STUDENTS (BENEFITS AND GRANTS)

HC Deb 28 May 1976 vol 912 cc839-56

2.16 p.m.

Mr. Kenneth Clarke (Rushcliffe)

I am grateful for the opportunity to draw attention to the problem of social security benefits and maintenance grants for students. In considering the income of students generally, these subjects overlap.

I begin by discussing the social security position of students in higher and further education. I should like to set out the general problem. It is my opinion that students ought to be no concern of the social security system. I think most students would agree that they ought not to be dependent upon supplementary benefits for their income. A feature that the students usually have in common is that they are young, usually fit, and not seeking permanent employment in industry or commerce but delaying it while they complete full-time education. Their income during that period of education ought to be looked after by the system of maintenance grants, and ought to be an obligation on the education budget alone.

In recent years, however, partly as a result of the successful National Union of Students campaign, which pointed out to students the benefits to which they might be entitled, a growing number of students have been claiming supplementary benefit as an addition to their maintenance grants during vacations. In August 1973, 12,000 received benefit. By August 1974 the number had become 21,000, and by August 1975, 64,000.

From the point of view of the social security system, in which I take a regular interest in this House, the students are a quite anomalous category of claimants. They are a considerable nuisance to the Supplementary Benefits Commission and its officers. They clog up the works, and they add extra work to the Department, which has a great deal to do for an extremely needy section of our com- munity. One would prefer that they were not drawing this benefit. But it is also a sad reflection of the inadequacy of grant levels and the financial difficulties of students that they have been able to qualify for supplementary benefit in such numbers in recent years.

The way in which they have qualified is as follows: their grant was regarded as a grant for the entire year; the vacation maintenance element in the grant came out at £3.18 each week, that was deducted from their supplementary benefit scale entitlement. So, by and large, students received about £7 a week by way of supplementary benefit.

The Government recently announced some changes in this system. This was an opportunity to sort out the position and make sure that students were put back properly on the education budget, and that social security system was relieved of this problem. Unfortunately, in making their announcements the Government did not sort out the problem. On the Floor of the House the only announcement that was made was made by the Secretary of State for Employment, who spoke mainly to illustrate how the students would be removed from the unemployment figures, which would relieve the Government of the additional embarrassment of having the figures inflated by students registering for work in the vacations.

Aside from that piece of cosmetics, the serious change came in the announcement by the Secretary of State for Education and Science, made in a Written Answer. I regard it as most unfortunate that we have not had proper opportunity to discuss the matter in the Chamber before this short debate today.

For the benefit of those who may wish to take an interest in what we say today, I shall read the Secretary of State's Written Answer in full: My right hon. Friend the Secretary of State for Scotland and I propose to change the student support arrangements for the 1976–77 academic year, so that the student's personal maintenance award will apply solely to term time attendance and the winter and spring vacations. It will no longer provide for the summer vacation when there are normally opportunities for students to support themselves. A further review will be needed for the arrangements to apply in subsequent years. "I am advised by my right hon. Friend the Secretary of State for Social Services that, as the grant will on average provide the equivalent of at least the supplementary benefit entitlement of the single non-householder for the short vacations, it will no longer be necessary or appropriate for the majority of students to claim supplementary benefit in those vacations. Students who are unable to find vacation employment in the summer will continue to be able to claim supplementary benefit if they do not have enough income to support themselves."—[Official Report, 23rd February 1976; Vol. 906, c. 41.] That was the announcement, and I turn now to what flows from it and the changes that the Government have now introduced. It seems to me that the first change is that from now on student non-householders will not be able to claim any supplementary benefit in the winter and spring vacations. The vacation maintenance element will disentitle them to supplementary benefit. On the other hand, in the summer vacation, if such students are not able to find work or do not get work they will be able to claim an increased amount of supplementary benefit compared with previous summer vacations. There will be no vacation maintenance grant element for them, and they will therefore be entitled, as they were not in the past, to the full rate of supplementary benefit if they are not able to obtain or do not obtain work in the summer.

That seems to be the change: for most students, no benefit in the winter and spring, and more benefit in the summer if not in work. My first comment is that it falls far short of what I believe should be the aim, which is to take the fit and able-bodied out of the social security system and put responsibility for students firmly back on the education budget.

In addition, however, it seems to throw up some fresh anomalies, and I wish to have the Minister's response to them. First, it seems that there are certain categories of student for whom the new arrangements may cause hardship in the winter and spring vacations, when, as I have said, the non-householder will no longer qualify for supplementary benefit.

The students about whom I am most concerned are those whose parents' incomes are such that a parental contribution is assessed by local authorities towards their maintenance grant. We all know that student grants are means-tested on parents' income, and parents are called upon to make a contribution, which the State does not pay, towards the grant.

The difficulty comes when parents are assessed to make a contribution but do not pay it. That, in itself, is a difficulty anyway, but it could create added difficulty in vacations, when a student presents himself for supplementary benefit only to be told that his maintenance grant covers the vacation. The truth is that it may not. There may be a high parental contribution in his case and. although he is regarded as having the vacation maintenance grant, if his parents do not pay it he will be told that he has an income provided under the student maintenance arrangements although in fact his parents are providing no such income at all.

This has always been the practice, and on 24th March the late Minister of State, Department of Health and Social Security confirmed that the arrangement was to continue. He said: I understand from the Supplementary Benefit, Commission that where a student claims supplementary benefit during vacations, account is taken of the parental contribution as assessed by local education authorities. There are no proposals for change."—[Official Report, 24th March 1976; Vol. 908, c. 193.] So far as I can ascertain, this particular category of claimant will be almost unique among claimants for supplementary benefit in that they can be turned away and be told that they have income—which, indeed, they ought to have—through the parental contribution when they are not in fact receiving that income.

I realise that the problem arises out of the system that we have retained for having parental contributions assessed for grant. This is not the first time that I have said that, as an aim of policy, I wish to see the parental contribution abolished as a feature of our student maintenance arrangements. It is becoming increasingly absurd and out of line with modern social attitudes that contributions should be assessed on the basis that parents will regard themselves as responsible for students, that is, for adult children up to the age of 25.

I realise that it would be exceedingly costly to end the parental contribution system, even though the cost would be reduced through the abolition of child tax allowances, which parents receive at present. However, it is plain that we are as yet making no progress towards removing the parental contribution.

Yesterday, in the decision regarding grants for the next year announced by the Minister, the starting point for parental contribution was raised from a residual income of £2,200 each year to a residual income of £2,700 each year. That is a welcome movement, in line with the movement of earnings, but my understanding is that, as it is in line with the movement of earnings, the net effect will be that for one year no extra parents with modest incomes will be called upon to pay parental contribution. We are simply not getting any worse; we are not, however, making progress.

I was alarmed also to see that the £50 minimum grant remains at £50, although it has been at that level for many years. This means that those students who are most dependent on parental contribution, because their parents' income goes above the upper limit, will still receive only £50, and will be made more dependent on parental contributions than they were in the past.

Although one is naturally rather disappointed by yesterday's announcement, one realises that the present constraints on public expenditure make it impossible for any responsible Member on either side to berate the Minister of State for not being able to go much further at present. However, he will be aware, as I am, that there is a growing problem of students who are not receiving the parental contribution that they are supposed to receive, partly because an increasing number of parents refuse to pay and will not accept an obligation in respect of their adult children, and partly because the contribution levels are fairly fierce, and a large number of parents, I believe, have real difficulty in coping with their circumstances and paying the contribution assessed.

Given that there is this problem of parental contributions not being paid, and given that the Minister, under the present constraints, cannot do much to improve the situation regarding parental contributions, will he or his ministerial colleagues ask the Supplementary Benefits Commission to review its arrangements and make quite clear that if there is a genuine case of a student who is not receiving the parental contribution that he is supposed to receive, he will be accepted as being someone without means during the vacation and thus possibly eligible for benefit?

Another question arising out of the benefit arrangements under the new system relates to what supplementary benefit can be obtained, and in what circumstances, during the winter and spring vacations. As I have said, the non-householder student will get nothing; but there remains the situation of the house-holder student who can still get some assistance through supplementary benefit for his rent payments.

Again, my understanding is that students are being advised that if they are householders they will still be able during the winter and spring vacations, to go along to their social security offices and claim some payment towards rent. What is thoroughly unclear, however, is precisely who will be regarded as a householder in these circumstances. What kind of accommodation will be covered? Is it only accommodation outside university? Are there circumstances in which hostel accommodation could be included, or accommodation within a college or university?

Is it not somewhat anomalous, also, that there will still be some students in full-time residence in some household of their own in their university town who, apparently, will be able to claim supplementary benefit although all other students will cease to get it during the winter and spring vacations?

I turn now to the question of the summer vacation, during which, at least from the point of view of students, matters can be expected to improve, since many students will try to get work but if they cannot or do not find work they will receive the full rate of supplementary benefit, which they were not able to do until the recent new arrangements. Even in these difficult times there are many possibilities for work in the summer. Without being pompous, I feel that it is a good thing, in principle, for students to work in a totally different situation during the summer, not only to maintain themselves but to broden their experience. But it is not always so simple, because of the present level of unemployment in some areas, and students then get the full rate of supplementary benefit.

Students who are not terribly inclined to go out and look for work create a problem. They may find the supplementary benefit which is available to them a disincentive to bothering to find a job. That disincentive has become greater, particularly to students living at home with prosperous parents. If they work, even if they earn only a modest sum, their parents will lose out in tax. But if they do not work even if their parents have means and they come from a prosperous home, the students are still paid the full rate of supplementary benefit, because their parents' means are not taken into account for that purpose. They are paid supplementary benefit almost for the asking. I realise that it is not quite for the asking, because they have to register as unemployed and they are not eligible for benefit unless they are believed to be looking for suitable work.

The Supplementary Benefits Commission finds it difficult enough to deal with their ordinary clients and to distinguish between those who are genuinely looking for work and those who are not; I doubt whether officials have the time to chase up the little army of students who arrive on the books each summer vacation. The Government's new arrangements have slightly increased the encouragement to students who decide that they are not going to get a vacation job.

These are further anomalies, which arise in part because the Government have missed the opportunity of removing students from the social security system and dealing with them through maintenance grants. The Government were more concerned with dressing un the unemployment figures than getting down to the basic problem of students claiming the dole or supplementary benefit. The problem should be dealt with through maintenance grants.

The Minister has just completed discussions on grants, and yesterday he announced the new rate for next year. When the new maintenance grants were fixed, was any account taken of the changes in the supplementary benefits arrangements? Was the total amount available for grants increased or decreased because of the changes in public expenditure following the supplementary benefit changes? I have to put it that way because the Government have not said whether, in terms of public funds, money is about to be saved or more is to be spent by the changes in social security benefits for students.

I tried to get the figures, and received this reply from the Chief Secretary: It is not possible to estimate the numbers of students who would have claimed benefit if the present system of student support had remained unaltered, compared with the numbers who may claim under the new arrangements."—[Official Report, 23rd March; Vol. 908, c. 132.] That reply was absurd. I accept that it is difficult, because one would have to speculate, but I do not believe that the Government made a policy change of the sort announced by the Secretary of State for Education in his Written Answer without some Treasury estimate of the likely impact on public funds. Whilst making every allowance, and agreeing that it must be a rough-and-ready estimate in difficult circumstances, I believe that the Government must say what was their estimate of the net gain or net loss to public funds. Was there a saving to public funds by taking students off supplementary benefit during the winter and spring vacations, and was that taken into account when the Secretary of State made the changes in maintenance grants?

In answer to a Question I was told by the Minister of State: Grant rates for the 1976–77 academic year are now under consideration."—[Official Report, 8th March; Vol. 907, c. 59.] I did not ask the question to which he gave an answer. I had asked him the question that I am now asking—was the change in social security arrangements taken into account in any change in maintenance grants?

Yesterday's announcement represents broadly an 18 per cent. increase in maintenance grants across the board, with little change in priorities. There is a welcome small improvement in the rules, whereby married students can be regarded as independent of their parents. That is a small improvement, because it will mean that where a married student lived away and cared for children before going into a course of higher education that time will count towards the necessary time for the student to be regarded as independent of her parents.

I do not criticise the Minister too much for not deciding to make any changes in policies or priorities this year. I regret that the National Union of Students refused to accept the Minister's invitation to discuss priorities and decide how best to divide up the cake. It was entirely predictable and in line with all that we know of the character of the NUS that, faced with an actual share in the responsibility and involvement in details over grant negotiations, it would duck away from being saddled with any part of it. A sum of £30 million has been divided up. What account was taken of any social security savings in arriving at that figure?

The increase of 18 per cent. will be regarded as disappointing. It has already been so regarded by responsible and irresponsible elements in the student movement. I realise that we must have public expenditure constraints, and I accept that education must take its fair share of cuts. Without straying outside the debate, however, I find it astonishing that the Department of Education should carry such a major share of the economic burden, and should head the league table of departmental cuts.

Students must bear a share of restraint when there is restraint in the economy. I condemn the suggestion that there should be sit-ins in universities and colleges following this award. The public are becoming bored with that kind of militant campaign, which can do nothing to help solve the problems that will arise next year.

There are difficulties over student incomes, which are revealed when one discusses the position of those below the poverty line or on supplementary benefit. Will the Minister explain and sort out the new anomalies that have arisen from the Government's changes? For the longer term, may we have an assurance that when they next have the opportunity of looking at this problem of the social security system and the relationship between that and maintenance grants for students, the Government will not miss that opportunity but will see that students are dealt with through the education budget alone?

2.39 p.m.

The Minister of State, Department of Education and Science (Mr. Gerry Fowler)

I begin by picking up the hon. Gentleman's words when he spoke of the possible abolition of the parental con- tributions in the grant system. I agree in large measure with what he said and applaud that as a long-term aim, but it is of necessity a very long-term aim unless economic circumstances improve drastically. The hon. Gentleman said that he knew that it was unrealistic to ask for that now, and he was right.

The same argument applies when the hon. Gentleman suggests that the maintenance award should cover the whole of the year, with an adequate amount in it to rule out claims for supplementary benefit during the year. I am sure that he realises that it would mean a substantial net increase in public expenditure—I cannot be precise about the figures—if we were to deal in that way with the problem of students claiming supplementary benefit. That is inevitable because, as the hon. Gentleman pointed out, some students find employment, not least in the long vacation in the summer, others who might be entitled to supplementary benefit do not claim it, and so on. Therefore, there would need to be quite a sharp increase in public expenditure. I am sure that the hon. Gentleman will accept that it would be inapposite for us on these benches to urge increases in public expenditure now, and that it would be even less apposite for any Conservative Member to do so.

I should like to say something about the principle on which we settle the student grant. The hon. Gentleman said that while he accepted that there would not be many major changes in the structure of the award this year he had hoped that a more radical review might take place. I do not know whether he is aware of this, but the general principle remains that the major review of student awards shall take place triennally, and the annual reviews in the two "off" years are designed essentially for uprating the award to take account of inflation and perhaps for minor adjustments in structure. They are not designed to accommodate major changes in structure. We still look for that to happen in general once every three years.

This gives me an opportunity to say a few words about the student grant package which my right hon. Friend announced yesterday. The new rates of student grant for the next academic year show an increase of 18 per cent. over current rates. This preserves in real terms, and improves a little, the level of the student grant. I believe that in the present economic situation that is a fair and reasonable settlement, and I entirely endorse the hon. Gentleman's statement that it would be futile, if not much worse, for students to sit-in in protest against what they might regard as the inadequacy of the award. They will find that they will have a little more in their pockets in real terms at the beginning of the next academic year than they had at the beginning of the last. Students, no more than any other group in the community, cannot opt out of the country's economic difficulties.

We have also improved the parental income scale throughout, and substantially at the lower levels. The hon. Gentleman pointed out that the residual income at which parental contributions begin has been raised from £2,200 to £2,700. We must remember that residual income is the gross income less a series of allowances for other children, mortgage interest, superannuation payments and the like. Therefore, one would expect that for a normal family contributions will not now start until gross income is about £3,300 or a little more. Thereafter, we shall find that contributions will be reduced significantly, especially at the lower levels of income. For example, the contribution required from parents with a residual income of £3,400—perhaps a gross income of nearly £4,000 or more—will be reduced by £100, which is a substantial change. I hope that this will be at least a modest improvement in the system this year.

However, the improvement to which the hon. Gentleman referred, and about which I should also say a little, is that which enables married students to count periods of time spent at home before their course in looking after young children, as well as time spent working, in accumulating the three years of self-sufficiency needed for a student under 25 to become independent of the parental contribution. I am rather pleased by that change, because it will largely compensate for the removal last year of the concession that married women could be regarded as independent for awards purposes if they were 21 before they started their course. That concession was removed and the age became 25, as with everyone else. It is proper that it should be the same, because we do not believe in discrimination between the sexes. Nevertheless, I am rather pleased that this year's concession takes many of those students back to the position they would have been in, but by a rather different route.

The new rule avoids any discrimination, because it applies equally to men and women. I do not know how many male students spend a substantial period looking after young children before beginning their courses, but I am sure that there are one or two. We can now safely say that the award regulations are exactly the same for men and women throughout, which I think is a very good thing.

I turn to the main subject raised by the hon. Gentleman——

Mr. Kenneth Clarke

rose——

Mr. Fowler

I suspect that the hon. Gentleman would like me to say something about the £50 minimum award. I had planned to speak about it a little later, but if he wishes I shall do so now.

The £50 minimum award seems to me to be an odd anomaly in the system. Two possible philosophies could underlie an award system of the sort that we have. One is that which seems to be embodied in the system in general; the philosophy that the award is a means of topping up the family income to a point, and not specifically just the student's. Otherwise, we should be in difficulty with the parental contribution argument, to a point where the student could always undertake a course of higher education without hardship. The alternative philosophy is that the award is a prize that should be given to anyone who gains admission to a degree course, an HND course, a DipHE course, and so on.

Those are two distinct philosophies. It is the former that, in general, is embodied in the awards regulations, yet we still have the £50 minimum award, which really belongs to the latter philosophy, that something must be given, whatever the family income, as a reward or prize for gaining admission to a particular course.

What we are talking about is not whether that minimum award should be increased or decreased but whether there should be a minimum in a system that basically embodies a different philosophy, or—let me not prejudge the issue—whether we should embody the second philosophy rather than the first in the award system, which would involve getting rid of the parental contribution. I have already agreed with the hon. Gentleman that I should have that as a long-term aim. It would not be right now simply to fiddle with the £50 award. It is an anomaly, and we must think through more radical changes, of which that would be a part.

I turn now to the question of supplementary benefit. The grant has always been designed to enable students to meet necessary costs in term time and also to make a contribution towards their maintenance in the vacations—but only a contribution. Students always have been expected to look elsewhere for the main part of their support in vacations—generally to their parents, or to their own vacation earnings, or to a combination of the two.

Some students, for one reason or another, are not available for work in their vacations. When I was a university student I worked in one or two vacations, but more commonly I did not. This was not because I was lazy, but because I was working exceedingly hard for my examinations, hoping to get the best possible degree. It is possible that some students who are devoting the vacation to private study will suffer financial hardship. In such cases the local education authorities can, at their discretion, provide a limited amount of assistance.

Students, like other members of the community, are nevertheless entitled to a whole range of social security benefits, provided they satisfy the criteria of eligibility for them. Two important ones from our point of view are supplementary benefit and employment benefit. As the hon. Gentleman rightly said, in order to claim them a student must register for employment and be available to take any suitable job offered to him, just like anybody else. In practice, this means that students can claim those benefits only during their vacations. The hon. Gentleman did not deal with the question why students could not claim in term time, but they could not conceivably, I hope, be looking for employment then.

Most students do not have an adequate contributions record to entitle them to unemployment benefit. Some do. I am sure that the hon. Gentleman would agree that it would be a very drastic step indeed to say that students who qualify for unemployment benefit by virtue of their own contributions record should not be allowed to draw benefit just because they are students. I am not saying that that is an impossible step, but it would clearly be a drastic step and would require very hard thought indeed.

As I have suggested, most students are restricted to supplementary benefit, although they have to register as unemployed in order to draw it. The Supplementary Benefits Commission takes account of the contributions made towards vacation maintenance by the student grant.

Perhaps I may briefly deal with the hon. Gentleman's point about the account taken by the Supplementary Benefits Commission, in assessing supplementary benefits entitlement, of the notional parental contribution. I use the word notional "to cover cases where it is paid and others where it is not. The hon. Gentleman is right in saying that a significant proportion of parents do not pay the parental contribution. For the third or fourth time in my own career I plead with parents who read Press reports of this debate to pay the parental contribution where they possibly can. It is not always a question of not being able to pay; in some cases it is almost a matter of principle—or lack of principle—that the parental contribution should not be paid.

I shall not comment at any length on what the hon. Gentleman said about taking account of parental contribution in the assessment of entitlement to supplementary benefit. As he will know, there has been a case on this very matter. It went against the student, but I understand that he has appealed. Therefore the particular case—though not the matter of principle—is sub judice, and I should prefer to wait for the result of the appeal before discussing the matter in any detail in the House. I hope that the hon. Gentleman will accept that I am in a somewhat difficult position on that issue.

I suspect that one reason why the number of students claiming supplementary benefits has risen so much in recent years has been the very successful campaign of the National Union of Students, which has managed to get across to its members their entitlements and rights. Another has been the employment situation generally, which has resulted in a quite dramatic fall in the number of jobs available to students in vacations.

There has therefore been a very sharp increase in the numbers claiming, especially at Christmas and Easter. This is part of the explanation for the recent change. At Easter 1972 about 16,000 students registered as unemployed. At Easter 1975 that figure had grown to 95,000. By Easter 1976 it was 172,000. It is rising very rapidly indeed. At Christmas last year the total was 127,000.

The majority of these people quite clearly qualified for and were claiming supplementary benefit. Perhaps only about 10 per cent. would be entitled to unemployment benefit. Claims on this scale, especially in the short vacations, present a serious threat to the normal operations of the unemployment benefit and supplementary benefit local offices, and there has been some resentment by the staff in certain areas, and some resentment, of course, by the public at large.

The problem does not arise in the same way in the long vacation, when students find it easier to get a job either because they are available for employment for a longer period or because there is a longer period for which they are registered. They do not all come down at the same time, so there is not quite the same rush as in the shorter Christmas and Easter vacations.

It was in recognition of those difficulties that my right hon. Friend the Secretary of State for Education and Science made his announcement in the Written parliamentary Answer on 23rd February, to which the hon. Gentleman referred. In the short vacation, especially at Easter, there is considerable pressure on students to continue with their studies at university or college. I hope that a high proportion of students do so. It would seem to be imperative, with the examinations coming in the following term.

At the same time, it is very hard for them to obtain jobs. But in the summer vacation, by contrast, not only do most students return home, and not only is it easier in general for them to find work; they are at the end of one academic year and there is less pressure on them to continue their studies throughout the vacation, though I would not want to deter students from devoting part of the long vacation to their studies. We therefore feel it important to concentrate on the short vacations, thus relieving students of financial worries throughout the period when they need to devote their full energies to their studies. That is why, in the next academic year, the students' personal maintenance grant will apply solely to term time and the two short vacations, and no part of the grant will apply to the summer vacation.

It will be necessary for local education authorities to pay the whole of the vacation element in the grant to students as part of the autumn and spring term grant payments, and we are advising them accordingly. Such advice is given in the circular letter to LEAs on the basis of the grant settlement announced yesterday. Instead of paying in equal instalments, in future we are advising authorities to pay in tranches of 35 per cent., 35 per cent. and 30 per cent. on a three-term basis.

The effect of the change in the grant arrangements will remove the need for the majority of students to claim supplementary benefit in short vacations if they cannot find jobs. On average, the amount provided in the grant will be as much as the supplementary benefit scale provides for single non-householders.

The hon. Gentleman asked what happened with the rest. Those students with a supplementary benefit entitlement, assessed on the normal supplementary benefit principles, at the single non-householder rate—for example, because of rent commitments—will still be able to claim the difference. It may be that a student is married. It may be that he has a home in the normal sense. It may be that he has a flat in his university town where he has to continue to pay rent throughout the vacation. Arrangements vary very much. I do not want to comment on these various arrangements because, as always with supplementary benefit, each case must be examined on its merits by comparison with the normal rules. In the summer vacation, students unable to find jobs will be able to claim benefit in the normal way, and there will be no deduction on account of their grant, so the entitlement of most students will accordingly be higher in the summer than it has been hitherto.

I want to remove one possible misconception before leaving the question of what happens in the short vacations, and that is to stress that the new arrangements do not mean that in the short vacations students are debarred from claiming supplementary benefit. Their right to claim remains exactly as it was before. The change is a financial one; it is not a change in the Regulations. In no way are students being legislated, by sleight of hand, out of what otherwise would have been their right.

All that I have been saying has been in relation to mandatory awards, but it should apply also to LEA discretionary award holders on advanced courses or aged over 19 and on non-advanced courses, whose awards are normally at the same rate as mandatory awards. So we should get the same effect there, too. It means that if we take all full-value awards together the new arrangement should affect 420,000 students in Great Britain in 1975–76.

Taking the academic year as a whole, students generally will be no worse off under the new arrangements than they are at present. The majority who do not claim supplementary benefit will not be affected, except that they will receive a somewhat higher proportion of their grant than previously in the autumn and spring terms on the 35 per cent., 35 per cent., 30 per cent. principle. Students who make a practice of claiming benefit may be individually slightly better or slightly worse off under the new arrangements, depending on the pattern of their claims throughout the year, but the scheme as a whole is financially neutral.

That allows me to answer another of the hon. Gentleman's points. He wondered whether there was a substantial cost to the new scheme and whether account had been taken of this in the new award structure. He will realise from what I have said that, in essence, the scheme is financially neutral as it affects public expenditure as well as in the way that it affects students. The two go hand in hand. There was nothing to redistribute in that sense.

There has been a very slight change in what otherwise might have been the total value of the award. It is a very small amount monetarily, to ensure that the objective of covering adequately the two short vacations at higher than supplementary benefit levels or at the same as supplementary benefit levels is achieved. But that is part of the whole redistributive package and, overall, the package is financially neutral.

When my right hon. Friend announced the new arrangements for 1976–77, he said that there would be a further review of arrangements to apply in subsequent years. There are many difficult issues, and some of them have become apparent in what both the hon. Gentleman and I have said today, more particularly if we think of extending the arrangement in any way, or to consolidate it, or whatever it may be.

There are very difficult issues involved in this matter, and I can see no prospect of reaching an early conclusion on what future arrangements may be. I imagine that it will take a long time. But the Government fully recognise that there is likely to continue to be a genuine problem for some students in vacations, especially when short-term jobs are hard to come by, and that, whatever arrangements we may wish to propose in the longer term, we shall need to make adequate provision to deal with this and to ensure that students are not treated as an underprivileged class. Certainly that will be my objective while I hold my present office.