HC Deb 20 December 1988 vol 144 cc275-7
9. Mr. Wallace

To ask the Secretary of State for Education and Science what representations he has received concerning the White Paper "Top-up Loans for Students"; and if he will make a statement.

17. Mr. Yeo

To ask the Secretary of State for Education and Science what representations he has received regarding his proposals for top-up loans for students.

Mr. Kenneth Baker

Since the publication on 9 November of the Government's White Paper on top-up loans for students, about 3,600 representations have been received expressing a variety of views.

Mr. Wallace

Have any of those representations drawn to the Secretary of State's attention surveys which tend to show that the top-up loans scheme would deter from entering university people who are already under-represented—those in low-income brackets, disabled students, mature students and women? Has he also received representations from Scotland about the lack of reference in the White Paper to the special circumstances in Scotland, which has a four-year honours degree course? Is the Secretary of State satisfied that his proposals will not undermine that cornerstone of Scottish education?

Mr. Baker

Our proposals on top-up loans will not deter children from the lower, disadvantaged socio-economic groups from going into higher education. Where there are loan schemes in the rest of the world, and in Europe, in particular, not only do those countries spend less than we do on student support, but a much higher proportion of youngsters from lower socio-economic groups go into higher education. We have managed to combine the highest expenditure on higher education in Europe—compared with our gross national product—with the lowest uptake by youngsters. The loan scheme is an attempt to increase access, and I am sure that it will succeed.

Mr. Speaker

Mr. Colin Shepherd.

Mr. Yeo

What about my question No. 17?

Mr. Speaker

Mr. Yeo, then.

Mr. Yeo

Does my right hon. Friend agree that since graduates generally enjoy above-average incomes it is entirely fair that they should contribute directly to part of the cost of their higher education, especially as there will be protection for graduates on below-average incomes?

Mr. Baker

In annex D of the White Paper we calculate that the benefit to students from investing in higher education brings a return of about 25 per cent. Most graduates earn well above average earnings and virtually no new graduates are unemployed. If a new graduate is unemployed, it is by choice.

Mr. Andrew F. Bennett

Does the Secretary of State accept that one of the most worrying aspects of the scheme is the effect that it will have on medical students? Will the Minister tell us whether there have been any representations from the banks or building societies about their willingness to run the scheme?

Mr. Baker

Since the publication of the White Paper, we have had constructive meetings with the banks, building societies and other financial institutions to consider the details of the scheme and to find out how best it can be administered. I hope that those meetings will lead to a fruitful conclusion.

Mr. Rhodes James

Will my right hon. Friend emphasise that the White Paper is only a consultation paper on which comments are invited by 1 February? Will he suggest to my right hon. Friend the Leader of the House that the House might be involved in that process and have a debate next month in Government time? With all Christmas benevolence, will my right hon. Friend follow the sage advice of Sir Winston Churchill on a similar occasion and take the paper upstairs and cut its dirty throat?

Mr. Baker

I said earlier that we had received 3,600 representations; we have now had 3,601. I am aware of my hon. Friend's views. I should be happy to have a debate, but I do not determine the timetable of the House. I am sure that my hon. Friend's recommendation will have been heard. We have had support from many parts of the education world, including the university town that my hon. Friend represents. Many people feel that it is right that students, who benefit enormously from higher education, should make some contribution towards their maintenance while at college.

Mr. Fatchett

Will the Secretary of State confirm that the proposed loan scheme will cost the taxpayer more than £600 million by the end of the century without opening up access to higher education? Will he also confirm that to increase grants by the rate of inflation over the same period would cost less than one third of the cost of introducing the proposed top-up loan scheme? Why do the Government intend to introduce a scheme which will push students further into debt, while not adding one extra student to higher education?

Mr. Baker

The hon. Gentleman confirms the point that I have always made. The proposal is not meant to cut the amount of money spent on higher education but to increase it. I do not believe that it will reduce access because it will provide many students with a certainty of income that they do not have now. Also, it will provide at least 50,000 students who do not qualify for grants access to top-up loans.