Higher Education (Basic Amount) (England) Regulations 2010

My Lords, a little over two months ago, I published a report outlining a sustainable way forward for higher education funding. Our conclusions are now generally well known, and I have expounded upon them in detail in your Lordships’ House on a previous occasion. Today, I will speak as directly as I can on the narrower issue of raising tuition charges, but I do not wish to mislead your Lordships that the argument rests there. The Government have accepted many of our proposals and have made a strong argument for tackling tuition charges first to ensure certainty for students and universities. Let me be clear that, although the Government’s proposals for higher charges deviate in some important ways from our own, I will support the Government motion today. Under our system, we recommended removing the fee cap and introducing a levy mechanism that would kick in at £6,000 to ensure that institutions shared the cost of supporting their students; the Government’s proposals are for two caps—a basic cap of £6,000 and a higher cap of £9,000 for institutions that agree to tougher standards on access and widening participation. While I remain a supporter of our proposals, the Government’s plan replicates the benefits of our approach in some important ways by allowing institutions to gain increased access to private sources of finance at a time of necessary fiscal austerity, by enforcing different behaviour for institutions charging higher fees and by allowing the Treasury to budget accurately for the cost of student loans. Those are powerful arguments in favour of passing today’s motion. Higher charges are just one part of the proposed system, as the overarching philosophy of our report was guided by three distinct but related principles: quality, participation and sustainability. I want to outline very briefly how tuition charges fit into our approach to those three important principles. On quality, we recommended lifting the cap not only on tuition charges but on the number of students admitted to individual courses. That is a critical element of our reform package. We cannot expect institutions to change unless we first allow them to change. The panel’s view was that students, as the people who experience higher education, are best equipped to judge its quality. Allowing institutions to grow, expand and adapt according to student needs will be critical to ensuring that our universities remain the best in the world. On participation, the panel was keen to ensure that no student felt compelled to avoid higher education for financial reasons. We should begin by drawing a distinction between tuition charges, which are paid back after graduation, and living costs, which must be paid during study. The evidence that we received was very clear that, for poorer students, having adequate cash in hand for living costs makes a big difference to whether they feel able to participate in higher education. However, on tuition charges, the panel received no evidence that higher fees have so far had an impact on participation. Most likely that is because education remains free at the point of access. We determined to maintain that important principle. That is why we recommended that all students continue to receive generous loans to cover their tuition costs. That is also why we recommended that loans be extended for the first time to the 40 per cent of students who choose to study part-time. As for the repayment of loans, we wanted to make the system much more progressive than it is at present. By increasing the graduate repayment threshold to £21,000, and raising it annually in line with earnings, that is exactly what will be achieved. Turning to the final principle of sustainability, we wanted to create a system that could evolve organically rather than by painful contractions every five years or so. Our system—I stress again that it is a system—would achieve that by putting students very firmly in control of shaping the university landscape. Their choices would become the key variables to which everything else would respond. However, for that to work, the concept of student choice must be supported by the practical measures that bring it to life. School pupils must receive adequate information, advice and guidance from the age of 13 to ensure that they fully comprehend their choices. We recommended that money be set aside to create a professional career service for exactly that purpose. We recommended that all universities develop student charters to spell out what students will receive in return for their investment. We also recommended that a new, independent regulator be created to target funding on expensive subjects and to ensure that students can continue their studies in the rare event of institutional failure. I hope that it is clear that what we have presented is not just a series of recommendations but a systematic approach to reform—a system in which the pieces fit together for a reason. Today we are debating the question of tuition charges, but soon we will be back to discuss the further elements of reform. I believe that these reforms are essential for this nation to maintain its hard won pre-eminence in higher education, and I therefore strongly support this step.