University Tuition Fees
I beg to move,
That this House has considered e-petition 182953 relating to university tuition fees.
It is a pleasure to speak under your chairmanship, Sir David.
Tuition fees were introduced in September 1998 under the then Labour Government as a means of funding tuition for undergraduate and postgraduate students at universities, with students required to pay up to £1,000 a year in fees. Over the years, those fees have rocketed, with some courses costing £9,250 for a typical three-year period. That is something the Chancellor is seeking to address and cap at a lower rate, while the Labour party has pledged to abolish tuition fees altogether.
Some observers argue that tuition fees have helped to improve the higher education sector and offer, by generating much-needed income for universities and allowing extra resourcing into education, improved facilities, research, student support services and high-quality staff. Others argue that tuition fees are simply plugging a £3.3 billion gap between the cost of research at universities and the revenue it generates. Whichever way we look at it, the issue of tuition fees and the provision of student loans is controversial. People being put in debt before they even start a career is rightly not popular with students, irrespective of the threshold of earnings required before repayment.
According to the Sutton Trust, eight out of 10 students will never fully repay their tuition fee loans, and the decision to raise the minimum earning level at which loan repayments kick in from £21,000 to £25,000 means that 81% of graduates will not pay back what they owe. Its report, “Fairer Fees”, identifies that typical debts on graduating are around £46,000, rising to £52,000 for those entitled to take out maintenance loans to cover the costs of living. The report also shines a light on the implications of Brexit. Currently, EU students studying in the UK are entitled to the same tuition fee loans as British students, and figures for last year show that 11%, or 8,600 people, remained in arrears. The position after Brexit remains unclear.
Universities, safe in the knowledge that virtually guaranteed income streams from tuition fees would rise every year, thus giving them financial stability, have been accused of paying eye-watering salaries to vice chancellors and the like, and are very much on the back foot as tuition fees have been put under intense scrutiny politically. The petition that we are debating puts the whole subject into sharp focus, and I believe that this debate is timely, given cross-party unease with things as they stand.
Back in the day, when I accessed higher education, we were provided with a grant, which had to be topped up through parental contributions. My folks did what they could, but could not afford their full share, so like many other working-class kids from low-income backgrounds I struggled to get by—but I did, and at least I did not end up burdened with too much debt. Personally, I am uncomfortable with the fact that people—usually young people—have a financial noose placed around their neck on graduating, especially with the figures showing the high level of debt that remains unpaid.
I congratulate my hon. Friend on introducing this really important debate. I apologise for the fact that I cannot stay for all of it because I am meeting a group of schoolchildren from my constituency shortly. Does he agree that at a time of low productivity it makes absolutely no sense to have disincentives for people to progress to higher education, which would improve their skills educational attainment?
I absolutely agree, and that is especially the case for people from low-income backgrounds. I would prefer to see the end of tuition fees and a return to a grant-based system or alternative method of funding.
It is a pleasure to serve under your chairmanship, Sir David. I have to confess to being slightly surprised at being called first, but none the less I am very happy to contribute to the debate and thank you very much for the opportunity to do so. I also thank the hon. Member for Hartlepool (Mike Hill) for introducing the debate.
I wanted to contribute this afternoon because the subject is close to my heart and of particular interest to me. When I read the petition I was somewhat intrigued by some of the statements made in it, and I think it is important that debates such as this one are on the actual reality. As we know, the petition states:
“University fees are rising more and more.”
Well, a month or so ago there was a statement saying that university fees would be frozen, although I accept that the petition was probably submitted before that was announced. It goes on to say:
“£9000 for university fees is too high and the stress of being in debt is what puts individuals off applying for degrees.”
I completely understand that notion, but the reality does not bear it out; the statistics, the data and what happens day in and day out in our universities do not suggest that that is actually occurring.
I looked at the UCAS information submitted after the last round of UCAS applications were made. The number of 18-year-olds who went to university last year, when this scheme was in place, was at record levels, at nearly a quarter of a million students, up 1.5% from previous years; the total number of students currently in university is over half a million, which, again, is at a record level and over 0.5% up; and someone from the kind of income groups and social economic groups that the hon. Gentleman described, and which I think he and I both originate from, is 70% more likely to go to university now than they were in 2006. I accept that there is a challenge and that many people are concerned, but the reality is that many more students are going to university compared with a number of years ago, and many more students from low-income backgrounds are going to university compared with a number of years ago. My first fundamental point is that we have to be careful to have these debates on the facts.
Secondly, we have to look again at what the principle is. What are we ultimately trying to do around university fees? The key point I always come back to when debating the principle of tuition fees is that somebody has to pay, so the question is who? The answer is either general taxation—that is, the taxpayer pays—or that some contribution is made by the people who will ultimately benefit from this the most. When I went to university in 1999, it was the second year of tuition fees. I paid £1,000, although I recognise that is nothing like the amount of money asked for today. I accept the notion that if someone will benefit—if they are likely to achieve a greater amount of pay over their working life—they should be expected to pay a greater share of the amount it costs to get them into that position.
On that point, does the hon. Gentleman agree that there is a societal good in having a highly educated population? The cost of that education should not be placed entirely on the individual, but we as a society should value it and pay for it?
I completely accept that there is a societal good, and that is exactly why we should have debates such as this one. The reality is still that a proportion of the cost per student, on average, in our university sector is being paid for by society. An increasing portion is being paid for by the individual, but a portion is still being paid by society. The hon. Lady is absolutely right to make that statement. The system already makes provision for that, and the question is where we draw the line.
From the hon. Gentleman’s remarks and his answer to my hon. Friend the Member for Wirral West (Margaret Greenwood), does he accept that there needs to be a balance and that £9,000 tuition fees for the majority are wrong? That should be scaled depending on what institution someone goes to and what course they attend, for example, and there should be factors determining how much people pay in tuition fees or not.
I accept in principle that there should be a societal contribution and an individual contribution, which I think the hon. Member for Wirral West (Margaret Greenwood) was querying. My argument—the hon. Member for Poplar and Limehouse (Jim Fitzpatrick) was absolutely correct about this—is that when an individual gains the most, they should be expected to contribute the most. We can have a party political debate about where to draw those lines, and I would probably take a different view from the Labour Members in the Chamber and from the Leader of the Opposition. In principle, somebody pays, and the question is whether that comes from general taxation or, at least, a contribution from the individual. My view is it should be a contribution from the individual, and I understand, accept and support the direction of travel on tuition fees in recent years.
The motion that we are debating is about reducing fees to £3,000. In preparing for the debate, I looked at some economic bases on which the current system works. In my understanding, if we reduced fees to that amount, it would blow a significant multi-billion-pound hole in the national finances. I would not support that, but if it happened, the proponents of the measure would need to explain where the additional money would come from. It would be likely to reopen the debate about whether we should cap student numbers, which raises a question about supporting aspiration. It would probably also reopen the debate about the amount of money spent on supporting students through waivers, outreach programmes, measures to increase retention, combination discounts and hardship funds, with which nearly £0.4 billion is associated for the coming year. I would be interested to hear from those proponents where the alternatives would come from or what would be stopped if the proposed tuition fee reduction went through.
I am listening carefully to the hon. Gentleman. Does he not accept that there can be workforce issues with particular professions, such as nursing and midwifery, which we have at the University of West London in my constituency? Professor Peter John, the vice-chancellor, has contacted me, saying that he is worried about the 20% decrease in applications since the nurse bursary was cut. It feels as if student fees are adding insult to injury. The hon. Gentleman has pointed out that £3,000 is a bit of an anachronism because no one has suggested going back to that, but that profession has particularly suffered, with applications down 60% on the normal cycle for the February intake. Given that there has been a steep fall in EU nurses, frozen pay and NHS cuts, it feels like that profession is being battered by this measure as well as everything else.
I thank the hon. Lady for that point, but I am not au fait with the specific subject and area that she outlined. However, if we accept the principle, which started in the late ’90s and was extended in subsequent periods, of trying to engender choice in this area and accept some element of market-based principles—I know that is controversial with some in the Chamber—then when there are demand, challenge or supply problems, the market mechanisms should have the opportunity to work.
I do not want to be totally critical of today’s debate, because I recognise that there is a genuine issue and that the petitioner began the petition because of genuine concern about where we had ended up as a country. I accept that the system as a whole has some issues, which is why I welcome the Government’s full review of tuition fees and the education system in general. I recognise that there has been inflation in the system in recent years and discussions about vice-chancellor pay in the past few months. I accept that initially, when the larger fee came in, not all institutions were expected to go to the top amount, so the review is timely and important. The argument is not about whether the system works perfectly now, because it does not—no system ever works perfectly, but this one obviously has challenges—and it is not about whether areas can be improved. Specific, obvious issues with the system have been highlighted in recent months, and I accept all that.
Ultimately, we come back to the principle that somebody pays: the taxpayer or the individual, or the individual makes a contribution. I think it is entirely legitimate that the individual makes a contribution. I support the system as it stands, pending the fuller review of the detail. For me, this is ultimately a question of a quasi-hypothecation or no hypothecation. Somehow the money will be spent and it will be paid back. The question is: who pays it back? Is the money associated with the people who get the greatest benefit? In my view, the people who benefit the greatest should contribute the most.
I remind hon. Members that the same rules apply in Westminster Hall as in the Chamber. If Back Benchers wish to speak, they will need to stand up to indicate that. As only Jim Fitzpatrick stood up, I will call him first.
It is a pleasure to see you in the Chair today, Sir David. Thank you for calling me earlier than I had anticipated. You have explained why and, fortunately, colleagues will not have to wait too long for their turn, as I will not detain them for long.
I am grateful to the Petitions Committee and my hon. Friend the Member for Hartlepool (Mike Hill) for the opportunity to participate briefly in the debate. I am pleased to follow the hon. Member for North East Derbyshire (Lee Rowley), who made a thoughtful contribution, outlining the pressures on the further and higher education system and the pros and cons of different elements. It was a fair presentation and I look forward to hearing the Minister respond to his comments, and to everybody else’s, including those of the Scottish National party spokesperson, the hon. Member for Glasgow North West (Carol Monaghan), and of my hon. Friend the Member for Blackpool South (Gordon Marsden). I suspect that my hon. Friend and I were the only two people in the Chamber today who were in the Commons when tuition fees were introduced in 1998, so I look forward to his wisdom prevailing in the debate from the Labour Front Bench.
I confess that I only realised the debate was taking place when the communications hub alerted me that my constituents had contributed the 10th-highest number of signatures to the petition—12,089. I tried to work out why that might be the case, but I have not arrived at a conclusion. I have not seen email traffic from my constituents to support the level of concern that the numbers suggest, but the petition has obviously attracted them and I am pleased to make a contribution.
I am grateful to the House of Commons Library for its background paper. Reading it brought back memories of our debates in 1998 on introducing tuition fees at £1,000 and then, in 2004, on raising them to £3,000. Our discussions were along the lines that the hon. Member for North East Derbyshire indicated—about the cap on student numbers and releasing it to allow more young people to go into further and higher education, which would require some assistance and contribution through tuition fees. That argument clearly won the day.
In 1998, I was ambivalent about the £1,000 level, mainly because the conditions attached meant that most young people and families in my constituency would not be expected to pay since the majority of my young constituents came from below the household income threshold at which it would be required. Tuition fees would not have added to the pressures that they experienced simply because of the size of household incomes in Poplar and Canning Town, as it was in those days. I assume that I supported the proposal—I have no recollection of not doing so.
However, the sister policy of abolishing maintenance grants, which the hon. Gentleman also mentioned and which the Library briefing paper focused on, concerned me. Whereas fees and their introduction would have had minimal effect, the proposed abolition of maintenance grants would have had—and did have—a profound impact. I voted against it, and that was my first—and probably only—vote against a three-line Whip in our 11 years in government. I knew that many families locally would not have been able to support their children into further or higher education without the grants. The briefing paper makes just that point by quoting the National Union of Students president, who said in her evidence to the House of Lords Economic Affairs Committee that simply abolishing fees would not help students, and that
“just scrapping tuition fees will not solve the problem. It is about maintenance support. Scotland is a prime example. It has no tuition fees, and students are still struggling. It is important to reinstate maintenance grants.”
Sir David, I am sorry I did not include you in our little gang of survivors from 1998, because you are non-political when in the Chair, but you were there, and you will remember, as will my hon. Friend the Member for Blackpool South, that, interestingly, the Labour Government restored maintenance grants four years later, recognising that they were an important policy. That was welcome.
My hon. Friend is making an excellent speech on his rebel past and what fees were like before they turned into the monster that they have become. In those days, did he foresee cases like that of Siobhan Hallett of Acton? She makes £27,000 and her repayments are £58 a month, but if she works any overtime, her repayments rise to £115. She says:
“I feel like I am being robbed every time I try to better myself in society.”
She wants to get on the housing ladder, but she is being penalised by rising loan repayments. The Student Loans Company is taking what she earns.
My hon. Friend makes an important point about repayments—when they start, how much is repaid and at what interest rate. To be fair, the hon. Member for North East Derbyshire raised those points as well. I am sure that the Government are trying to weigh up all the different elements, because they all affect each other and the system is clearly unfair. I am sure that when my hon. Friend gets a chance to make her own contribution, she will focus on that; I might intervene to support her points, because they are emphatic and critical to young people’s quality of life during their time at university.
The hon. Gentleman referred to the situation in Scotland. Is he aware not only that students in Scotland are not saddled with £27,000 in debt in the way that students in other parts of the UK are, but that last year, additionally, almost 3,000 students qualified for a non-repayable bursary or had their funding increased? Will he comment on that particular situation?
I am grateful to the hon. Lady for mentioning Scotland. I will come back to that. The position is also referred to on page 13 of the House of Commons Library briefing; I note that the Scottish Government are currently conducting a review of Scottish funding. That is welcome, because there are questions about how the policies on tuition fees, loans and repayments are applied in England, Scotland, Wales and Northern Ireland. I am pleased to hear that the Scottish Government are carrying out a review. I will return in a moment to what the Library briefing says about that.
As I was saying, I supported the introduction of tuition fees to help raise the cap on the numbers of young people going into further and higher education at college and university, because it was clearly recognised that the ceiling had been there for too long—30% was not right for our 21st-century country—and a change had to be made.
The Library briefing makes the point that each £1,000 cut in tuition fees would cause universities to lose £1 billion in income, or else the taxpayer would have to make up the difference, as the hon. Member for North East Derbyshire said. I do not support the abolition of tuition fees, but neither do I support £9,000 across the board. They should be variable, with the highest fees for the Russell group alone; £3,000 certainly seems too low for those universities. The petition, which is welcome, indicates that this debate is very much still alive.
There is general agreement that for good-quality university education to be sustainable, it must be paid for. There are many aspects to that, including the public purse and the individual. Does the hon. Gentleman agree that maybe we should consider looking to employers, who are also beneficiaries of graduates and postgraduates in their businesses? Could they be greater players in funding the education system that we need and desire?
The hon. Gentleman makes a good point. My hon. Friend the Member for Wirral West (Margaret Greenwood) said in her intervention that all of society benefits when a highly skilled cadre of young people come through the system. They make us more productive, more energetic and more able to compete in the world market. These are difficult questions for the Minister. I am sure that he has all the answers for us, and we look forward to hearing them in due course. Yes, a contribution across the board is entirely appropriate.
The Library briefing has some interesting paragraphs on fees, as I mentioned in response to the intervention by the hon. Member for Edinburgh North and Leith (Deidre Brock). Page 13 says:
“The free fees policy in Scotland has been discussed by many commentators, most noticeably by academic Lucy Blackman Hunter, who has suggested that free fees benefit middle-class students the most. It has also been suggested that the free fees policy is unsustainable and has led to the underfunding of Scottish universities and rising debt among poorer students.”
As I mentioned, the Scottish Government have indicated that they will be holding a review. I certainly wish them every success in that. My son went to Glasgow University, although as a London-born resident he paid full tuition fees.
I appreciate the point, but that does not address the fact that many students now in university in Scotland will leave with significantly smaller debt than students in England who are currently paying £27,000, as has been mentioned, and those paying slightly less elsewhere in the United Kingdom.
The hon. Lady makes a good point. The point has also been made that many students are leaving university with debts so high that they will never pay them back. The loss to the Exchequer is transparent. It suggests that the balance is wrong and needs adjusting. I do not detract from what she said, but the Library briefing says that the Scottish Government are reviewing the situation. Maybe they will make some adjustments to indicate how they would make the balance more equitable.
In conclusion, I am grateful to the petitioners for the opportunity to make these brief comments. Debts, interest rates, unpaid loans and fee levels have been key manifesto issues in every election at least since 2001. From this debate, it is clear that that will continue.
It is a pleasure to serve under your chairship, Sir David. I thank my hon. Friend the Member for Hartlepool (Mike Hill) and the Petitions Committee for bringing this debate, after the online petition was signed by 160,000 people, so that we can discuss the subject.
This is the issue that first drew me into elected politics as a student at the University of Leeds. I was concerned that the Dearing review would bring forward fees, ending the free education that I enjoyed along with many other Members of this House, and it led me to seek election to the student union executive at Leeds University. I spent that year and every year since then campaigning against tuition fees and for a return to free higher education. This debate is close to my heart. I hope that the Government will take heed and reflect on the damaged caused by increased fees.
This Government and the coalition that preceded them, who introduced £9,000 fees, view higher education as nothing more than a pre-work training course and a source of personal economic mobility. That marketised view of education does nothing to differentiate educational institutions from private profit-making entities and markets such as retail. To a free market ideologue, the system created by the Conservative and Liberal Democrat coalition is entirely logical; for the rest of us, however, it is deeply flawed. My view and that of the thousands of people who signed the petition is that tuition fees are not sustainable. I am sure that my hon. Friends will agree that education is not a business but contributes to the common good of the nation—what we used to call the common weal.
To look overseas, Chile under Pinochet reduced and then stopped providing direct grants to universities. Bahram Bekhradnia of the World Bank team that went to Chile to help to reform the system said:
“Universities were funded for teaching only via the tuition fees that students henceforth paid. And students received loans from the government to enable them to pay their fees. Sound familiar?”
This Government’s system is straight out of the Pinochet free market playbook, one widely recognised to have failed. Those are not my words but those of somebody from the World Bank. He continues:
“Well, after three decades, the Chilean government has now concluded that this is an unsatisfactory way to fund higher education…Chileans are looking for a new system under which the government will provide grants to universities funded from general taxation.”
They have started down that path and away from a fees-based system.
Looking at a country that undertook the free market experiment in higher education over 30 years ago, and which we are still in the early stages of, is instructive about what will happen here in future. First, in Chile, the debt of former students is colossal in relation to their earnings—by far the highest in the world. England has started to catch up: graduate debt is exploding as cohorts of students from the new funding regime complete their degrees. Secondly, just as in primary and secondary education in this country, previous Chilean Governments encouraged private institutions of variable quality in tertiary education, which now educate 80% of people. As a result, there are serious concerns about some private institutions creaming off taxpayer-funded loans for students and making unsatisfactory provision in return. Thirdly, the funding arrangements make it difficult, if not impossible, for the Government to steer the higher education system in a way that is possible with direct grant funding. That matters when higher education is a vital element of a country’s economic and social development, as Governments around the world, including the UK Government, increasingly believe.
That is a vision of our future unless we change the system. The Chilean Government under Michelle Bachelet have started to reform the system: 80,000 university students received free education last year and the majority of students had a cost reduction. It took Chile 30 years to reverse the mistakes of a free market in higher education. Let us not repeat the same mistakes here.
It is shameful, given that the contribution of the public purse to universities is one of the lowest in the OECD, that we are not seeing greater levels of state funding for something that contributes so much to our nation’s welfare. The Government contribute no more now with £9,250 fees than when £3,000 fees were introduced. In fact, with the proposed freeze at £9,250 this year and next year, universities are seeing a real-terms funding cut. Students are paying for the majority of the system but seeing cuts to university funding from central Government. Students and universities are victims of the Government’s chaotic policy. Free market ideology means the Government take no responsibility for the destruction and dismantling of our once renowned centres of education but degrade our institutions by starving them of state funding. It is time to call a halt to the coalition Government’s free market experiment and this Government’s continuation of it, and to implement a system that encourages readily available higher education for anyone with a will and a desire to learn.
I appreciate the opportunity to speak this afternoon, Sir David. I was due to be a member of a statutory instrument Committee but I was kindly relieved of that duty by a colleague. I thank all those who signed the petition that allows us to have this debate. I support the comments made by my hon. Friends the Members for Leeds North West (Alex Sobel) and for Hartlepool (Mike Hill) and by other Opposition speakers.
I will address fee repayments in my constituency. Reading is a university town, as many hon. Members may know, with a particularly high number of graduates. The local workforce has a high proportion of highly skilled and highly trained people in industries such as IT, research in the public and private sectors, and a range of applied technology businesses—many of which are exactly the sort of business that the Government seek to see grow as we are due to leave the European Union. Many of those young graduates are above the loan repayment threshold but do not yet command such a high salary as to be insulated from the effect of fee repayments. I notice hon. Members nodding; the situation is similar in many other high-growth parts of the country.
I will give additional details to illustrate how the mistaken tuition fees policy has a harmful impact on that group of people and on economic growth in areas that are hubs and should be fostered, as the Government have pointed out. A practical example is a teacher in their 20s living in Reading who has effectively had a 15% pay cut—this applies to public and private sector staff, as many private sector employees have had a real-terms pay cut too—but faces an additional charge on their income of up to 9% a year through tuition fee repayments because they are in the cohort that has been through the £9,000 a year regime. We can imagine the impact on key workers such as teachers, nurses, social workers, university staff, IT workers and others. That must also be viewed in the context of high house prices and the high cost of living such as the high travel to work costs of a season ticket to London or for local commuting—many people in the Thames Valley commute between towns with growing high-tech industries such as Maidenhead, Reading and Newbury, where Vodafone is based. House prices can be as high as £300,000 for a two bedroom terraced house in Reading. Not all houses are that price, but that context is significant.
At the same time, a young person in their 20s or 30s who has to repay large amounts of debt, who faces relatively static pay or indeed a pay cut, and who faces high house prices, may want to start a family but may delay that because of the impact of the extra costs and burdens on them. Many employers in high growth areas such as Reading are suffering staff shortages. The high real cost of repayments in a high cost of living area is part of the cocktail of factors affecting those shortages. We have a shortage of teachers locally, as was pointed out to me by the local head teachers I met last week. Young staff, potentially some of the most important in the educational sector, who have gone through their initial teacher training, who are bedding in and who have a lot of their career ahead of them, are moving out of our area to live in lower cost parts of the country where the effects of loan repayment will be less. The same is true for areas such as social work, nursing and midwifery, where real concerns have been raised; the four-hour A&E wait target has not been met at our local hospital for many months.
Private sector employers are also heading in the same direction. We have some very large employers in our local IT sector, as well as a burgeoning group of entrepreneurial small businesses and a large supply chain. Many people in those supply chain businesses and many of the entrepreneurs cannot command the same salaries as the highest of high flyers in blue chip industries. I hope the Government will consider that, particularly on the day they have launched their industrial strategy, and reflect on the need to allow these clusters to develop in towns and cities like Reading—the small and rapidly growing urban centres with universities that are the engines our economy needs as we face the challenge of Brexit.
The challenge of repaying such debts is increasing year on year, given the context I have described. Not only have tuition fees risen, but other costs have too. In particular, the cost of housing is significant and growing because the supply is not expanding. Conservative Members will point to the Government’s Budget measures last week, but I remain sceptical because other Government measures have not raised the supply of housing. Sadly, under George Osborne, plans for 1,000 new council houses in my constituency were stopped by the Government’s mistaken approach, and the Government have fought the local council’s attempts to keep a larger proportion of housing at affordable levels in private developments.
Given the rising house prices, the lack of real housing supply in the area, and the further austerity that will lead to further falls in real earnings for people in the public sector, and possibly for people in the private sector as the local labour market is depressed as a result, it is high time for the Government to reconsider their tuition fees policy. I urge Government Members to do so—particularly the Minister, who I know is a deeply cerebral and thoughtful man. I am sure that they have the best of intentions. If they take a step back, as my hon. Friend the Member for Leeds North West suggested, and look at the international comparators and the trajectory we are on, I believe they will reconsider their worrying and mistaken policy.
May I conclude with a small plug for the University of Reading and other local institutions? Our town is lucky to have them driving local growth in IT, science and other fields. I hope that such growth continues to flourish, but I fear the tuition fees policy may be an obstacle to it.
It is good to be speaking in a tuition fees debate once again, and I thank the hon. Member for Hartlepool (Mike Hill) for kicking off this afternoon.
The Government enjoy using the phrase “make work pay”, but today I will start by saying that we need to make education pay. For many young people who face the choice between crippling student debt or taking a low-paid, unskilled job, only one route is possible. The hon. Gentleman spoke about his working-class background and how university was a struggle for his family. I understand that completely; I, too, come from a working-class background. I was one of five children, and all five of us went to university. That was only possible because we not only did not pay fees, but had generous maintenance grants to support us and our family while we were at university.
This debate is fundamentally about the value we place on education and about our ambitions for the future of our young people and our nation. Will the young people embarking on tertiary education courses contribute economically and societally to our nations, or are we providing them with a service for which they must pay? The hon. Member for Leeds North West (Alex Sobel) talked about the free-marketisation of education, and spoke in detail about the experience in Chile. He explained that it took Chile 30 years to understand and appreciate the errors of its ways and change its tuition structure entirely. I really hope it does not take the Minister 30 years to do the same for English students.
The hon. Member for North East Derbyshire (Lee Rowley) asked who pays, and his conclusion was that it should be those who benefit. I do not disagree, but I question exactly who benefits. As legislators, we must be clear about that. In a higher education debate on 13 September, the Secretary of State for Education referred to fees as a “burden” on society—a dangerous piece of spin that the Government can ill afford to peddle. The post-Brexit economic success of the UK will rely on a well-educated population with a range of educational experiences and expertise. We already have skills shortages in science, technology, engineering, maths, healthcare, education and digital, so graduates are needed now more than ever to ensure that the UK remains competitive outside the EU. When we consider that EngineeringUK estimates an annual shortfall of 20,000 graduates in engineering alone, we can see that fees for tertiary education are illogical.
The effects of the tuition fees policy are also clearly demonstrated by the abolition of nursing bursaries. The hon. Member for Ealing Central and Acton (Dr Huq), who is no longer in her place, pointed out that the decline in the numbers of those choosing to study nursing comes at the same time as a sharp drop in the number of EU nurses registering to work in the UK. That needs to be a wake-up call to the Government about their damaging policies.
A fundamental principle of the Scottish National party is that education should be based on the ability to learn, never the ability to pay. We have a strong and principled record of opposing increases in tuition fees in England and Wales, and we will continue to reject any legislation that seeks to increase the financial burden on students. Of course, fees are not the only attack on English students: the interest on tuition fees has risen sharply, maintenance grants have been scrapped, and now we hear that some students’ debt on completion of their course has reached an astronomical £50,000, which will leave many young graduates saddled with debt throughout their entire working life. The hon. Member for Reading East (Matt Rodda) spoke about the repayment threshold, and the salaries and costs of living of those who may be just above it. Coupled with increased costs of living, repayment is a huge burden on people’s week-to-week finances.
In Scotland, we take a holistic view of education. I have already referred to “tertiary education”, and I try to refer to it generally, because the distinction between further education colleges and higher education institutions in Scotland is fluid. I have heard many times in this place a spin on UCAS figures suggesting that fewer young people from disadvantaged backgrounds enter higher education in Scotland than in other parts of the UK. That is used as an example of why it would be wrong to abolish fees, but I am sure that the Minister and other hon. Members present know that that is simply not the reality.
One third of degree-level courses in Scotland are in further education, but that is not accounted for in UCAS figures. Audit Scotland reports that it amounts to more than 45,000 Scottish students undertaking higher education in Scotland’s colleges. In Scotland, many students access higher education from further education, but that is not captured by UCAS figures either. For the benefit of hon. Members who have not heard me cite what UCAS has to say on the matter, let me quote it again:
“For people living in England, Wales and Northern Ireland, UCAS covers the overwhelming majority of full-time undergraduate provision…In Scotland there is a substantial section of provision that is not included in UCAS’ figures. This is mostly full-time higher education provided in further education colleges, which represents around one third of young, full-time undergraduate study in Scotland…Accordingly, the statistics on UCAS entry rates and acceptances…reflect only…undergraduate study that uses UCAS.”
Put simply, UCAS figures consider only direct entry from school to university; they take no account of degrees delivered in FE or of young people who enter university from an access or college course.
I cite these figures off the cuff, but I believe that in Scotland we have lost 150,000 further education places, which has reduced accessibility to further education for many. Despite the very good efforts of the Scottish Government, we are still not attracting enough people from lower-income backgrounds to university. Those appear to be the facts; the hon. Lady may wish to agree or disagree with them.
Perhaps the hon. Gentleman has read some figures but not fully understood them. We have college places aplenty in Scotland; we have college places that cannot be filled. There are now 116,000 full-time college places in Scotland, which is more than ever before.
In a Times Higher Education article last year, Professor Danny Dorling of Oxford University wrote:
“In contrast to England, Scotland shows what a real narrowing of inequalities would look like. There, the most dramatic change has been in the proportion of children from the most disadvantaged quintile of areas going to the highest tariff universities. Home student applications continue to rise in Scotland even as they begin to stall in England.”
To talk down the interactions between FE and HE in getting young people from disadvantaged backgrounds into tertiary education does a great disservice to the institutions and the young people served by them.
Our free tuition policy benefits 120,000 undergraduate students every year, saving them from the massive debt seen in other parts of the UK. The hon. Member for Poplar and Limehouse (Jim Fitzpatrick) stated that he was probably one of only two Members who were here when tuition fees were first introduced in 1998. In 1998, my son was born. He is now in his second year of university in Scotland and he has no tuition fees. At the moment, he is still debt-free, because like many students in Scotland, particularly in the west of Scotland, he lives at home and he has a job to supplement his life, especially his social life, if that is required. However, he is debt-free and hopefully will remain so.
Even taking into consideration my previous comments about UCAS statistics, the number of students from Scotland’s most deprived areas who are entering university has increased by 19% in just two years. We are clearly ahead of others in supporting such young people to ensure that they remain in education. Alastair Sim from Universities Scotland says that the entry rate for 18-year-olds from the most deprived areas of Scotland is 51% higher than 10 years ago.
Despite the attempts of this Tory Government to use statistics to spin the story, the facts in Scotland are different. In Scotland, we place a value on our young people; from baby boxes to free tuition, we tell them that they are important and we need them. We are told that our free tuition prevents Scottish students from accessing the available places. Again, that would help the Tory spin, but once again I have to disappoint. Since the SNP came to office in 2007, the number of Scottish-domiciled full-time degree entrants has risen by 12%, and since 2013 the total number of funded places available at Scottish universities, including additional places to widen access to students from Scotland’s most deprived areas, has also increased.
There is no doubt that the Scottish Government’s investment in additional places for access students and for those progressing from college has had a positive impact. We are investing £51 million a year to support 7,000 places, including those for access and articulation from FE to HE.
We are reaping the benefits. UCAS statistics for this academic year show that more than 34,500 applicants living in Scotland accepted a place at university this year, which is an increase of 2% and a record number at this stage in the cycle. Contrary to what the hon. Member for North East Derbyshire said, all other UK nations saw a fall in the number of people accepted to university compared with last year.
In my speech, and in response to the hon. Member for Edinburgh North and Leith (Deidre Brock), I referred to a comment in the House of Commons Library briefing paper that the Scottish Government are carrying out a review of this whole area of policy. Is that the case, or is it not? The hon. Member for Glasgow North West (Carol Monaghan) is painting a very positive picture, but if the picture is so positive why would the Scottish Government have to carry out a review?
Of course the review is taking place. Despite the positive picture, and it is a positive picture, we do not stop there. We will keep going and keep going, until we can ensure that every young person, regardless of background, can go to university or can see university as something they would like to do.
The Scottish Government are doing other things, too. In Glasgow, they run a project called the advanced higher hub. I have mentioned it before in this place. In Scotland, advanced highers are the highest school qualification. The advanced higher hub is funded by the Scottish Government and supported by Glasgow City Council and Glasgow Caledonian University. It takes young people from disadvantaged schools all over Glasgow and brings them together to do their advanced highers. The idea was that if only one or two pupils were doing advanced highers in a particular school, it was not economically viable to run those courses, whereas bringing pupils from different schools together made it economically viable.
One of the side effects of the project arises from those students having their lessons on a university campus, as they start seeing university as something they can all do. University seems normal; the process is normalised. The number of young people who have attended the hub and who are now going to university is just overwhelming. It is a huge success story. We will continue to do all we can to widen access and ensure that our young people are given the best opportunity to succeed.
I want to say something about Labour’s position. I welcome Labour’s stance on tuition fees and I support any attempts to reduce or abolish those charges, but I struggle to understand Labour’s position. I want to have faith in it and I want to believe the Labour party, but we also see the Labour Government in Wales increasing tuition fees. I appeal to Labour colleagues in this place to follow the SNP, talk to their Labour colleagues in Wales and consider what can be done so that the public can be assured of their intent.
There must be two Scotlands—I am sure there are—because the Scotland that I see in my mind’s eye has an education system that was at one time the envy of the world but that is now struggling, which I very much regret. I understand that in the programme for international student assessment scales, or PISA scales, which are a measure of education, Scotland has slipped back to 27th, behind Lithuania. I know that PISA is not linked to university or higher education. However, Scotland is good, but we need to make some improvement in our education system.
I am happy to talk about PISA and Scottish education. It is amazing that throughout the world Scottish education is lauded as a shining example; it is only here that it is not. We come here and we hear about how awful Scottish education is, but Scottish education is ranked extremely highly.
As for the PISA tests, they look at pure knowledge—rote learning. They ask pupils to recall facts. That is not what the Scottish education system is about. There is an element of that, but it is also about problem-solving, employability, communication skills—in fact, it is about everything that employers are looking for that are not captured in any PISA tick-box tests.
I am interested in the arguments that the hon. Lady would use when meeting her constituents or others in Scotland about why those in vocational education should subsidise the children of their neighbours who are in higher education. One of the issues for many of us in England is that the huge rise in apprenticeships, whereby people are earning while they are learning and becoming self-sufficient, does not begin to justify those people subsidising their neighbours’ children. What does she say to that?
I thank the hon. Gentleman for that intervention. We place a huge value on vocational training as well and I invite him to join me at City of Glasgow College, where people are looking not only at degree-level courses but at vocational courses. Nobody there considers those students taking vocational courses to be subsidising anyone else. City of Glasgow College is a fabulous new facility right in the heart of the university sector in Glasgow; we have Glasgow Caledonian University on one side of it, with Strathclyde University on the other side, and Glasgow University just a mile and a half away. City of Glasgow College is now the shining example to all of those universities, and many young people at the college are the envy of those in the higher education institutions.
I am very grateful to the hon. Lady for giving way again. I have been to Glasgow, although not for a few years, and I would be interested to see how the City of Glasgow College is doing things. However, at the end of the day, if we are going to reduce university fees in the way that she has suggests, someone will have to pay for that. The truth about our system at the moment is that we have 20 of the best 100 universities in the world, not least because of the investment that has gone into them. We have overseas students who are effectively subsidising our students and if we lower the fees, someone will have to mind the gap that will be created. Who will that be?
It is quite simple; once again, look north. One of my party’s fundamental principles is that education is about the ability to learn and not about the ability to pay, as I have already said. Paying for education is a duty of Government, of business and of society, which includes the taxpayer, to ensure that we have a well-educated population that can provide economic growth in different businesses and different sectors. Post-Brexit there will be a struggle to create economic growth. It is a duty of us all to pay our taxes so that those taxes can fund the higher education of our young people.
I thank the hon. Lady for giving way. I just wanted to make a point of clarification about PISA, which is a very interesting international study. As someone who was a civil servant in the Department for Education some years ago and who has worked in the sector recently, I think it is important to look at the broad picture that PISA gives but also to understand its strengths and weaknesses. One significant thing about PISA is that the countries with education systems that do best in the test tend to be those with high levels of investment in education and of teacher qualification and a generally pro-education culture. Of these, the western countries are Finland and Canada, both of which have a lot to offer in pointing us in the right direction.
The hon. Lady comments on Scotland and on the nature of PISA. My understanding, from having worked with academics who are specialists in the comparison of different education systems and, indeed, in broader educational research, is that there are criticisms of PISA—it is one of a number of measures—but it measures not rote learning but rather students’ ability as teenagers to understand complex material and to act on their own. The Minister may want to comment on that as well. Trying to dismiss PISA as the hon. Lady does might be misleading, and she perhaps needs to look further into the issue. That it not to say that PISA is perfect—there is an extensive, learned debate among academics who specialise in education policy on its pros and cons—but I caution her about trying to dismiss it as a rote-learning exercise because, in my understanding, it is not.
I thank the hon. Gentleman for his intervention. I am not here to discuss PISA. I am happy to talk about it, but the fact is that the education system in Scotland has changed dramatically over the past 10 years to match the needs of businesses and employers and to allow our young people who want to go on to higher or further education to do so. Many things are done in Scotland that are simply not captured by PISA.
I finish by saying that the Institute for Fiscal Studies has calculated that if student debt were to be scrapped immediately in England £20 billion would be added to the UK Government debt and that delaying the decision until the end of the current Parliament would add £60 billion—three times that amount. That is perhaps something for the Government to think about because if that decision has to be taken, it should be taken sooner rather than later. The SNP is fully committed to guaranteeing fair access to higher education so that every young person, regardless of background, has an equal chance of going to university, and my party will continue to work hard to ensure that.
It is a great pleasure to serve under your chairmanship, Sir David. I thank my hon. Friend the Member for Hartlepool (Mike Hill) for introducing the debate, with crispness but with insight. The truth of the matter is that a lot of water has run under the bridge since the e-petition was initiated. Members will have seen in the Library briefing that it was put together before the general election was called. Debate on it was therefore postponed. As I say, a lot of water has run under the bridge—under our bridge, and the Minister’s also perhaps—since then, but the reality that prompted 166,000 people to add their names to the petition remains the same. The current system of fees at record highs, and potentially rising in the years ahead, is unsustainable.
This has been a good-natured, thoughtful debate, with some excellent contributions from both sides of the House. This is the first time I have heard the hon. Member for North East Derbyshire (Lee Rowley), and I pay tribute to his speech. There are always different ways of looking at how things have gone. He cited the figures on participation in education that are handed out by Tory Whips at every Education questions, and they are true, in certain areas and in certain cohorts of young people. However, we have to think not simply about young people but about people of all ages, because that is a key issue we will face in the next 10 years. Indeed, among young people themselves, there are disturbing signs regarding completion, which I will mention later, making the picture perhaps not quite as rosy as the hon. Gentleman suggests.
We have had some excellent contributions from Labour Members. My hon. Friend the Member for Poplar and Limehouse (Jim Fitzpatrick) not only reminded himself and me of our mortality in this place, but also the Chair, which may or may not be a good thing to do. The truth of the matter is exactly as he said. People forget, of course, that the decisions taken in 1998 were the result of the Dearing report. The report had a consensus in this House, because of the issues it needed to address, but even then, there were many concerns about maintenance grants, as my hon. Friend rightly said.
Maynard Keynes famously said:
“When the facts change, I change my mind. What do you do, sir?”
That is one reason why the Labour party is now committed to what we said we would do in our manifesto. The loss to the Exchequer, in my view and, I think, that of many, of the funding processes is becoming unsustainable.
The huge amount of erudition and reference with which my hon. Friend the Member for Leeds North West (Alex Sobel) spoke did not affect the fact that he stressed, absolutely rightly, that the current Government in particular—the previous Government under David Cameron were also guilty of this—have an obsession with an ideological viewpoint which, as I have said before, could have come from the pages of Ayn Rand, in the sense that they regard higher education principally as a private consumable, although from time to time they throw bits of food off the table to the public good. That is one issue with which Opposition Members and progressive Government Members take strong issue. It must be remembered that Bahram Bekhradnia, whom my hon. Friend the Member for Leeds North West mentioned—the Chilean example he gave was a fascinating one—was not only a distinguished director of the Higher Education Policy Institute, which the Minister and I frequently use to bounce ideas off, but a director for 10 years, so he knew what he was talking about.
I was pleased with and interested in the contribution by my hon. Friend the Member for Reading East (Matt Rodda). He made points about the negative—if I can put it this way—nudge impact on groups of people, and he talked particularly about the south-east. From a northern perspective, one reason we were not happy with the freezing of the threshold was that it brought more and more graduates in the north and the midlands into the repayment trap too early. We should see in this whole process the problems of repayment.
The hon. Member for Glasgow North West (Carol Monaghan), whom I was pleased to work with on the Higher Education and Research Bill, made a number of interesting points, some of which I agreed with, some of which I did not. She talked about the impact of fees on English students, but the Government’s fee policies affect, and the tuition fees e-petition concerns, not just English students but tens of thousands of students enrolled in higher education in further education colleges, like mine in Blackpool. The issue also affects thousands of Scottish students in England and thousands of students from Northern Ireland. The Minister might want to pause for thought, because the Democratic Unionist party has been less than keen on tuition fees. That was why the DUP absented itself from our tuition fees debate in the main Chamber on 13 September and why the Government had to flee the field on that occasion and were forced to allow our Opposition motion to pass unopposed. The Minister should have a care not to rub his DUP colleagues up the wrong way, otherwise there might be an addition to that £1 billion down payment for their support.
The tuition fee changes that the Government put through before the general election saw the basic rate for tuition fees rise from £6,000 to £6,250 a year. The higher rate moved from £9,000 to £9,250. According to the Sutton Trust’s recent report, “Fairer Fees”, the average debt for students is £46,000. Student fees in the UK are 10 times higher than the European average and twice as high as in the US. In June this year, the Institute for Fiscal Studies sounded further alarms about the Government’s direction of travel. It said:
“Replacing maintenance grants with loans…results in students from low-income families graduating with the highest debt levels, in excess of £57,000.”
It also said that
“changes since 2012 have increased the repayments of almost all graduates, increasing the burden of student loans the most for low and middle earners”.
I have made reference to this elsewhere in the House, but the University and College Union commissioned a report from London Economics that was published on 20 July. It suggested that thousands of graduates will suffer a midlife tax crisis from the repayment of accrued interest on student loans. With a ninefold increase in inflation from 0.3% in April 2016—before the Brexit referendum—that will now get radically worse. None of these things exactly hangs out a welcome sign to young people who have got a place or hope to go to university, and that is significant.
The Sutton Trust has issued Members with a factsheet on student debt, but it has also done research that shows that in 2017, financial worries about HE were particularly pronounced, and they increased in families with low levels of affluence. Some 66% of those families were worried, as compared with 46% in high-affluence households. It is no wonder that the results of the survey of student experience by the Higher Education Policy Institute and the Higher Education Academy show that just 35% believe that their higher education experience represented good or very good value for money.
I have talked about the issues around the drop-out rate. Two recent reports from the Office for Fair Access and the Social Market Foundation point to growing drop-out rates, particularly among students from disadvantaged backgrounds. I have already referred to the Sutton Trust survey. It showed the poorest statistics in eight years for school students wanting to plan for higher education.
I will raise a point that the Government seem to neglect. I have talked before about the fact that we can nudge people away from things as well as towards them. The issue is not just a question of the increasing pressure on those who have taken out loans and how that affects their social mobility; it is also a question of how that puts off people who might want to go to higher education in the first place. By its very nature, that is much less quantifiable, but it is a real factor that needs to be discussed.
What is clearly part of the equation is the impact on part-time and mature students. The main casualties of the increases in tuition fees since 2012 from £3,000 to £9,000 have been mature students and part-time learners. In England, there has been a 60% drop in the number of part-time students since 2010-11. The Minister has said on several occasions that he thinks the argument is far more complex than that, but many people, including me, think that the statistics tell their own story. We simply cannot afford to have that haemorrhaging in the involvement of those groups.
The skills figures are stark: only 13% of the 9.5 million people in the UK who are considering higher education in the next five years are school leavers. The majority are working adults. There is a social dimension to the issue. That is underlined by the fact that one in five undergraduate entrants in England from low-participation neighbourhoods choose, or for financial reasons perhaps have no option but to study part-time. Those are the sorts of people being affected. Even the Minister’s distinguished predecessor Lord Willetts has now admitted that the decisions the Government made in 2012 to treble tuition fees—at that time, the fees were buttressed by various safety mechanisms for social mobility, but those were then stripped away by subsequent Governments—weaken that argument about social mobility still further.
Those are not good bases on which this or any Government should defend the current system. Indeed, there is a palpable and growing realisation that the Government’s settlement for higher education is divisive and financially unstable, especially in regard to tuition fees. Keith Burnett, the vice-chancellor of Sheffield University, put it sharply in a Times Higher Education article in June:
“With total debt forecast to hit £200 billion in six years and to pass £1 trillion by 2045, it will dwarf credit card debt”.
On the basis of the Government’s disappointing general election results—it is important we recognise that it was not just students who turned against them in a big way; it was young people in general, because the student issue and how the Government were dealing with it was seen as emblematic of their attitude towards young people in general—it is not surprising that there has been lively discussion in government about what should be done. The First Secretary of State acknowledged that student debt was a huge issue. The Leader of the House spoke about it, although she did not come forward to discuss matters properly. One of the leading members of the Government—if one is to believe what one hears, he is very much a darling of Tory activists—the Secretary of State for Exiting the European Union, the right hon. Member for Haltemprice and Howden (Mr Davis), is on record as saying in 2010 that he opposed the plans to increase fees to as much as £9,000 a year. He said
“that is something I don’t believe we can allow to continue. I have always been against tuition fees. In 2005 our policy was abolition and I was one of the drivers behind that.”
That is the reality of where we stand today. The Government have conceded that the situation with fees is unsatisfactory. If they thought the current system was working well and would be sustainable in the long term, they would not have tinkered with it at the Conservative conference, where they capped the fee rise to £9,250 and increased the repayment threshold of student loans. As one of the central announcements in her conference speech, the Prime Minister committed to a review of HE funding and student finance, but the Minister has yet to reveal the details of that review. At the conference and subsequently, he seemed singularly unhappy about associating himself with the review. The Chancellor failed to mention it in the Budget, so will the Minister let us know the terms of reference for the review? Will it be a full consultation? When will it be brought back?
I know that the further education sector is very close to my hon. Friend’s heart. I just left the reception of the London region of the Association of Colleges where there was great dismay that the Government have been almost silent on the future arrangements for the further education sector. That is similar to the absence of any clarity on where the Government are generally going in this whole area that my hon. Friend is outlining.
I thank my hon. Friend for raising the situation in further education colleges, because a number of FE colleges, including in my constituency, took the leap of faith in the late 2000s—very much encouraged by the then Labour Government—and set up higher education departments. Those higher education departments must be allowed to flourish, but it seems they are bearing not only the burdens that I am talking about generally, but particular burdens because of the nature of the young people they take in. It is a double whammy, because they take in young people from poorer backgrounds, who are precisely the sort of people most likely to be put off by rising fees. They also take in older people who wish to reskill and retrain, and they too are precisely the sort of people likely to be put off. We know that because we see what is happening with the advanced learning loans that the Government introduced progressively, largely but not entirely for further education, where 60% of the money put out in those advanced learning loans—the figure has barely changed—year by year has remained the same. That is a crisis for FE colleges, but it is also a particular crisis for HE in FE colleges.
Our plans would uprate the funding to universities in line with inflation, whereas the Government’s plans basically impose a real-terms cut in funding. Of course, rising fees might have been easier to swallow if they had been put back into the system, but, again, as MillionPlus has said, and as has been referred to today, there has been no increase in direct grant available from Government for university courses in the arts, humanities, social sciences, architecture and economics to name a few of the subjects affected since 2014-15. That means universities are now required to fund programmes that previously were supported by Government, and there has been a decline in capital investment and an 80% cut in the teaching grant. Will the Minister confirm how much funding in real terms universities will lose in each of the next five years as a result of their current position and their decision to freeze fees?
Now that the Government have increased the student loan repayment threshold, whatever else it might mean for the benefit or otherwise of the students concerned, it means that they are going to miss their own RAB target by around 15%, so will the Minister confirm whether they will revise the target?
The University and College Union got it right when it responded to the Chancellor’s Budget statement. It said:
“The glaring omission from today’s speech was any support for current higher education students, or further detail on the Prime Minister’s promised review of university funding in England.”
That is why we have persistently, in both the HE and FE Bills that came through before the general election, argued the case for much greater focus on some of the groups who will be affected by that. That should go to the heart of the way in which student loans are handed out at the moment. The Minister knows that the Student Loans Company has recently been the subject of controversy, but the issue, which I will not dwell on today, of overpayments and how that has affected many students brings us back to the point that the Government and the Student Loans Company are operating a system that is beginning quite significantly to fail. If the nature of the Student Loans Company board or the Office for Students board were perhaps slightly broader than they are at the moment, more light might be shed on this area.
We appreciate the fact that the Chancellor has listened to our call for proper information sharing between HMRC and the Student Loans Company. Even though it has been postponed until 2019, I hope that that will have a major impact on the current situation. A great deal of thought needs to be given to any major changes in student finance, but the direction of travel matters. We are clear about our direction of travel. We would build bridges for people and not put barriers in their way via a series of measures that stress private good as opposed to public good and which keep people in silos.
I am grateful to the petitioners for giving us the chance to have this debate as well as to the hon. Member for Hartlepool (Mike Hill) for introducing it.
Enabling people from all backgrounds to take advantage of the opportunities provided by higher education is obviously an important goal for the Government. Since reforming the student finance system in 2012, the Government have been able to lift the enforced cap on student numbers that had been in place for many years and remove the associated cap on social mobility that it represented. We have enabled record numbers of 18-year-olds, including those from disadvantaged backgrounds, to start in higher education. We have also increased the total resources available to universities by about 25% per student per degree, according to the IFS. As a result of all of that, increased numbers of students stand to benefit from increased lifetime earnings of at least £100,000 more than non-graduates after tax.
[Mr Christopher Chope in the Chair]
However, it is only fair that graduates should share some of the costs associated with their education, rather than those costs falling to the taxpayer alone. The system is designed to ensure that those who benefit contribute to the costs of higher education in proportion to the benefits that they receive from it. The motion raises the question of whether we should reduce tuition fees to £3,000. In our view that would be a big step backwards. We estimate it would cost the Government an additional £6 billion a year. The Government would have to choose whether to reduce funding to universities, reintroduce a cap on the number of students who could access higher education, or ask taxpayers, many of whom will be non-graduates, to pay that £6 billion additional cost. None of those options is palatable. We need our universities to be well funded so that they can equip our graduates with the skills and knowledge that they need to contribute to our economy.
Will the Minister give way?
I want to respond to the points made by the hon. Member for Poplar and Limehouse (Jim Fitzpatrick), and then I will give way to the hon. Member for Glasgow North West (Carol Monaghan). The hon. Member for Poplar and Limehouse clearly does not support the wholesale abolition of tuition fees, which I understand to be the present policy of the Labour party. However, I hope he will acknowledge that the most worrying effect of reducing fees to £3,000 would be to lower the participation of students from lower socioeconomic backgrounds. To lower spending and to control it in the context of rising demand for what would effectively be free higher education, the Treasury would push hard to introduce student number controls that we, thanks to our present student finance system, have been able to lift under our current arrangements.
I thank the Minister for giving way. He mentioned who should pay the fees and shoulder the responsibility for that. If we ask taxpayers, “Do you want to fund this particular student £9,000 a year to go to university?” probably their answer would be no, but if we were to say, “Do you want to have teachers in our schools, nurses and doctors in our health service and engineers working on different projects, and your taxes will fund that”, I think the answer would be different.
The Government recognise that the cost needs to be shared in proportion to the benefits that flow from higher education. There are public benefits, which the Government make a contribution to on behalf of taxpayers, and there are private benefits, which individual students should make a contribution to. We have a mixed economy for our higher education system, which makes it sustainable and fair.
If the Minister is suggesting that the private benefits would be an increased salary, part of the increased salary would be an increased tax, so people would be contributing via their salary.
Indeed they would, but it is also important that they make a direct contribution that relates to the benefit they have received, which has been provided for them by a public funding contribution.
I echo the point made by the hon. Member for Glasgow North West (Carol Monaghan). In response to the Minister’s challenge to me, he is right: I do not support full abolition, but neither do I support the £9,000 level. I think there is a balance to be struck. On his comment that the Treasury presses hard, I know it does. I have been in Government; the Treasury always presses hard. The political choice that one makes, and that the Treasury and the Cabinet make, is how far it is allowed to press, and where the trade-offs are. The hon. Lady says that there should be contributions from elsewhere. The health service has suggested that we have golden handcuffs for those who want to qualify as doctors, and free them from their tuition fees to get them into the NHS and keep them there for the rest of their professional lives. Those choices and judgments have to be made.
I would just note that higher education is a devolved policy responsibility in the United Kingdom. Those parts of the United Kingdom that have the present level of fees that we have in England have been able to lift student number controls. Other Administrations, which have made their own policy choices, have not been able to lift student number controls. As a result, under those Administrations we have seen far lower levels of widening participation than we currently see in England. We genuinely think that returning to a cap on student numbers would be absolutely disastrous for young people from lower income backgrounds.
One crucial element in danger of being overlooked is that the lifting of the cap on student numbers has been extended in a particular direction, very constructively across the country. I refer to the policy on nursing degrees, and the new policy of nursing associates that complements it. Were it not for that, frankly my county of Gloucestershire, and those like it, would have a net deficit of about 350 new nurses per year. With the new policy, the University of Gloucestershire has been able to offer nursing degrees. Over time, that will result in far greater numbers of home-grown nurses than previously, and I am grateful to the Government for that.
My hon. Friend is right: putting the funding of nursing places onto the sustainable basis that other students are on will enable far greater participation, and result in an uplift in the numbers of nursing students in this country.
Taxpayers already contribute around half of the costs of the higher education system. We believe that it is right that graduates should also contribute, and that that contribution should be linked to their income. As I have said, that means that those who have benefited the most from their education repay their fair share. The hon. Member for Leeds North West (Alex Sobel) gave us interesting insights from Latin America, which I know is a source of great inspiration for those in the Labour party at present. We look with interest to see what other lessons he draws from Venezuela and countries from that part of the world, as Labour develops its ever-shifting policy on higher education.
Every year, the Government consider the appropriate maximum level of tuition fees, and sets a cap. The Government consider whether the maximum tuition fee amounts should be uprated in line with inflation, to support continued investment in course delivery. We are committed to ensuring the ongoing sustainability of our world-class higher education sector. The student finance system ensures that teaching in our universities is well funded, but that individuals do not pay until they are seeing a good return on their investment. As I said, continued investment in the higher education sector has seen funding per student per degree increase by 25% since the 2012 reforms.
What is more, funding per student is today at the highest level it has been in almost 30 years. The recent decision to freeze the maximum level of tuition fees in the 2018-19 academic year takes account of the views of young people, their parents, and Parliament. We have evaluated the current position of our universities, and on that basis, we have decided not to uprate tuition fees by inflation for the 2018-19 academic year. Students will therefore see maximum fees of around £300 less than if the maximum fee had been uprated with inflation.
The hon. Member for Reading East (Matt Rodda) mentioned that his constituents were struggling to repay the cost of their higher education. To help him put it in context, as a result of our decision to increase the repayment threshold to £25,000 with effect from April next year, if one of his constituents earns £30,000 per year, that constituent will be repaying about £1.20 per day. We think that is a reasonable amount for someone on that level of income to repay as a contribution towards the cost of their higher education.
Is it not correct that those earning far more will end up paying less because they will repay their loan much more quickly? The total amount of interest that they pay will therefore be far less than somebody on £25,000, who will take much longer to repay their loan.
That is right. The amount that someone repays is linked to the amount that they earn in any one year, and the repayment will be more rapid for someone on a higher level of income.
The current student finance system removes the financial barriers for those hoping to study, and avoids students facing upfront tuition fee costs. We have maintained the universal accessibility of the system, which allows all eligible students to access the required finance, regardless of their background and financial history. Critically, monthly repayments depend on income, not on interest rates on their debt, or on the amount borrowed. From April 2018, we will increase the repayment threshold to £25,000, and adjust it annually in line with average earnings after that. That change will benefit around 600,000 borrowers, and will continue to benefit future borrowers. Many borrowers who have already graduated will see their monthly repayments reduced. That change forms part of a considered and costed proposal that reinforces the principles of our student finance system, and puts money back in the pockets of graduates.
Those changes are important and will make a difference to a large number of people. There are, however, two matters on which my hon. Friend knows we do not entirely agree. One is the interest rate. When student loans revert to being repaid with normal interest, I do not see the argument for having them use the retail prices index as a base rather than the consumer prices index. My second point is a wider one. The universities themselves believe that they would be able to attract even more students from abroad—which would help the funding of our universities—were students to be excluded from the immigration numbers. Does he agree that that is something that we might look forward to one day?
My hon. Friend raises some interesting points. A longstanding feature of the system has been that it uses RPI, as that includes costs that are relevant to the basket of goods and services that students consume, including housing costs and mortgage interest costs. That is why RPI has been embedded in the student finance system historically.
International students make a massive contribution to our higher education system, economy and society. They enrich the learning experience, and the Government welcome them warmly. We wish to see more international students come to study in the United Kingdom. Members will have seen some positive changes in the Budget, including an expansion of the tier 1 exceptional talent cap, and that route into the country. The Budget also contained measures to make it easier for students to flip into tier 2 after they have finished studying, which means that they can move into work straight after completing their studies, rather than waiting until they receive a diploma some time later. That will be particularly valuable for people doing postgraduate courses. The Government are taking steps to ensure that we have a competitive offer for international students, so that we continue to be competitive around the world in attracting international students.
The hon. Member for Glasgow North West suggested that the tighter controls on student numbers in Scotland were not restricting opportunities there. I know that she did not want to hear about the OECD’s PISA rankings, but she may be interested in taking note of what the Sutton Trust has said about student numbers in Scotland, and how, in its opinion, they have restricted the aspiration of young people in Scotland. The Sutton Trust recently stated that
“Scottish 18 year olds from the most advantaged areas are still more than four times more likely to go straight to university than those from the least advantaged areas”
in Scotland. In comparison, they are 2.4 times more likely in England. We obviously take note of the hon. Lady’s points, but she should not give the impression that social mobility in Scotland is being advanced by higher education policy there to a greater extent than by our policies in England.
As I explained in my speech, much of the data on student movement is not captured by UCAS figures and is therefore not captured by the Sutton Trust’s report, so it is simply not a true reflection of the picture in Scotland.
I take note of the hon. Lady’s comments. The Sutton Trust has been engaged in this area of study for many years and has had plenty of opportunity to take on board points from her party over the years, but it has evidently chosen not to do so.
The Government remain committed to widening participation in HE. England’s sustainable student finance system has enabled record numbers of disadvantaged 18-year-olds to benefit. As my hon. Friend the Member for North East Derbyshire (Lee Rowley) noted, in 2016 disadvantaged 18-year-olds in England were 43% more likely to go to university than they were in 2009, and the application rate for disadvantaged 18-year-olds increased to a record high once again in the 2017 entry cycle.
I am grateful for the Minister’s wide-ranging discussion of the issues. Will he meet employers from my constituency, and possibly from other high-cost areas, to address the issue that my hon. Friend the Member for Leeds North West (Alex Sobel) mentioned—namely, that graduates on middle incomes may end up paying more in tuition fee repayments over time than those on the highest salaries, and that that may have a damaging effect on local economies? I would be very grateful if we could meet the Minister and officials to discuss that matter.
I am always happy to discuss these matters with colleagues. I will be keen to do so.
There is always more to do on widening participation, including on the progression of disadvantaged students to more selective institutions and ensuring that the retention, success and progress of some of those students is better. Universities have committed to spend £860 million on improving access and success for students from disadvantaged backgrounds through access agreements agreed for 2018-19 with the independent director of fair access. Through the Higher Education and Research Act 2017, the Government introduced measures to make further progress, including a statutory duty on the new regulator—the Office for Students—to have regard to equality of opportunity in connection with access to and success in higher education for students from disadvantaged and under-represented groups. We have also created a director for fair access and participation within the OFS as an executive board member.
Access and participation plans—the successor to access agreements—will ensure that any provider wanting to charge higher fees must have a plan agreed before they can do so as a condition of their registration with the Office for Students. The Act also created a transparency duty for all providers, which means that they will have to publish application, offer, acceptance, completion and attainment information, broken down by gender, ethnicity and socioeconomic background so all students can make an informed choice about which university they attend and so universities can see where they need to make further progress on widening access.
In his thoughtful speech, the hon. Member for Blackpool South (Gordon Marsden) rightly mentioned the numbers of part-time and mature students, as he has done on many occasions when we have discussed these matters. Studying part-time and later in life can bring enormous benefits for individuals, the economy and employers. That is why the Government are taking steps to help hard-working people who want to gain new skills and advance their careers by studying part-time. The Government intend further to enhance the student finance package for part-time students by introducing part-time maintenance loans in 2018-19. In the 2017 Act, we enshrined the need for the new higher education sector regulator to have regard for part-time study.
The hon. Gentleman also mentioned drop-out rates. Access to higher education is only one aspect of improving social mobility. The full benefits of gaining a degree are experienced only by those who actually complete their studies. Non-continuation rates for UK students at English institutions are lower now than they were in 2009-10 for all categories—young, mature, disadvantaged and black and minority ethnic students. Although progress has been made, the Government continue to look carefully at this area and are working with universities to focus on improving retention via the access agreement process and the teaching excellence and student outcomes framework, one of whose core metrics is non-continuation and drop-out rates, as the hon. Gentleman knows.
The Government are committed to removing access to finance as a barrier to entering higher education, which is why we continue to make more money available to students than ever before. Many hon. Members mentioned living costs. Students who started their courses this academic year—2017-18—have access to the highest ever amounts of funding to support their living costs at university. Our system deliberately targets living cost support at those from the lowest income families, who need it most. Replacing maintenance grants with loans— the theme of several Members’ remarks—enabled the Government to increase support for full-time students’ living costs by 10.3% for students on the lowest incomes in 2016-17, with a further 2.8% increase in such support for the current year.
With a view to the future, we are further strengthening our approach to widening participation by placing an overarching duty on the Office for Students to consider the promotion of equality of opportunity in relation to access and participation in all that it does. The new director for fair access and participation will have a clear role within the Office for Students to look across the student lifecycle.
The current student finance system is achieving our aims of widening participation and increasing the income that goes to the sector. As I said, funding per student, per degree is up 25% since the funding reforms at the beginning of the previous Parliament. The university system is better funded than it has been at any point over the past 30 years. The progressive nature of the system is ensuring that higher education is open to all people who have the potential to benefit from it. In all of this, the Government are ensuring that the costs of our system are split fairly between graduates and other taxpayers, with graduate contributions linked to income.
The current system has allowed the sector to grow and has made higher education accessible to a greater number of 18-year-olds from disadvantaged backgrounds than ever before. Reducing or abolishing fees would take us back to the days of underfunded universities and limited access for disadvantaged students, and would inevitably result in often hard-pressed taxpayers paying the bill for a system that would benefit the few, not the many: bad for students, bad for universities and poor value for money.
Question put and agreed to.
That this House has considered e-petition 182953 relating to university tuition fees.