential fees. She was wise to welcome him with the words that his job was a poisoned chalice, although I do not want to blemish my welcome by reminding him that that may indeed be so.

The Minister will have noticed that although the entire speech of the Liberal Democrat spokesman, the hon. Member for Newbury (Mr. Rendel), rubbished my party's policy, the hon. Gentleman announced that he would vote with us—that is the Liberal Democrats!

I shall give some figures that are at the heart of the debate, as it has mostly centred on student numbers. I do not think that anyone has yet pointed out that, in 1960, one in 20 school leavers entered higher education. Nowadays, partly as a result of what the Conservatives did in government, when we expanded access—contrary to some of the claims from Labour Members—one in three school leavers goes into higher education. By 2010, the Government intend that one in two 18 to 30-yearolds should do so.

The Government intend the numbers in higher education to grow and grow. It is worth looking again at the reasons. The answer given by recent Governments in general and by the Labour Government in particular seems explicitly utilitarian: more graduates mean more growth. The Secretary of State expressly confirmed that in his speech. So that the rationale for the right hon. Gentleman's thinking is in no doubt, I shall quote from another of his recent speeches. He said:

"I don't mind there being some medievalists around for ornamental purposes, but there is no reason for the state to pay for them…I argue that what I described as the medieval concept of a community of scholars seeking truth is not in itself a justification for the state to put money into that. We might do it at, say a level of a hundredth of what we do now and have one university of medieval seekers after truth…as an adornment to our society."
I shall not argue—at least, not for the moment—that there is no convincing proof of the assertion that more and more graduates will deliver more and more economic growth, although I believe that there is no such evidence. Nor shall I argue that such a utilitarian view of education is both blinkered and philistine, although it is. Instead, I shall argue that that view has led directly to the alarm with which Labour Back Benchers greeted the Government's higher education policy—the Minister will recall that about 100 Labour Members failed to support the Government on Monday night—and the lack of support that the policy has received almost everywhere else.

There is a simple truth about the expansion of higher education, as we discovered when we were in government and the Government are discovering now. Sooner or later, the irresistible force, namely, more and more students entering higher education, meets the immovable object, namely, the reluctance of the Treasury to fund tuition fees and grants for all those students. That is exactly what happened when we were in government and it is happening to the Government now.

Let us consider student numbers. Since 1989, numbers have risen by 90 per cent., but funding per student has fallen by 37 per cent., because there is not enough taxpayers' money to go round. It is that shortage of money, not the ill will of Ministers—who are, by and large, well-meaning people—that has caused the Government twice to tear up their election promises.

In 1997, they promised no tuition fees, but two and a half months later, under financial pressure, they revealed plans to introduce tuition fees. In 2001, they promised no top-up fees, but this year, again under pressure from the Treasury, they had to reveal plans to introduce top-up fees. No wonder, according to a NatWest survey—only one of a number of such surveys—that students who graduated last year have an average debt of £10,000, a rise of 67 per cent. on 2001. No wonder, according to the Government's own figures, that nearly a fifth of students drop out. That is lower than the rate for many of our competitors, but much higher than it was. No wonder, with such a shortage of money in the system, that there is a £5.3 billion backlog in capital investment, according to Universities UK, and that, according to a NATFHE survey, UK academics ranked 10th for academic pay out of 15 countries.

What is building up is a composite picture of debt-ridden students, anxious parents, underpaid teachers and lecturers, and vice-chancellors and principals who are viewed by Ministers, according to their own words, not as scholars who have charge of independent communities of scholars, but as wheels and cogs in the machine of economic production. That is what the Government's policy is driving them towards, and none of those people is getting a fair deal, as I am sure that my hon. Friend the Member for Daventry (Mr. Boswell) will say in summing up the debate.

The Government will compound the existing problems of debt and drop-out, however, by trying to enrol an extra 15,000 students a year and employ an extra 1,000 teachers a year—the equivalent of another 20 universities—costing £25 million a year. According to the Government's own logic, there is no reason whatsoever why their target should be as low as 50 per cent. If it is true that more graduates produce more growth, why not raise the admissions target to 60 or 70 per cent., or even 100 per cent.?

When I made that point to the Secretary of State during his speech, he approvingly quoted countries—although I think that only one of them was in the European Union—that had even higher participation rates, and the Government's own logic is now forcing them to travel down that road. We, too, went down that road when we expanded student numbers when we were in government. Now, the Government appear to have left themselves no option but to follow that route, which will lead to more debt and to more potential students being deterred from entering higher education—many are precisely the sort of students whom the Government want to encourage.

On reflection, the Minister will be aware that my right hon. and hon. Friends have carried out a stroke of Disraelian audacity by producing a widely welcomed policy that seeks to abolish not only top-up fees, but tuition fees. That leaves him and the Labour party politically isolated, with 100 Labour Back Benchers having failed to support him in the Lobby on Monday. We will watch with interest to see how many of them support him today, but my hon. Friends and I know from talking to parents, students and potential students in our constituencies, many of whom may not yet have voted or many of whom did not vote Conservative at the last election, that our policy is certainly a vote winner that has left the Government in great difficulty.

3.12 pm

It is a great pleasure to follow the hon. Member for Wycombe (Mr. Goodman) in the debate. He based his assertion that Labour Back Benchers were split down the middle on this issue on a sample of two Back Benchers' speeches. That was a small sample, but I believe that he was not far wrong. After my speech, the sample will be only a little bit larger, but it will show that 66 per cent. of us have some reservations about Government policy.

I was emboldened to speak in the debate by three things. First, the hon. Member for Daventry (Mr. Boswell) said on Monday that he was particularly interested in hearing from Labour Back Benchers during this debate, and who could refuse such an invitation? Secondly, I am the author of early-day motion 799—one of the early-day motions on the subject—and it starts:
"That this House supports the National Union of Students' campaign against student top-up fees".
It makes no mention of fees in general. Thirdly, I feel this afternoon that I am at the apex of my political career in the House. Yesterday, I was elected as chairman of the all-party parliamentary beer club, and I do not think that it will get better than that, particularly after what I say today.

I want to talk about the political context of top-up fees, which is easily forgotten. I then want to answer the question, which has been asked in interventions on Monday and today: why should students who go to top universities and will subsequently earn large amounts of money in future not pay more than students who go to other universities—bog standard universities, as some people might say?

First, on the political context, the proposals arise from the review that the Prime Minister set up after the last election, but very few of us thought that we would end up with top-up fees. It was reported that he had told activists that student fees produced the greatest number of voter complaints during the election. He said:
"It is an issue that came up a lot in the election campaign and we've got to make sure that we have got the right way forward for the future".
Well, he was not wrong; it certainly did come up a lot during the election campaign.

Hon. Members will remember the Deputy Prime Minister's unfortunate incident with the egg. On a much smaller scale, I was involved in a copycat incident at York university two days afterwards, when a student cracked an egg over my head. That happened two days after some flour had been thrown over me, and the local paper helpfully said that all I needed was some milk and I would be a right Yorkshire pudding!

I was slightly heartened that, the following day, I was at home when an election leaflet from my principal opponent—a Conservative—came through the door, and there was a picture of him shaking hands with someone who was mildly familiar. I then realised that my Conservative opponent was shaking hands with my Conservative assailant under the headline, "Conservatives tough on crime and disorder". We all have to put up with these things during political life.

It is interesting that we in the Labour party have changed and become in favour of top-up fees. I take as my text what my right hon. Friend the Home Secretary said in the House on 23 March 2000:
"Anything that discourages open access to all universities and their departments in this country is, in my view, wrong. Those who argue for substantial differentiation in fees have to answer where the resources would come from to pay for those on low incomes to enter university departments, given that the top-up fee that they were levying would have to pay for that and for any improvement in quality. They would also have to answer how it would be possible for any Minister to argue with the Treasury for additional resources if those resources were going to be obtained by the universities levying fees on students rather than sharing the costs, as we are at present, with the taxpayer."—[Official Report, 23 March 2000; Vol. 346, c. 1106.]
That point has been made by Liberal Democrat Members. My right h on. Friend the Secretary of State for Education and Skills said that he was generally anti top-up fees when he came to office. What has persuaded those men of great intellect and the Labour party, or the Prime Minister, to change their minds?

If we read the papers, which is all we Labour Back Benchers can do to see how such policies are produced, we learn that two great intellects are behind the proposals on top-up fees. First, the late Roy Jenkins apparently had a meeting with the Prime Minister and argued very strongly for top-up fees. Secondly his biographer, Andrew Adonis, who also works for the Prime Minister, apparently thinks that it is a very good idea as well. Andrew Adonis is obviously a man of far greater intellect than I am, but the one thing that I have and he does not is the ability to vote on top-up fees in the House.

I gently tell those on the Front Bench that this will be the first domestic policy issue since 1997 where not only have both major Opposition parties lined up against it but so have a very substantial proportion—50 per cent., or perhaps a bit more—of Labour Back Benchers, and there is the House of Lords as well. Politics is ultimately a game of numbers, and I really do not see how the current proposals can possibly get through the House.

I come now to the policy issues that underlie the debate. Why should not students pay top-up fees? Well, the question itself reveals the philosophy behind the proposals. We will basically have a market-based education system. We will have elite universities, and the theory goes that people should pay to go to them and that they will be where all the research takes place. We will then have teaching factories, where those who have lower aspirations will go.

In A-level economics, we learn that, for a market to work, people must have perfect information. People will not have the information to decide whether to pay the top-up fees. How can 18-year-olds from working-class estates in Selby possibly decide whether to take a degree at Cambridge, where they will have to pay? The fee will not be £3,000 ultimately, because the cap will go, and they will have to pay many more thousands of pounds. How can they possibly decide whether that will benefit them most? If they are risk averse—all the indications are that working-class children are risk averse for a whole variety of reasons—they will go to the nearest university. Their choices will be restricted.

We have heard that there will be bursary schemes and that further announcements will be made about them. At the moment, the proposals are that each university should draw up its own bursary scheme, although it will have to meet some as yet undefined standard. Let us imagine being an 18-year-old from a working-class estate trying to work out what bursary scheme is on offer from which university. That proposal will act as a massive deterrent. For those just above the threshold who will not get bursaries—those from hard-working working-class and lower-middle-class families—how on earth will their choices not be distorted by top-up fees? Of course they will be distorted.

Is my hon. Friend therefore saying that, in essence, children of middle-class families will have the wherewithal to make sensible and intelligent judgments based on the return that they will get from universities, but working-class kids will lack that wherewithal?

No. Let me give an example. Last summer, I advised a student from a working-class estate in Selby who was desperately trying to get to university. He could not open a bank account because the bank would not accept him unless he had a passport or a driving licence. It is so hard to get to universities from some backgrounds if information is not available and if family pressures are not necessarily in favour of going to university. In our party, we should take great pride in the fact that our ambition is to get far more children from working-class backgrounds into university. So far, we have failed. The best that we have done is to maintain the proportion, and the best that these proposals will do is maintain the proportion. That represents a poverty of ambition.

Surely, making out, as the Opposition have done, that this debt will be a millstone round the neck of young people after they have finished their studies is not the way to encourage them to go into higher education. Is it not the case that if we say that higher education is an investment in their future, they will be far more likely to go into higher education and to get those benefits? We are focusing all the time on the costs and not on the benefits.

The costs are real, and they are very real for people who are 18 and who do not have a tradition of taking out great debts in their family. That will obviously have an effect on their choices. We only need to speak to working-class students, and to students who will be just above the threshold, to realise that it will affect their choices.

Surely the point of the proposed changes is precisely that students are not being asked to pay anything upfront. We are not asking poor students to pay; we are asking better-off graduates to pay. My hon. Friend the Minister for Lifelong Learning, Further and Higher Education said the other day that a graduate earning £18,000 would pay back £5.20 a week. Surely that is a price worth paying for education.

In many ways the model to consider in relation to the proposals is the elite group of universities in the United States. We need only look at Harvard to see what we would get if we introduced differentiated fees. A large number of people whose families were well-off, irrespective of whether they went to public schools or state schools, would go to those elite universities anyway, a small proportion of students on bursaries would also go, as the universities would feel bound to provide them with places—perhaps, as is the case at Harvard, they would wait on the tables of the richer students in return for their bursaries—and a lot of people in the middle would be deterred from going to those elite universities because of the extra expense involved. Their choices would be determined not by ability but by affordability.

One or two more Members want to speak, so I shall conclude in a moment. The Minister for Lifelong Learning, Further and Higher Education, for whom I have a great deal of time—we travel regularly together on the train to our constituencies, although perhaps he will talk to me less than he did previously—spoke warmly about Dearing on Monday and about what a great idea that review was. I remember that the Prime Minister made a speech on the anniversary of Jim Callaghan's lecture on education at Ruskin college in which he talked about trying to get a consensus on higher education policy. We need a consensus: our original ambition was based on Dearing; now we are to make another big change in student funding in 2005, which will have all sorts of distorting effects in terms of gap years and so on. One day, I am afraid, there will be a non-Labour Government.

Does my hon. Friend agree that, when there is no consensus—clearly, not even on the Labour Back Benches—the future of higher education is too important to be treated as a political football? We need to step back and have a Dearing II-type review.

Absolutely. If we are serious in the House about improving access and improving our higher education system, we must get a system that lasts a very long time. For me, that would mean stepping back from the current proposals. If the White Paper had proposed a number of options, perhaps supported by different members of the Cabinet—a graduate tax, for example, and an increase in the general fees level, as has been suggested today—it would have made it much easier to forge a consensus. I urge Ministers, even at this stage, to step back and to try to get that sort of consensus on the future of higher education.

3.25 pm

I am proud to belong to a party which, when in office, produced an increase in the numbers in higher education from one in eight of those eligible to one in three. That was a terrific expansion, and it was right that we did that. It is worth putting on the record that when Labour was running for election in 1997 it pledged not to introduce tuition fees and then did so, and in 2001 pledged not to introduce top-up fees and again did so. We know that the Chancellor of the Exchequer does not agree with this policy, and the majority of the speeches from the Labour Back Benches this afternoon have not been in agreement with it.

As we heard on Monday, the new Minister for Lifelong Learning, Further and Higher Education, who I also welcome to his post, was asked by his predecessor to think seriously about this policy. I want to focus on the disincentive effect that I believe that this debt—that is what we should call it—will have on those thinking about going into higher education. We already know that students are facing—purely for maintenance and what they must pay at the moment—an average debt of around £12,000. That is a significant sum of money, which students must cope with by working hard at part-time jobs while they study and by trying to pay it back afterwards. If that average level of debt is to increase from £12,000 to £27,000, as we have heard this afternoon, that alone will be enough to put off many able people from going to university in the first place.

I have just presented a petition to the House, on behalf of my constituents, under the heading, "Debt on our doorstep", which looks at the issue of debt in our society. We have rightly campaigned in this House about third world debt, about which we will be talking later this afternoon. Individual personal debt in the UK, however, is a serious problem. I am extremely concerned that the Government proposals will add to it, and will also have the effect of turning away from university many of those who could and should have taken that route.

Young people today will face significant mortgage costs and housing costs. In my constituency and many others, to get on the housing ladder young people face huge costs to meet from their monthly pay to service their mortgage. If a further deduction is to be made from their pay just because they have been to university, they will think that that is a poor choice, and it will be a strong disincentive to take that route.

The last part of the equation in terms of finances for people to consider is the pension situation. The House is also urging young people to think about pensions and to save sensibly for them. Young people will have to pay their mortgage costs and university costs and add their pension costs to that. Such a situation is not sustainable and we, as responsible parliamentarians, cannot urge people to take on the combination of those three strands of debt at such a young age. I urge all hon. Members to think seriously about that.

I ask the Minister not to use Orwellian double-speak by saying that students do not pay but graduates do. They are one and the same person; we are merely talking about deferring an expense. It is not so long since the Government outlawed advertisements that talked about taking the waiting out of wanting, so I am worried when Ministers talk in such terms. Would we say that shoppers do not pay for goods but that consumers do? Such language does not add to the debate.

I am also worried that several Labour Back Benchers described the sum as an investment rather than a debt. We all believe in the value of education to help people to fulfil their potential, but let us not kid ourselves that an owed liability paid for by monthly deduction from a pay slip is not a debt. We should not use any other word.

The difference between Labour Members and Conservative Members could be that we think that education is an investment unlike a car on which a person might spend a similar amount, for example. Does the hon. Gentleman agree that there is a fundamental difference between consumption and investment, which is essentially why his argument falls down?

We all agree that education is an investment and that it is worth going through education to better oneself. However, we are discussing how education should be funded and I argue that imposing a specific tax on learning only on people who had been through university or higher education would create a disincentive. We argue that it would be better to use central funding.

I shall, but I am conscious that one or two hon. Members still wish to speak.

Is the hon. Gentleman saying that the situation is okay for those who have money and can afford the investment, but that those who do not have the money and would like to pay back the investment afterwards should not be able to do so?

I am arguing precisely the opposite point. I argue that those with the lowest income will be most put off by the prospect of accumulating £27,000 of debt—a substantial amount—in addition to that accumulated by students at the moment.

There are many jobs for which a degree is not essential but that are taken by people who we would all say had an excellent opportunity to develop at university. I worked in the London insurance market before I came to the House. It is a professional market that contributes greatly to this country's economy, and many who work there have professional qualifications but not necessarily university qualifications. There is no particular advantage for them to be a university graduate, so I think that people who want to enter such a profession would be put off going to university if they realised that it would result in them being poorer each month.

I am deeply concerned about the access regulator and its potential effects. I am especially worried that people who were the first in their family to attend university would disadvantage their own children by doing so and that people from certain schools could be disadvantaged. The Minister for Lifelong Learning, Further and Higher Education was absolutely right when he said on Monday that the way to get more people to university is to bring them up to the A-level standard in the first place because we know that nine out of 10 people from more disadvantaged backgrounds who get two A-levels go on to university. We should go down that route.

We have not touched significantly on an important issue that has been the Cinderella of our educational provision: vocational and technical training. I am proud to represent a constituency next to Luton university, which has paid me the great honour of asking me to sit on its court. Dunstable college, which is a first-rate further education college, is in my constituency, as is the Learning Warehouse, which is an innovative new learning venture in Leighton Buzzard. It is a collaboration among several FE colleges to offer education for people from the age of 16 to the grave. I am convinced that a large number of my constituents will pick the FE and vocational route—to their benefit—rather than taking the university route. The university route will be appropriate for some people, but not for sufficient people to meet the 50 per cent. target. The situation in different countries has been bandied about today and I shall mention Switzerland. Very few people there go to university but the country has outstanding technical and vocational education, which is well thought of and desirable for Swiss youngsters.

The Select Committee on Work and Pensions examined challenges facing the UK labour market this morning. I shall quote two brief facts taken from a document outlining the way in which the European Union views the UK labour market. First, it states that the UK suffers from

"Poor basic skills amongst a significant proportion of the workforce",
and, secondly, that there is
"Low educational attainment levels and participation rates in lifelong learning".
That is right, but those two problems are best dealt with by taking the vocational and technical route, not by purely taking the university route.

I share the hon. Gentleman's views about the value of national vocational qualifications, but how does he think students pay for them? Does he think that the money comes out of thin air? Is he aware that they pay for it themselves per unit?

I am aware that students pay, but the hon. Gentleman will probably agree that most students at FE colleges tend to be more locally based and do not have the extra costs of those students who go away to university.

3.35 pm

I know that time is short and that I have had more than my fair share of interventions, but I want to refer to something that the hon. Member for Ashford (Mr. Green) said. He accused me of attempting to mislead the House in a question that I put to my right hon. Friend the Secretary of State. I note that he is not in the Chamber, so I am reluctant to comment on that, but I must set it on the record that it is my clear understanding that a further invitation was issued to the hon. Gentleman to appear before the Education and Skills Committee to explain his party's policy, which he chose to decline. If I am incorrect, I am sure he will take the opportunity to correct me later.

Given that my right hon. Friend comprehensively demolished the Conservative party's policy on higher education, which has emerged so interestingly in recent weeks, I do not intend to go over it, although there is much that I should like to say. Instead, I shall focus on a small number of points.

We adopted the 50 per cent. target—in my view, quite rightly. The Conservatives have said that that is far too high and that they would cut it, but they have not told us exactly what the consequences of that would be. We know that they would be severe because they would reduce opportunity, and the reduced number of places would largely be borne by working-class young people. That is indisputable.

The Liberal Democrats are also worried about the 50 per cent. target. They do not want an arbitrary target, but accept that it could be higher than 50 per cent. It is inevitable that the participation rate will increase beyond 50 per cent. as we move towards 2010. The rate in 2003 of 18 to 30-year-olds attending university or going into higher education is 43 per cent. For each of the past seven years, the rate of participation has increased by 1 per cent. a year. So it is reasonable to assume that for each of the next seven years it will also increase by 1 per cent. a year, based on previous projections. That does not take into account the significant—almost dramatic—improvements that are occurring in key stage 2 scores at the end of primary school, in GCSE scores at 16 and in A-level results at 18.

It is almost inevitable that the natural progression, and the result of the Government's investment in primary and secondary schools over the past few years, will lead to far greater demand for higher education as we move to 2010 and beyond. That is important because it demonstrates the pressure on higher education budgets and the urgent need for Governments to find a different way of funding it.

On debt, the point is that there is no such thing as a free university education. The question is not whether there should, or should not, be debt, but how the debt should be distributed. The Liberal Democrats say that the debt should be paid for entirely by those earning more than £100,000 a year. The principle that they apply is that graduates should pay more through the tax system. The great flaw in their argument is that the majority of graduates will not pay more through the tax system because they do not earn more than £100,000 a year. The Tories are honest about their policy. As my right hon. Friend made clear, we are back to class politics with a vengeance. They want the burden of payment for higher education to be switched entirely on to non-graduates. That is unfair. It is turning the clock back.

The key to the problem is to strike a balance.

The Dearing report establishes the key principle that responsibility for payment should be shared by all those who benefit from higher education, including the state, the community as a whole, the individual and employers. We have not heard very much about employers' contribution to the cost of higher education, and such a discussion may be for another time. However, although we can argue about the details, rates and thresholds, what the Government are doing is absolutely right if we are to get a better balance for all the beneficiaries of higher education.

I am afraid that I cannot give way because time is pressing—[Interruption.] What the Government are doing is right, and I am delighted to ensure that 50 per cent. of this afternoon's contributions from Labour Members come with reservations about their policy and 50 per cent. are in favour.

Deferred Division

I must announce the result of the deferred Division on the Question on sexual orientation discrimination. The Ayes were 267, the Noes were 54, so the Ayes have it.

[The Division List is published at the end of today's debates].

Tuition Fees

Question again proposed.

3.40 pm

This has been an interesting debate, which has largely spoken for itself. It was introduced with panache by my hon. Friend the Member for Ashford (Mr. Green), who deployed our arguments and thinking in painstaking detail. The Secretary of State then responded, but he may have been more rattled by The Guardian poll on education than we thought. Instead of going back into his shell, although he is not known for that, he delivered a speech that can only be described as doing handstands on the edge of the precipice.

The Conservative motion was then supported, I think, by the hon. Member for Newbury (Mr. Rendel), who is going to vote with us. Most of his arguments, however, were a rather dry exposition of his reservations and to some extent a caricature of what we want to do. An interesting aspect of our debate, which needs to be seen in the context of our previous debate on Monday, is the argument that was not made. It was referred to, but it was not made explicit by the Government in their amendments on either occasion. There is no reference at all in the Government amendments to top-up fees, as the hon. Member for Cambridge (Mrs. Campbell) perceptively pointed out, which are the policy which may not be spoken of. It would upset Labour Back Benchers, so it is better to keep it private for as long as possible.

The only thing that the Government can salvage from this week's events is the hope that perhaps 100 Labour Back Benchers will have taken an exceptionally early bath and will not be available to oppose them this afternoon. However, we all know about the strength of feeling on the issue, which was encapsulated the other day in the vitriolic intervention of the hon. Member for Leeds, East (Mr. Mudie) and today in the contribution of the hon. Member for Newcastle-under-Lyme (Paul Farrelly). I would only point out—and I am sure that Government Whips are well aware of this—that there are at least 86 Labour Members who sit in silent dissent. Legislation is forthcoming, if the Government get round to it, but it will be difficult to get it through the House. As an aside, two education Ministers are former presidents of the National Union of Students. One is the Secretary of State, the other the Under-Secretary of State for Education and Skills, the hon. Member for Enfield, Southgate (Mr. Twigg). They supported NUS policy, but I wonder when they saw the light and realised that it was all very sensible after all. It must have been after the coming and, indeed, going of the Conservative Government. Matters are therefore interestingly poised, albeit at an intermediate stage.

To pick up on other contributions, it was interesting that Labour Back Benchers, as I anticipated, expressed a number of reservations about Government policy. The hon. Member for Cambridge believed that differential fees would have an adverse effect on access and, in a charming speech, the president of the beer club—the hon. Member for Selby (Mr. Grogan), who deserves further preferment—expressed passionate concern about the misdirection of Government policy.

In particular, his contribution was valuable for mentioning the situation for people who are not affluent by any conceivable test and whose family income is just above the threshold. They are caught by the full weight of debt. The hon. Gentleman also spoke about poverty of ambition, and the danger of demoralising people who might want to make a wise choice and might well be fitted for higher education.

We heard a contribution in support of Government policy from the hon. Member for Preston (Mr. Hendrick). It was difficult to find out where he thought we should go, except possibly towards an indeterminate target, regardless of cost. I am not sure his Secretary of State would agree. We have just had a contribution from the hon. Member for Bury, North (Mr. Chaytor), who interests himself in these matters and sought to justify the target.

On our Benches, we had particularly interesting contributions from my hon. Friend the Member for Hertsmere (Mr. Clappison), who was rightly concerned about intervention in the independent sector, my hon. Friend the Member for Wycombe (Mr. Goodman), who produced a trenchant criticism of utilitarianism and an account of the stresses that higher education Ministers inevitably endure, which I can say from my own experience was entirely authentic, and my hon. Friend the Member for South-West Bedfordshire (Andrew Selous), who made a positive and thoughtful comment and brought the lifetime implications of debt—for example, for pensions funding—into the discussion.

One or two other interesting points emerged. When there was a discussion about the student drop-out rate, it occurred to me that if we could cut that, the whole of the mythical Labour case for the alleged withdrawal of student places would fall, because the increase in drop-out covers the wasted places and any possible run-back in the size of the sector.

There was the usual confusion between participation and access. If the Secretary of State spent a moment looking at the figures for Northern Ireland, where there is a primarily selective secondary education system, he would see that participation is more effective in that country. [Interruption.] The right hon. Gentleman tries to tempt me to go wider than perhaps I should have done. We will discuss that in another context. He needs to reflect carefully, and we shall reflect on what he said about the amount of support that will be available to parents or students who have to pay top-up fees. In the short time available, we wanted to hear from Government Back Benchers.

Again, I assert the principles underlying our approach. First, of course we accept that there is a continuing role for public finance in higher education, because there is a national interest in higher education. There are benefits to students. We do not believe that they are automatically of the order of £400,000, as Ministers said rather glibly. If there are such benefits, which will not be available for every student, the right way to capture them is through income tax, which is a progressive system. It follows that if we are guardians of public money, it must be used to best effect and not wasted on fruitless courses or excess drop-out.

Secondly, we should respect the autonomy of institutions. Too little has been said about that. The Secretary of State says that we are taking it away, but any vice-chancellor who derived further resources from what was on offer under the right hon. Gentleman's predecessor, now the Home Secretary, as a new deal for higher education has much to think about. Any such additional funds have been bought at a high cost in intervention. That will be much worse when OFFA comes along as a political sop to the Provisional wing of the Labour Government to lend plausibility in respect of access. For the avoidance of doubt, I can say that there will be no diminution of access under our plans in relation to disabled student allowance, and we will be able to offer a measure of support for individual students. More details will be available on that matter in due course.

Finally, we need to provide a fair deal for students. We need to remember that there are opportunity costs for students, particularly for those from less advantaged backgrounds who choose to go to university. They are not earning for three years and they have to maintain themselves, often at additional cost, in a strange town or city. The level of debt is significant and oppressive and it does represent a tax on learning. That is a tax that has been introduced by the Government. They may well recruit one or two more vice-chancellors to support them in their present course, although I think that those vice-chancellors are ill advised, but I can assure the House that they run the risk of losing the support of 1.5 million students and their parents and associates—a constituency of 5 million persons who know about the £9,000 a head price tag and will draw the appropriate electoral conclusion.

3.50 pm

This debate, unlike Monday night's, highlights the stark choice before the British people. The Liberal Democrats have always added to the gaiety of the nation, but it will be a long time before they rule the nation. We enjoyed listening to their policies on Monday, but today we have seen the real stark choice. This issue concerns the future not just of higher education but of this country and where we want to be in the 21st century.

What I find really amazing about the Conservative party is that, even after the full process of Letwinisation, even after the caring Conservative phrase, even after the Leader of Her Majesty's Opposition had visited working-class estates in Edinburgh, and even after several focus groups and bonding sessions—or bondage sessions as they were called on Monday—we have this Tory policy.

What we are debating here is not whether we should see a growth in numbers, although that is an important issue to which I shall return, nor whether we could do more to widen participation, although that too is an important debate. Those are not the central issues. What we are talking about here is whether to expand higher education and to maintain investment in higher education for the good of the nation, or whether to contract and cut back, squeeze and freeze and damage opportunities for our young people.

At best, 10 Conservative Back Benchers were present for this important Opposition day debate, yet the Conservative proposal is to remove £430 million of funding for higher education—90,000 university places and 13,000 lecturers would go as part of their policy—and to end payments of £193 million currently going through the Higher Education Funding Council for England to widen participation for youngsters from working class backgrounds in higher education. As the Institute for Fiscal Studies, to which my right hon. Friend the Secretary of State referred earlier, said in its press release this morning, that is a clear redistribution from poorer to richer households. That is at the core of the Conservative party's policy.

In opening, the hon. Member for Ashford (Mr. Green) made a number of remarks with which we fully, wholeheartedly, 100 per cent. agree. He said that fair access should be based on merit. That is absolutely true. We have said that over and over again and it is in our document on wider participation. It will not be the role of OFFA in any way whatever to interfere in the basis for access to university. [Interruption.] I shall come to the purpose, but let us deal with the points on which we can agree.

We also agree that we should concentrate on skills when we unveil our policy in the next week or so, and I assure hon. Members that it will be worth waiting for. They will see that we are investing a considerable amount in skills. We also agree that the key is to improve secondary education.

Our White Paper deals with all those issues, but it does not duck the central question of how we will secure expansion and ensure good-quality higher education into the 21st century without additional funding. Much of Monday's debate was about how to provide that funding, but today's debate has been about reducing the amount that we invest in higher education.

The hon. Member for Newbury (Mr. Rendel) told us how terrible Tory policy was and how the Liberal Democrats would therefore support the Conservatives in the Lobby this evening—an argument that lost me. He also asked about provisions to protect extra investment, which were also raised by the hon. Member for Harrogate and Knaresborough (Mr. Willis) on Monday. I have given an assurance about that, as has the Secretary of State, but, perhaps more importantly, legislation already protects the funding council from taking fees income into account in its funding of institutions. Such provision already features in legislation and we have no intention of interfering with it.

My hon. Friend the Member for Cambridge (Mrs. Campbell) showed her usual good grace and courtesy, and gave paeans of praise for the Government's policy. She mentioned pay for higher education lecturers. Of course, we have invested a considerable amount in the past three years and we will invest more in the next few years. She has a difference of view about the key issue, which we have not tried to hide: our proposals for variable fees. We say that, just as Dearing argued four years ago, graduates should make a contribution and that it should go to universities and not be centralised. She said—I hope this is correct—that someone's decision whether to go to university should not be determined by their parents' finances or the money in their pocket. Of course, the basis of our argument is that that will not happen. We are doing away with up-front tuition fees, students will repay money only when they are in work earning £15,000 a year or more and the debt will be repayable at very modest levels. If the difference between us were simply about the level of the increased tuition fee, it would not be so wide, but it is about much more.

The hon. Member for Hertsmere (Mr. Clappison) referred at the start of his speech to somebody whom I suppose could be described as "Paranoid of Hertsmere" and what they had written to the newspapers. I think that there was paranoia and scaremongering in his speech. He spoke about supporting the reintroduction of assisted places and made it absolutely clear where the Conservative party wants to go in that regard. He accused the Government of attacking the middle class, when it is clear that the issue is about money moving from the poorer to the more wealthy, as this morning's report pointed out.

My hon. Friend the Member for Preston (Mr. Hendrick) made a very important point about the perception of debt. As my hon. Friend the Member for Bury, North (Mr. Chaytor) pointed out, we are talking not about whether there should be debt for students and graduates, but about the level of that debt. My hon. Friend the Member for Preston made the important point that, if we scaremonger and frighten people about the level of debt, which is obviously an issue, it will become a self-fulfilling prophecy. What we need to do is ensure that youngsters understand that the money is an investment in their future and that, in terms of our proposals, it is not an onerous burden.

The hon. Member for Wycombe (Mr. Goodman) was simply wrong. He said that the drop-out rate had increased, as did the hon. Member for Ashford. The rate has not increased; it was 18 per cent. before we took office and it is 17 per cent. now. Indeed, it is now 17 per cent. of vastly increased student numbers, so that argument is not reasonable. Neither is the argument that the funding per student has been reduced. It is now 36 per cent. more; we reversed that trend.

My hon. Friend the Member for Selby (Mr. Grogan), who will be seeing more of me on our train journeys between London and Selby—I congratulate him on his appointment as president of the parliamentary beer club—said that we need Dearing II. Let us look at Dearing I. Dearing represented a very important contribution to the debate. The Conservative Government set up the Dearing committee of inquiry. Conservative Members supported tuition fees through the Lobby, yet they cannot accept Dearing's central proposal, which is that there has to be increased funding, some of which needs to come from the graduate.

This has been an extremely interesting debate. We believe that universities are powerful instruments for transforming society and that they are a civilising influence on society. The Conservatives' policy is a triumph of opportunity over integrity—[Interruption.] I meant of opportunism over integrity—I correct that slip straight away. Even the families whom they purport to help will find that they have been sold a pup when they realise that their child will find it harder to find a place at university. If we are to pull youngsters through to the stage where they have two A-levels and the chance of a university place—as all hon. Members agree that we should—and they find that the place is no longer available, that entire generation will have been let down. Even worse, the Conservatives' policy would drive down attainment, because those who get two A-levels will not have those university places to go to. So, to the delight of our international competitors and to the dismay of the higher education sector and business—

rose in his place and claimed to move, That the Question be now put.

Question,That the Question be now put, put and agreed to.

Question put accordingly,That the original words stand part of the Question:—

The House divided: Ayes 191, Noes 293.

Division No. 256]

[4:02 pm

AYES

Ainsworth, Peter (E Surrey)Djanogly, Jonathan
Allan, RichardDodds, Nigel
Amess, DavidDoughty, Sue
Ancram, rh MichaelDuncan, Alan (Rutland)
Atkinson, Peter (Hexham)Duncan, Peter (Galloway)
Baker, NormanDuncan Smith, rh lain
Baldry, TonyEvans, Nigel
Baron, John (Billericay)Fabricant, Michael
Barrett, JohnFallon, Michael
Beggs, Roy (E Antrim)Field, Mark (Cities of London & Westminster)
Bellingham, Henry
Bercow, JohnFlight, Howard
Blunt, CrispinFlook, Adrian
Boswell, TimForth, rh Eric
Bottomley, Peter (Worthing W)Foster, Don (Bath)
Bottomley, rh Virginia (SW Surrey)Fox, Dr. Liam
Gale, Roger (N Thanet)
Brady, GrahamGarnier, Edward
Brake, Tom (Carshalton)George, Andrew (St. Ives)
Brazier, JulianGidley, Sandra
Breed, ColinGillan, Mrs Cheryl
Brooke, Mrs Annette L.Goodman, Paul
Browning, Mrs AngelaGray, James (N Wilts)
Burnett, JohnGrayling, Chris
Burns, SimonGreen, Damian (Ashford)
Burnside, DavidGreen, Matthew (Ludlow)
Burstow, PaulGreenway, John
Burt, AlistairGrieve Dominic
Butterfill, JohnGummer, rh John
Cable, Dr. VincentHague, rh William
Cameron, DavidHammond, Philip
Campbell, Gregory (E Lond'y)Harvey, Nick
Campbell, rh Menzies (NE Fife)Hawkins, Nick
Cash, WilliamHayes, John (S Holland)
Chidgey, DavidHeald, Oliver
Chope, ChristopherHeath, David
Clappison, JamesHendry, Charles
Clarke, rh Kenneth (Rushcliffe)Hoban, Mark (Fareham)
Clifton-Brown, GeoffreyHogg, rh Douglas
Collins, TimHolmes, Paul
Conway, DerekHoram, John (Orpington)
Cormack, Sir PatrickHoward, rh Michael
Cotter, BrianHowarth, Gerald (Aldershot)
Cran, James (Beverley)Hughes, Simon (Southwark N)
Curry, rh DavidJack, rh Michael
Davey, Edward (Kingston)Jenkin, Bernard
Davies, Quentin (Grantham & StamfordJohnson, Boris (Henley)
Keetch, Paul
Davis, rh David (Haltemprice & Howden)Kennedy, rh Charles (Ross Skye & Inverness)

Key, Robert (Salisbury)Russell, Bob (Colchester)
Kirkbride, Miss JulieSalmond, Alex
Kirkwood, Sir ArchySanders, Adrian
Knight, rh Greg (E Yorkshire)Sayeed, Jonathan
Laing, Mrs EleanorSelous, Andrew
Lait, Mrs JacquiShepherd, Richard
Laws, David (Yeovil)Simmonds, Mark
Letwin, rh OliverSmyth, Rev. Martin (Belfast S)
Lewis, Dr. Julian (New Forest E)Spelman, Mrs Caroline
Liddell-Grainger, IanSpicer, Sir Michael
Lidington, DavidSpink, Bob (Castle Point)
Llwyd, ElfynSpring, Richard
Loughton, TimStanley, rh Sir John
Luff, Peter (M-Worcs)Steen Anthony
McIntosh, Miss AnneStreeter, Gary
Mackay, rh AndrewStunell, Andrew
Maclean, rh DavidSwire, Hugo (E Devon)
McLoughlin, PatrickSyms, Robert
Maples, JohnTapsell, Sir Peter
Marsden, Paul (Shrewsbury & Atcham)Taylor, Ian (Esher)
Taylor, John (Solihull)
Mawhinney, rh Sir BrianTaylor, Matthew (Truro)
May Mrs TheresaTaylor, Dr. Richard (Wyre F)
Mercer, PatrickThomas, Simon (Ceredigion)
Mitchell, Andrew (Sutton Coldfield)Thurso, John
Tonge, Dr. Jenny
Tredinnick, David
Moore, MichaelTrend, Michael
Murrison, Dr. AndrewTrimble, rh David
Norman, ArchieTurner, Andrew (Isle of Wight)
O' Brien, Stephen (Eddisbury)Tyler, Paul(N Cornwall)
Öpik, LembitTyrie, Andrew
Osborne, George (Tatton)Waterson, Nigel
Ottaway, RichardWatkinson, Angela
Page, RichardWebb, Steve (Northavon)
Paice, JamesWeir Michael
Paterson, OwenWhittingdale, John
Pickles, EricWiggin, Bill
Portillo, rh MichaelWilletts, David
Price, Adam (E Carmarthen & Dinefwr)Williams, Hywel (Caernarfon)
Williams, Roger (Brecon)
Prisk, Mark (Hertford)Willis, Phil
Randall, JohnWilshire, David
Rendel, DavidWinterton, Ann (Congleton)
Robathan, AndrewWinterton, Sir Nicholas (Macclesfield)
Robertson, Angus (Moray)
Robertson, Hugh (Faversham & M-Kent)Yeo, Tim (S Suffolk)
Young, rh Sir George
Robinson, Mrs Iris (Strangford)Younger-Ross, Richard
Robinson, Peter (Belfast E)
Roe, Mrs Marion

Tellers for the Ayes:

Rosindell, Andrew

Mr. Laurence Robertson and

Ruffley, David

Mr. Mark Francois

NOES

Adams, Irene (Paisley N)Blizzard, Bob
Ainger, NickBlunkett, rh David
Ainsworth, Bob (Cov'try NE)Boateng, rh Paul
Alexander, DouglasBorrow, David
Allen, GrahamBradley, rh Keith (Withington)
Anderson, rh Donald (Swansea E)Bradley, Peter (The Wrekin)
Anderson, Janet (Rossendale & Darwen)Bradshaw, Ben
Brennan, Kevin
Armstrong, rh Ms HilaryBrown, rh Nicholas (Newcastle E Wallsend
Atherton, Ms Candy
Atkins, CharlotteBrowne, Desmond
Bailey, AdrianBryant, Chris
Baird, VeraBuck, Ms Karen
Battle, JohnBurgon, Colin
Beard, NigelBurnham, Andy
Begg, Miss AnneByers, rh Stephen
Benn, HilaryCairns, David
Bennett, AndrewCampbell, Alan (Tynemouth)
Benton, Joe (Bootle)Campbell, Mrs Anne (C'bridge)
Betts, CliveCampbell, Ronnie (Blyth V)
Blackman, LizCaplin, Ivor

Casale, RogerHendrick, Mark
Caton, MartinHepburn, Stephen
Cawsey, Ian (Brigg)Heppell, John
Challen, ColinHesford, Stephen
Chapman, Ben (Wirral S)Hewitt, rh Ms Patricia
Chaytor, DavidHill, Keith (Streatham)
Clark, Mrs Helen (Peterborough)Hinchliffe, David
Clark, Dr. Lynda (Edinburgh Penlands)Hodge, Margaret
Hoey, Kate (Vauxhall)
Clarke, rh Charles (Norwich S)Hoon, rh Geoffrey
Clarke, rh Tom (Coatbridge & Chryston)Hope, Phil (Corby)
Howarth, George (Knowsley N & Sefton E)
Clarke, Tony (Northampton S)
Clelland, DavidHowells, Dr. Kim
Clwyd, Ann (Cynon V)Hughes, Beverley (Stretford & Urmston)
Coaker, Vernon
Coffey, Ms AnnHughes, Kevin (Doncaster N)
Cohen, HarryHumble, Mrs Joan
Coleman, IainHutton, rh John
Colman, TonyIddon, Dr. Brian
Connarty, MichaelIllsley, Eric
Cooper, YvetteIngram, rh Adam
Corston, JeanIrranca-Davies, Huw
Cranston, RossJackson, Helen (Hillsborough)
Cruddas, JonJamieson, David
Cryer, Ann (Keighley)Jenkins, Brian
Cummings, JohnJohnson, Alan (Hull W)
Cunningham, rh Dr. Jack (Copeland)Johnson, Miss Melanie (Welwyn Hatfield)
Cunningham, Jim (Coventry S)Jones, Helen (Warrington N)
Cunningham, Tony (Workington)Jones, Kevan (N Durham)
Curtis-Thomas, Mrs ClaireJones, Lynne (Selly Oak)
Darling, rh AlistairJones, Martyn (Clwyd S)
Davey, Valerie (Bristol W)Joyce, Eric (Falkirk W)
David, WayneKaufman, rh Gerald
Davidson, IanKeeble, Ms Sally
Davies, rh Denzil (Llanelli)Keen, Alan (Feltham)
Dawson, HiltonKemp, Fraser
Dean, Mrs JanetKennedy, Jane (Wavertree)
Denham, rh JohnKhabra, Piara S.
Dhanda, ParmjitKidney, David
Dobbin, Jim (Heywood)Kilfoyle, Peter
Donohoe, Brian H.King, Andy (Rugby)
Dowd, Jim (Lewisham W)King, Ms Oona (Bethnal Green & Bow)
Dunwoody, Mrs Gwyneth
Eagle, Angela (Wallasey)Knight, Jim (S Dorset)
Eagle, Maria (L'pool Garston)Kumar, Dr. Ashok
Edwards, HuwLadyman, Dr. Stephen
Efford, CliveLammy, David
Ellman, Mrs LouiseLazarowicz, Mark
Ennis, Jeff (Barnsley E)Lepper, David
Field, rh Frank (Birkenhead)Leslie, Christopher
Fisher, MarkLevitt, Tom (High Peak)
Fitzsimons, Mrs LornaLewis, Ivan (Bury S)
Flint, CarolineLiddell, rh Mrs Helen
Follett, BarbaraLinton, Martin
Foster, rh DerekLove, Andrew
Foster, Michael (Worcester)Lucas, Ian (Wrexham)
Francis, Dr. HywelLuke, Iain (Dundee E)
George, rh Bruce (Walsall S)Lyons, John (Strathkelvin)
Gerrard, NeilMcAvoy, Thomas
Gilroy, LindaMcCabe, Stephen
Godsiff, RogerMcCartney, rh Ian
Goggins, PaulMcDonagh, Siobhain
Griffiths, Nigel (Edinburgh S)MacDonald, Calum
Griffiths, Win (Bridgend)McFall, John
Hain, rh PeterMcGuire, Mrs Anne
Hall, Mike (Weaver Vale)McIsaac, Shona
Hall, Patrick (Bedford)McKechin, Ann
Hamilton, David (Midlothian)McKenna, Rosemary
Hamilton, Fabian (Leeds NE)Mackinlay, Andrew
Hanson, DavidMcNulty, Tony
Harman, rh Ms HarrietMacShane, Denis
Harris, Tom (Glasgow Cathcart)Mactaggart, Fiona
Healey, JohnMcWalter, Tony
Henderson, Ivan (Harwich)McWilliam, John

Mallaber, JudySavidge, Malcolm
Mann, John (Bassetlaw)Sawford, Phil
Marris, Rob (Wolverh'ton SW)Sheridan, Jim
Marsden, Gordon (Blackpool S)Smith, rh Andrew (Oxford E)
Marshall-Andrews, RobertSmith, Angela (Basildon)
Martlew, EricSmith, rh Chris (Islington S & Finsbury)
Merron, Gillian
Michael, rh AlunSmith, Jacqui (Redditch)
Miliband, DavidSmith, John (Glamorgan)
Miller, AndrewSoley, Clive
Mitchell, Austin (Gt Grimsby)Southworth, Helen
Moffatt, LauraSpellar, rh John
Mole, ChrisSquire, Rachel
Moran, MargaretStarkey, Dr. Phyllis
Morgan, JulieSteinberg, Gerry
Morris, rh EstelleStevenson, George
Mountford, KaliStewart, David (Inverness E & Lochaber)
Mullin, Chris
Munn, Ms MegStoate, Dr. Howard
Murphy, Denis (Wansbeck)Stringer, Graham
Murphy, Jim (Eastwood)Stuart, Ms Gisela
Murphy, rh Paul (Torfaen)Sutcliffe, Gerry
Naysmith, Dr. DougTami, Mark (Alyn)
Norris, Dan (Wansdyke)Taylor, Dari (Stockton S)
O'Brien, Bill (Normanton)Thomas, Gareth (Clwyd W)
O'Brien, Mike (N Warks)Thomas, Gareth (Harrow W)
Organ, DianaTimms, Stephen
Osborne, Sandra (Ayr)Tipping, Paddy
Owen, AlbertTodd, Mark (S Derbyshire)
Palmer, Dr. NickTouhig, Don (Islwyn)
Pickthall, ColinTurner, Dennis (Wolverh'ton SE)
Pike, Peter (Burnley)Turner, Dr. Desmond (Brighton Kemptown)
Plaskitt, James
Pollard, KerryTurner, Neil (Wigan)
Pond, Chris (Gravesham)Twigg, Derek (Halton)
Pope, Greg (Hyndburn)Twigg, Stephen (Enfield)
Pound, StephenVaz, Keith (Leicester E)
Prentice, Ms Bridget (Lewisham E)Walley, Ms Joan
Ward, Claire
Prentice, Gordon (Pendle)Watson, Tom (W Bromwich E)
Prosser, GwynWhitehead, Dr. Alan
Purchase, KenWicks, Malcolm
Purnell, JamesWilliams, rh Alan (Swansea W)
Quinn, LawrieWilliams, Betty (Conwy)
Rammell, BillWills, Michael
Rapson, Syd (Portsmouth N)Winnick, David
Raynsford, rh NickWinterton, Ms Rosie (Doncaster C)
Reed, Andy (Loughborough)
Reid, rh Dr. John (Hamilton N & Bellshill)Wood, Mike (Batley)
Woolas, Phil
Rooney, TerryWorthington, Tony
Ross, Ernie (Dundee W)Wright, Anthony D. (Gt Yarmouth)
Roy, Frank (Motherwell)
Ruane, ChrisWright, David (Telford)
Ruddock, JoanWright, Tony (Cannock)
Russell, Ms Christine (City of Chester)Wyatt, Derek
Ryan, Joan (Enfield N)

Tellers for the Noes:

Salter, Martin

Paul Clark and

Sarwar, Mohammad

Jim Fitzpatrick

Question accordingly negatived.

Question, That the proposed words be there added, put forthwith, pursuant to Standing Order No. 31 (Questions on amendments), and agreed to.

forthwith declared the main Question, as amended, to be agreed to.

Resolved,

That this House rejects any proposal to abolish the existing fee of £1,100, which would lead to substantial reductions in the numbers of places in higher education and, as a consequence, fewer lecturers and a lower quality higher education experience; congratulates the Government on its plan to abolish up front tuition fees and to raise the threshold for repayment of loans from £10,000 to £15,000; welcomes the steps that the Government is taking to widen participation amongst students from deprived backgrounds, the establishment of the Office for Fair Access, the introduction from 2004–05 of a £1,000 grant for students from the poorest backgrounds and better support for part-time students; condemns any proposal to withdraw the funding that is already being spent on widening participation, which would lead to fewer students from deprived backgrounds entering higher education and completing their degrees; and supports the continued expansion in participation planned by the Government and the part to be played by foundation degrees designed in collaboration with employers as an appropriate strategy to equip the UK workforce with the high level skills needed to compete in the global marketplace.

Fair Trade

We now come to the debate on fair terms for international trade. I must advise the House that Mr. Speaker has selected the amendment in the name of the Prime Minister. There will be an eight-minute limit on Back-Bench contributions to the debate.

4.16 pm

I beg to move,

That this House shares the concern of the Trade Justice Movement about the plight of the poorest people in the world, and congratulates the Movement on bringing their conditions to the attention of the public; notes with concern the fact that a billion people live on less than a dollar a day, that life expectancy in many African countries is declining, and that 30 million people in Africa have HIV/AIDS; believes that rising levels of international trade and trade liberalisation offer the best hope of alleviating poverty in the developing world; calls for high quality legal and economic advice for developing countries on trade issues; further believes that the Government has failed to do enough to promote trade liberalisation, to reform agricultural subsidies and to phase out European trade barriers; and further calls on the Government to use the World Trade Organisation meeting at Cancun to do more to reform the international trade rules to give poor countries a fair deal on international trade.
There is a terrible sense of déjà vu in holding this debate on our Opposition day exactly one year after our last such debate. If we look back over the past year, what have the Government really achieved in respect of securing fair terms for international trade? We share the frustration of the Trade Justice Movement that so little progress has been made.

Unlike the Secretary of State for Trade and Industry, who wrote in The Guardian this week that she "fundamentally agrees" with the Trade Justice Movement, I can honestly say that although we share many of the movement's demands, we do not share them all. However, we congratulate it on bringing these issues into the public arena and giving us the chance to debate them openly. I shall be holding a trade justice surgery in my constituency on Friday, and I urge Members to take the opportunity, as I know that many are doing, to meet campaigners.

The case for fair rules of international trade is overwhelming. The United Nations estimates that if trade rules worked for poor countries, they could reap benefits of up to $700 billion a year—14 times the amount that developing countries receive each year in aid, and 30 times the amount that they pay in debt repayments.

One of the best parting shots of the outgoing Secretary of State for International Development was made in her withering analysis of the failure of successive trade talks to make any meaningful progress. In her speech on the dangers to Doha at Chatham house on 25 March, she said that
"failure in the Doha Round of the World Trade talks mean a tragic missed opportunity to tackle the distortions and unfairness in trade rules that disadvantage the poorest producers and the poorest countries."
She also said that
"we missed 2 key development milestones":
on trade-related aspects of intellectual property rights and public health, and on special and differential treatment for developing countries. She described how the discussions in Geneva are stalling, destroying trust between World Trade Organisation members and dissipating their willingness to negotiate.

Yet we are only three months away from the next round of the trade talks, in Cancun this September, with very little progress to show for all the efforts made. The post-11 September spirit of contrite concern for the world's poor, which led to Doha being called a "development round", seems to have given way to vested interest, the old complacencies and the status quo.

Does my hon. Friend agree that it is doubly disappointing, because since the last Doha round and within Europe, a step has been taken in the wrong direction? The reality is that there are now fewer prospects than ever for the European Union properly to open up its markets to the producers of the third world.

My hon. Friend is absolutely right, and I shall mention in a few moments the disappointing results of the most recent common agricultural policy negotiations.

Where is the will to change? We hear plenty of rhetoric about "healing the scars of Africa", but we see little improvement. The poorest countries' share of world trade has dropped by almost half since 1981 and is now just 0.4 per cent. There is an air of business as usual about the place. Last Friday's conclusion to the discussion on reforming the CAP was utterly depressing. Despite all the rhetoric about Britain playing a lead role in Europe, the Prime Minister appears to have capitulated before France and Germany to a deal that leaves the CAP substantially unreformed and the level of subsidies uncut until 2013—only two years before the deadline for meeting the millennium development goals. They were targets that we set ourselves to lift people out of poverty, ill health and missed opportunity, and to ensure that no one is left behind. At the European summit last weekend, the Prime Minister returned without, apparently, having raised the issue of the CAP with the French President and with no mention of the importance of CAP reform in the Council's conclusions.

Agriculture is of key importance because three quarters of the world's poor live in rural areas. Agricultural produce is virtually their only source of cash, and developing countries are particularly vulnerable because production tends to be focused on a small number of cash crops. Yet the rich nations of the world regularly destroy opportunities in growth markets by dumping surplus agricultural production with subsidies from taxpayers' money. One of the starkest examples is in India, which, as the world's largest producer of milk, is unable to compete in the growth market of the middle east because of the subsidised exports from, among other places, Europe. It is a shameful comparison that every cow in the European Union is subsidised by $2 a day, while 3 billion of the world's poor live on less than that amount.

Export subsidies are the most iniquitous feature of the CAP and even France is willing to acknowledge their damaging effects, but where is the will to remove them? The CAP does not now even serve our own farmers well. They suffer from exactly the same problem as developing farmers—seeing the middlemen take more and more of the profit on what they produce for diminishing returns at the farm gate.

Would the hon. Lady be willing to overcome the roadblock by removing the right of nations to declare it an absolute strategic interest to keep the common agricultural policy? She will be aware that there is a qualified majority in favour of going much further than France is willing to go, but France is declaring the CAP to be a vital national interest. Would the hon. Lady be willing to give that up?

The hon. Gentleman's intervention reminds me of a similar one last year. The point about using the veto in favour of national interest is that it is so frequently abused, and it is the abuse of national interest that presents the real problem.

Farmers in this country suffer from exactly the same problem as developing farmers in seeing middlemen taking more of their profit. I would go so far as to urge British farmers to join the fair trade campaign and demonstrate real solidarity with the world's poor farmers. Like the Columbian coffee farmer, the East Anglian sugar beet producer would then make common cause to balance the power of the big food retailers and supermarkets. Consumers could buy products marked with the fair trade symbol knowing that, at home or abroad, more of the profit will go to the farmer.

Does the hon. Lady agree that not just fair trade but co-operative fair trade makes an enormous difference for farmers? On my recent visit to Ethiopia, I visited a coffee co-operative where the vast majority of the profit made along the entire chain went back to the individual farmers, who received probably four times more than they would get if they just sold their produce to the market. Is that an acceptable approach?

The hon. Gentleman makes a good point. The co-operative principle, whether abroad or in this country, has been very successful in helping farmers to secure more of the value added to their product and ensuring that their farm gate returns rise. It is certainly a principle that we support.

My hon. Friend referred to milk and India earlier. Is not it a great shame that this country—for whatever reason, but mainly due to pressure from the European Union—abolished one of the most successful co-operatives of all time, the milk marketing board? Can my hon. Friend assure me that those matters, which have stood British farmers in good stead, will be considered by the Opposition, if not by the Government?

My hon. Friend makes an important point about a complex and highly competitive international market for dairy produce. It is important to reiterate that we have called for a review of the way in which the present rules governing the dairy industry in this country operate, in view of the intense competition from other large producers, such as New Zealand—the lowest cost producer—and Denmark, to ensure that our farmers are able to compete on fair terms with them.

The European Union is not the only offender. The US Farm Bill, which recently granted an extra $100 billion in farm subsidies, distorts world trade in the same way. On a recent visit to Malawi, I learned that 300,000 Malawian farmers had been persuaded by American companies to grow premium grade tobacco. Once the crop was established, the price was driven down to $1.6 a kilo, compared with the subsidised price received by US domestic farmers of more than $6 a kilo. US farmers produced more, the world price fell, and now the Malawians are out of business.

Cotton subsidies are another example. The price of cotton is at an all-time low and cotton farmers in developing countries are suffering most from the plummeting prices. In the US last year, for example, some 25,000 cotton producers received almost $4 billion in subsidies. That is three times more than the US gave in aid to Africa. Oxfam estimates that Africa is losing $300 million a year as a result of cotton subsidies, and that prices would rise by a quarter if the unfair subsidies were eliminated.

Members of the Trade Justice Movement are not against a rules-based system of international trade, but they want it to be fair—and so do I. They are sceptical about the way in which the World Trade Organisation works, because it appears to favour the rich and powerful nations. Rich countries, especially the US, Japan and Canada, and the European Union, have well-funded teams of specialist negotiators, while half of the poorest countries cannot afford them. For that reason, my right hon. Friend the shadow Chancellor has announced that we would help to create an advocacy fund for developing countries to use to provide themselves with high quality legal and economic advice on trade issues. Let us face it, we are not short of lawyers.

Can the hon. Lady enlighten us on how big the budget for that fund would be? Would it be greater than the £60 million that was cut from the aid budget in 1995, which was five times more than the annual income of Oxfam for that year?

I construe from that intervention that the hon. Gentleman does not think that it is a good idea to provide developing countries with equal representation and that he does not believe that rich nations have a shared responsibility to create a level playing field.

I applaud my hon. Friend's speech and the policy announcement of the advocacy fund, which has been hugely welcomed—not least because it would give developing countries the choice when it came to accessing the appropriate advice to be on terms at the WTO. The Chancellor and other Ministers seek to ensure that they have continued all-party support for many of their international initiatives, so does she agree that it is disappointing that when we seek such support for our policy, the Government remain significantly silent? That shows that they do not care about equal-terms advocacy.

I thank my hon. Friend for that intervention. As he will know, there is usually a remarkably high level of consensus on the subject of international development. My right hon. and learned Friend the shadow Chancellor has welcomed the increased spending on international development that the Government have announced. Therefore, I too find it disappointing that the practical suggestion set out by my hon. Friend has not been taken up so far. Perhaps the Minister will have an opportunity this afternoon to correct that—or perhaps the Government have something else in mind.

Although the WTO is a relatively new organisation, it must be seen to operate fairly if it is win the trust and confidence of those countries that feel poorly served by it at present. I was rather intrigued by something that the Secretary of State for Trade and Industry said in her article in the The Guardian this week. She said that the Government would create new institutions to deal with unfair trade. Perhaps the Minister will tell the House what she has in mind.

I thank the hon. Lady for giving way. I welcome the motion before the House, and the spirit in which she is speaking to it. She mentioned trade liberalisation, and the failure to increase the amount of trade in which developing countries can take part. Although supporters of the Trade Justice Movement would accept much of what she has said so far, they also believe that developing countries should have the ability to grow their own economies to the point where they are strong enough to take part in the WTO. What ideas does she have for allowing that to happen and ensuring that trade liberalisation does not mean simply that large multinational companies exploit developing countries?

I thank the hon. Gentleman for that intervention, but he may not understand the important fact that trade liberalisation has brought benefits to developing countries. I shall be discussing later whether or not, on balance, trade liberalisation has been good for developing countries.

That is an important question. In last week's edition of The Big Issue, an overwhelming case was made for the benefits of trade liberalisation. The magazine set out what globalisation can do to improve the prospects of a developing country by reducing poverty and boosting its economy.

As the UN's development programme has observed, global poverty has declined more in the past 50 years than in the previous 500. In those five decades, there has been substantial trade liberalisation. Indeed, the number of absolute poor—people who live on less than $1 a day—has fallen by 200 million in the past two decades, even though the world's population has grown by 1.5 billion.

Globalisation is a buzz word that anti-capitalist protestors have seized on. They have attacked it as the source of the world's ills, but globalisation—which is capitalism, if Labour Members can screw up their courage to use the word—is what the Government now believe in. The right hon. Member for Birmingham, Ladywood (Clare Short) has said that
"multilateral trade liberalisation is an indispensable part of development."
It is a key driver of economic growth, but—and this may be of interest to the hon. Member for Ceredigion (Mr. Thomas)—it needs to go hand in hand with good governance and effective institutions that channel its power for good.

The world is an unequal place. Resources are not distributed evenly, but it is what Governments do with what they have that makes all the difference. With certain exceptions such as Burma and North Korea, the open-market policies of the Asian continent have brought huge progress. Several African countries with a pro-market approach, such as Botswana, Uganda and Mauritius, have achieved economic growth, but others remain mired in the deepest misery. They suffer from conflict, corruption, sickness and—all too often—from hugely burdensome bureaucracies that hold them back.

I am grateful to my hon. Friend for giving way, and I am certainly enjoying her excellent speech. Does she agree that in the past 20 years it has been shown that good governance, the rule of law and a market-based economy are the key ingredients to a developing nation becoming prosperous and providing for its people? Does she consider that that ought to be more of a focus for Government policy than is currently the case?

I thank my hon. Friend for that intervention. He knows the subject well, having preceded me effectively in this post. He is right. India, because it is so populous, is probably the largest of many examples of a nation that realised that it was losing its competitive position and that trade liberalisation would unleash real opportunity. That is one of the best examples with which to encourage other developing nations to take the same steps.

The International Development Act 2002 focused on poverty reduction, which we support. During the scrutiny of that measure, my hon. Friend the Member for South-West Devon (Mr. Streeter), who spoke for the Opposition, pointed out that we must not lose sight of the importance of fostering good governance—something that was reflected in the words of the right hon. Member for Birmingham, Ladywood. Good governance and effective institutions are essential to help to ensure trade liberalisation. Together, they bring real development and progress in those countries.

The point that my hon. Friend made, backing up our hon. Friend the Member for South-West Devon (Mr. Streeter), is right and I agree with everything that she has been saying. In essence, the aims of the Trade Justice Movement are pretty good and, in some ways, we can support them. However, when one visits a country such as Angola, as I did last month, and discovers that the president is pocketing $1 billion of oil revenue every year, while our aid programme is but £12 million a year, it puts everything into perspective. Does my hon. Friend agree?

My hon. Friend touches on an important point. Politicians, whatever our persuasion, represent our electorate and make choices on their behalf. We try to provide leadership on policy, but the bad news stories, such as the one that my hon. Friend highlighted, create much public scepticism about the effective use of taxpayers' money. That is why it is so important to encourage and foster good governance and to stamp out corruption. We can then be confident that our taxpayers' money is being used to maximum effect to help the poorest countries in the world.

I do not want to stand in this place next year bemoaning the lack of progress on international trade reform. As the Prime Minister said, the biggest thing happening in the next six months is world trade: Cancun represents a milepost, yet nothing prevents progress on CAP reform but the selfishness of those who do not want change. Meanwhile, coffee farmers in Ethiopia are dying in their huts and throughout the world people's livelihoods are being ruined.

In his 2001 conference speech, the Prime Minister said that we must practise the free trade that we are so fond of preaching. In this country, we are so tired of his rhetoric that no one believes him any more. People in other countries see little benefit from that rhetoric in their livelihoods. I urge the Government and all hon. Members to seize the opportunity to bring about a fair deal in world trade for our fellow citizens throughout the world.

4.38 pm

I beg to move, To leave out from "House" to the end of the Question, and to add instead thereof:

"congratulates the Trade Justice Movement on bringing the plight of the poorest people in the world to the attention of the public; notes with concern the fact that a billion people live on less than a dollar a day, that life expectancy in many African countries is declining, and that 30 million people in Africa have HIV/AIDS; reaffirms the commitment made in the 2000 White Paper "Eliminating World Poverty: A Challenge for the 21st Century" to improving international trade rules so that they work for all countries, and especially the poorest, in helping to reduce poverty; notes that the successful pursuit of trade reform through the Doha round of multilateral negotiations could contribute substantially to the Millennium Development Goals; welcomes the substantial efforts the Government is making to promote trade liberalisation, reform agricultural subsidies and phase out European trade barriers; believes that significant progress must be made to improve access for developing countries to developed country markets; further believes that a solution to the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS) and public health negotiations is urgently needed; and welcomes the commitment to ensuring that the Doha round produces real benefits for the poor."
First, I welcome the debate and the Opposition's choice of subject, not least because it gives the House the chance to discuss development and trade in the week of the Trade Justice Movement's lobby of Members of Parliament. Secondly, I offer a warm welcome to the Treasury Bench and to the Department for International Development to the Under-Secretary of State for International Development, my hon. Friend the Member for Harrow, West (Mr. Thomas), who will reply to the debate. I am sure that I speak for the whole House in wishing him well in his post. My right hon. Friend the Secretary of State for International Development and I already enjoy working with him.

I was remiss in not welcoming the Under-Secretary to his new post. I am grateful to the Minister for giving me this opportunity to make it clear that I should have done so.

While we are in this mood of generosity, may I say that I also welcome a great deal of what the hon. Lady said in her speech? She put with clarity and force the case for fairer trade as a means of helping to encourage development. I say "a great deal" not because I am churlish, but because her argument was at its least convincing when she tried to suggest that the Government are not trying hard enough similarly to make the case that she has put to the House this afternoon. That is not true, and I suspect that she knows that it is not true, not least because my right hon. Friend the Secretary of State for Trade and Industry, who is leading the WTO negotiations, is passionate about the issue and committed to making this a round for development. However, the hon. Lady is absolutely right to ask—this is the question for the House to consider this afternoon—whether, overall, the world is doing enough to deliver a fairer trading system. We are all concerned about whether we will make progress.

The background to the debate—the reason why it matters—is the daily reality of life for the 1.2 billion of our fellow human beings who live in abject poverty and lack the basic necessities that all hon. Members take for granted: clean water to drink, the chance to go to school and someone to heal them when they fall ill. Those people only wish for themselves and their families the things that hon. Members wish for the people whom we represent: the chance to live to a reasonable age, to be part of a community, to raise a family and to earn a living.

I wonder whether the Minister would care to tell the House just how unhelpful he thinks the common agricultural policy is?

If the hon. Gentleman will bear with me a moment, I intend to come to that very point, because it is a very important part of the challenge that we face if we are to deliver progress for those 1.2 billion people.

As always in international development debates, it will be common cause across the House that global poverty amid so much plenty in the world is the single greatest challenge that we face. It is morally wrong. It is unjust. It feeds bitterness, division and conflict. All those are reasons why the world community, including the Government and the Opposition parties, are so committed to making poverty reduction one of the main millennium development goals. As the hon. Lady rightly said, they are the goals against which those 1.2 billion people will judge our commitment to making a difference to their lives. That is the issue.

International trade is one of the most important means that we have to try to eliminate global poverty because it is about providing countries with increased opportunities to trade, to provide employment for their citizens and to allow poor people to improve their lives. More exports produce higher economic growth, greater encouragement of domestic reform and, therefore, faster poverty reduction. It is estimated that the increased income for developing countries from a 50 per cent. cut in protection, by developed and developing countries, would be about $150 billion a year—in other words, three times the value of all the aid that rich countries give to the poorer countries of the world.

If the House is weighing in its mind the balance of benefit, making progress on world trade can do more than we in the rich world are seeking to do in the aid that we give. The hon. Lady referred to the World Bank's estimates of the impact that eliminating all barriers to trade in goods would generate. Indeed, the figures that she quoted would have the potential to lift 300 million people out of poverty by 2015.

Mrs. Cheryl Gillan
(Chesham and Amersham)