|Higher Education Bill
Mr. Allen: My amendment will help those youngsters, so I shall explain it carefully. That is why we have a Committee stageto smoke these things out.
The youngsters who currently are on very low incomes do not pay fees up front, as my hon. Friend rightly points out. The up-front fee does not apply to them. However, my youngsters in that category are not
Column Number: 209avoiding university in order not to pay the fees. [Interruption.] It is a different issue; it is about going to university, and my youngsters are put off going to university not by the fact that if they go there is no fee, and certainly not by the fact that if they wish to pay fees under the Government's proposals they can do so at £4.23 a week on earnings of £15,000. The youngsters in Nottingham, North are put off because they cannot afford to go in the first place.
Even using my hon. Friend's mathematics for the most expensive course, which costs £3,000 a year and involves repayments of £9,000, surely everyone will understand that getting money up front in order to get to university, and repaying the most modest amounts when earning between £15,000 and £18,000, is a very good deal for the needy. It is not a quid pro quo; it is getting the money when it is needed. That is what we all fought for. So-called rebels and so-called loyalists fought hard to get the Government to restore the grant to the modest level of £1,000, and we have now managed to get it up to £3,000. I give credit to my hon. Friends the Members for Leeds, East (Mr. Mudie) and for Cambridge (Mrs. Campbell) and other colleagues of all views for having restored the grant, which is to help poor youngsters when they need help, and not when they are no longer poor but are graduates starting to earn a good salary.
Mr. Rendel: Will the hon. Gentleman give way?
Mr. Allen: I will, but I am conscious of the need to move on.
Mr. Rendel: To some extent, it seems that the hon. Gentleman does not quite understand the system. Under the present system, I understand that the young person about whom he is talking could take out a loan for maintenance that is repayable after graduation. The new system will allow him to take out a grant, which turns into a loan on graduation. He still ends up with the same size loan, which is still repayable on graduation.
Mr. Allen: Again, the hon. Gentleman has not benefited from the seminars that a number of us attended prior to Christmas. He confuses grants with fee repayments. I would rather not take more of your time, Mr. Hood, to explain it further. It is not a simple equation between money for grants and money paid back in fees. I explained that as carefully as I could, in response to my hon. Friend the Member for Leeds, East.
Amendment No. 144 deals with a technical question. It is not merely whether universities should enjoy the freedom to propose the cost of a course: what we do in response to their proposals is entirely another matter. We know that an operation under the NHS costs a certain amount of money. Labour Members would not dream of putting a price tag on it. However, the price of certain operations can be usedit may well be used by Opposition partiesto demand a certain amount of money for such operations in response. The price points are politically neutral. The question is what we do with them.
Column Number: 210
Mr. Mark Francois (Rayleigh) (Con): Will the hon. Gentleman give way?
Mr. Allen: Let me finish my argument, then I shall give way.
There is also a technical point to the amendment. Economists have observed that the rate of inflation in the public sector is higher than in manufacturing because the scope for productivity gains is far more limited. Relative costs escalate by an estimated 0.5 per cent. per annum, because education has to compete with businesses for the same pool of workers, yet the latter enjoy the benefit of greater productivity gains. Were we to tie universities to £3,000even if it were justified, according to the standard level of inflationwe would effectively reduce their income year on year. However inadequate the language, amendment No. 144 seeks to deal with that question.
Mr. Francois: I appreciate that the hon. Gentleman is seeking not to detain the Committee for too long, but would not amendment No. 144 bust the £3,000 cap?
Mr. Allen: It would allow universities to propose fees additional to £3,000. Deciding what we then do with the proposal is why we are all in politics and why we are talking about regulation and social intervention.
Mr. Willis: This is crucial. If the amendment referred to a maximum of 0.5 per cent., we would understand its effect, but it refers to
Mr. Allen: If I had thought that any of my amendments would be accepted, I might have considered them in the same detail as the hon. Gentleman. Sadly, I do not think they will be accepted.
Amendment No. 223 refers to what I have called an equalisation fund. The hon. Member for Westmorland and Lonsdale (Mr. Collins) seemed to think that that was a novel approach, but it reflects the way in which local government has long worked. Where local authorities receive rate income or other income, an equalisation mechanism assists those that are less well off. I am floating the idea that the income generated by the fee income that the Government will give universities might produce anomalies. We will want to address those, and one way of doing that, which I am floating with the Minister, would be to put 10 per cent. of that fee income into a pool and do what we would do in local government.
We could perhaps provide assistance to the modern universities or to those with particular difficulties in a region. We could create a kitty, and people could see how the fee income was being used to equalise some of the worst effects. I shall be interested to hear what my
Column Number: 211right hon. Friend the Minister has to say about that. Colleagues have raised the issue with him over the past few months, and it might be worth further consideration here or in the other place.
Amendment No. 239 would include in the Bill provisions relating to university bursaries. One of the great gains that has emerged during our deliberations on the Bill is that we are not looking to universities to give bursaries for the remission of fees, because we are developing a system whereby people will pay fees only when they are better off, not when they are poor students. It would be nonsense to remit fees when people were earning £15,000, £18,000, £30,000 or £100,000. We are therefore seekingthe universities have generously come into line on thisto ensure that university bursaries will, in future, be aimed at the front end, where youngsters will need the money. However much money is involved, and however much is repaid, youngsters will need the money early, so university bursaries will be paid early.
We now agree that that should happen, and the theme recurs in several parts of the Bill, so let us include a provision in the Bill. We should do that for colleagues who are carefully considering the matter and so that we have a coherent Bill. I know about the procedural difficulties and about the problems with parliamentary draftsmen and civil service procedures, and I know that we need to change parts of other Acts and incorporate them in the Bill. Such things might be confusing, so let us ensure that they are not by setting out in the Bill what we propose to do.
It would then be far easier to convince those who have heard stories about massive debts, which they think will prevent them from going to university. There is a great deal of confusion about the issues. We can stick the Bill in front of people and tell them that there is a mandatory £300 bursary from the university to those people who need it on top of the £2,700 grant provided by the Government.
Mr. Tim Boswell (Daventry) (Con): I have not intervened earlier as I have enjoyed the hon. Gentleman's attempt to clarify the Bill.
Is it not the case that if the bursary is to be made available by the institution, it will effectively be funded through the fees of other students who are at that institution at the same time? What happens in later life to the students who have paideven in small measurefor the bursaries of others while they were at university will therefore become a contingent matter. The people who paid at the time for their colleagues may never earn the incomes that those who indirectly benefited from their bursaries attain in later life.
Mr. Allen: If those people are not earning a certain amount, they will repay their fees at a lower level. For example, should an individual decide to start a family and leave their job, their repayments will fall to zero. Should someone choose to work in a voluntary capacity or take a lower-paid job, the weekly repayments will drop, commensurate with their earned income. That is an important proposal, and one that
Column Number: 212will help graduates to repay fees only when they are capable of doing so, once they have reached a certain income.
Chris Grayling (Epsom and Ewell) (Con): That is an enormously important point, to which the hon. Gentleman has referred several times. He must surely understand that the student loan scheme does not involve repayment only when graduates can afford it. It is a deferred interest scheme. In the current year the interest rate is 3.1 per cent. For each year, the interest that graduates are unable to pay on the loan because they are not earning enough is simply added to the principal of the overall loan. It is a deferred interest loan and not one that is repaid only when graduates can afford to do so.
|©Parliamentary copyright 2004||Prepared 24 February 2004|