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Higher Education

Volume 497: debated on Wednesday 14 October 2009

I must tell the House that Mr. Speaker has selected the amendment in the name of the Prime Minister.

I beg to move,

That this House congratulates those who have secured a higher education place for 2009-10 and wishes them well in their studies; regrets the increase in the number of applicants unable to secure a place this year; further regrets the financial difficulties faced by up to 175,000 students who started term without the loans and grants to which they are entitled; believes it is unacceptable that three-quarters of a million telephone calls to the Student Loans Company went unanswered in three months and that an avoidable contact policy was adopted; notes with regret that warnings about the problems in Student Finance England appear to have been ignored; asks the Government to clarify the treatment of emergency loans made by higher education institutions; regrets the problems faced by international students as a result of the poor implementation of the new visa system; notes the need for additional, fully-funded, higher education places in 2010-11; calls on the Government to consider new ways to improve access to university for 2010-11; further calls on the Government to provide more information on its planned sale of the student loan book; and welcomes the idea of a cross-party student finance review to look at the long-term sustainability of the higher education sector, a fairer deal for part-time students and links with further education.

We called for this debate at the very first opportunity since the House came back from recess because of the widespread and deep concern felt, I am sure, in all parts of the House about the financial uncertainties facing students who are starting university this year. Students, especially those starting university, should not have to face the financial distress, uncertainty and anxiety that many of them are, sadly, now confronting because of problems with the delivery of their student loans. I am sure that all of us will have received e-mails, letters and messages from students who are constituents of ours. I think of a student at Liverpool John Moores university who e-mailed me only yesterday. She said:

“I find it diabolical that my loan is this late, that the Student Finance company are aware of the fact that I have a three year old, that I’ve got no money, I can’t afford to pay nursery fees and frankly, I find it absolutely shocking and downright unacceptable to be ignored in this manner. I have NO money at the moment—I NEED my loan in order to live.”

That is the type of e-mail that we are receiving.

We are also receiving messages from the National Union of Students and student unions across the country, which are aware of the problems. I should particularly mention the university of Wolverhampton student union, which has been exceptionally active on the problem. We are also hearing about it from universities and vice-chancellors. I shall quote a message that I received from the vice-chancellor of my local university, Portsmouth university, yesterday. He said that he has already had to give emergency loans and grants to 217 students, and said:

“We anticipate that this will grow rapidly because students arrive with some money, which is now running out. Later this week we shall need to defer the first accommodation payment for those whose funding has not arrived, which is a significant cash flow issue. If one third of our students cannot pay their first instalment, we shall be short of £1 million until the payments are received.”

He goes on to make a point that many people are making to us:

“Students are becoming very frustrated with lost applications, lost or not received duplicate applications, failure to alert the student of insufficient documentation until the student rings them and then being put to the back of the system on receipt of these.”

The situation is a shambles, and it is causing enormous distress to many students. Ministers have been trying to avoid responsibility for that by hiding behind the Student Loans Company. I very much hope that when we hear from the Minister for Higher Education and Intellectual Property in a moment, he will give a frank account of what has gone wrong and what he will do about it. Ministers cannot escape responsibility for what has happened. For a start, the system is one that they introduced; it is a consequence of a report that they commissioned, entitled, rather ironically, “Improving the Student Finance Service”. In a written statement on 3 July 2006, the Minister’s predecessor, the hon. Member for Harlow (Bill Rammell), announced the new system. Previously, assessments were made via local authorities. In that statement he said:

“The student finance service needs to be as simple and accessible as possible to students, parents and graduates.

As well as clearer information, faster decisions, timely payments and accurate repayments, the transformed service intends to provide taxpayers with better value for money”.

That was the promise three years ago. The reality, of course, is shockingly different. We are talking about a system that Ministers themselves designed. It is also a system whose complexity goes back to policy mistakes made in the late and not really lamented Department for Innovation, Universities and Skills—an extraordinary system in which three separate years of students each has a different regime for maintenance loans and maintenance grants, because the system has been changed year after year, creating extraordinary levels of complexity.

When we look into the detail of what happened, we find that the papers that students send in are sent to Darlington. From Darlington they are taken by truck to Glasgow, where they are supposed to be electronically scanned in. We are told that the electronic scanners in Glasgow do not work properly, so the papers are put back on a truck and taken back down to Darlington, where much of the data is apparently being manually input because the electronic scanning procedures do not work. There is a helpline where the phone is rarely answered. E-mails go unanswered and the website is often inactive.

I have to say to the Minister that the ghosts of standard assessment tests, education maintenance allowances and tax credits are hanging over this debate. He must take some responsibility for tackling the problem, especially as these difficulties were predicted months, if not years, in advance at meetings attended by senior officials of his own Department. The company forecast—we have this from the minutes of a meeting on 15 July 2008 attended by one of his senior officials—that 40 per cent. of all calls would be abandoned because customers would find the line engaged. The company forecast that it would be receiving three times as many e-mails a day as it was possible to process.

The Department’s response to these looming problems was a policy whose official name was—anyone would think I was making this up—minimising “avoidable contact” with students and their parents who were trying to get the loans and grants to which they were entitled. That is the story of incompetence, made worse by the complacency of some of the assurances that we were getting regularly that the situation was all about to get better. It did not particularly inspire confidence when the deputy chief executive of the Student Loans Company, challenged on the fact that documents appeared to be going astray and that the caseload was not being tackled, said that we should not worry because the documents were like lost car keys:

“It’s a bit like losing your car keys—you think you have lost them, but they are in the house somewhere”—

which is not quite good enough for students and their parents.

I wrote to the great panjandrum himself, the Secretary of State for Business, Innovation and Skills and just about everything else, on 11 September. His reply, as one would expect from Lord Mandelson, was prompt and courteous, but the distancing from the Student Loans Company made me think of a man carrying a noxious substance at arm’s length while holding his nose. I could not have envisaged a Minister distancing himself more skilfully.

The Secretary of State begins by saying:

“I am told that this year the SLC has received a record number of applications”.

“I am told”—was he perhaps at a cocktail party where this was mentioned? Did he read it on flicking through his press cuttings and say, “Oh dear, look what’s happening to student loans”? “I am told”—did a minion perhaps bring this information in on a silver platter for the Secretary of State to consider? He should have been told because he is the Minister responsible for an organisation that belongs to his Department and also to the Scottish Executive.

The Secretary of State says:

“I am told that this year the SLC has received a record number of applications”.

This year is the first year that the system has been operating. It did not operate in the same way in any previous years. This year is the first year when the problem has arisen because this year is the first year when Ministers’ policy has been in operation.

“I am told that this year”—

I admire the skill. One can already sense the Secretary of State shimmying round a problem for which he ought to be held accountable. He goes on to say:

“I understand the Company has told all students who applied before the relevant deadline that they will receive confirmation”.

We would love to hear from the Minister what this deadline is. There are various deadlines at the end of the application form. They are not on display on the website, and some of them are very early indeed. We would like to know what the deadline is.

Lord Mandelson goes on to say:

“As you know”—

that is very encouraging; the Secretary of State knows that he and I share this understanding—

“demand for university is up this year and this has put some pressure on the SLC’s helplines.”

That means that people cannot get through. The response from the Secretary of State is exquisite in its ability to distance him from any practical responsibilities for which he and the Minister for Higher Education and Intellectual Property ought to take some responsibility.

We would like to hear from the Minister a response to the following practical questions. First, how many students are still affected by the problem? There was a figure of 50,000 at one point. We have seen from a freedom of information request that there seems to be a gap between the 1,092,000 applications for student support across all three years and the 916,000 that have been processed. That would suggest a far larger gap of 175,000, so will the Minister please give us, first of all, an accurate up-to-date account of how many students are affected?

Secondly, the Secretary of State says that everybody who applied before the deadline is okay, but what was the deadline? Was it last June, long before students had their A-level results and long before clearing had started? What was the deadline? Thirdly, when will the problem be tackled? When will it be sorted? Can the Minister give a guarantee and a date by which time students who are still facing uncertainty will get the information that they need about their grants and loans? In particular, can he guarantee that the problem will be solved before the process of applications in January starts? Some students start at university in January or February; they do not all start in September.

Fourthly, what about the costs being incurred by universities? There is the access to learning fund, which many universities are having to use to help their students in financial distress, but the access to learning fund—whose size, incidentally, has already been reduced—was intended to help students who are under financial pressure through the year as part of the regular process of assisting students with modest incomes. It is not supposed to be spent in the first few months tackling a financial crisis not of universities’ or students’ own making. What financial support will the Minister offer to universities in these difficult situations?

Fifthly—this is an area where the Department is adding insult to injury—will the Minister confirm that the main helpline number being used by students and their parents to get information is an 0845 number? Will he confirm that there are no numbers other than the 0845 number, and will he confirm that this is contrary to Ofcom guidance, which recommends that public bodies should not use such numbers exclusively? Will he tell us how much money is being made by the Student Loans Company obliging people to use an 0845 number and then leaving them hanging on, sometimes for a very long time?

Sixthly, will the Minister undertake regular reports to Parliament, now that Parliament is back? Instead of FOI requests and suchlike, will we now have a regular update on what is happening?

Those are some crucial practical concerns. So far the response of universities, students and the National Union of Students has been far more imaginative than anything we have heard from Ministers. Universities UK talks about universities delaying payment for university accommodation, which we know is going on. We know that universities and the NUS are prepared to write to private landlords to ask them to be sympathetic to students who cannot pay their rent, and that they are trying to help students with child care payments. The initiatives are all coming from universities and students. From Ministers we have heard nothing, and we now need to know what they are going to do.

While the Minister is present, and as the motion ranges beyond the subject of the Student Loans Company, important though that is, will he also clarify the Government’s position in two other areas that are of great public interest? The first is the sale of the student loan book, on which we had a statement in answer to an urgent question earlier this week. We believe that the Government had £6 billion of proceeds from the student loan book marked down for the future. It looks as if they now propose to increase that figure, so it would be very interesting if the Minister for Higher Education and Intellectual Property could tell us the new figure, because the sale of the student loan book was specifically identified as one item on which the Government would draw to meet their new target of an extra £3 billion in receipts. Does he still stand by the statement that he made on 14 July? He said:

“The Government still intend to make sales from the student loan book, but it is clear that this should only be done at a time when we can get a good return for the taxpayer. For the time being, the market conditions do not allow this.”—[Official Report, 14 July 2009; Vol. 496, c. 373-74W.]

Is that still his view of market conditions? If so, where does he expect the extra proceeds from the sale of the student loan book to come from? Any further light that he can cast on that would be helpful.

The other area that is causing universities a lot of concern is the visa regime, which we refer to in our motion. We understand the need for tough and effective visa controls, but there are concerns from some universities about the scale of the delays that foreign students experience. Those people are incredibly important sources of revenue for British universities, but the registrar of the university of Warwick said:

“UK visa officials appear to have replaced red tape with red barbed wire”.

Universities UK says that we are now

“in serious danger of sending out a message that the UK does not welcome international students”.

The Minister will be aware of concerns about access to visas in places such as China, Hong Kong, Japan and Singapore. What measures are the Government taking to ensure that the necessary visa controls are implemented briskly and effectively and do not damage British higher education’s reputation in the wider world?

I sense that the hon. Gentleman is moving towards a conclusion by his eyes flicking upward towards the clock, so I shall be brief. The Opposition’s motion refers also to their belief that the Government should provide more places at university this year. Will he enlighten the House about how he plans to pay for the extra 10,000 places that he pledges?

I certainly will enlighten the Minister on that point, because we think that Ministers are in an odd position. In their amendment to our motion, they claim credit for the large number of students going to university this year, but of course some of that is down to the demographic bulge that was caused by the higher birth rate in the early 1990s. Some of it, sadly, is also down to the fact that young people cannot find jobs, so, when they receive the qualifications at A-level, they apply for university. I accept absolutely the argument that when the economy is in such a mess, if young people with A-levels that qualify them for university wish to go, it is for them a far better option than their simply going on the dole.

At our party conference, we proposed an imaginative way of offering 10,000 extra, fully funded places for university students next year, when the demographic bulge will be at least as big and, sadly, unemployment will still be growing. For the summer of 2010, we propose a discount for early repayment of student loans, which would bring into the Exchequer extra cash that could be used to pay for extra student places. Our belief is that the extra student places—[Interruption.] The Minister for Further Education, Skills, Apprenticeships and Consumer Affairs mutters under his breath, “For those who are well off.” The policy’s crucial point is that the 10,000 extra student places will go to students from all backgrounds, and, in particular, we know that the best way to help students from modest backgrounds to get to university is to provide more places in total. That is the policy’s crucial feature: it offers extra places at university with a clear, cash-flow benefit going to the Government in order to pay for it as a one-off measure in the likely student places crisis of 2010, which could, unless we take imaginative action, be at least as bad as that of 2009.

Given that the money that the hon. Gentleman hopes his policy will return to the Government is money that the Government owe to banks, for the sake of clarity, what is the difference between his proposal and the Government undertaking additional borrowing, which I understand he opposes?

Extra cash will go to the Exchequer in the crisis year of 2010, because that is the year when we envisage there being a bulge in the number of student applications. It will bring extra receipts to the Exchequer, and, if I may say so as we reassemble after three party conferences, the crisis of student places has been acute this year and could be as bad next year, but only one party had any imaginative proposals to offer more places for university students next year.

I see the Chairman of the Select Committee on Business, Innovation and Skills trying to catch me eye.

My Committee has had responsibility for universities for barely two weeks, and I am very sorry but a prior engagement means that I cannot be present to hear the Government’s response. Through my hon. Friend, however, may I say to the Minister for Higher Education and Intellectual Property that I am disappointed that the Government’s amendment does not refer to the visa issue? It has been very well flagged up and anticipated, and we were led to believe that the problem was being dealt with. I am concerned that it has not been dealt with effectively, and I look forward to reading what the Minister has to say about the issue in his remarks.

I am grateful to the Chairman of the Select Committee, because that is a very important point.

The Opposition are committed to improving opportunities for young people—

No, I am reaching my conclusion.

That means improving the opportunities to get young people into apprenticeships and training; getting them off benefit, as they suffer under a recession that this Government brought about; more places at university for them; and the proper administration of the loans and grants to which they are entitled. I therefore commend the motion to the House.

I beg to move an amendment, to leave out from “House” to the end of the Question and add:

“welcomes the record number of students attending university or college this year meaning more students benefiting from higher education (HE) today than at any stage in UK history; commends the Government for its record levels of investment in HE, an increase of over 25 per cent. over the last decade compared to a 36 per cent. decline per student under the previous Government; recognises the Government’s commitment to expanding opportunities to participate in HE, including an extra 10,000 opportunities this year in courses related to science, technology, engineering and mathematics subjects and 10,000 recently-allocated additional student numbers for 2010-11; commends the Government’s generous student support package and regrets that this year the Student Loans Company (SLC) has been unable to provide the level of service students and their families have rightly come to expect; notes that 800,000 English-domiciled students have already had their applications for funds approved and that following additional Government support the SLC has allocated extra resources to deal with enquiries and processing; further notes that the vast majority of students who applied within the deadline will have received their money, that interim payments are available for students and the Government’s Access to Learning fund provides help for students suffering financial hardship; further notes the significant contribution international students make to the UK, and believes that the new student immigration system is effective and fair; and further notes the Government’s confidence in future economic growth which will enable a viable sale of the student loan book.”

I thank the Opposition for the chance to place on the record the Government’s commitment to young people in higher education, which has clearly been one of this nation’s great success stories over the past decade. I also welcome the opportunity to debate with the hon. Member for Havant (Mr. Willetts). I am fast learning that he rarely misses the opportunity to overstate his case. I think back, for example, to our exchanges before the recess, during which the hon. Gentleman confidently predicted the collapse of the clearing system this autumn—a collapse, needless to say, that never happened. Perhaps it is his reputed two brains that account for the tendency to provide twice the level of cynicism and hysteria every time he rises to speak at the Dispatch Box. Either way, I thank him, because on any analysis, the Government have a strong record to discuss.

The story of more people going to university, from a wider variety of backgrounds, to enjoy properly funded higher education is clearly a positive one. We do not pretend that nothing ever goes wrong. Indeed, the main subject of the Opposition motion today is that something has gone wrong in relation to the Student Loans Company, and in a few moments I shall turn to that issue. But let the House be under no illusion: my hon. Friends and I do not fear a debate about our record; on the contrary, we welcome it. Higher education has always provided a stark illustration of the difference between the Government’s vision and that of the Opposition, and I, like the rest of the country, wait impatiently to find out the suite of policies that the Opposition propose.

I know, for example, that the hon. Gentleman has often stated his commitment to widening university participation. If only those wise aims were matched by wise means. Instead, we have heard a succession of sketched-out proposals that have vanished into thin air like smoke from the Bullingdon club’s after-dinner parties. The hon. Gentleman has described the latest proposals in instalments over the past few months. One idea was to charge 8 per cent. interest on student loans. It is hard to think of a more effective deterrent to ordinary working-class students than that.

Would my right hon. Friend also like to point out to the hon. Member for Havant (Mr. Willetts) that he is wrong when he states that old universities are letting students down?

The hon. Gentleman is patently wrong, as my hon. Friend suggests; if he picks up this week’s edition of the Times Higher Education, he can see the international rankings that demonstrate that that is not the case. It is not appropriate for someone who suggests that he wants to stand at this Dispatch Box and lead on higher education to talk down what our universities are doing.

Is it not the case, though, that not content with giving this nation a huge overdraft, the Government’s failure to take action over the Student Loans Company means that many of my constituents are themselves suffering huge overdrafts—not only the students but the parents? They will be disappointed and surprised that, instead of mocking the very serious points made by my hon. Friend on the Front Bench, the Minister is not a little bit more contrite and humble and offering an apology to the people of Shropshire, who are suffering real financial hardship.

I will discuss the Students Loans Company in a moment. The people of Shropshire will be deeply disappointed that those on the hon. Gentleman’s Front Bench propose a £610 million cut in our budget. How would that support their endeavours to send their children on to higher education? That is the question that he should be asking.

The hon. Gentleman should also ask why the hon. Member for Havant proposes—we heard it again this afternoon—a 10 per cent. discount for graduates whose parents are rich enough to pay off loans early. That is clearly another equivalent to the Opposition’s inheritance tax cut for some of the wealthiest estates in the country. He said that he would fund an extra 10,000 places, but that is money that he would not have to spend, and that the Government certainly do not have to spend, because the Government borrow the money from the banks in order to meet those tuition loan repayments. His proposal would therefore cost Government an additional £240 million across those academic years. Where would that money come from? What kind of a way is that to run the economy? How is it that he has failed to add up properly and proposed a policy that would actually plunge us into further debt?

Although we welcome the expansion in higher education, is my right hon. Friend aware that one of the consequences of increased student numbers in Loughborough and other small towns is the rise in the number of houses in multiple occupation? It is imperative that he always considers the impact of that on the local community and does not increase student numbers just for the sake of it. I wanted to intervene on the hon. Member for Havant (Mr. Willetts) to ask how many of the extra 10,000 places that he is proposing could be sustained in relation to growth in those communities, because the figures just do not add up. Will my right hon. Friend ensure that not only the universities but the communities are taken into account when we expand higher education?

I recognise that there are genuine issues in constituencies such as Loughborough about houses in multiple occupation. My hon. Friend will know that the former Secretary of State, my right hon. Friend the Member for Southampton, Itchen (Mr. Denham), who shares that concern and sees its effect in Southampton, has now found his way to the Department for Communities and Local Government, so action can be taken on two fronts.

I had hoped that the hon. Member for Havant would give way on that point. Does my right hon. Friend acknowledge the veracity of the statement from vice-chancellors—perhaps not all, but certainly some—when they say: “If we are to have a further 10,000 places, is someone going to tell us where the classrooms and lecturers are coming from?” Those are very serious considerations.

My hon. Friend is absolutely right. She recalls a moment in time during the early 1990s when the Conservatives increased participation but lowered the unit of resource—class sizes grew and facilities were poor. They failed to invest in research, and we subsequently had a Save British Science campaign. We cannot go back to that. She is right to remind the House of the hard choices that we face in government as we, by necessity, manage growth in the system.

We have heard a quite extraordinary set of allegations in the past 10 minutes. There is no Conservative policy for an 8 per cent. interest rate for students, there is no £620 million cut, and the 10,000 extra places would be properly funded with extra cash going to the Exchequer. I suggest to the Minister that in the remaining 10 minutes of his speech he focuses on a practical problem facing students and their families now and offers some explanation of what has gone wrong with the Student Loans Company system and what he is going to do about it.

It is my speech and I will make it as I want to.

The hon. Gentleman’s constituents will also be concerned that according to today’s edition of the Evening Standard, the Conservatives are saying, in advance of an independent review, that students should pay £7,000 in fees. That is what they are saying to the country. That is extraordinary given that we have said that we will set up an independent review and we have sought to consult Opposition parties on it. I was surprised to read that proposal before I came into the Chamber.

So was I. I can tell the Minister that there is no such Conservative policy; as we make clear in our motion, we believe that student finance is something on which there should be a cross-party higher education funding review.

On the sale of the student loan book, the hon. Member for South Holland and The Deepings (Mr. Hayes) supported that measure in this House back in 2007, before the global economic crisis made raising money from assets a necessity, as it is now. In March, I said clearly that the time was not right and we would suspend that sale. It is now October. As the Prime Minister, the Secretary of State for Business, Innovation and Skills and the Chief Secretary to the Treasury have made clear, following the progress that Volkswagen and Lloyds have made as regards the securities market, we will test the market. We will of course seek to get value for money on behalf of the taxpayer, but it is right that we test the market to see whether we can make that sale possible.

The Minister is right. We support the principle of selling the student loan book—when the time is right. He will remember that my hon. Friend the Member for Reading, East (Mr. Wilson) and I made it absolutely clear at the time that a value-for-money criterion was critical. Following today’s debate, will he commit to making that funding criterion—a framework that he must have in the Department; he would not be diligent if he did not—available to the House so that we can see on exactly what terms the loan book will be sold?

As the hon. Gentleman knows, the Treasury will make that assessment on the basis of the market as is appropriate at the time.

Let me turn to recent events at the Student Loans Company. We have already heard something about that from hon. Members. This year, the whole university applications and admissions process has faced unprecedented demand brought on by the effects of the recession. Unemployment, especially youth unemployment, has risen, and it is clear that this has caused many more young people to apply to university, and for student support, than might otherwise have done so.

Faced with these pressures, the Student Loans Company has fallen short of public expectations in responding to increased demand. While it is true that, as at this moment, 640,000 students in England have been paid by the SLC this year—more people than ever before at this point in the year—I share the concern of Members in all parts of the House that a minority of students have not received their funding in good time ahead of the new academic year. That in unacceptable and falls short of what the public can expect.

This year’s problems have had a profoundly regrettable effect on individual students and their families. Even when they have not led to financial hardship, they have undoubtedly caused worry and frustration, particularly for parents attempting to get through on the phone lines. The company’s chief executive has already publicly apologised for the difficulties that customers have had in contacting it. Its chairman has also apologised to customers for their experiences this year, and I repeat that I, too, am sorry for what parents and students have experienced. I also share Members’ frustration at the disappointing customer service provided by the Student Loans Company. Many students and parents have not been able to get through to speak to an adviser and find out about their application. Others have been confused about the process and what is happening with their application at an important time in their life.

In anticipation of increased demand, I provided the SLC with all the resources that it asked for in this financial year—an additional £6.9 million—to fund increased costs to the organisation. Problems began to emerge in early September, and I met the chief executive and deputy chief executive of the SLC on 8, 10, 14 and 24 September to express my concern and ensure that action was taken. To support the SLC further, I made available an additional £230,000 of funding in September to help put a number of measures in place. They included a 70 per cent. increase in the number of phone lines, recruiting additional staff to answer phones, paying more staff to work overtime, increasing call centre operating capacity by about 35 per cent., reminding students and parents that they could check the status of their application online and improving answers to the most common inquiries.

The SLC has now stated its target that anyone who submitted an application on time, with the correct information, will receive their full payment by the end of October. It is now vital that it learns the lessons of this year and plans for improvement next year. I have received a letter from the chairman of the SLC setting out his initial view of what happened in the first year of the transition to a fully centralised system of financial support for students in England. However, there needs to be a thorough consideration of the matter. To that end, I have invited Professor Sir Deian Hopkin, the former vice-chancellor of London South Bank university, and Bernadette Kenny of Her Majesty’s Revenue and Customs to bring external scrutiny, expertise and challenge to the company’s review of lessons learned from this year and its preparedness to meet the challenges of next year. The SLC itself is on record as acknowledging the need for such an exercise, but I am determined that the process should involve the external challenge and expertise needed to provide a frank assessment of what went wrong and a series of thorough proposals for the future.

I am grateful to the Minister for the much more sober tone that he is now adopting. Will he clarify two points? First, he said that 640,000 students had got their money through. What is his latest estimate of the number of students who have applied, or are going to university, but have not yet had their financial assessment completed and are not yet receiving funding?

Secondly, the Minister mentioned the target for anyone who submitted their application on time. It is extremely difficult to pin down on the website what “on time” means. A lot of students are asking when the deadline was.

The deadline was at the end of June. The hon. Gentleman will appreciate that many people who apply for student finance do not ultimately go to university. Others apply solely on the basis that they have entered the clearing process. With the increase in demand this year, there was a huge growth in the number doing that. The SLC says that it is currently receiving about 5,000 applications every week, but he will understand that not all those applications result in students actually going to university. The company has to process them, but some people are assessing what their finances might be if they went to university, and some are not successful in getting to university at their first attempt.

There has been a big increase in the number of applications. In fact, 830,850 applications have been processed, which is 49,000 more than last year. There are 77,000 applications in processing, and we understand that 71,200 students are not eligible or have withdrawn. It will be a moveable feast over the course of the next few weeks as students enter university. Of course, some students apply at that point, and this year there has been a growth in the number doing that. Some enter university and decide that it is not for them and drop out in the early months of their course, or switch institutions.

There are complexities to the numbers, but of course I do not withdraw from what I have said—that the standards of service that the public have come to expect from other big call centre operations, be they NHS Direct or HMRC, have not been met. The review will consider governance, programme management and processing, and I want it to report quickly so that its recommendations can be incorporated into the SLC’s preparation for next year’s processing.

In his response to the hon. Member for Havant (Mr. Willetts), the Minister said that many students drop out of their studies at this stage. Does he recognise that the reason why a lot do so in their first year is financial hardship, and that the current situation makes it more likely that students will drop out?

There are a range of reasons why students drop out of university, and the hon. Gentleman will be aware that through the widening participation component of the block grant that we make to universities, particularly those that specialise and have considerable expertise in supporting more vulnerable students and those from more deprived backgrounds, we provide money that supports the retention of such students at university. As the hon. Member for Havant said, we also provide £45 million to our universities through the access to learning fund, to support students through what are normally called “hardship funds”. Those funds are being drawn on to support students at this time in particular.

It is important that we bear in mind that it is 14 October, and most universities’ terms began two weeks ago. We are at the beginning of the process. However, the situation has not been good enough, the demand was not anticipated, there have been problems with scanning and technology and trialling has not been effective enough. Too many people have not been able to get through on the phone, and automated e-mails have driven people to want to phone, increasing demand even further. That must be the subject of a lessons learned exercise.

The Minister is, as always, talking the good talk, but does he not accept that the reality in Members’ constituencies is a lot of frustrated students? They are not just those going to university but students such as those in my constituency who want to study at The Hill college in Abergavenny but are unable to do so because the Welsh Assembly have cut their funding. I know that he will say that that is not his responsibility, but my constituents are suffering as a result of the policies of his Government both here and in Cardiff bay.

That is a nice try, but as I have said before, the hon. Gentleman will be aware of his party’s commitment to £610 million-worth of cuts and the effect that that would have at this time.

The SLC’s current operational difficulties are unfortunate, and I have described to the House the measures that are in hand to deal with them to ensure that they are not repeated. However, they should not distract us from the real issue, which is the Government’s success in building our world-class higher education system, our resolve in ensuring that the system is truly fit for the challenges that we will face as a nation in future, and our unswerving commitment to building aspiration among young people from ordinary and, especially, underprivileged backgrounds, for the many benefits that higher education brings.

That is in stark contrast to the Conservatives, who offer not a renaissance, but a risk that the country cannot afford. They asked to be judged on how they treat the poorest in society, only to offer unworkable and wasteful discounts to students from the richest families in the country, and they have nothing to say on social mobility and widening access to university. They promise to peg down debt, only to make spending commitments that they cannot afford. Having promised people that they have changed, they revert back to a Thatcherite core, opposing the help that businesses need to stay solvent, the help that families need to stay in their homes, and the help that young people need to invest in the future.

The past few months have reminded us that the Conservatives are in opposition for a reason. Neither credible nor compassionate, they offer nothing more than the echoes of their discredited past. As the country emerges from the economic shock of this century, what people need, especially our young people, is not hollow rhetoric, but support, and opportunities to contribute to this country’s renewal.

Many of us will have a sense of déjà vu today. Just before the summer recess, we had many debates and discussions about the crisis and shambles over which the Minister of State was at that time presiding—the lack of places in higher education to meet demand. This summer, on behalf of my party, I covered A-level results day. In previous years, the debate has been centred on standards. This year, after seeing television pictures and photographs of elated students receiving their results, we saw some heartbroken students who had realised that their place was not guaranteed and who had no idea what was going to happen to them in clearing. We will not know until next week, when UCAS releases its final figures, the status of such applications and how many people’s success at obtaining results has led to disappointment at not obtaining a university place.

Today, however, we are concerned with yet another shambles presided over by the new Department. According to various press reports in the past few days, at least 100,000 students are yet to receive confirmation of their grants or maintenance loans. It has also been reported that first-year students have been hard hit. According to information released to the BBC under a freedom of information request—it is a shame that the BBC had to obtain the information that way and that the Student Loans Company or the Government were not more open with students and their parents—28 per cent. of applications by first-year students had not been processed by last week.

We know that universities are able to be flexible, particularly with first-years, regarding, for instance, hall fees, which after all are entirely under university control, but what about students who are having to pay private landlords, rental deposits or the finding fees that letting agencies demand? Hon. Members who represent university constituencies, including my hon. Friend the Member for Manchester, Withington (Mr. Leech) and I, will know about those fees. What about students who have child care considerations and fees to pay? They cannot at the moment be certain that they will have access to the money that they need to meet those obligations.

I am especially concerned about non-traditional students who have accessed university for the first time. On Monday, our first day back following the summer recess, it was my great pleasure to host a reception in the Members’ dining room for the Helena Kennedy Foundation, at which Baroness Kennedy gave awards to people who have received bursaries from the foundation. Many of them are from very difficult backgrounds and were going to university for the first time. Following my intervention on the Minister he addressed the fact that people drop out of university. Many who are going to university for the first time drop out because of pressing financial circumstances, and it would be a tragedy if the drop-out rate increased because people’s fears of the financial pressures of accessing a degree were realised.

This is the first year that the SLC has had responsibility for handling grant applications; many hon. Members will have gone through the old local authority process. The hon. Member for Havant (Mr. Willetts) has already referred to that most unfortunate quotation in yesterday’s edition of The Guardian of Mr. Derek Ross, the deputy chief executive of the SLC, who said that the problem was akin to losing one’s car keys. We have all done that at some point and it is a personal inconvenience, but Mr. Ross has mixed up personal inconvenience with the financial hardship and uncertainty faced by others. I hope that those remarks are withdrawn and, indeed, apologised for.

Why were the problems not foreseen? The SLC should have prepared for its new responsibilities. As I understand it, consultation on moving to the new system took place three years ago, in 2006. It was welcomed by many at the time, including the National Union of Students, because it was a move away from the fragmented system of local authorities processing applications using different procedures, which produced different outcomes up and down the country, to a uniform system. The NUS was given assurances that the SLC would prepare for the day and time when it took over responsibility, but it is now clear that those assurances were not worth much.

The SLC should also have foreseen that there would be a rise in applications this year. UCAS released statistics at various stages in the past academic year, and we have known what the situation would be for some time. We said in the debate in the summer that the crisis of access to student places should have been foreseen. Likewise, the SLC should have foreseen that it would have to deal with a greater volume of applications than in prior years. In addition, the uncertainty over the number of places meant that there were bound to be more late applications for financial support. Those things could have been foreseen and they should have been planned for.

It should be acknowledged that the Minister has expressed his disappointment with the situation, but this is the fifth fiasco that has been presided over either by the Department for Business, Innovation and Skills or by the former Department for Innovation, Universities and Skills. The right hon. Gentleman is the sole survivor from that short-lived Department. We have had the further education college capital expenditure programme fiasco, delays in education maintenance allowance awards, confusion over the funding of sixth-form places and the uncertainty this summer over higher education places.

The Minister told us what he is doing to get the SLC to learn lessons and I welcome what he said about getting a review under way, but it is vital that those lessons are learned so that we do not go through the same again in 2010. I welcome the appointment of Deian Hopkin, a former vice-chancellor, whom I met on many occasions at South Bank university, and whom I like and respect very much. Will the Minister tell us when the review will be complete, so that lessons can be learned and so that new processes can be put in place in time for next year’s applications? What will the Department do to help universities that are giving short-term, emergency loans? The Minister referred to the access to learning fund, but he neglected to say that the fund has been cut by 30 per cent. in the past four years, between 2005 and 2009. What will he do to enable universities to give ongoing support to individuals who have been affected by the delay in financial support—an upsetting start to their university experience—so that they are able to continue their studies and the danger of them dropping out is ameliorated?

I apologise for missing the start of the debate, but Committee duties delayed my arrival in the Chamber.

The hon. Gentleman was a member of the Education and Skills Committee, and he mentioned confusion. I am confused about whether the Liberal Democrats now believe in variable fees—top-up fees as they are called—or whether they have changed their minds? Is it that their leader does not like them, but the party does?

It was a pleasure to serve on the Education and Skills Committee and the Children, Schools and Families Committee under the hon. Gentleman’s chairmanship, and I learnt a lot from that excellent Select Committee process. If he is patient and stays for the rest of my speech, he may find that his question is answered.

The sixth shambles over which this Department has presided—the problems faced by international students—is referred to in the motion. On this issue, my sense of déjà vu goes even further back. It was the subject of the first early-day motion that I tabled as a new MP in May 2005 and the second speech that I made which was on the Immigration Bill. I spoke specifically about the difficulties that Bristol university and Universities UK had brought to my attention. They anticipated that the changes in the visa regime in that Bill would lead to problems for international students. The then Home Office Minister, the right hon. Member for Harrow, East (Mr. McNulty) who is, as we all know, gentle and kind, especially to new hon. Members, told me twice that I was talking rubbish and more rubbish—

Perhaps he is studying a letter carefully.

Four years on, we know that there have been massive delays in processing these visa applications. International students are crucial not only to the financing of higher education in this country—bringing in some £4 billion of fees a year—but to the intellectual sustainability of many courses. Many such courses, especially those in shortage subjects such as engineering, would not be viable without the physical presence of international students. Anything that blocks their access to study in the UK is surely to be regretted, and the Minister needs to intervene urgently with his Home Office colleagues to sort that out.

Many of our services depend on the contribution made by overseas graduates, and the most obvious example is medicine. Will the Minister give an assurance that medical students who have already embarked on a degree course will be able to complete the post-graduate stage of their qualification and will not be subject to further variations in their visa conditions?

I turn now to the short-term future of higher education, rather than today’s problems. Next year, there must be no repeat of the debacle this year. We know now that the number of 18 and 19-year-olds in next year’s cohort will rise again, just as we knew it would this year. We know now that unemployment will continue to rise in the short term, and as a result—as we know from all previous recessions—more adults will look for shelter in higher education.

The Conservatives have proposed a fees discount to fund places in higher education, although the hon. Member for Havant was reticent about it in his speech. That may be attractive as a short-term fix, but it is another example of the Conservative party seeking to make life more comfortable for the well-off, especially if it were to be part of their long-term thinking. We will seek clarity on that point in the run-up to the general election.

In the longer term, we agree with the motion when it says that there must be a level playing field for part-time students. That was the subject of the last report that the old Education and Skills Committee produced on international students, and one of the last recommendations that the Committee made. My party passed a resolution at our conference in March that said that we would also abolish the fees for part-time students. However, we also envisage that in future higher education will see a greater emphasis on foundation degrees and a strengthening of the role of further education colleges, as well as more emphasis on the skills needs of the nation, especially in STEM subjects—science, technology, engineering and maths. I have mentioned that issue many times in such debates. We would recommend a national bursary scheme to fund students taking the STEM subjects that are essential for us to achieve a low-carbon economy.

The hon. Gentleman is making a very good speech, but his leader has recently mentioned the necessity of savage public expenditure cuts and an article in The Times mentioned that universities would face a 20 per cent. reduction in their budgets. Is that Liberal Democrat policy, and how does it compare with the cuts that the Conservatives would make in higher education?

The hon. Gentleman will know that the leader of my party was referring to the desperate state of the nation’s finances and the reluctance of the present Government or the Conservatives to face up to the cuts that have to be made if we are to balance our national books, or to give any specific examples of how those cuts could be made. At least my party has put forward some specific examples, such as the Trident missile programme which no longer needs to be renewed and which would release billions of pounds to be invested in other priorities.

I mentioned the skills that we will need for the low-carbon economy that must be part of our future. I just want to draw the House’s attention to some good practice. For instance, in Cornwall an array has been built offshore to take advantage of the tidal energy. Combined Universities in Cornwall has introduced a new degree in renewable energy—the first such example in the country—and a foundation degree in renewable technologies, and is working with others to provide technical-level skills. We need much more of that happening in our higher and further education institutions.

I cannot agree with the penultimate sentence of the motion, which states that this House

“welcomes the idea of a cross-party student finance review to look at the long-term sustainability of the higher education sector”.

That is not because I oppose trying to reach a consensus on the funding of higher education or other long-term issues that face this country, such as long-term care for the elderly or pensions. It is because the fees review in higher education was specifically promised in the Higher Education Act 2004. Lord Mandelson has so far dodged announcing that review, although I congratulate the hon. Member for Havant on getting a reply to his letter from Lord Mandelson. My own experience has not been so happy. We were due to have a meeting to discuss the fees review, but it was cancelled at short notice. It was replaced by the promise of a phone call at a very precise time—and at that very precise time the Minister’s private secretary called to say that he no longer had the time to speak to me. So I am none the wiser about Lord Mandelson’s ideas on cross-party working on the future of higher education, or more critically, when the review promised in the Higher Education Act will commence or what its terms of reference will be.

It is evident that a cosy consensus is building up between Ministers and Conservative Front Benchers, because they do not want this debate to take place in the run-up to the general election. They want to stifle that debate and ensure that the conclusions of the report are kicked into the long grass in the field beyond the next general election. The Liberal Democrats believe that students deserve better than that and that higher education should be a key part of the debate between all three parties at the next general election. We will certainly be affirming, and reaffirming—

Before my hon. Friend comes to the end of his speech, would he care to comment on the Prime Minister’s amendment, in which he claims that interim payments are available for students who have not received their grants? Does my hon. Friend agree with me about the difficulties that students have had accessing interim payments? Will he also comment on the difficulties that students experience trying to access the learning fund, which the Prime Minister suggests provides financial help to hard-up students? Very many students have great difficulty accessing those funds.

I thank my hon. Friend for that intervention. I do not know, because he is sitting behind me, whether he was here when I referred to the access to learning fund and the cuts that the Government have made to it. I ask the Minister who sums up to address that point.

At the next general election I will certainly reaffirm my party’s commitment to abolish the current fees model for funding higher education because it is broken. There is certainly no scope for fee increases, which we know is the real purpose of the higher education review that is yet to commence. It is essential that we break the link between students’ choices over subjects and where they study, and the financial contributions that become necessary later. At the next general election, the Liberal Democrats will be making fully costed and credible proposals in our manifesto to give prospective students and parents a meaningful choice.

The Government are coming to the end of their life. It would be churlish to say that everything that they have done in the higher education field has been a failure, so I shall certainly not do that. For instance, I acknowledge on the record the investment in science, which has been obvious and welcome. However, I also acknowledge that the bulk of the extra investment at undergraduate level has come largely from student tuition fees, which has broken clear pledges that the Labour party made in 1997, and which the Labour Government made in 2001. At the previous general election, they were punished for that in many constituencies around the country, including my own and that of my hon. Friend the Member for Manchester, Withington and others. The Government are now thrashing around for funds and are proposing to sell the student loan book. They are desperate to stifle debate about the future of higher education at the next general election. There are many reasons why the Government deserve to lose the election. Their record on student finance is certainly one of them.

It is a pleasure to follow the hon. Member for Bristol, West (Stephen Williams), although I disagree profoundly with a couple of things that he said. I think that the whole House agrees with the first line of the Conservative motion:

“That this House congratulates those who have secured a higher education place for 2009-10 and wishes them well in their studies”.

I shall ignore the rest of the motion at this point—I wanted to start with a consensus, before breaking it.

I want to focus on the issue of widening participation, by which I mean giving access to higher education to as many people as possible from as many different types of background as possible. Within that, I include further education—any education after school that prepares people for the world of work. Traditionally, people from more privileged backgrounds have had better access to higher education than those from less privileged backgrounds. I think that we all agree on that. Since 1997—this is where I really disagree with the hon. Gentleman—we have had a very proud record of achieving far better and wider participation in higher education.

I am terribly sorry to tell the hon. Lady that Higher Education Statistics Agency performance indicators clearly suggest that the participation rate of working-class students has hardly improved since 1995.

Ha-ha! But if the hon. Gentleman will wait, I shall provide my own statistics. In terms of wider participation and access for all, 2007-08 saw a rise of 20 per cent. since 1997 and an extra 2 million students in higher education. That is a massive number, although we have some way to go. However, I wanted to start with something positive and say that, without a doubt, we have widened participation and opened up access to higher and further education—in particular, higher education, which has traditionally been a bastion for people from more privileged backgrounds.

I want to mention briefly the Student Loans Company fiasco, which is an issue that has affected anyone with students in their constituency. Although nobody is trying to justify what has happened with the company—it must never happen again—it was more devastating for students from backgrounds without money or without anyone to make them a loan to ensure that they were all right for the first couple of weeks at college. Furthermore, the situation has been very frightening for those not used to the environment of higher education. I hope that that is appreciated and that the situation that has arisen does not do so again.

I turn to the Aimhigher programme, which has been very successful in accessing students and children from backgrounds where people would not normally think about proceeding to higher education. That is the big issue about access to higher education: if someone comes from a background in which parents and other family members are not used to people entering higher education, they tend not to aspire to it. They think that university is not the sort of place for them, which cuts them off early on—before they start out on their careers—from any number of higher earning and status vocational careers that those from more privileged backgrounds take for granted. I include being an MP among those careers. We still have some work to do. However, programmes such as Aimhigher do some amazing outreach work in secondary schools—some work is also being done in primary schools. The mentoring is fantastic, and it involves people who come from less privileged backgrounds talking to children in school and working with families to ensure that people understand that university is a place for everybody, that it is not closed to anybody and that everybody should be allowed to go. When it comes to social mobility, widening participation and giving access to everybody, that is a really important point.

The increase in the number of over-40s entering university is very interesting. It gives people the opportunity to enter higher education, which they might not have had growing up—again perhaps because they came from backgrounds where it was not the sort of thing that people did. Later in life, they now consider re-entering education, going to university and getting a degree to be the right thing to do. That is a real success story.

The hon. Lady mentioned students participating in higher education at age 40, many of whom will be studying part time. Does she think that it is about time that the Government removed the anomaly concerning those studying part time and those studying full time in higher education?

I was about to come to full-time and part-time education. I am concerned about the 16-hour rule, which I have raised again and again.

Would the hon. Gentleman like to intervene, instead of shouting?

I chair the youth affairs all-party group where the 16-hour rule is a particular issue. It is an issue particularly for younger people—19, 20 and 21-year-olds—who have had a bad time in the past. I am talking about ex-offenders, runaways and people who have been through the care system who are on benefits and receiving support, but who now think that they perhaps want to go into full or part-time education.

Those on jobseeker’s allowance who want to study part time—[Interruption.] My speech is so interesting, Opposition Members should listen—I listen to theirs. Those who want to study part time have to pay their tuition fees up front, and that applies whether they are on jobseeker’s allowance or not. Part-time students still have to pay those fees up front, which discourages people from studying part time. It is important to look at that in targeting those people whom we want to take up studying.

My hon. Friends will be aware of this, but the 16-hour rule means that jobseeker’s allowance claimants cannot study on further education courses that take up more than 16 hours a week or, for those under 20, 12 hours a week. That seriously needs to be looked at. I have mentioned the issue time and again, and I would be grateful not just if someone said that they would look into it, but if they did something about it.

I am a nice person, so I will give way, as long as the hon. Gentleman promises to listen to the rest of my speech.

I was listening carefully to the hon. Lady’s points. I had a conversation with a student at an FE college the other day who was having to do her course in fewer than 16 hours a week in order to remain on JSA, which is absurd. I commend to the hon. Lady our excellent report, which we produced last week, about getting people off welfare and into work, in which she will see some imaginative ideas about tackling that problem.

I thank the hon. Gentleman for that intervention. The 16-hour rule needs to be looked at seriously, because it definitely discriminates against those who come from less privileged backgrounds. Those on jobseeker’s allowance or housing benefits tend not to be those from the most privileged backgrounds in our society, so it is critical that we look into the 16-hour rule to help widen participation.

I will draw my remarks to a conclusion in a second, but I want to reiterate that record numbers of state school pupils aspire to go to university. That is critical to what this Labour Government have done since 1997—it is about widening not only participation, but aspiration. We have record numbers of children and young people aspiring to go to university from poorer backgrounds. It is critical that we ensure that young people are given the skills to get them through the recession and out the other end, taking a full part in both higher education and the world of work.

One interesting statistic, which counters the one that the hon. Member for Havant (Mr. Willetts) mentioned earlier and refers to a gap that we need to close as quickly as possible, is that 79 per cent. of children from working households—that is, households where there are working parents—aspire to go to university. That figure drops to 66 per cent. among children who come from homes where there is no working parent. That gap in aspiration is something that all of us in the House, no matter what our political party, must aspire to close. I want to finish on that point. Since 1997, this Labour Government have had a long and proud record of widening participation. We should all work towards widening it even further.

I am grateful to you for giving me the opportunity to take part in this Opposition day debate and make my maiden speech, Madam Deputy Speaker. I also thank the hon. Member for North-East Derbyshire (Natascha Engel) for her comments.

As this is my first speech, I want to pay tribute to Dr. Ian Gibson, the previous Member for Norwich, North. He was a dedicated constituency Member whose tradition of independence and plain speaking I hope to emulate. He was known locally for his work on science, as I understand he was here in the House, and for sticking up for the people. Although I do not enter this place as a scientist, I certainly intend to stick up for all my constituents.

There has been a Norwich, North seat since 1950, but the city of Norwich has been represented in Parliament since 1298. I am proud of Norwich, North, with its one foot in the city of Norwich and its other foot in surrounding parishes and beautiful Broadland. We have a history stretching back to Roman times, and colleagues in the House may already be familiar with Norwich’s trading prominence in the intervening centuries. We are known for industries such as chocolate, mustard, wool, shoes, financial services and now modern technologies, including biotechnology and engineering. We have a high proportion of small and medium-sized firms, and I applaud all those in Norwich who choose to take a risk and build their own businesses.

Norwich also has cultural prominence. Underpinning our current vibrant arts scene, we can also claim the writing in English—or middle English, to be more specific for any other students of literature in the House—of the first book by a woman. On the political side, movements have often gathered on Mousehold heath in my constituency, including the Chartists 170 years ago and Robert Kett’s followers before that.

We are also known for the Canaries’ best efforts to stay up the leagues. Norwich City football club is currently prospering in division one. Given that the last full match that I saw in person resulted in Norwich losing 7-1 at home to Colchester—is the hon. Member for Colchester (Bob Russell) here? No, he is not—I think that, in the interests of the club, it may be wise for me to stay away until promotion is fully secured. For any real aficionados of Norfolk’s footballing heritage, I draw hope from a reputed draw with Arsenal by the village football club of Thorpe St. Andrew, only as recently as 1894. It remains a shame to this day that the parish could not afford to pay the travel costs for the match replay in London.

In addition to its fine urban history, Thorpe St. Andrew is but one of the parishes that give present-day Norwich, North so much of its character and feeling. According to local sources, Sprowston is the largest parish in Norfolk—I look forward to receiving letters claiming otherwise, which I shall happily forward to the parish council. Old Catton can claim further cultural merit. In Catton hall, it has the location of the first commission for landscaping by Humphrey Repton. Equally importantly, Old Catton’s history exemplifies the tradition of independence in the people of Norfolk, among whom I count myself. According to local historians, the parish had

“a high proportion of freemen in the Domesday record which is typical of Norfolk”.

The Domesday Book also lists other parishes in Norwich, North, including Hellesdon and Taverham, where, in its Victorian heyday, a paper mill produced half of all the paper used to print The Times. Drayton, the final parish in Norwich, North, has another literary claim to fame. During the 15th century, the village was in the possession of Sir John Fastolf, a prominent soldier who, it is claimed, gave his name to Shakespeare’s character Falstaff.

In researching this speech, I found that some of the things that trouble the people of Norwich, North have not changed in decades. For example, although I was not sworn in as a new MP until this week, over the summer my postbag contained a wealth of letters complaining about a sewage farm located just in the constituency of my hon. Friend the Member for South Norfolk (Mr. Bacon), but none the less pungent for that. I have found references to residents complaining bitterly about the very same sewage works from as early as 1933.

I sincerely hope that other problems that are raised with me will take less than 70 years to be resolved. For example, I look forward to working over the next nine months on NHS facilities, transport, housing and more. I am already working on behalf of those constituents who face problems with social housing. My predecessor talked eloquently about Norwich’s housing during his maiden speech in 1997, but the problems have not diminished since then. It is a personal priority for me to focus on the improvement of the stock and service for local council tenants.

Finally, the backdrop to my first few months as the Member for Norwich, North is a bleak one for many of my constituents, for their jobs and for their businesses. My constituents are struggling in this recession. In this Opposition day debate on higher education, I must highlight the importance of the educational sector to the local economy in Norwich and Norfolk. Not only as a local MP, but as a Norfolk girl who might be said to have made good, I look forward to addressing the graduation ceremony at City college, Norwich, on Saturday. I shall applaud the many young people who have gained qualifications—as does the motion before us today—and I shall praise the work of the tutors and others who enable their success. However, I also sympathise greatly with the college for the deep confusion that it has experienced through the Learning and Skills Council’s capital crisis. Many of my constituents are already losing out in the chaos, and we may all lose further if the college cannot recoup the £3 million already sunk into plans encouraged by this Government.

Finishing on today’s higher education topic, I pay tribute to the university of East Anglia, which is the former home of my predecessor, although it is in the constituency of the right hon. Member for Norwich, South (Mr. Clarke). It is notable for working with local partners, the city and the county. The Norwich research park is taking on today’s great environmental challenges, and Professor Tim O’Riordan of the school of environmental sciences is our fine city’s sheriff this year.

Local employers, many of which I have sought to meet since my election this summer, want to work with local institutions such as UEA and the City college to ensure that the education offered reflects the needs of people and businesses in Norwich and Norfolk. That requires clarity and honesty on finance. I look forward to working with all involved back at home to realise higher education’s contribution to economic recovery and growth, as I look forward to working with colleagues in this House to see the many good ideas expressed in this debate brought to fruition for my constituents and theirs.

It is a pleasure to follow the hon. Member for Norwich, North (Chloe Smith). I warmly welcome her to the House, as do all hon. Members. It was a pleasure to listen to her speech, which was young, enthusiastic and knowledgeable—characteristics and qualities that are warmly welcome here. It is my belief that she will represent her constituents with care and professionalism. I congratulate her, and I am delighted that she is taking her seat.

I believe that the Government have an excellent tale to tell on higher education, in regard to its expansion and its development. I live in the northern region, where we have five high-status universities, all with developed or developing relationships with further education, and with schools and their communities, supporting the growth of student numbers and the diversity of subject areas. We have seen the development of foundation degrees and the way in which universities and further education are supporting a recruitment exercise of youngsters and middle-aged people—often on low incomes—into higher education.

The activity of persuading young and older people that they have talent and can enter higher education takes a serious effort, as does getting them to believe that they can read for a degree. The language involved can seem different and perhaps a bit peculiar. There is a serious challenge involved, but I am delighted to say that the universities in the northern region are doing an excellent job. On my doorstep are the universities of Teesside, Sunderland, Northumbria, Newcastle and Durham, and in my own constituency I have the Queen’s campus, which is part of the university of Durham.

We are talking about some important issues today, including visa control, the student loans facility, and the way in which the additional 10,000 students are being added. It is important for me to remind the House—if it needs reminding; perhaps it does not—that we have seen a staggering increase in student numbers over the past 12 years. In my own region—Teesside university is within a mile of my constituency—we have seen a growth in student numbers from about 14,000 to 28,000 youngsters. At Queen’s university, Durham, the student numbers are now topping 15,000. This is a staggering increase. It should not surprise any of us that this also presents enormous problems for those administering the student loans and grants, but I believe that the figures speak for themselves.

We would not have seen that increase without the high-calibre leadership of vice-chancellors such as Graham Henderson and his staff, all of whom offer a staggering range of qualities. In that, it is not just, as it was in my day with the universities of the ’60s and ’70s—[Interruption.] Yes, I am afraid that it was those decades, but I am proud to say that I was one of the flower power people at that time. [Interruption.] I may be an ancient flower power person now, but it is still there with me.

When the university of Teesside says, “We must encompass seriously more within our region if we are to develop the quality and diversity of education,” it follows it up by creatively and innovatively developing collaborative work with large companies. I shall specifically mention Rolls-Royce, but that is not the only company. Professor Simon Hodgson, dean of the school of science and technology, is developing technologies for low-emission aircraft engines for future generations—just what we want if we want to fly. That piece of research is extraordinarily important and I am delighted to say that it is being done on my doorstep.

It will not surprise anybody when I say that my pride does not stop there, as the university of Teesside has been shortlisted for the title “university of the year” in the category of the outstanding employer engagement initiative on the basis of its work with the chamber of commerce. This is a golden field of older, mature and experienced people—for many of us, of course, older means over 30; for me, it means seriously over 60, but I am prepared to move the older category along the line. The chamber of commerce is telling its people that they have so much to give, so they should give it. Some of those involved are teaching within the university and others are listening.

We should not for a moment understate the importance of the opening comments of the hon. Member for Havant (Mr. Willetts) speaking for the Opposition or of the Minister speaking for the Government side, and we must recognise that the student loans facility needs to be seriously improved. In saying that and acknowledging the problem, it is important to celebrate the expansion of our universities and the increase in the number of young people—particularly those from low-income families—attending them.

I was born in a two-up, two-down house in the Rhondda valley and from the whole street of terraced houses, probably only five families out of 90 sent their children to the grammar school. My father was under no illusions when he said, “You will learn, my girl”—and I did; I had no option. When I said, “How do you know we are bright?”, he said, “I am telling you that you are bright, because the more you work at it, the better your intellect will develop.”

It is worth noting that that sort of statement—too many years ago for me to want to inform the House, but well over 50 years ago—is still being said today to our young people. It is not just important to say, “You have got talent”—although we need that vision—as we also need a strategy. The strategy that the Government have developed has been invaluable. We have seen education maintenance allowances to persuade people to stay in education post-16, and then the Aimhigher programme, which is clearly changing low to high aspiration. That is a struggle—a mammoth struggle—but it is taking place.

The universities of Durham and Teesside are the two I know most about; they are out in their communities, working with schools serving low-income areas. They work seriously hard with such low-income groups, and I am delighted to say that they are producing some serious results. Primary schools in the poorest areas of Teesside are involved in the graduation ceremony—guns and all—in the university of Teesside. Nothing is too good for this lot. We are trying to persuade them to realise that if they have the talent, which they have, it needs working on; we are there for them and will help to ensure that their talent is developed.

I have spoken about the need for a strategy and I have mentioned Aimhigher and the education maintenance allowance, but we also know that we need the money. We have seen some staggering—multi-million—amounts of money being spent on our universities. It was inconceivable in my days of the ’60s that such multi-million amounts would follow, but they have—the Government have delivered them.

How has this year of recession affected Sunderland’s funding allocation? We want more students and we want their talents to be developed so that they can join our economy. Sunderland’s financial allocation for 2009-10 has increased by some 6.2 per cent., which is well above the national average. Teesside’s allocation has increased by 10.2 per cent., which is more than double the national average. We must help areas such as mine where people have seriously low incomes and feel that they have a bigger hill to climb, and where traditional industries are changing. We need them on board.

I am sorry that the hon. Member for Havant (Mr. Willetts) has left, because I hoped that he might respond to what was said in an article that appeared in The Guardian. He would not allow me to intervene—I understand that, because we all have much that we want to say—but his views are made clear in the article, which states:

“Universities are badly failing students with unfit teaching and old-fashioned methods and will have to radically modernise lectures and facilities if they want to raise fees, according to the Conservatives' spokesman on higher education.”

I want to know names. Which universities are using “old-fashioned methods”? Which universities are “failing students”? We need to know what is being spoken about here.

The hon. Gentleman believes that

“vice-chancellors are not prepared”

to face the problem that he would be given by students “if fees go up”. My husband has worked in universities throughout his working life, and I have been part of them in an indirect way. I can tell the hon. Gentleman that parents and students are in absolute agony in their wish to experience quality. They choose to go to the places where they believe that pharmacology, or engineering, is taught best. They judge on the basis of delivery and quality. When money is spoken of in this way, we should look at the qualifications involved.

I wanted to challenge the hon. Gentleman on another issue, because I think it important for us to challenge each other in debates such as this. Universities UK makes the position very clear. It says:

“Every survey shows satisfaction levels of 80 per cent. or above. These do not indicate deep-seated problems.”

It also says that there is a genuine belief that UK degrees are world-beaters—world-class—and I can say on the basis of my own knowledge that that is absolutely true. If the lead Conservative spokesman says that some universities are failing, it is important for us to know which he is talking about.

The details of the student loan facility were articulated carefully from the Dispatch Box. It is clear that there are problems, but I was delighted to hear my hon. Friend the Minister explain how they would be corrected. I went to university in 1967, and most of my friends were waiting until November for their grants to come through. The present position is not new—and I was one of 5 per cent., not 39 per cent. Let us get things into perspective, and then the argument may become rather more rounded. The visa system is crucial, and we must not allow it to be bunged up in any way. The students in our universities are very important people.

I am sorry to end on a down, but I think it important to say this. When the Government decided on the additional student numbers, they said that they would be tied to strategically important and vulnerable subject areas. I can tell the Minister that that was an arbitrary definition of requirement. I think that we should be much more cautious about using arbitrary definitions as though they were fact, and related to the requirements of our economy.

The system was bureaucratic, and many universities in my area felt that emerging from that bureaucracy was an impossible task, but the extra 10,000 places are valuable. It is important for us always to acknowledge what a superb system of universities and higher education we have. Do not let us spoil it with systems that have resulted in serious problems for universities to handle, instead of the serious opportunities which I believe were intended.

May I begin by congratulating my hon. Friend the Member for Norwich, North (Chloe Smith) on delivering such an excellent maiden speech? She can be very proud of herself, and I am certain her predecessor would have looked on and nodded in approval. I am sure she will be his equal in every respect in fighting for the interests of her constituents in this House.

In the short time available to me, I would like to focus on three areas: widening participation, the financial pressure on universities, and the student loan book. I know that other Members will more than adequately cover the issues to do with student numbers and the recent student loans payment crisis so I do not intend to cover those topics. Indeed, my hon. Friend the Member for Havant (Mr. Willetts) demolished the Government handling of the loans crisis in such a forensic manner that no more needs to be said on the subject.

All Members probably accept that higher education will play a vital role if we are to emerge from this deep recession more able to compete in what is a highly skilled global economy. Enabling our young people to have the opportunity to gain entry into higher education is both morally right and an economic necessity. By preventing a large number of students from fulfilling their educational potential, the Government risk making the country less competitive. When we look at what has happened over the lifetime of this Government, we see that in higher education as elsewhere it is the disadvantaged groups in our society who have been failed most. While many more middle-class children have been able to go to university, those from lower socio-economic groups have struggled to make progress. Data from the Office for National Statistics confirm that in the most deprived 10 per cent. of neighbourhoods only three in 10 children go on to higher education, compared with six out of 10 school leavers in the least deprived 10 per cent. of areas. Moreover, this year tens of thousands of young people have suffered because the Government put a brick wall where a ladder should be, blocking the path to university for many who have worked so hard to get their A-levels.

It cannot be denied that much of the answer for the underperformance of the lower socio-economic groups lies within our schools. As Ofsted has made clear, a whole swathe of our schools are underperforming and failing children. It is not just Ofsted that is making that clear, because only yesterday our captains of industry made clear their concerns. The chief executive of Tesco, the nation’s largest private employer, described standards in schools as “woefully low”. He said the private sector is now being left to “pick up the pieces” by having to spend resources on basics such as writing, numeracy and communication skills. The chief executive officer of Asda weighed in behind him, as has the CBI. The Department’s response to this critique said it all: according to its spokesman,

“standards have never been higher in our secondary schools.”

That brings to mind something that I think Tony Blair once said: if we do not understand the problem, it is very difficult to be part of the solution.

Improving standards in schools is crucial, but we must also look at other ways to open up higher education to all groups. It is clear that the one-size-fits-all approach is failing. I have been extremely impressed by the US model of community colleges. I have spoken about it before in this Chamber, and I have been banging the drum for it for some time. I was therefore very pleased to see positive mentions of the community college system in the recent Select Committee report. Such colleges constitute the largest part of the higher education system in the US, offering short vocational courses as well as the equivalent to our foundation degrees. They provide access to learning for millions of students who otherwise would be excluded from a traditional university education.

One of the main successes of the community college system is that many people from lower socio-economic and minority groups have thereby had an opportunity to engage in higher learning. Currently, 34 per cent. of students enrolled at community colleges are from minority ethnic groups. Students are also typically older, with 16 per cent. over the age of 40, and they are typically employed, too—77 per cent. are in full or part-time employment. Students typically begin the first part of their associate degree at a community college with the option of using accumulated credit to transfer to a traditional university to complete a bachelor’s degree.

By breaking down courses into bite-sized chunks, US colleges also offer the chance to reskill without having to shoehorn busy lives into rigid timetables. Credit is therefore a vital component underlying the structure and system. Americans rightly view the career ladder as a career lattice, where people drop in on education as and when it is needed and it fits in with their lives—in this country, we often see that as “dropping out”.

Important lessons can also be learned from how the US community colleges manage their finances; put simply, the model is much more cost-effective than the one in this country. Networks are organised on a sub-regional basis and groups of colleges often pool resources, such as human resources, and other administrative functions. As purely teaching institutions, colleges typically do not host very expensive research facilities, thus keeping financial pressures to a minimum. Although there are growing examples of good practice in the UK, such as the Staffordshire University Regional Federation consortium, which I visited, local articulation agreements should be encouraged. They should be led by a strong university at the core of each grouping. The UK has 172,000 students studying higher education in 269 further education colleges. Such colleges provide 39 per cent. of all entrants to higher education, so we already have a good base on which to build a US-style system.

It is also clear that the student demographic is changing, and it is time that the Government realised that the higher education system can no longer be centred solely on the needs of 18-year-olds undertaking the traditional three-year course. Although spending on widening participation has increased, it has been sprayed around like a water cannon, whereas it should have been precision-guided. If the Government are truly serious about widening participation, they need to ensure a much more strategic focusing of funds.

I do not think that I have time to do so, because others wish to speak.

I wish to move on to discuss the financial challenges faced by universities. They are cutting their budgets at an alarming rate and many are in considerable financial difficulty. As I said at the previous departmental questions in July, seven universities were on the Higher Education Funding Council’s warning list of “at higher risk” institutions but soon as many as 30 could be on it, facing significant financial difficulties. Those not in any danger, such as my own university of Reading, are still having to chop huge swathes from their budgets. Financial pressures on the university of Reading have meant that it is cutting £10 million from its budget and has had to make painful decisions about closing departments, such as those of physics and health and social care, and courses in continuing education. The university recently announced that it has had to cancel its £60,000 joint sponsorship with Thames Valley police of four community support officers on its campus. I have had lengthy discussions with the pro-vice-chancellor about this, as both the safety of students and peace and quiet for local residents are priorities for me as the local MP. I am very concerned about that and have made my views clear, and I am continuing discussions with the university and the police about how we can ensure student safety will not be compromised. Many universities up and down the country are having to make even more painful decisions affecting staffing and the services to students than the university of Reading is having to make.

Finally, in light of this week’s announcement, I wish to say a few words about the sale of the student loan book. In my previous position as shadow Minister for higher education, I was involved in this legislation, and it appears many of the concerns I raised at the time, along with my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), are being borne out by events. Throughout its passage, the Sale of Student Loans Bill was always deemed to be enabling legislation, necessary for a rainy day. Indeed, following its Royal Assent, the then higher education Minister withdrew the book from sale because he was worried about securing a fair price and was finding doing so increasingly impossible. Not much has changed since then regarding the value of the loan book in the marketplace, but the Government’s need to get their hands on the money clearly has. The rainy day has arrived and it seems to have become a bit of a monsoon. The student loan book is once more up for grabs as part of a fresh sale of state assets that aims to raise an estimated £16 billion.

The Prime Minister announced that the sale would not go ahead if a good deal could not be brokered, but I feel that the panic to plug this massive financial black hole will override the financial caution. I want to repeat what I said during the passage of that Bill—the legislation was supposed to be about the sensible management of an important public asset, which at the time was worth nearly £20 billion, but it has actually become a tawdry attempt to cash in on a valuable asset by a Government running out of resources and of money. The former higher education Minister, the hon. Member for Harlow (Bill Rammell), said on Second Reading:

“Making a sound judgment about the timing and pricing of sales is particularly important given the recent turbulence in world credit and financial markets…Decisions will…always be informed by what provides the best value for money for the taxpayer.”—[Official Report, 22 November 2007; Vol. 467, c. 1393.]

Indeed, if my memory is correct, at our insistence a framework for making the decision was put in place in the Bill, but I do not think that details of that framework were ever published. The Minister for Higher Education and Intellectual Property cannot sidestep that issue, as he tried to earlier when he was pressed by my hon. Friend the Member for South Holland and The Deepings. The details of that framework should be published so that we can all see just what the criteria are to which the Government are working. If they are not published, people will believe what I believed when the Bill was introduced: that the Government are in danger of stripping taxpayers of a valuable public asset in the hope of receiving a quick cash injection. The Minister must surely be aware that flogging assets recklessly will not make the Exchequer solvent.

What about the students? The former higher education Minister repeatedly stated during the progress of the Bill that it would have “no material impact on graduates”. That proposition remains entirely dependent on the good will of the Government. Given their incompetence with all things student related—particularly this summer—that is a precarious safeguard. This car boot sale of state assets needs to be managed with caution. The quick sale of the student loan book is no substitute for a long-term plan to get the economy back on track. Any business man—like me—can assure the Government that a short-term sale for a quick fix is definitely not the way forward. The structural budget deficit is what must be targeted.

We are very fortunate that we have a world-class higher education system in this country. However, through their focus on short-termism and their mismanagement of the UK economy, the Government have made many universities vulnerable to financial problems and international competition. As events over the summer have proved, the Government have lost their grip on higher education. I fear that the only way to get it back on track is a general election and a fresh approach from an incoming Conservative Government.

I want to touch briefly on one or two points raised by my hon. Friend the Member for Reading, East (Mr. Wilson). He said that there is no point trying to widen participation in education when so many of our children are leaving school failed by this Government’s system and with poor qualifications. Indeed, other hon. Members have also touched on the fact that many colleges have, like Oaklands college in my constituency, had the learning and skills grant pulled at short notice. That college is attended by many severely disabled pupils because Hertfordshire keeps its disabled pupil teaching within Hertfordshire and the college specialises in such teaching. It was hoping to widen participation for those disadvantaged young people, and what happened? At the eleventh hour and the 59th minute, the funding was pulled, leaving my college in a dilemma about what to do next. It is still struggling with that dilemma and Mark Dawe, whom I meet regularly, has my utmost sympathy. It is no good seeing crocodile tears from the Government.

I want to touch briefly on a topic that has not come up. Many young people have been let down because they wanted to go to university this year but have been caught up in the regrading fiascos that, unfortunately, left them unable to take up their university places. Dr. Jack Alvarez, my constituent, who teaches at Haberdashers’ Aske’s school, which is just outside my constituency, wanted me to bring the matter to the attention of the Minister. Many extra pupils have been participating in GCSEs and, importantly, A-levels and AS-levels, and if the grades are challenged, the challenges need to be lodged within a certain time frame to ensure that they meet the clearing house dates.

Priority requests for regrading are usually handled within 18 days. Awarding bodies have until 7 September to deal with them, but the universities close their books by 28 September, and the bulge in the numbers of pupils applying to go to university this year has led to the matter being especially badly handled.

This year, 80 per cent. of all clearing places were taken by 25 August, even though exam results were released only on 20 August. Although the good news was that many high-flying pupils did get their results upgraded, I am sad to relate that the short time frame meant that a lot of them missed the opportunity to go to university or to the university of their choice, or they lost their university place.

The Minister must look at the problem. It is pointless to encourage young people to go to university if regrading is shoehorned into a time scale that is, frankly, undeliverable. The result is that high-flying, well educated and qualified pupils from all walks of life end up being unable to access a college place of their choice. Some of them have looked at the loans fiasco, realised that it would cause them to struggle financially and said, “I’m walking away.”

If the Government want to deter young people from participating in higher education, all they have to do is to put them in a system where there is very little chance of fair play. As happened with the loans fiasco, people who tried to communicate the problems that they were encountering found that the phone lines were impossible to access.

I shall rest on that point. We should think about what young people face: it is hard enough to start out in life but, when more than one obstacle is put in our way, many of us would say, “Forget it.” Given the stresses and strains that hon. Members have suffered over the summer in our relationship with bureaucracy, surely we must recognise that many people will walk away when faced with the sort of obstacle that I have described.

If we want to encourage young people into higher education, we must ensure that they leave secondary school with the qualifications that they need, and then that their places and loans are managed properly.

We have had a rigorous and well informed debate, in which we heard an excellent maiden speech from my new hon. Friend the Member for Norwich, North (Chloe Smith). She is a bright star with a bright future.

This Government promised to extend opportunity and to ensure that 50 per cent. of young people attended university. That promise was made by the former Prime Minister Mr. Blair in a speech 10 years ago, and it was repeated in the 2001 Labour party manifesto, yet today’s debate has been all about broken promises and false claims. The scar of disappointment cuts deep—in some cases to despair.

Even though the figures have been recalibrated and recalculated, by last year the Government had achieved just 43 per cent. participation in higher education. Success for women masked failure for men, for whom the rate stood at 38 per cent.—just one percentage point higher than a decade ago. Under a consistent measure, the proportion of university entrants from both sexes increased hardly at all over the whole decade.

Both my hon. Friends the Members for St. Albans (Anne Main) and for Reading, East (Mr. Wilson) made good contributions to the debate. The latter has championed the cause of community colleges for some time. I acknowledge and praise him for that. His remarks were interesting and stimulating, on a matter that we certainly take seriously even if Ministers do not. However, I am sorry to tell my hon. Friends that, even though the Government are spending £2 billion a year on widening participation, the participation rate for working-class students has hardly improved since 1995.

If that were not bad enough, the improvement rate has actually declined. In the previous decade, participation by working-class students grew at a faster rate. Although I acknowledge the genuine determination across the House to try to widen participation, the truth is that the Government have failed by any measure. It is clear that there are Labour Members, such as the hon. Member for North-East Derbyshire (Natascha Engel), who care about these matters. It was especially distressing to hear how her ambitions, and the ambitions of the whole country, have been frustrated down by Ministers—not through lack of concern, but through their inability to deliver results.

The experience at the beginning of the current academic year has demonstrated beyond all doubt that the Government have no hope—and, worse, no intention—of meeting their 50 per cent. target.

Even though applications increased by a predictable measure this year, the result, as my hon. Friend the Member for Havant (Mr. Willetts) noted in his excellent opening remarks, has been chaos. While the Government blew up expectations, parents and students have been let down, the dream of a generation has been exploded, with universities left to pick up the pieces. There are 140,000 potential students who cannot find a place in higher education, as my hon. Friend pointed out and only 22,000 places were available through clearing; that is down by 50 per cent. from the year before.

That so many young people should lose their chance to learn can hardly come as a surprise to Ministers. Universities received roughly 60,000 additional applications this year. The Minister for Higher Education and Intellectual Property broadly confirmed that, yet the Government simply did not allocate sufficient places to meet that extra demand. Every previous recession has brought an increase in the number of applications for university places, so the Government must have known that that would happen. The issue should have been anticipated and dealt with, and a solution should have been found.

The Government are still nowhere near their target, and yet the system of student finance that they established has not been able to cope with the pressure, as was generously acknowledged by the hon. Member for Stockton, South (Ms Taylor). She said that the situation was not good enough, and challenged those in her own party, on the Treasury Bench, to recognise the problem. I must be fair to the Minister of State: he did acknowledge it. His words were damning of his own record and that of his hon. Friends. He said that the situation was not good enough; that it was not effective; that it had not been sensibly anticipated; that the technology had failed; and that systems had let students down. But who is to blame? I am afraid that the buck stops on the Government Front Bench. The Minister knows that, and should have acknowledged that, too. After all, it is the Government who shifted responsibility for processing loans from local authorities to Student Finance England.

Announcing the new system in 2006, the then Education Minister, the hon. Member for Harlow (Bill Rammell), said:

“As well as clearer information, faster decisions, timely payments and accurate repayments”

would be assured. It is no wonder that after doing so little for HE, and FA for FE, he was sent to the FO. He left a legacy for the Minister for Higher Education and Intellectual Property; I know that the situation was not of the latter’s making, but it is still his responsibility. How stark is the contrast between past soft-soap rhetoric and the granite-hard reality of the problems facing students and their families this year!

Some 175 students started this term without loans. Worst hit are first-year students, as the hon. Member for Bristol, West (Stephen Williams) said. At the end of last week, 28 per cent. of first-year applications had yet to be dealt with, and universities are being obliged to make emergency pay-outs. I hope that when the Minister for Further Education, Skills, Apprenticeships and Consumer Affairs winds up, he will talk about those emergency pay-outs and will comment on the questions asked by the hon. Member for Bristol, West, about how easy those pay-outs are to access, and what the Government are doing to support universities in that regard.

The problems could have been anticipated. Indeed, they were; minutes from the board meetings of the Student Loans Company reveal that in July 2008—a full year before the problems became public—the company forecast that 40 per cent. of telephone calls would go unanswered. At the same meeting, a policy of avoidable contact was adopted. That, by the way, is Labour-speak for not answering the phone. The Student Loans Company is using an 0845 number, against official Ofcom advice, so callers must pay for a 10p-a-minute call, and some of the revenue can be “shared” with the Student Loans Company. I call that adding insult to injury, and adding impertinence to both.

To add to the chaos, the future of the student loan book is now unclear. At the beginning of the week, the Government announced a fire sale of Government-owned assets. Back in 2007, the comprehensive spending review committed the Government to raising £6 billion over the next three years from student loan sales, yet no sale has yet been made. When the Minister winds up the debate, will he tell us whether the £3 billion is in addition to the £6 billion in the CSR? Can he tell us when he expects the first tranche of loan sales to be made, and if no sale is expected to be made by the end of the financial year, can he say how the Government intend to make up the £6 billion shortfall?

In the past year, there has been a succession of crises in HE, further education and skills. First, there was the crisis over FE capital funding; then the crisis of the Train to Gain overspend and the problems with apprenticeships; and now there is the crisis in student finance. Is it any wonder, when responsibility for this vital area of policy has been shifted from one Department to the next, like a macabre game of pass the parcel—first DFES, then DIUS and now BIS? But this is not a game. The Government are playing with people’s lives—the hopes, dreams and potential of a generation. In Labour’s end, to paraphrase Eliot, is its beginning—a 13-year journey back to where it started.

As the Minister for Higher Education and Intellectual Property knows, I admire his progress from disadvantage in Tottenham to high office. I know that in his heart he must be ashamed that as a result of his Government, few others so disadvantaged will follow in his footsteps. For he must also know in his heart that if we want to reinvigorate higher education, if we want to reignite social mobility, if we want to deliver social justice, we need a Government who genuinely believe in education: change driving hope, a fresh start—a new Conservative Government for a new Britain, because Britain deserves better.

We have had a good debate with some excellent contributions, some colourful ones and some thoughtful ones from both sides of the House. It has been an immensely enjoyable debate.

I congratulate the hon. Member for Norwich, North (Chloe Smith) on her maiden speech. She spoke with great clarity and passion about her constituency. I particularly thank her for the praise that she gave to her predecessor, Dr. Ian Gibson, who is a close friend of mine and was an excellent Member of the House. She said that she wanted to emulate his independence in the House. I hope she has informed her Whips Office of that, as I am not sure her Whips will so heartily praise her if she does so.

We are clear that finance should not be a barrier to people entering university. The hon. Member for South Holland and The Deepings (Mr. Hayes) referred to the background of my right hon. Friend the Minister for Higher Education and Intellectual Property. Both my parents left school at 14, and I come from the first generation of people who had the opportunity to go to university, coming through comprehensive education and going to Oxbridge. If people have been through that experience, it stays with them and makes them genuinely and honestly committed to widening participation and access.

That is what the Government have done. Many more people from my kind of background are now able to go to university than was the case in the past, and certainly when I went to university in the early 1980s. We are committed to widening access to higher education, and that is what we have been doing. That is why we have a generous system of student support providing both grants and loans for tuition fees and living costs in university. That is why we have non-repayable maintenance grants of up to £2,906, which were reintroduced by the Government. About two thirds of all students are expected to benefit from a full or partial maintenance grant.

Whatever review takes place—[Interruption.] I hear the hon. Member for Bristol, West (Stephen Williams) chuntering—it will not involve the savage cuts that the Liberal Democrat party leader seems to have promised, although the hon. Gentleman was quick to distance himself from that. However, it is appropriate to refer, as my right hon. Friend the Minister did, to the problems that there have been with the Student Loans Company. He gave a clear explanation of events. It is a matter of great regret that students have not been able to get through to the Student Loans Company to speak to an adviser and find out about their application. Students and parents have been confused about the process and about what has been happening with their applications. The poor level of customer service, as my right hon. Friend made clear, is not good enough.

I have very little time, so if the hon. Gentleman will allow me to make some progress, I may give way later.

The Student Loans Company has put measures in place with financial support from the Government to help students follow the progress of their applications and to address the problems that people have had in getting through to its call centres, including providing additional helplines and more staff to answer calls. Action is being taken, but we should keep the problems in perspective.

Every single one of those applications is important, but more than 640,000 students have been paid by Student Finance England this year. That is more people than ever before at this time of the year, and we should acknowledge that a significant number of students do not apply until shortly before the start of term. The suggestion of 175,000 students still being unpaid is way off the mark. Each year a large number of students begin applications but do not complete them. I understand from the Student Loans Company that this year that amounts to 77,000.

My right hon. Friend announced a review under Professor Deian Hopkin, which has been welcomed. In response to the point from the hon. Member for Bristol, West, the review will be undertaken as quickly as possible. We should make a judgment on what has happened when we hear the full conclusions of that independent review, but it should not divert us from the fact that this year more students than ever before are going to university. From reading the motion and listening to the hon. Member for Havant (Mr. Willetts), one would think that fewer students than ever before were going to university. The Opposition’s motion regrets the rise in the number of applicants without a place, and we need to unpick that, because it means that the Opposition are saying that we should have provided more places. I heard the hon. Gentleman say that, but let us just analyse it for a moment. When we had fewer students a few years ago, the Opposition said that we had too many—that we were shovelling people into university; now that we have more students than we had then, the Opposition say that we have too few. How on earth can anyone sustain that position?

The hon. Gentleman has been described many times as having two brains, and perhaps that explains how two totally different positions can be maintained within the same head. That is the only possible explanation, because it would cause most of us great mental perturbance if we tried to square that circle.

I wonder whether the Minister is not holding in his head two completely inconsistent positions. Is he claiming the credit for those extra numbers, because some of those extra students are students whom universities should not have recruited, and he is going to fine those institutions for taking them on.

That is a nice attempt to avoid the charge, but before I conclude I shall refer briefly to a further confusion in the hon. Gentleman’s head: his plan to pay for this sudden conversion to 10,000 extra places in university. When I intervened on him earlier, he told us that he would offer a discount to existing graduates who pay off their student loans more quickly and would use the money that was returned to pay for more university places. However, the cost of student loans to the Government is not the amount of money that is loaned to the student; it is the difference between the rate of interest charged on a student loan and the rate of interest charged by the bank from which the Government borrow the money to pay for the student loan. By asking for money to be returned early, all the hon. Gentleman is doing is taking money that is owed to the bank, bringing it back in-house and giving it out again to students to pay for their higher education. In other words, it is a smoke-and-mirrors, totally disingenuous way of borrowing extra money, which the hon. Gentleman claims he and his party do not want to do.

Earlier today, I heard the Leader of the Opposition say of the Prime Minister, “Doesn’t he understand that we won’t win the public’s trust unless we’re straight with them about the choices that we face?” Extra students at university cannot be paid for through some scam scheme by which money that the Government already owe someone else is repackaged in order to hide the need to borrow the money to pay for the places. When will we see the detailed costings of that policy and exactly how much the hon. Member for Havant believes it will raise?

Who does my hon. Friend think is most likely to pay back that money early? What kind of person? Would he hazard a guess as to whether a richer or a poorer person would have that kind of money up front to pay back their loan more quickly?

I am not sure of the answer to that question, but I suspect that the money would not come from somebody who saved in a credit union; it would be more likely to come from somebody with access to a hedge fund, rather than anybody from the communities that we are discussing.

To talk about widening participation while proposing a highly regressive policy on higher education, combined with a completely bogus way of paying for additional places, really is disingenuous. We look forward to seeing the detailed costings of this fag-packet policy. I do not know whether the hon. Gentleman was consulted when the Leader of the Opposition talked about it on a Sunday television programme, nor whether the shadow Chancellor was consulted, but it is unravelling just as quickly as the right hon. Gentleman’s pension plans.

When will the man with two brains tell us whether there is one single coherent strand to his policy for extra places? It is not extra cash: one cannot magic money out of nowhere. Even in opposition one has a duty to be responsible about finances, and we look forward to hearing him tell us exactly how he would pay for that policy.

I fear that my time is running out—[Hon. Members: “Hear, hear!”] I am afraid that it is running out as rapidly as the credibility of the hon. Gentleman’s policy. We shall oppose the motion and I urge the House to support the Government’s amendment.

Question put (Standing Order No. 31(2)), That the original words stand part of the Question.

The House proceeded to a Division.

Question put forthwith (Standing Order No. 31(2)), That the proposed words be there added.

Question agreed to.

The Deputy Speaker declared the main Question, as amended, to be agreed to (Standing Order No. 31(2)).


That this House welcomes the record number of students attending university or college this year meaning more students benefiting from higher education (HE) today than at any stage in UK history; commends the Government for its record levels of investment in HE, an increase of over 25 per cent. over the last decade compared to a 36 per cent. decline per student under the previous Government; recognises the Government’s commitment to expanding opportunities to participate in HE, including an extra 10,000 opportunities this year in courses related to science, technology, engineering and mathematics subjects and 10,000 recently allocated additional student numbers for 2010-11; commends the Government’s generous student support package and regrets that this year the Student Loans Company (SLC) has been unable to provide the level of service students and their families have rightly come to expect; notes that 800,000 English-domiciled students have already had their applications for funds approved and that following additional Government support the SLC has allocated extra resources to deal with enquiries and processing; further notes that the vast majority of students who applied within the deadline will have received their money, that interim payments are available for students and the Government’s Access to Learning fund provides help for students suffering financial hardship; further notes the significant contribution international students make to the UK, and believes that the new student immigration system is effective and fair; and further notes the Government’s confidence in future economic growth which will enable a viable sale of the student loan book.