Contribution
My Lords, I very much welcome this measure. I should declare my interests as a visiting professor at King’s College London and a member of the University of Southampton’s council. I know from seeing universities close up that the situation is indeed serious, as the Minister rightly said. The freeze in the level of fees has meant a 28% cut in the real resource available for universities in the last seven years. This cannot carry on, so I support this measure.
Having heard the Minister’s arguments about the need to strengthen universities’ financial position, I would add that it is a pity that the entire extra revenues for universities from this measure go in meeting the national insurance costs that they face. I hope that the Minister will be able to tell us, in her winding-up speech, her estimate of the extra expenditure on national insurance for universities as compared to the extra receipts from these higher fees. What I conclude from this is that, if the Minister is to live up to the excellent rhetoric about putting universities on a sounder financial footing, she will need to go further in future. I hope that, in her response, she can give some indication of her plans for the future. I would encourage the Minister to carry on with indexation as an absolute minimum—after all, that is what the Blair Government did, automatically indexing fees year after year—because, otherwise, the problem that she described so eloquently will just continue to get worse.
A range of us have, in different ways, tried to find an alternative system for funding higher education. Employers will not put up any more, and the Treasury and the taxpayers are not going to put up any more either. So we all end up reluctantly concluding that this is the only game in town. All three political parties represented in the Committee today have concluded that you have to put up fees in order to sustain our higher education system—and that is the case.
We could all learn a lot from my noble friend Lord Johnson, who introduced the TEF. Clear pressure to raise the quality of teaching is an important part of any future increase. Personally, instead of the rather random process of an Augar review or a freeze, I always wanted to see a quinquennial review—a review every five years—modelled to some extent on the way in which the social security system operates, from which we can always learn. A quinquennial review would enable a judgment to be made about the right level of the repayment threshold and the right level of fees, in the light of what had happened to earnings and the cost of higher education, and it could set out a formula that lasted for the life of a Parliament.
I will not comment on foundation years. I recognise the political and popular anxieties about measures such as this. Such measures never poll well, but the reason for that is often a misunderstanding. A lot of people still think that students have to pay up front, and a lot of people, including parents, think that the debt is like a credit card debt or an overdraft, meaning that, if their child has a £50,000 debt, they can take out £50,000 less as a mortgage. Those are misconceptions. The fundamental case for these measures is that they are in the best interests of students. Students will have a well-financed and well-funded higher education and, as the Minister rightly explained, will pay back only on a repayment formula that is not changed by these measures.
Finally, I urge that, now that the Government are operating with a model that they themselves were crucial in designing, the Minister and the Government own it. All three parties have a shared interest in trying to communicate the reality of this system. If ever we lapse into saying that the fees should not go up because there is a cost of living crisis, that feeds misunderstanding and is extremely irresponsible.
I hope that the Minister will be able to spare the time for a meeting where we could go through the painful lessons I have learned about how one tries to communicate the reality of the system. I also hope that she might consider a more strategic approach, so that universities know that the real resource they have will at least be protected in the years to come.