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Alistair Burt: It is a pleasure to have given way to the hon. Gentleman, who, as the House knows, took my seat in 1997, but who has subsequently made some kind remarks about me, both in the House and outside, which I much appreciate. He certainly knows his education, too. I am a little disturbed that he should say that our appreciation of people going into higher education is newly found. I will not restate the figures yet again, but my point is that things improved markedly when we were in office, and the present Government should seek to continue that progress.

On targets, I have already said that we improved from one in eight to one in three, without quota, without target. The Minister's aspiration is much narrower: to go from one in three to one in two. I am a little puzzled about what might constitute higher education, following the Secretary of State's remarks yesterday in the Education and Skills Committee. She is reported to have said that one may not need a degree to qualify for what she called the "higher education experience", but that all would become clear. I do not know what criteria the Government will use to meet the target: taking a degree, visiting the university for a course, or driving past on a wet Tuesday afternoon. When we know that, perhaps we can talk figures.

Margaret Hodge: There is no change in the calculations. The Conservative Government also used to count a whole range of qualifications at sub-degree level—HNDs, HNCs—and we have the new foundation degrees, but we will not double-count, as the Conservatives did.

Alistair Burt: I am grateful for that clarification. Yesterday, the Secretary of State said:

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That is good. She continued:

When asked how the Government would define the target as being met, she replied:

That is what has puzzled people, but no doubt we will find out in due course precisely what she meant.

The impact of not completing a course of study is high. Least important, we all may think, is the financial cost, which some estimate to be about £200 million a year. Of greater significance, as we would all agree, is the cost in self-esteem to the undergraduate, who will have struggled to reach university, sometimes overcoming substantial obstacles in life, only to have to deal with a particular form of rejection.

Mr. Willis: The hon. Gentleman put his finger on one of the most crucial issues, which is dropout. In the United Kingdom, uniquely, we do not credit students for what they have achieved. For students to be able to go through the system and gain their qualifications should be an aspiration for us all. Does he agree that, rather than talking about dropouts, we should regard people as having taken one step on the ladder towards achieving their degree or other success? I welcome him to his post.

Alistair Burt: That is kind of the hon. Gentleman. Yes, I agree. I have read the debate that is taking place about what may constitute a credit for the degree or period of study, and I know that there is some concern about the current system. We need to find a new arrangement. I hope to explore that in my discussions with universities over the next few months.

The rejection felt when a course is not completed can be communicated to others, rebuilding barriers to education that we all want to dismantle. For every person who has failed to graduate as a result of Labour's failure to understand the problem, the Labour promise of a better tomorrow has, sadly, been broken.

Charlotte Atkins: Do not dropouts frequently occur for reasons other than student finance: for example, choosing the wrong course or not getting the right quality of teaching? I was a member of the Committee that produced the report to which the hon. Gentleman referred. Students told us that their main concern—although of course they were concerned about finance, as I was when I was a student—was the quality of teaching. We are doing a lot to improve that by putting extra investment into universities.

Alistair Burt: The hon. Lady is correct: several factors may contribute to a student failing to complete a course. I am strongly of the opinion—as I know is the Minister—that more information needs to be provided by schools for those who enter at that stage. I have cited the quotations from those close to universities because I wish to query the impact of the new financial arrangements on the decisions that students make on whether to complete a course. The changed nature of the financial circumstances since 1997 has led to the fears that university representatives—and students—have mentioned.

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Universities UK told the Committee that perceptions of debt are critical to students' decisions to enter and remain in higher education, especially for students from poorer backgrounds and those without a tradition of higher education in their families. It seems common sense that the level of debt, rather than the simple existence of any sum owing, must be the crucial factor in perception of debt as it applies to access to higher education. Therein lies the biggest error in the Government's calculations. Professing an aim to widen access not only to bring more students into higher education but to ensure that they came from a wider social spectrum, the Government hit unerringly on the single most likely barrier to those students' entry. Families for whom significant debt had often meant real hardship and fear had little likelihood of coming to terms with the new arrangements, when all too often there was confusion about the precise financial repayment arrangements.

In the midst of the evidence that was building up from universities and others, Ministers either did not know what was going on or could not easily admit that they had got it wrong. In February 2001, Baroness Blackstone, then Minister with responsibility for higher education, told the Committee:

One wonders where the noble Lady was looking, because the evidence was all around her. The signature dish of this Government is high-handed arrogance and bare-faced denial of error. In those few words of Baroness Blackstone, it was set before us again.

In contrast, the signature dish of the Liberal Democrats is promising the earth in the knowledge that they will not inherit it. In this debate, they have taken full advantage of the fact that nobody ever bothers to ask where they would find the money to fund their policies. A hefty price tag is certainly attached to the measures advocated by the hon. Member for Newbury. A reply to a written question has shown, for example, that the abolition of tuition fees would cost the Exchequer some £270 million every year, even before the cost of restoring maintenance grants.

There is a proper debate to be had about the balance of contributions between the state and the student in further and higher education. However, it must be an honest debate. It is wrong to give students the impression that all their problems could be solved without talking about finance or through the now infamous 1p on income tax, about which we have heard so often.

Dr. John Pugh (Southport): Would the hon. Gentleman acknowledge that in Scotland, where tuition fees have been abolished, finance has been put in place to accommodate that change? Therefore, our proposal is financially solid and not unrealistic.

Alistair Burt: The hon. Gentleman will appreciate the difference between the jurisdictions in Scotland and England. It is not all roses in Scotland, because the threshold at which students begin paying the graduate tax is low—about £10,000—and the package of reforms introduced as a result of Cubie involved the reduction of loan entitlement for many students while they were studying, leading to greater hardship. Whatever the financing arrangements in Scotland, they do not begin to

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equate to the number of students in the rest of the country and we have heard nothing about financing from the Liberal Democrats today.

Mr. Andrew Turner (Isle of Wight): Is not it astonishing that the Liberal Democrats can talk about this issue without saying where they will get the money, secure in the knowledge that the Scottish arrangements discriminate against English students? Those arrangements discriminate against students from the Isle of Wight, while taxpayers from the Isle of Wight and other parts of England pay for Scottish students to get a better deal—because of the Liberal Democrats.

Alistair Burt: My hon. Friend makes his point extremely well.

Mr. Rendel: The hon. Gentleman challenged me on the point that we did not raise the financial issue. It is clear that, in practice, we have managed to make the new arrangements in Scotland work, in agreement with the Labour party, without resorting to any increase in income tax. In our last manifesto, we allocated a small part of the extra £3 billion that would be raised by a penny on income tax to the abolition of tuition fees. The figure that the hon. Gentleman himself has given demonstrates that only a small part of the £3 billion would be needed.

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