MATT RODDA, MP for Reading East, spoke out in Westminster Hall in a debate concerning tuition fees chaired by Sir David Crausby, MP for Bolton North East.
“I will address fee repayments in my constituency. Reading is a university town, as many honourable Members may know, with a particularly high number of graduates. The local workforce has a high proportion of highly skilled and highly trained people in industries such as IT, research in the public and private sectors, and a range of applied technology businesses—many of which are exactly the sort of business that the Government seek to see grow as we are due to leave the European Union. Many of those young graduates are above the loan repayment threshold but do not yet command such a high salary as to be insulated from the effect of fee repayments. I notice honourable Members nodding; the situation is similar in many other high-growth parts of the country.”
“I will give additional details to illustrate how the mistaken tuition fees policy has a harmful impact on that group of people and on economic growth in areas that are hubs and should be fostered, as the Government have pointed out. A practical example is a teacher in their 20s living in Reading who has effectively had a 15% pay cut—this applies to public and private sector staff, as many private sector employees have had a real-terms pay cut too—but faces an additional charge on their income of up to 9% a year through tuition fee repayments because they are in the cohort that has been through the £9,000 a year regime.
“We can imagine the impact on key workers such as teachers, nurses, social workers, university staff, IT workers and others. That must also be viewed in the context of high house prices and the high cost of living such as the high travel to work costs of a season ticket to London or for local commuting—many people in the Thames Valley commute between towns with growing high-tech industries such as Maidenhead, Reading and Newbury, where Vodafone is based. House prices can be as high as £300,000 for a two bedroom terraced house in Reading. Not all houses are that price, but that context is significant.”
Matt went on to describe the impact of tuition fee repayments for young people, adding:
“At the same time, a young person in their 20s or 30s who has to repay large amounts of debt, who faces relatively static pay or indeed a pay cut, and who faces high house prices, may want to start a family but may delay that because of the impact of the extra costs and burdens on them. Many employers in high growth areas such as Reading are suffering staff shortages. The high real cost of repayments in a high cost of living area is part of the cocktail of factors affecting those shortages.
We have a shortage of teachers locally, as was pointed out to me by the local head teachers I met last week. Young staff, potentially some of the most important in the educational sector, who have gone through their initial teacher training, who are bedding in and who have a lot of their career ahead of them, are moving out of our area to live in lower cost parts of the country where the effects of loan repayment will be less. The same is true for areas such as social work, nursing and midwifery, where real concerns have been raised; the four-hour A&E wait target has not been met at our local hospital for many months.”
The impact of staff shortages is being felt by many industries, not least the private sector. Matt went on to say that some of the large employers in Reading's local IT sector, as well as burgeoning groups of entrepreneurial small businesses and supply chains are also affected. He continued:
“I hope the Government will consider that, particularly on the day they have launched their industrial strategy, and reflect on the need to allow these clusters to develop in towns and cities like Reading—the small and rapidly growing urban centres with universities that are the engines our economy needs as we face the challenge of Brexit.”
Matt made particular reference to the high cost of living in Reading and a shortage of affordable housing, which adds a double-impact to the incomes of young graduates who are on the cusp of making tuition fee repayments. He said:
“The challenge of repaying such debts is increasing year on year, given the context I have described. Not only have tuition fees risen, but other costs have too. In particular, the cost of housing is significant and growing because the supply is not expanding. Conservative Members will point to the Government’s Budget measures last week, but I remain sceptical because other Government measures have not raised the supply of housing.
Sadly, under George Osborne, plans for 1,000 new council houses for Reading were stopped by the Government’s mistaken approach, and the Government have fought the local council’s attempts to keep a larger proportion of housing at affordable levels in private developments.”
“Given the rising house prices, the lack of real housing supply in the area, and the further austerity that will lead to further falls in real earnings for people in the public sector, and possibly for people in the private sector as the local labour market is depressed as a result, it is high time for the Government to reconsider their tuition fees policy. I urge Government Members to do so—particularly the Minister, who I know is a deeply cerebral and thoughtful man. I am sure that they have the best of intentions. If they take a step back, as my honourable Friend the Member for Leeds North West suggested, and look at the international comparators and the trajectory we are on, I believe they will reconsider their worrying and mistaken policy.”
Commending Reading's university as being a leader in the local growth in the surrounding industry and the widening pool of talent, Matt rounded off his contribution by adding:
“May I conclude with a small plug for the University of Reading? Our town is lucky to have the University, driving local growth in IT, science and other fields. I hope that such growth continues to flourish, but I fear the tuition fees policy may be an obstacle to it.”
Matt's interventions in the debate paved the way to him extending an invitation to the Minister of State for the Department for Education (Universities and Science) Jo Johnson MP to meet with him and employers from Reading East and potentially other high-cost areas in order to address the issue of graduates on middle incomes paying more in tuition fee repayments over time than those on the highest salaries.
The debate was adjourned to continue at a later date.