Leader: High aspirations are being killed by debt aversion

Gordon Brown will not be chancellor for ever, but it would be rash for higher education to hope that the next denizen of 11 Downing Street will be any more lavish than Mr Brown.

Instead, future general elections are more likely to be won by displays of financial caution than by shows of conspicuous spending. And for Labour, as the likely winner of the coming general election, this means that universities are a problem. The present system of student finance is already hindering a generation of potential students, and it is certain to be even more of an obstacle to those who figure in Labour's higher education expansion plans.

Evidence from City and Islington College in London shows that universities are aware of the problems. Cambridge, Oxford and London have taken steps to attract CIC's students and show them that a top university is a real option.

But converting that interest into university entrance is a more sombre story. The large London colleges just a short Tube ride from CIC admit few of its ex-students. The same is true of Oxford and Cambridge. A big factor in students' shying away from such institutions is the student support regime. Most people would think hard before taking on a five-figure debt in their early 20s, and especially those who are being asked to be the first in their family to get a degree and who have no guarantee of its economic value.

As our analysis of the national picture throughout the United Kingdom shows, means-tested bursaries and allowances are arriving in Scotland, and hardship issues are being examined creatively in Wales and Northern Ireland.

It is natural that devolution will mean different solutions to the problem in different parts of the UK. But it is vital that the problem be addressed in England, too, and that requires new thinking at the Department for Education and Employment. The forthcoming select committee report on student retention will provide more evidence of the scale of the problem. The Liberal Democrats' proposals to restore means-tested grants are the most coherent solution to student poverty and are a prerequisite to expansion. Labour should steal them.