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The Secretary of State for Education and Skills (Mr. Charles Clarke): As our White Paper identified, a number of independent reports have shown that graduate earnings vary significantly, depending on a student's chosen course and university. For example, a new report published this week by the Centre for the Economics of Education confirms that graduates from Russell group universities are likely to earn more than those from other universities. Given that difference in potential earnings, and given the need to increase funding for higher education, we consider that the fairest way to proceed is to have a variable fee regime.
Dr. Iddon: My right hon. Friend knows that courses in the science and engineering disciplines are far more expensive to run than other courses, and that we are desperately short of good-quality graduates in those fields. If differential fees are allowed, universities might take the option of charging higher fees for those courses. Is my right hon. Friend as concerned as I am about the continuing closure of science and engineering departments? The latest announcement is that King's college's chemistry department might close. Would not the introduction of differential fees make matters worse?
Mr. Clarke: I share my hon. Friend's concern about any potential closures of university science and engineering departments. We are discussing with universities and the industries concerned how to mitigate that. I do not accept, however, that a variable fee regime would have the implications that he describes. In fact, there is a good deal of evidence that for both men and women, higher returns over and above two or more A-levels are associated with studying medicine, law, economics, maths and engineeringsubjects such as those that my hon. Friend mentionsand it is not unreasonable that the fees regime should reflect that.
Dr. Naysmith: My right hon. Friend mentioned medicine as a subject that might fall into the category that needs special attention. He knows that there is an increasing need for doctors in the national health service, partly due to the immense investment that we are making in it. Does he share my anxiety and that of the British Medical Association that the differential fee policy could have a disproportionate effect on medical students? Has he evaluated the potential effect on the supply of doctors?
Mr. Clarke: My hon. Friend's focus on the state of medical education is correct. I am discussing the way in which we tackle such issues with my right hon. Friend the Secretary of State for Health. We are considering several alternative routes, including the golden hellos and handshakes that already apply in some disciplines.
Mr. David Rendel (Newbury): Given that the latest evidence shows that some courses carry a negative graduate premium, does the Secretary of State accept that, according to his logic, those who take such courses should be paid to go to university?
Mr. Clarke: I do not accept that, hon. Members will be surprised to know. The impact of the regime will happen over four or five years as we ascertain the way in which universities and vice-chancellors decide to deal with specific courses. There will be much more variety in fees than people currently believe. Some universities will probably reduce the fees from the current £1,100possibly even to zeroto take account of some of the factors that the hon. Gentleman described. We will therefore have a more diverse system, which will be generally beneficial.
Dr. Ian Gibson (Norwich, North): Industries in the United States put millions of dollars without strings attached into their local universities, thus allaying many of their financial problems. Why does not that culture prevail in this country?
Mr. Clarke: I think the reason is that the relationship between the higher education sector and industry is not strong enough. We are actively promoting discussion about that. For example, my right hon. Friend the Secretary of State for Trade and Industry and I hosted a seminar with the Confederation of British Industry and universities to discuss the matter. As my hon. Friend knows, despite the extra money from business to which he referred, American universities charge fees that are massively higher than anything that we anticipate in this country. I do not believe that there is a connection between the issue that my hon. Friend raised and the variable fee regime.
Adam Price (East Carmarthen and Dinefwr): The Centre for the Economics of Education study to which the Secretary of State referred concluded that the introduction of differential fees would make the signal that is attached to a degree fuzzier to employers and reinforce existing divisions in the university sector. Does the Secretary of State agree?
Mr. Clarke: I do not agree. The most interesting fact in the survey is the 2.5 to 6 per cent. variation in earnings premium for students at Russell group universities. It concludes that some universities could charge between £3,000 and £7,000 a year more, and that that would be justified by the premium. We suggest nothing like such a variation, but it is reasonable to show clearly and directly that society and the individual benefit from university education. That should be acknowledged.
Mr. Kevan Jones (North Durham): Does my right hon. Friend agree that excellent regional universitiesfor example, the University of Northumbria at Newcastle and Sunderlandare anxious that they will be at a disadvantage if an élite group of universities,
Mr. Clarke: First, nobody is anticipating putting fees up to that kind of level. Secondly, my hon. Friend's question gives me the chance to pay tribute to the five universities in the north-east that are working extremely well together to promote the kind of collaboration that we have been describing, precisely to avoid the effects about which my hon. Friend has expressed concern. It is through that form of collaboration that we can establish a regime that will enrich the university sector as a whole in an entirely beneficial way.
The Minister for School Standards (Mr. David Miliband): Ministers and officials have regular discussions with teaching unions covering a wide range of issues. We are working with local government to ensure that the growth in teacher and support staff numbers is sustained, as promised in 1997 and 2001.
Mr. Syms : Does the Minister understand the real concern in Poole that, in an authority area in which more than 100 per cent. of the standard spending assessment has been passported to schools, there are going to be redundancies among teachers and classroom assistants? Parents in Poole do not want excuses; they want an acknowledgment that there is a problem and a will to sort it out.
Mr. Miliband: I am slightly disappointed by the tone of the hon. Gentleman's question, since he came to the Department with a group of representatives from Poole and had an extremely useful meeting with me about these issues.
Mr. Miliband: The hon. Gentleman might say that, but I have had a letter from the chief executive in Poole saying how useful the meeting was, and that one of the things that had resulted from it was a new dialogue with the schools to try to overcome the problem. That is the kind of action that we like to see.
Mr. David Watts (St. Helens, North): May I urge the Minister not to take any notice of Conservative Members crying out for more resources? Many of the authorities that are making people redundantor claiming that they will have to do soare receiving vast amounts more than authorities such as St. Helens. Will he resist those calls?
Mr. Miliband: I know that my hon. Friend is a doughty campaigner for schools in St. Helens and that he is as pleased as I am by the enormous increase in achievement in both the primary and secondary sectors.
Mr. Andrew Robathan (Blaby): Will the Minister now admit that he has been entirely wrong? Will he come to Leicestershire and see how we are having to set deficit budgets and make teachers redundant because of the Government's failure of policy? Apparently, everyone else is wrong except those on the Government Front Bench. Well, what about the story in The Times which says that 3,000 teachers are to be made redundant across the country? They cannot all be wrong. How about the Minister saying sorry and admitting that he is wrong?
Mr. Miliband: There are important and serious issues around the country. Thanks to the Government's economic policies, Leicestershire has half the level of people on income support than the national average, and that is reflected in its funding position. It is also significant, however, that the variation in funding for different schools across Leicestershire is one of the highest in the country. There is fully 10 per cent. difference between the schools that have been helped the most and those that have been helped the least.
Mr. Geoffrey Robinson (Coventry, North-West): The Minister will be aware from his visit to my constituency that standards in all the schools are continuing to rise very encouragingly under the policies of his Government. It would, however, be a pity to see certain schools falling back on account of the very marginal shortfall in Coventry, which got the full 7 per cent. The Minister will be aware that this does not involve a huge amount of moneyabout £1 millionand if there could be some sort of indicative arrangement as to what we might expect next year, the schools would be encouraged to carry on with their full complement this year.
Mr. Miliband: My hon. Friend has spoken well about the achievements in Coventry schools. I know that the local education authority is working hard with the local schools to ensure that any problems are overcome, and making use of the flexibilities that were offered by my right hon. Friend the Secretary of State last week.