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Clause 23

Duty of Secretary of State to Impose Condition as to Student Fees, etc

Lords amendment No. 3.

Alan Johnson: I beg to move, That this House disagrees with the Lords in the said amendment.

Madam Deputy Speaker (Sylvia Heal): With this the House may consider Government amendments (a) and (b) in lieu of the Lords amendment.

Alan Johnson: The Government have considered carefully the Lords amendment on gap years. We cannot accept it for technical reasons, but we accept the principle behind it. In combination, our amendments in lieu would achieve the same policy intent, but in a more tightly drafted way.

We have previously argued that the decision on whether to exempt gap year students in 2005 from higher fees is more properly a question for individual universities than for the Government. The point of variable fees was to give universities flexibility to respond to a perceived threat. However, we have been swayed both by the arguments in this House and the other place and by the stance taken by the universities themselves. They have made it clear through their support for the Lords amendment that they support a sector-wide response on this particular issue and are content for the Government to legislate.
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By providing the protection in the amendments, we avoid the risk, however small, that some students will choose to forgo a gap year in 2005, thus placing extra pressure on places in the higher education system that year. The advantage to students of putting the provision into the Bill is certainty about the fee regime and the student support package to which they are entitled no matter which university they attend. The students will qualify for the same student support arrangements that will exist for students who began their courses before 2006 but are still studying in that year. That includes eligibility for a deferred loan to pay their lower standard rate fees, eligibility for the £1,000 grant and fee remittance of approximately £1,200.

The Government amendments in lieu also address the situation of the very small number of students who, because of a successful appeal against their A-level results, miss out on a university place in 2005 and have to start instead in 2006. We might fairly describe that as an enforced gap year.

I shall say a little about how our amendments in lieu differ from the Lords amendment so that right hon. and hon. Members may be confident about the need for them. First, the Lords amendment includes a reference to "years", which we have replaced with "academic year", in line with the rest of that part of the Bill.

Secondly, the Lords amendment refers to "designated" courses. To be sure that we cover a broader group of students who might wish to take gap years in 2005, the Government amendments refer to "qualifying" courses, which are the subject of separate regulations and which is the correct description of courses for which student support is available.

Thirdly, we have structured the Government amendments to reflect the structure of the rest of part 3 of the Bill—that of an access plan, with the associated right to charge higher fees, linked into the condition of grant in clause 23(1). Our amendment would mean that an access plan cannot allow a higher education institution to charge higher fees to gap year students in 2006, which would make matters watertight.

Fourthly, the Lords amendment contained no provision for sanctions should a higher education institution seek to charge higher fees to the gap year cohort. Those are the very students whom the amendment sought to protect, but it provided no enforcement arrangements. The amendments in lieu correct that by making it clear that clause 23(1)(b) and the sanctions contained in clause 21(3)(b) will apply to that cohort.

Finally, the Lords amendment was based on the first set of regulations that we made in 1998 when a similar arrangement applied, rather than on the regulations as subsequently amended.

Mr. Phil Willis (Harrogate and Knaresborough) (LD): We are grateful to the Minister for the way in which he has dealt with this issue. Will he confirm that for a student who goes up to university in 2006, the old fee regime will apply to all three years, or to four or five
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years for, for example, a medic or an architect? Alternatively, will just the first year be covered, after which they go on to the higher fee regime?

Alan Johnson: It applies to all the years—three for a traditional honours degree course, or four for chemistry and so on.

Mrs. Anne Campbell (Cambridge) (Lab): I am interested in the fee to be charged to the gap year student, the way in which eligibility for a grant is affected and the debt repayment terms, which are advantageous for many students. Will the new conditions applying to grants, fee repayment and so on apply, or will the old conditions pertain?

Alan Johnson: As always, my hon. Friend makes her point clearly, and it is an important point. We will treat the students as if they started their university course in 2005. They cannot have the best of both worlds. They will have the lower fee, the fee remission of £1,200 will continue and they will have access to the £1,000 grant: they will not have access to the larger grant of £2,700. However, if students felt strongly about that, they could take their gap year, reapply to university and become part of the 2006 intake. In that sense, they do have the best of both worlds. The arrangements mean that the 2005 position will be retained in all senses, including the student support package.

I was explaining about the two sets of regulations. The amendment in the other place would amend the original regulations from 1998, but we changed those regulations in 2000. The regulations differ in the way in which they treat students who change courses between acceptance by a university and the start of the courses a year or more later, either because the original course for which they were accepted no longer exists or because they have decided to take a different course. The second set of regulations is a little less restrictive on what students are allowed to do when changing courses if they are still to qualify for the concession. I am sure that hon. Members would want us to replicate the regime that worked well in 1998, and that is what the amendment in lieu would achieve.

Mr. Simon Thomas: I welcome the Minister's comments, although the provisions will apply only to students in England. They will apply to students from Wales who study in England, but we do not yet know what will happen in Wales on the introduction of top-up or additional tuition fees. The National Assembly may introduce them at a later stage, but it has not yet decided to do so. As we need primary legislation to address the issue of gap year students in England, will the Assembly be able to address the issue as it desires under this legislation or will we need another dose of primary legislation here? Is the Minister confident that the Bill gives sufficient powers to the National Assembly to deal with the issue of gap year students in Wales when that matter arises?

Alan Johnson: Sometimes when I cannot immediately think of a response to a question, inspiration strikes, amazingly, when I sit on the Front Bench for a few
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minutes. I hope that by the end of the debate I will be able to give the hon. Gentleman the answer to his question.

Chris Grayling (Epsom and Ewell) (Con): The date in the amendments in lieu is 1 August 2005, but that may mean that they do not affect those students who secure a place through the clearing system. If they do not achieve the grades that they expected, but obtain a university place none the less later in August or in September through the clearing system, would they be excluded from the exemption that the amendments in lieu provide?

Alan Johnson: I hope not. We have tried hard to ensure that the exemption applies to students who make their applications in the traditional way and the minority of students who wait for clearing before they make an application. I would have thought that those students would be covered. I understand his point about 1 August, and I may be able to provide a more considered response to that question by the end of the debate.

I urge the House to reject the Lords amendment, in the best possible spirit, and accept the amendments in lieu.

Chris Grayling: I welcome the Government's decision to accept the principles behind the amendments that were first tabled by me and my hon. Friends, and then by our colleagues in the other place. In the spirit in which the Minister rightly paid tribute to his colleague, Baroness Ashton, for the work that she did, I congratulate Lord Forsyth, who did a tremendous job on this Bill. Many sixth formers should feel great gratitude to him, because his work has contributed to the concessions that the Government are making this afternoon. Those concessions are enormously welcome for those sixth formers and others who have been concerned about the issue.

3.15 pm

The flaw in the Government's original proposals was that anyone leaving school in the summer of 2005 and deciding not to take up their place for a year—as many thousands of young people do—would be forced to start university under the new funding regime, with £3,000 fees, rather than under the old regime with £1,125 fees. Any hon. Member who has visited a school sixth form recently—I have and I am sure that others have done so—and has asked those in the lower sixth, who will be those affected by the issue, about their intentions for 2005 will know that many have decided to go to university straight away and miss out on a gap year. Indeed, the specialist gap years organisation Gap Year Fairs says that the soundings that it has taken in sixth forms suggest that as many as three quarters of those who would normally take a gap year had decided against doing so because they wanted to avoid the higher fee regime that will be in effect from 2006.

It was not only those planning to take a gap year for the potential experience who were set to lose out as a result of the Government's plans. People do not take a gap year only for the experience. There are many students who work to raise money for their university
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costs, and they would have also lost out. I await with interest the Minister's clarification on the issue of clearing, because many people only obtain a university place through the clearing system after 1 August. Others find that their results were much better than they expected, so they take a gap year, reapply for a place and start university a year later. I hope that the Minister will address the problem faced by young people in that position. Some, for example, expect to get three Cs, apply for a university course that is realistic given their abilities and then discover that their results are better than that. What will happen to those people? Does the amendment take their situation into account?

The Government have rightly identified in the amendment the situation of those who appeal against the grades that they have been given. They are also at risk of losing out. I welcome the fact that that has been addressed. What made the situation particularly absurd was that when this same situation arose back in 1998 when university fees were first introduced, the Government did allow transition arrangements that ensured that no student would lose out financially by having a gap year. However, when we debated the issue in Committee and on Report both the Minister and Labour Members were unconvinced. The Minister said that those affected this time had had plenty of notice—three years' notice, he claimed—but no doubt they are the same students who were told at the time of the last general election that the Government would not introduce top-up fees.

The hon. Member for Nottingham, North (Mr. Allen) was even more dismissive. He said in Committee that the amendments we were putting forward were for just one group of people in society, and that for many of his constituents a gap year would be working in the shop of the same name to save money for university. Actually, he is right, and the amendments in lieu will make it easier for those of his constituents fortunate enough to go to university. We look forward to more of them doing so. The change will give them the opportunity to work and save money, if they believe that that is the right approach for them.

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