§ 10. Mr. Graham Allen (Nottingham, North) (Lab)If he will establish a tax-free education bond available to all parents, to help them save for university fees payable by their children when graduating; and if he will make a statement. [158476]
§ The Chief Secretary to the Treasury(Mr. Paul Boateng)We have no plans to introduce such a bond. Our proposals ensure that no parent needs to fund their children's variable tuition fees. Instead, graduates will make a contribution to the cost of their higher education, and only when they can afford to do so.
§ Mr. AllenI thank the Treasury team for their management of the economy, which means that two thirds of the young people in my constituency come from homes that will benefit from a full £3,000 grant under the Government's proposals in the Higher Education Bill. Will my right hon. Friend consider a children's trust bond, which is a very good idea, and whether we could extend it into a lifelong learning bond that would be available to anyone who wanted to invest in further education or part-time learning or be a mature student? Will my right hon. Friend examine that idea, 1046 see whether it is possible to extend it and perhaps write to me before the Bill completes its progress through the House?
§ Mr. BoatengWe are grateful for the careful consideration that my hon. Friend gives to these matters, not least in Standing Committee. He will appreciate that our policies aim to improve the savings environment, create the right savings incentives and empower individuals to make financial choices throughout their lives. In relation to the children's trust fund, our policy has always been that fundholders are the best judge of their future needs. That is why we have not imposed any restriction on how those funds might be used. I am always open to correspondence with my hon. Friend, who has written to the Treasury on a number of occasions. I look forward to receiving a further letter from him and will respond to it as soon as possible.
§ Chris Grayling (Epsom and Ewell) (Con)The Chief Secretary knows that under the Government's proposals on student fees, the cost to the taxpayer of the increased student loan subsidy and of compensating less well-off students for the cost of paying fees exceeds the amount of money that will be raised by the university through fees, while students end up with much higher levels of debt. The only possible economic reason for the Treasury to do that is if it intends to claw back grant money from the universities in future spending reviews. Does the right hon. Gentleman intend to do that?
§ Mr. BoatengI have no intention of anticipating the outcome of future spending reviews. However, spending on higher education will rise from about £7.5 billion in 2002–03 to nearly £10 billion in 2005–06—a real-terms increase of more than 6 per cent. each year. Compare that with the cuts that were the track record of the Opposition. Compare those figures with the record of the previous Administration, under whom funding per student between 1989 and 1997 dropped every year, and by 36 per cent. in total in real terms. That is their record. Ours is one of achievement and continued support for students and universities.