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9.54 pm

Brian White (Milton Keynes, North-East): The right hon. Member for Wokingham (Mr. Redwood) said that this was a bit like groundhog day, and he is right in the sense that no state opening day would be complete without him attacking a policy that was in his manifesto, as he did with the third generation mobile phone auction, which was included in the Conservative party manifesto. Equally, the day would not be the same without Members confusing long-winded speeches with scrutiny. I enjoyed the speech, and the performance, of the hon. Member for Southend, West (Mr. Amess), and I agreed with him on one thing--the adoption Bill is a key one and I particularly welcome it.

The election threw up three key issues and disposed of some shibboleths. Some key groups that were highly vocal in the previous Parliament should be given no credence in this one. The Countryside Alliance has been shown to be a busted flush. We ought to get a Bill on hunting out of the way, and not let it become the big issue that it became in the previous Parliament. Lady Young's homophobic attacks, too, have been shown to have no support in the country. For the second time, a party has gone into an election attacking the European Union with anti-EU rhetoric. As we found out in 1983, and the Tories have found out in the most recent election, there is no support in the country for that.

As a person who has always fought politically in the Tory heartlands, I am delighted that the climate is now one of concentrating on public services. Many of the points that I was going to make have been made by my hon. Friend the Member for Sherwood (Paddy Tipping). To a large extent, I agree with his analysis.

In their first term, the Government rightly put the emphasis on getting the economy right, but people now want much more than that. They want not just investment in public services but delivery of them. A number of people were disillusioned during the election campaign because of the language used. They did not connect, because they confused public-private partnerships with privatisation, job cuts and reduction of services.

The recent example of Middlesbrough striking a deal with the unions and with business is the kind of private finance initiative that we ought to be supporting. There are good examples around and we ought to be building on them. The PFI has delivered in some places, but it is not an universal solution.

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The issue of the delivery of public services has caused much disappointment. A comment made recently by the e-envoy concerned me. He said that we would be able to "tick all the boxes". That tick-box mentality causes concern. The Treasury thinks that it has delivered because it has allocated the money in the comprehensive spending review. The Departments think that they have delivered because they have pushed legislation or regulation through the House. The agencies think that they have delivered because they have conducted a pilot scheme and have shown Ministers how it works. However, the people conducting the pilot schemes are then left trying to secure sustainable funding and keep the schemes going. Most of the country will not have seen the pilot scheme, because it will have been conducted in only one or two areas or for a limited time. That is part of the problem.

The Prime Minister rightly said that we should not renationalise Railtrack because it would waste two years, during which we could be securing investment to improve services. However, if that argument applies to renationalisation, it also applies to privatisation.

One thing that has concerned me is the way in which funding operates. In a number of areas, pilots receive project funding from a variety of sources, and people are spending their time trying to get funding for projects, going to different sources at different times and not delivering services.

There is the issue of how we deal with core funding. Very small amounts of core funding would go a long way in delivering the kinds of public services that people want and expect from us. We need to learn that lesson as we deliver services throughout this Parliament. We should

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address the confusion over capital and revenue, and ensure that there is sustainable revenue funding for projects.

There are so many different audit requirements, too. Every time an issue arises, we add another set of them. I fear that what Lord Cullen is saying will add several more. I suggest to Ministers that they take seriously the performance and innovation unit report and the Public Administration Committee report on modernising government. They contain a number of crucial recommendations.

There is a range of welcome steps in connection with the proposed communications Bill. I welcome the fact that the Bill will be published in draft form, which will allow us to take on board the fact that technology is changing. I hope that the Government recognise that, and adapt the legislation as it happens.

I should mention one issue associated with communications.

Mr. Kirkwood: Only one?

Brian White: There are lots, but I have time to mention only one.

California receives about 25 per cent. of its income from sales tax, and it reckons that that will disappear in the next 10 years. We have not even started to address the issue of the loss of VAT revenues in this country. We need to do so.

The low voter turnout did not result from apathy. It was a clear political statement--one that we need to take on board and tackle. The Queens's Speech gives us the opportunity to do so, and I hope that we shall address that matter seriously in this Parliament.

Debate adjourned.--[Angela Smith.]

Debate to be resumed tomorrow.

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Student Debt

Motion made, and Question proposed, That this House do now adjourn.--[Angela Smith.]

10 pm

Mr. David Drew (Stroud): I am delighted to have the first Adjournment debate of the new Parliament. I welcome you to the Chair, Mr. Speaker, and my hon. Friend the Member for Barking (Ms Hodge) to her new post as Minister for Universities. Her promotion is well deserved and I look forward to working with her during the next few years.

I am pleased to have this opportunity to talk about student debt. It is an issue to which I have given some consideration. It was pure coincidence that the topic of last night's "File on Four" was student debt. I cannot pretend that I did not listen to the programme, but many of the ideas that I intend to introduce tonight had already formed in my mind. The programme was an interesting one. I know that my hon. Friend the Minister declined to give an interview, for reasons that I well understand, but I hope that she will go on the record tonight on what I regard as an important topic.

Several people helped me to assemble the information for this debate. In particular, I should like to thank Wendy Piatt of the Institute for Public Policy Research and Christine Gillie, Gillian Allen and Paul Bolton of the House of Commons Library. I shall draw extensively on the work of Claire Callender of South Bank university, who is an acknowledged expert in the field. In the past couple of days I have been lobbied by the British Medical Association and the National Union of Students. The BMA's comments related specifically to medical students, whereas the NUS took a more general approach to the issues as they affect students. The NUS hardship survey is a worthy and interesting study that covers much of the ground that I hope to cover tonight. Finally, in April I had a meeting with constituents who are students in higher education--the sector on which I tend to concentrate. Although I shall paraphrase what they told me, I mean to reflect their views accurately, because they provided useful information about the problems that they face as students.

The case that I shall present acknowledges that there is a problem of student debt. That problem is not a new one: when I worked in higher education for some years prior to being elected to Parliament in 1997, it was clear that many students had difficulty managing their living expenses in addition to their studies. Too often, students missed lectures owing to other commitments--work commitments. With work being harder to find in those days, they had to turn up or risk losing their jobs and have difficulty continuing with their studies. To me the question is not whether the problem exists, but what its scale and nature are.

As I said, the problem is not recent, but it appears to be assuming a higher profile in the press and among students. I do not pretend that there is no anger, angst or anxiety about the number of people who get into difficulty. The problem of debt is not limited to students--it affects all manner of people in society--but it is especially relevant to younger students and to those who have the commitments of mature students. I am sure that it is an issue to which my hon. Friend the Member

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for Nottingham, North (Mr. Allen) will allude in his Adjournment debate on Friday, in which he will explore reasons for low turnout. I received quite a lot of correspondence from students telling me that they would not vote and that one of the reasons was that problems of student debt had caused them to feel somewhat detached from wider society. It is easy to say that and it is difficult to draw supporting evidence. Even anecdotally, students seem to be saying that that is what they feel. We must at least take notice of that.

One of the major tenets of the case that I am presenting is that we do not know nearly enough about student debt. Despite two major investigations into the funding of higher education over the past five years--the Dearing and Cubie reports--more recently a major report from the old Select Committee on Education and Employment, which considered student retention, and a House of Lords debate in March, which considered student poverty, I argue that there is still a lack of knowledge about what is really happening. It is important that the Government undertake an investigation to ensure that they know the scale and nature of the problem.

We hear about a threefold increase in the level of debt since 1996. It must remain conjecture, but there is some evidence that that is possible, if not likely. We need to know whether that is the real situation. It is pleasing that the Minister's predecessor, Baroness Blackstone, said on a number of occasions that she was prepared to review what was happening. She said that if there was a case to be made that there were problems, she would take action.

This is not a new area for me to delve into. I tabled written questions over the last year of the old Parliament, and I was pleased to receive a response to one such question from my hon. Friend the Member for Croydon, North (Malcolm Wicks), when he was the responsible Under-Secretary of State. He referred to the need for a review. It was not necessarily an especially positive response, but I can read into it that the Government remain open-minded. I ask my hon. Friend the Minister for Universities at least, as a result of the debate, to review what the Government have been saying about student debt to ascertain whether we can launch a full investigation. If nothing else, England deserves a full investigation, every other part of the British Isles having had such an investigation into student debt. That has resulted in some changes, certainly in Scotland. I understand that changes are afoot in both Northern Ireland and Wales. It is probably true that England should follow suit.

The "File on Four" programme yesterday evening threw up some interesting and some worrying facts and statistics. It is estimated that there are about 3,000 plus students who are either currently suspended or excluded from universities because of their failure to pay off debts. One in six students drops out before completing his or her course of study. That is costing the Exchequer about £200 million. Figures that come from the former Department for Education and Employment's investigation suggest that about 89 per cent. of students admitted to some element of financial worries. It appears that 62 per cent. of students admit to working. Perhaps that is inevitable, but work brings some pressure to bear on students' studies.

Certain groups are disadvantaged, including students who are single parents or who come from ethnic backgrounds. These factors will bring particular pressure on their continuation as students. Obviously, they tend to

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be those who face the greatest problems with student debt. Against that, according to the Universities and Colleges Admission Service, there is still a continuing increase in student applications. However, there seems to be some evidence that things become worse the lower down the social classes we go. There is certainly a continuing problem with mature students, which I mentioned during the passing of the Teaching and Higher Education Bill of 1998. I felt that the situation was disadvantaging those students. We need to consider carefully how mature students are encouraged into higher education.

The Government's record contains much on which we can congratulate them. They reacted swiftly to the Dearing report and brought forward the Teaching and Higher Education Bill. That changed the method of funding higher education and brought much-needed cash into the universities. Anyone who worked in or had connections with universities knew how parlous their state was. There were many arguments about what needed to be done to help individual students and to ensure that we invested properly in our economy and provided the productivity boost that is so desperately needed.

In some respects, therefore, the Government's record is one of which we can proud, especially as it will boost the amount of money going to the university sector by upwards of £1 billion by 2003-04. Some clearly opposed what they saw as the end of free higher education, but some of us never saw it as such; it was a system that inevitably helped the better-off and we had to look at ways in which we could help the less-well-off in their ability to access the system. I support the continuing aim of my party and my right hon. Friend the Prime Minister that 50 per cent. of under-30s should go into higher education by the end of the decade. That is a tough standard by which to be judged, and the party and the Government have to make sure that they deliver on it.

The Government have done many other good things on the back of that proposal. Many of us feel that the 16 to 19 group was most disadvantaged by the lack of funding and too many students did not fulfil their post-16 education, so it was a wise move for the Government to introduce the excellent educational maintenance allowance. In areas in which it was piloted, support of about £40 a week was given if parents' income was less than £30,000 per annum. From all the evidence, the allowance seems to be working well and I look forward to the roll-out to a national scheme, which, I believe, is gathering pace.

As the scheme has been so successful for the 16 to 19 group, I urge my hon. Friend the Minister to consider whether we should roll it forward for a further year into the first year of university education for members of disadvantaged groups who would not otherwise be able to take up their university places. Again, I support that idea, which has been expressed by others. Other help needs to be given, such as looking at whether we could rejig thresholds and whether we could ask people to pay their tuition fees at the end of their course, rather than at the start, as there seems to be a problem with the perception of those fees, if not the way in which they work in reality.

There are therefore many things that we could do, and we can now draw on evidence from certain parts of the British Isles. Evidence from the Dearing report and the

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post-Dearing investigation suggests that we need to look closely at the way in which disadvantaged groups in particular are being encouraged to take up their places or otherwise. The Cubie report, which was the Scottish Executive's response to overcoming some difficulties experienced north of the border, came up with the idea of a graduate endowment package. That is an interesting idea for several reasons, but I am not sure that it is as progressive as some people maintain. If we are to have fees, the choice between whether they are paid at the beginning or the end of the course is the way to progress. Will my hon. Friend look at that and comment accordingly?

The recent Select Committee report, which I mentioned earlier, came up with a raft of 40 recommendations, many of which the Government could usefully take on board. Indeed, they responded positively to the report. Professor Callender of South Bank university has backed up her evidence to the Committee with her comments on the Radio 4 programme last night. She argued that we perhaps still have an overly traditional approach to higher education, which means that we have not been able to bring in to higher education the necessary number of people from other backgrounds. I see that as the broadening of higher education, rather than the existing deepening of the numbers of those who have come from certain sectors in the past and will do so in future.

There is certainly a perception of debt problems, and we need a proper investigation of whether students from disadvantaged backgrounds are more risk averse and the questions that they need to consider if and when they decide to go into higher education. There is some confusion about the different mechanisms that are available: will my hon. Friend say whether it is possible to conflate different schemes to make sure that they are simple to understand, easy to operate and do not in any way prevent people from going into higher education?

It is fairly clear who the most disadvantaged groups are and why they struggle with student debt. They include parents, students with dependants, mature students, part-time students, students from ethnic minorities, students undertaking particular courses, such as medicine--as I have said, the British Medical Association drew my attention to some of the problems that such students have--and postgraduate students. I am not saying that all students in those groups suffer enormously from debt problems, but within those categories a good number of students face some difficulties.

The difficulties are well known, but they are worth repeating to ensure that everyone is aware of them. They include the loss not only of potential income as a result of giving up a job, but can involve the loss of passported benefits. I have never completely understood why a loan counts as income, but some people are substantially worse off as a result and the Government should look again at the loss of such benefits. There have been some changes and perhaps further improvements could be made and the work taken forward. Ethnic minorities in particular can do badly because some Muslims will not draw down loans.

There are no easy solutions; otherwise, someone would have come up with them. As Professor Callender, the leading expert on student debt, admits, no large-scale study has been undertaken, and we need a large-scale longitudinal study of what students have done both before college, at college and afterwards. If they obtain a reasonable job, they should be able to pay off their debts,

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but if they do not, they can face continuing problems. We need to reconsider the thresholds to ensure that they are right--£10,000 seems a low level at which to ask people to start repaying their debt. Again, I would ask for further investigation of that. We need to recognise that the most disadvantaged who are sometimes deterred by such problems are the very people whom we want to attract into higher education.

My meeting with my constituents brought out many of the matters to which I have alluded. They looked askance at some of the work of the banks and at overdrafts. They were totally opposed to the Russell group proposals, and I am pleased that the Government, in their manifesto, ruled out top-up fees. However, more still needs to be done to encourage people into higher education.

I am pleased to have had the opportunity to raise the matter today shortly after the general election. I hope that the Minister, in her first comments on the subject, will make some noises about the need for a review. We have now had three years of Dearing and it is about time that student debt was reviewed.

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