Why I Oppose the Coalition Government’s Proposals On Higher Education


Higher Education (Basic Amount) (England) Regulations 2010

Copy of the SI
10th Report from the JCSI
14th Report from the Merits Committee

Motion to Approve
14 Dec 2010 : Column 553

Lord Alton of Liverpool: On the question of personal debt, did the noble Lord see the figures released earlier this month that showed that personal debt in this country is now £1.5 trillion and that, out of 2,000 families surveyed, more than half said they were already in trouble with the debts that they had incurred? Is this any way to go into working life-with this albatross round your neck?

Lord Ashdown of Norton-sub-Hamdon: I understand the point that the noble Lord is making. However, we accept that it is reasonable for people to borrow huge sums to get themselves on to the property ladder. I see nothing different in following the same broad system. This is equivalent not to a credit card debt but to a mortgage. It is perfectly reasonable that we ask people to pay a significantly smaller amount of interest on a debt that will improve their life chances. There is nothing odd or strange in that.

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Lord Alton of Liverpool: I thank the Minister for giving way and I declare an interest in that I hold a chair with Liverpool John Moores University and am a visiting fellow at St Andrews. I want to test the Minister on whether the proposals are progressive, as has been asserted all the way through this debate, even though the Institute for Fiscal Studies has said that they are regressive. The IFS says that those who will be hit the hardest are not those coming from the free-school-meals category but those in the 30 per cent category of the lowest income earners in this country. Does the Minister agree with that assessment?

Lord Henley: I do not agree with that assessment because no one will be paying anything until they earn £21,000 or whatever the figure will be after it has been increased. That figure of £21,000 is roughly the average wage. Thereafter, we go on up to about £42,000 before people pay the maximum, which is RPI plus 3 per cent. I do not think that that is the credit card levels of interest that the noble Lord and others seem to imply. That is not a heavy repayment to ask of someone on £30,000, £40,000 or even £50,000 or £60,000. If we take medical students as an example, a GP now earns in excess of £100,000. When one thinks of their investment, that is not a bad return.

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Why I Oppose the Coalition Government’s Proposals On Higher Education

David Alton

I declare an interest as the parent of two children currently at university and one still at school. I also hold a chair at Liverpool John Moores University and, as a beneficiary of R.A.Butler’s landmark 1944 Education Act, I was the first from my family to have the opportunity of higher education.

I have three reasons for being opposed to the Coalition Government’s proposals currently before the House

They are: Equity; Quality; and Process

Equity

Probably no one in the House of Lords knew more or had a more respected view about educational provision than the late Lord Dearing.

At the heart of the benchmark Dearing Report was the belief that the cost of higher education should be fairly distributed within society between the taxpayer, the individual beneficiary, and employers. The Government’s proposals do not strike that balance, and significantly tilt the balance away from the State onto the individual.  They represent a marked shift in the way Britain supports higher education; and they also represent a mercantile approach to education, scornful of the value of the arts and humanities – courses which include economics, politics, philosophy and history.

As the teaching grant is cut by 80%, the burden of which will be transferred to students, it will mean that students, rather than employers or the State will have to subsidise research. And it means that beyond the tripling of tuition fees from £3,000 to £9,000, higher education has to contend with a colossal £3 billion hole in its finances.

As they lose State support, universities will be left with little choice but to charge £7,000 – £8,000 to replace the money which they will have forfeited and many are already deciding to charge the full £9,000 in order to cover other costs.

In response to the complaint that these proposals lack fairness or equity Ministers rightly point to help for the very poorest students – support designed for recipients of free school meals. But this is a very inadequate fig leaf.  For one thing, 20% of families who are eligible for free school meals do not register, and the working poor do not qualify in the first place.

The Institute of Fiscal Studies says that these proposals are regressive and that middle income families will pay the most. They say that graduates from the poorest 30% of households would pay back more than under the current system.  Measured against parental income, the proposed system is not progressive throughout the top 4 deciles of graduates.

Two weeks ago a 16-year-old at a school in Maghull on Merseyside, where I was speaking as part of the Lord Speaker’s programme of informing young people about the work of the House of Lords, asked me directly “how can you say you want to help the poor, when you hurt the poor?”

It’s a question worthy of a considered answer.

Many low income families and hard working families from middle England will find it incredibly difficult to face a  £45,000 loan for one child, £90,000 for two and a quarter of a million pounds for three.

In any event, while we are right to despair that our country has seen its finances plunged into appalling debt, is that what we want for our students: student debt, family debt if they decide to form permanent relationships, and mortgage debt?  Where two graduates marry they will begin married life with debts of up to £90,000 – and in some cases will still be paying off their loans when their own children apply for university.

At the beginning of this month UK personal debt stood at a staggering £1.5 trillion and the annual  poll of almost 2,000 homes for the Bank of England found more than half struggled to meet repayments for credit card or other unsecured debts.

Adding to the cycle of personal indebtedness will not make for a happier or more contented society; it will have the reverse effect.

.Quality

Around 80,000 people applied for higher education in the 1960s. Today the number is 700,000 The President  of Universities UK, Professor Steve Smith, says that, between now and 2017, 2.2 million jobs will be created in the three occupational groups which will most likely require graduate-level skills.

We can, of course, argue about the quality of individual courses or institutions – and the need for more focus and professionalism and less duplication –  but the answer will not be to dramatically reduce the numbers of British graduates; not unless we want to reduce our skilled work force and mimic a third world economy.

We should be proud of our graduates and that in the UK we have some of the best world class research facilities; as well as three of the world’s top ten universities. Can we really be so sanguine about standing alongside Romania as the only OECD countries cutting investment in higher education?

If we pass these proposals  English students and graduates will face the highest fees of any public university system anywhere in the developed world: higher than France, higher than Germany, and higher even than the United States.

Process

The White Paper on Higher Education is not planned until April. By bringing these proposals forward prematurely haven’t we put the cart before the horse?

A report by the Office of Budget Responsibility suggests that the Government’s proposals will not save money but actually add £13 billion to public sector net debt by 2015-16.

The Higher Education Policy Institute report states that

“the proposals will increase public expenditure through this parliament and into the next”,

and that

“it is as likely that in the long term the government’s proposals will cost more than they will save.”

Those assertions, along with many others, deserve to be tested.

An unamendable order rushed through Parliament gives no opportunity to do that.

And, where was pre-legislative scrutiny?

And why wasn’t greater heed paid to the wise proposal  made by Greg Mulholland MP and others in the Commons to defer the vote until greater thought could be given?

Throughout the proceedings in the Commons complaints were repeatedly made about the pell-mell rush and undue haste with which these measures have been taken through.

When the Coalition came to office earlier this year it enjoyed considerable public goodwill – not least because of the emphasis which was placed on conducting business in a less adversarial way, the promise to try and find more common ground, and the need to build public consensus.

Dealing with controversial proposals of this kind without proper scrutiny and without properly examining the alternatives, risks squandering that good will.

There are good things among the Government proposals – the increase in the threshold at which graduates must pay back their loans from £15,000 to  £21,000 is welcome; so is the decision to treat part-time students in the same way as full-time students by not charging them any up-front tuition fees.

But, overshadowing all of this was a promise made at the General Election by those who signed pledges that tuition fees would not rise. That has inevitably dominated this whole debate and been responsible for much of the anger in the country.  Political capital and good will should never be lightly squandered and political integrity, at a time of such public cynicism about politics, is a virtue which once lost is hard to reclaim.

I fought several General Elections on the principle that all tax payers should be asked to pay a little more to specifically fund education – a hypothecated tax for one purpose alone. I found little public opposition to that proposition. I am sorry, therefore sorry to see what was always called “the essential investment” placed as a burden on students rather than shared buy us all. It is an investment which should be shared by State, student and employers together. These proposals do not strike a fair  balance, which is why, on grounds of equity, quality and process, I am opposed to what the Government is doing.

Universe Column,

January 23rd 2010.

David Alton

My parents left school before the age of 16 but both of them knew the importance of education. There is no greater force for personal and national progress than educational opportunity.

In my own life, as a typical council estate boy who made it into grammar school, and who went on to become the first from either side of the family to enter higher education, I need no convincing of the centrality of education as the engine which creates change and opportunity.

That is a principal reason why I so strongly oppose the Government’s decision to allow the tripling of the cost of tuition fees to £9,000 and to cut the teaching grants to universities by 80% – creating a staggering £3 billion hole in higher education’s finances.

The late Ron (Lord) Dearing probably knew more about educational provision than anyone I have ever met.

At the heart of his benchmark Dearing Report was his belief that the cost of higher education should be fairly distributed within society between the taxpayer, the individual beneficiary, and employers. The Government’s policy fundamentally alters the way we fund higher education by tilting the balance away from the State and placing it overwhelmingly onto the student.

During the 1980s and 1990s I fought several General Elections on the principle that all tax payers should be asked to pay a little more to specifically fund education – a hypothecated tax for one purpose alone. I found little public opposition to that proposition. I am sorry, therefore, to see what was always called “the essential investment” placed as a burden on students rather than shared buy us all. It is an investment which should be shared by State, student and employers together.

The new policy also represents a mercantile approach to education, scornful of the value of the arts and humanities – courses which include economics, politics, philosophy and history. Some things have value rather than a price.

But, the policy should also be judged against the test of social justice.

The Institute of Fiscal Studies says that these proposals are regressive and that middle income families will pay the most. They say that graduates from the poorest 30% of households would pay back more than under the current system.  Measured against parental income, the proposed system is not progressive throughout the top 4 deciles of graduates.

Many low income families and hard working families from middle England will find it incredibly difficult to face the prospect of a  £45,000 loan for one child, £90,000 for two and a quarter of a million pounds for three.

If the Government are right to argue that we must act to reduce national debt how can it be right to simultaneously increase personal debt?.

At the beginning of last month UK personal debt stood at a staggering £1.5 trillion and the annual  poll of almost 2,000 homes for the Bank of England found more than half struggled to meet repayments for credit card or other unsecured debts.

Adding to the cycle of personal indebtedness will not make for a happier or more contented society; it will have the reverse effect.

And what sort of way is it to begin working life encumbered by mountains of debts?  In addition to paying back loans students will face family debt if they decide to form permanent relationships, and mortgage debt if they are able to buy a house.  Where two graduates marry they will begin married life with debts of up to £90,000 – and in some cases will still be paying off their loans when their own children apply for university.  Our students and graduates now face the highest fees of any public university system anywhere in the developed world: higher than France, higher than Germany, and higher even than the United States.

If the new funding regime drives young people away from higher education it will not only be young people and their families who will suffer – the country will lose out, too.

The President  of Universities UK, Professor Steve Smith, says that, between now and 2017, 2.2 million jobs will be created in the three occupational groups which will most likely require graduate-level skills.  If we dramatically reduce the numbers of British graduates we will be without an adequately skilled work force and end up mimicking a third world economy.

Can we really be so sanguine about standing alongside Romania as the only OECD countries cutting investment in higher education?

And there is also doubt about the claims being made that the policy will save money.

A report by the Office of Budget Responsibility suggests that the Government’s proposals will add £13 billion to public sector net debt by 2015-16.

The Higher Education Policy Institute report states that

“the proposals will increase public expenditure through this parliament and into the next”,

and that

“it is as likely that in the long term the government’s proposals will cost more than they will save.”

Those assertions, along with many others, deserved to be tested. Instead of which, the policy was pushed through, pell mell, with indecent haste.

Those of us who have been the beneficiaries of State funded higher education should be leery and mistrustful of ill-considered and confrontational policies which run counter to social justice and shift our collective debts onto our students – and be willing to speak out against them.

When the Coalition Government came into office it enjoyed considerable public goodwill – not least because of the emphasis which was placed on conducting business in a less adversarial way. They promised to try and find more common ground, and the need to build public consensus.

Ironically, the 1944 Education Act – which opened the door to higher education for people like me –was passed with cross-party support in Parliament. It then stood the test of time. By contrast, this divisive new policy was not based on any attempt to find common ground. It was also a policy which one of the coalition partners had implacably opposed at the recent General Election.

This has undermined trust in politics and damaged politicians. It has made people believe that ministerial careers have come to matter more than principles.

The decision of the Liberal Democrats to break their high profile election pledges on student finance has been responsible for much of the anger in the country.  Political capital and good-will should never be lightly squandered and political integrity, at a time of such public cynicism about politics, is a virtue which once lost is hard to reclaim.