Labour will abolish grants for 1.6m students

Labour will abolish grants for 1.6m students in higher education and replace them with loans repayable over 20 years at a saving of pounds 1bn to the taxpayer under plans to be unveiled today by David Blunkett, the Shadow Education Secretary. The scheme, in the middle of a row over plans to withdraw child benefit for 16-18 year olds in full time education, is likely to provoke an outcry from some Labour supporters, and will be seen as further evidence of the hard cutting edge being applied to Labour policies.

Mr Blunkett will give a commitment that the loans will cover student maintenance, but not tuition fees, as called for by the vice-chancellors. He will commit Labour to spending the additional funds on increasing the proportion going on to college or university from 30 per cent to 40 per cent by the turn of the century.

Mr Blunkett will stress that hard choices will have to be taken to increase the numbers going into higher education, but many of the controversial details will be handed to a review under Sir Ron Dearing. These will include the size of the loans, and the rate at which they should be repaid.

The Dearing review will also consider whether smart cards should be used for individual learning accounts, and proposals that they should be administered by a "learning bank" proposed in the Commission on Social Justice report. Private money could be encouraged by Labour to finance the loans, and invest in capital schemes in universities. Colin Brown