Higher Education (Basic Amount) (England) Regulations 2010

Lord Alton of Liverpool Excerpts

Tuesday 14th December 2010 Lords Chamber

[Lord Ashdown of Norton-sub-Hamdon]

The noble Baroness makes exactly the point that I would have gone on to, had she given me the opportunity to do so. When we consider university cuts, we may do one of two things. We may institute those cuts or ask graduates—not students—to bear a proportion of the costs. The right reverend Prelate who spoke earlier said that students should not be required to pay for higher education. They are not being required to pay; they are being asked to share in the payment. Under these proposals, universities by and large will have the same amount of funds as they had before, because graduates will pay their contributions. That is perfectly right. I cannot argue the case that the higher education sector should be removed from the burden that the rest of the nation has to carry. Those such as the right reverend Prelate seem to propose that somehow higher education should be free. It was free for my generation. I never went to higher education; my university was Her Majesty's Corps of Royal Marines. Free higher education is possible for 7 per cent of the population, but is impossible for 50 per cent. One has to find a mechanism to fill the gap.

The next question is whether it is fair. I will deal with the issue of debt. I accept that the consequence of these proposals will be to raise debt to the order of £27,000, £30,000 or perhaps more. I regret that; it is the consequence of the age in which we live and the economic position in which we were left. However, we do not complain when young people have to take out a mortgage debt of £150,000 or £200,000 to buy their house. This is not like a credit card debt; it is much more like a mortgage. There is a fixed system of repayment and a fixed mechanism for repayment. Frankly, I do not find it offensive; if one can take out mortgages for physical property, why should one not take out a mortgage to improve one's intellectual property, from which one will benefit in future? I know that I am testing the patience of the House and I am keen to make progress, but I will give way.

[Lord Alton of Liverpool]

On the question of personal debt, did the noble Lord see the figures released earlier this month that showed that personal debt in this country is now £1.5 trillion and that, out of 2,000 families surveyed, more than half said they were already in trouble with the debts that they had incurred? Is this any way to go into working life—with this albatross round your neck?

[Lord Ashdown of Norton-sub-Hamdon]

I understand the point that the noble Lord is making. However, we accept that it is reasonable for people to borrow huge sums to get themselves on to the property ladder. I see nothing different in following the same broad system. This is equivalent not to a credit card debt but to a mortgage. It is perfectly reasonable that we ask people to pay a significantly smaller amount of interest on a debt that will improve their life chances. There is nothing odd or strange in that.

My final question is that of fairness. The noble Lord, Lord Triesman, made the case that somehow or other—

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[Lord Henley]

This is not the time or place for the noble Baroness and me to go into these matters. The noble Baroness and I have been arguing points for 14, 15 or even 20 years and we have never necessarily agreed, so I do not suppose that we would agree if we argued for a bit longer about this. The simple fact is that we are confident about the robustness of our assumptions, and HEPI obviously takes a different view.

Those were the two principal myths that I wanted to stress. I also make it clear that we have considered all these issues carefully. However, as I said in my opening remarks, we recognise that very strong feelings have been aroused. I underline and re-emphasise that our proposals mean that when graduates come to pay—and they will not pay until they earn more than £21,000, and in due course that £21,000 will be uprated in line with earnings—they will pay less per month than they do at the moment. I also stress that that will be needs-blank and that in many cases they will not be paying anything at all, particularly if they have taken a career break or are not earning up to that limit.

These regulations will also allow us to provide a funding stream which enables our universities to attract a flow of income to sustain their world-class position. I am very grateful that noble Lords such as the noble Lord, Lord Bilimoria, stressed the global status of our universities. There is unprecedented global demand for higher education and we cannot let our HE sector drop behind our international competitors. I think that the number of people coming from overseas indicates that they are maintaining their position. However, in this current fiscal climate, that requires significant changes to higher education funding and student finance.

The next thing that I want to stress, which is contrary to what the noble Lord, Lord Triesman, said, is that we greatly value the autonomy of our higher education sectors. They are not emanations of the state, as the noble Lord put it. Each university and college is autonomous and each will be free to decide what contribution it sets for its courses. As we know, a number of vice-chancellors in England have indicated publicly that the Government’s proposals for university funding are reasonable and retain fundamentally important progressive elements. Again, I am grateful for all those who have stressed, like the noble Lord, Lord Ashdown, the progressive nature of our proposals.

[Lord Alton of Liverpool]

I thank the Minister for giving way and I declare an interest in that I hold a chair with Liverpool John Moores University and am a visiting fellow at St Andrews. I want to test the Minister on whether the proposals are progressive, as has been asserted all the way through this debate, even though the Institute for Fiscal Studies has said that they are regressive. The IFS says that those who will be hit the hardest are not those coming from the free-school-meals category but those in the 30 per cent category of the lowest income earners in this country. Does the Minister agree with that assessment?

[Lord Henley]

I do not agree with that assessment because no one will be paying anything until they earn £21,000 or whatever the figure will be after it has been increased. That figure of £21,000 is roughly the average wage. Thereafter, we go on up to about £42,000 before people pay the maximum, which is RPI plus 3 per cent. I do not think that that is the credit card levels of interest that the noble Lord and others seem to imply. That is not a heavy repayment to ask of someone on £30,000, £40,000 or even £50,000 or £60,000. If we take medical students as an example, a GP now earns in excess of £100,000. When one thinks of their investment, that is not a bad return.

I now want to deal with timing, as it has been alleged that we are rushing this through too fast. I want to stress again that we have a responsibility to give students, their families and the universities certainty about what arrangements will be in place for the 2012-13 academic year. One has to remember that, although the White Paper will not come out until early in the new year, already by then students will be beginning to visit the universities that they want to apply to for 2012. They will be starting to apply in the summer of 2011 for some courses, so everyone, including the institutions, need to know where they stand and when they can plan ahead.

Finally, I come back to the nature of the amendments. The noble Lord, Lord Triesman, has sought to reassure the House that his amendments are merely an invitation to the Government and another place to think again. I make it clear in no uncertain terms that this is not an occasion when we can think again. These two amendments are fatal and, if carried, would negate and override the vote in another place last week.