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Chris Grayling: We have reached two extremely important parts of the debate and I listened carefully to the Minister's comments. First, Lords amendment No. 4 comes down to the question of trust: do we trust the Government when they say that the money raised from fees will go to universities and will not simply be used by the Treasury as a stealth tax? Secondly, Lords amendment No. 2 deals with concerns about the impact of the proposals on key groups of students doing courses longer than the conventional three years.

I shall start with Lords amendment No. 4. We know that in 1998 student fees were introduced, so the Government told us, as a way to get more money into universities, but despite the Minister's claims to the contrary in Committee, the reality is that the Government clawed back all the money raised in fees by cutting the money they spent in real terms on universities. How do we know this for sure? Because it is here in black and white in the Department's own report, which we need to consider.

Fees were introduced late in the 1998–99 financial year. In that financial year, real-terms funding per student was £5,160. The following year—the figure includes the £1,000 of student contributions—it had fallen to £5,110. So it is absolutely clear in black and white that the money was clawed back. Incidentally, the amount that the Government spend per student is still lower in real terms than at that time and has been increased only courtesy of the student contributions. The Government are contributing less per student than when they took office and less than was contributed by the last Conservative Government.

Mrs. Anne Campbell: Can the hon. Gentleman confirm that when the last Conservative Government left office their spending plans for the following two years involved a reduction in that unit cost for university students of 6 per cent. each year? That is what this Government inherited when they took office in 1997. Obviously, they had to put some of that money back, and do so through the introduction of fees.

Chris Grayling: I am mystified by the Government's pride in following Conservative policies for the first two years of their term of office, particularly when the former Conservative Chancellor said that he would not have followed them as rigidly.

Given all that, it is hardly surprising that there is a little scepticism about what the Government plan to do, particularly when the cost of their proposals is so great
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for the taxpayer. Taking their own figures from the regulatory impact assessment, the amount that they will have to spend each year in the total student support package to introduce the new system is £1.1 billion. The estimated extra revenue to the universities over and above what they get at the moment, again according to the Government's own figures, is £900 million. It would be cheaper to stay where we are and for the Government to write a cheque to the universities.

Why on earth would the Government go through all the political grief of the past few months? Their majority was almost destroyed in the vote on Second Reading, there has been huge unrest, they nearly lost a flagship Bill—which would have entailed a great deal of embarrassment—and lasting damage has been done to their relations with many of their Back Benchers.

Also, huge damage has been done to the Labour party on campuses. I have been around many universities in the last few months. Members should try to find an active Labour party student branch on campus these days. They would find active Conservative branches, and in a few places they would find active Lib Dem branches, but they would never find an active Labour branch. That has disappeared—it is an extinct species.

Why do all this when it would have been cheaper to write a cheque to the universities? The truth is that many in the university sector believe it to be a precursor to another clawback. That is the only way in which these proposals make economic sense.

Mrs. Campbell: To put the hon. Gentleman right, there is an active branch of Labour students at Cambridge university, the president of which is a young lady called Jane Jacks. I thought he might like to know that.

Chris Grayling: I commend the hon. Lady. It is clear that her stand against the Bill, although perhaps not as complete as that of some of her colleagues, has encouraged those in her own university town to continue to back her. I doubt, however, that they would express support for the Government's policies. I might disappoint her by saying that if she visits many other universities she will find that many of her colleagues are not as fortunate as she.

Why would the Government do all this? Clearly, there is a real fear in the university sector that it is a precursor to a clawback. Indeed, the Association of University Teachers has rightly pointed out that back in 1998, when fees were introduced, the issue of a clawback was raised. The Lords passed an amendment then that did very much the same as the amendment that we are considering today. Ministers at the time said that it was not needed, and that they would not accept it. What happened? They clawed it back. All that the Chancellor of the Exchequer has done is to guarantee funding until 2007–08, which is well before the full impact of tuition fees is even fed through to the universities. The Minister cannot give a commitment beyond that. He could do if he accepted this amendment, but the reality is that people in the university sector are not confident that the same will not happen again.

Mr. Willis: I am trying to follow the hon. Gentleman's argument. In terms of belief and credibility, throughout
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Second Reading and in Committee, and throughout Second Reading in the other place, its Committee stage, Report and Third Reading, the Conservative party never once said how it would fund the proposals to get rid of tuition fees and top-up fees and to sustain the level of spending predicted by this Government. We now hear that the right hon. and learned Member for Folkestone and Hythe (Mr. Howard) will follow Labour's spending plans for the first two years of a Conservative Government, were such a thing to take place. I will support this Lords amendment, but whence would the Conservative party get the resources to meet the pledges that it has made in this House and to the student body?

Chris Grayling: The hon. Gentleman is right to be interested, and I am delighted that he is. He will have to wait a little bit longer. We in the Conservative party believe that we should get our policies right and have them stick until the general election, and not have to change them a few months later, as his party did in relation to the £100 reduction in council tax. We will get it right, and we will publish our plans when we are ready.

The other part of this debate is equally important. The practical consequences for individual students of what the Government are doing will be extremely severe. Those students who do four, five or six-year courses, many of whom enter professions that are not particularly well paid, will see a huge increase in the burden of cost that they will bear as a result of the Government's measures. The Government have totally failed to understand the impact of their proposals on those key professionals, who are the real losers as a result of this change, and the ones who will really feel the extra costs. Those people will be put off pursuing the professions in which this country needs people.

It is extremely revealing. The Government have admitted this afternoon that this amendment could cost £180 million. We know that the total extra amount that will be raised from top-up fees is £900 million. What the Government are saying is that £1 in every £5—20 per cent. of the extra cost of these measures—is being levied from those who already bear the highest cost from being at university. That is not acceptable.

The Minister made a point about students missing a year. Let me tell him about the student to whom I talked recently who had to give up in the middle of her second year because her father was dying of cancer, and who therefore missed the year. Subsequently, she came back to finish her university course, and was deeply frustrated and bitter that she not only had to pay the fees for the year that she had missed but the fees for the additional year. Does he honestly believe that it is right and proper that someone who must give up their course temporarily in such a situation must pay an extra year's fees in order to complete it? I do not think that that is acceptable.

Mr. Clappison: May I respectfully invite my hon. Friend to examine some of the evidence received by the Constitutional Affairs Committee from the legal profession about what it thinks the impact of tuition fees will be? It relates to the decisions of those who enter the profession as to what branch of the profession they choose and what sort of work that they do. In particular, it relates to the effect on the numbers who come into the profession to undertake legal aid work, which is notoriously poorly paid. The fear is that the able
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students entering the profession will choose increasingly to do highly paid work in City firms, and big commercial work, as opposed to representing people on lower incomes through legal aid work.

4.15 pm

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