Oral Answers to Questions

Debate between Lord Johnson of Marylebone and Angela Rayner

Monday 6th November 2017 Commons Chamber

[Joseph Johnson]

We want the UK to remain the go-to place for scientists, tech investors and researchers in the years to come post-Brexit. We have given many assurances to EU researchers around the continent that they are welcome in the UK. We want their contribution to continue, they are hugely valued, and we have every expectation that that is going to continue to be the case.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

I wonder if the Minister told Universities UK how the Department was funding the Prime Minister’s announcements on student finance. Can he confirm that those will cost the Department £175 million in this spending review period, and can he guarantee that this will not be funded by yet more cuts to the rest of the education budget?

[Joseph Johnson]

I ask the hon. Lady to wait for the Chancellor of the Exchequer’s Budget in a few days’ time, because all the details of the funding of those announcements will be set out then.

Higher Education Funding

Debate between Lord Johnson of Marylebone and Angela Rayner

Wednesday 11th October 2017 Commons Chamber

[Angela Rayner (Ashton-under-Lyne) (Lab)]

(Urgent Question): To ask the Secretary of State for Education if she will make a statement on higher education funding.

[The Minister for Universities, Science, Research and Innovation (Joseph Johnson)]

On 9 October, I made a written ministerial statement to the House setting out changes to the repayment threshold for student loans from April 2018 and confirming the maximum tuition fees for the 2018-19 academic year. The Government’s reforms to higher education funding since 2012 have delivered a 25% increase in university funding per student per degree. University funding per student is today at the highest level it has been at any time in the past 30 years.

As the House is aware, the Government have decided to maintain tuition fees at their current level for the 2018-19 academic year. This means that the maximum level of tuition fees will be £9,250 for the next academic year, 2018-19, which is about £300 less than if the maximum fee had been uprated in line with inflation.

We will also increase the repayment threshold for student loans from its current level of £21,000 to £25,000 for the 2018-19 financial year. Thereafter, we will adjust it annually in line with average earnings. This change applies to those who have taken out or will take out loans for full-time and part-time undergraduate courses in the post-2012 system. It also applies to those who have taken out or will take out an advanced learner loan for a further education course. Increasing the repayment threshold will put more money in the pockets of graduates by lowering their monthly repayments. They will benefit by up to £360 in the 2018-19 financial year. The overall lifetime benefit is greatest for graduates on middle incomes; low earners of course continue to be exempt from repayments.

We have world-class universities, accessed by a record number of young people from disadvantaged backgrounds, and a progressive funding system. We are building on those strengths through our planned reforms, including reforming technical education to provide new routes to skilled employment and strengthening how we hold universities to account for the teaching and outcomes they deliver through the teaching excellence framework.

The changes we are making are considered proposals that reinforce the principles of our student loan system and ensure that costs continue to be split fairly between graduates and the taxpayer. However, we recognise that there is more to do. We have further work under way to offer more choice to students and ensure they get value for money. We want more competition and innovation, including through many two-year courses. As the Prime Minister made clear last week, we will continue to keep the system under careful review to ensure it remains fair and effective. The Government will set out further steps on higher education student financing in due course.

[Angela Rayner]

Let me welcome Members back from conference season. We sang “The Red Flag”; the Conservatives waved the white flag. I told our conference that the Government should get on with sorting out student finance. Then the Prime Minister told her conference that they would. I suppose I am cheaper than Lynton Crosby, but the Government’s announcement begs just a few questions: what, who, when, why, how and how much? Apart from that, it is completely clear. What are the details of the review of higher education that the Prime Minister promised? Who will sit on it? When will it start and finish? Who decided that policy, how and when? Is it true that the Minister was unaware until the Prime Minister announced it? Surely he cannot be the least favoured Minister in the Johnson household.

Can the Minister tell us how much these policy changes will cost? How much more will taxpayers contribute and how much interest receivable is lost? Will the reduced income be replaced by additional funding? Can the Government explain why they have changed their mind since we last asked for these measures to be taken and they refused? Are they still considering capping interest rates below the 6% some graduates are being charged? What is their policy on grants? “Senior sources” have briefed that the Education Secretary wants them back. Will the Minister now match our commitment to restore maintenance support?

Just what is the Government’s policy on tuition fees? They boast about freezing fees for one year, but we all know that that is simply because they do not have a majority in this House for any rise, so what will they do after that? Will they finally accept that this House voted against their most recent rise, and revoke that too?

The Prime Minister said that the Government have listened and learned. Will they listen to this House, and when will they learn that actions mean more than words?

[Joseph Johnson]

I will answer some of the hon. Lady’s questions—in fact, all the questions. The normal, cross-Government processes were followed in the run-up to the announcements. The Department for Education worked closely with the Prime Minister’s team to develop those announcements. We are delighted to be able to announce the changes that she set out. I set out in the ministerial statement that I published on Monday the full details that the hon. Lady has just asked for. However, to recap, the threshold will rise to £25,000 from £21,000. That will put a further £360 in the pockets of graduates. We have taken stock of the views of parents, students and Parliament itself in coming to our decision to freeze tuition fees for the coming academic year. Therefore, we are listening and, where appropriate, we are taking action to ensure that our student finance system is getting the balance of interests right between those of students and those of the general taxpayer.

That is the core principle of our student finance system, which must achieve three goals. First, it must support access for the most disadvantaged, and it is achieving that with great success. Someone from a disadvantaged background is more than 50% more likely to go to a highly selective university than when the Labour party left office, and more than 43% more likely to go to university overall. Students are less likely to drop out, whether they are from BME, disadvantaged, mature or part-time backgrounds, than they were when the Labour party left office. This system is delivering participation and access in a way that alternative student finance systems never have.

Secondly, the system is working for universities. Our universities are 25% better funded per student and per degree than they were under the old student finance system, before the 2011 reforms. That is of fundamental importance. Does the Labour party really want our universities not to have the resources they need to do excellent teaching and to deliver great research? That is what it is proposing. It is proposing a return to the system that we saw in the run-up to the Dearing report in 1998, a system that saw a real-terms decline in university funding of almost 50%. Those are the changes that the Labour party will deliver if it has a chance to get into office.

Thirdly, our system is fair to the taxpayer. We keep the balance of funding under careful review. As the Prime Minister made clear in her party conference speech and in announcements in Manchester last week, we will announce further steps in that regard in due course.

Oral Answers to Questions

Debate between Lord Johnson of Marylebone and Angela Rayner

Monday 11th September 2017 Commons Chamber

[Joseph Johnson]

As I said a minute ago, that would not limit numbers. The fact that they are in the migration cap does not limit the ability of institutions to recruit as many international students as they wish, provided that they meet the requisite academic standards. There is no cap and no plan to introduce a cap, and that applies to Scottish institutions as much as it does to English ones.

[Angela Rayner (Ashton-under-Lyne) (Lab)]

It is a sad fact that it actually does have an impact on the number of international students coming to the UK. For years, the Prime Minister told us that we need to clamp down on international students who overstay their visas, using figures to suggest that as many as 100,000 people are remaining in the UK illegally. In fact, we know the figure is now 4,600 students—the Government were out by 95%. Does the Minister fully support the Prime Minister’s desire to keep international students in the net migration target?

[Joseph Johnson]

We welcome strongly the work the Office for National Statistics is now doing to improve the quality of statistics relating to international students. Like the hon. Member, we noted its preliminary conclusion that the International Passenger Survey might be systematically undercounting emigration after study. I was very pleased that the Home Office report on exit checks data, published on 24 August, showed that students are very largely compliant with immigration rules. That is an important bit of information and it underscores our intent to continue the situation whereby there is no cap on the number of students who can come and study in this country.

Tuition Fees

Debate between Lord Johnson of Marylebone and Angela Rayner

Wednesday 19th July 2017 Commons Chamber

[Joseph Johnson]

My hon. Friend makes some superb points, and he is a tireless champion of his constituents.

On the repayment of loans, our repayment system offers a fair deal to students. The current student loan system is deliberately subsidised by the taxpayer and is universally accessible to all eligible students, regardless of their personal financial circumstances or credit history. Our repayment system is based on income, not on the amount borrowed. Graduates with post-2012 loans pay back only when they are earning more than £21,000, and then only 9% of earnings above that threshold. After 30 years, all outstanding debts will be written off altogether with no detriment to the borrower, and the Student Loans Company has no recourse to their other assets. The maximum fee cap is being maintained in line with inflation in 2017-18, so it will not be increasing in real terms for anyone going to university. We believe that it is right for those who benefit most from the higher education they receive to contribute to the cost of it. We should not forget that higher education leads to an average net lifetime earnings premium that is comfortably over £100,000.

Labour continues to scaremonger about the changes to higher education. The Conservative-led coalition and this Government have introduced important reforms. The Opposition have promised to write off student debts, to cut tuition fees and to restore maintenance grants. However, they have failed to set out a credible plan on how to fund their promises, and are now shamelessly abandoning them just weeks after the general election. That is hardly surprising, given that they had not even managed to persuade key figures in the Labour party who served in their previous Government. For example, Lord Mandelson described their policy offer as “not credible” and urged Labour to

“be honest about the cost of providing higher education”.

Of course, it is not just Lord Mandelson who has commented on this. The former shadow Chancellor, Ed Balls, said that his party’s failure to identify a sustainable funding mechanism was a “blot on Labour’s copybook”.

I therefore challenge the Opposition to explain how they would fund their alternative proposals on tuition fees, maintenance grants and the write-off of student debt. We estimate the annual cost of their policy on tuition fees to be £12 billion a year over the next five years of this Parliament. In addition, a one-off expenditure would be required to make good the promise of writing off historical student debt to the tune of £89.3 billion in cash costs. If Labour wanted to go the whole hog, a further £14 billion would be required to compensate graduates for historical borrowing that they had already repaid.

Make no mistake, Labour’s policy of abolishing fees would be a calamity. It would be ruinous for our world-class university sector, leading almost certainly to a fall in per-student funding of the same magnitude we saw in the decades before the introduction of top-up fees—a fall of around 40% in terms of the unit of resource. It would lead to the inevitable re-imposition of student number controls, which would cause the poorest and most disadvantaged to miss out on university, throwing social mobility into reverse. It would do all this at an eye-watering cost to the hard-working general taxpayer, whether he or she had been to university or not. Gone would be the concept of a fair sharing of the costs of university between graduates with higher-than-average lifetime earnings and society at large; taxpayers would foot the entire bill. That would be bad for universities, bad for students and bad for the taxpayer. It is no surprise that in the one place where Labour is in power, it has chosen a different approach. Last week, the Labour Government in Wales quietly increased their tuition fees for 2018-19 to £9,295 a year, making them marginally higher than the current rates in England. Labour in Wales at least knows that the party opposite’s plans are unfair to students and ruinous to universities. Perhaps it should tell the Labour party leader.

[Angela Rayner]

On a point of order, Mr Speaker.