Access to Higher Education
The next item of business is a debate on motion S2M-4788, in the name of Fiona Hyslop, on access to higher education.
All of us in the chamber will recognise the opportunities that access to higher education can bring. Many of us will have been the first in our families to go to university. Since I went to university in the 1980s, at the age of 17, there has been an expansion in the number of young people who go to university. However, the Government wants to claim as its own successes in the expansion of access to higher education that were achieved before it came to power.
Today, the Scottish National Party can reveal figures that show that, despite there being 2,000 more 17-year-old Scots in the population than there were in 2001, 2,000 fewer of them are going to university now than were five years ago. When Labour came to power, 46.6 per cent of young people in Scotland were going into higher education. Now, marginally fewer—46.4 per cent—are doing so according to the Executive's latest figures in its "Age Participation Index for Scotland 2004-05". We can debate whether the figure is too high or whether it is sustainable, but we cannot argue—as the Government tries to—that the figure has gone up.
Does Fiona Hyslop dispute the simple fact that university access has increased by 12 per cent since 1990?
If the minister had listened to the start of my speech, he would have heard me say that there was an increase in student numbers in the 1990s. However, the increase began in 1990, not when Labour came to power. The Executive claims, in its glossy documents, that the increase was down to the Labour Government, but it was not.
Just as the school performance of the bottom 25 per cent of pupils is flatlining, and just as pupils' attainment below higher level is flatlining, so the Government's performance in higher education is flatlining. The fact that a Labour document claims that student numbers have gone up and that access to higher education has increased under Labour from 40 per cent to 50 per cent, although it has not, shows us that the Government does not have a grasp of the fact that it is flatlining in its education performance. It is no wonder that Jack McConnell wants to introduce another arithmetic examination—he must want to check dodgy Labour claims. If he is responsible for this matter, we will be left with the bizarre sight of a mathematics teacher who cannot count.
The SNP believes that those from deprived backgrounds should have wider access to higher education. The Government says that it believes the same but, since 2002, it has managed to increase the number of students from deprived backgrounds in higher education only from 1,630 to 1,665. That grand total of 30 people is hardly anything to write home about—or even enough to put in an amendment. After nine years of Labour and seven years of Labour and Liberal Democrat rule, we should be seeing some results.
There is a debate to be had about participation levels in higher education. I think that the target of about 50 per cent is about right, given that other countries are competing for knowledge economy jobs in a fast-changing world where one's ability to learn tomorrow is as important as what one knows today. I should point out that the current 46 per cent participation rate includes people taking higher national certificate and higher national diploma college courses, which is probably why the rate was so high when Labour came to power after the Tories. Anyone who attacks such levels should consider that point.
Will the member give way?
No—I want to carry on.
The 50 per cent participation rate is made up primarily of people from the middle class. Perhaps many of those people might find more personal fulfilment if they pursued other opportunities instead of automatically drifting to universities. If everyone is to fulfil their potential, we need the brightest people in deprived communities to form more of that 50 per cent.
If the Government has increased neither the absolute numbers at universities nor the number of people from deprived areas going to universities, what has it done? Well, the state has created a mountain of debt that hangs like a millstone round the neck of students and graduates in their 20s and 30s and is a drag on the economy. In 1999, the average student debt was £2,500. Since then, that amount has been ratcheted up to an average £11,000 today, and it is rising even further as a result of back-end endowment fees that are added on at graduation.
Debt and the fear of debt put off exactly the sort of students from deprived backgrounds whom we want to get into university. Although the United Kingdom figure for university applications has risen, there has been a dip in the number of applications from Scots, particularly from over-25-year-olds with financial and family commitments. As a result, there are compelling education and social justice reasons to tackle the student loans situation, although the public finance and economic arguments, which my colleagues will set out during the debate, are just as important. The point is that the student loans and graduate debt system in this country is inefficient, expensive and a drain on the public purse.
What would be the annual cost of replacing the current student loans scheme with grants for all?
I am about to discuss that. It would cost £100 million.
The Conservatives have published figures showing that across the UK the public purse is shelling out £1 billion a year to subsidise the interest on loans, even though it has been estimated that 30 per cent of them will never be repaid. In Scotland alone, the cost of interest subsidies is £100 million. That figure does not even take into account the loans that Labour sold off in 1997. Scots have paid out more than £25 million—and indeed are still paying—to subsidise loans that have been sold off to banks in America and from which they will see no income. Even though they were based on a seven-year repayment model, loans are taking 13 years to repay.
The situation is so bad that, according to the Government's accounts, it has already written off £500 million of the debt. Indeed, the difference between the book value of the debt and its fair value shows that the Government itself expects not to get back a third of it. The Government says that the debt amounts to £1.4 billion, but it needs to look at its own accounts.
There is a serious concern about the growing debt culture in this country and whether individuals or the economy can sustain such debt. The Bank of England has warned that student fees in England will increase inflation. The SNP wants an education system based on the ability to learn, not the ability to pay. As a result, we want to stop the fundamentally flawed, expensive and unsustainable rip-off of the public purse that is the student loans system. It is clear that, in that respect, the public finance arguments are as compelling as the access to education arguments.
Parents and grandparents want their children and grandchildren to have the life chances that they never had, but they are horrified by the level of debt in which those children and grandchildren find themselves. Scotland in the 21st century needs a Government that is bold and imaginative, not tired and flatlining. It is time for a change to get the Parliament and the country moving. I say to the Labour and Liberal Democrat Government: move over, so that Scotland can move on.
I move,
That the Parliament recognises the opportunities made available to young people accessing higher education in Scotland and the importance to the Scottish economy of having a highly educated workforce; notes with concern, however, that debt and the fear of debt are having an adverse affect on Scots applying to universities; believes that access to university should be based on the ability to learn, not the ability to pay, and calls for replacement of the current expensive and inefficient student loans system by a fairer grant system and for the problem of student loan graduate debt, which is a drag on the economy, to be addressed.
I notice that we are still waiting for an answer to Murdo Fraser's question, but no doubt that will come during the debate.
I am happy to speak on behalf of the Executive in this debate on higher education. If I had to choose an area in which the Executive's record is indisputably strong, I would find it difficult to come up with a better example than higher education. I can at least thank the nats for that.
We have achieved something that many thought was impossible. We have helped our universities to preserve their international competitiveness while maintaining our policy of protecting the interests of Scottish students by not introducing top-up fees—or indeed any other fee.
The Executive has proven its commitment to further and higher education by investing strategically in our colleges and universities. Over the period of the current spending review, our investment will have increased in real terms by 23 per cent to more than £1.6 billion in the next financial year. That money goes directly into our institutions to cover the costs of maintaining our internationally renowned higher education sector and world-class colleges. We have allocated significant investment in research and teaching and, for the first time in decades, estates have been improved. Indeed, no one can enter a university campus without seeing the benefits of our capital expenditure programme.
Ms Hyslop's speech contained so many foxes that I find it difficult to decide which one to shoot first.
But the Executive has banned fox hunting.
I think that Mr Fraser will find that we are still allowed to shoot them.
That investment has funded significant growth in the sectors. In the 1960s, when opportunities to participate in higher education were limited, the participation rate in higher education was about one in six. That figure is now closer to one in two. Since devolution alone, the number of Scots entering degree-level studies has increased by 12 per cent.
At the same time, our institutions are becoming more and more accessible. It is an undeniable fact that more people from disadvantaged backgrounds now have the opportunity to enter higher education and are reaping the benefits of it. Since 2001-02, the number of students from low-participation neighbourhoods entering degree level study has increased by 18 per cent.
None of that suggests that students are being put off higher education by the prospect of student loans. In fact, it is clear that most young people recognise higher education's economic and social benefits, which is why they are prepared to invest in their future.
Continuing that growth and maintaining those opportunities are essential if Scotland is to meet the undoubted pressures of globalisation. Education and lifelong learning will contribute hugely to our future by providing a flexible, highly skilled workforce as well as the social benefits that accrue from wider participation in higher education.
However, such an objective does not come cheaply. By the final year of the current spending review period, our annual combined investment in our universities, colleges and students will stand at £2 billion.
Not that we have heard anything about them so far this morning, but I must say that the SNP proposals on student funding are fundamentally flawed. For a start, they are flawed financially. Far from costing £100 million, the full package floated by Nicola Sturgeon, who I notice has not been able to stay for the rest of the debate, would cost in the region of £1.7 billion.
The Executive has already written off a third of the debt and the current annual repayment income on the existing debt is only £29 million. Does the minister consider that to be a satisfactory state of affairs for public finance?
I do not deny that writing off student loan debt, replacing loans with grants and abolishing the graduate endowment—
So the Executive has written the debt off.
Of course we will write off bad debt.
In addition to writing off the existing debt, the SNP would have to write off the payments that previous graduates have already made to the cost of their loans. That amounts to £300 million. The total cost of the SNP proposal is not £100 million but £1.7 billion.
However, the proposals are flawed not only financially, but in principle. Student loans have been in existence for almost two decades, in which time participation has doubled. As I have said, there have never been more people from the most disadvantaged groups in higher education. The SNP proposal would not increase our already high participation rates, extend the benefits of higher education to those from the most disadvantaged backgrounds, support world-class teaching in our universities or help our institutions to provide students and staff with world-class facilities.
I will leave it at that, Presiding Officer, and return to the other issues in winding up.
I move amendment S2M-4788.2, to leave out from "recognises" to end and insert:
"applauds the substantial growth of investment and participation in the higher education sector in Scotland in the last seven years, the growing opportunities made available to young people and others wishing to access higher education in Scotland, the increase in participation rates in higher education of those from disadvantaged backgrounds over the same period and the vital importance of having a skilled and highly educated workforce to the Scottish economy; welcomes the facts that 72,000 students have benefited from young student bursaries since the reintroduction of student grants in 2001, that Scottish students have had their fees abolished by the Scottish Executive and that the Executive continues to oppose top-up fees, but notes with concern that the £1.7 billion costs of replacing all student loans with grants and writing off student debt threatens the continued success and expansion of higher education institutions and diverts effort and resources from encouraging wider participation from under-represented groups."
I have two thank yous to say to the SNP this morning. The first thank you is to Fiona Hyslop for giving us the opportunity to discuss the important issue of student debt. In so doing, I draw attention to my entry in the register of members' interests, which states that I am a member of the board of management of Dundee University Students Association.
The SNP is right to say that we have a difficulty with growing levels of student debt. I do not intend, in the short time available, to rehearse all the statistics, but we just need to look at the level of bankruptcies to see the extent of the problem. In 1997, only 31 graduates declared themselves bankrupt. In 2004, that figure was 1,541—a huge increase—despite the fact that student loans are exempt from bankruptcy, so those students must have acquired debts in other ways. No one would sensibly advise students to go down the bankruptcy road, but the sad fact is that some see it as the easiest way out of their problems.
It is clear that the current arrangements are not working. Our party has previously set out proposals to address the situation. We have to realise that the problem is not students borrowing under the student loans scheme, but rather students borrowing in more expensive ways by using, for example, unsecured bank overdrafts or, worse still, credit cards. Our solution is to extend the current student loans scheme and allow much larger sums to be borrowed, but at commercial rates of interest. That would still be cheaper for students than unsecured bank overdrafts and credit card borrowing, which are the areas of real concern as far as student debt is concerned.
As Murdo Fraser is probably aware, there is no evidence that significant numbers are running up commercial debts. We have evidence that 84 per cent of higher education students' borrowings are through the Student Loans Company, so how could they borrow commercially at a lower rate than they do from the Student Loans Company? Is not what Murdo Fraser proposes that they should pay more to commercial lenders?
The problem is that there are many students for whom the student loan is insufficient, so they have to borrow money elsewhere. Under such a scheme as we propose, they would pay a lower rate of interest than the rate that they pay to those other lenders.
I want to say a second thank you to Fiona Hyslop and her party for their extraordinary generosity this morning. The SNP proposes to scrap the student loans scheme and replace it with a scheme of grants, which it claims would cost £100 million a year, but we have not yet heard justification for those figures. Have we heard from the SNP where the extra £100 million—or however much it will be—will come from? No, we have not. However, Fiona Hyslop's generosity does not end there, because the SNP proposes to go further than that and write off the existing debt to the Student Loans Company of all Scottish-domiciled students, of whom there are 300,000. The latest figures from the Student Loans Company, which are for 2004, show the value of those outstanding loans as £1.47 billion. Even what is called the fair value—what the company thinks it can recover—has been assessed at £990 million, and that is going up year on year. So there we have another spending commitment, another splendid act of generosity, on the part of the SNP on behalf of the Scottish taxpayer, requiring a cool £1 billion-plus to write off all student debt.
You have one minute left, Mr Fraser.
I could say that such generosity is unprecedented but, given some of the other spending commitments that we have had from the SNP over the past three weeks, that would not be a fair comment. I am surprised that Mr Mather has not fallen off his chair at the thought of all the tax increases he will have to put through to fund that largesse.
Fiona Hyslop's generosity does not stop even there, because she proposes to go still further. The SNP is also going to pay the fees of all English students studying in Scotland. Has the SNP even costed that pledge? Has it thought about the implications of a flood of English students coming north to Scotland to study here, displacing Scottish students? Has it thought of the millions that that would cost? No.
The issue of student debt and the future of higher education is serious, and the questions about it require serious answers. Our party has put forward a serious package of proposals to help to address the problems. What is on offer from the SNP is not serious, credible or affordable.
You must close now.
It is an attempt to play to the student gallery, with no prospect of delivery. From a party that aspired to—
No. You must take my word for it. You must close.
Amendment S2M-4788.3 moved:
"leave out from ‘with concern' to end and insert ‘the growing levels of student debt and bankruptcies among graduates; believes that an extension to the current student loans scheme with larger non-means-tested loans available at low commercial rates of interest would reduce student reliance on unsecured bank overdrafts and credit card borrowings and provide additional funds for higher education, and calls on the Scottish Executive to introduce such a scheme in preference to the current unsatisfactory arrangements and unrealistic and unaffordable proposals to replace loans with grants.'"—[Murdo Fraser.]
Fiona Hyslop insinuates—indeed, she tells us—that tuition fees have not been abolished but have simply been deferred in the form of the graduate endowment, but she should listen to the hundreds of thousands of Scottish university students who have not had to pay a single penny of tuition fees over the past six years.
Not yet.
That is a fair point, but I think that the students would disagree strongly with Fiona Hyslop. My own three children have been to university and would be the first to agree with what I say.
The Parliament legislated for the graduate endowment to increase the amount of money that is available to support the most disadvantaged students in Scotland in meeting their living costs. However, Fiona Hyslop and other members are content to mislead anyone who bothers to listen by telling them that the graduate endowment is a tuition fee. The endowment would not cover even a third of the cost of an average Scottish degree, so that claim simply does not add up. It has been implied that there are no grants, but there evidently are, because more than 50,000 Scottish students were awarded a grant or bursary in 2004-05. The deal for Scottish students is superior to the deal for students in the rest of the UK for those reasons, and the English and Welsh are the first to tell us so.
I turn to the SNP's latest student finance policy. Fiona Hyslop hopes to pay off the full cumulative debt of Scottish graduates who have student loans, replace borrowed loans with free grants and abolish the student endowment, the cost of which we have heard will be only £100 million. It has been amply demonstrated by Allan Wilson and Murdo Fraser that that is absolute nonsense and that the question must be revisited. Conjuring with money does not work. Jim Mather is great at presenting us with his fiscal fairy, but this one ain't gonna wash. I issue a third challenge to the SNP to put flesh on the bones, because what has been said so far will not do.
Which other budget will the money come from? Will it come from the universities budget? Will our institutions face a spending cut? Could there be a cut in their competitiveness, as Murdo Fraser has suggested? To tell the truth, I am not aware what the SNP has pledged to our universities at all.
Nothing.
That may well be the case.
What of the proposal for grants, not loans? Is Fiona Hyslop aware that the poorest students currently have grants, not loans? Whom does her policy ultimately benefit? A key question is whether the grants that she proposes are to be means tested and, if they are, what will be left for those students who do not qualify for them but who want a little extra support if they cannot get a low-interest loan. Will they have to turn to the commercial providers, to which Murdo Fraser referred?
We are talking about paying off the debts of current and former students in Scotland. The nationalists' £100 million would not cover even 5 per cent of that debt. How long would the process really take? Where would the money come from? Would there be job losses at the Glasgow-based Student Loans Company? Those questions need to be answered.
The SNP has also said that it wants to make all education in Scotland free to all students. Here is the killer question: will the SNP pay the fees of English students? Will English students get grants, not loans? What about people who study part time? Students want to hear more than sound bites and conjecture from the SNP. They want no more of Jim Mather's "Jim'll Fix It" fiscal fairy. They want proper answers. I warn the SNP not to place a bid when it cannot pay up. That would be a cruel joke on our young people.
The Executive parties show little sign of having grasped the strength of the SNP's arguments in favour of reforming student support and widening access to higher education. The minister was at it again this morning, claiming that the SNP policy to abolish student loans and restore maintenance grants would cost the public purse billions of pounds extra.
I shall try to keep things simple for the minister, Jamie Stone and other members. Let us look at the relative costs of paying out loans rather than grants. The average grant level that the SNP proposes will be equal to the average loan currently paid out to students. There is no difference there, but surely foregoing loan repayments will mean that expenditure on student support will rocket? Well, no actually. That is because we will no longer need to pay out the current subsidy to keep loan interest down to no more than the rate of inflation. Last year, the Executive ingathered £29 million in loan repayments, but paid out exactly the same in interest subsidy.
If we take into account the £5 million that it cost last year to run the Student Loans Company, which we will abolish, a grant system will cost the public purse £5 million less than the existing loan system.
Will the member take an intervention?
No, I do not have time.
Those figures are robust and stand up to scrutiny. Indeed, our Conservative friends across the chamber have also twigged that the self-sustaining loan system that they envisaged back in the early 1990s, when it was introduced by Ken Clarke, has not come to pass.
Sit down, please.
Rather than remove the burden of loan debt from students, the Conservatives propose to cut public spending by privatising loans and removing the interest subsidy. We reject that approach because it would compound the difficulties that modern students face in getting rid of the debt that they incur in procuring a degree education.
Will the member give way?
I am sorry, minister, but I have only two minutes left.
We believe that society as a whole benefits from an educated citizenry and that higher education should be paid for through general taxation. If, indeed, graduates reap the reward of having higher incomes than non-graduates, they will pay back much more in higher taxes, providing that we maintain a progressive tax system.
When Ken Clarke abolished grants and introduced loans, he posed the famous question: why should the bus driver have to pay for the lawyer's education? I find that an illuminating question, in the sense that it clearly betrayed the mindset of the British elite. It clearly had not crossed Mr Clarke's mind that the lawyer in question could be the bus driver's son or daughter. The seamless transition from Tory to new Labour preserved that mindset and we have subsequently seen the imposition of tuition fees and top-up fees, which have heaped the costs of acquiring a degree on to students and their families.
Our Liberal Democrat friends across the chamber will claim that they have mitigated the worst excesses of the policy developments by insisting that the Executive goes down the graduate endowment route instead. However, they cannot deny that such a policy still increases the burden of student debt and acts as a disincentive to students from poorer backgrounds entering higher education at all.
The Liberal Democrats' colleagues down south share our concerns. I could not have put it better than did the Lib Dems' English education spokesperson, Sarah Teather, who said:
"It's extremely sad to think that there are intelligent young people out there who achieved good grades yesterday but won't be applying to university because of the cost."
She also said that when school leavers choose whether to go to university they are now more concerned about their ability to manage their debt than their ability to study.
I appeal to our Liberal Democrat colleagues that it is surely time to ditch that unholy alliance with Labour that so discomforts their principles. They should be looking forward to making common cause with like-minded people.
It is refreshing to have the chance to debate SNP policy. I wanted to do the party justice, so I had a look at its website. It has a promise today by the SNP's deputy leader under the headline:
"SNP makes ‘free education' pledge".
The article states:
"graduates will not start their working lives … burdened by debt."
So, what is that level of debt? Well, the SNP website tells us that it is £18,700 for each graduate. I have to say that both Ms Sturgeon and Ms Hyslop used a rather more conservative figure on television and in the chamber when they stated that the average graduate debt is £11,000.
Let us stick with the conservative figure of £11,000, forget all the past students and the historic debt, and just focus on the pledge of free education for today's students. What would it cost? There are 271,000 students in higher education. For some reason, the SNP is not concerned about further education students. Let us start with higher education.
I have particular concerns about the further education figures, which is why I am concerned that the numbers going into higher education—which includes universities and further education colleges—have flatlined under this Government, despite its claim that the numbers have increased.
Well, let us stick with higher education. The average debt of £11,000 for 271,000 students comes to a total of around £3 billion. Therefore, to meet the pledge of free education, the SNP proposes either to divert half the national health service budget in Scotland to those destined already to be the richest half of Scottish society, or it does not really mean to meet the pledge at all.
Actually, if we look at the small print that goes beyond the dishonest political posturing, we find that the promise is not for £3 billion and free education but for £100 million. That would be enough to clear the £11,000 debt of one in 25 Scottish students. Is the SNP suggesting that student unions should run a lucky dip to find the one in 25 who will have a free education? If we include further education students, one in 50 would benefit from the lucky dip.
What we have here is a piece of gesture politics, but it does tell us something about the SNP's political priorities. For the SNP, it is tough luck for the one in two students who do not go to university and for those whose modern apprenticeships are financed by Scottish Enterprise, the budget of which the SNP wants to halve. It is also tough luck for all council tenants, who are surely a more deserving case for the writing-off of historical debt in order to build affordable homes. They are surely more deserving than people such as Ms Sturgeon, who might herself have historical student debt imprudently left around. It is also tough luck for all those Scots who believe that our future depends on the strength of our universities, because most of the funding for universities in Scotland comes not from the Executive's core grants but from United Kingdom research councils, UK foundations such as the Wellcome Trust, and UK companies, many of which would be jeopardised under the SNP.
I said last week that I thought "Big Spender" was the SNP's recurring theme tune. There certainly seems to have been no change over the past week. If the SNP wants to be taken seriously, it must stop trying to buy votes, stop peddling free education for all when it means nothing of the kind and start engaging in a serious debate about how we widen access to Scottish universities.
I draw members' attention to my entry in the register of members' interests about my role as the rector of the University of Edinburgh.
I think that everybody in the chamber agrees that higher education is vital to the future of Scotland and that we need more young Scots to fulfil their maximum educational potential and go into higher education. I think that we all recognise the need for a smart, successful and sustainable Scotland. This debate is welcome, because it addresses one of the fundamental issues in the debate about higher education—who will pay for it?
Over the past 20 years, the burden of debt for students has increased and it has distorted access to higher education for young people. It has changed how people access higher education and how they approach it. When I graduated from the University of Edinburgh in 1994, I had £2,100 of student loan debt, which I found easy to repay over the following three years. However, according to figures from the National Union of Students, students leave higher education today with more than £20,000 of debt. We must recognise that that has a huge impact on students' approach to higher education. As Fiona Hyslop said, that burden affects not only the ability of the most debt-averse students to go into tertiary education but their choices when they do go into tertiary education, because they recognise that a huge burden of debt will hang over their heads.
Can Mr Ballard quantify exactly what that impact has been, given that the number of students gaining access to universities has doubled since 1990? In Scotland, access has increased by 12 per cent since 2000 and access by students from disadvantaged backgrounds has increased by 18 per cent over the same period.
I think that Fiona Hyslop answered the minister's question in her opening speech.
We have also seen a massive increase in the number of students who drop out of university. Debt is one of the key reasons why students decide not to continue their tertiary education.
We must be realistic about the amount of support that we offer students in the current system. At the moment, a student will get just over £4,000 in loan or in loan plus the young students bursary. For the average student in Edinburgh, rent and bills come to about £95 a week, which completely wipes out their loan and their young students bursary. We must recognise that we do not give students enough support.
Edinburgh University Students Association has just produced its education manifesto for the 2007 elections. Jamie Stone talked about listening to students. If members want to listen to students, they should read what students and student associations are saying, which is that students are not getting enough support and should be provided with better support. Students are not receiving enough help through concessionary fares, there is a lack of support for mature students and the cost of visas for international students has doubled. That is all part of the Executive's policy of heaping more debt and greater financial burdens on students.
If we want higher education to be the pride of Scotland and we want people to make the right choices in higher education, we as a society must support students rather than expect them to bear an ever greater burden of debt. That is why I will be supporting the SNP motion tonight.
I want to raise an issue that affects a specific group of students—part-time students. Not only is debt mounting for students in general—partly because of the graduate endowment, which is nothing short of a back-end tuition fee, and partly because of loans—but part-time students are being positively discriminated against. There is no enforcement of the Executive's policy that part-time students ought to pay pro rata, in spite of the fact that the issue has been raised regularly in the Parliament. As far as I am aware, the review of the present arrangements has not yet reported back.
Earlier this year, my colleague Alasdair Morgan asked the First Minister about funding for part-time students. Mr McConnell acknowledged that it was up to universities to set their own rates for such students, but said that a review was under way. In his concluding remarks, perhaps the minister could tell us how far that review has got and whether the existing, grossly unfair arrangements for part-time students will be rectified before this session of Parliament concludes.
In response to a letter from me about fee levels for part-time students, the university at which one of my constituents is enrolled as a part-time student said:
"we also take into consideration market forces."
That might be the kind of policy that members of new Labour, as worthy successors to the Tories, favour, but I thought that such a proposal would be anathema across the board in the Scottish Parliament. I do not want to find out that that is not the case.
Is the member able to confirm whether part-time students are covered by the SNP's pledge on free education? If they are, where is that costed in the figure of £100 million?
Along with a number of her colleagues—especially those in the Executive—Christine May is obsessed with the £100 million. She should give some thought to the loans situation. There is a major difference between repayment of a capital sum and repayment of a capital sum plus the interest on it. There is confusion even in the mind of a former Minister for Enterprise and Lifelong Learning about how long it will take to pay off the capital and the interest, how that will be done and how often payments will be made. The Deputy Minister for Enterprise and Lifelong Learning has implied that we have promised to repay the total sum in one year, which would mean that the £100 million would not be adequate.
Will the member give way?
Mr Adam, you are in your final minute.
No, thank you. I am responding to a specific point and I am in my final minute.
I am deeply disappointed that ministers and former ministers are unable to grasp the fundamental economic issues that are at stake or, as I suspect is the case, are being deliberately misleading. To service debt, one must pay it off, and one can do that over a period of time.
Will the member give way?
No, thank you.
Originally, the Executive might well have wanted students to pay off their debt within seven years—it looks as if that period could now be 13 years—but if a Government decides to consolidate that debt, it can choose over what period to make that repayment.
Will the member give way?
No, thank you.
We have made a commitment to provide £100 million a year, which will service that debt and the capital repayment. All students who are domiciled in Scotland will be covered by the £100 million.
I am always pleased to debate education issues. I agree with the SNP motion's recognition of the opportunities that education provides for a more fulfilling life, but that is where I part company with its sentiments.
I admit that, as a student, I would have argued that to ask students to contribute financially to their time at university was wrong because it would deter young people—particularly those from less affluent backgrounds—from taking up places at university. I am sure that many other members are in the same position. However, I must now accept—as must today's students—the reality of the situation.
When loans were introduced in 1990, there were around 138,000 students, but by 2004-05 that figure had doubled to 276,000. I admit that the increase in the number of students from low-income families has been less. I will come back to that.
Will the member give way?
In a minute.
I cannot give all the reasons why my original feelings on the matter have been shown to be wrong. One reason is perhaps that, as the SNP's deputy leader Nicola Sturgeon has admitted, parents and young people now recognise that a university education benefits the individual concerned. The increase in the number of students is a fact and it flies in the face of the SNP's assertion.
Along with many other members, I would like to hear more about how the SNP thinks that it could pay for the promises it has made. It seems to me that the SNP's absent leader Alex Salmond has decided that next May's elections are crucial to his future, so the SNP has spent the summer making promises that it does not know how to fund.
Let us consider how much it would cost to replace student loans by a fairer grant system and to address graduate debt. It would cost at least £1.7 billion to write off student loans. Who would pay for that? Would it be hard-working families, who would have to pay higher taxes, or would it be young people who have chosen to go to work? The SNP motion ignores the 360,000 people who go on to further education, although I know that my colleague Christine May will not.
Let us compare those uncosted promises with what Labour has delivered. We have abolished tuition fees, reintroduced student grants for the poorest students—there is sensible targeting for those who are most in need—and increased funding to Scotland's world-class universities. Almost 50 per cent of young people in Scotland are now in higher education, which is the highest figure in the UK.
What really distresses me about the SNP's position is that in trying to grab a headline on student grants, it has failed to look at the bigger picture. The fact that fewer young people from poorer backgrounds go on to higher education is not just to do with money. We must consider how we can help them. Is there a lack of confidence? Can we do more to encourage those young people while they are at school? Can we work with their parents to explain the benefits that higher education can bring? We must address the issue in another way. The SNP is shirking that task.
I look forward to many more debates on the huge subject of education, which offers great opportunities to everyone who becomes involved in it. I hope that the SNP will get in touch with the real issues, such as future investment in our universities, which face the challenge of variable fees elsewhere. We must think about how universities can continue to progress their research abilities and their links with industry. We need to consider drop-out rates and the additional pressures—including financial—that are being placed on young people as a result of the need to obtain further qualifications once they have obtained their first degrees. Education is crucial, and we should be taking it seriously, not just grabbing at soundbites.
There is no doubt that rising student debt is a real and important issue. There is also a moral obligation on us as legislators, in that we should not be saddling our future taxpayers with such levels of debt. I do not agree with Wendy Alexander when she says that we should not subsidise the richest people in society—that is not the issue. We have a system in our society called income tax: the more money one earns, the more one pays back to society. We are investing in our future—we should not be saddling people with huge amounts of debt.
Will the member give way?
No—unfortunately, I have only three minutes.
That said, we should congratulate the Scottish Executive on its measures so far. Over the years it has, in real terms, helped to alleviate the problems of student debt.
Will the member give way?
I cannot. I have only three minutes.
We have restored grants to the poorest students through the graduate endowment scheme. That is the point of the scheme; we have a better system than that in England.
I have two sons, one of whom is at university in Scotland and another who is looking to go to university next year, also in Scotland. Why do both of them want to study in Scotland? It is not because of any pressure from me. They know that when they leave university, their graduate endowment debt will be £2,000 and that, if they went south of the border, it would be at least £9,000. That is because of what we have done in the Scottish Parliament. I make the partisan point that, had it been left to the Labour Party, we would not have the graduate endowment. One has only to look south of the border: they have fees, they are sticking with fees and they are going to have top-up fees. That is wrong. There has been a real Lib-Dem input to what the Executive has done in Scotland.
That said, there remains a large measure of unfinished business. I would like us to tackle student debt even more than we have done. I was pleased to hear my party leader make it clear last year that he would prefer to see the Scottish Executive, and not our students, pay the graduate endowment in full. There is nothing wrong with the graduate endowment; it is a good scheme. The legislation makes it clear that it is designed to give grants to our poorest students. However, the problem with the scheme is that current students are expected to pay into it. In the first session of Parliament, we made the compromise that led to the scheme. By the time we reach the third session, I hope that we can do something to put that right.
I am surprised that there are not more members in the room rolling up for the great SNP giveaway. Not only would the SNP give away money from Scottish funds, it would deny Scotland the student loans funding that currently comes to us from the Treasury.
We have created a post-18 education system that allows people to learn. We have increased participation not only among school leavers, but by increasing the numbers of mature students and returners to learning in postgraduate and diploma courses, thereby upskilling our workforce.
I am disappointed that the SNP made so little reference to the important role that the college sector plays in higher education courses and in offering courses that lead to further qualifications. Is the SNP seriously saying that a higher national certificate that a single mum from Methil achieves is less important or relevant than a degree that someone else achieves from the University of St Andrews, the University of Edinburgh or any other university? That is exactly what it is saying.
Our colleges are flexible and cost-efficient providers of higher education. They do that for increasing numbers of students from disadvantaged backgrounds, thereby increasing the participation rate of students from those backgrounds in higher education. Our colleges are locally based, which means that travel—which is a significant cost for many students—is not the issue that it can be in respect of participation in university education.
Of course, post-18 funding for education is not only about supporting students; it is about supporting our institutions to be the best and about supporting their record of leading the UK in gaining research funding. That is what helps to increase the numbers of international students who come to study in Scotland. A recent British Council report showed that over 80 per cent of international students cited the quality of education, the quality of teaching staff, the facilities in Scotland and Scotland itself as major factors in attracting them here and in what they enjoy.
I have some questions for the SNP in my last seconds. They are questions that the SNP has not addressed and which turn the SNP's policy on its head. Why should the funding that we are putting in place for those who are not in education, employment or training be jeopardised in order to write off the debt of those who will be the highest earners in the country? Why is the SNP not saying that it will not write off all student debt, just some of it? The SNP plans to write off only the student loan debt—indeed, the Conservatives have a point when they talk in their amendment about the other expensive debt that students come out of education with. What about apprentices? What about the situation in countries that we aspire to emulate and whose economies are doing better than ours? Those countries have a mixed system of loan and grant. Their systems work; ours will work, too.
I apologise for not being able to stay for the rest of the debate. I have to attend a visit by Bell Baxter high school in the education centre.
Sadly, the debate has been less about student debt than it has been about arithmetic. I will come on to that later. First, I want to stress the positives. Scottish students have benefited from devolution. Thanks to the Liberal Democrats, they pay no fees and those from the poorest backgrounds have gained access to substantial grants. Scottish students graduate with significantly less debt than do their English counterparts. At the University of St Andrews, which is now one of the 10 top universities in the UK and number one in Scotland, 10 per cent of applicants now receive bursaries. That shows that students from disadvantaged backgrounds are accessing that institution. There has also been an increase in the number of Scottish applicants to the university. All of those things are positive gains that are thanks to the Liberal Democrats in the partnership Government in Scotland.
I turn to the Opposition. We have not heard much about the Tories' amendment this morning. Let us look at their proposal. The Tories propose to solve the problem of student debt first by allowing students to borrow more and, secondly, by charging them higher interest. That seems to be it.
What about the SNP? I turn to its arithmetic. The problem for the SNP is that its sums do not add up. In effect, the SNP is saying that it can write off existing debt at no cost.
In "Grants Not Loans: Supporting Students—Fair, Just and Enterprising", which Fiona Hyslop published in August 2004, she said:
"Perhaps the simplest way of thinking about this would be to consider how it would work if this was a person-to-person loan. If you lend £10 to a friend with the implicit expectation that this will be repaid but later decide not to accept the repayment, you are not having to pay out another £10 to cover the money already loaned, but you have to forgo your ‘asset'."
So, that is it—nice and simple. I will go to my bank tomorrow and say that I do not have to pay off my mortgage because the bank has already given me the money and it does not need it back. It is another example of Mather maginomics—more of the fiscal fairy dust that we get from the SNP. The debt will just fall down the SNP's funding gap.
Let me just talk a little about the SNP funding gap. In "Scotland In Surplus", which the SNP published in July, the SNP indicated that Scotland would have £4.3 billion surplus. On 7 August, Alex Salmond said that the SNP had, of course, based its figures on a world oil price of $65 and that, as the price had increased to $70 since April, the surplus had risen to £5.3 billion. I checked the world oil price this morning, and it is now down to $63 a barrel. In less than a month, the SNP has lost £1.4 billion of its alleged surplus. That is hardly a way to run an economy. It is Mather maginomics and it does not add up—[Interruption.]
Order.
The only thing that is bigger than the SNP's funding gap is its credibility gap.
However, members should not worry if the SNP's student funding policy does not add up; there will be another one along in a minute. The SNP has had nine policies in the past nine years. In 1997, the SNP was calling to replace student loans with 100 per cent grants. In 1998, it accepted that it could not fund that commitment and dropped the proposal. In its election manifesto in 1999, it pledged to make a grant of £500 to the poorest 20,000 students. By 2000, the amount pledged had gone up to £1,500 for 66 per cent of the student population. By 2001, it was Cubie plus, whatever that was—nobody could really work out what it meant, including the SNP.
By 2003, the SNP did not really have any policy at all. There were no costings, no specifics and no ideas in the SNP's 2003 election manifesto. In 2004, the SNP made up for that with all sorts of bizarre ideas. To cap it all, it supported the proposal of higher fees for English students studying medicine in Scotland. There was, of course, a U-turn on that policy in 2005. Now, in 2006, the SNP is going to pay off all graduate debt, abolish graduate endowments, give out loans for free and fund all English students to come here and study in Scotland for free—all for £100 million. Parliament is not fooled, and the students of Scotland will not be fooled either.
Today's SNP-sponsored debate allows us to reflect in nostalgic fashion on the way things were: a world in which there were no tuition fees; a world in which there were student grants; a world in which there was a massive and sustained increase in the number of young people going into higher education, from 70,000 to 240,000; a world in which the number of universities in Scotland increased from eight to 13. In short, we can reflect on the halcyon days of Conservative Government.
Can it be that it was all so simple then? Yes. If we had the chance, would we do it all again? Yes, we would. But could we? Could we do it in relation to student support? It would probably be very difficult to replicate the way things were in 1997. Even at that time, the financial strains within higher education were beginning to show, and the Conservative Government established the Dearing and Garrick committees to review higher education funding and student support.
Sadly, we do not know what a Conservative Government would have done with those committees' recommendations, but we certainly know what happened when the Labour Government received their reports: out went grants and in came fees. Although, in a classic piece of Liberal Democrat duplicity and sophistry, it is now called a "graduate endowment", we still in truth have a form of fees in an accumulated debt, which is repayable on graduation at a marginal tax rate of 9p in the pound.
The Scottish National Party wants to take us back to the way we were. In principle, and if it is affordable, that is not a bad thing. I was the beneficiary of such a system—I paid no fees during my four years of studying law at the University of Edinburgh. My father was not one of Adam Ingram's bus drivers, but I qualified for a grant that enabled me, when it was supplemented by income from vacation jobs, to graduate without the burden of debt that weighs heavily on so many young people today, a fact that we must accept.
The plain fact is that the SNP's policy is simply not affordable. Its members say that they can take us back to a world in which there are generous grants, no fees, no loans, no graduate endowment and a massive £1 billion accumulated debt write-off. They expect us to believe not only that that is one of their priorities, but that it can be financed out of the Scottish block grant. Having promised the earth to students and graduates, the SNP then trots out Mr Mather—a cross between a bank manager and a business guru—to tell us that, at one and the same time, the SNP will cut business taxes. Its policy simply does not add up and it is simply not credible. I congratulate Wendy Alexander and Iain Smith on their contributions to the debate—they should go into business as demolition contractors.
The SNP's policy would divert valuable resources from the task of educating our young people to that of maintaining them. It ignores the fact that, notwithstanding the changes that were made to student support in 1998, the number of people in higher education has continued to increase. The policies that the SNP has outlined today are the sort of policies that Labour politicians used to advocate before they got into Government and learned to count. The SNP has never learned to count. Today, it has shown that it never will. It remains a party of incorrigible spendthrifts.
I suppose that I should declare an interest. I have a son who is at university. Interestingly, he is the first in his family to attend a higher education institution.
I wish to address what David McLetchie had to say and address a question that was posed by Mark Ballard, Wendy Alexander, Mary Mulligan, Mike Rumbles and other members about who would pay for this latest SNP folly. The grim truth of the SNP's position is that it would mean that Scotland's modest-earning and hard-working families would pay to send Scotland's better-off teenagers to university. As David McLetchie said, that was the case back in the halcyon days of so-called free education. It was only the numbers that were involved then that made that a comparatively good thing. The reason why the SNP has no numbers in its motion is that the numbers are now the moral issue.
If we go back 40 years—I am perhaps doing David McLetchie a disservice—to the grants system, one in six Scots youngsters left school and went on to higher education in the 1960s. If we strip out the better-off people, who were then dominating higher education, only one in 12 ordinary working families sent their youngsters to uni at that time. In the 1960s, for every one ordinary working family whose offspring went through a university gate, another 11 working families were paying the taxes that paid the grant. Even then, it was probably the middle classes who were the true beneficiaries of the system. It was clear, however, that those 11 families were relatively content to pay the taxes because they knew that, one day, their kid might also go to university, as mine does now. Today, the figure is one in two or thereabouts. The universities are now full of ordinary working families' offspring.
Everyone has the ability to learn, whether they go to university or not, but university access is not universal.
Does the minister agree that, when Labour came to power, only 8 per cent of university entrants came from deprived backgrounds and that the figure has gone up only to 8.6 per cent? There is a huge challenge left unmet.
Of course there is a challenge to meet—I am telling the SNP how to do it. We have increased access for young people from disadvantaged backgrounds by 18 per cent in five years. That is why it would not be fair to heap all the cost of higher education on the half of the population—or thereabouts—whose sons and daughters will never see the inside of a university but who nevertheless make an equally valuable contribution to our economy by learning vocational skills, going into employment and creating the wealth that enables us to run world-class institutions, as well as running our service industries.
There has been a lot of hype about the SNP's first 100 days and what it would do in the unlikely event that it ever had the opportunity to manipulate the levers of power. We now know what it would do: it would abandon the policies that would have got it there in the first place. Fifty days ago, Nicola Sturgeon told the Scottish people—by news release—that she would reinstate so-called free education: she would get rid of the graduate endowment, and abolish student loans and replace them with grants. She would also write off existing graduate debt from student loans. That suggests a number of questions today, only 50 days on. If those commitments are good enough for the SNP's press releases, why are they not good enough for its parliamentary motion? If the SNP is promising free education for all, why on earth does it not say so in its motion? If the SNP is not promising free education for all, why did it issue a press release saying that it was?
SNP members seem to work on the principle that if they can fool enough of the people for a few more months, they might get away with it. They seem to have fooled the Greens, but trying to deceive young people into believing that they are going to get or be offered something that they are not in fact going to be offered is, dare I say it, a pretty low trick.
Let us get this on the record once and for all. Does the SNP stand by the promises in its press release? If it does, the rest of us could get on with the serious business of costing those promises. I can tell the SNP now that they would cost £1.7 billion. We currently pay grants, bursaries and fees. The Treasury in effect pays the loans. The SNP might save £80 million in write-off subsidy, but it would have to pay the additional £150 million that it would cost to transfer loans into grants and write off the historic debt.
Has the SNP cynically sought to mislead the young people of Scotland and their parents with its hype and spin or with sleight of hand? It has to answer those questions today—I now give the SNP the floor to do so.
This has been a useful debate. It has flushed out the scare tactics of unionism and has proved that unionism weds people to the idiots' guide to the free market. It makes them fail to see education in the full context of our economic well being and limits them to a zero-sum mentality. On top of that, unionism seems to make people unable to tell the difference between debit and credit and between capital and revenue—everything is conflated into a scare scenario.
In seeking to bring clarity and common sense to the debate, I look to Ian Bell who, in The Herald on 17 June, asked since when education was ever free. His contention, like ours, is that if we had an efficient and fair tax system, our education could be paid through taxes. That would go really well. Mr Bell, unlike Jamie Stone, knows that one can change the term "fee" to "endowment" and still end up with a debt that further inhibits participation in university education for deprived kids.
Will the member take an intervention?
Mr Stone should sit down. The canards are about to be shot. Like us, Ian Bell argues that loading youngsters with debt in the prime of their lives offers them a perverse incentive. Like us, he knows that skilled graduates in a properly run and vibrant economy will more than pay their way in the tax system and will start businesses and generate effervescence and vibrancy in our economy.
Where are we today? This week the chairmen of Scottish Enterprise and the Confederation of British Industry Scotland called for higher levels of economic growth, telling us implicitly that the current rate is not good enough and that we have to do something different. Is this Executive of ours so wedded to loans and inefficient management of financial and human resources that it now acknowledges that it cannot run efficient systems or generate economic growth? The Executive is retaining the current system because it no longer believes that it can retain our best and brightest people.
Will the member take an intervention?
The minister has laid enough canards for me to shoot down. I will just crack on.
Let us consider the unintended consequences of the loans policy. The doubts that have been cast on the SNP's probity come from the idiots' guide to the free market. Adam Ingram defended our probity wonderfully and robustly. On top of the unintended consequences of the loans policy, we face the cost of fewer capable youngsters from lower-income backgrounds getting into university. There has been a marked increase in part-time work and bankruptcy among those young people: Murdo Fraser's solution is to bring in the free market, to let them borrow more and then to unleash higher rates of interest on them. That means that home ownership, marriage, families and business start-ups will be delayed and migration will accelerate, all of which will depress our economy. Wendy Alexander's speech was another argument that does not withstand audit.
Throughout the debate, various costings of the SNP policy have been postulated: £1 billion, £1.7 billion and £3 billion from Wendy Alexander. How much does the SNP think the policy will cost and where will the money come from?
It will cost £100 million per annum. Murdo Fraser should look at our website and our aspiration to move this country off 1.6 or 1.7 per cent to 3.5 per cent economic growth, which is now subscribed to by Melfort Campbell and John Ward, both of whom are putting themselves on the right side of history, unlike the Tories.
Members can all sit down. They have flown their canards—now let us see them shot down. Jamie Stone should be ashamed of himself because, in essence, the policy that is in place has a perverse and duplicating effect on his constituency and the rest of the Highlands and Islands. More and more people who are further away from universities and are on lower incomes are caught in the trap.
Members can sit down. I am listening to none of them.
We contend that Scotland should reinstate free education, recognise that educated people pay more taxes and not slavishly follow America. America is not right about everything. We are in danger of making education totally commercial. That is confirmed when we see how, in the classless United States of America, potential wealth increasingly dictates life chances and educational choices. We do not want that in our Scotland.
The reality is that we can build economic muscle and we should all be looking to challenge the retention statistics of Scottish graduates. I talked to representatives of Scottish Financial Enterprise—two chief executives ago—who told me that they reckoned that at least 40 per cent of our graduates leave Scotland. That figure increases in respect of the better universities and the more advanced courses.
When I asked Professor Jim Love of the University of Strathclyde what percentage of his economics graduates leave to follow their long-term careers outside Scotland, he said 70 to 80 per cent of them do, which is a shocking statistic.
The case has been made. Scotland's economy needs its graduates: they have to stay here. The SNP policy will provide for that. I support the motion.