Plenary, 29 Mar 2001

Meeting date: Thursday, March 29, 2001

Official Report 667KB pdf

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Education (Graduate Endowment and Student Support) (Scotland) (No 2) Bill

The next item of business is a debate on motion S1M-1780, in the name of Wendy Alexander, which seeks agreement that the Education (Graduate Endowment and Student Support) (Scotland) (No 2) Bill be passed.

I am delighted to move this motion today. The bill forms the cornerstone of a package that will deliver significant improvements to student support in Scotland.

It is a tribute to the workings of the Parliament that it has moved so quickly from the introduction of the bill to stage 3 consideration. I pay tribute to the efficient and careful way in which the Enterprise and Lifelong Learning Committee went about its task. The committee's adherence to a tight timetable means that the benefits of this bill will be felt by students from autumn this year. I thank committee members for their contribution. I am also grateful to Nicol Stephen and Alasdair Morrison for the consideration that they have given to the bill and for time that they have spent dealing with the details of the bill to ensure that we got it right.

I would also like to pay tribute to the stakeholder groups, who, in evidence-giving sessions in the committee and through the valuable work that was undertaken by the student support technical advisory group, have worked to ensure that students benefit from a scheme whose details are as fair as possible.

I also commend the Cubie committee on its 1999 report, which led to the proposals before us today. We are following the guiding principles that the committee set: targeting resources, flexibility and support for those most in need. We have also followed the recommendation that we bring in an endowment with repayment linked to earnings.

The principle of Cubie was the principle of an endowment. The principle is that an investment in a student's education allows that student to reap the rewards of that investment for the rest of their life. On average, women in Scotland who have gone to university earn £1 million more in discounted lifetime earnings than those who have not. That bounty is earned over a lifetime. We are asking for £2,000 in later life to pay for a four-year course in which the Scottish Executive will have invested in excess of £20,000. That is the principle. I note that Cubie suggested that the endowment should be over £3,000 but we are asking only for £2,000.

The issue of the threshold dominated the debate but the threshold is not a matter of principle and we think that there is a case for revisiting it. However, no one will be making payments for a few years. I ask those in this chamber who say that they care about the burden of red tape on businesses why they want to inflict on employers two different systems of repayment.

Will the minister give way?

I do not have time.

The Cubie principle was that the endowment should be based on the ability to pay, which should be based on income. That is different from the mortgage scheme with a market interest rate that the Tories propose.

We heard a familiar tale from the SNP. It does not believe in the graduate endowment or the Cubie principle but, again, gives us an easy, uncosted promise that nobody would have to pay anything. In the SNP's five-day-old tax plans, there was not a ha'penny to fund that promise.

The truth is that the coalition parties have stuck to the Cubie principles, have moved beyond the denunciations and have delivered for students.

The other substantive point that was made in the debate was on the issue of student poverty. I say to Dennis Canavan that it is precisely because of the kind of stories that he told today that we are committing an additional £50 million to this landmark achievement in the provision of student support.

We have abolished tuition fees and from this autumn we are introducing bursaries—grants by another name—of up to £2,000 a year for young students from the poorest backgrounds. Those with a family income of less than £15,000 will be able to access an extra loan £500. What does that mean? It means that the spending power of students living away from home will increase by 13 per cent and that that of students living at home will increase by 17 per cent—that is more than four times the rate of inflation. I note also that Cubie indicated that there should be an increase of only 13 per cent.

To put all that in perspective, I will point out that, in 1980, students had to live on £3,189, in today's prices. This August, students from the poorest families will have access to £4,315—which is more than £1,000 more in grants and loans than they would have got 20 years ago. That means that Scotland's least well-off students will get a better deal than either the SNP or the Conservatives suggested that they would in their evidence to the Cubie committee.

Another way in which the world has changed in the past 20 years is that there are now more mature students. That is why we have introduced a mature students bursary fund.

The overall package adds up to a better deal for the least well-off students. No one will have more debt, 45 per cent of students will get more money each year than they do now and we will remove students from joint and several liability for council tax. Altogether—getting away from the denunciations and considering the delivery—we are giving young Scots their best ever chance to go to university. By reintroducing bursaries and ensuring that the poorest students have more to live on than they have had for more than 20 years, we are delivering.

The bill is ready to be approved by the Scottish Parliament and to pass into law. It is a significant achievement for the Scottish Parliament. It is a clear example of the partnership Government working together to respond to the wishes of the people of Scotland. The bill will work towards the provision of an inclusive higher education sector in Scotland that supports and empowers all Scots. I am pleased to move the motion.

I move,

That the Parliament agrees that the Education (Graduate Endowment and Student Support) (Scotland) (No 2) Bill be passed.

The subject matter of the bill has been discussed and debated at length in the chamber and in committee. Amendments have been few and this debate is to be brief, mainly because the bill is lacking in specification and detail. Committees have commented on the failure of the Executive to clarify the criteria that will qualify some for grants and ensnare most with a tuition fee.

In the debate following stage 3, it is customary in the Scottish Parliament to applaud the passing of another milestone as our legislature embeds further legislation for our nation. I cannot and will not do so on this occasion. Obviously, the bill contains elements that are sensible and overdue. It is right, for instance, that our Parliament should address the iniquities that students face with council tax and the difficulties that many faced in the absence of a grant. However, while such elements are welcome, the bill has to be considered as a whole. The Scottish Executive cannot mask the iniquities in the bill by lacing it with overdue and inadequate legislative advances. Moreover, it is scandalous that the Scottish Executive should seek to ensure the passage of the meat of the legislation by leaving it to regulations. The Scottish Executive has been told and knows well that the regulations cannot be amended but can only be accepted or rejected. Accordingly, Executive diktat is to be used to enforce the digestion of the Executive's unpalatable proposal.

The nub of the matter, however, remains the same: a tuition fee is a tuition fee, whether it is paid at the beginning, the middle or the end of the course. Renaming a tuition fee a graduate endowment is not an abolition but is, in the words of Winston Churchill, a "terminological inexactitude". He who is guilty of the greatest terminological inexactitude is the minister responsible for a department in which language and interpretation is crucial—the Deputy First Minister and Minister for Justice, Jim Wallace. I am referring to his declaration before the elections to the Scottish Parliament—elections that were supposed to usher in a new era for Scotland and for Scottish politics.

As a prelude to that new way of governing, Jim Wallace indicated that tuition fees would be killed stone dead. The phraseology may have changed, but the definition remains the same: students in Scotland require to pay for their higher education. Jim Wallace may call it a graduate endowment, but the effect is the same: it is simply a tuition fee by another name. It is yet another Liberal Democrat sell-out.

Student debt will not be addressed by the endowment. Access to higher education for those from disadvantaged families will not be improved. This is a missed opportunity; this is not Cubie. The Executive partnership has excelled itself in hype and hyperbole. New Labour invents tuition fees; the Liberal Democrats rename them a graduate endowment. Then, both parties, sickeningly, claim credit for their abolition. When the bill is passed, the sycophantic Lib Dem clapometer will go off the scale. The Lib Dems will be claiming that the partnership that they brokered has delivered. However, when the minister signs the bill, she will also be putting her signature to two other things: first, an invoice—in due course—to an already indebted student community for the privilege of learning; and secondly, a political death warrant for the Liberal Democrats for selling out Scottish education, which they hypocritically claimed was so dear to their hearts.

Those of us who benefited from the foresight of a past generation, in its provision of universal higher education, can take no satisfaction from the bill. Those who gained so much, but who choose to provide so little, must hang their heads in shame. The passing of the bill will not be a milestone for the Parliament, but will be a millstone for the student community, and a tombstone for the coalition partners.

What have we heard today from the terror of the Cabinet? What will we hear today from other members of the coalition Government in their closing speeches? We will hear, and, in the press releases, we will read about a commitment to social inclusion.

Where was the principled support for social inclusion when Tony Blair introduced tuition fees? Where was the principled support for social inclusion when every Labour MSP here today defended that position in standing for the Parliament?

Will Mr Monteith give way?

I have no time; please sit down.

When will we hear of the commitment to social justice? Where is the social justice in students being penalised because of their families' incomes? At the age of 18, a student can enlist in the armed forces and die for his or her country. She or he is treated with respect, as a consenting adult, when it comes to sexuality. When attending a higher education institution, however, the student is viewed as a dependant. Where is the dignity in that? Where is the social justice in that? We will be told that the goal was to encourage students from low-income families. That is well intentioned, but the bill does not do that. The bill characterises everything that is wrong and bad with the British and Scottish Governments that run our countries.

Rather than standing up for socialist principles and redistributing income through progressive taxation, as Mr Sheridan suggests, the measures in the bill bring in stealth taxes. Make no mistake, the Education (Graduate Endowment and Student Support) (Scotland) (No 2) Bill represents yet another stealth tax.

The Executive has the audacity to tell us that the bill is good for us. The Liberal Democrats have fallen for that. They have not abandoned any principles, however—because they did not have any in the first place. If the minister believed that there was no disincentive as a result of the tuition tax, why give exemptions to 50 per cent of students? Where is the social justice in forcing students to be more in debt to the banks and the credit card companies, and in forcing them to work longer hours because their loan entitlement has been cut?

We will also hear that the bill is a victory for coalition politics, a victory for the partnership and, in particular, a victory for the Lib Dems. They will claim that the tail is wagging the dog. The truth, as always, is quite different. The bill does not abolish tuition fees, as students and anyone else who is living in the real world will realise. An undergraduate tax has been replaced by a graduate tax. It may have been reduced from £3,075 to £2,000, but it is still a tax. The eligibility for the exemptions may have expanded from 33 per cent of students to 50 per cent of students—but it is still a tax. Those reliefs have been funded by reducing the loan entitlement of students, forcing more students into greater overall debt. Students have to pay higher commercial interest rates than they would normally have expected to pay if they had not taken out the graduate investment.

Will Mr Monteith take an intervention?

No, I will not. I have no time.

Then we have the case of Scottish students—in which Mr Rumbles will be particularly interested—who wish to study in England. Many of them have to study in England because of the nature of their chosen course.

This is nothing more than a low, shabby deal, which puts money in some students' pockets at the expense of other students. But then, when the student leaves university, not content with bullying the First Minister, the Minister for Enterprise and Lifelong Learning wants to see that student mugged and their money taken back out of their wallet.

The bill is not what it seems. We have sought at every stage to improve it, but have failed. Let us be clear: the Government has not listened. There are alternatives to the bill: tuition fees should and can be abolished. We have a bill that is available to lodge, but the Government is insisting on proceeding with its own bill. There are no principles in the bill; there are no principles in the coalition partners' support for it. We oppose the bill in principle.

If ever we saw an indulgence in hype and hyperbole, that was in Mr MacAskill's speech a few minutes ago. When it—[Members: "Hyperbowl?"] When it comes to principles, let us consider the Tories, and the incredible statement from Brian Monteith that they are standing up for students. Does he not remember who abolished student grants in the first place?

It was Labour.

Student grants were abolished by the Tories.

In fact, while the Tories reduced grants, it was the new Labour Government that abolished them.

They reduced them, yes.

The Liberal Democrats welcome the bill, because it completes the second stage of the student support package that the coalition is introducing. Let us make this clear to everyone: tuition fees are gone. No student or parent was asked to pay student fees this year—not one.

Yes—one was: a Scottish student who went to England.

I challenge the Opposition to bring forward any student who paid tuition fees this year. No parent or student in Scotland has been asked to make a contribution after they leave university, despite the fact that they have not had to pay tuition fees this year. That is a fact—it is up to the Opposition to produce anyone who has actually been asked to make that contribution.

There has already been a response to the policies pursued by the coalition, with a dramatic increase in the number of students in Scotland last year; this year, because students do not have to pay tuition fees, their number is running 10 per cent ahead of that for last year. Students are voting with their feet, in support of coalition policies.

Every organisation that gave evidence to the Enterprise and Lifelong Learning Committee supported the principle of graduates making a contribution to funding living costs for the next generation of students. The only organisation to stand against that is the SNP. It is on its own once again.

The bill makes available to students from poorer backgrounds about £2,000 in grants. That is a huge step forward in trying to encourage students from poorer backgrounds to come into further and higher education. It is a big step forward for social justice.

The bill ring-fences the contribution made by students—remember that only 50 per cent of them have to make it—in order to ensure that funds are available for the next generation of students' living costs. The bill also reduces student debt by up to £4,000 for students from poorer backgrounds and leaves 99 per cent of students with less debt than they would have under the present system, even when the £2,000 contribution is taken into account. That is a tremendous step forward in encouraging students from poorer backgrounds to enter further and higher education.

Nobody would dispute the fact that most of the bodies that gave evidence to the Enterprise and Lifelong Learning Committee expressed concern about the £10,000 threshold, which we have heard so much about. However, I draw members' attention again to the Cubie committee, which took evidence the length and breadth of Scotland, from students, parents and student organisations. In evidence to the Enterprise and Lifelong Learning Committee, a member of the Cubie committee stated clearly that the issue of the £10,000 threshold was not raised with it, despite the fact that under Cubie's proposals the student loan system would still be in place.

If the threshold is not an issue, why did the member's colleague, the former Deputy Minister for Enterprise and Lifelong Learning, tell us that he thought the threshold was too low?

I will come to that point. I was only repeating the evidence that was given to the committee.

The Scottish Executive consultation received 106 replies, of which only five raised the issue of the £10,000 threshold. The Executive listened to students and parents in that consultation. I accept that organisations have raised the issue, but the right place to deal with it is Westminster. The Liberal Democrats are pursuing the issue and will argue for an increase in the threshold.

Students in Scotland no longer have to pay tuition fees. When the bill is passed, students will have access to grants of up to £4,000. Student debt will be reduced by up to £4,000. Ninety-nine per cent of students will have less debt, even once the £2,000 contribution is added. Most important, the Liberal Democrat-Labour coalition will have delivered the best student package in Europe.

We now move to open debate. As we have time in hand, members' speeches can last up to five minutes.

Thank you, Presiding Officer, for allowing me to take part in this very important stage 3 debate. As a member of the Enterprise and Lifelong Learning Committee, I thank all those who were involved in our work on the bill: the committee members, the clerks and all the stakeholders who gave evidence to the committee. Like other members of the committee, I found that evidence very interesting.

Before I was elected to the Parliament, I worked in further and higher education for 17 years, mainly during the period of Tory rule at Westminster. Like my Liberal Democrat colleague George Lyon, I say that I would not like to take a lesson on principles from Brian Monteith's party.

From my experience, I think that we certainly need to raise substantial amounts of money if we are to widen access. We must widen access not to the groups that continually attend further and higher education colleges and universities but to socioeconomic groups 3 and 4. Even when there were full grants, the percentage of people from socioeconomic groups 3 and 4 attending university did not hit double figures. The packages that we are discussing today and our lifelong learning strategy must attack that problem. I believe that the bill does so.

I will concentrate on widening access to all within our communities, whether people want to enter a first-steps programme, a further education college or a university. The bill cannot be seen in isolation from the wider lifelong learning agenda, but it has key elements that will help to promote wider access to education and training and remove barriers. We must not forget the work that is being done across the board and in which the Enterprise and Lifelong Learning Committee is participating fully.

As George Lyon said, the proposals have been designed so that no student incurs more debt under the new system than they would have done under the current system and, crucially, so that students from poorer families end up with less debt. That is very important.

I welcome the introduction of a scheme enabling part-time students to borrow up to £500 to assist with study costs. In my previous job, I saw the changing patterns of people's learning. More and more people are studying part time. That financial help will be most welcome and will encourage more people to come through the doors, sometimes as their first step. The first step is often into part-time education.

I also welcome the introduction of a young students access bursary scheme, which will be administered by the Student Awards Agency for Scotland and will provide help for young students' living costs, depending on their family's income. I also welcome the establishment of mature students bursary funds, which the committee recommended. Those funds will be administered locally so that there can be flexibility in help and support for the mature students who need it. That represents a move away from 100 per cent loans to support through bursaries for many students.

The bill is good news for Scottish students and in particular for those on low incomes. Those on the lowest incomes, who have never paid fees, will receive up to £4,000 a year in additional bursary support.

As George Lyon said, many students will be exempt from the graduate endowment. They will also benefit from the additional £10 million access payment fund.

I am pleased that not only mature students but lone parents and students with a disability will not be liable for the endowment.

No one has mentioned the fact that someone undertaking a higher national certificate or diploma at further and higher education colleges will be exempt. Perhaps the minister will say what stage has been reached by the technical working group that is considering how students who complete an HNC or HND at further and higher education colleges will be affected if they move on to take a degree.

Like Marilyn Livingstone, I was a lecturer in further and higher education. How much would it cost a student to do a one-year top-up course to upgrade from an HND to a BA, for example in business studies? Would that student pay the £2,000?

That is the question that I am putting to the minister. From the evidence that we took, we learned that the technical working group was examining that matter. I am asking how far down the road the group is. We were assured that such students would not pay the full sum, but we do not know the details.

The Committee of Scottish Higher Education Principals welcomed the hypothecation of money from the endowment. That means that there will be money in further and higher education for the students who most need it—the future generation of students from socioeconomic groups 3 and 4, who we hope will attend colleges.

I welcome the bill as part of the wider lifelong learning agenda, which has social justice at its core. In particular, I welcome the announcement of £20 million over three years to ensure that further education students have equity of funding with students in higher education. I support the bill.

On a point of order, Presiding Officer. Earlier on, Conservative members sought guidance on the time that would be available for the debate and we were given to understand that it would be restricted to half an hour. As a result, not only did we trim our speeches, but we did not take interventions, as that would have made it difficult for us to put across all the points that we wanted to make. I now understand from the methodology that we are following that we are in open debate and that we will proceed to 12.30 pm. Is that correct?

The timetabling motion allows us to run until 12.30 pm. Therefore, as I indicated to the chamber, I will allow speeches of up to five minutes in this section of the debate. We have 45 minutes in hand.

I will pass on the opportunity of speaking for 45 minutes.

I will speak from a personal historical perspective. My wife and I put three sons through higher education, with diminishing help from the state. During their time in higher education, the minimum grant diminished, disappearing altogether by the time that my third son had gone through university. We all know that the Tories made that decision. I put that on the record because it is important to remember that they began the process that put us in the situation in which we find ourselves today.

Rather regrettably, student loans then became the flavour of the time, and with student loans came student poverty, which Dennis Canavan mentioned. I will plagiarise some of the copy to which he referred this morning. A report in The Herald today on research carried out by Dr Claire Carney at the University of Glasgow found that almost half of the 1,600 second-year students surveyed were working part time for an average of 14 hours a week, compared with a Government expectation of 10 hours a week. The most important part of that report was the finding that, in seven out of eight indicators of physical and mental health, student health among those surveyed was significantly poorer than the health of a comparable cross-section of the population. That is not good news.

Such reports will not encourage potential students who might be uncertain about a career choice of entering higher education. They might prefer to take their talents to jobs outwith higher education, in order to earn a regular salary. Their wasted, misapplied, misdirected or redirected talent might be a loss for them as individuals, and also a loss to the nation.

I recognise that some of the help that is being given to people from financially poorer backgrounds will be useful. However, does the minister appreciate just how much pressure there is to conform to the non-academic norms in many areas? When full grants still existed—with travel expenses and tuition fees paid for and everything that there used to be—I recall that a sixth-year girl sought an interview with me just after new year, to say that she was leaving school, because the peer-group pressure from her friends who were not studying was too much for her to sustain. Are the grants sufficient to turn such situations round? I hope so, but I doubt it. Will those who will not obtain grants, or who are on the margin of grants, and who are faced with tuition fees in the long term, be deterred? I think that they probably will be.

I propose a slightly frivolous compromise. Rather than arguing about graduate endowments or tuition fees, perhaps it would be more appropriate if we called the bill the higher education invoice (student tariff)—or HEIST—bill.

The starter level of £10,000 for repayment is nonsense. Although George Lyon referred to how few objections there appeared to be to that level, the National Union of Students Scotland says:

"the scheme departs from any notion of financial benefit from higher education … It cannot be right to demand a financial contribution from graduates who have not benefited financially from their education".

Given that level of £10,000 for repayment, none of us in the chamber is able to suggest that a graduate would benefit from their higher education.

Having abolished grants completely, Labour now brings back a few; having condemned the Tories' loans system, Labour has refined it; and having abolished tuition fees, Labour reinstates them, post graduation. As I used to write on the end of essays, "Not good enough. Could do a lot better."

If any speech encapsulated the bill, it was that of Mr Lyon. If I may, I will pick upon his quaint utterance of "hyperbowl". That is not a term with which I am familiar, but it seems redolent of a big, gaping receptacle. In the context of his contribution to the debate, that seems wholly appropriate. It was clear from his speech that ignorance is indeed bliss, because the Tories did not abolish grants or introduce tuition fees—Labour did. I say to Mrs Livingstone—who seems to have deserted the chamber—that no Scottish student paid tuition fees under 18 years of Tory government, and a grant was given to any Scottish student whose income circumstances required it. Let us have no hypocrisy from the Liberal Democrat benches.

The bill has always seemed to me to be strange: what its authors seek to present it as is not what, on analysis, it is. If the bill is to taken seriously as a credible attempt to abolish tuition fees, where within it is the phrase "abolition of tuition fees"?

Will the member give way?

Certainly.

Does the member not agree that the bill has nothing to do with tuition fees, which have been abolished?

The bill may, in the perception of Liberal Democrats, have nothing to do with tuition fees, but in the perception of everyone else—with the exception of Mrs Radcliffe's Labour colleagues—the bill has everything to do with tuition fees. With the fondness for verbal usage that the Liberal Democrats are so keen on, the bill is an attempt to use vocabulary to create a postgraduate tuition fee by any other name. No one outside the chamber who has half a brain—

Will the member take an intervention?

No—I have already taken Nora Radcliffe's intervention.

No one outside the chamber will accept for one moment that the bill supports the abolition of tuition fees in any way. It is a patent instrument for the maintenance of tuition fees, switching them from an up-front charge for people going to university to a deferred charge for people who have left university.

Perhaps there is nothing particularly surprising about the bill. If we are to be bluntly honest about the approach of the Labour party, it never wanted to abolish tuition fees—good heavens, the Labour party introduced them, so why on earth would it seek to abolish them?

Will Annabel Goldie give way?

Very well.

For the record, does the member agree that her party's Government severely reduced the level of grant, but that it was the new Labour Government that abolished grants?

As I made clear, no student in Scotland suffered under the Conservative Government as students have suffered under the Labour Government, or as they will suffer under the bill's proposals.

The bill is both hypocritical and duplicitous. The hypocrisy is that the Labour element in the chamber does not want to abolish tuition fees—no one believes for one moment that it does. However, it had to satisfy an electoral compact with the Liberal Democrats, who were on record before the Scottish Parliament elections as telling everyone who wanted to listen that they wished to abolish tuition fees. It is amusing and, I am sure, almost distressing to the public and our audience outwith the Parliament to see the braying—some might say asinine—discomfiture of the Liberal Democrats when they are forced to try to defend the indefensible.

Quite simply, in the partnership agreement that accompanies the unholy electoral alliance that is the Executive coalition, the Liberal Democrats said, "You've got to do something that looks like abolition of tuition fees." The Labour element of that coalition, which was not interested in the slightest in the abolition of tuition fees, said, "Leave it to us—we'll mesmerise you with a document that will say everything but ‘get rid of tuition fees'."

That is the patent nonsense with which we are now confronted.

Will the member give way?

No. I am sorry, but I do not have a lot of time.

The bill contains a proposal that is patently a charge on our students. Although members of the coalition parties might not want to accept the evidence, all the evidence that was taken made it crystal clear that the imposition of a deferred charge, tax or fee—members can call it what they will—on our graduates is a deterrent, and to seek repayment at a £10,000 threshold is penal. Some would say, and the Conservative party has argued, that it is a tax.

In principle, the Conservative party is unable to accept the bill, as it is patently dishonest. Section 1 does not do what it sets out to do—on the contrary, it maintains a provision for Scottish higher and further education that we, and to their credit, members of the Scottish National Party, are opposed to. Once upon a time, the Liberal Democrats were also opposed to it. Unlike the Liberal Democrats, Conservatives will not betray their commitment to the electorate; we will honour and abide by it.

Voters often say that they are cynical about politicians. They need only listen to a speech delivered by Annabel Goldie to feel that. She talked about hypocrisy, yet I have never heard a more hypocritical speech in the chamber. We must have a little bit of honesty in politics. Annabel Goldie used the word hypocrisy—she levelled the charge at the Liberal Democrats. Dishonesty in politics serves nobody, whether it is the Tories yesterday, talking about lowering income tax but putting more into public spending, or today, talking about how much they supported the students during the 18 long Tory years. The Tories started the attack on student support, which the Labour-Liberal coalition in the Scottish Parliament is now reversing. The Tories should take the responsibility where it lies. They started the downward spiral for students. Labour and the Liberal Democrats have reversed the trend.

Will the member take an intervention?

No. Annabel Goldie would not take an intervention.

As George Lyon said, the first stage of the process was the abolition of fees last year. The Education (Graduate Endowment and Student Support) (Scotland) (No 2) Bill is the second stage of the process. Fees have been abolished—it is as simple as that.

If fees have been abolished and the Liberal Democrats have achieved what they told the electorate they would achieve, why, when they did not want to introduce anything else, are they in support of the introduction of a graduate endowment, otherwise known as a tax?

I am happy to answer that question. I am absolutely clear that if the Liberal Democrats had a majority in the Parliament, we would have stopped after the first stage of the process, but we are in partnership with the Labour party in the coalition, and that is what coalitions are about—winning some, losing some and compromise. The most important point about coalition politics is that the partners do not get all that they want all the time. We have managed to abolish tuition fees, which was our main aim, and we are now in the second stage of the process, which we are happy to sign up to, which is the graduate endowment.

The most important point about the bill, and the reason why I am particularly happy to sign up to the second stage of the process, is the inclusion of section 2, on the use of graduate endowment income. When the bill was introduced in October, that section was not included. I am absolutely delighted that it is now. It says:

"The Scottish Ministers shall, in making budget proposals to the Scottish Parliament, include provision that the income arising from the graduate endowment for the financial year to which the proposals relate be used for the purposes of student support."

That is what the bill is all about—student support. There will be a ring-fenced fund, to which, in the early years, the Scottish Executive will contribute.

If it is a ring-fenced fund, where is the core funding on top of which the extra comes? All the ring-fenced fund will do is substitute money that would otherwise have come from general taxation.

That is not true. The Executive is absolutely committed to paying into the student graduate endowment fund until, in future years, the fund is completed by contributions from ex-graduates. I am delighted to support the bill. It will ensure that £2,000 grants are made available to our poorest students, which is worth while in itself. George Lyon talked about the bill providing the best student support package in Europe and I absolutely agree that that is the case.

The bill is part of a two-stage process. I am particularly pleased with the Liberal Democrats' input, working with our Labour partners in coalition, to delivering the bill. We got rid of student tuition fees in the first stage last year; we are now instituting the student endowment as part of the second stage of the programme. The bill is about working together for the advantage of our students, enabling students to access further and higher education and removing barriers. I am particularly proud of that.

I must say that the Tories' contribution to the debate is absolutely astounding.

The main criterion on which the bill should be judged is whether it will encourage more people, especially young people, to go on to higher education, particularly students from low-income families. I doubt very much whether it will. If more students do go on to higher education—and I sincerely hope that they will—it will be despite the burden of post-graduate payments rather than because of it.

I am disappointed that the Executive refused to enshrine in statute the principle that students from low-income families should not be prevented from pursuing a course of study. The Executive refused to accept any amendments at stage 3—so much for it listening to the Parliament. Even amendments that were in line with the Executive's declared policy and those that sought to implement the recommendations of the Cubie committee, which the Executive set up, were deemed unacceptable by the Executive.

On the threshold for payment of the post-graduate contribution, Wendy Alexander asked why we should inflict on employers two different systems of collection. The main aim of the bill is not to create or reduce burdens for employers; the main aim is educational. I say to Wendy Alexander that the burden on employers would be reduced—indeed eradicated—if the proposed system of graduate endowments were replaced by a fairer system of income tax, which employers would simply operate through pay as you earn. Instead of a fairer system of income tax, whereby people, including graduates, on higher earnings pay more, we have the imposition of post-graduate tuition fees. I know that the Executive does not like that term but, like it or not, the endowment is a form of graduate tax or tax on education.

It used to be generally agreed that a progressive system of taxation was based on the principle of "from each according to their means; to each according to their needs"—that is a basic socialist principle. Today's Labour Government and the Lib-Lab Executive in Scotland seem to be afraid to implement that principle. Instead the Executive has concocted a system of graduate taxation.

Does the member recognise that the Scottish Parliament does not have control over income tax, which is reserved to Westminster, which the member left? Dennis Canavan keeps referring to the endowment being a tax. If he feels that it is a tax, which the Parliament is not allowed to levy, he should challenge it.

The Parliament is allowed to levy taxation if it wants, although its taxation powers are minimal—

Mr Canavan.

The Executive is afraid to use those taxation powers—

Mr Canavan, I must ask you to face your microphone when you are speaking, otherwise the chamber will not hear you and neither will the official reporters.

My apologies. I was saying that the Parliament does have taxation powers and that the Executive is afraid to use them. The Parliament's taxation powers are minimal, but the Executive could make representations to the Chancellor of the Exchequer regarding a much fairer system of income tax, whereby people, including graduates, on higher incomes would pay more.

Can I say anything positive about the bill? The only thing is that it is at least an improvement on the status quo—it is an improvement on the system that was introduced by Westminster—but I do not think that that is good enough. When the matter was debated in the House of Commons, I pointed out that many of today's Cabinet ministers were beneficiaries of a generous grants system, which enabled them to go on to get the benefits of higher education. It is rather ironic that those same Cabinet ministers are now kicking away the ladder of opportunity from many of the young people of today, particularly those from low-income families. The same charge can be levelled against the Scottish Executive.

Investment in higher education is an investment in our future, but the bill does not ensure that there will be an adequate level of investment. The Executive is selling our students short. It is missing a golden opportunity to show the Scottish Parliament acting as a standard-bearer in ensuring a much fairer deal for our young people, who will, we hope, build the new Scotland and help to build better opportunities and a better future for all our people.

As convener of the Enterprise and Lifelong Learning Committee, let me begin by repeating what Marilyn Livingstone said by way of thanks and gratitude to everyone who came to give evidence to the committee during the course of the bill. I also thank the minister for her congratulations to the committee.

Before I deal with the substantial points, as the Minister for Parliament is in the chamber, I want to make a parliamentary point about the legislative process through which this bill passed because it may affect other bills in future. At stage 1, the Subordinate Legislation Committee and the Enterprise and Lifelong Learning Committee unanimously concluded that there was the wrong balance between the primary and the secondary legislation and that some materials that were designated for the regulations should really have been in the bill. The committees did not push that point because of the tight timetable that was required to implement sections 3 and 4.

I ask the Minister for Parliament to consider the issue for future legislation, because it would be bad news for Scotland if we continued to get the wrong balance. Everybody knows that to change primary legislation requires a three-stage consideration by the Parliament, whereas there is no ability to amend regulations—there is only the ability to say yes or no. The functioning of our legislative process would be helped if we took that lesson on board. I hope that the Minister for Parliament will consider that point.

Dennis Canavan hit the nail on the head when he said that, when we are considering the bill and the Cubie report, the central issue is whether the bill will increase access to higher and further education in Scotland. Marilyn Livingstone pointed out a dogged statistic that has been with us for many a long year: the percentage of students from low-income families who have gone on to higher education, irrespective of the financial regime governing grants and loans, has remained pretty much static almost since the war, despite the Robbins reforms of the 1960s and other changes that have taken place since that time.

Since the bill is likely to be passed, I hope that we do not accept that issues such as the payment threshold are carved in stone. The Enterprise and Lifelong Learning Committee is about to undertake a substantial inquiry into lifelong learning. The inquiry remit includes all post-school education and training. I imagine that a key aspect of our inquiry will be to address the issue of access to further and higher education. The committee will want to look again at whether sufficient financial and other support mechanisms are in place to try to increase the number of young people in social classes 3 and 4 going into higher education.

Kenny MacAskill mentioned the East Ayrshire educational maintenance allowance scheme initiative. I support the expansion of that scheme, and I hope to see its extension throughout the rest of Scotland, at some time in the near future. Early indications as to the success of the pilot scheme are encouraging. It does seem to be getting people from lower-income backgrounds into higher and further education.

The threshold issue will have to be addressed again. I think that even the Executive agrees that a threshold of £10,000 is ridiculously low. The threshold at which loan repayments start has not been altered since 1997-98, when the new income-contingent scheme was introduced. The repayments for the endowment will start in 2004, by which time seven financial years will have passed. The value of the threshold has eroded by about £1,000 a year. However, the threshold was set far too low to start with; we need a substantial hike. The threshold should be set in line with earnings. That brings us back to the principle behind the Cubie recommendation of a threshold of £25,000, which was to reflect the beneficial effect of a higher education on earnings. That is an important principle reflecting fairness and equity.

Ministers have three years—or perhaps they have two years, after which we will have a year—to consider what will happen after 2003 before the scheme starts in 2004. Once the Enterprise and Lifelong Learning Committee has completed its inquiry into lifelong learning, we should take the opportunity to return to this issue and do what is necessary. Our ambition should not be that students from low-income families leave higher education with less debt; our ambition should be that they leave with no debt.

I want to reinforce a point that I made earlier. This bill is an improvement on what went before and I am very glad to see it. However, what have been shown in the debate this morning and in debates during the preceding months—and I am referring particularly to the contributions from Dennis Canavan—are the complications that remain to be addressed.

We need a system of support for all young people—a system that, in the interests of social inclusion, gives equal value to the contributions of all young people between the ages of 16 and 24. We need a system that values people and supports them whether they are employed, unemployed, still at school, leaving school, at college, at university, in full-time education or in part-time education, and whether they are single parents, leaving care, at home or leaving home. We need a system of support for young people that meets all the needs of all young people between those ages.

This bill, in part, addresses the needs of students in colleges and universities. We need to consider wider issues and to be more progressive. I repeat what I said earlier about what the Irish are considering. With our colleagues at Westminster, we should start to consider the idea of introducing a basic income scheme, the first part of which should be for young people between the ages of 16 and 24.

I thank all members who have spoken today and I acknowledge their comments.

By supporting this bill, the Scottish Parliament is upholding three important Scottish virtues. The first is a reverence for learning, which is enshrined in the aspiration of the democratic intellect. The second is our national sense of fairness, with the greatest support going to those who need it most. The lad o pairts must not be held back by the financial circumstances of his or her home. The third Scottish virtue is honesty and thrift—not making fraudulent financial commitments that we neither cost nor say how they will be paid for.

The coalition parties are delivering for Scotland. We are reflecting this nation's sense of reverence for learning, our sense of fairness and our honesty and thrift in our dealings. Scotland should be proud of a Parliament that, in its first session, is upholding the virtues that Scotland holds dear and is giving Scottish youngsters, particularly our poorest youngsters, their best ever chance to go to university.

Let me deal with three of the points that have been raised. First, Marilyn Livingstone asked whether those paying for one-year top-up degrees would pay the graduate endowment. I am happy to confirm that those who transfer from a higher national diploma to a one-year top-up degree will not pay the graduate endowment. The latest draft of the regulations from the Executive is framed to say that.

Annabel Goldie talked about what the Scottish electorate wants. That is not the strongest suit of her party. I note that her party's proposals for loans not to be related to the ability to pay and for graduate endowment repayments to be related to the market's graduate mortgage rate of interest are likely to find as much favour with the electorate as some of her party's other proposals on student support.

Will the minister give way?

No, I have two minutes. Let me move on.

I will deal with the more substantive observation, which was made by Dennis Canavan and Tommy Sheridan. Dennis Canavan suggested that the ladder of opportunity is being kicked away. I want to deal very precisely with that point, and I will do it with illustration to Tommy Sheridan, who is not gracing us with his presence any more.

Tommy Sheridan went to university in Stirling in 1980. If he went up as a low-income student in 1980, less than £3,200 in grant was available to him. If he were going up this August as a low-income student, he would have access to more than £4,300 in bursary and loan support. That additional £1,100 is the fundamental nature of our determination to tackle student poverty without raising the debts of any low-income students. No one will have more debt than they do today, but 45 per cent will have more help.

The convener of the Enterprise and Lifelong Learning Committee, Alex Neil, made a point about the threshold for repayment. We have said that there is time to revisit the threshold before anybody pays a ha'penny of graduate endowment, but this Parliament should not send a signal to employers in Scotland that we will ask them for two separate repayment schemes.

I welcome the Enterprise and Lifelong Learning Committee's determination, as the convener indicated, to examine access. That is the nature of the challenge that faces us. We need to change the fact that 10 per cent of students come from social classes D and E backgrounds. Many Labour and Liberal Democrat members feel that many challenges lie ahead of us.

Scotland's higher education tradition gave us four universities when our nearest neighbour had just two. That precious tradition extends far beyond the issues of student support. We need to nurture it more effectively as a Parliament.

Today, we have the opportunity to endorse a bill that seeks to address the long-term future of higher education support. It is the sort of measure of which the whole Parliament can be proud. It is taking an important step forward. I thank the many members who have taken an interest for their support. I call on the Parliament to give its support to the Education (Graduate Endowment and Student Support) (Scotland) (No 2) Bill.