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Higher Education

Volume 470: debated on Tuesday 8 January 2008

We now come to the debate on higher education and adult learners. I have to announce that Mr. Speaker has selected the amendment in the name of the Prime Minister. I remind the House that there will be a 10-minute limit on Back-Bench contributions to the debate.

I beg to move,

That this House is concerned that the Government’s decision to withdraw funding from institutions for equivalent or lower qualification students will have a disproportionate impact on the part-time sector in general and on specific institutions such as Birkbeck and the Open University; and urges the Government to consider ways in which it can minimise the damage this measure will do to lifelong learning and the delivery of the Leitch agenda objectives.

Although that is the motion, it is really early-day motion 317, which is a cross-party motion tabled by the two Members who represent Milton Keynes, where the Open university is situated—my hon. Friend the Member for North-East Milton Keynes (Mr. Lancaster) and the hon. Member for Milton Keynes, South-West (Dr. Starkey). That early-day motion has collected more signatures than any other motion before the House. The official Opposition are simply a modest vehicle to ensure that the House has an opportunity to debate and vote on that excellent motion. The Prime Minister has claimed that he believes in radical constitutional reform, but I doubt that even he envisaged anything as radical as a non-partisan Opposition day debate on a cross-party motion. Let us see how we get on.

First, let me help the Secretary of State with a little problem that I think he has recognised. It seems that his amendment to our motion is seriously defective and is not an accurate account of the Government’s policy. I hope that he will correct the record, either now or during his speech, and amend his amendment so that it gives a more accurate account of his Government’s policy. If we cannot rely on the Government to table an amendment that is an accurate account of their policy, we should not be surprised that they got into such a muddle.

Has my hon. Friend noticed that the second objective of the Secretary of State’s new Department is to:

“Improve the skills of the population throughout their working lives”?

Without prejudice to my hon. Friend’s speech, does he not think that it would have been helpful if, instead of bringing forward these measures, the Secretary of State had deferred consideration until after the comprehensive review of student support in 2009, which is only next year, and had then consulted on its conclusions?

I totally agree with that excellent intervention, which was based on the excellent early-day motion. There has been such support for that early-day motion because of the enormous respect on both sides of the House for the work done by the Open university, Birkbeck college and other institutions across the country in providing educational opportunities to mature part-time students, and especially to women, giving people a second chance in life regardless of what they have studied in the past.

Does my hon. Friend not think it odd that, at a time when the Government are increasingly saying that the faith communities are important, the new regulations will impinge on the training of priests, imams and rabbis? In the Church of England alone they will add at least £500,000 to the cost of training priests.

My hon. Friend is right. Many people who share his concern about education will have received a host of representations from a variety of professions that often recruit and train people who have already done a degree in a different subject. I think that some 75 per cent. of ordinands in the Church of England study theology after they have studied a separate degree. Those are exactly the groups that will be affected by the proposal.

Harold Wilson famously believed that the Open university was one of his greatest achievements. Some on this side of the House might say that it was one of his few achievements. Nevertheless, it was a Labour creation. That might be one reason that we welcome so many Labour Members to the debate. The Prime Minister is proud of having taught at the Open university. We ask all hon. Members, especially Labour Members, to be true to the principles of their party and its historic achievements, and to be true to themselves by voting for a motion that many of them have already signed up to.

Of course, although the debate will focus on the Open university and Birkbeck college, the decision has a much wider application. The Government are proposing that students who already have a degree qualification should not receive any support if they return to university. We are talking not about grants or loans, as the regime governing them is already much tougher for returning students, but about the removal of Higher Education Funding Council teaching support for any university that takes on returning students. For the first time, home students on approved courses at English universities will not get even a contribution towards teaching costs. They will be treated as though they were from China.

That is an unprecedented shift in the pattern of higher education financing. I believe that such a decision should have been taken only after a serious review of its implications, and that it should have been considered alongside all the other issues connected with the future of university fees that legislation already requires us to look at in 2009.

The hon. Gentleman mentioned the 2009 settlement, but the proposal under discussion is part of the existing settlement. Will he share with the House how he would substitute for the £100 million that the proposal will produce, given that his party’s record on higher education funding before 1997 was so abysmal?

My argument is very simple. It is that the Government’s decision should be sent for review, and perhaps considered as part of the 2009 review of fees. The HEFC budget amounts to £7.5 billion, and the Government have no reason to impose a cut worth only £100 million.

We are talking about an HEFC budget of £7.5 billion. For reasons that have left most people baffled and confused, the Government have decided to take £100 million away from mature students who already have a degree qualification and to use that money for some other, unspecified, purpose. We believe that that decision should be reviewed.

The purpose is not unspecified, as the money will be used to help those mature students who do not have a recognised qualification.

The Government’s decision was announced last September. The relevant brief from the HEFC—the Government’s own quango—was last updated on 11 December. It takes the form of questions and answers, and one question was how the Department for Innovation, Universities and Skills intended to use the money saved from withdrawing funding for ELQs—that is, students with equivalent or lower qualifications. The response was:

“The Secretary of State has confirmed that any savings made from withdrawing funding for ELQs will be available for HEFC to redistribute according to agreed priorities yet to be decided.”

That was two and a half months after the reduction was announced, and yet the “agreed priorities” were “yet to be decided”. It seems to me that the decision was taken in haste, and that we are in danger of having to repent at leisure.

The Government argue that people with a degree who return to study must be hit so that new students can be helped. Of course, the Opposition want more new students to participate in higher education, but the Government’s argument rests on a false dichotomy. The Government often cite the Leitch report but, as has been noted already, that deals with lifelong learning, which is about both reskilling and upskilling. To say that we must penalise people who are reskilling to make available money for new students who are upskilling is to fail completely to understand what the Leitch agenda of lifelong learning is all about.

Labour Members may not want to take my word on that, so perhaps I should quote what the Prime Minister said in a speech on this subject in May 2006. Talking about his approach to lifelong education, he said that it should be “recurrent”, “permanent” and on offer to anyone at any time. We are simply trying to hold the Government to account over a statement that the Prime Minister made about his approach to the matter. He made a commitment that all adults

“should have access to training and vocational opportunities throughout their working lives.”

We believe that that commitment clearly matters to the Prime Minister. It matters to the many Labour Members who have signed the early-day motion, and it is a commitment that the House should reflect in the vote to be taken later tonight.

However, instead of that vision of lifelong learning, we now have what has been called the “measles” theory of education—get it once, get it early and try never to have it again. That is not the right approach, and it is a real barrier to people trying to change jobs, shift careers and move forward. I shall give the House some examples of those who will lose as a result of the Government’s approach.

Among the losers would be a person who had studied medicine at university and would now like to study cognitive therapy. I saw that the Secretary of State for Health was here briefly a little earlier. He has launched an initiative to try to ensure that there is more access to cognitive therapy on the NHS. However, people who already have a medical degree and who wish to study cognitive therapy and deliver the Government’s objectives will be penalised by the policy under discussion this evening.

In addition, a person who wants to do a post-graduate certificate in education will get funding, but someone who wants to get a qualification to teach in the FE sector will not, even though the Government are supposed to value the FE sector and to want to see it expanded. Moreover, a person with an engineering degree who wants to use his expertise in business and to study for an MBA will not be funded, even though we are supposed to want to encourage innovation and enterprise in this country.

Another loser would be a woman with a degree in French who may have taken time out of the labour market to raise children. If she now wanted to do a higher education IT course—it does not even have to be at a university—she would not get any support from the HEFC. Let us be clear: some of the biggest losers as a result of the Government’s policy will be women who want to return to the labour market after a long period away.

Does my hon. Friend agree that the policy is a false economy? The people who would benefit from being able to acquire another qualification of degree equivalent or lower would be an asset to this country, as they would be able to get another job that paid more money. That would mean that they would pay more in tax, but the Government appear to be turning their backs on such people.

My hon. Friend is right. We are talking about the importance of spreading opportunity in this country—something that I thought all hon. Members would support. I am sure that hon. Members of all parties will have seen the many representations that we have received, but I shall quote the submission on women returners from the university of London union, a body of which I believe the Minister for Lifelong Learning, Further and Higher Education was at one time general manager. The union said today:

“There is a real danger that the proposed cuts would particularly disadvantage those who have taken a career break to care for children or elderly relatives”.

I am sure that Labour Members are hearing the same warning, and it is something that the Government desperately need to address.

I am fascinated by the even-handed approach that the hon. Gentleman is adopting, but will he clarify Conservative policy on these matters? Under his party’s proposals, would anyone—anyone—with a level 4 qualification be entitled to ELQ training?

We believe that the current regime should be retained, pending a review of the Government’s proposal. We should be happy for such a review to be held, and indeed the relevant legislation on higher education finances makes it clear that the fee regime should be reviewed in 2009. I believe that the Select Committee on Innovation, Universities and Skills, which the hon. Gentleman chairs, is considering the matter, and I look forward to its report.

The Government announced their decision on this matter with no consultation. That caused much shock and unhappiness in the HE sector, so suspending the decision and retaining the current regime would allow an appropriate consultation process—including a review exercise by the Select Committee—to take place. That would be the common-sense approach, and it is what the early-day motion that has been signed by 86 Labour Members calls for.

The Select Committee of which I am a member is indeed holding a quick inquiry into this subject. I just ask the hon. Gentleman why he was not prepared to wait until the Select Committee report was published. Furthermore, will he encourage some Conservative members to attend the Committee? We have seen very few of them so far.

My hon. Friends are so assiduous in so many functions around the House that if by chance they are unable to attend that Committee, I am sure it is because they are hard at work in another Committee somewhere else in the House.

I hope that we will have a further debate in this Chamber when the Select Committee has produced its report. That will be excellent, and I very much look forward to it. It would be sensible, when we have that type of inquiry under way, not to take any decision until after the consultation. It would be absurd for the Government to announce a decision with no consultation and then, sadly, for the consultation to happen afterwards.

I am grateful to the hon. Gentleman for his usual generosity. Is his priority for state support for higher education first-time students or second-time students?

This is the false dilemma that has got the Government into such a muddle. Large numbers of British citizens historically had a right to go to university and study on approved courses, without any grants or loans but at least with HEFC support for their teaching costs. The decision that, for the first time in the history of British higher education, a group of people should not receive finance even for their teaching costs because they have a first degree is a significant one. I personally think that many such people are deserving. Many of them are women wishing to return to work. Many of them are trying to enhance their skills or change their career. It is wrong to say that the only way in which we can help a new student is by penalising a group who have benefited not only themselves but, as my hon. Friend the Member for Ribble Valley (Mr. Evans) said, the wider society and economy by returning to university.

The Government say, “Don’t worry. It’s all going to be fine because many returners will be financed by their employer.” But often one of the main reasons that people study is that they wish to change their career and their employer. In fact, one of the things that Birkbeck, the Open university and other institutions say is that sometimes they have students who do not wish their employer to know that they are studying because it is a prelude to changing the direction of their career. So the idea that someone can go to their employer and say, “I have decided that I want to leave my current employment and do something totally different. By the way, the Government have just slapped an extra charge on me. Would you mind contributing to my studies?” is fanciful. It is not just us who are saying this; we are simply speaking on behalf of the experts and institutions affected across the country.

On this occasion, the point has been made clearly by the director general of the Confederation of British Industry. He said:

“No doubt there will be real interest in the possibilities of cofunding now being developed by the Government. … But they are not going to step up to the plate just because the public purse is too constrained and because students can’t afford to pay more either.”

He went on to describe the Government’s policy as

“Something of a leap in the dark”.

So employers are not saying that they will be willing to finance courses, because the people who want to do a second degree are often people who are trying to change the direction of their life. Many of them come specifically to London because they want to embark on a new career. It is why so many of the institutions that will be most severely affected are in London and why it is a great pleasure to see my hon. Friend the Member for Henley (Mr. Johnson) here in the Chamber. I suspect that this may be something that he wishes to touch on if he succeeds in catching your eye, Mr. Deputy Speaker.

So the policy affects London; it affects women returning to work; but above all it affects part-time students. In fact, 20 per cent. of part-time students will be hit by the Government’s proposal as against perhaps 2 per cent. of full-time students. This proposal thus has a 10 times greater effect on part-time students.

Again, in trying to continue in the spirit of cross-party openness on this issue, we have to recognise on both sides of the House that we have given part-time students a raw deal. We have not cracked the challenge of how we improve the deal, given the amount of money involved, but we all know that part-time students have a raw deal compared with full-time students. That seems to be a shared analysis.

The policy affects London and it affects England, but it is yet another instance of a policy that does not affect Scotland. Yet we will doubtless see the Government dragoon Scottish Labour Members of Parliament through the Lobby in support of a policy that is simply bad news for England.

My hon. Friend raises another important aspect of this tangled debate. I am trying to keep it simple. It seems to me very simple indeed. There is an excellent early-day motion; it has been signed by more Members than any other. It is a cross-party motion brought before the House by two hon. Members in opposite parties. It has been signed by hon. Members from all parties. We would simply like the House to vote for it tonight. That seems to be the right approach. I hope that, as we consider that vote, in the remaining hours of debate we will hear more about some of the groups who will be affected.

I have mentioned the Church. I have received a letter from Relate. Many marriage guidance counsellors trained for marriage guidance having previously obtained a degree. Relate estimates that 70 per cent. of the people it trains have a previous degree and that withdrawal of funding would reduce the institute’s funding by a quarter. Did the Secretary of State for Innovation, Universities and Skills realise that he was doing that to the finances of Relate when he launched his policy without consultation? I very much doubt it. Did he know what he was going to do to pharmacists? Has he seen the letter from the Council of University Heads of Pharmacy, which says that universities train as pharmacists people who have a previous university degree and that his proposal would have a major impact on students studying for the Master of Pharmacy degree and seriously undermine the School of Pharmacy and other schools of pharmacy across the country? Was the Secretary of State aware of that when he took this decision? What were the Government up to?

I hope that tonight we will get a significant change of position from the Government, but I hope that the concessions they announce will be properly considered—better considered than the policy. The Secretary of State may come to the Chamber now and announce more exemptions, but I do not like the game of exempting some subjects but not others and making invidious decisions that some courses are desirable and others are not. This is a fundamental change in the way in which higher education is financed in this country and it should be reviewed as a whole.

The Secretary of State may offer support for particular institutions. He will know of course of the powerful feeling on both sides of the House about the Open university and Birkbeck, but some cobbled together package to help with the transitional costs of one or two institutions would fail to rise to the nature of the problem that he has created. Perhaps I can quote from a letter to The Guardian from the president of the National Union of Students and 27 others on 21 November. It states:

“The Funding Council’s consultation is restricted to implementation, but broadening exemptions won’t solve the problems. With no public consultation on the principle, no evidence base on the outcome and a real danger of damage to the lifelong-learning agenda, the sensible way forward is for Ministers to defer implementation in 2008 and refer this policy to the 2009 Fees Commission for the proper scrutiny which it deserves.”

That view, which is the view of many people in the world of higher education, seems right. It is what the Government should do. That is what we are calling for, and I believe that that review should tackle the fundamental issue that many of us on both sides of the House care about.

We do not want to live in a country where, if at first you don’t succeed, you don’t succeed. We want people to have a second chance. We want people to have new opportunities. We do not want to live in a country where people endlessly ask, “Where did you come from? What did you study?” We want to live in a country where what matters is what one can do in the future, not where someone came from. We do not want to say, “Well, sorry, you did a geography degree 20 years ago. We can’t help you.” That is not the kind of higher education system that we want. I do not believe that it is the kind of higher education system that Labour Members want. I therefore call on hon. Members on both sides to support our motion tonight.

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

‘supports the Government’s decision to reprioritise some funding currently supporting the teaching of higher education students who already hold an equivalent or higher qualification, in order to enable approximately 20,000 additional full-time equivalent students to enter higher education for the first time; notes the Higher Education Funding Council for England (HEFCE) consultation which proposes that transitional protection will be put into place to ensure that no provider loses in cash terms, that the change to the funding methodology will protect Foundation Degrees, employer co-financed programmes, and strategic subjects, and that the premium paid to support the costs of part-time provision will be increased; notes that HEFCE and Ministers have been engaging constructively with the Open University and Birkbeck on this issue; and believes that the Government is right to give priority to first-time students.’.

Before I begin my response, I should like, with permission, to point out to the House an error in the Government’s amendment on the Order Paper—a matter on which I wrote to Mr. Speaker earlier today and indeed to the hon. Member for Havant (Mr. Willetts). The phrase “equivalent or lower qualification” should of course be “equivalent or higher qualification”. Therefore, the amendment that the Government are moving is in the revised form. I apologise to the House for any confusion caused.

I welcome the debate. It is a subject that has generated a great deal of heat, if not a great deal of light in recent weeks. Tonight, the hon. Gentleman has done his best to add to the heat, without having added any useful light. The House will have noticed that although he tried to give the impression that he opposes the principle of what the Government are proposing, he failed to oppose it. There is a degree of opportunism behind that, which is unfortunate.

The reality is that the principle behind the proposal was announced in September. Since then, the Higher Education Funding Council for England has carried out a consultation, which was completed on, I think, 7 December. Ministers expect to receive advice from HEFCE on the proposals in the near future. I cannot anticipate the results of that, but clearly there has been a consultation. Those with an interest, and the universities, institutions and courses mentioned in tonight’s debate, have had the opportunity to respond to that consultation.

I notice that the Secretary of State starts the story in September. May I ask him to start a little earlier than that? Will he explain to the House what options were before him and Professor Eastwood, and why the option that we are discussing was put on the table, especially given the entire lack of consultation with institutions before that point?

I think that I will deal with those points in the course of my speech. I want to set out the reasons behind the Government’s proposals, and the practical considerations that we need to take into account. I understand that genuine concerns on the subject have been raised by right hon. and hon. Members of my own party. I believe that my hon. Friends’ concerns are misplaced, but I recognise that they reflect the Labour party’s historical commitment to universities, including the Open university and Birkbeck, and its broader commitment to lifelong learning. I share those values. As I recently told Open university staff,

“Over the last 36 years, the Open University has been a key driver of change in…higher education”.

The OU

“has allowed over 2 million people to graduate, most of whom would never otherwise have had a higher education.”

That is not a bad record for a Labour idea described by the one-time Tory Chancellor of the Exchequer, Iain Macleod, as “blithering nonsense”.

I am glad to hear that the Secretary of State shares the values that he mentioned, but why does he not share my concerns, those of my hon. Friend the Member for Salisbury (Robert Key), and those set out in a letter to me from the Bishop of Hereford today, which concern the fact that all faith communities will be affected by the withdrawal of equivalent or lower qualification funding, including imams and rabbis, and clergymen from all the Christian churches of this nation? Is that what he calls upskilling, and is it, in his view, helpful to community cohesion?

Clearly, a number of issues about particular courses that may be affected were rightly raised in the consultation. I will not anticipate the result of the consultation, because we have not yet received the report from the HEFCE, but I acknowledge that a range of issues have been raised, some of them by the hon. Member for Havant, and we will need to consider those issues carefully.

Given the values that I share with my right hon. and hon. Friends, I would not be making the proposals if I were not confident of the future of the Open university, Birkbeck—an excellent institution—and the other higher education institutions that provide higher education to people who would otherwise miss out. We need to deal with two issues tonight. The first is the issue of principle. Are the Government right to reprioritise funding away from students who already hold an equivalent or higher level qualification, in order to support students who have never had the chance of higher education? The second is the issue of practice. Can the changes be implemented without causing wider ill-effects on individual institutions, the higher education system as a whole, and reasonable opportunities for learners?

Let us all be clear: there is no cut to overall higher education funding. Spending on higher education will remain at the record levels established by this Labour Government. By 2010-11 there will have been an increase in Government spending of over 30 per cent. in real terms since 1997-98, and there will be 2 per cent. real growth per annum over the next three years. Of course, in sharp contrast, between 1989 and 1997, when the hon. Member for Salisbury (Robert Key) was a Minister, state funding per student fell by 36 per cent.

I accept what the Secretary of State is saying, as far as the global budget is concerned, but does he not appreciate that if he carries on with the proposals, there will be unintended consequences? I have received a letter from a constituent, Chris Holden, who wants to be ordained. He gained a degree from Lancaster university a few years ago. He recognises that if the funding disappears, there will be an enormous impact. Does the Secretary of State recognise that there will be unintended consequences if the Government carry on with the proposals?

One of the reasons for holding a consultation is to ensure that Ministers understand the consequences. That is why one consults. An initial idea is always put forward, so that we can find out the detailed reaction. I notice that the hon. Gentleman did not make the obvious point that I would make: today, the choices available to the House and to people who want to enter higher education are vastly greater than when the Conservatives were in power. The Opposition have still not acknowledged the damage that they did to higher education in their time in office.

The Government have asked the HEFCE to advise us on how to distribute £100 million of core teaching grant over three years. That money will not be lost to the system. It will be redirected to fund more university places for first-time learners, or learners progressing to a higher level of qualification. Up to 20,000 full-time equivalent students—and so, in reality, far more students, some of them studying part time—will have the chance to start a first degree or higher level course in the first three years. That sets the right priority for individual opportunity, and for the country.

We have to develop the skills of our people to the fullest possible extent, carry out world-class research and scholarship, and apply knowledge and skills to create an innovative and competitive economy. As the noble Lord Leitch made clear, to be in the premier league for skills, our country will need 40 per cent. of working-age adults to have a level 4 qualification by 2020. Today, 20 million working-age adults do not have a degree-level qualification. An extra 5 million people will need to go through university by 2020 if we are to be even on the edge of the premier league for world-class skills. Lord Leitch not only set out the challenge, but was clear about the priorities for funding: the higher the qualification, the greater the level of individual or employer contribution. He argued that that was fair, given the benefits for individuals and employers who gain higher-level skills. Those principles are being applied across the adult education system.

We took the difficult decision to introduce variable fees. When we face a choice, as we do today, both economic success and economic justice argue that public money should go first to those who have never had the chance of higher education. The choice is between second chances for those who have already enjoyed substantial public funding for their degree, and first chances for those who never have.

I thank the Secretary of State for giving way to me a second time, but I am still confused about how the problem came about. He mentioned £100 million. Did he ask the HEFCE to find him £100 million, and if so, why is he now consulting on how to spend it, or did the HEFCE randomly decide to cut £100 million from its own budget?

The position on that is clear, and is on the public record. I wrote in early September, asking for the HEFCE’s advice on how to prioritise funding towards those who had not previously had the chance of higher education. That letter is in the public domain, so there should be no confusion about that.

Let me give some background. Over the next 10 years or so, the number of young people available to go to higher education will fall by about 100,000. There will need to be a massive expansion of higher education opportunities for adults who have already left school, and who never had the chance to go to university; perhaps they did not think it was for them. Most of them will study part time, rather than full time. It is those people whom the Government want to benefit from the change in priorities. I believe that they should be the first priority for a Labour Government. But of course I recognise that it is not as simple as that. There are people who have had higher education, perhaps 20 years ago—perhaps women who have taken time out to have a family. It is necessary to develop the work force that the country needs. The measures on which the HEFCE has consulted offer a balanced way forward.

For those who wish to have vocational retraining because their qualifications are out of date, foundation degrees are protected. They will continue to attract ELQ funding. For those wishing to study science, maths, engineering, modern languages, education, some medical disciplines and other strategically important subjects, ELQ funding is protected. For those wishing to top up their qualification, perhaps from a higher national diploma to an honours degree, ELQ funding is protected. For those whose employers will co-fund their courses, ELQ funding is protected. In other words, many opportunities will remain open to those seeking to obtain higher qualifications.

Not everyone is covered, but for many of those, the value of investing in their own higher education will be well worth the cost of a subsidised career development loan, just as many people at lower levels of skill who have never had the chance of higher education also pay towards the cost of their qualifications.

The Secretary of State has just issued a long list of exemptions, but he is as aware as I am that that represents just 4.6 per cent. of people currently studying at the Open university, which will potentially be affected by the proposal.

I believe—I shall return to this later—that the Open university is probably better placed than many other institutions because of its style of work, the ways in which it can reach people who want to study from home or study part time, and its ability to design new courses to appeal to people who do not study there at present. It is true that not every course at the Open university is protected by that list, and clearly, there could not be a reprioritisation of funding if every course was protected. None the less, I am considering first and foremost whether the higher education system will protect a range of opportunities for people who wish to retrain in the way suggested in the debate, and I believe that the proposals do so.

The detailed decisions on the measures that I have outlined must wait until we receive HEFCE’s report, but overall I believe that we have set out the right priorities.

My right hon. Friend rightly reminded the House of the emphasis that the Government have put on upskilling adults. The list of those who will be exempted is formidable and impressive, but will he ask the HEFCE to consider that there is an issue, particularly in our more fluid economy, in relation to self-employed people who may wish to take a further degree? They will not automatically be covered by the exemptions that he described.

I respect my hon. Friend’s knowledge on the matter and would be happy to discuss it after the debate. [Hon. Members: “Why not now?”] Without prolonging the exchange, I am not entirely clear about the point that my hon. Friend is making. Many of the routes that I have described as being protected would be available to those who are self-employed. The particular route of co-funded courses, for obvious reasons, may not be available, but that was not by any means the only route that I proposed.

My right hon. Friend mentioned that he was awaiting the outcome of the consultation. Many of us who want to be persuaded by the arguments would be happier to hear from both the HEFCE and the Select Committee. There is no rush. Could we not wait for the Select Committee to make its recommendations?

As a former Chairman of a Select Committee, I can hear myself making a similar argument if I were in my hon. Friend’s position. The Government believe that it is important to press ahead with the beginnings of the change. If that is to be done, we must take decisions on a timetable that enables higher education to plan for next September. We cannot put ourselves in the hands of the Select Committee inquiry, because that is likely to put us beyond any reasonable time scale. We are, of course, interested in discussing issues with the Chairman and other members of the Select Committee and other knowledgeable and interested parties, but I cannot commit myself to the time scale that my hon. Friend has asked for, as we must make progress.

I am grateful to the Secretary of State, who is being typically accommodating, if I may say so. If he cannot give such a commitment, can he at least say that he is prepared to consider putting on the exempted list theology and theology for ministry courses, which would have such a profound impact on all the religions in this country?

I do not want to be drawn into a topic-by-topic discussion of the list, because we have not yet received the report from the HEFCE. The point that the hon. Gentleman makes was made earlier. I acknowledged that there was an issue to be debated and I do not think that I should say more, because we genuinely have not taken decisions but we recognise the breadth of opinion.

Having set out the issue of principle, I turn to an equally important issue—practice. Can the change be made without the damage that some are claiming? It will undoubtedly mean change for every higher education institution. For some, including the Open university and Birkbeck, the change will be greater than for others, but the approach proposed by HEFCE is designed to ensure that institutions can respond, and that they are protected while they do so.

First, transitional protection will mean that no institution will lose money in cash terms against its 2007-08 baseline over the next three years. That protection would exist even if those institutions did not successfully attract a single additional student. Secondly, as I said, a range of courses are protected from the change. Less than a third of the ELQ budget will be reprioritised over the next three years. Thirdly, clear incentives are proposed to enable institutions to further protect existing funding and attract additional funding.

Courses that attract employer co-funding are protected and will continue to attract ELQ funding. Over the coming years we need to expand the number and range of employer co-funded provision. The Minister for Lifelong Learning, Further and Higher Education recently announced an additional £100 million of co-funded higher education courses over the next three years. Employer take-up of that money will obviously be greatest where higher education institutions offer the courses that employers want to those employees who need to retrain on a part-time basis, who need to be able to study flexibly and who need to be able to study from home. Not only can the Open university and Birkbeck bid for those funds, but the way that they operate and the education that they offer means that they are particularly well placed to develop the higher education that employees, employers and the wider economy need.

Fourthly, the HEFCE proposes to increase the targeted allocation for part-time students. The proposal is intended to maintain part-time courses that might otherwise be affected. Finally, there are some specific institutional issues. The Open university, for example, has piloted a number of schemes to widen participation through work with parents and grandparents, and it has done work on the provision of online materials. It provides opportunities for disabled students to access higher education. There are opportunities to review with the HEFCE how the funding model can better and more explicitly reward these valuable activities.

Cash protection, protection of a wide range of key courses, opportunities for increased employer co-funding, and improved support for part-time courses will together enable institutions to respond to a change that is being phased in over three years.

What response has my right hon. Friend had from employers to the opportunities that he is proposing for co-funding partnerships?

We currently have 15 highly successful pilot schemes of co-funded courses with funding from employers and funding through the HEFCE. That is the basis on which the much larger sum has been committed.

The hon. Member for Havant rightly referred to the enthusiasm of the director general of the CBI for the development of such co-funded courses. Unfortunately, the hon. Gentleman deliberately misquoted by running together two quotes from the director general of the CBI slightly out of context. The director general of the CBI said:

“No doubt there will be real interest in possibilities of co-funding now being developed by the Government. Business will welcome more incentives to develop courses of this kind.”

I am therefore confident that institutions will be able successfully to attract new funding from employers for a wider range of courses relevant to the labour market.

My right hon. Friend will be aware of the interest of the Minister for Science and Innovation in the university of Wolverhampton, which is headquartered in my constituency. I spoke to its vice-chancellor today. She told me that, even with the protections to which my right hon. Friend refers, it would lose, under the proposals, 6.5 per cent. of its grant—£2.4 million a year.

I am talking about the most accessible mainstream university in the country. Due to the deprivation of the local economy, trying to get co-funding from employers, as the university has been trying to do, is difficult. I urge my right hon. Friend to be careful of some of the consequences of a proposal the broad thrust of which I strongly support.

Obviously, I do not have the detailed information about the institution mentioned by my hon. Friend. However, I will make this additional point: institutions should not forget that the £100 million that is being reprioritised from ELQ is available to higher education institutions to attract new students. An institution such as Wolverhampton will be able to bid for that money to extend the opportunity for higher education to those in the deprived area that my hon. Friend mentioned who have never been to university.

No money is lost under the system; there will be a reward for the institutions best able to attract and offer higher education to people who have never had the chance to go to university. It is true that we are not carrying out a central allocation of funding. We wish to incentivise institutions to reach out, get to those students and draw them in. The money is there and it will be available for the institution that my hon. Friend mentioned to bid for, as it will for others.

To summarise, to handle the transition there is cash protection, the protection of a wide range of key courses, opportunities for increased employer co-funding, improved support for part-time courses and the ability to bid for all the funds that are being reprioritised. That is why I am confident that institutions will be able to respond in the next three years.

What would my right hon. Friend say to the constituent who wrote to me this morning? As an 18-year-old, he had done a chemistry degree at Manchester and then served nearly 32 years as a probation officer—not a high-earning occupation. He was looking forward to taking an interesting degree when he retired at 60, to stimulate him in his retirement. Under these rules, will such a thing be impossible for most older people?

As my hon. Friend well knows, in the past three years we have reprioritised funding, across the education system, from informal learning towards the qualifications and skills most directly needed in our economy. My hon. Friend will be familiar with the fact that that has happened in further education.

I recognise the value of educational opportunities pursued purely for benefit and individual gain. In the next few weeks, my Department will launch a new consultation on the future of adult learning in the 21st century. I want that to range from the leisure course in the local community to higher levels of education. I hope that my hon. Friend will take what I have said as an acknowledgement of his point and a suggestion that how we have met such need in the past may not always be how we will meet it in future. But yes—we need to find ways to meet that need, and in the next few weeks my hon. Friend will hear more about that from me and my Department.

The Secretary of State said that there is a three-year time scale for a number of elements on the menu of protections that he has identified. However, he has not mentioned any time limitation on protections for key courses and strategically important and vulnerable courses. Clearly, however, the Open university and others are briefing that those are also subject to a three-year time limitation. Will the Secretary of State take it from Members that we are not comforted and that three-year protections that work on a downward curve are no significant reassurance?

I am particularly concerned about suggestions that £30 million or £31 million is at stake at the Open university, as though the money will disappear from its budget tomorrow. Such suggestions assume a much wider reprioritisation than we propose at the moment and an absolute cut-off of transitional protection after three years. The HEFCE consultation merely covers the comprehensive spending review period, so none of those things should be taken for granted and our proposals should be assessed on the merits that we have put forward.

As I said at the Open university, that university has some 200,000 students. It would need to recruit 3,000 extra students in each of the next three years to make up what would be the shortfall for the next three years. That is the reality; it is not the impossible task described by many this evening.

I shall take one further intervention, but then I must come to an end as many Members wish to speak.

The Government have to take account of a number of criteria in deciding how to allocate funding, and my right hon. Friend has referred to some of them. May I refer to others, such as the aptitude and will of the student to take advantage of the opportunity and complete the course? One of the critical issues is whether the resources allocated will end up delivering a qualification.

We have extremely good completion rates in higher education. If my hon. Friend is suggesting that the next group of students, out there in the community as adults who did not go into higher education after they left school, are not up to it and unlikely to succeed, he and I have a major disagreement. I believe that it is perfectly possible for higher education to attract the equivalent of 20,000 full-time students successfully and for those students to complete courses as well as anybody else.

I should draw to a close.

I am grateful to the hon. Gentleman for recognising that.

Let me be clear. Ministers and the HEFCE recognise the challenge to many higher education institutions of changing their ways of working to respond to the new priorities. It will take time to change and develop new partnerships. The transition needs to be carefully managed; institutions need proper protection.

I also recognise that no two institutions are the same. Birkbeck is already working with HEFCE to see how to respond most effectively. I hope that the Open university will do the same.

The Secretary of State was talking about protection for the institutions. The Open university cites the figures that he disputes not because it has invented them—they are HEFCE’s own estimates of the long-term steady state position that there will be at the end of the changes. Transitional support before getting to that end-term state is not sufficient; it does not tackle the fundamental problem. Will the Secretary of State clarify exactly what he is talking about?

The figure on the HEFCE website assumes—and that is HEFCE’s decision, not ours—a much greater reprioritisation than the Government have proposed or asked the HEFCE to advise us about. That is the reality. The point is very important and I hope that the hon. Gentleman will accept my answer. At the end of the three-year period, the amount of money that the Open university would need to make up through all the different sources of students that I have mentioned is about £12 million a year. I have already said how that can be done and set out the number of students involved and the sources of funding available to the Open university to do that.

The Government have been prepared to take difficult decisions, including the introduction of variable fees, to support our world-class higher education system, and I ask the House to support us once more tonight. As Harold Wilson, who with Jennie Lee was the architect of the Open university, once said:

“He who rejects change is the architect of decay. The only human institution which rejects progress is the cemetery.”

Order. I remind the House that the Government amendment has been moved in a slightly amended form from that printed on the Order Paper, with the substitution of the word “higher” for the word “lower” in line 3.

It is with some trepidation that I rise for the first time in my new role, chucked in at the deep end on the second day. I thank the hon. Member for Havant (Mr. Willetts) for his courtesy yesterday in alerting me to this subject. He explained in his introductory speech that the motion is based on an early-day motion. In the past couple of days, I have done several radio interviews based on one of my own EDMs about Bristol Old Vic, which I invite colleagues to sign. People ask what is the point of an EDM; well, this is the point. EDM 317 has now been withdrawn as we are, in effect, discussing it tonight, but the Table Office informs me that 211 Members had signed it. That is the most up-to-date figure, rather than what was printed this morning, and it includes more than 80 Labour Members, some of whom are in the Chamber. I hope that when we troop through the Lobby in just over an hour and half they will have the courage of their convictions to vote for what they signed.

The new Department for Innovation, Universities and Skills is just over six months old, but it has already succeeded in upsetting just about everybody in the sector or outside the sector, including everyone from the director general of the CBI to the National Union of Students—not usually bedfellows. This is a fundamental change designed to introduce £100 million-worth of internal savings in the Secretary of State’s Department. I wonder why he feels the pressure to make those savings.

I welcome the hon. Gentleman to his new position, but will he accept that, as I told the House, these are not savings but a reprioritisation from one group of students to another?

I thank the Secretary of State for what he thinks is a clarification, and for welcoming me to my post. It is an internal saving or reallocation within his Department, and for some parts of the higher education sector it is a cut in their provision, so it is certainly a saving imposed on them.

In his letter to David Young, chairman of the Higher Education Funding Council for England, the Secretary of State says:

“I will write to you again at a later date with full details of the Comprehensive Spending Review…settlement and my strategic priorities.”

The old Department for Education and Skills had its CSR settlement sooner than everybody else, so I wonder why it has taken so long to decide what the strategic priorities are. Of course, that settlement was made before the split and the setting up of the new Department, and I wonder whether this is a casualty of the disaggregation of the old DFES budgets. The change has been rushed through with little consultation. The Department’s predecessor has form in that area, given that it announced, without any consultation at all with the higher education sector, that it was going to give foundation degree-awarding powers to colleges. It announced the decision and let everyone else sort out the details and deal with the implications. Once again, the higher education sector feels bounced. This decision will hurt its institutions financially, as well as individual students, some of whom will surely now decide that they are not going to go on to do an equivalent or lower qualification. That will undermine the Leitch agenda that the Government say that they are trying to achieve.

I understand that some Labour MPs will have probably been getting some hostile correspondence, particularly if they represent relevant university seats, and I know that they have been given some helpful internal Labour party advice, which has also, rather helpfully, been given to me. I have the parliamentary Labour party briefing that has been circulated to help Labour Members to rebut the points that have been made by Liberal Democrats and Conservatives. If you do not mind, Mr. Deputy Speaker, I will quote from it—even though it says that I might be committing an offence by doing so, I believe that I am protected while I do it in this Chamber. There are some choice quotes. [Interruption.] I notice that the hon. Member for Milton Keynes, South-West (Dr. Starkey) is laughing; an institution based in her constituency is raising this concern with her and with all hon. Members, so I do not think that it is an amusing matter. The tone of the briefing suggests that this is all a fuss about nothing. It says that

“the £100m is less than a third of the total funding of £327m that is currently spent on ELQ students.”

It is less than a third—it is 31 per cent., so it is still a pretty significant amount of money. It says:

“Those with first degrees do not have to study at an equivalent or lower level than they already have. They can study for a masters”.

Surely that is missing the whole point. Students should be free to make their own decisions on what is necessary for them to increase their employability in the labour market, and if they need to study for an equivalent level qualification or for a lower level qualification, that is the choice that they should make and the choice that the higher education market should offer to them. It seems ludicrous to say that they could go away and study for a masters.

On the Open university, Labour Members are told to tell us that

“it is important not to overstate the financial impact—some public comment has done so.”

I know who I would rather believe—the Open university. The briefing also says that the Open university would get a share of the £100 million that has been reallocated within the DIUS budget

“if it recruits new students (which we strongly believe it can).”

The Open university has told us that it thinks that these proposals will undermine its existing course provision rather than enhance its ability to recruit new students. The briefing goes on to say:

“The OU had a £350m turnover in 2005-06 and has generated surpluses to top up its reserves.”

The implication is that that is okay then—it can afford to take a financial hit. That is rather like the Secretary of State’s colleague in the new Department for Children, Schools and Families hovering like a magpie over schools’ balances; the same attitude is being taken here.

There are just two more quotes to go. The first is:

“Some people are asking us why we ever gave money to people on ELQs over those who didn’t have a degree at all.”

This is the real gem:

“The government has made a strategic decision…HEFCE is consulting on the implementation of the policy…We can’t consult on consulting.”

That attitude shows total contempt for universities, which are feeling bounced into this and that they have to deal with the implementation of the consequence of a decision that has already been made. The briefing was of course was a private document that was not meant to be circulated, but I am glad that somebody helpfully circulated it to me.

What is in the public domain is the guidance for students who are contemplating an ELQ course, or have, in many cases, already applied. The DIUS website offers this advice for new students:

“prospective new entrants in 2008/09 studying courses at the same or lower level should contact the institutions at which they are interested in studying in a few weeks time to see what the position is.”

That is hardly helpful advice for somebody who is taking a fundamental decision. It goes on to say:

“We recognise that these changes may mean that institutions increase their tuition fees for Second Degrees, although they are not obliged to do so.”

How on earth are institutions going to make up for pretty drastic cuts, in some cases, in their core teaching grant if they do not increase fees? The website goes on to give the justification for this reallocation of funding, saying that £100,000 in public support is given to somebody who has progressed all the way to a second degree-level qualification, as compared to £55,000 of support to somebody who leaves school at 16. Surely that is not the right comparison to offer in public. I thought that the whole point of this was to reallocate money from people who want to pursue a second degree to people who might want to pursue a first degree.

I was just wondering whether the hon. Gentleman is, very helpfully, going through the Labour briefing in such detail because he does not have any policies or points of his own to raise.

I thank the hon. Lady for her intervention. We in the Liberal Democrats are going through a fundamental review of our policies at the last general election.

Indeed, the Government could do with some in-depth thinking as well. Unlike the hon. Lady’s colleagues, my party will take a proper decision on the issue at a party conference, after 18 months of deliberation and the taking of expert advice from throughout the sector, including the Open university.

What I have to say is not all negative. I recognise that there are exemptions, some of which the Secretary of State outlined earlier, particularly for SIVS—strategically important or vulnerable subjects. I have some questions for the Minister of State. What is the Department’s calculation of the number of SIVS ELQs that will be exempt when the new arrangements are in place? How many students will not fall within that exemption, based on the information we have at the moment? Those students will have to pay for their education to make up for the loss of core teaching grants to the institution at which they are taught.

What will the fees be? Does the Department have a view on what course fees institutions should charge to recover their costs? It is important to remember that someone studying for an ELQ at the moment may already be paying £3,000 for their second degree. The cost in question will be imposed on top of what they are already paying as a student. In effect, they will be treated like international students from outside the European Union. And while I am talking about the international aspect, what will the effect be on UK taxpayers who did their first degree at a foreign institution—such as my new party leader, for instance? It looks as though they will be charged in the same way, even though it did not cost the British taxpayer anything. Surely that cannot be right. There will be anomalies within courses where people studying exactly the same course, sat next to each other in the same lecture theatre, could be paying nothing, or £10,000.

There are also anomalies within the exempt courses. Medicine has been mentioned, but what about the professions allied to it? What about radiography, physiotherapy or psychology? My hon. Friend the Member for Cambridge (David Howarth) mentioned cognitive behavioural therapy. Stress in the workplace is important, and we need to deal with it to achieve the Leitch agenda and get more people back into work. However, none of those professions allied to medicine fall within the exemptions.

Not only has there been no consultation on the implementation of the funding change, but there has been no equality impact assessment, and I would like to know why, particularly when many ELQ students, or first-time students studying part-time—they may feel the ongoing implications as their courses become unviable—are likely to be older students. The majority, as in the rest of higher education, will be women. The Open university tells us that 13 per cent. of its current ELQ students come from the bottom quartile of areas of multiple deprivation. There are certainly the sort of equality implications that the Government want everyone else who changes their policy to consider, whether in local government or elsewhere, but they do not seem to have gone through such an exercise before they made their announcement.

The changes will undermine the delivery of the Leitch recommendations. The 70 per cent. of the 2020 work force referred to in one of the most quoted parts of Leitch are already in work, and they will need the retraining implicit in the taking of an ELQ. The Open university tells us that 68 per cent. of its existing ELQ students are over the age of 35. They are precisely the people whom the Leitch report talks about—people who will need to upskill at some point during their career. If a person is over 35, their first degree is clearly 15 years out of date. Birkbeck has specialised in the refreshing of adult skills since 1823, but it tells us that the proposal will fundamentally undermine its capacity to support Government policy. It provides several case studies, and I shall just mention one. Jayne Kavanagh got her degree in medicine in 1990, but in 2002 she went to Birkbeck in order to do a degree in philosophy. Birkbeck says:

“A degree in Philosophy might be regarded by many as an esoteric qualification, but…it has helped her to become lead in medial ethics and law at the Royal Free and University College Medical School”.

Surely everyone would think that worth while.

The change may lead to some courses becoming unviable. The Open university and Birkbeck have provided examples and many other higher education institutions, including Bristol university, have made representations to me.

The change will be especially felt by smaller institutions, particularly specialist institutions. The National Institute of Adult Continuing Education has given several examples. The Conservatoire for Dance and Drama will suffer a 26 per cent. cut in its core teaching income. The Institute of Cancer Research will experience a drop in its core teaching income of 19.5 per cent., which undermines the publicity that the Prime Minister received for his new found enthusiasm for prevention being better than cure. In an Act last year, the Government gave further education colleges foundation degree awarding powers, yet their provision for full-time higher education honours courses could be undermined because they tend to be few in number. There is a lack of joined-up thinking.

Switching £100 million in the budget is a case of robbing Peter to pay Paul, which brings me to recognising the effect on the clergy that several hon. Members have mentioned. Westcott house in Cambridge and Trinity college in my constituency are examples of institutions that could be affected. They say that 60 per cent. of ordinands who go for training in the Church of England do not do their first degree in theology, so they clearly need to study a further course. Training for the priesthood is obviously not a Leitch target—it must be one of the few things that does not have a target in the Leitch report.

The final disadvantage of the proposals is the regulatory and administrative burden that they will impose on universities. How will they know, when someone approaches them, whether that person already has a degree? There is no national register that they can check. The proposals will impose an additional burden on them. After yesterday’s news about the Irish international university, we know that anything is possible in higher education.

If the Government want to effect the proposals in the Leitch report—to which Liberal Democrats are signed up; we recognise that they are necessary—surely it would be better, if higher education is to make its contribution to delivering the Leitch agenda, to do something to help part-time students in the way in which the old Select Committee on Education and Skills recommended. We should remove the distinction between full-time and part-time students, as happens in Australia. Our higher education funding system is modelled on that in Australia, with the exception of the anomaly that I outlined.

As I said earlier, the Department is only six months old but it already appears to have upset many people in the sector. We have heard much about the Labour Government’s legacy in recent times. The Secretary of State ended his speech by citing the main legacy of the 1964-70 Government, led by the previous longest serving Labour Prime Minister, Harold Wilson, as being the Open university. I am sure that right hon. Gentleman does not want to be the Secretary of State who damaged the Open university. Despite what he says, the Open university tells us that that is the implication of his policy announcement. Surely it would be better to delay implementation until 2009.

Whenever I have taken part in such debates, the Minister for Lifelong Learning, Further and Higher Education has said that it would be 2009 before the Government understood all the implications of the changes that they have made in higher education in the past five years. He said that it is too early to tell whether the changes have had an adverse impact on applications—indeed, too early to tell many things—and that the Government would hold an in-depth review in 2009, as was promised when the Higher Education Act 2004 was being considered.

Given all that, why introduce such proposals now? Why are the Government subjecting themselves to such self-inflicted pain when a fundamental review will take place next year? Surely it would be better to postpone the change and wait until the in-depth review so that they can have some joined-up thinking and a properly thought-through policy.

Order. Before I call the next speaker, let me remind the House that the 10-minute limit on Back-Bench speeches now applies. An awful lot of hon. Members are trying to catch my eye and it would therefore be helpful if they felt able to take less than their 10 minutes.

Birkbeck college is in my constituency. It is one of many distinguished academic institutions in my constituency but most of the others provide full-time courses for undergraduates and graduates. Birkbeck provides full-time courses for graduates but mainly part-time courses for teaching people to study for first degrees or other, lower qualifications. Its undergraduates are not the usual 18 to 20-odd-year-olds; they are people who work for a living during the day and study at Birkbeck in the evening. Unlike other undergraduates, they also pay tax, because they are working people, so when we talk about looking after taxpayers we are talking about them, among others. Those students show an amazing commitment to learning and a zeal for knowledge that puts to shame what I suspect most graduates in the Chamber—that certainly includes me—showed when we had the privilege of doing our full-time degree courses.

Some 2,600 of Birkbeck’s part-time students already have degrees and are working for equivalent or lower qualifications. They include women who want to study again after taking time off to bring up children, people who have lost their jobs, people who are disabled and people whose first degree proved unsuitable or irrelevant to their current occupation. Nearly all Birkbeck’s part-time students are seeking to upgrade their knowledge and skills. They include people in management who want to make further studies of personnel—or human relations, as I believe it is called these days—as well as people who feel the need to add IT or computer science skills to enable them to progress in their current occupation, and those, including doctors and nurses, who work with the elderly, the mentally ill or children in the day and want to study psychology to improve their ability to look after those people.

Generally, part-time students at Birkbeck are not doing flower arranging. They are studying serious subjects. They are doing what the Government want: upskilling themselves. They are setting an example for others, in respect of what the Prime Minister said he wanted when he talked about people needing not one chance but second, third, fourth and, indeed, lifelong chances. That is what Birkbeck has been providing since 1823, but the Government are stopping the funding of those courses, against a background of part-time students and what might be described as part-time institutions getting a raw deal, compared with full-time students and colleges that mainly deal with them. That has gone on for decades.

The Government’s decision means a reduction of about 1.6 per cent. for institutions providing full-time studies, but a reduction of about 16 per cent. for institutions providing part-time studies. The impact on institutions that provide part-time opportunities rather than full-time study is therefore 10 times greater. Yet the work of Birkbeck and other institutions that provide part-time courses is crucial to the Government’s plans for widening participation. They are the very institutions on which much of the Government’s strategy will depend. Indeed, Birkbeck recently opened what might be described as an outpost in Stratford, in the constituency of my hon. Friend the Member for West Ham (Lyn Brown), in an effort to spread the opportunities and the benefits.

The Government have said that they will try to help Birkbeck and the others by making provision to tide them over, but that help is time limited. My understanding is that if those institutions are successful in obtaining alternative sources of income, the safety net will be reduced by however much their efforts succeed in securing. The question then is: where can they get the extra money from? Most part-time students and people who go to night classes are not very well off. They cannot get student loans, and their means-tested grants, which are available to a limited number because such students have incomes, are not pro rata, as with grants for full-time students, and are capped at a low level.

I am therefore disappointed with the Government’s decision, as well as concerned about it. There does not seem to have been much consultation before the outline decision was taken. I find it hard to believe that this is being done by good and decent people such as my right hon. Friend the Secretary of State for Innovation, Universities and Skills. He is my friend and he is honourable, but he is not right; he is wrong on this occasion. I cannot believe that Ministers have seriously considered the impact of this change on individual institutions.

I was also perturbed to encounter a suggestion by one Minister that there were more than 250 higher education providers in England so that students could shop around for the best deal. That sounds rather like an “on yer bike” statement de nos jours, which fails to understand the position of the part-time student. For full-time students, study during the day is their main object, so they can shop around and go to where the course they want is provided, but it is not the same for part-time students, who work for a living during the day and study in the evenings. They cannot shop around; they have to stay where their job is; they are not as mobile as the average undergraduate.

Setting aside the impact on students, are the Government seriously telling Birkbeck to go up market? That is plainly contrary to the Government’s policy and Birkbeck’s proud record for the past 185 years. It is also plainly contrary to Birkbeck’s modern intentions, which included and led to the setting up of their outpost in Stratford, east London. I believe that its response has been very temperate. It is asking only for the Government to exempt more subjects from the cuts and to exempt people who are coming back for a second helping, so to speak, after being out of education for more than five years. That would exclude what might be described as the serial scholars. It is a perfectly reasonable request to make and I hope that further long-term support will be provided to Birkbeck and the other institutions to cope with the change in funding and to enable Birkbeck to continue what I regard as its noble past over those 185 years of providing teaching to working people who have a thirst for learning. It is not too late for the Government to reconsider at least the practical implications of what they are proposing.

I confess that early-day motions have been dismissed in the past as political graffiti, but you can imagine my delight, Mr. Deputy Speaker, when I discovered that early-day motion 317, tabled in my name, had been selected as the motion for tonight’s Opposition debate.

I make no apologies for the fact that I will be extolling the virtues of the Open university. It is a great honour to represent that university in this Parliament and I am sure that the Open university is held in great regard by hon. Members from all parties. I should first point out, however, that not only the OU will be affected by the Government’s decision, as 22 other institutions will be equally affected. The motion is very reasonable. Perhaps that is why 86 Government Members decided to sign it. I confess that I thought that we might make some progress tonight, but judging from the Secretary of State’s speech, I fear that I may well be disappointed—though we shall see.

The Open university is not only one of Milton Keynes’s biggest success stories, with more than 200,000 students studying every year; it is one of the UK’s best success stories, which is emulated worldwide. In 2003, for example, the OU helped in the middle east to set up and provide teaching materials for the Arab OU, which already has 30,000 students. Our Open university has paved the way and helped other countries to establish their own open universities to allow people all over the world to improve their academic records, which otherwise would have been too expensive or too time-restrictive to pursue. The OU has recently started talking to the Government of China to explore the benefits of collaboration on open and distance learning to meet the huge growth in demand for higher education, which its growing economy requires.

The OU has served as the leader in bringing education to those whose time and finances do not allow them to take three years out for full-time study. It has led the world in harnessing the widest possible range of assisted technologies to enable people with disabilities to study. For example, some 3,500 ELQ—equivalent or lower level qualifications—students have special needs and want to study on an equal platform with their peers. From the OU’s earliest experiment in using the latest technology to take education right into people’s lives via their TV sets, it has continued to pioneer ways of reaching ever more people in ever more places, using the almost limitless power of the digital age.

More than 125,000 teachers in Uganda, Sudan and Nigeria are now using the Open university’s learning materials. Moreover, since last year the OU’s audience has included new migrants in London developing language skills alongside OU qualifications in health and social care. I understand that, although those migrants may wish to study for United Kingdom-based degrees, the Government’s proposals will prevent them from doing so if they already have an equivalent qualification from overseas.

The IT skills gap is one of the crucial challenges facing the UK economy today, not just because the IT sector is booming but because all business areas are leveraging competitive advantage by adding value through IT. More than 70 per cent. of jobs advertised in the United Kingdom now have an IT component, and the only way in which the UK will be able to address the widening gap between supply and demand is by upskilling and reskilling people who are already working in the UK economy. The OU is a major contributor in this arena nationally, allowing people to update their IT and business skills in line with their job requirements without needing to enter a classroom. Every year more than 30,000 computing, IT and business course places are taken by part-time OU students.

Only today, the Prime Minister said that he wanted to help the Open university to achieve its aim of reskilling and upskilling the current British work force. How strange, then, that the OU should have been one of the principal victims of the decision to remove funding from those studying for courses that involve equivalent or lower qualifications. They are precisely the work force who are needed by the British economy, and the decision was made without consultation either in the sector or in business.

Men and women who are sacrificing their time to re-educate themselves in absolute conformity with the Prime Minister’s stated aims of lifelong learning, and who mostly remain in work paying taxes and supporting our economy, are to be treated less favourably than other students. In many cases, employers will not make up the lost funding. It is very rare for the employers of people who are trying to forge new career paths for themselves away from their current jobs to help fund their spirit and drive to better themselves. Under the proposed new funding system, people who went to university straight after school or college but left the workplace in later life to raise children or become carers of relatives will have their right to re-equip themselves for the rapidly evolving UK economy denied.

May I present the Minister with a brief case study showing the sort of person who will be affected by the changes that he proposes? Lydia Stanley writes:

“In 1982, at the age of 21,I completed an ordinary BA degree in French and Science in Society. I didn't really know what I wanted to do with my life at the time, and ended up doing a secretarial course, after which I worked as a secretary for 19 years.

I had felt rather discontent with secretarial work for some time—it can be a good career but I didn't really feel it was for me. In 1999, one of my friends got hold of an OU prospectus. I decided it sounded very interesting so I enrolled on the course Using Mathematics, after which I switched to computing courses.

In 2002, when I was about half way through my OU degree, I was made redundant from my secretarial job. By then I felt I wanted to work in IT and started to work as an IT Volunteer at Victim Support, the charity that supports victims of crime, in order to gain some experience. About a year later, I was employed by them on a fixed-term contract, and eventually on a permanent contract. I therefore started my first IT job at the age of 41, and am still working on their IT Service Desk.

In 2006 I completed the named BSc in Computing and gained a First.

Regarding funding, I doubt I would have studied with the OU if the fees had been a lot higher, and would probably still be doing secretarial work or something similar.”

Given the Government’s supposed commitment to lifelong learning, I am sure that Lydia and thousands like her will be deeply disappointed by the Minister’s explanation of why they are to be discriminated against by this ill-conceived Government initiative.

The fact remains that the ELQ policy will frustrate attempts to enable people of working age to update and broaden their knowledge and skills in line with the changing needs of the economy and of society more generally. Some 68 per cent. of OU ELQ students are over 35; most can therefore be assumed to have degrees that are at least 10 to 15 years old and in need of updating. Crucially, the policy will withdraw Government support from most graduate development. Most ELQ students at the OU are studying business studies, maths, computing, technology, science, education and languages—just the sorts of skills that the Government claim to be encouraging.

Higher fees for ELQ students will create a disincentive to continuing professional development, and a genuine risk that the main economic benefits of CPD will be lost. Contrary to popular belief, most ELQ students pay their own fees. Only 13 per cent. of ELQ students at the OU receive any fee contributions from their employers and just 10 per cent. have all their fees paid by their employer. The idea that funding will be readily available from employers is simply plain wrong. Why would an employer pay for an employee to train to change career only to leave their employment? What about self-employed people? To quote one OU student:

“I am self-employed so ‘support by employer’ is basically the same as paying my own fees. I am studying with the OU business school. I can barely afford it as it is.”

Pricing research undertaken both by Universities UK and the OU shows that part-time students are extremely price-sensitive. There is a high risk that thousands of ELQ students studying for vocational reasons and paying their own way will be priced out of continuing professional development by the Government’s ELQ policy. It is equally true that certain groups of students will be particularly affected.

Research shows that employers have tended to offer support mainly to full-time workers from the wealthiest households. Part-time employees, the self-employed and those on low incomes will be disadvantaged, as will those such as carers who are temporarily out of employment. The Minister need not take my word for it; I have a few more quotes from current OU students:

“I am a single mum trying to survive on a less than average public service salary in expensive London. These changes would effectively bar me from the opportunity to help myself.”

Another student said:

“Part-time study while working is difficult enough as it is. Adding a large financial burden will most likely provide the justification for not bothering in the first place.”

Ministers have made some exemptions to the ELQ policy and HEFCE has proposed others, but they do not go far enough. The fact remains that only 4.6 per cent of HEFCE-funded ELQ students at the OU will be exempt under current proposals.

Finally, I would like to highlight the impact of the policy decision on OU funding. It will reduce resources available for core services at the OU and will jeopardise plans for growth and innovation. In financial terms the OU will lose funding for 25 per cent., or 29,000, of its 140,000 students in England from 2008, which combined with the HEFCE estimated loss of grant of £32 million is a total lost or at risk in 2010 of some £49 million.

The motion is reasonable, which is why some 86 Government Members have signed it. All I am asking is for the Government to stop, consult properly and think again about whether this is really what they want to do to fit in with their agenda for lifelong learning.

I am sorry that the hon. Member for Havant (Mr. Willetts) is not here at the moment because I was going to congratulate him on the clever debating device of using the early-day motion as the Conservative motion. The problem is that once he started to speak to that motion, he added lots of things to it which those of us who signed the EDM would not necessarily agree with.

I welcome this opportunity to rehearse again the virtues of the Open university. I do not intend to do so at great length because many others have already done it, but it is a fantastic institution. It has made degree level courses available to a wide range of individuals whom conventional universities would not allow to take degrees. It has contributed over the years precisely to upskilling and skilling many who would otherwise have been trapped in very low-skill, low-paid careers. I understand that the OU’s commitment is to make sure that it is able to continue in that role, and I simply intend to repeat the three major points that I have made directly to Ministers in meetings, most recently just before Christmas when my hon. Friend the Minister for Lifelong Learning, Further and Higher Education met me and two trade union representatives from the Open university. I understand that a final decision will be made on the detail of the proposals in mid-January.

The first point relates to the list of exemptions. There are strong arguments, made when the trade union representatives met the Minister, about adding IT to the list. It is clear that individuals who took their first degrees about two decades ago are unlikely to be quite up to the minute on IT skills—to put it mildly—and that therefore there are strong reasons why individuals who already have one degree might wish to get another at the same level but in IT. When we spoke with the Minister, he was sympathetic to the arguments we made although, obviously, he felt unable to commit himself at this stage when the final announcement has not been made. I certainly hope that IT will be included.

The second issue is employer co-funding. Employers, who gain enormous benefit when their employees are upskilled, should be expected to co-fund the training of their employees; that is highly desirable. There are lots of reasons why they should do so. If employers treat their employees well, on the whole their employees feel a sense of loyalty and tend to stay with them. Providing decent training helps not only to upskill their work force but to engender a feeling of loyalty among them towards their employer—and, of course, the employer cashes in on the employee’s experience of the firm or business and the way it works, instead of having to bring in somebody new who would not be familiar with that. Therefore, we should expect employers to co-fund more of the training of their employees.

However, a reasonable point was made by Open university people: although employers are often willing to co-fund the training of their senior staff, they can be a lot less keen to do so for middle-ranking staff. As what we are requiring is a comprehensive change in culture among businesses, Ministers ought to be a little more cautious about the speed at which they believe we might be able to persuade employers to change their culture. I therefore ask Ministers to consider phasing in these changes over a slightly longer period in order to see quite how successful they are at persuading employers to be more effective in funding training.

Can the hon. Lady give the House one reason why an employer would wish to support financially an employee to do an ELQ—an equivalent or lower qualification—when the outcome of that would be of no benefit to their business?

Obviously not, but that is a curious question to ask because I could throw it back by asking why an employer would not co-fund an employee’s training if that training was going to benefit the employer[Interruption.] I will get on to the point about people moving employer. In many cases, rather than looking to recruit more highly trained people from outside the business, an employer could be thinking of, so to speak, growing their own expertise by retraining individuals they already employ at a much lower level. That is perfectly reasonable.

I will not give way because, unlike Front-Bench spokespeople, if I do I will lose time—I can give way once without losing time, I think.

Employers will obviously not fund everybody, and they certainly will not fund people who actually desire just to go off to another employer, but that does not cover all cases, or even the majority necessarily.

The third issue has been alluded to: women returners. They are probably the largest single group who are likely to have taken a degree a long time ago, and which they have not been using recently as they have not been at work because of family responsibilities. Because they have not been at work, they do not have an employer to co-fund their training. Therefore, Ministers should consider the group of women returners in more detail as they are a special case. For a huge range of reasons—not least those of equality, but also of making use of the skills and experience that such women can bring to the work force—we ought to make sure that any proposals we put forward do not inadvertently militate against that group.

Those are the three points that trade union representatives made directly to the Minister, and which I wanted to repeat in the debate. I am confident that the Government will have been listening to the points people have made and to the feedback that the Higher Education Funding Council for England—HEFCE—has received from universities during the consultation period, and that the final proposals will not be the same as the original ones. If they were, they would be likely to cause unacceptable damage to the Open university and, presumably, to Birkbeck, which is an institution that I know less well, so I strongly urge Ministers not to bring back the original proposals.

As the hon. Member for Havant has now returned to the Chamber, I want to make a final remark about some of his comments on the general system of university funding. As someone who had been on the receiving end of it before becoming an MP, it seemed to me that some misdirection was being given to hon. Members who might be slightly less familiar with how HEFCE has, for some time, taken decisions on the priorities to be given to different subjects. An individual with qualifications does not have a right to have a place on a degree course and subject of their choosing just because they fancy it. That has never been the case in the British system, unlike the French system, where someone can turn up at a university, sign up to something whether or not sufficient places are available and engage in a ridiculous Darwinian survival of the fittest that has a huge wastage rate.

HEFCE has always taken decisions on university funding. It decides which subjects it regards as being more necessary—in the national interest—than others and uses the funding accordingly. To suggest that expressing priorities is an outrageous departure—[Interruption.] No, this is precisely the point that I made about the early-day motion, because if one reads it carefully one finds it does not say what Conservative Members are suggesting. I accept that individual Members who signed it may mean it to mean different things from what other Members mean it to mean, but it asks the Government to consider the representations that are being made to them by the Open university. That is what I am asking the Government to do now. There has been a consultation period and they have received representations, so I am asking them, as the EDM did, to consider the matter and to make changes. I believe that that is also what the Government’s amendment does, which is why this debate is somewhat curious. I would want to vote for both the motion and the amendment—the two are entirely consistent.

It is a pleasure to follow the hon. Member for Milton Keynes, South-West (Dr. Starkey). I do not know whether she will vote for the motion or for the amendment. I do not think it is against the rules to vote for both, and she will doubtless do so.

I want to make a brief contribution. It has been mentioned on a number of occasions that the new Select Committee on Innovation, Universities and Skills is holding an inquiry into the issue of equivalent or lower qualifications, following an unprecedented barrage of correspondence and lobbying not only by the Open university and Birkbeck, but by universities ranging from those as far north as Sunderland and Middlesbrough to some of the London colleges. It is important for us to widen the debate. We must not consider only the Open university and Birkbeck.

Our inquiry will examine four key things. The first is the arguments presented by the Secretary of State and the Minister for Lifelong Learning, Further and Higher Education for phasing out support given to institutions for students studying ELQs. The second is the timing of the decision on the implementation of change, given the proposed review of higher education funding and fees for 2009-10. The third is the exemptions in respect of certain courses, as proposed by HEFCE. We will want to know, as doubtless will the Minister, why HEFCE has not exempted such courses as theology and pharmacy—the list could go on. The fourth is the impact on students, in particular women and older workers. The issue of immigrant workers has been mentioned. They often come to this country with a degree that is not accepted in the workplace, and thus there is a need for retraining. We hope to obtain information on those four criteria.

Finally, we will look at the impact on institutions, especially the long-term implications for specialised institutions such as the OU and Birkbeck. We hear the Minister’s comments about supporting the universities over the first three years, but the crucial aspect to understand is what happens at the end of those three years. When the Minister winds up, I hope that he will tell the House what will happen after those three years if the OU, for instance, has not made up the quota of students that would guarantee its base resource funding. Do we go on supporting it or will it have to make significant cuts in its organisation? That is an important question.

When the Secretary of State responded to my intervention about the protection lasting only three years, he explained that that was the length of the comprehensive spending review period. However, there is a protection for six years, in terms of the teaching out of people who have already started an ELQ at the OU, and hon. Members are right to be concerned that the other protections will last only three years.

I am grateful to the hon. Gentleman for that intervention, and I am sure that the Minister will respond to that point when he winds up. I hope that the inquiry will also be able to clarify the situation.

Has the hon. Gentleman considered that the Leitch proposals suggest that many more people should have level 4 qualifications and above? There will therefore be a pool of adults from which the OU and other higher education institutions will be able to draw additional students in the future.

I shall return to the subject of the pool, because there is a real question about where the 20,000 extra students will come from, especially as we will have a significant demographic downturn. The number of 18-year-olds going to universities will decline significantly over the next decade. I take the hon. Lady’s point that there will be a pool of people which will need to be tapped, especially married women who are returning to the work force.

Despite the Christmas period, we have already had 300 submissions to the inquiry and the Minister will not be surprised to learn that most are hostile to the proposals. We hope that by 14 January we will have had even more responses. I have not carried out a scientific analysis of them, but the typical response is from someone who took a three-year full-time arts degree as an 18 to 21-year-old and now plans to take a degree or lower qualification in computer science, accountancy or management. They are people who genuinely want to change course. Among the many points made by those students is an echo of what the Government have said many times—that we now live in a constantly shifting global economy, that qualifications relevant even 10 years ago may no longer be relevant in the workplace today and that ELQs are essential to keep up with the pace.

It would be wrong to prejudge the outcome of our inquiry, but tonight is an opportunity to examine the context in which this somewhat surprising announcement was made. After all, there was no consultation about the principle behind the initial announcement. The Secretary of State was very honest, as he always is, when he said that he had asked HEFCE to find money to fund another 20,000 full-time equivalent students. That is where the £100 million figure came from. The Secretary of State has done a valiant job in defending a policy that HEFCE—not the Government—decided. It was HEFCE’s answer to the problem of the extra 20,000 students. Tonight we have had a recognition of the fact that there will be a £100 million cut for mostly part-time students studying for ELQs. That will be a cut in order to finance an expansion in the number of students elsewhere by 20,000. That has been fully established.

The Secretary of State has produced no research evidence to support his strongly held views that the change will not damage the drive for new skills in the workplace. As other hon. Members have commented—the hon. Member for Havant (Mr. Willetts) made the point in his opening remarks—why choose now, when there will be a review in 2009? We recognise that there has to be a fundamental look at how we fund higher education and at what we want it to deliver in the 21st century, but why pick out such a small bit—merely £100 million of the £7.1 billion that is spent on teaching in higher education?

I have listened carefully to the arguments that the Government have presented to our Committee as well as those that they have made tonight. We have no problem with Lord Leitch’s analysis that 40 per cent. of adults need to be at level 4 by 2020. We believe that that is a sound policy. We accept that to achieve that target we will have to increase significantly the number of students studying for the first time at that level, as the hon. Member for City of Durham (Dr. Blackman-Woods) said. We accept that in order to support a more highly educated and skilled work force employers will need to contribute to developing that pool of labour, as the hon. Member for Milton Keynes, South-West said. We accept that as far as the overall spend in higher education is concerned, there will not be a net reduction but simply a redistribution of the resources. We can accept all those facts without questioning them deeply.

There is a question about whether the Secretary of State has fully understood the nature of the part-time student market, and in particular the market for existing graduates to retrain in new areas where they can, we hope, become more economically active. I am sure that the Minister for Lifelong Learning, Further and Higher Education would agree it would be absurd to develop a policy whereby initial qualifications, provided they were at level 4, were sufficient to meet the hugely complex and ever-changing demands of a modern economy. That would be nonsense. I do not believe that the Minister believes that at all. How does the ELQ policy fit into a broader Government strategy of not simply upskilling—which we all accept is a good policy—but reskilling at whatever level is necessary to make individuals more economically active and productive?

There is a worry that by simply applying the Leitch upskilling target we are in danger of making the same mistake as when Tony Blair set the target for 50 per cent. of 18 to 25-year-olds to go to university. A drive for quantity rather than the appropriateness of the qualifications is a mistake that we should not make again. Far too many of those who have graduated over the past 10 years have qualifications that they simply cannot use or they find themselves employed in positions that require at best a level 3 and, more often, a level 2 qualification. How on earth do those people who become caught in a qualifications trap get out of it without reskilling? ELQs are an essential element of that reskilling.

Of course, the Minister can talk about the ambassador’s wife taking a course in French or some other mythical example, but as the right hon. Member for Holborn and St. Pancras (Frank Dobson) pointed out, those who are studying in the marketplace that we are discussing are serious students. I ask the Minister to set out the Government’s policy on reskilling rather than simply upskilling.

No doubt the Minister will point out the many exemptions—such as medicine, economics, law and psychology. However, I ask him when the policy suddenly arose. If the public purse in education is now to be used to influence people’s choice of course and the outcome to meet national skills needs, why does the policy not apply at level 4? That would be more appropriate. What principal difference means that a student is allowed carte blanche to study wherever he likes for his first degree, provided the institution will accept him, but not if he wants to retrain to become economically active? There is a difference between the two policies.

Like many who reacted strongly to the attacks of the right hon. Member for Norwich, South (Mr. Clarke) on mediaeval historians, I have a real unease about the state deciding what students should study—

“Hear, hear,” says the mayoral candidate from a sedentary position. However, my serious point is that this is a legitimate subject for debate. The debate is important in the broader context of what we should expect from higher education, given that no party can devote limitless resources to it. However, the policy under discussion is not being applied to the vast majority of post-18 graduates, so why are the Government picking on one small group of students?

Finally, I return to the fundamental question, which the hon. Member for Milton Keynes, South-West did not answer: should employers contribute to training costs? Many employees want to do ELQ courses because they do not like their current jobs and want to move elsewhere. What employer would want to pour money into helping dissatisfied workers to get skills so that they can go somewhere else? I do not know of any. It is not a sensible description of the process, and I am sure that it is not what the hon. Lady meant.

In his brilliant speech to the inaugural conference of Universities UK, Richard Lambert asked why it was thought that employers would take that approach. The Government say that they must do so to ensure that people have the skills they need, but employers have responded by saying that they would simply go to the EU, as there is now a global market in labour. The task of ensuring that our nation’s work force have the necessary generic skills lies with the Government, and the necessary funding must come from the taxes that we pay to the state.

The debate is important, and the motion under consideration is reasonable. The House has responded to it in a reasonable way, and I trust that the Minister winding up will do likewise. I am sure that he will.

As ever, it is a particular pleasure to follow the hon. Member for Harrogate and Knaresborough (Mr. Willis). He has always been a champion of adult learners, and I welcome the inquiry that his Select Committee is conducting.

At the outset, I should declare the interests that reveal my enthusiasm for adult learning. I am an honorary life member of the National Institute of Adult Continuing Education, and I am also a vice-president of Carers UK. I want to say something later about the relationship between carers and adult learners.

I welcome the debate because it offers another opportunity for the Government to showcase their achievements in higher education and lifelong learning, especially when it comes to widening, deepening and increasing participation. It also gives us an opportunity to remind the House about the Government’s commitment to implement the Leitch report. However, I am one of those who counsels caution in respect of the proposal to withdraw funding for ELQ students, and I am among the signatories of early-day motion 317.

I wish to put it on record that, of course, I endorse the Government’s contention that there needs to be a reprioritisation of resources so that access and participation can be widened and rendered more equitable, and so that quality can be maintained. However, I worry about the unintended consequences of the proposal. We have heard about them already this evening, and they have been described eloquently by the Open university, Birkbeck college, NIACE and the think-tank, Million Plus. The consequences have also been set out by the CBI director general, Richard Lambert, who has been quoted several times in the debate.

I tend to agree with those critics who worry that the proposals will distort—clearly unintentionally—the Leitch agenda. They have noted that there are risks that the proposals will destabilise the part-time HE sector, have an unequal impact on certain institutions and disproportionately affect certain adult learners. It is that final risk about which I want to speak now, especially as it relates to carers.

As chairman of the all-party carers group I take a particular interest in the circumstances of carers, and my Carers (Equal Opportunities) Act 2004 made special provision to ensure that carers were encouraged to pursue lifelong learning. What will happen when a carer happens to be a graduate and is unable to upskill after years, sometimes decades, of enforced caring?

I come to this debate as a strong supporter of my Government, but one who is an enthusiastic supporter of Birkbeck, the Open university and all adult part-time learners. My right hon. Friend the Secretary of State has rightly acknowledged tonight that such admirable institutions need time to adjust to the changing challenges of our time and to ensure that we have a more radical and enabling higher education system. The House should welcome that commitment as a genuine gesture of support and of his willingness to await the results of the HEFCE inquiry. I urge him to go further and allow even more time for change to take place and to consider the suggestions made by the OU and Birkbeck, particularly that the proposals should be withdrawn or at least that the money saved should be reinvested specifically in institutions that support the skills development of mature part-time learners.

May I finally urge the Secretary of State to consider consulting Education Ministers in the devolved institutions, who are clearly committed to widening participation, as we are here in England, but who do not appear to be going down this road? I urge my right hon. Friend seriously to consider consulting HE Ministers to strengthen wider participation rather than weaken it.

When it was my privilege to help shadow the Minister for Lifelong Learning, Further and Higher Education, I had the pleasure of giving the founders day address at Birkbeck college. I also saw a great deal of the wonderful work done in universities across London. It is also one of the most important jobs of the Mayor of London to speak up for education in London, to use all his powers to defend London universities and entrench the position of London as the knowledge centre of Europe, and to make sure that we continue to have a constellation of first-class institutions that continue to attract huge numbers of foreign students from across the world and contribute healthily to the £1.5 billion in fees that are so vital to the higher education economy of this country.

At the risk of being partisan, I think it is incredible that the current Mayor of London has said nothing about this issue or about cuts that profoundly affect higher education in this city. I do not wish to do him a disservice; I have not heard him say anything about the issue in the past few weeks. Thousands of people come to London to start their lives afresh and often a major part of that reinvention is a process of re-education and acquiring new skills. That is why there are so many institutions in London whose bread-and-butter work is to teach those who already hold a qualification at an equivalent or higher level. They include City of Westminster college, Birkbeck, South Thames college, the Conservatoire for Dance and Drama, London Business School, Open university, the Institute of Cancer Research, the School of Pharmacy, the London School of Hygiene and Tropical Medicine, City university, Thames Valley university, Lewisham college, the University of East London and London Metropolitan university. Many of these institutions will have to rethink radically their provision in order to survive. Nine out of 10 of the most seriously affected higher education institutions and 54 per cent. of students taking equivalent or lower qualifications are in London. This move is seriously regressive for London. It is injurious to the interests of thousands of potential learners across the city. As my hon. Friend the Member for Havant (Mr. Willetts) has said, it is particularly damaging to women who wish to acquire further qualifications after a change of career. It frustrates opportunity, stifles aspiration, and sends a negative message to those thinking of pursuing higher education in London. It does nothing to help our status as the centre of the global knowledge economy.

As was pointed out by my hon. Friends, and by the hon. Member for Bristol, West (Stephen Williams), who speaks for the Liberal Democrats, the cuts are completely antithetical to the Leitch agenda and the Government’s previous gospel on the subject. Last September, at the Universities UK conference, the Secretary of State gave a speech underlining the need for universities to offer flexible part-time provision, in order to help hit the target of 40 per cent. of the work force holding an HE-level qualification by 2020. Many London institutions are uniquely placed to deliver that.

Birkbeck has specialised in the high-quality, research-led teaching of working people since 1823. In 2007, it broke all records for its recruitment, and it was praised by its students for the third year running for delivering an exceptional, high-quality education. As a result of the flexible style of its provision, a third of Birkbeck’s students are equivalent or lower qualification students, yet under the new measure they will pay for that. It is estimated that 6,000 or 7,000 people will be affected. The Government’s cuts will directly limit the potential of a great institution, and the potential of thousands of students to change their lives. London is disproportionately affected by the cuts. I urge the Secretary of State to rethink this arbitrary decision, and to instead incorporate the proposal in the wider review of fees expected in 2009, as my hon. Friend the Member for Havant and Members of all parties have argued.

I think it incredible that we will allow Scottish MPs to vote on cutting higher education funding for English students in a manner that will not apply in Scotland. It is an infamous measure, and in all conscience they should abstain from voting on it. It threatens to discriminate against the very people whom we are trying to help.

The debate on ELQ funding has surely shown the House at its best, focusing on an issue of real concern in a measured, non-partisan way. It is all too easy for politicians to follow Napoleon’s advice to “Never interrupt your enemy when he is making a mistake.” That course of action would do for the moment, but it would surely be found wanting over time. What really counts are the interests of thousands of potential learners, whose opportunities will be stifled, and whose life chances will be limited unless Ministers change their minds about the proposal.

Just a few weeks ago, the Prime Minister said, on the subject of learning, that we must provide

“not one chance but second, third, fourth and lifelong chances”

in a society that places

“the highest possible cultural value upon learning”.

The proposal’s impact flies in the face of that aspiration. I know that Ministers take the issue seriously, and I do not for a moment accuse them of anything other than good will in their aspirations for higher education, but surely the tone and tenor of tonight’s debate will oblige them to think again, taking into account the early-day motion, the debate, and the representations that they have received from all parts of the House, country and sector.

As my hon. Friend the Member for Havant (Mr. Willetts) said, supported by the hon. Member for Harrogate and Knaresborough (Mr. Willis), no consultation took place before the proposal was made. There was no lobby or campaign to bring about the change. I repeat that there was no consultation on the principle. The Secretary of State implies that a consultation is under way, and he is of course right, but it is a consultation on how to implement a proposal that has already been made, as the Minister for Lifelong Learning, Further and Higher Education told me in answer to a written parliamentary question. In other words, rather than asking those who know best whether the change should happen, the Secretary of State will consult them on how to limit the damage when it does.

Two days after the Secretary of State announced the withdrawal of ELQ funding, it was reported that he wanted to re-educate the work force with

“university evening classes, weekend courses and part-time degrees”,

yet as we heard in today’s debate, it is the very institutions that lead the way in providing flexible learning that will be most damaged. As the right hon. Member for Holborn and St. Pancras (Frank Dobson) said, Birkbeck college in London is among those institutions. A third of students at Birkbeck college, which specialises, as he said, in part-time evening courses, are ELQ students. The proposal means severe cuts to the part-time learning that the Secretary of State claims to champion.

Earlier in the debate we heard the Secretary of State pouring cold water on some of HEFCE’s figures and statements, which was quite a shocking thing for him to do, but nevertheless HEFCE estimates that 20 per cent. of part-time students in England will be unfunded from 2008-09. As my hon. Friend the Member for North-East Milton Keynes (Mr. Lancaster) said in a stout defence of the Open university—not for the first time, he was its champion in the Chamber tonight—the OU will be severely affected by the proposal. It was good to hear my hon. Friend speaking up for Harold Wilson’s brainchild. By contrast, the hon. Member for Milton Keynes, South-West (Dr. Starkey)—I do not mean to be unnecessarily unkind to the hon. Lady, and I emphasise the word “unnecessarily”—managed, with remarkable dexterity, to skate on thin ice and dance on the head of a pin at the same time.

One of the other institutions that will be affected is the Cambridge Institute of Continuing Education, where more than 80 per cent. of students already have a first degree or equivalent qualification.

It is not only those high profile institutions that will be detrimentally affected. Universities and colleges should work to widen access because education is a tool to build greater social mobility and a more just nation. Many of the institutions that have the best track record in attracting students from disadvantaged backgrounds will bear the brunt of the cuts. As the hon. Member for Bristol, West (Stephen Williams) said, FE colleges and specialist provision will suffer, as well as high profile universities.

HEFCE suggests that, even allowing for the exemptions, institutions such as the university of Wolverhampton, which was mentioned by the hon. Member for Wolverhampton, South-West (Rob Marris), who is not in his place, and the university of East London, both of which attract nearly 40 per cent. of their students from the bottom three socio-economic groups, will lose millions in funding as a result of the Minister’s proposals.

London Metropolitan university was mentioned by my hon. Friend the Member for Henley (Mr. Johnson), who is a champion for London and all that is best about our capital city. It is estimated that 97.5 per cent. of the students at that university come from state schools and it will be among the biggest losers.

HEFCE says that the changes could destabilise efforts to increase the amount of part-time and flexible learning. The policy directly contradicts the aim of widening participation.

Ministers say that the £100 million saving will be recycled within the HE sector to first degree students, but the House is left to guess how or where this will happen and who will benefit. It is not in the letter that the Secretary of State sent to HEFCE. There is barely a mention of the £20 million being redirected to help the students whom he mentioned tonight. We can only assume that he had not made his mind up then or does not know now. I hesitate to say this because I do not want to offend anyone in the House, but I wonder whether that was a rabbit drawn from a hat to cover the Secretary of State’s embarrassment once he realised how unpopular and how unacceptable the proposal was among Opposition Members, the representatives of HE and his colleagues.

Ministers make much of the Leitch review of skills, but Lord Leitch concludes that demographic change means we must reskill and not just upskill the existing work force. The proposal undoubtedly makes reskilling harder for all and impossible for many. The exemptions are arbitrary and inconsistent. Vets will be exempt, but not pharmacists. Land management will continue to be supported, but not law or business studies. Many professional qualifications will be damaged. In 2005-06 21 per cent. of students studying for science, technology and engineering degrees were ELQ students.

That information comes from a Minister’s written answer, so I am surprised that the Secretary of State is shaking his head.

Such qualifications have a direct impact on Britain’s economic chances—and the chances of countless of our countrymen.

The London Business School will be the fifth-hardest hit institution as a result of the change. No wonder the director general of the CBI is concerned; he says that it will damage management and business education. If we are to meet the skills needs of the 21st century, we must enable people to access education in a way and at a pace right for them. That should mean more part-time and distance learning and more modular courses, but the proposals are injurious to those ambitions.

Unless the decision is reviewed, the route back into learning will be harder to travel. Mothers who want to return to work and need to reskill will find that they will not be funded; workers who have been made redundant because of technological change will not find funding for reskilling. So much for the Prime Minister’s talk of second, third or lifelong chances. So much for the culture of learning in which the Minister tells us he believes.

The early-day motion on which the motion is based was signed by more than 200 Members across the House. It is straightforward, measured and clear. The Opposition have not sought to add or subtract from it; we have simply reproduced it for the House to consider tonight. We just want Ministers to look at ways in which damage—damage to lifelong learning, to the Leitch agenda, to objectives that are broadly shared across the Chamber—could be minimised. We believe that it would be better to defer implementation and refer the issue to the 2009 fees and funding commission. Surely that is fair; surely that is right.

Occasionally, an opportunity arises for Members across the House to speak with one voice. This is such an occasion, and voting for the motion is such an opportunity. The Government’s proposal to cut funding for thousands of learners is simply unwarranted, unwelcome and unwanted. I urge Members who genuinely believe in the efficacy of education, in lifelong learning and in second, third and lifelong chances—and I know that Members across the Chamber do—to join me and my hon. Friends in voting for the motion.

We have genuinely had an exceedingly good debate about an important issue. What has come across strongly is that across the House there is a genuine commitment on these important issues.

I strongly believe that the issue of part-timers and adults in higher education is hugely important to every community in the country and to us as a nation. As Sandy Leitch’s thought-provoking, challenging analysis of our skills needs until the end of the next decade made clear, if we are to remain competitive, we need to do much better in getting people to the highest skills levels. He identified that to be globally competitive we need to increase the proportion of the working-age population with a higher education qualification from 29 per cent. today to 40 per cent. by the end of the next decade.

That is a challenging target. Even if we achieve it, it will move us from 10th place in the international league table just into the upper quartile. The target is stiff and challenging; that is why as a country and as a Government we have to ensure that the highest priority for public, taxpayers’ funding is people who are not yet at the first-degree level; that is why that has to come first.

Does my hon. Friend not think it significant that in the speeches from the Conservative and Liberal Democrat Front Benches there was not a single mention of the 70 per cent. of the work force who do not have a university degree? Does he think that they would have turned out in such large numbers had we been talking about apprenticeships or national vocational qualification level 2 or 3? They would not have done.

As usual on these matters, my hon. Friend is absolutely right. We have heard nothing from the Conservatives about the 20 million people in the adult work force, 10 million of whom are women, who have not got to that first degree level, and we should hear more about that.

Can the Minister, for whom I have the highest regard, explain exactly how he will increase opportunities for people who have not yet had a degree by taking away opportunities from those who might go on to acquire further qualifications?

We are redirecting £100 million, which is 0.2 per cent. of the higher education budget, in the first year of the operation of this new system, and we are redirecting that £100 million towards people—20,000 of them by the end of the three-year comprehensive spending review period—who are not yet at first degree level. In order to meet that stiff and challenging target, adult learning and part-time study are important; that is why the Government have been so keen and determined to increase both in higher education.

Words, including some of those that we heard from Opposition Members, are cheap, but our commitment has been reflected not in words but in actions. We have also been treated to some words intended to suggest that the Government are somehow trying to persecute the Open university. Let me make it abundantly clear for the record that nothing could be further from the truth. I say this with genuine conviction. I believe that the Open university is one of the finest creations of any Labour Government; that is why that institution has such strong support from my right hon. and hon. Friends. I have to say that Conservative support for the Open university was not as apparent at its inception, as my right hon. Friend the Secretary of State pointed out when he quoted the late Iain Macleod, who, when he spoke for the Conservatives, described the idea of the Open university as “blithering nonsense”. Let us bring it further up to date. My right hon. Friend might have added that as Education Secretary in 1970, Margaret Thatcher had to struggle hard against pressure from her own Back Benchers in order, as she said her biography, to save the Open university. This commitment to and support for the Open university is a little late and opportunistic.

Nevertheless, the Labour party—the party of this Government—created the Open university and we continue to support it. We retain, importantly, our commitment to part-time study as a route to individual betterment for people who, for whatever reason, have missed out on the chance of higher education first time round.

Could the hon. Gentleman be clear about what consultation took place with the Open university, Birkbeck and others before the letter was sent from the Secretary of State to HEFCE suggesting these measures?

The Secretary of State has made the position clear. We set out the policy, we have been consulting on its detail, and that consultation has not concluded. HEFCE and Ministers have been listening to the points that have been made.

Under this Government, part-time student numbers have risen by no less than 40 per cent.—faster than numbers of full-timers. That has happened because we have continued with the strong and long Labour tradition of support for mature students in higher education and for the part-time mode that is so important to them. That is why this Labour Government were the first Government to bring in part-time student support. It is why, two years ago, we increased the part-time student grant by 27 per cent., and why in each of the past two years we have allocated an additional £40 million, through the funding council, to support part-time provision. Compare and contrast that with the record of the last Conservative Government, of whom the hon. Member for Havant (Mr. Willetts) was a member, when there was precisely no incentive for higher education institutions to recruit part-timers and no support to allow learners to study part-time.

But does the Minister not understand that his proposals will damage part-time students who do not have a degree already, as well as those who have a degree? Those proposals will make part-time courses less viable, they threaten existing part-time provision, which means those without degrees suffer, and they will limit the range of students studying part-time courses. He is undermining his own policy through those ill-conceived proposals.

That is emphatically not the case. I urge the hon. Gentleman, whose views I normally respect, to look at the detail of the proposals, and to recognise the fact that we are increasing the part-time premium to institutions such as the Open university through the Higher Education Funding Council. Institutions such as the Open university and Birkbeck will be exceedingly well placed to take up the additional growth from the redirected £100 million, and the 2 per cent. above inflation increase in the overall higher education budget each year, in order to make good any loss in respect of ELQ students.

We have invested in and supported part-timers; the previous Government did nothing whatsoever to support them. Let us also remember what happened to overall higher education funding under the previous Government. During the last seven years of that Government, there was a 36 per cent. real terms cut in higher education funding. When one talks to vice-chancellors and lecturers, one finds that they very much remember those days. In the past 10 years, we have seen the biggest increase in higher education funding for 40 years. Since this Government came to power, we have increased funding by 23 per cent. in real terms, and for each of the coming three years of the CSR period, there will be a further increase of 2 per cent. above inflation. This Government are not cutting funding for higher education; we are maintaining and expanding higher education. What we are doing, rightly, is redirecting 1.5 per cent. of the overall higher education budget by the end of year three in order to give a chance of a university education to more than 20,000 full-time students who would never have had that opportunity otherwise.

The Minister is throwing out a lot of stats, and going back 20 or 30 years in some cases, but could he explain clearly to this House which bit of the motion he disagrees with?

I disagree with the bit of the motion that says that the Government should ensure that we minimise the impact on institutions such as the Open university and Birkbeck because that is exactly what we have already been seeking to do through the consultation. We have sought to ensure that those institutions are able to benefit from the growth that will come from the redirected £100 million and the overall increase in higher education funding. I shall return to that point later.

I shall now comment specifically on some of the points that have been raised during the debate. The hon. Member for Havant made a significant issue of the proportion of women who will be affected by the policy. Let me be clear and state for the record that 47 per cent. of ELQ students are women, just as 47 per cent. of non-ELQ students are women. It is also the case, as my hon. Friend the Member for Bury, North (Mr. Chaytor) alluded to, that tens of millions of women in the adult work force do not have a first degree, and ensuring that they receive funding will be a priority under the proposals.

The hon. Member for Havant was challenged by my hon. Friend the Member for Blackpool, South (Mr. Marsden) to say what he would he do if he were faced with this decision, and on where the money would come from, and he said quite simply that he would not make this decision. That is fine; such a priority can be made, but if another decision were taken, the Opposition would have to go out and explain it to the 20,000 students who would not have their first degree funded as a result.

The hon. Gentleman also made a point about our proposals being contrary to what Sandy Leitch has recommended. I do not believe that that is the case. The proposals will give significant opportunities to enable people to reskilll through employer co-funded courses, vocational foundation degrees and whole range of exempted subjects.

As I said at the beginning of the debate, if the Tories were honest, they would say, “Let’s raise taxes and have it all.” That is what I believe.

I know from many conversations that my hon. Friend believes that. I will leave it at that.

More interesting was the intervention from the hon. Member for Harrogate and Knaresborough (Mr. Willis), who chairs the Select Committee. He challenged the Conservative party to make a commitment that, if a Conservative Government were elected—

Indeed. The Chairman of the Select Committee challenged Conservative Members to make a commitment that any student who had a first degree could get a funded ELQ. The hon. Member for Havant could not make that commitment and urged us simply to wait for the results of the commission in 2009. We therefore have principled opposition, but only for a year. Indeed, we have political opportunism that masquerades as principled opposition on the issue.

The hon. Member for Bristol, West (Stephen Williams), whom I welcome to his new position and responsibilities, mentioned foundation degree awarding powers for further education colleges. My memory of that change was of significantly more noise and opposition compared with the reaction to the proposals that we are introducing today. Yet now that the change has been made, we hear not a murmur from the sector. That demonstrates that we sometimes have to do what is right, consult and take people with us.

The reason for the noise from the sector was that the Government had not consulted it. Matters improved and there is not so much noise now because we went through a legislative process in this place and significantly amended the original proposals. We will not get that chance with tonight’s proposal.

The same principle applies. One presents a proposition and consults about the detail—we did that previously and we are doing it now. I appreciate that the hon. Gentleman is new to the Front Bench, but he is seriously misinformed about the current position. He lamented the fact that ELQs would now be unregulated and that higher fees could be charged, but that is the current position. Institutions can already charge higher fees for second degrees. Given the competitive market, I believe that universities will think long and hard before raising fees. They know that significant other sources of funding will come forward as a result of the changes.

I respect the integrity and commitment of my right hon. Friend the Member for Holborn and St. Pancras (Frank Dobson). Let me reassure him about Birkbeck college. I have met representatives of Birkbeck twice and I spoke at its founder’s day before Christmas. I have been impressed by the college’s willingness to engage with the Higher Education Funding Council and examine the way in which it can reorientate the organisation to take up the opportunities that are on offer. It is a model for the way in which we expect higher education institutions to respond.

The hon. Member for North-East Milton Keynes (Mr. Lancaster) claimed that the changes would result in the Open university losing £49 million in funding. That is categorically untrue. It does not serve the cause of the argument to make such claims. My hon. Friend the Member for Milton Keynes, South-West (Dr. Starkey) passionately supports the Open university, as was demonstrated when she made exactly the same arguments in private to me as she made on the Floor of the House.

Let me conclude by making the position abundantly clear. First, there is no overall reduction in funding for higher education. On the contrary, it will continue to increase. Secondly, funding for students taking ELQs in strategically important and vulnerable subjects will be protected. Thirdly, students taking foundation degrees will be protected. Fourthly, funding for employer co-funded courses will be protected. Finally and crucially, no institution’s grant will be reduced in cash terms in the next three years while the new policy is introduced. That is an important message to Birkbeck and the Open university.

I strongly believe that institutions such as the Open university and Birkbeck are well placed—indeed, given their records, better placed than most—to take advantage of the opportunities and recoup their share of the £100 million that we are redistributing. The proposal is about priorities. The needs and interests of first-time students—

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:—

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

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


That this House supports the Government’s decision to reprioritise some funding currently supporting the teaching of higher education students who already hold an equivalent or higher qualification, in order to enable approximately 20,000 additional full-time equivalent students to enter higher education for the first time; notes the Higher Education Funding Council for England (HEFCE) consultation which proposes that transitional protection will be put into place to ensure that no provider loses in cash terms, that the change to the funding methodology will protect Foundation Degrees, employer co-financed programmes, and strategic subjects, and that the premium paid to support the costs of part-time provision will be increased; notes that HEFCE and Ministers have been engaging constructively with the Open University and Birkbeck on this issue; and believes that the Government is right to give priority to first-time students.