HC Deb 23 July 1997 vol 298 cc953-66 3.31 pm
The Secretary of State for Education and Employment (Mr. David Blunkett)

With permission—[Interruption.]

Madam Speaker

Order. Let me obtain a little quiet for the Secretary of State. Will hon. Members leaving the Chamber please leave quietly and quickly? We are waiting to hear the statement.

Mr. Blunkett

With permission, I wish to make a statement about the publication today of the report of the National Committee of Inquiry into Higher Education.

The Government are very grateful—as I am personally—to Sir Ron Dearing, the chairman of the inquiry, and to the 16 members of his committee. Their work has been completed in record time, and in a manner for which we are all extremely grateful.

Today, the Government announce a new deal for higher education, involving new funding for universities and colleges, free higher education for the less well-off, no parent having to pay more than at present and a fair system of repayment linked to ability to pay.

Our university system is in crisis. Our competitors in north America and the far east—the Asian tigers—have many more young people in higher education. In the United States, the proportion is about 40 per cent., and in Canada it is 44 per cent. Those countries recognise the need to invest in their people, mirroring the investment in fixed capital and equipment of the past. Such countries are expanding higher education rapidly. Business in this country recognises that need as well.

One young person in three now enters higher education, compared with one in 20 in the early 1960s. Half the students in higher education are over the age of 21, and a third of them are part time. Public funding per student has fallen by about 25 per cent, over the past decade, with consequences for the quality of teaching, seminar work, materials and investment. Yet the increase in participation among socio-economic groups A to C has been double that of groups D and E. The present system is clearly not working.

The same level of funding for students today as existed in the 1970s would cost the taxpayer an extra £4 billion per year. That level, with increased participation— towards 40 per cent.—would cost an additional £2 billion by 2015. Taken together, such changes would add up to 3p in the pound to the basic rate of tax.

The previous Government placed a cap on the expansion of higher education, created the present mix of loans, grants and parental contributions and failed to address the financial implications of the further development of the sector. However, with cross-party agreement, they established the Dearing inquiry, accepting that the status quo was no longer an option. Everybody recognised that our higher education system was in dire need of attention. It has faced both funding problems and huge anomalies.

Tuition is free for some, but 500,000 part-time students in higher education and many of the 2 million further education students are expected to pay fees and receive little or no maintenance support.

The committee was given the task of ensuring maximum participation in higher education, enhancing standards and quality and ensuring fair and transparent means of student support, while obtaining value for money.

The Government endorse the aims and purposes of higher education set out by the committee, building on the Robins committee report of 30 years ago. "Higher Education in the Learning Society" is a coherent and thoughtful report that provides a vision of the future.

The committee's recommendations cover the local and regional role of higher education, the qualifications framework, academic standards, the role of information technology, management and governance of institutions and the quality of teaching and research. We shall consider those recommendations over the summer.

We welcome the committee's proposals for widening participation, including its emphasis on groups that are currently under-represented. Later this year, we shall set out our comprehensive response in a White Paper on lifelong learning. Today, I shall give an initial response to set out a clear direction.

The committee recognises that we cannot afford further improvement or expansion of higher education on the basis of current funding arrangements. Students should share both the investment and the advantages gained from higher education: rights and responsibilities go hand in hand. The investment of the nation must be balanced by the commitment of the individual: each will gain from the investment made. Graduates gain considerably from higher education. Compared with non-graduates, graduates see their earnings rise on average by as much as £4,000 for every £20,000 of earnings.

Dearing believes that the present loan system is unfair, unworkable and ineffective. He recommends that loans should be paid back over a longer period to help poorer students; that parents should not be asked for higher contributions; that a £1,000 tuition fee for everyone— which is roughly 25 per cent, of the average cost of a course—should be added to the loan; and that some element of maintenance grant should be retained.

We accept a great many of the broad principles laid out by Sir Ron. We intend to build on the committee's preferred option, and to take it together with the proposal in our policy statement, "Lifelong Learning".

We must develop a more efficient system than the present confusion of loans, grants and parental contributions. For lower-income families, instead of the remaining grant, students' living costs will be covered by a maintenance loan of the same value as the current grant and loan package. An additional maintenance loan equivalent to the tuition fee will be available to students from higher-income families. We shall, however, ensure that the poorest students do not have to pay fees. That is the best way of encouraging access to free education for the least well-off. We are equally determined to ensure that there is no increase in parental contributions.

Our response to Dearing ensures that fees and maintenance together do not place an increased burden on middle-income families. At present, parents are expected to contribute up to £2,000 for maintenance.

The committee proposes that repayments should be made on an income-contingent basis. We accept that, but the committee's funding options also assume that repayments should begin when a graduate's income reaches £5,000. We do not believe that that is acceptable. We shall consult on a higher starting point for repayment. We also believe that repayments should be over a longer period and set at a lower level of annual repayments than is proposed by the committee. A supplementary hardship loan of £250 per year will also be available.

We are also minded to accept the committee's recommendation that students with special needs should receive the specific grant on a non-means-tested basis. We shall consider the need for appropriate measures, such as bursaries for students entering teacher training and some health and social care professional courses. Employers in other fields may wish to consider similar measures.

We intend that these proposals should apply to all new students and we are examining how best such changes might be phased in. In addition, I assure the House today that top-up fees play no part in the Government's proposals. No university or college should proceed on the basis of introducing such additional fees.

The Government will also be considering how the new arrangements will apply to the particular situation of higher education in Scotland.

The proposals will mean more money for universities. The Government will ensure that savings are used to improve quality, standards and opportunity for all in further and higher education. Change is essential if we are to maintain the skills and research base of our country. We cannot defer action to another generation. Our preferred solution secures equity, access, quality and accountability. Our proposals retain the principle that repayments should be made on the basis of future income, not present circumstances.

Today's report presents major challenges, which every Member of this House will have to address. I recommend to the House that we take on this challenge with clarity and courage. To do otherwise would be to betray the next generation. Building on the report, we shall produce a system that will be fair, and will be good for students, for parents, for the universities, for business and for Britain.

This Government are facing the future with confidence. We have the will to take the difficult decisions and to ensure the investment needed for the future of our nation.

Mr. Donald Gorrie (Edinburgh, West)

On a point of order, Madam Speaker.

Madam Speaker

Order. I take points of order after statements. I shall call the hon. Gentleman then.

Mr. Stephen Dorrell (Charnwood)

I thank the Secretary of State for sending me an advance copy of Sir Ron Dearing's report. I echo the right hon. Gentleman's thanks to Sir Ron and his committee for a huge piece of work on the future of our higher education system.

That is the end of the facts. The right hon. Gentleman should be aware that his statement will be met with widespread disappointment, not only on the Benches behind him but throughout the higher education world. That disappointment will turn to anger when people realise the scale of the lost opportunity that the Government have allowed to pass and the scale of the right hon. Gentleman's defeat at the hands of the Chancellor of the Exchequer and the Treasury.

The consistent theme of the Chancellor is, in the words of Fagin to the Artful Dodger, "You've got to pick a pocket or two." First the Government picked the pockets of the pension funds, then on Monday they picked the pockets of the national lottery and now they are picking the pockets of students and their families from the low-income sections of our community.

Sir Ron Dearing's committee was established with bipartisan support. The committee was established because both the former Secretary of State, my right hon. Friend the Member for South-West Norfolk (Mrs. Shephard), and the right hon. Gentleman recognised that higher education had expanded under the previous Government. They wanted a review of the structure of higher education, to allow it to proceed in the next 30 years on an affordable basis, as the Robins report had done 30 years ago.

Sir Ron Dearing's committee produced 400 pages of important recommendations, and we heard the Secretary of State's reaction to only one of them—and that was to reject it. What does he have to say on the objectives set out in Sir Ron Dearing's report, on increased participation by young people in university and higher education? Does the Secretary of State agree with those objectives? We did not hear that. Does he agree with Sir Ron Dearing and his committee that we should introduce a more flexible structure of qualification following higher education? We did not hear that. Does the Secretary of State agree with Sir Ron Dearing and his committee that we need a review of the settlement of academic pay? We did not hear a word about that from the Secretary of State.

I believe that I am right in saying that the word "research" hardly touched the Secretary of State's lips this afternoon. He set out nothing in response to Sir Ron Dearing's recommendations on the future of research in higher education. In particular, Sir Ron Dearing sets out his assessment of the extra resources needed in higher education from next April. His figure is £350 million. Do the Government agree with that figure? If they do, where is the money coming from? If they do not, where do the Government disagree with Sir Ron Dearing and his committee? To none of those questions did the Secretary of State give any form of answer.

The Secretary of State said in his statement: The proposals will mean more money for universities. The vice-chancellors, academic staffs and student bodies of British universities want to know from the Secretary of State this afternoon how much money he is promising them, or is it simply another vague promise that will be delivered some time or never?

In his statement, the Secretary of State answered only one question, on undergraduate finance. He was crystal clear, and said: For lower-income families, instead of the remaining grant … costs will be covered by a maintenance loan". It is in black and white. It is a one-off hit of an extra £5,000, which has to be found by lower-income students and their families. That is the right hon. Gentleman's policy: extra state guaranteed loans for well-off young people from Islington and a kick in the teeth for low-income families from Sheffield. It was a policy that was specifically examined and specifically rejected by Sir Ron Dearing and his committee, because it was thought to be inequitable and inconsistent with the objective that the right hon. Gentleman set out at the beginning of his statement—that of widening access.

Is the Secretary of State aware that his statement is a major lost opportunity for British higher education, and a shabby and opportunistic smash-and-grab raid on the budgets of low-income families?

Mr. Blunkett

I am deeply disappointed at the right hon. Gentleman's response. We established all-party agreement on the setting up of the Dealing inquiry, and we set Sir Ron and his committee a difficult task. I have grasped the nettle of picking up on the recommendations in that report, together with our own proposals in "Lifelong Learning", which were put to the electorate on 1 May. Those proposals included changes to the maintenance and grant system.

We have taken Sir Ron's recommendations and built on them, to ensure that no low-income student has to pay fees in higher education; that there will be an additional contribution through a loan of £250; and that we protect those in teaching and health. We have, in essence, taken on board the thrust of the principles that Sir Ron laid out, but built on them to ensure that even more money will be available over the next 20 years.

The right hon. Member for Charnwood (Mr. Dorrell) accuses me of not understanding or not appreciating the needs of low-income families. I do, because I came from one. I know that what is necessary for the future is to be able to offer young men and women the opportunity to go into higher education as we lift standards in schools. If we do not put more money into higher education and if we lift access, and cannot respond to that demand, it is precisely the low-income groups that will be excluded.

I repeat to the right hon. Gentleman what I said in my statement. Over the past decade, the participation of those in socio-economic groups D and E, to which he referred, has increased by only half of that of higher-income groups. It was precisely for that reason that Sir Ron recommended increased access. I ask the right hon. Gentleman not to come to the House simply to criticise us for what he ridiculously called opportunism, when he has not a single answer to the question of raising the funds that are needed.

We have grasped this difficult nettle, we have taken on the challenge of expansion and of ensuring that young people have opportunities for the future, and yes, we have given a commitment that the resources will go into universities and colleges. I challenge the Opposition to say where they stand, what future this country would have had under their proposals and why they are ducking the opportunity for consensus in going forward on proposals for investment for our country.

Mr. John Gunnell (Morley and Rothwell)

I am conscious that my right hon. Friend has given a positive statement. Will he particularly consider the position of part-time students who are currently paying fees? As he will know, that group was especially failed by the Conservative party. Will he assure me that, in considering the proposals, he will offer those students a better deal than they would have had if the Conservative party had been responding to the report?

Mr. Blunkett

My hon. Friend is quite right. As part of the review and the White Paper on lifelong learning to which I referred, we shall come back with proposals for helping part-time students.

I say to everyone who criticises what we are doing, "Where were you when 500,000 part-time students had no support at all? Where were you for the 2 million adults in further education who have had to pay fees? Where were you in those inequities and injustices?" I agree with my hon. Friend that we must grasp the issues together.

Mr. Don Foster (Bath)

We echo the Secretary of State's thanks and congratulations to Sir Ron Dearing and his team, and join the right hon. Gentleman in his belief that there is an urgent need to increase the resources available for higher education, to raise quality, to extend and widen access, and, as he rightly said, to provide more support for part-time students. That is particularly necessary after the 40 per cent, cut in funding per student in higher education in the previous Conservative Government's lifetime. It certainly ill behoves the shadow Secretary of State to talk about "picking a pocket or two". The Conservatives certainly did in relation to higher education.

Is the Secretary of State nevertheless aware that we remain to be convinced of the need to introduce tuition fees for those who currently do not pay them? Although we recognise that there is a need for students to contribute more to higher education, we believe that it can be done by the conversion of the mandatory grant into a means-tested loan. Combined with additional support from employers and the state, that could meet all the Secretary of State's aspirations.

I ask the Secretary of State especially whether he will ensure that every single penny of the money raised, from whatever source, will be redirected into tertiary education and not siphoned off for other Treasury purposes. In his support for part-time students, will he consider making a loan available to them? After the Prime Minister's comments only a few minutes ago, will the Secretary of State ensure that students in Scotland do not suffer unfairly because they are pursuing four-year degrees? Finally, to attempt to reduce the problems of student poverty that are currently leading to one in eight students dropping out of higher education, will he consider extending and increasing the amount of the maintenance loan?

We welcome many of the aspects not only of the Dearing report but of the Secretary of State's statement.

Mr. Blunkett

I am grateful to the hon. Gentleman for his comments, and I appreciate the way in which he made them. I appreciate also the difficulty that all political parties face in addressing those difficult issues.

The Government are mindful of people on lower incomes, which is why we shall waive tuition fees for them. We are mindful also of the issues that have been raised about part-time students, and, in the autumn, we shall introduce proposals to address those issues. As I said, we appreciate that there are special issues in Scotland. Some students in England and Wales, too, are on courses lasting four years or more. On the issue of funding, I can only reiterate what I have already said twice today: the entire objective in taking our difficult decisions has been to put higher education on a firm footing for the next two decades. We appreciate the way in which the Liberal Democrats are approaching the issue, and we are happy to work together with them.

Mr. Dennis Canavan (Falkirk, West)

How can a Labour Cabinet that includes so many beneficiaries of Harold Wilson's comprehensive system of university grants even contemplate kicking away the ladder of opportunity from so many present and future students, by depriving them of grants and forcing them to pay tuition fees? Does the absence from the Treasury Bench of any Scottish Office Minister show that, for Scotland, the Government's reactionary proposals will be transferred to a Scottish Parliament—which, I hope, will kick them into the bucket where they belong?

Mr. Blunkett

I understand my hon. Friend's strength of feeling and the nostalgic view of a time when only one in 10—actually one in 20—people went to university. People from the area where I was raised never dreamt of going to university, and if we do not expand higher education, many of them will still not get there.

I do not want tears for the working class, because I am one of them. I want decisions and action to protect the poorest people, so that they will not be denied access and so that they will not have to pay fees. I have already made it clear that availability of hardship loans will be extended. Above all, I want to ensure that we do not wring our hands about the privileged at university, while ignoring those in further education who do not have the benefit of earning, on average, one fifth extra in salary over their lifetime.

Mr. Robert Jackson (Wantage)

I am sorry to dissent from the line being taken by my right hon. Friend the Member for Charnwood (Mr. Dorrell), but I congratulate the Government on the statement. Of course, the devil will lie in the detail—which we have yet to see—but I believe that the Government have taken a courageous decision, which should be supported by everyone who has universities' interests at heart. I ask the Secretary of State an important, detailed question: can he give a categorical assurance that the Government will not attempt in any way to limit the existing freedom of our colleges and institutions of higher education to charge tuition fees?

Mr. Blunkett

I very much welcome the hon. Gentleman's welcome for our statement, given his knowledge and background as a former Minister. Given the extent of what we have announced this afternoon and the commitment to investment in the universities, we have to make it clear that we cannot have a freebooting system, in which top-up fees help some at the expense of others. I understand the strong feelings of those in universities who believe that they could raise lots of money independently from the state, but that would be done at the expense of a comprehensive and coherent university system.

Mr. Bill Rammell (Harlow)

Following the previous question, I hope that we intend to stop universities charging top-up tuition fees, and that we shall explore legislation to ensure that that does not happen. Many of the elite institutions are already extraordinarily socially exclusive, and the introduction of further discretionary top-up fees for individual institutions would make that much worse.

Mr. Blunkett

We shall explore whatever is necessary to ensure equity in the system. I say to the university vice-chancellors who have mooted top-up fees that they cannot have it both ways. They cannot threaten to introduce top-up fees because the Government have not addressed their financial needs, including investment in the future, and then introduce top-up fees when the Government have grasped the nettle.

Mr. John MacGregor (South Norfolk)

We shall obviously have to see the details of the Dearing report, but does the Secretary of State recognise that his acceptance of at least some of the Dearing proposals on financing shows that we were right in the late 1980s and early 1990s, and that his party's approach, especially on student contributions, was wrong? What will be the public expenditure profile on education for the next five years, as a result of the announcement? Does the Secretary of State agree that one of the most important areas of the Dearing report is the maintenance of standards and qualifications as we expand higher education yet further? What does he intend to do about the proposals in that respect?

Mr. Blunkett

I respect the right hon. Gentleman's commitment and knowledge, but the criticisms we made—about the payback period, the lack of a contingent, progressive nature of the loans and the amounts levied on those on relatively low incomes—still stand. The progressive nature of our proposals will ensure that people on less than £20,000 a year will be expected to pay less on average than such people currently pay. I accept that we shall need to spell out in the White Paper the profile of the investment and expansion that will be required in the years ahead. I shall not do that this afternoon, because our proposals need to be integrated with the Dearing proposals. Sir Ron's proposals raise differing sums depending on the income-contingent basis and the starting point for the loans.

Charlotte Atkins (Staffordshire, Moorlands)

I represent a constituency with many low-income families. How will the Secretary of State's proposals maintain the principle of free education for the poorest students?

Mr. Blunkett

Anyone from a family with an income of less than £35,000 will receive some contribution towards their fees. Anyone from a family with an income of between £16,000 and £23,000, depending on the discounted elements of that income—which at the moment, remarkably, include mortgages but not rents, and child care costs for the better-off but not for the poor, because of the way in which they are applied—will not pay the fee at all. Therefore, they will be protected. What is more, the existing loan, translated into our new contingent loan scheme, will result in lower-income graduates, when they are earning, paying less than they do at the moment.

Mr. Phil Willis (Harrogate and Knaresborough)

Expanding access and numbers in higher education will be of little value without quality. We welcome in particular Sir Ron's proposal for an institute. What role does the Secretary of State expect the profession to play in that institute? Will it be the commanding role of regulating itself?

Mr. Blunkett

I am pleased that the hon. Gentleman has raised that. Involving the profession in developing the role of the institute for learning and teaching will be critical. Many students have said to me that the issue that worries them most is the deterioration in quality—or, in some isolated cases, the lack of commitment—of those who are teaching them. The quality of teaching, as well as maintaining the quality of research, is crucial in higher education. Involving those in the teaching profession and ensuring that they are equipped to do the job will be a great gain for our students of the future.

Mr. Derek Foster (Bishop Auckland)

Some in the House will know that I have some respect, and even a little affection, for the right hon. Member for Charnwood (Mr. Dorrell), who leads for the Tory party on education. However, he lost the plot this afternoon, as he frequently did during the general election campaign. No one is better placed than my right hon. Friend the Secretary of State to deal with these extremely difficult problems, and he is tackling them courageously. His struggle for an education, as someone from a poor family, and handicapped person at that, is an inspiration to us. I have total confidence that he will deal with the problem, protect poor families and expand access to higher education.

Mr. Blunkett

I am grateful to my right hon. Friend. In thanking him for his comments, I say to those on the Government Benches who remain unconvinced, many of whom also experienced further education and evening classes, that when we went to university, we found mainly the privileged there. Regrettably, over the past 40 years, the profile of those going to university has changed by only a fraction. If we commit ourselves to opening up access to those who have been traditionally excluded, we shall achieve a lot more than hand-wringing.

Mr. Andrew Welsh (Angus)

How can the Secretary of State argue that he is increasing access to higher education by introducing a means test? Will he put a stop to higher tuition fees in Scotland until a Scottish Parliament has had a chance to consider the issue from a Scottish perspective? What guarantees can he give that access to the traditional four-year Scottish honours degree will not be restricted and that the structure will not be destroyed? Why are we not having a Scottish statement, to find out what is happening to our education system?

Mr. Blunkett

As the hon. Gentleman knows, higher education has always been dealt with UK-wide—

Mr. Welsh

No, it has not.

Mr. Blunkett

Under the framework of grants and loans. I have said that special consideration will be given to Scotland, where students taking highers have often done only one year before entering university. That is different from the four-year courses that exist south of the border. That is why we have said that special consideration will have to be given.

Mr. Gerry Steinberg (City of Durham)

I welcome most of the recommendations of the Dearing report and understand the Government's difficulty with the higher education funding mess that was left by the previous Government, but I am still a little sad that it has been deemed necessary to introduce tuition fees. Will my right hon. Friend convince me that the proposals will increase access to higher education and that students from working-class backgrounds will have a better opportunity of getting into higher education? If he can convince me of that, I shall support him, but if he cannot, I shall not support him.

Mr. Blunkett

I understand what my hon. Friend is saying. We have a task together over the years ahead to ensure that we pick up the positive recommendations in the early part of the Dearing committee report, which indicate that we should examine—we shall do so over the summer and autumn, and report back to the House—how we can target resources for institutions that are paying specific attention to groups that have been excluded, including those in geographic areas that are massively under-represented. We must also look at the necessary action to be taken within schools and colleges to raise the expectations of those young people and their families.

I want to make it clear that this is not solely about what is now a minority of students who enter higher education at 18 or 19; it is also about encouraging mature students to come back into lifelong learning. We must pay attention to that, if we are not to write off generations that lost the opportunity which we were glad to accept.

Mr. Tim Boswell (Daventry)

Leaving aside the Secretary of State's carefully crafted efforts to conceal the fact that there are now record numbers of students with a better socio-economic participation than ever before, does he agree that the essential issue is the cash that is available for the higher education sector? Given that he has announced what amounts to a deferred student windfall tax, will he give an undertaking to the House that the resources will be fully recycled into the higher education sector?

Mr. Blunkett

I have given a clear indication this afternoon of the investment in universities and colleges, and the whole purpose of the exercise upon which we are embarking has been to achieve that goal. I want to make it clear that we are not charging students at the time they are students. We are relating what they have to pay to their ability to pay at a point in the future when they have become better off because of the higher education that they have received. Until hon. Members and those outside the House are able to understand that essential point, they will continue to stand on picket lines, mouthing platitudes with the Socialist Workers party.

Mrs. Anne Campbell (Cambridge)

Despite the welcome proposals for alleviating poverty among students from low-income families, does my right hon. Friend accept that some students might be reluctant to take on such a high burden of debt so early in their lives? Has he given any consideration to how the proposals might alter the patterns of demand for higher education, with more students choosing to live at home, more choosing to take advantage of the more generous option for part-time courses than has been available previously and more choosing distance learning—studying from their own homes?

Mr. Blunkett

My hon. Friend has raised a number of interesting issues, not least that of distance learning, which is a good, not a bad thing. It will be part of aiming learning at the individual rather than at institutions. I think that it will increase participation and help to gain agreement and commitment to education from a much broader spectrum of the population. If it encourages people to earn and to learn part time, it will be welcome, so long as we do not end up with a few extremely affluent and high-status institutions taking students of a different type from the rest of the university sector. I hope that we can avoid that by linking universities together, as Dealing recommends, so that they can co-operate and collaborate rather than compete with each other.

Mr. Eric Forth (Bromley and Chislehurst)

I welcome the general thrust of the Dearing report and much of what the Secretary of State said. Will he pause and reflect on two things of great importance? May I ask him not necessarily to accept the shibboleth that the more people who go into something called higher education, the better, but to consider whether a university degree is necessarily something that a third of the population or even more can get and that sub-degree qualifications may be more relevant to the idea of lifetime learning and the needs of business? May I ask the right hon. Gentleman also to pause and think further about liberating the institutions and enabling them to consider what fees, whether higher or lower, they wish to charge, in order to provide students with a range of options as to the financial commitment that they might wish to undertake? That would increase student and consumer choice and keep the institutions much more on their toes.

Mr. Blunkett

I am grateful for the opening remarks of the right hon. Gentleman, as someone who served in the Department for Education and Employment. I cannot agree with his last remarks about universities doing their own thing, for the very reasons that I spelt out earlier. I make it clear that I am not in favour of an ivy league— I want universities to co-operate. I want access to be available for all students—whatever their background, income or geography—to all institutions without a top-up fee. I believe that we can achieve that. We can achieve it on the back of the decisions that we are taking, so that we can raise and invest the money necessary to make it possible.

Mr. Gordon Marsden (Blackpool, South)

As someone who taught for a number of years in the Open university, I am sure that students there and elsewhere will be reassured by my right hon. Friend's emphasis on that sector. We shall look for further details in due course. May I ask specifically what consideration he has given and what proposals he currently has to give extra help to those who are already facing hardship within the maintenance system?

Mr. Blunkett

Sir Ron raises the issue of how we might extend the available hardship payments. I am very sympathetic to looking at the transition between the present system—the mish-mash that currently exists—and the new system as we introduce it. It would be fair to do that.

Mr. Roy Beggs (East Antrim)

While I believe that access to loan funds is no substitute for grants to students, I nevertheless welcome the Secretary of State"s of State"s statement that there will be a concentration of public funds to the benefit of students from poorer families. I also welcome the attention paid to the needs of Northern Ireland. However, will the Secretary of State seek to ensure that sufficient additional funding is made available, so that all the students in Northern Ireland who gain entry qualifications to higher education in England, Scotland and Wales will have opportunities that are at least equal to those enjoyed by the 2,500 students from the Republic of Ireland who obtain places in Northern Ireland, whose tuition is paid for by the British taxpayer? Will he look at that matter further? I was a bit surprised that Sir Ron Dearing and his committee did not address that burden on British taxpayers, whereby tuition fees are paid, for students from other EC countries.

Mr. Blunkett

I am grateful to the hon. Gentleman. I am aware of the different circumstances in Northern Ireland, including the higher take-up rate of higher education in working-class communities and the need to be able to sustain that. The proposals that we lay out will apply to all European Union citizens, and one of the ironies may well be a cross-border flow into the Republic, rather than the other way round, on a temporary basis. However, I understand that the students unions in the Republic are not happy with the system that was introduced two or three years ago, on the ground that we are advocating this afternoon—that it is not raising the status, standing and quality of teaching in the Republic. We might, therefore, be able to resolve the issues raised by the hon. Gentleman in a positive fashion.

Mr. Barry Sheerman (Huddersfield)

I congratulate my right hon. Friend the Secretary of State and the whole of the Dearing team, including the Policy Studies Institute and others, who have produced the report, although I have not had the benefit of reading it. My right hon. Friend has said that we have grasped the nettle. That nettle was too difficult for the right hon. Member for Charnwood (Mr. Dorrell) to grasp. How do we fund higher education for a new swathe of young people in our country? Every piece of research that I have read shows that the money has to come from the beneficiary: the taxpayer cannot and will not pay it, but the beneficiary should pay it, because he or she gets an education that fits him or her for life. That is one of Dearing's central principles, and it is a good one.

Dearing is also concerned with quality, which is most important. So, too, is accessibility. We need to change the culture in many of our schools. Many children do not see higher education as even a remote possibility—

Madam Speaker

Order. It is about time I heard a question to which the Secretary of State can respond.

Mr. Sheerman

I was just coming to one, Madam Speaker.

Madam Speaker

The hon. Gentleman has already done rather well, and time is pressing. Secretary of State.

Mr. Blunkett

I agree with my hon. Friend's last point, which I shall treat as a question. In my hon. Friend's own area, the West Riding, Alec Clegg got more students from the schools into university during the 1960s and 1970s than manage to get there today. Given the expansion in higher education since then, that is a disgrace.

Mr. Ian Bruce (South Dorset)

The right hon. Gentleman may wish to know that the former Government did not introduce 100 per cent, loans because Back Benchers refused to accept that that was achievable—politics is the art of the possible. Will he confirm that a student today can take out a loan of £1,500 a year during a four-year degree course, and will have to pay back £6,000; whereas under his proposals, for a maximum loan of £4,500 over a four-year period, that student would have to pay back £18,000?

Mr. Blunkett

No, we should compare like with like. The figure is £10,500, on the exemplifications that we have at the moment—with that codicil added because the trigger amounts make a difference to the repayment amounts and hence to the long-term debt.

Mr. John Cryer (Hornchurch)

I fail to see how these measures will widen participation in higher education, mainly because they mean an end to free universal higher education—an idea for which the Labour party and the Labour movement fought for decades. The proposals mean young people taking on large debts early in their lives.

Does my right hon. Friend agree that the proposals will lead to a division between universities and colleges? Some will offer bargain-basement courses to poorer students, while the better-off universities such as Cambridge, Durham and Oxford will charge high fees.

Mr. Blunkett

It is precisely to avoid that problem that we are bringing in this system instead of top-up fees, which universities claim they have the freedom to introduce willy-nilly under current law. So the truth is the very opposite of what my hon. Friend fears. The idea that graduates, who earn at least 20 per cent, more than their counterparts who are non-graduates, are poor does not hold water. We should save our tears for those who, for donkeys' years, got up at 5 o'clock in the morning to do cleaning jobs so as to pay the taxation that allowed some of us to do very well indeed.

Mr. Ian Taylor (Esher and Walton)

Sir Ron Dearing's report seems almost as radical as many of us had hoped. The Secretary of State is to be congratulated on grasping some of its radical aspects, including the deferred contribution of students to tuition fees.

Will the right hon. Gentleman give us a little more information on other crucial aspects of the report, such as research expenditure and contributions to infrastructure expenditure? Does he agree that universities are and should be available to all, but that it is equally important to establish internationally recognised scholarship and research? Does he agree that certain universities and departments will have to make a great deal of effort and will require extra resources if they are to stand up to international competition?

Mr. Blunkett

I am tempted to just say yes, because I agree with that point entirely. There is certainly a crisis in terms of equipment and the capacity to undertake research, and in terms of the buildings themselves. Sir Ron recognises that. We intend to deal with it in the White Paper on lifelong learning. I am grateful for the hon. Gentleman's comments; I sincerely hope that the shadow Secretary of State, the right hon. Member for Charnwood, will acknowledge the genuine feelings and commitment of his own Back Benchers.

Lorna Fitzsimons (Rochdale)

It is important for us to clarify several points. First, does my right hon. Friend agree that the current system is one of the most inequitable that we have, which is why the high-street banks refused to administer it when the previous Government tried to negotiate for them to do so? Secondly, will he make it clear that we do not have free universal higher education, as some people in the House and outside the House would have us believe, because Open university students, part-time students and further education students have always paid fees? Thirdly, will he tell the House that the crucial part of Dealing is, as I understand it, building a much needed bridge over the gap between further education and higher education, to give meaning to the principles that we have enshrined, on quality, access and fairness?

Mr. Blunkett

I agree entirely. We have tried to make it clear that there has been a misunderstanding, in that some people have taken young, full-time students entering at the age of 18 and 19 to be the norm. Now, more than 50 per cent. of students are mature and a third of students—half a million—are part time. Adult further education students not below the age of 19—there are 2 million of them—have had to pay. To put it in context, I believe that this is the final break with the welfare state that invested in the better-off at the expense of the worse-off.

Mr. Dorrell

This afternoon, several hon. Members on both sides of the House have asked the Secretary of State a question, the answer to which would be of real interest to everyone looking at this subject from outside, but which he has not yet given. How much money does he expect the tuition fees that he proposes to raise, and how much of that will find its way directly to universities?

Mr. Blunkett

By 2002, £650 million on the present accounting basis; £1,700,000 on resource accounting, which is being examined by the Government.

Several hon. Members


Madam Speaker

We now move on. I know that I have a point of order from Mr. Gorrie.