Commons statement on Higher Education Reform - Feb 24

The Secretary of State for Education (Nadhim Zahawi)

With permission, Mr Deputy Speaker, I would like to make a statement about how the Government are safeguarding the future of our universities, putting them on a sustainable path for taxpayers and students. Our universities—indeed, our entire higher education system—are some of the most innovative, important institutions in our country. Four of our great institutions are ranked in the global top 10 list. They are a true powerhouse of innovation and research—they even played a leading role in the development of the covid vaccine—and they will play a significant role in the prosperity of our country for years to come.

We recognise that education at all levels plays a role in learners’ personal fulfilment and pursuit of knowledge, whether that is in the humanities or in science and engineering as in my case, and in higher or further education. As we move past the pandemic and start a new chapter in our country’s history, now is the time to ensure that our universities are on a solid footing and sustainable ground for generations to come. To do so, I am announcing the launch of two consultations, which, taken together, outline our proposals for the higher education sector and secure a better deal for the student and the taxpayer. The consultations will deliver solutions to the problems that Sir Philip Augar’s independent panel examined in such depth and so thoroughly. The higher education policy statement and reform consultation, and the lifelong loan entitlement consultation, address the pivotal recommendations made by the panel, to whom I am indebted for their excellent work.

As Members across the House know, one of the Augar panel’s core recommendations was the provision of a lifelong learning loan allowance. That is why today I am launching a consultation on the lifelong loan entitlement, to seek views from the sector and the public on the shape and scope of this important policy. Under this new and flexible skills system, people will be provided with a loan entitlement equivalent to four years of post-18 education to use over their lifetime, whether in modules or as a whole. They will be able to train, retrain and upskill as needed in response to changing skills needs, sectors and employment patterns. It will be a powerful and innovative vehicle in levelling up, providing real opportunities for everyone and giving businesses the skilled workforce they need to thrive and grow.

In light of the new entitlement, it is now more important than ever that our higher education funding system is fair for both the student and the taxpayer. The bottom line is this: if we fail to act, we can expect just 23% of students who enter full-time higher education next year to repay the full cost of their loan. That is a challenge that our reforms will address. We are maintaining the repayment threshold at its current level for current plan 2 graduates until 2025—those who took out loans after 2012. We are also reducing the repayment threshold to £25,000 and extending the loan repayment period from 30 years to 40 years for students starting their studies in autumn 2023. That will make the system fairer for students and taxpayers. Graduates will see the benefit of their degree all their earning life, so it is only right and fair that they continue to contribute. We expect that as a result of our changes the proportion of students paying back their loan in full will increase to just over half. Our significant regulatory reform work, which we are taking forward with the Office for Students, alongside the measures we are consulting on, will drive up student outcomes and help students to access high-value employment that benefits them and the economy.

Without those interventions, the student loan book will balloon to nearly half a trillion pounds—half a trillion pounds—by 2043. I have thought very carefully about fairness for students when pulling together this balanced package of reforms. I am pleased to say that we have delivered on our manifesto commitment to address high interest rates, by reducing interest rates for students starting next year to RPI plus 0%, ensuring that graduates, under these terms, will not have to repay more than they have borrowed in real terms. New students starting in the academic year September 2023 are expected to borrow an average of £39,300. I have seen some spurious headlines today. In today’s prices, they will borrow £39,300. 

We forecast that the average graduate will repay £25,300 in today’s prices over the course of their loan. How does that compare with the current system? Under the current system, £19,500 is what they repay. I hope that offers colleagues clarity, rather than claptrap headlines. I want to be clear: no student will repay more than they took out in today’s prices. Let me repeat that: no student will repay more than they took out in today’s prices. We are also continuing to freeze tuition fees for all students for a further two years. The combination of those measures, the reduction in interest rates and the two-year freeze, means a student entering a three-year course next autumn could see their debt reduced by up to £6,500 at the point at which they become eligible to repay. When the total seven-year freeze is taken into account, that totals up to £11,500 less debt at the point at which they become eligible to repay.

Alongside that, we are investing almost £900 million in our fantastic higher education system over the next three years. That includes the largest increase in government funding for the higher education sector to support students and teaching in over a decade. An additional £750 million will be invested in high quality teaching and facilities, including in science and engineering, in subjects that support the NHS, and in degree apprenticeships. There are those who say, “Why aren’t you making higher education free?” To those people I would say, “Look at our counterparts in Scotland.” Over the last five years, universities in England have been able to cover their teaching costs more successfully than their Scottish peers, because of our more sustainable system of tuition fees and grants. 

As part of our plans to reform the higher education sector, we are building on our work with the Office for Students to set minimum expectations around completion rates and progression to graduate jobs or further study. We are seeking views on policies that will help to ensure that every student has confidence that they are on a high-quality course that leads to good outcomes, a good job and ensuring that the growth in our university sector is focused on high-quality provision wherever they are in the country. We are consulting on controlling student numbers and introducing a minimum eligibility requirement to access student finance. I want to make sure that every student who goes to university will be able to reap its true benefits and not feel that they have been mis-sold and saddled with debt after completing their course. 

It is really important that we have the conversation about the need for minimum eligibility requirements to ensure students are sufficiently prepared to benefit from higher education before they enter university. For example, that could be a return to the old requirement of two E grades at A-level, or a pass in GCSE English and maths. Of course, there will have to be exemptions for some groups, including mature students and part-time learners, on which we are also consulting. Young people should not be pushed into university if they are not ready. After our proposed exemptions that we are consulting on are applied, less than 1% of total entrants would be affected by a minimum eligibility requirement set at grade 4 at GCSE, but we will listen and be open-minded. 

Student number controls would limit the uncontrolled growth of provision that does not lead to good outcomes or good jobs. Incentivising the expansion of provision with the best outcomes for students, society and the economy has to be our goal. The proposals are about advancing real social mobility. That means shifting from a focus on simply getting students in the door counting the inputs, to ensuring they complete their course and secure a good outcome after they graduate—being obsessed about outputs and outcomes. 

As with everything my Department does, my officials and I have also considered carefully how we can support disadvantaged students with this package of reforms. Access to higher education must be dependent on attainment and ability to succeed, and not inhibited by a student’s background. Our proposals to reduce fees for foundation years would make them more affordable for students who need a second chance to enter higher education. Our flagship national scholarship programme, in which we will be investing up to £75 million, will help to support high-achieving young people from disadvantaged backgrounds to achieve their dream, regardless of course or university.

Finally, to complement the lifelong loan entitlement, we are rolling out new approved higher technical qualifications. Those will be high-quality, job-facing alternatives to degrees, approved to deliver the skills that employers need. From academic year 2023-24, we will extend student finance access to those qualifications and allow learners studying them part-time to access maintenance loans, as they can with degrees. That will address financial barriers for learners and move towards the flexibility that we envisage through the lifelong loan entitlement. Those two policies will be vital to bringing further and higher education much closer together, just as the independent panel recommended.

I believe that these reforms are fit for a dynamic and growing economy. The reality is that, apart from buying somewhere to live, taking on a student loan can be one of the biggest financial commitments that any young person can make. I am confident that they will set the sector up for success in the years to come and keep our student finance system fair and sustainable for students and the taxpayer. I have been continually impressed by the resilience demonstrated by students throughout the adversity of this pandemic. We owe it to this generation, and generations to come, to ensure that education remains open to anyone with the ability and desire to benefit from it. I commend this statement to the House.

12:31:00

Bridget Phillipson (Houghton and Sunderland South) (Lab)

I thank the right hon. Gentleman for advance sight of his statement and I join him in his comments about the events that we see unfolding in Ukraine. 

Given that 1,000 days have passed since May 2019, Members might be forgiven for forgetting the recommendations of the Augar review and the context in which it was launched. Concerns about fairness and affordability for students seem to have been lost entirely today. As the then Conservative Prime Minister outlined in launching the report: 

“removing maintenance grants from the least well-off students has not worked”.

 There has been little sign of any real concern for less well-off students this week. Instead, we have seen the Government’s total lack of urgency about any matter except their own self-preservation; their lack of ambition for our young people; their lack of ambition for our universities; and ultimately, their lack of ambition for our country. This is a Government whose approach to some of the biggest issues facing our universities is simply to kick the can down the road. They are freezing fees, not changing them, and tying interest rates to measures that they intend to phase out, and there is a deafening silence on living costs for students.

Time and again, this Conservative Government reach for the pockets of working people, with council tax put up twice, income tax thresholds frozen, a national insurance hike and now falling repayment thresholds that will see working people paying more for longer. This Government, who are responsible for a growing failure to support young people to achieve at GCSE, now want to shut people out of university rather than raising standards in schools, slamming the door on opportunity and ambition. As for the lifelong learning loan, which, as the Secretary of State noted, was a core recommendation of the review, why are we waiting even longer for yet another consultation when that was first promised as part of the Skills and Post-16 Education Bill?

This is not the approach that we need. It will not fit our country to face the challenges of tomorrow. These announcements hold back our universities, our young people and our country. A generation of children has gone through education under Conservative Governments since 2010. Let us consider what their experience has been: real-terms cuts to funding per pupil; secondary school classes at their largest for a generation; hundreds of thousands more children eligible for free school meals; school building repairs cancelled and postponed; hundreds of days lost to the pandemic; botched exam arrangements; and a historic failure to invest in the children’s recovery plan that the Government’s expert recommended and which our children desperately need. As those children now look ahead to university and the years that follow, they will see higher costs than ever before, stretching almost to retirement. This is a generation of children let down from primary school right the way through to university. 

Those decisions are about choices and priorities, but for this Government, our children and young people are an afterthought—an opportunity for a Treasury saving, not the future that we create together. It need not be like that. In Wales, the Labour Government have chosen to focus on supporting students to succeed. They chose to provide extra help on the cost of living and to widen access—two themes missing almost entirely from the statement that we heard. 

Today’s response, for which we have waited all this time, represents a failure by the Government and, sadly, by the Secretary of State. I have a great deal of respect for him and I know how seriously he takes his role, but what we have is 1,000 days of complacency ending in a victory for the Chancellor, not a victory for Britain. There was a failure last autumn to persuade the Treasury that higher education should be central to the economy and success of our country. There has been a failure to rise to the challenges that our universities face and to design a solution, and there was a failure, this spring, to navigate the chaos of a Downing Street paralysed by scandal.

The people who will feel the pain of this failure and that defeat are not in the Chamber today. They are teaching and learning in our universities. They are sitting in school dreaming of the better future that they deserve and which Labour believes we can achieve. Labour sees their future and our universities very differently from the Government. We believe in matching the ambition of our young people, in enabling university staff to support young people and our country to succeed, and in creating thriving universities at the heart of our towns and cities.

The tragedy today is that the Secretary of State knows full well that this is not good enough, but he cannot persuade his Treasury colleagues otherwise. Unlike this Government, the next Labour Government will treat universities not as a political battleground, but as a public good, central to the success of our country.

Nadhim Zahawi

I respectfully remind the hon. Lady that someone from a disadvantaged background today is 80% more likely to go to university than they were a decade ago. Let me go further and remind her that, in 2016, the coalition Government introduced the new apprenticeship standards and made sure that businesses were at the heart of setting those standards, because it is not politicians or experts in Whitehall who can decide what sectors of the economy will change and re-emerge. 

There is a common theme—a strategy—running through all our reforms, from the apprenticeship standards, with more than 5 million people entering apprenticeships, to the skills White Paper, the Skills and Post-16 Education Bill, which we just voted on and sent to the other place, and now our HE reforms. What if someone had said to me when I was choosing those new standards as the apprenticeships tsar that there would come a Prime Minister and a Chancellor who would back adults at any point in their life to upskill or reskill, or that we would say to someone in Aberdeen oil and gas who wanted to go and work in offshore wind, “We will stand behind you” with funding of £37,000, the equivalent of four years of education? That is what this Government are delivering and I am proud to be the son of a country that gives real opportunity to people from all backgrounds. 

The hon. Lady mentioned the issue of excluding those who may not do so well in GCSEs. That is not what the consultation is about. It is about making sure that there are routes for those people, so that if they do not do well in their maths or English GCSEs, but do well in their A-levels, university is still open to them. However, a different route—an apprenticeship degree—is also open to them, as well as other vocational qualifications. Bringing FE and HE together was central to the Augar panel’s recommendations and that is what we are doing. 

Finally, I respectfully remind the hon. Lady, who talked about our financial settlement, that my Department has a settlement of £86 billion for 2024, with £4.7 billion going into schools, £3.8 billion going into skills and £900 million—the highest uplift in a decade—going into our universities. That is our plan; she has no plan.

Robert Halfon (Harlow) (Con)

I broadly welcome the Government’s proposals. I pay tribute to the Secretary of State and particularly to the Minister for Higher and Further Education, who I know has worked hard on them; I am very grateful for the briefing that she gave me.

I welcome the cut in interest rates, which I think will make the system fairer. I have always felt it unfair that working-class people in my constituency of Harlow and across the country have a huge tax burden to pay for people to go to university and get better-paid jobs. The Government are right to rebalance that; I just urge caution on the maths and English GCSE issue. I know that the Secretary of State has qualified it, but there is a better option: just as apprentices do functional skills while doing their apprenticeships, why not make students who have difficulties with maths and English do refresher courses while they have the chance to go to university?

A more fundamental issue is that our education system narrows too early from the age of 16. I urge the Government to consider introducing an international baccalaureate system, as is used in 150 other countries. It could include vocational and technical education, but also English and maths: we would then not face the problem of people not being able to do maths and English by the time they get to university.

I really welcome the extra £900 million investment. I urge the Secretary of State to allocate a significant proportion—perhaps £500 million—to degree apprenticeships, which would mean an extra 34,000 apprentices at higher level. That would solve the student finance problem, because students would earn while they learn and would meet not only their own skills needs, but those of the country. They would be almost guaranteed a job, because 90% get a job at the end. That is the way forward. I know that the Secretary of State wants a 10% target, but a target over the next 10 years for 50% of students to do degree apprenticeships would transform skills in our country and transform the lives of those students.

Nadhim Zahawi

I am grateful for the support for our proposals from my right hon. Friend the Chair of the Select Committee on Education. I will absolutely be listening—this is a real consultation—to his proposals and concerns about the maths and English GCSEs. I completely agree that the concept of someone having to pay back more than they have borrowed is unfair; addressing that is a manifesto commitment, so we are delivering it. I am proud that we are touching 20,000 students on degree apprenticeships. I want to go much further than that and have set a target of 10%.

On the international baccalaureate, my right hon. Friend will know, because he has known me for a very long time, that I am about delivery and outcomes. I have the Department focused on skills, schools and family. Sometimes if you try to hug the world, you don’t do anything well enough, but I hear what he says. Let me deliver what I can while I have the privilege of leading the Department and then go back and do some more afterwards.

Kirsty Blackman (Aberdeen North) (SNP)

I thank the Secretary of State for the advance copy of his statement; I recognise that a lot is going on this morning and that not everything has happened on the normal timeline, so I appreciate it. I add my voice to those expressing solidarity with the Ukrainian people as the horrific events unfold.

The UK Government are presiding over a cost of living crisis, yet they are pursuing policy after policy such as the national insurance hike, the universal credit cut, the mandatory energy loan—even for students without a permanent address, who will have to pay it back despite not necessarily getting it this year—and now this. The UK Government’s decision to create a lifelong graduate tax by increasing the number of years in which graduates pay back will affect only those who are not well off enough to pay it back already. So the tax will hit hardest those who are already struggling to make ends meet.

If new students will on average pay £6,000 more back, where is the money going to come from? Has the Secretary of State done any assessment of the effect on those people’s pension pots as they approach retirement age, given that £6,000 less disposable income will be available to them? If half the students will be paying back the loan for almost their entire lifetime, it makes little difference to them what the total value of the loan is. The changes proposed benefit those who are already paying back, not those who have no hope of doing so.

In Scotland we believe in free education. We believe that it is important, and we will keep tuition free. I make no apologies for that position; it is the right thing to do. How can the Secretary of State and his Cabinet colleagues who paid nothing to attend university justify burdening those who go to university now with lifelong debt?

Nadhim Zahawi

I am grateful for the hon. Lady’s remarks and her solidarity on the situation in Ukraine.

I respectfully disagree with the hon. Lady because, when we look at the overall reforms, we should focus on the outcomes for students. That is what the reforms do. The lifelong learning entitlement, the work that we have done on skills, the ability to do a T-level as a fusion between an apprenticeship and an A-level—there are different paths to achieving a great career as an adult.

Non-graduates continue to pay—at the moment, all taxpayers fund higher education in England at 41p in the pound. We do not think that that is fair or equitable. As former students reach 50 or 51 years old at the 30-year repayment stage, they are coming to their peak ability to earn, so it is only fair that they be able to pay back the loan that they have taken out to give them the opportunity of a great job.

Jesse Norman (Hereford and South Herefordshire) (Con)

I must say that I particularly welcome the Secretary of State’s opening statement about Ukraine. If this country has one institution that speaks for liberality, openness of vision, and conversation across cultures and across parts of our nation, it is the university. His statement at the beginning was absolutely right, and I welcome it.

I hugely welcome the measures that the Secretary of State set out. I congratulate him and the Minister for Higher and Further Education on their work, particularly its focus on quality and inclusiveness together. I can tell them both from a Herefordshire perspective that if someone is coming out of a career serving Her Majesty in the Army or the special forces, the chance to go back and learn as a mature student and pick up a lifelong learning entitlement is of inestimable value. We should massively welcome it across the Chamber.

I also hugely welcome the combination of HE and FE. Skills-based higher education is absolutely vital. As for this conception among the Opposition that there is some lack of ambition, nothing could be further—

Mr Deputy Speaker (Mr Nigel Evans)

Order. Please could we have the question?

Jesse Norman

Of course, Mr Deputy Speaker—in my exuberance, I was enjoying that. Could I ask the Secretary of State to talk just a little more about how the package will work and how it will meet the twin goals of quality and inclusiveness, which are so central to our future development as a nation?

Nadhim Zahawi

I am grateful for my right hon. Friend’s support for the package. He is absolutely right to cite those who come out of their time serving their country with the opportunity to feel that their Government will stand behind them for the equivalent of a four-year degree course. Crucially, they can pull it down in modules, which speaks to the dynamic high-skills, high-productivity economy. That will make a difference. On his point about inclusion, I know that he has been a great champion of the New Model Institute for Technology and Engineering in his constituency. That innovation in our HE sector is equally important. I see it as a priority in our levelling-up agenda.

Mr Deputy Speaker (Mr Nigel Evans)

Will Members please go straight to their question, with no preamble?

Mr Barry Sheerman (Huddersfield) (Lab/Co-op)

My only preamble, Mr Deputy Speaker, is that every Member who has spoken so far has had free higher education, including me, the Secretary of State and you, I believe. Anyone in their right mind knows that this is an area that we should look at—of course we should, so I am glad that it is open to discussion. I have a vested interest: in a former life I was a university academic. Indeed, I taught you at university, Mr Deputy Speaker.

Chris Bryant (Rhondda) (Lab)

Not very well. [Laughter.]

Mr Sheerman

Obviously not very well.

I am also a visiting professor and have a long-term interest in this area, and I have worked with the Secretary of State before. I am worried about some of the unintended consequences of this. I am worried about the long-term impact on many, many people’s lives of higher tax burdens. I am not thinking of the high-fliers, such as those who go into high finance and merchant banking; I am thinking of the core of our skills, the people who became teachers, doctors, nurses and social workers. May I ask him to make this inclusive and, as far as possible, to secure all-party agreement on some of the aspects? As for lifelong skills, many people have tried it but no one has really cracked it. Please value FE as well as HE.

Mr Deputy Speaker

That was completely not what I asked Members to do—bad man.

Nadhim Zahawi

I think I can say that, on this topic, the hon. Gentleman is the voice of reason on the Labour Benches. As he said, I have worked with him, and I know that he has been a great supporter of some of these thinking on this in his work with a think-tank. We are consulting with an open mind to bring people together across parties, and I make that offer to my opposite number as well. Let us try to take the yah-boo politics out of this and get it right, because it is a big moment when we are able to truly integrate FE and HE. And I do not hold it against the hon. Gentleman that he educated you, Mr Deputy Speaker.

Mr Steve Baker (Wycombe) (Con)

I welcome this announcement, and I understand that Buckinghamshire New University does as well. I welcome the interest rate reduction, but may I ask whether the lowering of the threshold for people to start paying will apply retrospectively to those who have long since graduated? Buckinghamshire New University has advised me that the freezing of the tuition fee cap means, overall, a real-terms reduction in funding compared to the 2012 level. Will my right hon. Friend consider additional ways in which universities can earn income, such as expanding the number of international students who can come here?

Nadhim Zahawi

I am grateful to my hon. Friend for his support for these proposals. I can confirm that the lowering of the threshold will not be retrospective. The £900 million will of course make a difference to the HE sector, and that has been welcomed across the sector. We are very ambitious in our targets for international students. We set a target of 600,000 by 2030, and we have just smashed it: we have reached a total of 605,000, and I hope we can continue to beat that target in years to come.

Mr Deputy Speaker

I call Chris Bryant.

Chris Bryant

Thank you, Mr Deputy Speaker. I do not mind that you were taught by the hon. Member for Huddersfield (Mr Sheerman).

I am concerned about academics, because working in academia is pretty grinding at the moment. Academics are trying to run a business, trying to make the sums add up every year, trying to recruit the right students and the best students, and trying to meet all sorts of different quotas, while also trying to get on with their research. What in this package will really make the life of an academic an attractive one?

Nadhim Zahawi

I hope that our £900 million investment in the higher education sector will send a strong message about our backing for it. The Augar panel recommended that we bring down the fees, but we did not choose to take on that recommendation. I think that academics are doing an excellent job, and I am very grateful to them. I am pleased to see them making sure that students are given the quality of HE that they deserve by returning to face-to-face education.

Dehenna Davison (Bishop Auckland) (Con)

I am grateful to the universities Minister, my right hon. Friend the Member for Chippenham (Michelle Donelan), for the assurance that she gave me when we chatted this morning, but there are still a lot of anxious graduates in my constituency and across the country who fear that they will be hit in their pockets by a reduction in graduate repayment thresholds. Can the Secretary of State confirm once again that that will not hit current graduates?

Nadhim Zahawi

I certainly can.

Chi Onwurah (Newcastle upon Tyne Central) (Lab)

Given the world that we are in now, given the threats that we face and the opportunities that we want to seize, why would any Government make education harder to access, particularly for those from disadvantaged backgrounds? Let me give just one example. The number of students with special educational needs and those on free school meals—as I was—who are attaining GCSE maths and English is falling under this Government. Why should they be excluded from higher education?

Nadhim Zahawi

The simple answer is that they are not; quite the opposite. If the hon. Lady looks at the Government’s track record, she will see that someone from a disadvantaged background is 80% more likely to go to university than was the case a decade ago. We are consulting on how best to deliver the outcomes. If we become obsessed with the outcome of a great education, a great career or embarking on further study, that is the right thing to do, and we will achieve what we all want to see, which is disadvantaged young people getting the education they need. This package includes £75 million that is focused precisely on disadvantaged pupils who need additional help to get that degree. As the Prime Minister has said, talent is evenly spread in our country; opportunity is not.

Dr Matthew Offord (Hendon) (Con)

I tell my constituents that the best investment they can ever make is in themselves, and they can do that by going to university. I urge the Secretary of State not to fall for the rhetoric about people not being able to afford to go to university. It is possible to gain employment part time, or even full time in some cases, so it can be done. May I push him further on the issue of value for money for students? I would have liked to see university tuition fees go down, as proposed in the recommendations, and I would certainly like to see a service level agreement to provide students with a level of teaching, tuition and instruction that they have not been given during the pandemic. Perhaps, now that university vice-chancellors are receiving such high salaries, we could think about money going back to the students.

Nadhim Zahawi

The most valuable resource on this earth is the human resource, and our investment in the skills agenda, in our schools and, of course, in our families will mean that our HE sector is also able to deliver great outcomes for young people. My hon. Friend and I may disagree on this, but in real terms the amount of money going into universities is going down because of the freezing of fees. He raised an important point about the return to face-to-face education post pandemic. I urge all those brilliant academics to ensure that they deliver quality and value for money to the students who are taking out loans in order to gain great careers in the future.

Daniel Zeichner (Cambridge) (Lab)

I am afraid that the Secretary of State has been trounced by the Treasury. Students will pay more, universities will get less, social mobility will be capped, and when it comes to student repayments, those on lower and middle earnings will actually be disadvantaged. There is a further knock-on effect for universities in terms of research and development, which, as we know, is cross-subsidised. The Government are already struggling to reach their 2.4% R&D target. Presumably the Secretary of State has carried out an impact assessment, so will he publish it?

Nadhim Zahawi

It has been published, with the consultation. I disagree, respectfully, with the hon. Gentleman. The Government are focused on levelling the playing field through the lifelong learning entitlement, and by ensuring that university courses are of the highest quality and that drop-out rates fall and completion rates increase, and of course those career paths are there. Ultimately, if we are obsessed with outcomes, we will deliver a much better and much fairer system for all students throughout the country.

Laura Trott (Sevenoaks) (Con)

I warmly welcome the lifelong loans, and the funding reforms, however difficult they may be, are infinitely preferable to an increase in fees or interest rates, but as the consultation proceeds, will the Government look closely at the impact on women and, if necessary, take some mitigating actions?

Nadhim Zahawi

My hon. Friend is absolutely right. Raising fees or interest rates would have been hugely unfair and debilitating. The consultation is a true consultation in the sense that we want to get this right and I am willing to work with anyone who wants to join us on this journey to deliver great outcomes for all students in our country.

Andrew Gwynne (Denton and Reddish) (Lab)

On entry requirements, the Secretary of State said that he would listen and be open minded, and I fully support getting the best possible results for kids in their GCSEs. Back in 1990 when I sat GCSEs, I struggled with maths. I resat and still struggled to get a C—I kept getting a D, for some reason—but I still went on to further education and from there to higher education where I secured a distinction in finance, accountancy and managerial economics. Not bad for a kid who could not get a GCSE in maths. Can I urge the Secretary of State to tread carefully and ensure that he does not pull up the ladder of opportunity from kids like me in the future?

Nadhim Zahawi

The hon. Gentleman makes a powerful point and I congratulate him on his achievements. Having gone from being a kid who could not speak a word of English to standing here as Secretary of State for Education, I understand what it is like to fight quite hard to achieve. He makes the important point that we have to look at this really carefully. This option on the GCSE in English and maths is only one option that we are considering. As he suggests, there will be some students who not do well in GCSE but do better at A-level. I repeat that I am truly in listening mode on this. I want to get this right.

Bob Blackman (Harrow East) (Con)

I warmly welcome the statement from my right hon. Friend. There is clearly a temptation for universities to attract young people who are not prepared to do university courses, and indeed do not have the qualifications, just to get the money from the students, and then they fail them at the end. Research shows that many people are unaware of the opportunities for apprenticeships and other further education. Will my right hon. Friend agree to invest more money in creating greater awareness and career guidance, rather than shovelling people straight into university when it may not be the best course for them?

Nadhim Zahawi

That is exactly what the Skills and Post-16 Education Bill is doing. I do not think he is in his place any longer, but the Chair of the Education Committee, my right hon. Friend the Member for Harlow (Robert Halfon), is pushing us even further on those interactions between students and businesses and the opportunity of apprenticeships, and on doing more to ensure that teachers have the tools to enable them to share with their students the opportunity of an apprenticeship or a T-level as well as an A-level.

Paul Blomfield (Sheffield Central) (Lab)

The Secretary of State and I sat together on the Business Committee scrutinising the Conservative funding system, which he now describes as unsustainable. He will recall that some of us argued that at the time. A review was clearly needed, but he has been very selective in adopting its recommendations. The Augar review stated strongly that these sorts of changes to loans must be accompanied by the introduction of maintenance grants of at least £3,000 for disadvantaged students, which he has ignored, and that any reduction in tuition fees—which is what a freeze is, particularly at this time—should be matched by an increase in teaching grants across all subjects, not the selective additional resource that he has talked about. As the hon. Member for Wycombe (Mr Baker) and others have pointed out, this plan cuts university resources and transfers massive debt from the Treasury to graduates. Is the Secretary of State not effectively making students pay more for less?

Nadhim Zahawi

I remember our time on the Business Committee when Lord Browne made the initial proposals and we scrutinised them. It is only right that one is able to go back and refine the system and get it to work sustainably, and that is exactly what we are doing in this case. On disadvantaged students, the investment of £75 million in scholarships will make a huge difference. But also, when the hon. Gentleman and I sat on that Select Committee, there was no lifelong loan entitlement where students had a different path to gaining those skills and that career path to university. It is only right that we get the balance right between students and the taxpayer.

Andrew Bowie (West Aberdeenshire and Kincardine) (Con)

On behalf of the many thousands of Scots studying at English universities and of the many parents of Scots currently at university in England, I thank the Secretary of State and the Minister for Higher and Further Education, my right hon. Friend the Member for Chippenham (Michelle Donelan), for engaging with those of us who had concerns about how the Augar report, the review and the announcement today were proceeding. I specifically welcome the abolition of interest rates above inflation and the extension of the freeze on maximum tuition fees, but there will be those who are worried about the lowering of the repayment threshold. Can my right hon. Friend confirm that in this country and under this Government it will always be about ability and never about background when determining someone’s access to some of the best educational establishments in the world?

Nadhim Zahawi

That is absolutely right. I could not have put it any better.

Stephen Timms (East Ham) (Lab)

It is estimated that 4,000 Muslim young people every year choose with a heavy heart not to enter higher education because of the Islamic ban on interest. Nine years ago, David Cameron promised a system of alternative student finance to overcome that problem. We were told there would be a decision on that in this statement today. Does the Secretary of State plan to honour the promise made by the leader of his party to Muslim young people?

Nadhim Zahawi

I am grateful for that important question. It is only sensible that we align the future delivery of alternative student finance with these major reforms to ensure fair treatment for all students.

Antony Higginbotham (Burnley) (Con)

In Burnley and Padiham we have a brilliant further education college, Burnley College, and a brilliant university, the University of Central Lancashire. It is really important that young people know the choices available to them and make the right choice for them on where they study and what they study when they get there. Can I encourage the Secretary of State, as part of looking at the synergy between the two, to work with careers advisers to ensure that we really bed that in, so that young people of 16, 17 and 18, looking at that next opportunity, can have all the information in front of them?

Nadhim Zahawi

My hon. Friend is absolutely right. The Skills and Post-16 Education Bill that we are putting through at the moment will go even further in bringing the system much closer together. Let us look at what we have done with the investment in the institute of technology, which involves real collaboration between the university, colleges and business to create those opportunities and moments of inspiration for young people who will end up in a great career and with a wholesome and happy adulthood.

Dame Diana Johnson (Kingston upon Hull North) (Lab)

I understand that an impact assessment has been produced on the changes to the repayment of loans. Can the Secretary of State tell the House what the impact of those changes will be for young women who come from less well-off backgrounds?

Nadhim Zahawi

The really important thing to remind the right hon. Lady is that no student will pay more than they have borrowed. That is the most powerful message we can send out to anyone considering higher education.

Ben Everitt (Milton Keynes North) (Con)

Can my right hon. Friend confirm that these reforms will prioritise the long-term benefits of high-value employment and ensure that university courses are giving students the skills and the knowledge they need to fulfil their potential? Recognising that you asked for no long preambles, Mr Deputy Speaker, I will make my postamble very short. It will be no surprise to the Secretary of State that this is exactly the philosophy behind MK:U. It is about getting the digital skills and the STEM skills needed by businesses in Milton Keynes so that we can future-proof our economy.

Nadhim Zahawi

My hon. Friend is absolutely right. The work that MK:U is doing is exactly the sort of innovation that we need, in the same way that NMITE—the New Model Institute for Technology and Engineering—and others are doing as well. This is part of a long-term strategy. We began with the apprenticeship standards and reforms to ensure that businesses were embedded in the co-creation of our skills landscape. Skills are part of FE and HE, integrated together to deliver great careers and great outcomes for young people and the economy.

Wera Hobhouse (Bath) (LD)

Today’s announcement could severely undermine the creative courses in higher education. The Government’s figures on this are always skewed, because they do not reflect graduates who become self-employed. We know that 47% of those who go into the creative industries are self-employed. What will the Secretary of State do to protect the creative courses that lead to high-value jobs in the creative industries? If he is in listening mode, will he listen to the vice-chancellor of Bath Spa University, who has been raising her concerns about this for a long time?

Nadhim Zahawi

As part of our £900 million investment, we will look at how we continue to support our brilliant creative industries, but it is not the only way to support them through our higher education reforms. I visited Pinewood Shepperton studios a few weeks ago, which is about to deliver 3.5 million square feet of studio and creative space to be used for many decades to come, and it has already been taken by the likes of Netflix, Amazon and Disney. They have been recruiting kickstarters and apprentices, and they are doing a brilliant job. I recommend that the hon. Lady visits to see the incredible enthusiasm of businesses and education institutions for working together.

Chris Skidmore (Kingswood) (Con)

As the Universities Minister who oversaw the publication of the Augar review 1,001 days ago, I welcome the Government’s considered response and the Secretary of State’s marked change of tone and attitude towards higher education, which is much appreciated by the sector.

Minimum entry requirements have now shifted to become minimum eligibility requirements, but perhaps the Secretary of State will consider minimum exit requirements. As my right hon. Friend the Member for Harlow (Robert Halfon) said, universities would welcome the opportunity to take young students who, like the hon. Member for Denton and Reddish (Andrew Gwynne), do not have a maths GCSE and to work with them on their functional skills. If it is about outcomes, we should tell universities that it is their responsibility to deliver the basic functional skills of GCSE English and maths as part of their degree programmes.

Nadhim Zahawi

I commend my right hon. Friend for his excellent work on the Augar panel. He is a passionate advocate for the sector.

With your indulgence, Mr Deputy Speaker, I remind the House that, of every four international students, the United States take two, the United Kingdom takes one and the rest of the world shares one. That is how successful our higher education institutions are and have been. My right hon. Friend raises an important point, and this is a real consultation. I will take on board his suggestions and take a proper look at them.

Jim Shannon (Strangford) (DUP)

I thank the Secretary of State for his statement. Many of my constituents in Strangford and people across Northern Ireland attend universities here on the mainland to pursue a career in health. Has consideration been given to helping our health service by waiving fees and giving bursaries to those studying severely understaffed medical disciplines such as optometry, where cataract removal waiting lists are up to three years, and orthopaedics, where the waiting list for hip replacements is up to five years? Will the Secretary of State confirm that the Department for Education will work with the Department of Health and Social Care for the betterment of all throughout the United Kingdom of Great Britain and Northern Ireland?

Nadhim Zahawi

The hon. Gentleman will know that we already work very closely with the Department of Health and Social Care to make sure we hit our target of 50,000 more nurses. We always keep that work and the bursaries we offer under review to make sure we continue creating sufficiency so that we have a world-beating NHS.