There is no doubt that the reform of higher education, and in particular, the way we fund it, is a difficult issue. Twenty years ago, just a handful of young people got the opportunity to go to university. I was one of the lucky few. Now, thankfully, many more people, not just youngsters, go on to study for a degree. This growth brings new challenges. We all agree that more young people from every background should go to university, but we also know that universities need more money to keep them at the forefront of research and to provide top-quality teaching.

As a Labour government, we could opt for a quiet life. We could just coast along, bask in previous successes, shirk the need for reform. Though such an approach would be possible, I don’t believe it would be right.

Putting off the difficult choices would not help universities, who have suffered drift for too long; it would not help students, who want a better and fairer system of finance; it would not help parents, who currently have to find fees for their children up front. If we don’t address these tough issues and make those difficult choices, the loser, in the long term, will be the British economy.

The proposals that Labour have brought forward offer serveral key improvements on the current system. We would restore a grant of up to £1,000 for students from lower income families from September 2004. Second, Labour would abolish the payment of upfront fees with no real rate of interest – the amount to be paid would only increase with inflation. This means that from 2006, parents above the support threshold, who currently have to find £2,000 (£1,000 for upfront fees and £1,000 to make up the maintenance grant) will only have to find £1,000 – 50 percent less.

Third, we proposed raising the income threshold for payment after graduation from £10, 000 to £15,000 from April 2005 – saving every graduate £450 a year, but helping those on the lowest income the most. A graduate earning around £20,000 will pay around £40 a month back. Repayments will continue to be linked to salary, so the less you earn, the less you pay back per month (although it will take longer). If you don’t earn £15,000, you won’t pay anything back.

Finally, the proposals suggest establishing an independent access regulator to improve access to university for students from all social backgrounds; safeguarding and promoting our world-class research; developing and expanding the skill base of the country; and promoting and rewarding good teaching.

Fee remission will also continue under the new proposals. Presently, 40 percent of students already get the whole tuition fee paid. From 2006, they will continue to get the first £1,100 paid. A further twenty percent who currently get part of the fee paid will continue to get that assistance.

These developments are based on Labour principles. Both Labour in government and Labour party members, including Labour students, share common values. Firstly, we believe in equality of opportunity. The opportunity to go to university should be based on talent and ambition, not family background. This is not the case at present, where less well-off students do not get the same chance to study for a degree or diploma.

Secondly, we want Britain to prosper. We need a highly skilled workforce for our country to succeed. This is why the government will continue to subsidise substantially individuals’ fees. Currently, students who pay the full £1,100 are contributing between twenty percent and 25 percent of the average cost of their teaching. Under our proposals, there is no question that the government will continue to be the largest funder of students’ courses.

Our plans to expand higher education to 50 percent means more, not fewer, people will have the opportunity to study. Focus on foundation courses will ensure that 21st-century Britain has the skills it needs to compete in the world.

The leading universities need more income – as well as more public funding – to put their finances on a sustainable basis. They face large accumulated funding pressures, including an infrastructure backlog estimated at nearly £8 billion; a rise in student to staff ratios, up from 13:1 in 1990 to 18:1 in 2000; and an increasing challenge from countries which are investing heavily in top-class research.

The spending review will raise funding by an average of six percent a year in real terms, helping to deal with these pressures in the short term. But extra public funding is, by itself, not enough. And there are other demands on public funds – from hospitals and schools in particular. Universities need funding increases sustained over the long term. On average, over their lifetime, graduates earn 50 percent more than non-graduates. Given this large personal benefit, it is a fairer approach than asking the taxpayer to foot a still larger bill.

It is worth remembering what the opposition parties propose. Both the Liberal Democrats and the Tories want to scrap our target for getting 50 percent of young people into higher education. Labour believes a greater number of students means a stronger economy and greater social justice. The Tories believe in an elitist system for the few, coupled with twenty percent cuts in public spending; while the Lib Dems know that their policy does not stand close scrutiny.

Indeed a recent, leaked Liberal Democrat policy paper admits that they have been misleading students for the past five years. Faced with the difficult task of fleshing out a policy, they are proposing to develop a two-tier system. Under their proposals, students from poorer backgrounds will have no choice but to stay at home. Only those who could afford it would be able to study at the college of their choice. Wealth, not talent, would determine where students study.

There is no doubt that higher education brings great benefits. Going to university is a great asset both for individuals and the nation. Labour’s proposals mean that more people will benefit from high-quality university education. Everyone will benefit – students, parents, universities and higher education staff. And the nation will benefit. There are no easy solutions, but there are fair solutions. These proposals mean more young people from a range of backgrounds will get the chance to study.