Higher Education Funding

Debate between Barry Sheerman and John Denham

Thursday 8th January 2015 Commons Chamber

[Mr Sheerman]

The hon. Gentleman anticipates the second part of my remarks, and I do not want to detain the House for much longer.

I wanted to begin by setting the scene in establishing how important universities are to towns, cities and communities. Our higher education system is pretty marvellous. People come from all over the world to see it. I show them around and they marvel at its quality. However, it is not perfect; the hon. Gentleman is absolutely right in many ways. As my right hon. Friend the Member for Southampton, Itchen (Mr Denham) said, we are not delivering the right product in our universities. All my vice-chancellor friends will disown me for saying “product,” but it is a product.

Are we delivering the kinds of graduates our country needs? In lots of cases, we are—they are brilliant. My own university has one of the best design departments in the country. Young people who do its fashion degrees are snapped up by fashion houses all over the world. Indeed, the head of Burberry is one of our graduates. Mechanical engineers and design engineers are snapped up by Formula 1. My right hon. Friend the Member for Sheffield, Brightside and Hillsborough (Mr Blunkett) has a son who is a graduate working in F1 because of the fine quality of the department. We do loads of things right—of course we do—but often not in a way that is appropriate to what is really needed.

That is not to say that things are not happening. There are people doing two-year degrees in Coventry. Skoda Coventry has people doing degrees either only in the morning so they can work in the afternoon, or only in the afternoon so they can work in the morning. The diversity of what is being done around the country is much greater than we might think.

[Mr Denham]

In its evidence, million+ said that the political sensitivity of fees denies it the chance to run two-year degrees that would cost 80% of the cost of a three-year degree, because that would take the fees to more than £9,000 a year, even though the degree would be cheaper. Does my hon. Friend agree that we need to remove some of the artificial constraints that have stopped universities being as flexible and creative as they would like to be?

[Mr Sheerman]

That is absolutely right. We must find the right model and give opportunities to people. Part-time degrees have plateaued—some say diminished—but not in Scotland and Wales, interestingly. We need a more flexible system.

I get a bit tired of the CBI saying, “We’re not getting the right people with the right skills as graduates”, but there is a strong element of truth in that. When people are delivered having finished their degree, there should be a strong element of their being fit for employment. When a good arts or social sciences graduate comes to see me, I say, “You’ve got an arts degree—go to Cranfield or the LSE and get yourself a business degree or something with economics that is much sharper, because that is what the market is looking for.” That is a good combination, but it creates a greater level of debt, and a lot of people are reluctant to increase their debt.

The level of debt is always on my mind. Young people’s inability to get mortgages is a very important issue. We are in an age when it is getting more and more difficult for people to get a home of their own. Many people are still living at home with their parents when they are in their 30s. Those within the middle-income areas in public services, education and health will be most hit by the inability to get a mortgage.

I do a great deal of work in identifying entrepreneurs and increasing their ability to be entrepreneurs. As some Members will know, a lot of it involves crowdfunding and crowdsourcing. I have been working with a number of universities to ensure that they are knowledgeable about crowdfunding platforms. Then, when their undergraduates become graduates and want to start a business, there is on the campus, as in Northampton, an ability for them to get money through crowdfunding for start-ups. When I go to universities nowadays, I look very carefully at how much space there is for young entrepreneurs. They do not have to be a private entrepreneur; they can be a social entrepreneur. Enterprise and entrepreneurship is going to be the future.

When people ask me why the industrial revolution started in places like Huddersfield, I say that it is because we had cheap power in the form of the water that flowed from the Pennines and turned the water mills that made the factories possible; we had high skills; and—people tend to leave out the third element—we had entrepreneurs who could put all that together and make something. Our universities have to be much more focused on how to create opportunities for entrepreneurship to be not only learned but encouraged. As opposed to the old, tidy world of going into the City, academic life, or whatever—the traditional occupations—we have to make it much more possible for young people, and older people, to find the spark of enterprise and entrepreneurship.

By the time people have graduated, they should understand some of the rules of how to be interviewed properly and organise themselves properly. That would make a real difference. I once horrified some people at a meeting in the House when I said that I would teach management from four years old onwards. I chair the all-party management group. Managing one’s life is pretty darn important. When I talk to undergraduates, I find that they do not know how to manage their life. If they did, they would be much more likely to get a job.

I go round universities all the time. I am a visiting professor at Huddersfield and at the Institute of Education in London. I talk to graduates and they do not know what the British economy is like. I ask, “How many people in this country make anything?”, and they say that the figure is 30% or 40%, but of course it is less than 10%. We have 1% of people working in agriculture, 30% in what Conservative Members tend to call public services—but I call it education, local government and health—and 60% in private services. People working in early-years or later-years care will be on the minimum wage or minimum wage-plus, as will those in retail and distribution. When I tell students this, they say, “Wow, is that true?” Then I say to them, “If you’re on the minimum wage or minimum wage-plus, you can’t have the good life.” Someone at the back always puts their hand up and says, “Mr Sheerman, I really disagree with that. You can have the good life in a cave—it is in your heart.” Then we get into the best discussion of the reason most of us come into Parliament—to give the people we represent and the people of this country the good life. We con people if they end up thinking that one can have the good life without high skills.

The model for universities has to be refined; we do not have to throw everything up in the air. We need more flexible degrees, with much more emphasis on people being work-ready and enterprising so that they can become entrepreneurs.

This has been a tremendous debate, and the quality of the speeches has been excellent. For the first time in a long time, I may not stay until the end. I have a sick elderly relative who has been rushed into hospital with pneumonia, so I may have to disappear, but that is no disrespect to those who speak after me.

Tuition Fees

Debate between Barry Sheerman and John Denham

Tuesday 30th November 2010 Commons Chamber

[Mr Denham]

I shall give way in just a moment, but I want to make a little more progress.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

Will my right hon. Friend give way on that point?

[Mr Denham]

I shall give way to my hon. Friend—[Hon. Members: “Oh!”] He is an extremely distinguished education expert and he deserves to be heard.

[Mr Sheerman]

Has my right hon. Friend seen last week’s article by Sir Peter Lampl in The Times? He is a man who has done more for higher education than almost anyone in this country and who is totally unbiased in his politics, and he describes this double hammer blow to higher education as a disaster in a sector where we were world leaders.

[Mr Denham]

I did see Sir Peter Lampl’s article in The Times. It was a devastating critique of what is being proposed and it is all the more significant coming from somebody who supported the Labour Government’s introduction of top-up fees a few years ago. He is not a blind opponent of graduate contributions but somebody who has assessed the evidence of what enables students from poorer backgrounds to get to higher education and believes that this change will be damaging. Let me be quite clear: universities need to plan for 2012-13. Decisions will have to be taken by universities in the early months of next year, but only the Secretary of State’s indolence stands in the way of a full White Paper and draft legislation in January that would allow the House to consider the changes as a whole.

Let me take the issues in turn. How will graduates repay their debt? The Secretary of State said in his letter that

“we have put our costings and calculations in the public domain”,

but I had to submit a Freedom of Information Act request for the models before the Government published a so-called ready reckoner. The Library has now discovered that BIS uses a more complex model that has not been published. The Library told me:

“The ready reckoner version which has been published is a simplified version”.

So much for openness.

For all the talk of fairness, it is clear that middle-income graduates will pay the most. Library analysis shows that graduates repaying fees of £7,000 a year and a maintenance loan who work in middle-income graduate jobs will have to pay back 84% of a whole year’s gross earnings whereas those in the top 10% of earners will pay back less than half a year’s gross earnings. Million Plus reports today that the changes will leave between 60% and 65% of graduates worse off with middle-income earners being hit the hardest.

The coalition says that the threshold for repayment will be set at £21,000, but that is in 2016 prices. In real terms, that is the same as the £15,000 threshold that started in 2006 and is due for review next year. That is not generous: it is sleight of hand. Lord Browne said the threshold should be uprated every five years in line with earnings. The ready reckoner published by the Department assumes that it will be uprated every five years in line with earnings, but the Minister for Universities and Science, the right hon. Member for Havant (Mr Willetts), says only that there will be periodic uprating. I asked the Secretary of State whether that uprating would be laid down in law, but his letter is silent on that point. Even the dubious claims made about fairness depend on regular uprating in line with earnings, but if it is not in law it means nothing. The House must see draft clauses, not vague promises, before it is asked to vote on the fee cap.