Higher Education (Basic Amount) (England) Regulations 2010

My Lords, I thank the noble Lord, Lord Henley, for his clarity on the Government's propositions. We have not heard them put with that level of clarity before. It is unfortunate but necessary to move the amendments to the regulation and the resolution which follows it. Like the noble Lord, I will do so in one speech; I think that that will be welcomed by the House. The consequences for the future of higher education policy and the damage which we believe that the Government's proposals will do cannot go unchallenged. The House has heard before my declarations of non-remunerated interests: fellowships at Cambridge and Warwick universities and at the LSE. I should add that I also served—and met a number of noble Lords on the other side of the House as education Ministers—as the general secretary of the Association of University Teachers. My regret about today's circumstances flows above all from a long connection with, and even a great love of, the United Kingdom's higher education system. I know that that is true for a great many of your Lordships, who have had at least the same contact or feel the same contact. I take no pleasure in this at all. None the less, I hope to persuade the House that what we are saying is vital. It has been put to the side of the Chamber on various occasions that the Government’s proposals flow from the report of the noble Lord, Lord Browne, commissioned by a Labour Government. As we all know, commissioning a report does not imply agreeing with it. Indeed, I hope that I will be able to demonstrate that it was commissioned in circumstances so different from those obtaining today that we, as a House of Parliament, would be foolish not to consider whether it is today right for our universities. May I also be clear—as clear as I can be—about what this regulation and resolution together do? It is no ordinary proposal. It is not simply an adjustment of fee levels. This proposal is the game changer. Of all the issues raised, but never fully or properly discussed in the past six weeks, this proposal changes everything. It is the most profound of the policy proposals. It doubles the starting threshold fee for students and trebles the basic student fee, with only sketchy conditions to be met. The House will not need to be reminded that no student will pay upfront—that is not a new provision —or that repayment starts at a higher level of income, which I welcome, of over £21,000 per year, but that repayment will also occur at an additional rate of 9 per cent of income and will attract an increasing, sliding rate of interest which, at the top, is 3 per cent above RPI. The House will know that it has been pleaded in aid that there are some compensating factors said to lessen the blow to students. If a student’s parents are out of work and the student has received free school meals—that is, fortunately, a very small group in our society—there may be a fee-free period for the student to study paid for, by the way, by other students whose parents had been in work but who, nonetheless, may not have any considerable salary to dispose of. The increase in maintenance grants for lower-income students, consistently described by the Government as generous, in fact amounts to £6.70 per week. The compensating factors may give comfort to some people whose consciences may be pricking and who will, perhaps, still support the proposals today, although I hope they will not, but I would have had a sizeable bet a year ago that they would have described these arrangements as parsimonious. Stripped back to the realities, this is a 200 per cent starting fee hike and, for most, it will be 300 per cent increase. It will, in all probability, result across the board in about a 300 per cent increase in student debt. The independent Higher Education Policy Institute predicts that £9,000 will be ““the going rate”” because universities must charge ““all that they can””. Indeed, since these proposals are joined at the hip with an 80 per cent cut in the teaching unit of resource—90 per cent in universities without significant medical or engineering departments—the cut has imposed an average of £7,500 per student per year in university teaching income. Any institution charging less than that will lose money on teaching when compared with its current position. These are not proposals about gaining administrative efficiency in a university or unwarranted overheads that we should all properly address; they are an attack on high-quality teaching in our universities, which is a central function of our universities. That is quite simply what they are. One vice-chancellor, urging me to vote for the increases today—and I shall not—has written saying: "““The nightmare scenario would be the retention of the cuts but no means of restoring the balance through the higher tuition fees and the modified graduate tax that the Government is proposing””." When the Government plead in aid the support of some vice-chancellors for these measures, let us, at least in this House, be candid. It is Hobson’s choice. They feel compelled to get the students to pay privately the sums that have been cut by the Government on a scale and at a rate that no other country has contemplated. Judging from my mailbox, and I cannot believe that it is particularly different from the mailboxes of others in this House, no other higher education system believes we are sane. Nobody else would contemplate introducing so blatant a division between the rich and the poorer. I said, I think advisedly, that this is game changing. This afternoon’s decision will switch the concept of universities from being a public good, as they have always been in modern history and as they were rightly described by my noble friends Lord Giddens and Lady Blackstone on 22 October, to, in essence, a private-sector market that is driven by personal-private investment. Noble Lords might like that, or they might hate it—I am in the latter camp. Some might want to advocate it, some might want to fight it, but everyone must acknowledge that, as a concept for our universities, it has never once been debated and analysed in this House. Everyone must also acknowledge that we cannot have a monumental change of that kind on which the House has never focused. I have suggested that the noble Lord, Lord Browne, may have intended this outcome. Perhaps he discussed it in private meetings with Cross-Benchers, but I have not had the benefit of any such luxury. Let us turn to what has happened in your Lordships' House. I asked the noble Baroness, Lady Wilcox, three times in a month a question that is fundamental to the candour with which the Government treat the House. Did the noble Lord know in advance the scale of the government cuts for which his report has come to provide an alternative source of private money? If he did, he must have intended to make our universities private in so many crucial respects of their lives. However, as I say, we have never debated that or that outcome. If he did not, his plan must have been to grow university resources and the opportunities that universities provide, and then we would have a wholly different discussion. I hope that the latter is true. For those who are intrigued by the concept of the big society, this is of real consequence. Is this a strategy of building resources that would have spoken to greater inclusiveness, breaking down individual barriers to what people can achieve for themselves, their families and their communities and building their personal capacity for the greater good? Is it a strategy of building resource that would have spoken to a policy of growth in our economy, investing in the excellence that fuels an advanced economy, generating great science and great engineering and renewing its arts, its culture, creativity, its understanding of the social realm of life, and building the next generation of high-spec manufacturing that we all crave for our country? That would at least have been compatible with the growth White Paper. I had thought that these were the lodestones of government thinking, but obviously not. The noble Lord, Lord Henley, said that the cuts were intended to be made irrespectively because of the circumstances which the Government describe and with which I disagree, and then clung to what the report by the noble Lord, Lord Browne, had said: that this was simply the strategy to raise the money that had gone by another route. This is the strategy of replacing money from the Exchequer with money from students’ pockets. It is, straightforwardly, the undeclared privatisation of universities. It has nothing to do with strengthening our universities as a vital national resource. Will it achieve the policy objectives that are set out in such detail in nearly 122 words in the Explanatory Memorandum, because that appears to count as policy these days? Who knows whether it will? We have not debated it. I doubt it. Will the trebling of debt increase social mobility, a fundamental of the big society? Hardly. Will the policy take account of student debt? Self-evidently, that is the least of the considerations. Will it ensure a properly funded university sector? Only if you can survive an 80 per cent cut and you do not care too much about non-core subjects at the heart of the United Kingdom’s culture. Will it improve teaching quality and advanced scholarship? No authoritative body in higher education anywhere in the world anticipates that outcome from these proposals. Students may become customers in this system, but I tell noble Lords this: it will not give them the power to walk around switching providers as often as they feel dissatisfied—it is not that kind of supermarket. Will it attract a higher proportion of students from disadvantaged backgrounds? There are no first-class honours for getting that answer right; there is no prayer of it. Let me return to the position of those from lower-income families. The raising of the repayment threshold may help, albeit to a limited extent. What we lack is an answer to the question that I asked three times—and it is an answer for the House, not just for me: where is the specific research on the appetite for debt in these poorer families? It is the question which my noble friend Lady Kennedy asked so eloquently in late October. No impact research on this is provided. I honestly do not believe that the Government know how to find this out. With respect, there may be too little experience here of growing up in a poor community, too little experience of places in which even the small-ticket items have to be bought on the never never and there is always some neighbour in your street facing repossession. People in these circumstances hate debt. You suffer it, but you do not embrace it. Big debt is as welcome as a broken leg. Of course some people may have a wealthier future, perhaps to achieve a fruitful and professional life, but overall I cannot believe that many people in this position will consider a future with major debt alongside their aspirations to own their home and to better their own family, and then face a tax rate for their working lives plus 9 per cent. Goodness knows what the position will be of those who decide to enter higher education but who drop out without even a degree and the chance of additional earnings. In past discussions on Statements, these questions have been asked repeatedly of Ministers right across the House. I ask noble Lords seriously to judge for themselves what light is shed in the background papers. The honest answer is just about none. I have been concerned about middle class, middle income families because they are ineligible for any of the very modest compensating factors. Again, I asked three times about the impact on them. What is the probable length of their debt repayment? How does it compare with a period of repayment that is available to the wealthiest families? Will it be fair? The answer might lie with the ready reckoner that has been provided, if anyone in the House can make sense of it. Incidentally, if anyone wants to volunteer for that, I will nominate them for the Fields medal for mathematics. It is unintelligible and it does not answer these points. These families are entitled to little or no relief, and they will probably pay the higher rate all their working lives. They will certainly pay it when their own children embark on a university course of study, repeating the cycle of debt. They will never be in the position of wealthier families who can pay it up front, perhaps in much the same way in which people pay public school fees. We are entitled to detailed information on this, and it has not been provided. And so to the impact on those who are most likely to experience career breaks: mainly, but not exclusively, women. Where is the full study of their repayment profile? Where is the basis for a judgment on whether these proposals are discriminatory? I sought this information three times, and my heart leapt when I saw a link to the statutory equality duties impact test in the supporting papers. Would this finally be an answer to the question? There are days when I regret that we cannot use visual materials in debates in the House. I have the test here in my hand. It just says that you should make an impact assessment and that this, "““relates to policies of the previous government and may not be up to date””." The test, which is apparently now redundant, is available, but no evidence is available. The success criteria in the document outline the achievement of policy objectives but say not a word about overcoming this potential source of discrimination. If any of this is a sustained commitment to fairness, I am at loss to see how. I know very well that no one on the Front Benches of the previous Government would have tolerated a lack of evidence of this kind as a base for so fundamental a change in policy, much less one to transform our most cherished institutions: the universities. The whole vacant space of real evidence is capped by the missing cornerstone of any market analysis alongside the policy. Will the pricing attract more students, sustain current numbers, or diminish numbers? Is the demand for university places wholly inelastic or not? Could you charge whatever you wanted without affecting demand? I know that there are many successful business people in this Chamber and I make one assertion about each and every one of them: no one, no sane person, would wholly disregard price as a critical factor when trying to compute demand. No one would operate without market intelligence on price. Anyone today asking this House to invest in ““student fees 300 per-cent-up shares”” or ““student debt-for-life shares”” would ask whether there is basic information on what is likely to happy in the marketplace. It does not exist. Certainly, there is evidence out there. The inestimable Sutton Trust, on which many of us have frequently relied for excellent, objective analysis, has concluded that there will be a significant decline in demand because of pricing. Peter Lampl describes the proposals of high fees and deep cuts as toxic and rash, as going far too fast and as going much too far. The Higher Education Policy Institute, on which many of us have relied for depth and independence of study over a long period, concludes that a £9,000 fee, "““would reduce demand for HE by about seven percentage points … There must be a prospect that some students will baulk at paying a fee of up to £9,000 for a course that is likely to lead to rather uncertain financial benefits””." So I put it bluntly: this proposal lacks the rudimentary science on which policy should be based. The Government invite you—no more or less—to lick your finger and to put it in the air and see whether you like the feel of the breeze. If, as seems wholly likely, you get it wrong, the damage is done for ever. It is unacceptable. The House Merits of Statutory Instruments Committee could have hardly written more coolly about these proposals. It commends that we should consider the Government’s assumption that student numbers will not change as a result of the proposals and consider whether the Government have made an assessment in the light of the submissions made to the noble Lord, Lord Browne, of the possible consequences of a rise in personal debt for society at large and what the real impact will be on social mobility. Clearly, the committee cannot have discovered the answers any more than I believe we have. In this light, a full, independent study is sought by these amendments—nothing less—because that is the information on which we should make policy. It should not be made on guesswork and hoping that it turns out all right. There should be no guesswork about the future of our universities and students. Then the committee turned to process and timing. What are the reasons for bringing forward the package now when on the timetable we could work it out and reach consensus so long as we do it by 2012? It has asked us to examine the robustness of policy development, the process behind this instrument, which is as damming a question as could possibly be asked. My concluding argument is that, by insisting on an amendment to the original Labour legislation introducing fees—Section 28 to which the noble Lord referred in his opening speech—this House insisted that it, as well as the Commons, had the right to vote on the decisions. The case was made by some of those in the coalition who I see sitting on the Benches opposite. With an inbuilt government majority, it said, in another place, once introduced, any harsh Administration might come along and raise sharply the fees to the detriment of students. It sought and won the right to have a decision taken here, because in the past no one party could dominate this place and consequently get a decision at will. It is right that the option is sought today and agreed, because it was agreed in primary legislation in the 2004 Act. On the grounds that the Act put it into primary legislation that that right existed for this House, it cannot be objected to. The House of Commons gave its assent to that very arrangement. It cannot be wrong then to exercise the power that you sought and you achieved. So we do, but what a decision. I have emphasised the times when we sought and failed to get answers to the fundamentals. When I asked about the Government’s response to the game-changing shift signalled in the statements we heard and repeated in October by the noble Baroness, Lady Wilcox, the noble Baroness told us that in order to understand the policy, we must wait for the White Paper. I was disappointed, but I understood the point. When replying to the major debate on 27 October, addressing the same issues, the Minister said: "““I welcome the questions from the noble Lord, Lord Triesman, but I am sure that he will understand that I cannot pre-empt the Government's full response, which will be announced shortly””.—[Official Report, 27/10/10; col. 1302.]" That was referencing the much-heralded White Paper. I was again disappointed but I can appreciate that Governments do not start with decisive legislation before they have set out their thinking in a Green Paper and/or White Paper. The White Paper is still to be produced. Now, alongside the absence of evidence on which noble Lords are asked to take these decisions, we have an astonishing reversal of what any of us might think was the right way to treat Parliament. We now have the game-changing legislation as the first step, to be followed by the White Paper. Who knows, as we discuss that policy, we may on that occasion be promised a Green Paper and we might then, I suppose, be promised some form of consultation before that. The noble Lord, Lord Henley, said that this was all part of the Government’s proposals. Noble Lords have been given a jigsaw—