HC Deb 30 October 2003 vol 412 cc428-30
15. Paul Farrelly (Newcastle-under-Lyme)

When he proposes to publish details of the principal alternative models for student finance and university funding. [135246]

The Minister for Lifelong Learning, Further and Higher Education (Alan Johnson)

My right hon. Friend the Secretary of State for Education and Skills wrote a letter to my hon. Friend on 3 June 2003, in which he discussed the principal alternative options for student finance and university funding—namely, an increase in flat-rate fees, a graduate tax and real rates of interest on student loans. A copy of the letter is in the Library. The Department illustrated the effects of charging real rates of interest in a memorandum sent to the Education and Skills Committee on 27 May 2002, which is available in the Committee's report, "Post 16 Student Support", published on 4 July 2002.

Paul Farrelly

I thank my right hon. Friend for that reply. On several occasions, my right hon. Friend the Secretary of State promised Labour Back Benchers that he would make available full details of the main alternative funding models for higher education that he had considered. He still has not done that, so when he will make good that promise? There are alternatives to variable fees that we have not debated properly with the benefit of the promised information. Is not that because the architects of the policy—and I use the word carefully, as my right hon. Friend the Minister is not one of them—are so obsessed with variable fees that they will not give an inch on them, come what may?

Alan Johnson

I do not accept what my hon. Friend says. As I pointed out, my right hon. Friend the Secretary of State set out the alternatives in a letter. The Dearing report set out all the options, including a graduate tax and variability. Dearing had something to say on variability, as it was a national committee of inquiry into higher education. Following devolution, we had the Cubic report in Scotland and the Rees commission in Wales, both of which looked specifically at fees and set out the alternatives. In addition, the Education and Skills Committee has published four reports, all of which have alluded to various options.

I might not have been an architect of the policy, but my right hon. Friend the Secretary of State will be pleased to know that I support it thoroughly. This is an important debate—it excludes the Conservatives but includes the Liberal Democrats—about how we fund expansion through putting extra investment into higher education. However, I think that all the options are available for perusal, and I believe passionately that our proposals strike the right balance.

Mr. John Bercow (Buckingham)

Given the enormous pressure on the research base of UK higher education, the requirement to recruit and retain the best possible academics and the need to compete with international institutions of the highest quality, what consideration has the Minister given to methods of encouraging far greater commercial sponsorship of higher education in the future than it has enjoyed in the past?

Alan Johnson

The hon. Gentleman makes a very important point. The Dearing committee was commissioned by the previous Conservative Government and had all-party support. It said that funding for higher education should come from three sources—society, graduates and employers. I agree entirely with the hon. Gentleman, and two pieces or work are under way. The Lambert committee is looking at the relationship between business and universities, and another working party under the chairmanship of the vice-chancellor of Bristol university is looking at what must be the long-term solution—to secure more endowments and employer investment, as has happened in the US. The White Paper points out that a longer-term cultural change is required, but that is something that we need to work towards.

Peter Bradley (The Wrekin)

If it is wrong for the taxpayer to foot the entire bill for the cost of educating undergraduates, but right for undergraduates to make a contribution towards the benefits that they will accrue, why is it also right that, when they graduate, undergraduates should make a contribution to the costs of postgraduate research'?

Alan Johnson

I think that two different issues are involved in that question, but I point out to my hon. Friend that we have increased the stipends available to postgraduates, which now range from £9,000 to as much as £13,000. The stipend does not count as income, so it will not affect the repayment of fees.

It is crucial to make the point that we are not saying that the taxpayer should not make the lion's share contribution to higher education funding, but we agree, like Dearing, that we cannot say that higher education, with 40 to 50 per cent. participation, can be funded in the same way as when it was the preserve of a tiny elite back in the 1960s. The other point is that there are other priorities in education for extra taxpayers' money, were it available.