Student Hardship
Good morning. The first item of business is a Labour Party debate on motion S3M-4188, in the name of Claire Baker, on student hardship. We have little flexibility on time—I stress the word "little".
We know that the Scottish National Party promised much for students in its manifesto but has delivered far short of that. Promises easily made during an election campaign have been dumped in government. Little has been done to boost student support or to tackle hardship among the poorest students in Scotland. Students have criticised the Government's limited actions for the same reason. Gurjit Singh, the president of the National Union of Students Scotland, said recently that abolishing the graduate endowment had had
"little impact on the day to day life of students and does nothing to tackle the issue of financial hardship students face while studying."
Billions of pounds-worth of promises have been boiled down to £30 million for student support next year. That sum, which was announced in the comprehensive spending review, must be the most debated pot of money in the history of the Scottish Parliament. There has been a protracted bidding process that has set poor student against poor student. Worse still, we have £12.5 million of efficiency savings in the student support budget—a means test change that has cut the support of tens of thousands of students halfway through their degree—and recent changes to the education maintenance allowance that will impact heavily on college students. It seems increasingly that, with the £30 million, the SNP is just giving students their own money back.
There is a missed opportunity in the Government's proposals for how the money should be used. Even the most generous option would increase student support by only a few hundred pounds. The proposal by the Association of Scotland's Colleges, too, does not go far enough. I welcome the focus on college students, who are often forgotten in discussions about higher education, but I have two main concerns about the ASC's proposals. First, its research does not distinguish between Government loans and commercial loans. Secondly, the proposal does not address student hardship, which is as much a concern in colleges as it is in universities. In March, the Parliament rejected the proposals outlined in the Government's consultation because they failed to address the issue adequately.
Students say that although graduate debt is a concern for them, not having enough money to live on is a bigger problem, which the SNP is failing to address. The SNP needs to swallow its pride. Students are being forced to choose between fuel and food, books and bus fares. The poorest are increasingly saddled with credit cards, bank loans, overdrafts or even loan sharks, as part-time work and parental contributions dry up. Student hardship is the real issue.
The SNP is not doing much to address Scotland's high drop-out rate. Boasts of the return of free education ring hollow for students who are struggling to get by and have been pushed into commercial debt by a student support system that is no longer fit for purpose. It is no wonder that the patience of students at colleges and universities across Scotland has run out.
Since the previous debate on student support, the NUS, student leaders from colleges and universities across Scotland and all three main Opposition parties have signed an open letter to the Cabinet Secretary for Education and Lifelong Learning demanding a new direction from the Government and delivering a wake-up call to the SNP. The letter agreed joint principles: a minimum income of £7,000, or as close to that as possible, for the poorest students; focusing available resources on tackling student hardship, not graduate debt; increasing the availability of student loans; addressing students' continuing reliance on commercial credit; and increasing the funds that are available for hardship and child care funding, while looking at the potential for reform.
Claire Baker implies that the Labour Party would make extra resources available. Given the cuts of £500 million that are coming next year, would she raise extra resources by reintroducing the graduate endowment tax?
The proposals that the main Opposition parties have put forward, which are supported by the NUS, are covered by the £30 million in the 2010-11 budget—they require no additional resources from the Government. Scottish Labour, with the other main Opposition parties, has taken forward the principles that I have outlined and presented alternatives to the Government's proposals.
This is an opportunity for the SNP to work with a ready-made cross-party majority in the Parliament, and a consensus among students, to deliver for the poorest students in Scotland—investing in the short term, through this economic downturn, to invest in the long-term future of Scotland.
I acknowledge and welcome the difference in tone in the SNP's amendment. Although initially alternative suggestions to the Government's position provoked calls of "Grow up" to the students—and, possibly, the Opposition—there seems to have been a period for reflection. The amendment suggests a more sensible, perhaps even pragmatic, approach, which is to be welcomed. However, while the Labour motion makes clear that there are key principles that the Government needs to take on board, the Government's amendment does not recognise that.
I would like today's debate to be constructive. To that end, I would like to hear from the SNP three things that are not contained in its amendment. I hope that Fiona Hyslop will address each of them in her speech. First, I would welcome a cross-party dialogue on tackling student hardship, with an urgent meeting on the subject, if the cabinet secretary is willing. Secondly, I would like the SNP to agree to the joint principles that were outlined in the open letter to Fiona Hyslop, which was signed by students and the main Opposition parties. Thirdly, I would like to work with the SNP on Scottish Labour's and the other main Opposition parties' proposals for tackling student hardship.
The position of Scottish Labour and the other main Opposition parties is that existing resources should be used to provide a £7,000 income—as called for by students throughout Scotland—for 20,000 of the poorest students, including more than 6,000 college students, to take them over the poverty line; an increase in grant of £500 for the poorest students; an increase in support of £200 for all students, through non-means-tested loans; and investment of nearly £2 million in hardship and child care funds, which have been stretched to breaking point across Scotland this year.
By giving the poorest students the choice of a mix of loan and grant that suits their circumstances, the proposals would allow those students who do not want to take up the full £7,000 entitlement to choose to take a lesser amount in grant, close to halving their graduate debt. We would be treating students like adults—the choice would be theirs. The proposals are affordable, achievable and fair, would reduce hardship and would help many through the economic downturn.
Scottish Labour will not support the Liberal Democrat amendment, despite our agreement on many aspects of student support. Although I have sympathy for the idea of a minimum income, it is not realistic or achievable in this session. Furthermore, we cannot sign up to a policy that has not yet been costed.
We will not support the Scottish Government amendment. I recognise that it represents an olive branch, but I was hoping for a white flag to be waved not at any party represented in the chamber but at Scottish students, recognising that their views will be listened to and acted on, not fought against.
Will the member give way?
I am sorry, but that was my last sentence.
I move,
That the Parliament calls for a cross-party approach on tackling hardship among the poorest students in Scotland; believes that students have been severely let down by the SNP's broken promises, actions and inaction in power; further believes that the Cabinet Secretary for Education and Lifelong Learning's efforts have been misplaced in focussing solely on reducing graduate debt rather than student hardship while student demand for hardship and childcare funds increases, commercial borrowing among students continues and student support levels in Scotland fall far behind the rest of the United Kingdom; notes the open letter to the Cabinet Secretary for Education and Lifelong Learning signed by NUS, the main opposition parties and student leaders across Scotland calling for the Scottish Government to increase levels of student support through increased loans and for a new direction from the Scottish Government; further notes that on the 12 March 2009, through motion S3M-3675 as amended, the Parliament rejected all of the proposals contained in the Supporting a Smarter Scotland consultation, which closed in April 2009, for not adequately addressing student hardship, and calls on the Scottish Government to work with the main opposition parties on their joint approach to tackling student hardship by using the available resources to provide £7,000 in support for the poorest students, a £500 increase in grant for the poorest students, an increase in support of £200 for all students through the non-means-tested loan and almost £2 million to discretionary funds for childcare and hardship funding.
The Government has introduced a number of policies to address student hardship. We have abolished the graduate endowment fee, benefiting more than 50,000 graduates and students by saving them around £2,300 each. We have introduced a £38 million package of grants for part-time learners, benefiting up to 20,000 students a year. We are providing £16 million a year to institutions to alleviate student hardship. Because of the combination of those actions, for the first time since devolution the average student loan debt fell in 2007. In 2008, it stood at £5,354, compared with £9,580 south of the border.
In the four years from 2003 to 2007, the previous Administration made improvements to higher education student support totalling £22 million. I repeat: £22 million. In the two years that we have been in government, we have already provided double that amount—more than £44 million—to make specific improvements to higher education student support. Based on their track record, seeing the Labour Party and the Lib Dems competing with each other to be the students' friends, with duplicate motions in the space of weeks, is a bit like watching two bald men squabbling over a comb.
In addition to the £44 million that I have mentioned—double the £22 million that the previous Administration set aside—we have set aside £30 million to implement the results of the consultation.
Does the cabinet secretary accept that the vast majority of the £44 million to which she referred is spent on tackling graduate debt, not student hardship, which is the subject of this morning's debate?
I make clear that the previous Administration spent £22 million on student support, whereas we have spent £44 million on student support. I will explain to Claire Baker some of the steps that we are taking to tackle student hardship, in particular.
On top of all the provision that I have just talked about, we now propose to set the interest rates for student loans at 0 per cent or lower.
Lower?
That will ensure that student loan borrowers will not see an increase in the value of their debt. Indeed, some of them will see a decrease. Many MSPs have written to us on that point.
I am sorry, but can the cabinet secretary explain how there can be an interest rate lower than 0 per cent? Are we going to start paying money back to students?
I am more than happy to write to the member about the issue. We think that it is correct that when the inflation figures are as low as they are, if a level of 0 per cent is required, we will pay it, to ensure that students and graduates pay less or see their debt value decrease. If graduates have to pay less or if their loan debt is reduced, it should we welcomed across the chamber.
We have increased student discretionary funds from the £14 million that we inherited from the previous Administration to just over £16 million this year, of which £4.7 million is specifically for higher education child care funds. That is a rise of 14.6 per cent. Higher education discretionary funds are intended to assist students who are in financial difficulty and at risk of not completing their course. They are not—and never were, under the previous Administration—intended to be anything other than a contribution from Government to help institutions to meet genuine cases of hardship.
In addition to the higher education discretionary funds, the Scottish Further and Higher Education Funding Council is providing an additional £6.7 million—a 9.3 per cent increase—to help colleges respond to the increased demand for further education student support in the current climate. I think that a 9.3 per cent increase is to be welcomed.
Scotland is in a recession, and we are facing unprecedented cuts in our budgets. Westminster is taking £500 million out of the Scottish budget in 2010-11. We expect continued pressures over the next few years, which will shape the context of all future spending decisions across every portfolio. Extremely difficult decisions will have to be made.
Will the cabinet secretary take an intervention?
I have already taken an intervention from the member.
I acknowledge that recessions also have an impact on students. However, I assure the Parliament that student support and tackling student hardship will remain a high priority for the Government. "Supporting a Smarter Scotland: A consultation on supporting learners in higher education" closed only three weeks ago. I had hoped that the Opposition parties would give us due time to analyse properly all the responses that we have received before demanding that we make a decision. Those parties might consider the terms of our amendment, which reflect the exact wording that the three other parties used barely three weeks ago. That gives some indication of our acknowledgement of their position.
The options that were set out in our consultation represented our thoughts on the best way to proceed. The consultation asked:
"Are there any other initiatives or ideas that you believe we should explore further?"
That is a clear statement that we are open to and happy to consider different ideas and that we will work with others to investigate the potential implications. That includes co-operation with the other parties in the Parliament. I hope that that addresses Claire Baker's questions.
The motion reflects the views and opinions of Labour, Liberal Democrats and the Conservatives in the Parliament, as expressed in a similar motion on 12 March. In our amendment, the Government clearly acknowledges and recognises those views of Parliament. I hear the message loud and clear and acknowledge it: the Opposition parties oppose and will oppose replacing loans with grants, and they want the Government to boost income levels for students by increasing debt levels.
I call on Labour, the Conservatives and the Liberal Democrats to work together to deliver specific and fully costed proposals to tackle student hardship. Within the context of the recession, which affects students as well as the economy, and reflecting the difficult financial situation that has been forced upon us, the Government agrees that we need to work together to come up with solutions to tackle hardship, and we will do so.
I move amendment S3M-4188.2, to leave out from first "calls" to end and insert:
"notes the proposals from Scottish Labour, the Scottish Conservatives and the Scottish Liberal Democrats contained in their responses to the Supporting a Smarter Scotland consultation; notes motion S3M-3675 as amended whereby the Parliament called on the Scottish Government to tackle student hardship, and calls on the Scottish Government to work with all political parties to deliver specific proposals to tackle student hardship, particularly during this time of recession."
All contributions should be around four minutes from now on, please.
We have been shocked this morning by the minister's bald comments—but, sporting her fancy new haircut, it is no wonder that she is fixated on hair. What we wanted to be fixated on is student hardship—that is the focus of today's debate. The cabinet secretary is right to point out that we have had a couple of debates on the issue in a matter of a few weeks. That is a reflection of the fact that we all take it seriously.
There are a number of reasons to be concerned about the Government's recently completed consultation on student support. At certain points, there seemed to be totally unnecessary fight picking with the United Kingdom Government on student support, and there was a predictable attempt to blame other parties for the Government's failure to decrease student debt, which it had gone around Scotland promising Scottish students it would dump completely. There has also been a totally inadequate attempt at a minimum income guarantee.
What I found most concerning was the Government's apparent ignorance of the serious and worsening financial situation that Scottish students currently face. Living costs have risen significantly, but the average award payments from the Student Awards Agency for Scotland have not. Rents for students have increased, too, and in many key places they look set to continue to increase. Food prices have risen, and part-time and temporary jobs for students are increasingly hard to come by, with the careers service at the University of Edinburgh reporting a 20 per cent drop in the number of positions advertised. Those who can find work might find their hours or income reduced as businesses cut back on costs; those who rely on tips might find that they are reducing, as customers count the pennies when they go out for an evening meal. Meanwhile, students' parents and families are under more financial pressure, and they might be less able to help out than before.
All of that combined means that more and more students are living in hardship during their studies, yet the Government still wants to talk about its grand plans to make all students debt free—albeit at a rate of just £30 million a year, whereas the SNP's election pledge to drop student debt would have cost £2.5 billion. The ignoring of student hardship in the Government's proposals is particularly worrying. In the face of cross-party, student-supported alternatives that would actually reduce hardship, I find the cabinet secretary's response—to tell students to stop complaining and to grow up—quite inappropriate. However, I am heartened by her comments on the record today and by the tone of the Government's amendment.
With the support that is currently provided, students are forced to live below the UK poverty line. How can the SNP claim to support a smarter Scotland if the annual income of an individual moving from benefit to education would drop by nearly £2,000? Higher education, and education as a whole, are far too important for us to get this wrong.
We have a good track record, in government and opposition, of supporting students and of funding higher and further education. Our amendment to the Graduate Endowment Abolition (Scotland) Bill meant that the Government had to include consideration of something that had been a long-held policy intention of the Liberal Democrats: a minimum income guarantee for students.
Will the member give way?
No. The minister is well aware of our support when it comes to scrapping the graduate endowment. We are committed to moving towards an annual income of £7,000 for Scotland's students, made up from a combination of grants, loans and parental contributions. It is unacceptable that the Scottish Government is prepared to leave students in poverty, but we accept that, with the limited funds that the Government is offering and the budgetary tight squeeze that we are all facing, we cannot deliver that income for all students with the money that is being allocated for 2010-11. However, while we accept that the income guarantee has to be an aspiration, it goes in the right direction of travel.
We also accept that our position is not shared by other parties in the Parliament, although it is held by key organisations such as the NUS and the British Medical Association. That has not prevented us responding to the consultation, through joint proposals with the Labour and Conservative parties. Over the past few months, I am pleased to say, I have worked with Claire Baker and Murdo Fraser to find a better way forward for Scotland's students. We remain happy and willing to pull up another chair for Fiona Hyslop any time she wants to join us.
The Opposition parties are clear: we can make the £30 million that is available go further than the Government's loans-to-grants option. We want to help the poorest young students—those who receive the young students bursary—to achieve the minimum income guarantee of £7,000. We all stand ready to work with the Government if it is willing to consider alternative solutions.
What are we calling for? We want a £500 increase in the grants for the poorest students, meaning a £7,000 income for them, through increased grants and an increase in the student loan entitlement. Interestingly, our consultation response produced the idea of giving students a choice in what they do—whether to have extra grants or to take extra loans.
Could you close, please?
We are talking about young adults. We also want there to be an increase in support through loans for all students, because we recognise that all students are struggling at the moment. We want an extra £2 million to be put into discretionary funds.
You must close, please.
This is a very important issue. We stand ready to work with members from all parts of the chamber to tackle it, and to tackle it properly.
I move amendment S3M-4188.1, to insert at end:
"and agrees that the Scottish Government should make further progress towards the provision of an adequate minimum income guarantee for all students."
I am pleased to speak in support of Claire Baker's motion, which represents the joint position of Scottish Labour, the Scottish Conservatives and the Liberal Democrats.
I congratulate the Cabinet Secretary for Education and Lifelong Learning on her stylish new look—she looks sultry sitting on the front benches. Unfortunately, the look might be new but the SNP Government has the same old policies. Its record on student hardship has been utterly woeful. Lest anyone needs reminded, let us recall that, during the most recent election campaign, the SNP was to be found on campuses throughout Scotland promising to dump the debt. Many students—and, for that matter, many parents of students—took it at its word and voted SNP as a result. As they now know, they were victims of a cruel delusion. The SNP pledged to replace loans with grants and wipe out student debt, which it has singularly failed to do. It has not even brought properly costed proposals for implementing that manifesto pledge to the Parliament for members to scrutinise.
Perhaps students have no one but themselves to blame for that sorry state of affairs. I well remember being on a hustings panel at the University of Stirling last year with Claire Baker, Margaret Smith and Christopher Harvie. It is sad that Professor Harvie is not in the chamber this morning because, when he was challenged at that meeting on the issue, he said on behalf of the SNP that students should not have been so naive as to believe that a political party should be expected to deliver in government something that it had said in its manifesto. So there we have it: the official SNP response is that we cannot believe a line in its manifesto.
Student debt is a serious issue but, right here, right now, student hardship is a greater one. That view is supported by the student representatives in the NUS and universities throughout Scotland. Many students who previously supplemented their incomes with part-time employment find that, due to the economic downturn, they are unable to get jobs or, as Margaret Smith pointed out, the income from their jobs has fallen.
I point out that Murdo Fraser's last statement goes against his manifesto commitment that students would be able to borrow as much as they liked because they would have increased earning potential in future years.
No, it does not contradict it at all. Over their lifetime, students will earn more money, so we should allow them the opportunity to borrow more money from the Student Loans Company—especially if they get interest rates of less than 0 per cent, which would be a very attractive prospect—rather than having to borrow money, if they can get it, at high interest rates from commercial lenders or, even worse, on credit cards. That is what they do at the moment, and it causes real hardship.
The SNP Government's response to the matter in its consultation paper "Supporting a Smarter Scotland" is, unfortunately, inadequate. The Cabinet Secretary for Education and Lifelong Learning would rather use the available money to switch loans to grants for a small minority of students. In fact, what students need now is greater access to student loans—a secure and inexpensive way of borrowing—to protect themselves from hardship.
In our response to the consultation, the Scottish Conservatives adopted the approach that the £30 million that has been allocated should be used to reach a £7,000 minimum income for the poorest students; to increase by £200 the amount that is available to all students by means of the loan; and to invest an extra £2 million in discretionary funds to alleviate pressure on hardship and child care funds. That targeted approach would provide help to all students but focus on the poorest. It has the support of the three Opposition parties in the Parliament and of student representatives, so I hope that the Government will pay serious attention to it.
I do not know whether Murdo Fraser is aware that, in 2009-10, the Scottish Further and Higher Education Funding Council will provide an additional £6.7 million to help colleges respond to the demand for child care from further education students. Murdo Fraser is right to identify that issue, but there has already been some movement on it.
I welcome that clarity from the cabinet secretary because, as she knows, I have received a great deal of correspondence on the issue.
The Government amendment strikes a more conciliatory tone than we have heard previously, which I hope demonstrates good progress. The SNP has broken its promises to Scottish students, but it now has the chance to adopt a new approach, one that is shared by the Opposition parties and student leaders throughout Scotland. I hope that it will see sense in the debate and realise that it has an opportunity to start redeeming its reputation in the eyes of Scotland's students. I urge it to accept the motion in the name of Claire Baker.
In the past few months, there has been a serious focus on what students need in order to study. That is due in part to the Opposition parties' constructive approach, about which we have heard and which has focused on the financial support that students need while they are at college or university.
The SNP manifesto promise to wipe out student debt has been well and truly exposed as an election ploy. I have not read or seen reports that the Cabinet Secretary for Education and Lifelong Learning has, in any sense, lobbied in the Cabinet for the £2 billion that would be needed to fulfil that promise.
I make it clear that servicing student debt does not cost £2 billion.
As the cabinet secretary knows, that manifesto commitment was costed at £2 billion. She knows the point that I am making: that manifesto commitment has been well and truly exposed as an election ploy.
The Government has found £30 million, and that is what the Parliament has been asked to address. The Labour Party believes that that money should be used to relieve hardship for all students but should be focused on the poorest students in particular. The student support system is failing students and the SNP has allowed Scotland to drag behind the rest of the UK: the maximum income that is available to students here is less than the income that is available in England, and the threshold for entitlement has not been uplifted, so more students have lost out.
In a recent constituency case, I was astonished to learn that the Government changed the student support rules in a rush to ensure that the income of single parents' cohabiting partners will be counted towards the calculation for support. That is affecting students in the middle of their degrees. In two cases that have been brought to my attention, students have found that they no longer qualify for bursaries because the rules have been changed. I cannot for the life of me understand why the Government would rush to change the rules in the middle of an academic session. There is a certain injustice in that.
I would be happy to take an intervention from the cabinet secretary, because I have written to her on that point.
That change to means testing was fully supported by the NUS. Only 45 students contacted the universities on that point because of hardship and, with the allocation of increased hardship funds, the difficulties for the small minority that has been affected have been addressed. Indeed, that has been reported to the Education, Lifelong Learning and Culture Committee.
I would be pleased if the cabinet secretary gave that response to my two constituents who, in the middle of their degrees, have found their incomes reduced. That is an injustice, and I do not understand why the cabinet secretary does not share that view.
I have written to the cabinet secretary on another issue: age discrimination within the system. In fairness, it has come about because of changes through the European convention on human rights, but I understand that England has already reviewed the matter, and I ask the cabinet secretary to do the same. Age should not be a barrier to lifelong learning. I have a constituency case in which someone was turned away from the system because they were deemed to be too old to qualify for student support.
Many members have received representations from many constituents who have child care responsibilities and are pleading for changes to the student support system. The current system is becoming a barrier to parents who are trying to find their way in difficult circumstances. The system is piecemeal and uncertain, and there is a strong case for reforming it. We should consider the English system, in which parents' entitlements are more centralised. I support the idea that parents who go to university should be able to see what they can claim so that they can work out what they have to live on.
As Margaret Smith said, students will realise that the Opposition parties are making a serious attempt to improve their lives while they are at university. There is a clear call to consider student hardship now. Labour wants to focus on the poorest students. Even though the amount of money allocated is pitiful, we are making a serious attempt to play a constructive part in the consultation.
The relief of student hardship is a key issue in these hard economic times. Students will welcome the Parliament's focus on it.
I am shocked by Claire Baker's motion—[Interruption.] Wait for it; it will be worth it. Despite the massive turmoil in the world economy, which has been caused by the unsustainable debt that her party leader and the Labour Government in London encouraged, she wants to pile more debt on to students before they have a chance to get started in life.
Labour is talking about loans of £7,000. What a tuition fee that would be for a poor student who was caught in the pitiless grip of Labour's failed economic policies. Not content with plunging the country into an economic vortex, in which Government debt is on target to be about 80 per cent of gross domestic product in four years' time, Labour politicians want to capture each individual and make them suffer for the misfortune of living under a Labour Government.
Throughout the UK there are record levels of personal debt, which has been encouraged by Labour's philosophy of borrow, buy and consume.
Does Christina McKelvie realise that many students are turning to commercial loans? Such loans certainly do not attract an interest rate of "0 per cent or lower"; the average rate appears to be about 15 per cent. Student loans start to be paid back when a graduate is earning £15,000; we want to deal with student hardship now.
Margaret Smith need look no further for a response than a report from the Association of Scotland's Colleges, which concluded:
"A large majority of higher education students in colleges find their debt levels to be a significant problem and would far rather have greater financial hardship than be in debt."
Will the member give way on her point about the ASC?
I want to make progress.
Since 1997, Labour has encouraged people across our islands to borrow more than they can afford to borrow. Labour relaxed banking regulations to make irrational lending the norm. For Labour, location, location, location became far more important than education, education, education. Money, not wealth, has been the touchstone of Labour's years in power. There has been a fascination with piles of filthy lucre, with no idea how they would be paid for. Bankruptcies are increasing throughout the UK under Labour and more and more people are finding it impossible to survive under Gordon Brown's economic miracle. In Scotland, bankruptcies among students and graduates soared while Labour and the Lib Dems were in power. There was a 380 per cent increase in such bankruptcies between 1999 and 2007.
Thank goodness for the election of an SNP Government. The number of young people facing bankruptcy was cut by 11 per cent in our first year in office. How was that achieved? Not through the naive, simplistic and populist posturing in which Labour engages but through good, solid policy work. We abolished the graduate endowment fee. We put £84 million more into student support than Labour put in. We put £38 million into grants for up to 20,000 part-time students, as Fiona Hyslop said. I never thought that I would hear a Labour member complain about part-time students getting support from the Government.
Does the member acknowledge that the part-time student grant of £500 goes towards the student's tuition fees and does not give them a penny to tackle their hardship issues?
The grant reduces the overall burden by £500. I know students in colleges throughout Lanarkshire who welcomed it.
The SNP has put £16 million into student hardship funds—that is 14 per cent more than Labour put in.
It is unbelievable that Labour wants to move away from supporting students and prefers to drive students' economic prospects further underground. We all face decades of paying back the money that Labour is borrowing to try to bail itself out of the catastrophic failure of its economic and regulatory policies, so this is not the time to tell the people on whom we rely to create tomorrow's wealth that they must shoulder the burden of a massive personal debt that has been forced on them by the state. That would not be a good idea at any time, but it is barking mad when we are facing the economic tsunami that Labour created.
There is one comfort for us all: Labour is no longer in power in Scotland. We continue to suffer the effects of the mess that a Labour Government in London has made of our economy, but we are at least spared the double whammy of Labour making things worse in Scotland.
Instead of offering policies that might be good for the country and engaging in the debate to find the most appropriate way forward, Claire Baker, like the rest of her party, is more interested in trying to score party political points. While Labour continues to whinge and complain, the SNP will continue to make Scotland a better place to be. Why? Because we have got what it takes.
Given the promises that the SNP made during the election campaign in 2007, we might have thought that student hardship would be a thing of the past by now and that there would be no need for this debate. It might have been reasonable to assume that having done away with student debt, the Government would have moved on to improving the lives of students while they study.
We all know that the promise to wipe out student debate was no more than electoral smoke and mirrors. It would have cost an estimated £2 billion, so there was as much chance of the Government wiping out student debt as there was of it—let us see—introducing a local income tax, building a school or increasing the number of teachers in our schools and nurseries. I could go on. There have been so many broken promises, and I have not even mentioned the Scottish no-futures trust.
The cabinet secretary claimed that the cost of servicing student debt would not be £2 billion. The figure is irrelevant to Scotland's students; the point is that the SNP Government promised them that their debt would be written off. Our students deserve better: they deserve to be supported during their time at college or university and they deserve to be properly funded at a time when jobs are becoming scarcer.
By focusing only on the graduate endowment, the SNP left Scottish students far worse off than their counterparts in England.
Is the Labour Party committed to reintroducing the graduate endowment fee?
No, it is not. However, I make the point that although the cabinet secretary said, when she came to the Education, Lifelong Learning and Culture Committee to argue for abolition of the graduate endowment, that she was motivated by the story of a young woman who had to give up her university studies because she could not afford to continue, the abolition of the graduate endowment has done nothing to help a single student to continue to study in any of Scotland's colleges or universities.
We want to discuss student hardship in this debate. Scotland's students are worse off than their counterparts in England and Wales. The maximum that most students in Scotland can receive is £4,510, whereas students in England and Wales can receive up to £6,200. We argue that students in Scotland should be able to receive up to £7,000.
The Labour Party believes—indeed, all parties in Parliament, apart from the SNP, believe—that more funding must be targeted at supporting students while they study. That is why the three main Opposition parties have joined NUS Scotland in calling on the Government to use the additional £30 million that has been announced to ensure that our poorest students are guaranteed a minimum income of £7,000. That would be an effective way of attracting young people from our poorest communities back into further and higher education. Far too few of the young people in my constituency go on to further and higher education. That needs to be tackled.
We need more funding for child care, as Murdo Fraser said. Like many members, I have been inundated with e-mails from students who attend the University of the West of Scotland about the closure of the nursery at the Hamilton campus. Many students said that the removal of the service would make it impossible for them to continue their courses.
Will the member give way?
I need to wind up.
We call on the Government to increase by £500 the grant for the poorest students who are in receipt of the full young students bursary.
The Government often says that it wants to listen to and to work in partnership with other parties. All the Opposition parties stand ready to work in partnership with the Government, if it is willing to listen. Student representatives throughout Scotland want the Scottish Government to accept our proposals, which are affordable and respond to the explicit requests of Scottish students. What could be simpler? I support the motion in Claire Baker's name.
It is with slight trepidation that I return to debate an education-related subject, having taken some stick—if I may put it that way—for my remarks on corporal punishment two weeks ago. However, I am so struck by the opportunism and cynicism that are exhibited in the Labour motion that I cannot remain silent.
A stranger to the Parliament might gather from the exchanges in the debate so far that all was rosy in the student garden until the SNP came along two years ago and ruined things, but the truth is very different. Student finances deteriorated under the watch of what are now the major Opposition parties here for more than 20 years. We moved from the days when a student grant could keep a student in some comfort for the year to the point in 2007 when just about every student faced not only hardship but mountainous debt. However, the Opposition parties have the cheek to criticise the SNP for not putting all this right in a mere two years.
Will the member give way?
If Lord Foulkes wishes to apologise for his cynicism and opportunism, I suggest that he do so in his speech later on.
It is no wonder that the Opposition parties are huddling together for warmth today.
Members will recall that "Supporting a Smarter Scotland: A consultation on supporting learners in higher education" set out a three-point plan for student funding in Scotland. The goals were to abolish the unfair graduate endowment fee, to replace student loans with a means-tested system of grants, and to service the debt of Scotland-domiciled and resident loan borrowers. We have already seen the achievement of the first of those goals, with the burden of debt on graduating students being reduced by £2,300. The £30 million extra boost to the student support budget for 2010-11 will begin to address the second goal. The cabinet secretary has pointed out that, in addition, and among other dynamic measures that the Government has introduced, an improvement to the discretionary fund is available for education institutions to distribute, based on their assessments of individual student need. The fund now stands at £16.1 million, which represents an above-inflation increase of 14.6 per cent in two years.
Much progress is being made. The SNP Government has already taken more steps to help students than any previous Administration. The Opposition's squawks of protest about broken promises do not take into account the fact that, because of UK Government mismanagement of finances, the incoming Scottish Government in 2007 faced the tightest financial settlement from Westminster in the history of the Parliament.
Student hardship and graduate debt can be serious problems, and the prospect of either may inhibit some people from entering tertiary education altogether. Several reports have found that debt, or even the prospect of debt, is a major factor when students consider dropping out from their courses.
Why do I accuse the movers of the motion of cynicism and opportunism? I do so because they put in place the present system, which they now discredit, and then—with their Lib-Dem colleagues—maintained throughout their joint terms of office a loan-based system of student support that led to 370,000 students and graduates owing more than £2 billion to the state at the end of the 2007-08 financial year. That means that students graduating from a four-year course now face debts of around £10,000, with the highest level of debt generally being incurred by students from families that have the lowest incomes. Furthermore, because mature students are not eligible for grants, they can graduate with up to £18,000 of debt.
I welcome the idea of the cross-party approach that the motion calls for, but support for our students should not be a political football. The motion's cross-party gesture is immediately shown to be hypocritical because the next phrase in the motion seeks to rubbish the Government party—the biggest party in the Parliament. If Labour is looking for genuine cross-party support, it is going a very funny way about it. The suggestion by the member who moved the motion that she is looking for a white flag, rather than an olive branch, hardly suggests that she is taking into account the need for cross-party co-operation.
We need to work together and we must wait for the result of the recent consultation to be analysed and discussed. I put it to you, Presiding Officer, that Fiona Hyslop's amendment is one that will allow us to go forward and work together for the future of Scottish students.
Presiding Officer, you and others may be aware that I stood earlier this year, probably unwisely and certainly unsuccessfully, for the post of rector of the University of Edinburgh. However, I was able to hear the views of many hundreds of students, which I will try to reflect in my speech.
The University of Edinburgh is a world-renowned education institution that has a hugely impressive record of research, particularly in the growth industries of bioscience, informatics and regenerative medicine, which will power Scotland's economy in the future. The university has 26,000 students from 120 countries around the world. However, several thousand of those are Scottish students who rely on the SNP Government to fund not just the university, but themselves.
We heard from Murdo Fraser and Pauline McNeill about the SNP's broken promises to dump student debt. We have also heard again the tired rebuttal from Fiona Hyslop that—allegedly—student debt is falling. SNP members might have convinced themselves of that, and might even have convinced a number of wet-behind-the-ears journalists, but all the students to whom I spoke during my rectoral campaign are not convinced at all. They feel totally abandoned by the SNP.
The current president of the students representative council at the University of Edinburgh set up a Facebook petition, with a statement to which 700 students signed up:
"Fiona Hyslop fails to understand that many students are struggling as much as anyone else. Our families are suffering from the credit crunch. The job market is drying up. If the SNP allow poorer students to be priced out of education, they will be allowing a short term recession to condemn a generation."
The cabinet secretary said rightly that the amount that students owe the Government is falling—Murdo Fraser pointed out that, thanks to the Westminster Labour Government, it is interest-free debt—but students have increasing debt with, for example, Topshop, Barclaycard and Visa, with high interest rates. That is a complete travesty, particularly when the SNP Government has the power to do something about it but lacks the will to do so. For example, as has been said, the Government could extend the loan thresholds to match those in England and Wales, but it will not. It could agree a guaranteed minimum income for students of £7,000, as Karen Whitefield argued eloquently just a few moments ago, but it will not. It could also provide more money for campus student hardship funds, but it will not.
There are nearly 100,000 part-time and full-time students in Edinburgh, who are crucial to the economic future of our country. They need support from the Government, but have been told by the Cabinet Secretary for Education and Lifelong Learning that they should grow up and stop complaining—that was a patronising and insulting remark. The student community feels totally let down by the SNP and by the cabinet secretary personally. Whatever we might think about top-up fees—whether they were right or wrong—at least the student community know what it was up against. It knew the rules of engagement and the nature of the debate. The SNP's higher education policy and the complete lack of principle that forms its shaky foundations are an enigma and anathema to the student community.
Students want a guaranteed minimum income so that they can keep commercial debts low and part-time hours of work down. However, what they get from the Government is a raft of arrogance, ignorance and broken promises.
We come to closing speeches. I ask members to keep reasonably close to the times that they have been given.
Education debates are becoming a regular Thursday morning gig, which is not necessarily a bad thing, given the importance to Scotland of student hardship, funding for students and education generally. Rather than rehash the arguments that have been adequately expressed in the Labour motion and in the speeches of Margaret Smith and Murdo Fraser, I will reflect on a couple of points.
Much of the Government's defence—such as it is—on funding is founded on what it has done, not what it said it would do. Ultimately, that is why students are so angry at the situation that they are in, because it is not what was promised. I received a letter from the Minister for Schools and Skills, Mr Brown, in which he states that the Government did not know how much student funding was going to cost. Frankly, it is not acceptable to put that to the public.
I am pleased that we have cross-party Opposition support for the direction of travel on the issue, and I am pleased to have a somewhat conciliatory amendment to the motion from the cabinet secretary. It is encouraging that we might eventually develop a more mature debate around the issue.
However, I have some questions for the minister. What action will the Government take to deal with the anticipated 40,000 applications that our colleges expect to receive over the course of the next few months? What is the cabinet secretary's view on the Scottish Higher and Further Education Funding Council's apparent guidance to colleges that such places should be funded by reducing courses that involve less than 10 hours? Furthermore, what is her view on the funding council's apparent direction to colleges that they should focus on school leavers? Given that we currently face a dramatic and serious recession, we must surely strike a balance between school leavers and adults returning, mostly to further education colleges, to upskill and retrain. In my region, 300 people in Larbert might face that prospect, so I would be interested to know whether the Government has a cohesive approach on that. People who are retraining will also be students who are in hardship.
In order to comply with the Presiding Officer's request on timings, I will simply leave those questions in the air and hope that I hear from the SNP Government how it will address them. I am pleased to see that we have consensus among the Opposition parties in supporting the minimum income guarantee as the best way forward to reduce student hardship.
Although I am always grateful when members give the chair a little bit more time, I should say that we are not that desperate, so members should feel free to take up the time that they have been offered.
As my colleague Murdo Fraser made clear, we are pleased to support Labour's motion this morning. In my summing up speech, I want to dwell on three main issues.
First, there has been a distinct failure on the part of the Scottish Government to prioritise appropriately the financial problems that are faced by students today. In the current economic recession, increased numbers of people want places at college and university as they seek to retrain for a very difficult job market. The statistics that were released last week show just how difficult that job market is, as do the tertiary education sector's statistics on the number of applications that they receive that are not from school leavers. If we add in the fourfold increase in student bankruptcy in the past 10 years and the increased number of applications for university hardship funds—the University of Abertay Dundee has already run out of such funds twice this year—we can see why the student body is so desperately concerned.
Secondly, in our opinion, the Scottish Government has made a fundamental error of judgment in seeking to increase the level of grants, rather than loans, that are available to students. That is not good value for money and does not widen access to university education, which the SNP election manifesto claimed was such an important commitment.
Elizabeth Smith makes a serious point about the need for value for money in public finance. A genuine problem with student loans is that servicing the loan involves a cost to the public purse of a third of the value of the loan. Does she recognise that an over-reliance on the loans system involves inherent problems for the public finances?
There are complexities, but I believe firmly that loans are a much better option than the grants system. We must recognise that the problem is now acute. Before the economic downturn, many students could supplement their student loans with income from part-time jobs, but such jobs are now more difficult to find, so students are left with no choice but to borrow from credit card companies. That is a major issue for students.
As Murdo Fraser and Claire Baker both said, a much better use of the £30 million of available funds would be to target the poorest students. The money could be used to help about 19,000 students who currently receive the full young students bursary and a further 15,000 students who receive part of that bursary. On top of that, we propose providing a £200 increase for all students by increasing the amount that is allocated through the non-means-tested loan, which in turn would help about 78,000 students. We would also provide close to £2 million in discretionary funds. Those measures would go a long way towards relieving the current pressure on child care and hardship funds, although it is good to hear the commitment that the cabinet secretary gave on that issue.
We believe that our proposals are the first step to addressing the urgent need to support our poorest students. Our proposals would tackle student hardship and help students to move away from a situation in which they become permanently trapped in debt. By supporting the Labour motion, we have shown that we are ready to engage with other parties in order to progress the proposals. They are affordable, achievable and fair and could be delivered within the £30 million that is already available.
Finally, let me say a word on the on-going debate about tertiary education. Our universities and colleges are to be warmly congratulated for their success. As George Foulkes said, their qualities are vital to ensure Scotland's continuing success in the future. They should not be compromised by political dogma or hollow rhetoric in an election manifesto. Unfortunately, that is a very real fear if the Scottish Government continues to fail to understand properly the dilemmas—both academic and financial—that provide major headaches for our tertiary education institutions as they struggle to maintain their competitive advantage and the international reputation that they have spent hundreds of years establishing. Students, by definition, are caught up in those dilemmas. It is wrong that students are unable to rely on Parliament to address those fundamental problems, many of which have been eloquently expressed by student groups both privately and publicly.
No one doubts that the questions that surround the future of tertiary education, its staff and its students are complex, but they will not be answered if we do not recognise the true extent of the problem that we face. That is why we need a new approach, and that is why we are pleased to support Labour's motion.
Today's debate has, like the previous recent education debate, been wide ranging. As Hugh O'Donnell almost said:
"It's like déjà vu all over again."
However, as several members have mentioned, higher education is important, so it is important that we send the clear message to students and graduates that the Government values highly the contribution that they make to society. We will do, and are doing, all that we can to support students at what is perhaps the most important stage of their lives.
Although this might not be obvious from some comments in the debate, the Government has already done a great deal, as the cabinet secretary said, to address both hardship and debt. Before I reiterate some of our policy decisions that have demonstrated our support for students, let me just contrast those with the position of other parties. First, we have the £500 million of cuts coming next year and each year afterwards from Labour—
No, no.
Lord Foulkes might want to wish that away, but that is the hard reality that faces this Government and the people of Scotland.
On manifesto commitments, the Lib Dems have recently ditched their idea—not even a manifesto commitment—of making £800 million of cuts. It would be interesting to know how they would fund the things they want while taking £800 million out of the public purse. For the Conservatives, of course, the £500 million in cuts cannot come soon enough and would be brought forward. That is the background against which the decisions that we have taken—
Will the minister give way?
No.
The abolition of the graduate endowment tax has saved 50,000 students £2,300 each year. It is worth mentioning that in the context of the different attitude to debt that now exists in society. People are more frightened of debt than they were, as Ian McKee mentioned. The prospect of taking on debt is always a disincentive, but it is much accentuated when we have, as a country, a massively increased debt that will overhang our students in future years.
Will the minister commit to giving serious consideration to the proposal from the Opposition parties that students should be allowed to choose whether to borrow the amount that is currently available to them as a loan or to take a reduced amount as grant? That could halve the average amount of graduate debt.
The cabinet secretary's amendment already commits us to considering the proposals. It is worth mentioning that a loan of £1,000 costs the Scottish Government £310 in addition to the £1,000, whereas a grant of £1,000 costs us £1,000. Obviously, that must be a factor in our considerations.
As the cabinet secretary and Christina McKelvie mentioned, we have provided £16 million a year to institutions to alleviate student hardship. That is an increase of 14.6 per cent, which is a huge rise. For the first time, we have also uprated the higher education discretionary funds in line with other student support.
I will pick up one or two others points that have been made in the debate. Pauline McNeill might be interested to know that we have had no further requests from the University of Glasgow for the additional hardship funds that we have provided. The same is true—I mention this for Karen Whitefield's benefit—for the University of the West of Scotland and for the University of Edinburgh. In recognition of the increased demand on such funds, we have provided additional funding that is being used to meet that additional demand.
Other members pointed to the obvious need for the recession to feature in our decisions. We cannot take decisions without acknowledging both the recession and the increased demands that are being made on the education system. On the issues that Hugh O'Donnell raised, if he writes to me, I will respond to the serious points that he made about the increased demand on colleges and so on. Those issues are not part of this debate, but perhaps reflect the debate that he wanted to have.
The budget cuts of about £500 million that we face mean that we will have to make hard decisions. Despite that, we are adding £30 million to student support, which has given rise to this and previous debates.
The consultation process has been open to everybody and we want to take account of everyone's views. I therefore question why Labour's motion gives us only three weeks to analyse the responses and to make decisions. That is not a proper way in which to deal with the responses that have been received from a wide range of people.
Will the minister give way?
No. Margaret Smith would not take an intervention from me.
The Labour motion does not give us sufficient time to consider those responses, but the Liberal Democrats went even further in wanting us to make decisions before we had even finished the consultation. There is, at present, a competition to find a new quote from the people of Scotland to put on the Parliament building. The last thing that we want is for it to be, "What's the point of consulting us?"
I have already taken an intervention. I would like to make progress.
The Scotsman interviewed four universities, and only one—the University of Abertay Dundee—said that it had requested additional discretionary hardship funding in the current year. I think that I am right in saying that that request was met by the Government. In the current year, institutions have requested a total of £882,000 in additional discretionary funds to tackle student hardship, which is about £226,000 less than was requested in the previous two years. By and large—although it is not true of all universities and institutions—universities are meeting their increased demands from the resources that are provided by the Government.
The Government has made it clear in the debate that we take student hardship seriously. That is underscored by our commitment of additional resources to tackle the problem. We have invested a great deal of additional money in student support—far more than the previous Administration. The cabinet secretary mentioned the £22 million under the previous Labour-Lib Dem Administration and the £44 million under the present Administration. In addition, we have run a consultation on how best to spend the £30 million in additional funds that have been allocated.
The Labour Party is pressing us to commit to a specific approach before we have given due consideration to all the responses. We do not want to do that, at this stage. We are trying, as has been mentioned, to be conciliatory in our amendment and to take all views into account. We will consider Labour's proposal, but we must consider the wide range of other proposals, as is only fair to those who have taken the time to respond. We are happy to work with Labour, the Conservatives and the Liberal Democrats, but we call on them to make specific proposals and to say where they would take money from to fund their proposals. One or two members have said that they would provide more than the £30 million: it is incumbent on them to say from where that money would come.
It is essential that we work together for the benefit of students in Scotland. As our amendment is, the motion is relatively conciliatory at the start, and talks about a cross-party approach. However, as Ian McKee said, it quickly degenerates into an attack on one party, which is perhaps not the best basis for a cross-party approach. The amendment that has been moved by the cabinet secretary states that we want to work together on the issue. I ask the other parties to respect that and to vote for our amendment.
Claire Baker said that the SNP has failed to tackle the growing hardship problems that are faced by the poorest students in Scotland. She is quite right, and her words have been echoed by many members. Student support levels in Scotland are far below those in the rest of the UK and many students are forced to rely on commercial credit which, when it is available, is an expensive way to fund one's education. I therefore make no apology for repeating what other members have said about the SNP's policy to dump the debt.
As with the first-time buyers grant, the local income tax and the policy on maintaining teacher numbers, the SNP's slogan, "It's Time to Dump the Debt", was just that—a slogan. It was a policy that the SNP never had any intention of delivering, and it was never brought to Parliament. However, rather than admit that the SNP has broken its promise on student debt, Fiona Hyslop now denies making the promise in the first place. That makes one wonder how anybody can trust anything the cabinet secretary says. Students feel let down by the SNP, and with good reason. Their mistake was to believe what Alex Salmond and Fiona Hyslop told them in the SNP manifesto.
Nevertheless, it is not too late for the SNP to do the right thing by students. As we have heard from many members today, Scottish student support levels are considerably lower than those in the rest of the UK. Combined with the economic downturn, that means that hardship funds and child care funds are being stretched to breaking point at colleges and universities throughout Scotland, as those institutions are forced to top up completely inadequate funding. The SNP's wholly inadequate response to that challenge has been to set aside an additional £30 million for student support next year, with an insistence that the money should not be used to increase the availability of student loans. As we have heard, that will have the effect of driving students to commercial lenders who, even with the base rate at an historic low of 0.5 per cent, can charge an annual percentage rate of upwards of 20 per cent.
In July 2007, Fiona Hyslop wrote in The Times Higher Education Supplement:
"We believe it is wrong that graduates begin their working life encumbered by financial pressures".
Opposition members cannot see how the SNP can reconcile that statement with the policy of leaving it to commercial lenders to fill its student funding hole. It was no surprise that Parliament overwhelmingly rejected the options that were put forward in the Government's consultation document in March.
The joint principles that have been talked about this morning rightly focus on the provision of additional support for the poorest students. We must reduce barriers to higher education, and tackling hardship must be a key part of that. I am concerned that, although higher education participation rates have generally risen over the past decade, there are still pockets around the country—including in my constituency—where, in common with a number of former industrial areas, the number of university entrants is lower now than it has been in the past. There will be a variety of reasons for that. However, for students from poorer households, concerns about funding should never be a factor.
Fiona Hyslop and Keith Brown made valiant attempts to be upbeat in the debate, claiming that the Government has spent millions of pounds on student support. However, current full-time students know that there is not one penny more in their pockets. Christina McKelvie put the case that Scotland's colleges have made; however, we have significant concerns about the robustness of their research. We do not believe that they distinguish between commercial debt and Government debt, and they do not tackle student hardship.
Rhona Brankin mentioned Government debt. There is a 30 per cent charge to the Government for every £1,000 that is loaned. From where does she think the cost of servicing the Government loan should come?
The cabinet secretary talks about the cost to the Government of loans: I presume that she does not know that the Scottish Government pays 31p in the pound while the UK Government pays the rest. Under that policy, Scotland gets £458 million from Westminster for Scottish students. I am sure that she would be supportive of that. We simply must tackle the problem of student hardship.
Keith Brown asked for the detail of the policy that we propose. A lot of work has been undertaken by students and the three Opposition parties on the issue and we have much detail, which we would like to discuss with the Government. It is rich of Keith Brown to ask for detail when, for months, my colleague Claire Baker has been using the freedom of information procedure to try to get details of the Government's proposals. We want to work consensually with the Government. It is a minority Government and it is time for it to listen to the majority in Parliament.
I pay tribute to the students and their leaders who have come together to make their voices heard on student hardship. We are now in the highly unusual situation of the main Opposition parties and student leaders joining forces to ensure that the minority Government listens and that it tackles student hardship instead of just focusing on graduate debt. We and the students believe that the ministers have already let down students unforgivably with their empty promise to dump the debt. Their amendment today is far too woolly and simply indicates that they are listening to no one but themselves. Now is the time for ministers to show some humility, to show that they are listening to students and to do the right thing. I urge members to support the motion in the name of Claire Baker.