§ 9. Mr. George Foulkes (Carrick, Cumnock and Doon Valley) (Lab)What alternative proposals for closing the funding gap in university expenditure to those contained in the White Paper on higher education he has assessed. [141765]
§ The Secretary of State for Education and Skills (Mr. Charles Clarke)The four principal alternative options for student finance and university funding are an increase in flat-rate fees, a graduate tax, an increase in general taxation, and real rates of interest on student loans. We have placed in the Library and supplied to the Select Committee information and analysis on each of those. Our conclusion is that variable deferred fees are the best option for securing the investment that our universities need, while giving them the freedom to respond to student demand, and providing for fair repayments for graduates.
§ Mr. FoulkesDoes the Secretary of State agree that in order to get the extra money into universities, the principal alternative to the Government proposal is an increase in general taxation on the public, 83 per cent. Of whom did not go to university? Many of them—people such as waiters and chefs—[HON. MEMBERS: "What about cleaners?"]—and cleaners, too, earn a great deal less than £15,000 a year. Is the system that the Government are proposing not by far the fairest, as well as being very similar to the system already agreed by the Liberals for Scotland?
§ Mr. ClarkeI wholly agree with the implication of my right hon. Friend's question. I add to his attack on that particular solution the point that, in respect of income from either general or graduate taxation, any Secretary of State has to face choices in priorities between 642 university education and, for example, under-fives or primary education. There will always be pressure, which I personally welcome, to invest in the younger ages where we can make the greatest impact on reducing educational deprivation.
§ Mr. Nigel Evans (Ribble Valley) (Con)In examining the options for plugging the funding gap, has the Secretary of State thought of making variable top-up and tuition fees retrospective to the 1960s and 70s, when he and his Cabinet colleagues went to university, paid absolutely nothing for it and even received grants? Does he not understand the anger of parents in this country who look at him and his mates and wonder why people who received their university education for nothing are so keen and hungry to clobber today's children?
§ Mr. ClarkeI know that the modern Conservative party has made a study of retrospection, as indeed it should. I also know that the modern Conservative position is retrospection—to go back to the elitist education of the 1960s. I believe that the country needs to look forward to the future rather than backwards, which means creating a university system that truly creates a competitive economy and strong society for the future.
§ Paul Farrelly (Newcastle-under-Lyme) (Lab)Before my right hon. Friend publishes the higher education Bill in January, will he undertake not just to knock down the alternatives but to engage in an open discussion about alternatives from first principles, starting with his own estimates—not some vice-chancellor's estimates—of university funding?
§ Mr. ClarkeYes, I will. As my hon. Friend will know, we have already had many discussions—directly and with others—on precisely those matters and from first principles. I have found all the discussions exciting and illuminating, though I am not sure whether he felt the same about my responses. I agree that a proper discussion of these issues, based on proper assessments, is right. I will say, however, as an important qualification, that many assumptions depend on what modelling is used for different sources of income for fees and so forth. That is not a particularly productive area of debate. The productive area is to examine the real alternatives from first principles, precisely as he suggests, in a direct and frank manner. We will do precisely that.
§ Alistair Burt (North-East Bedfordshire) (Con)British universities look with some envy on the endowment income that universities abroad, particularly in the United States, receive. What long-term attention is he paying to finding imaginative incentives at this stage in order to help British universities to begin the process of building up their endowment income? At some stage in the future, it must play a larger part in funding than it does now.
§ Mr. ClarkeThe hon. Gentleman is entirely correct. We do need to build the tradition that exists in some other countries. To that end, we have set up a working party—led by the vice-chancellor of Bristol university, Eric Thomas, and including a range of individuals with 643 substantial experience of how other countries have operated in that respect—to establish what sort of encouragement we should provide. It will consider whether we should make any changes in our taxation regime. Off hand, I cannot recall the precise timetable of the report, but we are close to being able to do so. I have just been advised by my colleague, my hon. Friend the Member for Bury, South (Mr. Lewis), that the detailed report on encouraging endowments should be published in April. Such endowments are important for universities' independence, as well as their funding.