Student Finance (Hansard, 4 February 2002)

§ The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)
My Lords, we expect to announce the outcome of the review of student finance soon. We shall consult on any proposals for change.

§ Baroness Sharp of Guildford
My Lords, I thank the Minister for that reply. I am glad that the outcome of the review will be announced soon. As the Minister will know, the matter has caused considerable havoc among students. Last summer. having discovered how unpopular their regime of tuition fees was, the Government backtracked and suggested they were opting for a graduate tax, then for the Cubie proposals. Now it looks as if they will increase tuition fees for better off students. That leaves students very uncertain about whether they would be better off going to university next September or taking a gap year. Cannot the Minister give us a clearer reply as to precisely when the outcome of the review will be announced?

§ Baroness Ashton of Upholland
My Lords, there has been a huge amount of press speculation but it is entirely that—press speculation. We shall announce the review as soon as we are in a position to give this House and students the information that they require. The noble Baroness will be aware that we have said that students looking to apply for next year should do so on the basis of the current system.

§ Baroness Perry of Southwark
My Lords, does the Minister agree that although it is extremely welcome that the Government have conceded that their current system of student finance is simply not working, it is important that any system introduced in the future does not continue to discourage young people from poorer families, particularly those who constitute the first generation of their families to enter higher education from doing so? They should be encouraged by the finance system to enter higher education and not be discouraged as they currently are.

§ Baroness Ashton of Upholland
My Lords, as the noble Baroness may know, the aims of the review are to simplify the system especially in the area of hardship 452 support, to provide more upfront support for students from lower socio-economic backgrounds, to ensure that all students have access to sufficient financial support throughout their years in higher education and to tackle the problems of debt and the perception of debt. I hope the noble Baroness will agree that those areas fit entirely with what she was asking about.

§ Earl Russell
My Lords, when the Minister refers to sufficient financial support, does she understand that that must mean sufficient financial support to be a full-time student and not have to spend 12 or 14 hours a week making money? Does she understand further that much of the non-vocational information in a university course is useful, like a climbing frame, for evaluating critical responses to conflicting evidence? Once undergraduates are reduced by the pressure of the need to earn money to learning one single account by rote, we risk being in a situation where all the money spent on giving them a university education is wasted.

§ Baroness Ashton of Upholland
My Lords. the noble Earl makes important points, but the information from the MORI poll findings suggests that something like 46 per cent of full-time students in 1998–99 were employed during term time. That has not changed significantly from 1995–96. The figures show that at the present time around 40 per cent plus are working during term time. We recognise that this is about balancing and making sure that we have the right system in place. That is why we have taken the time to try to carry out the review effectively.

§ Lord Campbell of Alloway
My Lords, may I ask the noble Baroness what on earth she proposes to do about this state of affairs?

§ Baroness Ashton of Upholland
My Lords, we propose to come forward from the review with ideas upon which we shall consult.

§ Baroness Miller of Hendon
My Lords, are the Government satisfied with the MORI report that the Minister has just mentioned which indicates that poorer students are being burdened with a much higher percentage of debt than more affluent students? Indeed, during the past year that gap has widened. Does the Minister agree that there will be a problem as regards the Government's target of wider access to universities if they do not at the same time ensure that those universities have the means to manage that expansion?

§ Baroness Ashton of Upholland
My Lords, I believe that the noble Baroness refers to the Unite/MORI report which referred to a 26 per cent increase in debt. However, that does not compare like with like as last year many students still had a part grant, part loan system. The biggest increase is predicted among students from C2DE backgrounds—I understand that the figure is about £9,376—as they have less family income on which they can call. That is one of the issues 453 under consideration in the review of student support. I believe that significantly larger figures of up to £15,000 have been quoted in the press. Those are inaccurate. We shall, of course, have to consider universities' ability to take the numbers of students we predict will apply. That is all part of the review.

§ Baroness Sharp of Guildford
My Lords, will the review consider the fee regime as between part-time and full-time students? At the moment the fee regime for part-time students is far less favourable than that for full-time students and therefore in that sense inhibits those from lower social classes from applying for part-time courses. Can the Minister tell us anything about that?

§ Baroness Ashton of Upholland
My Lords, the review will consider the whole question of higher education. I am sure that consideration will be given to the most appropriate way forward for all students and that the review will take account of the need to deal with the issues I have raised and the many comments that noble Lords have raised not only in this House but also directly with the department.

§ Lord Dearing
My Lords, does the Minister agree that, in the light of the information released by Universities UK 10 days ago, any relief given to students cannot be at the cost of the universities but that the Exchequer will have to dip its hands into its pockets?

§ Baroness Ashton of Upholland
My Lords, I must repeat that all the issues, including that which Universities UK has raised—Universities UK has, of course, played a prominent role in submitting evidence to the review—will be considered.

§ Baroness Walmsley
My Lords, does the Minister have confidence in the figures in the Unite/MORI report or is there an element of under-reporting?

§ Baroness Ashton of Upholland
My Lords, MORI is a very reputable organisation which carries out a huge amount of research. I should not wish to suggest anything. Of course, issues will arise as to what may or may not be included in any poll. My reading of the report was that it was carried out on the basis of a reasonably good piece of work.

§ Lord Borrie
My Lords, there is not only a public interest but a considerable private interest on the part of the graduate in obtaining a good degree because it results, I believe, in an average of £400,000 of additional income in the course of a lifetime. Therefore, what are the Government's plans for arranging for a contribution or a graduate tax of some kind to enable that to be recognised?

§ Baroness Ashton of Upholland
My Lords, there has been much speculation about the type of approach that we shall take. All those issues will be deliberated.
454 We have always said that we need to recognise that those who benefit from a university education generally do better. I say "generally"; it does not apply to everyone. We also recognise that that point needs to be recognised to some extent in the course of the review.