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Alan Johnson: The hon. Gentleman is making a point that he has made before. Such powers have been devolved to Scotland and Northern Ireland, and both have made their own arrangements as regards grants and other matters. Why does he think that there would be a problem in Wales, when, to all intents and purposes, none has appeared in Scotland or Northern Ireland? What is so peculiar about Wales? Does he think that Scotland and Northern Ireland should not have such powers? Chris Grayling: The Minister helps me move on to my next point. I have no intention of moving too far from the issue of Wales, Mr. Gale, but you will understand that a comparison is necessary to explain why I have great concerns about the Welsh situation. Scotland has an entirely separate regime and some extraordinary anomalies have emerged, which do a huge disservice to the United Kingdom as a whole. The Minister will be aware that an English student attending a Scottish university is liable to pay fees, whereas a Scottish student attending a Scottish university is not. That anomaly had led to what is, by any measure of common sense, a complete absurdity. European Union laws require us to provide comparable access—[Interruption.] The Chairman: Order. I am being as tolerant as I can, but I cannot have two hon. Members talking at the same time. Chris Grayling: EU law requires Governments to provide people from any part of the EU with equal access to higher education. That has led to the absurd situation that it is less expensive for a student from eastern Europe to attend a university in Scotland than it is for a student from England. Whatever the aspirations of hon. Members who created the devolution settlement, I cannot believe that that was Column Number: 614 an intended consequence. In considering the Welsh situation, therefore, it is important to understand what we are doing.Mr. Collins: Does my hon. Friend agree that it is interesting that the Minister says that Wales should be treated the same as Scotland? If it had been, it would have its own Parliament and be responsible for the provisions before us, so we in Westminster would not be considering them at all. Chris Grayling: That is absolutely right. My hon. Friend also highlights the fact that whereas we have the opportunity while considering the Bill to address the question of consistency of provision for United Kingdom students in United Kingdom universities, we no longer have the power to address that issue in relation to Scotland. We can still do something about it in Wales. That is why it is extremely important that we understand what we are creating here. I have a number of questions for the Under-Secretary of State for Wales. First, what does he expect to be the eventual mix of the cross-border fund? What does he expect to be the situation for Welsh students attending English universities and English students attending Welsh universities in respect of the provision of grants and the fees charged, which the Government say those grants are designed to offset? What rules do the Government expect to apply? What financial support will be provided by the Department here to English students attending Welsh universities? What support will be provided by the Assembly to Welsh students attending English universities? What reassurances can he give the Committee that in setting up these new structures we will not see the anomalies that I have just described in relation to Scotland, which no hon. Member would consider sensible? The second issue I want to touch on is funding and funding support. The Welsh Minister for Education and Lifelong Learning, Jane Davidson, made an interesting comment on 23 January when she said that there would be pros and cons to devolving more higher education powers to Wales. She is probably right. She said:
But, and the but carries with it significant issues for higher education in Wales, she added that she would not be happy to have the powers without the corresponding money from central Government that is currently provided for every student. There is a bill attached. Wales would like to have these powers, but it would also like some money to enable it to take over the responsibilities. It would be helpful for the Committee to understand the financial implications for the Exchequer of making those changes and what the Ministers expect the balance of responsibility for funding to be after these changes are enacted. That is particularly important given issues in relation to grants. On 13 January, Jane Davidson said in her statement to the Welsh Assembly:
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the Assembly learning grant—
The implication is that there may be a funding gap between money that would come from the DFES under the current scheme and additional grant money that would have to come from the Welsh Assembly under the changes proposed in the Bill. Is there a funding gap? Will the switch in responsibilities that gives the Welsh Assembly the right to set its own grants and to take over the grant regime place a strain on other Welsh Assembly budgets? As the Assembly does not have the power to levy its own taxation, it cannot raise that money additionally from the Welsh taxpayer; it would have to take it from other budgets. It would be helpful to get the Under-Secretary's clarification on that point. My next point on funding concerns the potential for a double whammy for the Assembly after the transition. To appreciate this double whammy, one needs to recall that the Assembly has said that it does not plan to introduce variable top-up fees until at least 2007. That will be at least one year on, and potentially more. By the time that it has legislated and introduced the fees, we could be talking about two to three years before a new fees regime was introduced in Wales. The question of funding issues between English and Welsh universities therefore arises. In theory at least, the Assembly will face an issue with Welsh universities. As the Under-Secretary will be aware, they have raised concerns about the fact that although their English counterparts will be able to levy top-up fees after 2006, they will not be able to. They are concerned that their recruitment and investment as well as the quality of education that they can provide may be disadvantaged and that they will suffer relative to their English counterparts. The Assembly has made suggestions, which the Under-Secretary could perhaps confirm, that it will seek to compensate the Welsh universities for the gap between their financial situation and that of English universities that will exist after variable fees are introduced. That is a potential funding issue. On top of that, there is the issue of Welsh students in England, who will have to pay top-up fees. Less well-off students will receive grants and the Assembly will have to provide a subsidy to the student loans system to enable those students to pay their fees. Additional grants and additional loan subsidies for students domiciled in Wales who attend English universities post-2006 will impose significant additional costs on the Assembly. There is a danger that, on the one hand, there will be an extra bill for Welsh universities because of the disadvantage that they say they will suffer through being unable to levy fees and, on the other, that there will be the cost to the Exchequer in Wales of subsidising the loans to Welsh students to pay top-fees and providing grants to less well-off students. Will the Under-Secretary address that question? Column Number: 616 As I mentioned a moment ago, the Welsh Minister for Education and Lifelong Learning has expressed concerns about whether financing will be made available for taking on responsibility for the areas set out in clause 41, or whether there will be gap. In a year in which public spending is under pressure, what does the Under-Secretary expect the Assembly's position to be? If it has to find additional money for grants and loan subsidies, what will its situation be? The next issue that I would like to raise concerns the situation in 2006. The Welsh universities expect that when the new fee regime has been introduced in 2006, making it cheaper to go to university in Wales than in England, there will be a rush of students applying to Welsh universities. That creates a financial issue on the grant front. My understanding—the Under-Secretary will correct me if I am wrong—is that the grant regime will be fully in place by 2006. Therefore, in theory there will be a significant cost to the Assembly budget and to that of the Department for Education and Skills because of grants made to students attending Welsh universities. The grants will leave them better off, because they will not have the additional burden of paying fees in that year. Therefore, is there not an extra cost to the taxpayer in paying grants in that year that are explicitly set out by the Secretary of State as having been introduced to compensate students for the introduction of top-up fees, when in Welsh universities there will not be any top-up fees in that year? The grant goes straight into the students' pockets, which is nice for them, but because their student loan amounts will remain constant and they will receive the grant, those students will end up better off through their university years in cash terms and in terms of the availability of finance to them than their counterparts in English universities and those who attend subsequently. Can the Ministers address the issue of 2006 and set out for us what the position will be for those students?
5.30 pmThe fourth point that I want to raise with the Minister is about bursaries in Wales. In a response to a question from the hon. Member for Cardiff, Central (Mr. Jones) in January, the Minister said:
The Government's proposed overall student support finance package is designed to mix together grants and bursaries in a way that provides compensation for the introduction of fees to those from less well-off families. However, the package is balanced by the introduction of the access regulator. Given that variable fees will not have been introduced Column Number: 617 in Wales in 2006—although the core of the student support package is in place—if institutions do not need to provide access bursaries on similar terms to those provided in England, will the access regulator have a remit in 2006, or will that be introduced only later when bursaries and fees kick in?The last issue that I want to explore with the Minister are the specific exclusions in section 22 of the 1998 Act referred to in clause 41. With regard to Welsh devolution, that clause specifically sets out a number of areas that are excluded:
Referring back to the 1998 Act, there are exclusions that relate to the criteria for determining an eligible student and the means-testing process whereby one decides which students are eligible for a level of student support. The relationship between grants and incomes is prescribed, and reference is made to the bankruptcy position and the collection process. All of those are excluded. Some of them make logical sense. Excluding the collection process is logical because that process for student loans is carried out through the Inland Revenue system, which applies to all parts of the United Kingdom. Why that element of the 1998 Act is not being devolved to the Welsh Assembly is logically explicable. I listened carefully to the Minister's earlier comments about bankruptcy. It makes sense that the rule should apply across the United Kingdom. I am not sure about Scotland, but I see no reason why it should not be kept centrally. The Minister will understand that I am in favour of retaining common powers across the UK, and certainly across England and Wales, but it would help to understand the Government's reasons for deciding that some of the powers of section 22 of the 1998 Act should be devolved to the Assembly, and some not—including the determination of ''eligible student'' and means testing. I mention that particularly because Wales is distinctive in that it is a lower-cost part of the UK. In many ways it is also a lower-income part of the UK, although I do not have figures to hand for average incomes in Wales.
5.36 pmSitting suspended for a Division in the House.
6 pmOn resuming—
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