Student Loans (Hansard, 10 February 1981)

§ 5. Mr. van Straubenzee
asked the Secretary of State for Education and Science whether he has yet come to a decision as to a loan scheme for students.

§ 10. Mr. Whitehead
asked the Secretary of State for Education and Science if he is now in a position to announce his policy on student loans.

§ 14. Mr. Allan Stewart
asked the Secretary of State for Education and Science when he expects to conclude his current investigation into the possibility of introducing a system of student loans; and if he will make a statement.

§ 17. Mr. Nicholas Winterton
asked the Secretary of State for Education and Science if he will make a statement about his Department's continuing appraisal of the feasibility and desirability of replacing the present system of funding students in higher education with grants by a system of loans.

§ The Under-Secretary of State for Education and Science (Dr. Rhodes Boyson)
The question of loans for students is still under consideration.

§ Mr. van Straubenzee
During that consideration, will my hon. Friend bring to bear his formidable critical faculties on a proposition floated in some quarters, namely, that a loan should subsequently be repaid by way of an additional tax upon the graduate? Would not that inflict additional direct taxation on wealth creators? Can it really be supported by anyone who is a true supporter of the Prime Minister's policies?

§ Dr. Boyson
I am grateful for that question from my hon. Friend. Like him, I can identify myself as a true supporter of the Prime Minister's policy.—[HON. MEMBERS: "Stop playing for time."] I am not playing for time. When we asked for a report from the Department on various ways in which a loan or loan-grant scheme could be introduced, if we decided to do so, one of the schemes suggested was exactly that to which my wise friend referred, namely, a graduate tax. I believe that I went on record the same day as saying that I disagreed—as I am sure that my hon. Friend does—with such a graduate tax, which would seem to be a tax on intellect as well as direct taxation. Whatever schemes we are considering, we are certainly not considering graduate taxation.

§ Mr. Whitehead
Perhaps I can offer the Minister some more fraternal help from his own side. Do the recent reported remarks of the hon. Member for Cambridge (Mr. Rhodes James), as the Prime Minister's liaison adviser on higher education, indicate that no Government proposal 729 for a loans procedure to replace the present grants system for first degrees is under consideration? Does he realise, from the questions that have been asked today, that many Conservative Members as well as Labour Members believe that access to education should not depend upon the ability to pay or on the ability to pay back?

§ Dr. Boyson
I am getting helpful questions from both sides of the House today. On the question of a loan system, what we as a Government decide, knowing how much money will be available at any time, is the way in which that money can be used to the best advantage. I recommend that the hon. Member for Derby, North (Mr. Whitehead) should look at the number of people, including Open Universty students, who at present get nothing. There are people training for chiropody, speech therapists, those going into the law after their degree and those going into social work. However much certain people who are getting full grants may like it, hundreds of thousands of others are getting nothing. We shall consider the whole question.

§ Mr. Allan Stewart
Has my hon. Friend seen recent opinion polls which suggest that student loans would actually be far more popular and acceptable than is often believed? Does he agree with me that the effective choice is not between a loans system and a grant system but that there may well be a great deal to be said for a combined system including both grants and loans?

§ Dr. Boyson
What we are considering at present is the possibility of a grant-loan system, not a straight loan system. Recently information was put out regarding a vote at Edinburgh which, I accept, indicated that only 5 per cent, supported a direct loan system. But the same report showed that only 40 per cent, supported the present system of grants dependent upon parental income. So it is by no means as popular as some people pretend. A similar report from Bath and Exeter last year indicated that 56 per cent, of the students—[Interruption.] The hon. Member for Bedwellty (Mr. Kinnock) might learn something if he listened. I know that you, Mr. Speaker, are paying close attention to this. That report indicated that, 56 per cent, of students at Bath and Exeter preferred a loans system to the present grant system dependent upon parental income.

§ Mr. Hardy
Will the Minister take note of one clear fact about a possible loan scheme? Is he aware that in the industrial North and other areas of high unemployment a remarkable regional disparity would be inevitable, as young people would be reluctant to enter a period of indebtedness, and that if he was concerned about unity in this country he would not wish to act in that extremely divisive manner?

§ Dr. Boyson
I welcome the hon. Gentleman's question. I am sure that he will be as concerned as I am that under the present system the percentage of children from blue-collar worker families is now falling so that we are back to the level of the 1920s. Therefore, the present system is not solving the problem. If we introduce any system, it will certainly not penalise people earning low incomes when they enter college or low incomes when they come out.

§ Mr. William Shelton
When will my hon. Friend reach a decision?

§ Dr. Boyson
That is a very simple and direct question. We have now left the realm of philosophy and turned to 730 the calendar. I trust that within two or three weeks the Department can come to some form of conclusion as to whether there is a scheme that is likely to be viable, considering all the points that have been so wisely made in the House today. If we decide that there is, we shall put out a consultative document, so that everyone can spend even more time talking about it, and then make a decision in the summer.

§ Mr. Freeson
Can we take it from some of the hon. Gentleman's remarks that in considering this matter he intends to go much wider than grants to university students and consider the question of educational maintenance support generally; the disparities between the different systems of support under the Manpower Services Commission, industrial training boards, LEAs and the like? Does he accept that there is a need to look at the totality of financial support for students in education and training as well as in higher education?

§ Dr Boyson
I accept the points made by the right hon. Member for Brent, East (Mr. Freeson). As a neighbour, I always pay close attention to all that he says. There is no doubt that the present system has grown up in such a way, with different funding bodies, and that it is often unfair to those within it. Even within the education system for which we are responsible, the fact that some people are on mandatory grants while others are dependent upon an increasing number of discretionary grants is similarly unfair. I trust that we shall be examining the whole pattern.

§ Sir Albert Costain
Is the Minister aware that there is a good deal of resentment among students from the dependent territories, particularly from Hong Kong, at the large increase in fees? Will he consider the possibility of loans for those students?

§ Dr. Boyson
We have been in continued contact with Hong Kong regarding this matter. I believe that I actually said this in an Adjournment debate some months ago. If we could arrange some form of loans system with Hong Kong, we would see what we could do to co-operate in terms of students entering universities in this country.

§ Mr. Heffer
Is the Minister aware that if a loans system is introduced it will be one of the most retrograde steps to be taken in education? Is he aware that my own family is a good example of what can actually happen? My wife, who left school at the beginning of the war with seven passes and three distinctions, did not get to a university, whereas my brother-in-law, at the end of the war, managed to get to a university because of the grants system. Does the hon. Gentleman understand that thousands of ordinary working people will never have these opportunities if a loans system is introduced?

§ Dr. Boyson
I am glad to put the hon. Member's mind at rest. In this country at present, 23 per cent, of the intake to universities are children of blue-collar workers. In Sweden, where a loans system was introduced in 1964 by so-called social democrats—I know that those are dangerous words in this House—the percentage of children of blue-collar workers is 33 per cent, and rising, and the number in higher education has trebled since 1964.