Higher Education Fees

Damian Hinds Excerpts

Thursday 9th December 2010 Commons Chamber

[Damian Hinds (East Hampshire) (Con)]

There are some very real and big choices in this debate. The three biggest are, first, how many young people we want to be able to go to university; secondly, the extent to which we want those who do not benefit directly to pay for those who do; and, thirdly, how to ensure that we widen access and promote social responsibility. There is no perfect answer, but on those three choices the Government have it about as right as one could get it.

Many hon. Members have noted that it is sometimes a difficult conversation when people of our age—

[Bill Esterson]

Will the hon. Gentleman give way?

[Damian Hinds]

I am sorry, but because of the time I cannot.

It is sometimes difficult when people of our age have conversations with teenagers about university tuition, because it is startlingly obvious that we had an incredibly generous deal. That deal, however, was always based on such education being available to a relatively small number of people, and we were just the beneficiaries.

In the year I was born, 414,000 people were in full-time higher education; when I went to university, the number was 660,000; and now, it is 1.3 million. When we experience changes of that magnitude, we must fundamentally rethink how we pay for such things. Members from all parts of the House agree on that fundamental point, as they do on pension reform and on long-term care.

There has been another major change over those 40 years: real household income per head is 2.5 times what it was in 1970. That does not come from nothing; it comes from economic growth, an increased number of higher, value-added jobs and, most of all, growth in the professional and managerial classes, which is enabled by more people participating in higher education. We need those trends to continue, because never again will we make T-shirts cheaper than China. We need wider participation in higher education to thrive, and we need to excel in the necessary markets: advanced manufacturing, pharmaceuticals, financial services and, indeed, education itself.

The global market for higher education is growing at 7% compound per annum. This country is uniquely well placed to take advantage of that, first, because of the gift—literally, the gift—of the English language, and, secondly, because of the marvellous higher education brand names in England and, I must say, Scotland, Wales and Northern Ireland. To thrive in that market, however, our universities need to be properly funded, and top universities have long complained that, even with the Government contribution—

[Roberta Blackman-Woods (City of Durham) (Lab)]

Will the hon. Gentleman give way?

[Damian Hinds]

I cannot, because of the time.

Top universities have long complained that, even with the Government’s contribution and the fees, they were underfunded and could not cover their costs. Incidentally, the cost also applies to EU students. There were 61,000 such enrolments last year, a number that is growing fast, and they are also partly subsidised by the British taxpayer. The right hon. Member for Southampton, Itchen (Mr Denham) made light of the following point, but universities have used non-EU students as a cash cow to plug the funding gap, and that is not sustainable in a competitive, global market. Universities must be funded properly and sustainably.

It is true that, in higher education, there are what economists call both private returns and social returns— in other words, matters of social benefit—but all the studies say that the private returns outweigh the social returns, so it is fair that the students, over time, bear much of the cost.

With the package before us, with variable fees, requirements—rightly—to widen access and the higher £21,000 repayment threshold, we can continue to increase the number of young people accessing university, with all the benefits that that brings, and gear up the UK to take advantage of that key global growth market.