CONSTRUCTION OF REFERENCES TO LAND HELD FOR THE PURPOSES OF AN INSTITUTION

HC Deb 19 July 1988 vol 137 cc994-1014

Lords amendment: No. 293 in page 113, line 6 leave out payments, subject to such terms and conditions") and insert ("grants, specifying such particular obligations, and subject to such general guidance

Mr. Kenneth Baker

I beg to move, That this House doth disagree with the Lords in the said amendment.

Mr. Deputy Speaker

With this it will be convenient to discuss the following amendments to the words so restored to the Bill: Government amendments (a), in page 113, line 6, leave out 'payments' and insert 'grants'.

1. (b), in page 114, line 22, leave out 'payments' and insert `grants'.
2. (c), in page 114, line 27, leave out 'payments' and insert `grants'.
3. (d), in page 115, line 25, after 'any', insert 'grants or other'.
4. (e), in page 115, line 32, after third 'the', insert 'grants or other'.
5. (f), in page 115, line 33, leave out 'payments made by'.
6. (g), in page 115, line 39, a t end insert 'grants or other'.
7. (h), in page 167, line 29, leave out 'payments' and insert `grants'.

6.45 pm

Mr. Kenneth Baker

We come now to an important amendment relating to the funding of universities. The universities are vital institutions in our society, embodying values of the highest significance. Legislation concerning the universities is rare. Sensitive issues were bound to be raised by the university provisions of the Bill.

I remind the House that we have sought to give legislative effect to the widely accepted recommendations of the Croham committee. It proved quite difficult, in legislative terms, to provide for the transformation of the University Grants Committee from a body advising the Secretary of State to an executive body directly accountable to Parliament and more distant from the Government. Spelling out for the first time in law the relative powers and responsibilities of the various bodies in this field gave rise to some apprehension in university circles.

I recognised this concern and, to remove misapprehensions, I proposed a series of clarifications which were accepted on Report and generally welcomed. Specifically these clarifications safeguard institutions' private income, and this was further strengthened in the House of Lords; make clear that the holder of my office may not impose specific conditions on the flow of funds to particular institutions; make any long-stop direction by the holder of my office subject to parliamentary veto; and explicitly empower the funding councils to advise the Government. I am sure that hon. Members who have followed our debates will recall the changes that were made on Report. In addition to that, the Government invited the House of Lords to define a statutory commitment to academic freedom. This was done and later tonight we are accepting that amendment.

There should be no doubt about the importance of the funding issue. We are considering here the basis upon which the total of some £3 billion of taxpayers' money, voted by the House, is allocated in the public interest in support of higher education in universities, polytechnics and colleges.

The Croham committee was very clear about the question of public accountability for university funds from the public purse. It called for the council to have an "unambiguous" power to attach conditions to grant, including the positive or negative earmarking of elements of the grants". Amendment No. 293, which I am asking the House to disagree to, replaces that power with a much less certain power to make grants specifying such particular obligations, and subject to … general guidance". This amendment would call into question the ability of the Universities Funding Council to do what the UGC has always been able to do.

There has been much debate about the word "contracts", which the Government were not the first to use. The Croham committee used it, too, and put quotation marks around it to show that they were not talking about contracts in the strict legal sense. But nor are the Government. I have given unequivocal assurances that the new funding arrangements must, first, not be excessively bureaucratic; secondly, must respect the distinctive characteristics of higher education; thirdly, must not jeopardise the pursuit of research or scholarship; and, fourthly, must not deprive institutions of the flexibility that they need to seize new opportunities.

Mr. Dalyell

rose——

Mr. Baker

I hope that the hon. Gentleman will forgive me. We have a relatively short time for the debate; however, I shall give way.

Mr. Dalyell

I have read the Lords debate and consider that it is important to know in what sense the Government are using the word "contracts". Will the Secretary of State at least define the word, as the Government want to use it?

Mr. Baker

Some seem to have found the whole concept of "contracting"—and I hope hon. Members can hear the quotation marks, which the Croham report uses—at least novel, and perhaps even shocking. But we are aiming for a clearer articulation of features already existing in the present arrangements.

For the past two years, the University Grants Committee has been agreeing academic plans with the universities. The universities have not resented that and, indeed, in many cases they have welcomed the clarity of the new arrangements.

I know that the universities recognise that there has to be some balance between institutional autonomy and responsibility for public money. Several of the vice-chancellors have said that to me. The chairman of the Committee of Vice-Chancellors and Principals said yesterday: It is obvious that public money coming to the universities must be subject to 'terms and conditions'. We have the recent hearings by the Public Accounts Committee on University College Cardiff to remind us of the importance of that assurance.

Mr. Andrew F. Bennett

I am sure that the Secretary of State understands that the use of the words "terms and conditions" is the key to the matter which is of the greatest concern to the universities. Will the Secretary of State spell out for the House exactly what he means by the words "terms and conditions"?

Mr. Baker

The hon. Gentleman has anticipated what I am going to say.

The phrase "terms and conditions" is familiar in legislation. It serves a number of purposes here. First, it provides for proper accountability. The funding councils must, as the UGC does now, be able to secure satisfactory financial arrangements to monitor and safeguard very substantial public funds. That is a particularly important issue for the House as the funds in question will be voted here. The Public Accounts Committee will expect the chief officers of the councils to account for these funds.

Secondly, the funding councils must be able to continue the present practice of earmarking funds for particular uses in the national interest. Recent examples of this are the engineering and technology initiative and the additional resources for university restructuring that were announced by the Government last year. All those require the precise targeting of funds if they are to be satisfactorily achieved. That is why we need the words "terms and conditions" in the Bill. I assure the House that as a matter of course the way in which the funding councils will interpret those words will be developed through consultation. I shall ensure that this is so.

In brief, the point at issue is that by using ambiguous phrases, such as "specifying such particular obligations" and subject to such general guidance", the House of Lords amendment casts doubt on something that Parliament must leave entirely clear.

The Universities Funding Council and the Polytechnics and Colleges Funding Council—for the polytechnics and colleges must be treated in the same way—must be able, first, to require institutions to produce academic and financial plans, secondly, to require them to comply with reasonable accounting procedures and, thirdly, to ensure that money made available for particular purposes is used for those purposes and no others. In plain English, this means that the grants or payments made to institutions must be subject to terms and conditions. The House would be failing in its duty to the funding councils and to the taxpayer if it passed legislation that left such a vital question obscure.

Mr. Ashdown

rose——

Mr. Baker

I hope that the hon. Gentleman will forgive me if I do not give way. This is a short debate.

I am well aware that the Government's proposals for a more explicit basis for higher education funding have helped to spark-off an important and far-reaching debate, especially within the universities, about future funding. We shall listen closely to the debate—as will all hon. Members who follow these matters—and we hope to learn from it.

It is common ground between the Government and the universities that our institutions of higher education should be more autonomous, that the sources of their funding should be increasingly diversified and that their freedom of operation should be expanded in a more competitive setting in which they will be increasingly responsive to the needs of their students.

The Government have not yet reached a view about how to build on that common ground. We want the debate about funding in the higher education world to mature and reach practical conclusions. However, I would like to give the universities and other interested parties the assurance that we are interested in the common ground. We want to build on it and we shall not proceed in this matter without meaningful discussions with the leaders of our universities, polytechnics and colleges.

In the mean time, to remove misapprehensions about the Government's intentions, the amendments in my name substitute the word "grants" for the word "payments", which was one of the changes suggested by the House of Lords.

Mr. Andrew F. Bennett

I am sure that the House will be disappointed that the Government have decided to attempt to overturn the amendments made in the House of Lords. If the Government had really wanted to give the academic world the assurance that it sought, it would have been very simple for the Secretary of State to have accepted the amendments. He has not really explained why it is essential that he takes out the words inserted by the House of Lords and replaces them with words that he has selected—unless he believes that there is a fundamental difference. It is that fundamental difference which causes concern outside the House.

The essential problem for the Government is that the universities represent a challenge to their central monetarist philosophy. The pursuit of learning cannot be fettered by the need to make a profit or to show a financial return. Monetarism is about short-term profit and loss; the universities are about the slow, careful training of the intellect and a quest for knowledge and an understanding of the universe.

Underlying this part of the Bill is the Government's stated aim that universities should receive funding only by way of "contracts". Whether one puts the word in inverted commas or not, the implication is that something measurable and saleable will have to be delivered in return for payments.

Many have made fun of the way in which a university might have had to draw up a contract with a Newton, a Dalton or a Rutherford, and how they would have fulfilled their contract to defining a natural law. How would a university have drawn up a contract with a Keynes, a Walters or a Minford asking them for an economic theory? I was an undergraduate in the department of commerce and social science at Birmingham university. I wonder how Birmingham university would have drawn up contracts with Henry Maddocks, Alan Walters, Chelly Halsey and Geoffrey Ostergard—an entrepreneur, a monetarist, a socialist and an anarchist? How would Liverpool university have drawn up a contract with Professor Patrick Minford? Would he have been told, "You will produce an economic theory that will lead to the devastation of Liverpool and challenge the whole concept of a university"?

It is easy to ridicule the idea of such a contract, but implicit in the Government's view of monetarism and in the Bill is the idea that there has to be some obvious financial return. Our debates both in this place and in the other place have been only small skirmishes, but the Bill itself marks a profound disagreement between the Government's monetarist views and the views of those who believe in academic freedom. The assertion that some values and endeavours cannot and should not be reduced to cash register terms is a challenge to the Government and is central to the business of a university.

After this debate on funding and the debate on ILEA we shall return to the question of academic freedom. The two debates are linked because the amendments raise the question of how accountable to the Government the universities and, by implication, the rest of higher education should be. Governments have a right to demand that all higher education is of high quality and produces work of high quality and that students and employees are treated fairly, hut they do not have the right, and should not demand the right, to control what is studied.

In Committee, Ministers chided the Opposition when we argued that we wanted the Government to be prescriptive about conditions of employment and about the rights of students to high-quality teaching and supervision, but that higher education should be free from Government directives about what should be studied and taught. I do not see any inconsistency in that. It seems to be absolutely fundamental that the institutions and academics should have that academic freedom to study in the areas that they believe to be right rather than areas prescribed by the Government.

7 pm

In the other place, the Lord Chancellor argued that the amendments that we are now discussing, moved by Lord Swann and Lord Adrian, were making a mountain out of a molehill, and that by replacing "payments" with "grants" they were making a trivial change. If it was as trivial as the Lord Chancellor said, why is it that that Government are now demanding this change? Either it is of significance or the Government want to send a signal to the whole of higher education. That is what worries me—the Government are sending a depressing signal to higher education.

The Government do not have the resources or the skill—nor should they—to direct academic endeavour, except at the very margins. Just look at the damage that Lord Joseph did as Secretary of State when he tried to go round telling everyone that science and technology were good and the arts and social sciences were bad. That did not do much good for science and technology. It simply allowed the underfunding in those areas to go on and on, with people believing that that underfunding was because the arts and social sciences were unwilling to relinquish resources. It demoralised the arts and social sciences. It was fundamentally wrong. The then Secretary of State was even trying to address himself to the problems in this country, but there was no evidence that they came down to problems of science and technology. If the Secretary of State was to list the 10 problems that people saw as most pressing, I suggest that perhaps only one could be solved by major scientific endeavour—AIDS. Even that is arguable. It is probably as much of a social problem as a scientific problem.

Let us look at world food. The problem in Britain and the rest of the world is not that we lack the science to find ways of increasing food production; it is the problem of transferring food surpluses from developed to underdeveloped countries. On environmental destruction, we know enough about the problems of the ozone layer and the destruction of our forests. In the end, however, there is a difficulty in finding political solutions to those problems rather than in having the scientific knowledge. Our housing problem is not because we lack good architects and engineers, but it is a social and political problem of how to obtain the resources to build decent houses for all our people.

On nuclear and other weapons, Britain is not in a mess because we lack the scientific knowledge to develop weapons—we are good at doing that and we have tremendous scientific skills in producing weapons of destruction. The problem is in finding political ways so that we do not need those weapons in the first place, with the waste of resources that goes with them.

The Government's thesis that they have been pressing for the past few years, that there should be a major switch of resources from the arts and social sciences to science and technology, is fundamentally flawed. There may be a major argument that the Government should invest far more in science and technology, but it should not be at the expense of other areas.

Picking areas for research is extremely difficult. What appears to be an esoteric idea today may turn out to have a practical, real value in the future. Let me mention the example of linguistics. In the 1950s and 1960s an awful lot of people dismissed it as having little practical application whereas now, with the application of computer technology, we know that a full understanding of linguistics is fundamental for producing automatic translations and all sorts of other devices. If one talks to some of those who did the first work on lasers, they say that they were sceptical about whether there would be any practical application for their work, but in the end their thirst for knowledge produced something that is of major advantage to us.

In the Bill, the Government should have set out a charter for higher education—all higher education, not just universities. It should have been a charter, a bill of rights, establishing the concept of academic freedom in statute and establishing funding free from political direction over what is to be studied. Instead, in the clause, we have a mean determination to fetter universities with contract funding and to destroy all that I have mentioned because it is a fundamental challenge to the Government's monetarism.

I suggest that we vote against the Government amendments and that we assert that we want to preserve higher education from Government control over what is studied. We want to reject their demand for intellectual study that can be controlled by the profit motive. We want intellectual study to be free for the people to enjoy so that they can develop their intellect and the nation can prosper. I hope that the House will reject the Government amendments.

Mr. George Walden (Buckingham)

Three subjects get the incense swirling around the Chamber. One is the arts, another is religion and the third is higher education. We had an example last night—a whiff of incense—on religion, with spiritual this and spiritual that. The antidote to that is to look at some of the latest GCSE papers, in which there is little spiritual talk but quite a lot about the sociology of prisons. We have a similar atmosphere on the arts, where the antidote is to look in some of the cellars of our major institutions, which are full of the rotting ephemera of contemporary art, bought with money voted by the House.

Higher education is also a subject which tends to lead to much overblown rhetoric, and we have had a taste of it from the hon. Member for Denton and Reddish (Mr. Bennett). But it is not a service to higher education to talk about it in that way. Those whom I have met who run higher education establishments seem to be hard-headed and intelligent people, who do not go in for such talk. They are also fully aware that the drive for more accountability is not confined to this country. It is happening in America and France. The French, with their gift for encapsulating these things in telling phrases, have said that the accountability of universities is the counterpart of their independence. That is basically what we are talking about.

Despite all the talk by the hon. Member for Denton and Reddish about contracts, we must remember that the word "contract" is not in the Bill. Personally, I do not like that word when applied to higher education, for obvious reasons. One cannot contract to have a certain number of philosophers, and so on. But it has always seemed to me from the start that it was legitimate of Croham to talk about the spirit of contract—the contractual spirit—because we need some more of that.

I am opposed to the Lords amendment because it will take us back to the old days, the lax and unsatisfactory old days, when things were done in a rather hole-in-the-corner way. That was not satisfactory to many of the leaders of our universities. In private, many of them will tell one that. It seems to me that we do not want to return to that system. We should have something clearer, more above board and more comprehensible to everybody.

Another point which my right hon. Friend the Secretary of State was inhibited from mentioning, but which may have been on his mind, is this. He and to some extent I were involved together in getting money for higher education from the Treasury. I believe in getting money for higher education from the Treasury because there should be more higher education and more students in higher education. But when one goes along to the Treasury and asks for money, one must put oneself in the place of the Chancellor of the Exchequer. He has people asking for money for clear, definite and finite things—for houses, hospitals and the elderly. Therefore, if, through the Government amendment, my right hon. Friend the Secretary of State puts himself in a better position to secure more money from the Treasury for higher education, it will be a welcome change. He will be able to do that by demonstrating, through his new funding council and through the new sense of accountability, the achievements of our higher education, which are considerable and which will he even greater when the reforms have gone through.

I shall therefore vote in favour of my right hon. Friend's proposal. Of course, in some cases the changes and the new funding council will chafe against the softer parts of the system. But perhaps that flesh has become a little too soft. It will soon harden, to no one's disbenefit.

Mr. Dalyell

May I ask the hon. Member for Buckingham (Mr. Walden) what he thinks the Japanese do when they go to their Treasury? This debate takes place against the background of three times as many people in higher education in Japan as there are here, and look at the Japanese——

Mr. Walden

indicated dissent.

Mr. Dalyell

The hon. Gentleman is a distinguished orientalist and we can argue that another time. But that is the background to the problem.

Ministers often give themselves away by the rebukes that they heap on their opponents. Earlier this afternoon, the Secretary of State told the Opposition not to be dogs in the manger. I make no bones about taking the right hon. Gentleman into my manger. It is easy to override objections. The Secretary of State seems to be on a high and thinks that there are no serious objections to his proposals.

Other hon. Members wish to speak in the debate, so I shall ask only three questions. First, when my hon. Friend the Member for Denton and Reddish (Mr. Bennett) said in his excellent speech that if the Swann-Adrian amendment was not accepted it would send a depressing signal to higher education, the Secretary of State said sotto voce from a sedentary position "Not at all." I believe that he meant that comment. When he replies to the debate, will he explain why he said that, and why the Swann-Adrian argument is wrong?

Mr. Hawkins

I shall not try to answer for my right hon. Friend the Secretary of State except to say that the Opposition do not seem to have noticed that the Committee of Vice-Chancellors and Principals has welcomed the Government's proposal and has not lamented the death of the Swann amendment. Professor Sir Mark Richmond, the chairman of the committee, said that it welcomed the Government's amendment to the Education Reform Bill substituting the word "grants" For "payments" in clause 115. He went on to ask For clarification of the terms and conditions——

Mr. Sedgemore

He did riot get it.

Mr. Hawkins

He certainly did.

Mr. Dalyell

I have read the letter, too. It would probably be better for everyone if the Secretary of State answered that point rather than for me to take time on it. He may have an answer.

My second question relates to the earmarking of funds in the national interest. Precisely who will do that and on the basis of what general criteria? That is not a catch question; it is a genuine one. It is extremely difficult to decide what is in the national interest—not only the current national interest but the foreseeable national interest in five or 10 years' time. We are talking about the national interest of the future, perhaps a decade away.

My third question relates; to tenure. The Secretary of State will know from the Secretary of State for Scotland that on Friday night a group of Lothian Members of Parliament had a long meeting with Sir David Smith, the principal of Edinburgh university, and his senior colleagues. I pass on a matter that greatly worries those representatives of one of the great European universities. It is the question of redundancies. I tried in vain at Question Time to discover from the Secretary of State how much premature redundancy and retirement has cost. I thought that he would have a figure in his brief. I repeat that question and add this: are we sure that it is in the national interest to make redundant semi-compulsorily—that is what it amounts to—people aged 50 or 55 who still have much to give? I know that some of the people who were most successful in teaching me—it may not have been the same for everyone—were within 10 years of retirement. It is a crying waste of talent and is often pathetically sad in human terms that such men and women must retire early from their chosen profession.

I am appalled that the criterion of success offered by some universities is that they have completed a restructuring plan by achieving so many redundancies. This is a mark of sadness. It is not an act of success, but an act of gross failure of society.

7.15 pm

Mr. Timothy Raison (Aylesbury)

I am glad that Lords amendment No. 294 is now in the Bill. Earlier I and other hon. Members were worried that if the universities were successful in raising money from outside private sources they might lose some of the funding that they might otherwise expect from the Universities Funding Council, and I am glad that the Government have taken that amendment on board.

On amendment No. 293, although I cannot claim, despite my right hon. Friend's explanation, to understand every nuance of difference between a grant and a payment, his proposal is acceptable to the universities and I am happy to go along with it. I was extremely interested in my right hon. Friend's view that we have not come to the end of discussions on how the universities should he funded. He showed a remarkably open mind and a willingness to consider other ways of setting about this. His remarks were important because now coming to the surface are specific proposals that should be considered carefully. They relate to whether we can apply to the universities the system of choice that has been repeatedly and strongly emphasised in our debates on grant-maintained schools.

There is a strengthening argument for allowing choice and demand to replace Government in determining which universities will attract more money. That can be done by a simple mechanism—by saying that the fees charged to students should reflect the full cost, but that through a straight grant or a loan the student should be given enough money to pay for them. If we can reach that position, the student will then determine which university will provide more courses and which will provide fewer.

I am glad that that proposal seems to attract support from some of my hon. Friends, but it will not solve the problem entirely. We must also consider the national interest. The Government should be strengthening special areas of scholarship and learning, including science, but there should be other mechanisms by which they can perform that important role. My right hon. Friend the Secretary of State referred to that when he said that the Government should have the power to launch initiatives or to strengthen areas such as science. The Government could still use the mechanism of the Universities Funding Council if they wanted to confine particular resources to particular areas. The Government could also provide funds through the research councils, which are an important part of their armoury. I do not think that it is possible to conceive of a better way in which to do that than through the research councils. They have a long history and they have been a successful mechanism.

The picture before us is that raising fees to the full level and then supporting students will give us a chance to allow demand and choice to take effect, but the Government will also have the weapon necessary to strengthen the basic scientific and academic structure of our life, which is important.

I will touch on one other suggestion, which is to be found in an interesting essay by Professor Elie Kedourie called "Diamonds Into Glass". He talks about the idea that I have just suggested, but says: The Government now spends annually very considerable amounts in direct grants to universities. How then if a capital sum representing the present discount value of, say, ten or fifteen years' subventions were to be given to each university which would be told that henceforth, given such a handsome dowry (or better, alimony) it would have to fend for itself'? In a way, that is a still more radical idea, and I have no doubt that the Treasury would have kittens on a major scale were it to be imposed. That is an example of the sort of new thinking that would help to restore to universities their historic independence, which should be valued highly, but at the same time they should be given the opportunity to meet the needs of the modern world.

I repeat that I am delighted that my right hon. Friend the Secretary of State has shown a willingness to think about new ideas. The process will not end with the passage of the Bill, and I look forward to his next instalment.

Mr. Ashdown

I shall be brief, because I want to ask the Secretary of State only three questions. I join the right hon. Member for Aylesbury (Mr. Raison) in welcoming Lords amendment No. 293. The Secretary of State is right in saying that the Croham report mentioned contracting.

I direct the Secretary of State's attention to the debate in the other place on 28 June 1988 when, at column 1404, the Lord Chancellor—contrary to what the Secretary of State said—said that there was no difference between a grant and a payment. He went on about that at some length and wondered why there should be a debate on the matter at all. There appears to be a difference of opinion between the Secretary of State and the Lord Chancellor. The Lord Chancellor believes that the entire question was somewhat arcane as there is no difference in meaning. Perhaps the Secretary of State or the Under-Secretary will say who is right.

Croham was concerned about the extent of the terms and conditions and the proportion of contracting that the Government would nominate. We must delve into the Government's mind to discover precisely what they intend. If they intend to use a small proportion of those funds legitimately to direct, guide and steer, that is perfectly acceptable. If, on the other hand, they intend to use the larger proportion, as the right hon. Member for Aylesbury said, to diminish the choice and freedom of universities and their autonomy, we should be more worried. I hope that the Under-Secretary of State will tell us the proportions that the Government have in mind. Will he give an undertaking that it will always be the much smaller proportion that is used in the way suggested by the Secretary of State?

My second question relates to Croham's recommendations, because Croham mentioned the nature of the Government's determination. It would be acceptable, I think, to most reasonable minds if the Government used funds to direct positively—for example, to bring new blood to university teaching or to open a new university department. We can see why that might happen, but we need assurances that the Government will not use funds negatively—for example, by saying that money can be provided if a troublesome course is closed down. If the Government's determination is used positively, that would be fine, but used in a form that would cause universities to close down, to remove academics or to close down departments, it would be a genuine limitation on the freedom of universities, which I regard as important—and the Secretary of State has said is important.

It is unfortunate that the Secretary of State would not let me intervene, but I hope that he will now answer my third question. We must find out what is in the Government's mind. Are they carrying forward custom and practice more effectively in this legislation or is there to be some fundamental change in the nature of universities? I would rather not have to ask that question, but I must do so, because the Under-Secretary of State has caused a considerable furore—and rightly so—in academic circles by the words he used in The Times Higher Educational Supplement. His words were quite chilling. I shall quote them and then ask the Secretary of State whether he agrees with them. If he does, we have good reason to be suspicious that the Government have more sinister reasons for their amendments, as they want completely and fundamentally to alter the nature of our universities. The Under-Secretary of State said: Academics should stop cowering in the secret garden of knowledge and get to grips with the real world, since knowledge for its own sake is no longer the prime concern".

The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson)

rose——

Mr. Ashdown

I shall give way to the hon. Gentleman, but I rather hoped that he would allow the Secretary of State to tell us whether he agrees with those words.

Mr. Jackson

rose——

Mr. Ashdown

I shall give way when I feel that it is right to give way. I rather hoped that the hon. Gentleman would allow the Secretary of State to say whether he agrees with those words.

Mr. Jackson

The Secretary of State will make his own speech, but I hope that the hon. Gentleman will also read to the House my letter in the following week's issue correcting that misreporting of my remarks.

Mr. Ashdown

That report was reported in the Lords Hansard of 28 June. I notice that that was uncorrected. I accept what the Minister says, but I hope that he will take time in his speech to explain to the House, unequivocally and in crystal clear words, what has been the correction to that sentiment. If underlying his and the Government's motives are sentiments such as those, I believe that we should be suspicious about those words.

Mr. Jackson

It is a matter for the hon. Gentleman's own sense of honour whether he——

The Deputy Speaker

Order. I think that the hon. Member for Yeovil (Mr. Ashdown) has resumed his seat.

Mr. Robert Rhodes James (Cambridge)

Behind this brief amendment lies a real and deep concern about the relationship between the Government, especially the Department of Education and Science, and the universities under the terms of reference of the new Universities Funding Council.

The Secretary of State, especially in accepting the bulk of Lords amendments Nos. 294 and 293, has come a long way to recognising and meeting those concerns. I regret that he is not accepting amendment No. 293 in full, as I had hoped.

I disagree with my hon. Friend the Member for Buckingham (Mr. Walden). As the Secretary of State knows, Lords amendment No. 293 had the very strong support and endorsement of my eminent constituent, Lord Adrian. Although I do not always support the amendments of my constituents in the other place, as Lady David well knows, I regard this amendment as reasonable and fair.

My right hon. Friend has met all the major concerns of the universities about the original Bill, for which we are grateful, but I remain puzzled why he has rejected this one. I have listened to his arguments carefully, because, although this amendment is minor, it would give the UFC a greater independence of judgment, which it should have. It would be a pity if the considerable progress that has been made by my right hon. Friend's very responsive attitudes to the concerns of higher education might be in any way overshadowed by his opposition to part of Lords amendment No. 293. Although it is late in the day, I ask him to reflect further on the powerful argument deployed in its favour. I acknowledge that the concerns about centralised Government control over the universities are real and important. If the Secretary of State cannot reverse his decision tonight, I hope that he will reflect on the matter and realise that our worries are genuine and should be considered.

7.30 pm

When my right hon. Friend the Secretary of State was a Back Bencher—we still regard him as one of us—he made a famous speech in which he warned us about the tightrope between sycophancy and rebellion. I have tended to fall off that tightrope on to the rebellious side rather than the sycophantic side, but I should like to emphasise to my right hon. Friend that I am deeply appreciative of the advances that he and my hon. Friend the Under-Secretary of State have made towards meeting the concerns of higher education generally and not simply of the universities. That is why I regret my right hon. Friend's opposition to the Lords amendment. I also add my gratitude to my hon. Friend the Member for Reading, West (Mr. Durant) who, although a Whip, has been very co-operative.

I believe that my right hon. Friend the Secretary of State is wrong to reject the Lords amendment, and I hope that he will understand that I cannot support him in the Lobby on this matter.

Mr. Sedgemore

I agree with almost everything that I he hon. Member for Cambridge (Mr. Rhodes James) said, although I think that he was characteristically too generous to the Secretary of State.

One of the reasons why I rise is that it is an absolute delight to take part in any debate on the universities because they always end up with the Secretary of State wriggling and squirming and making a shameful retreat. He tried to reassure us over the question of contracts. He said that, like Croham, he was not concerned with legal contracts. My understanding of a legal contract is that it is simply an offer and acceptance usually made subject to certain terms and conditions. I cannot see that there is much difference between the contracts that he has in mind between the Universities Funding Council and the universities, and ordinary legal contracts.

Sir Mark Richmond says that he is worried about the way in which the phrase "terms and conditions" will be imposed. Unless the Secretary of State's words are qualified by the Under-Secretary of State, the simple answer is that the terms and conditions can be imposed at any time, in any field and unilaterally by the Secretary of State. The Secretary of State may adopt his traditional argument, am giving these exceptional powers to the body and it will never use them badly." It might not use them badly in the early years, but, when the crisis comes, how will it use them then? When there is a shortage of money, will it impose the terms and conditions in spheres that the Secretary of State did not outline? If he intends to limit the terms and conditions to the few cases of which he spoke, why does he not put that in the Bill instead of asking us to accept that the UFC will always act in a particular way?

The other reason why I have risen to make a short contribution is that, as the hon. Member for Cambridge said, basically our political system does not work. We have an all powerful Executive which usually acts in an arrogant and, occasionally, in a politically corrupt fashion. We have a Parliament which is powerless to correct the uses and abuses of the power of the Executive. Outside bodies and institutions have been rendered almost impotent. One could say that that has happened with almost the whole of the Bill, but it has not happened with any of the debates on the universities. The Committee of Vice-Chancellors and Principals has wielded power and influence. Not to put too fine a point on it, it has given the Secretary of State a drubbing, kicked him from pillar to post, twisted his arm, crushed his goolies, made him look silly and made him grovel. It has done that over his ideas on contracts, grants and payments by the UFC, academic freedom and over his attempt to control the administration of the universities and the development of ideas.

Some people, even in this House, resent the power of the CVCP. They resent the fact that it has helped the Opposition to put the case for academic independence clearly. They resent the influence that the committee has had over the House of Lords. They resent the way in which it has gathered together the support of the intellectual elite in this country and they resent the way in which it has got the media on its side, but, in the words of the Prime Minister—I am sure that the hon. Member for Cambridge agrees with me—we should rejoice at what the Committee of Vice-Chancellors and Principals has done. We should rejoice in the amendments that it has encouraged Members of the House of Lords to bring forward, and we should contrast the way in which the universities have stood up and fought for very fine ideals with the almost pathetic way in which the polytechnics have fought for nothing during the progress of the Bill and appeared to want to rush into the arms of the Secretary of State.

The universities and the CVCP recognise that there is nothing in this life so important as the development of an idea. The Opposition have recognised throughout the discussions on the Bill that there is nothing so important as the development of an idea. Even their noble Lordships have recognised that there is nothing so important as the development of an idea. Surely it is right that, at last, the Government should tonight try to recognise that and accept the amendments that the House of Lords has put forward.

Mr. Michael Latham (Rutland and Melton)

I share several of the reservations expressed by my hon. Friend the Member for Cambridge (Mr. Rhodes James) and I shall say why in just two minutes.

The part of my right hon. Friend's opening speech with which I most agreed was when he talked about the importance of the universities, the greatness of the institutions and how vital they are to our national life. That needs saying and believing over and over again because they are essential to our national life. That is why my instinctive feeling was to support the Lords amendment that my right hon. Friend is asking us to reject.

However, when my right hon. Friend referred to the Public Accounts Committee, he led me to think again and I shall listen carefully to what he says later. He said that the wording of the amendment tabled by Lord Adrian would not be sufficient to give powers to the UFC to be able to satisfy the PAC of its duty as accounting officer. I should like my right hon. Friend, or my hon. Friend the Under-Secretary, to explain why that should be so because, as a member of the PAC, I attach great importance to that matter. Only a few weeks ago, the permanent secretary to the Department of Education and Science, Sir David Hancock, spoke to the PAC about the university college of Cardiff where a scandalous situation has occurred. I asked Sir David: Is it your view and of the Department that these affairs have been handled incompetently and negligently? Sir David replied: Those are strong words to use on a public occasion. I asked him: Which would you prefer to use? He replied: "Yes."

I later asked Sir Peter Swinnerton-Dyer whether it was satisfactory that members of staff should be allowed to retire on full pension when they had acted incompetently and negligently. Sir Peter replied: No, I do not regard it as satisfactory. I do not regard it as satisfactory either.

I want to be sure, if my right hon. Friend wants me to vote with him—as I said, my instinctive feeling was to support Lord Adrian—what it is about Lord Adrian's amendment that would not give adequate powers to the UFC and adequate powers of scrutiny to the PAC. If my right hon. Friend can satisfy me on that, he will perhaps have my support.

Dr. Keith Hampson (Leeds, North-West)

My right hon. Friend and I have always seen eye to eye on the essential worth of universities in this country. I have never believed that the Government have sought fundamentally to change the relationship between the Government and universities. However, we must accept that there is deep suspicion in the university world about the Government's motives. That is at the heart of what has been happening in the other place. That concern is compounded when, on the one hand, the Lord Chancellor says that the amendments are an irrelevance and do not make any difference and, on the other hand, Baroness Hooper says that they do and that they deny powers to the UFC which it would otherwise have had.

We must strike a balance and it would be wrong for the UFC to have fewer powers than the UGC. It is important that the new body has the ability to undertake contracts, because that could be an inventive and stimulating way of funding certain parts of higher education. However, we do not want higher education to be on a narrow-funded basis—on the basis of contracts, whether for research, teaching or the provision of what the state happens to believe is in the national interest.

We need to preserve the universities system. The essence of the block grant scheme was to stimulate initiative and inventiveness at the academic level. We must support that fundamental. I do not see that the amendments will make any difference. Whether we call it a grant or a payment, we must keep the balance. There must be a certain amount of discretion at local university level to be productive, creative and innovative. At the same time the Government, or the funding council acting on behalf of the Government, must be able to produce a direction in certain areas and to stimulate a new way for the universities and polytechnics to meet those targets.

I end with one plea. I cannot see how it makes any sense for the Government to rationalise subject provision—we have a whole series of subject reviews—and at the same time to deny the tenure that academics currently hold if they switch to other universities as a result of those subject reviews and Government-initiated rationalisation. I urge that those academics who are obliged to move to other universities as a result of the Government's own subject rationalisation at least keep the tenure that they currently hold or there will be no incentive for them to move.

Mr. Spencer Batiste (Elmet)

We all subscribe to the principle of academic freedom. It is implicit in the definition of academic freedom that a balance is struck between the needs of the individual academic, the needs of his department, the needs of the university and the needs of the Government in funding the work involved.

It is essential that the Government have a right to earmark money for particular activities within universities. I understand that the Committee of Vice-Chancellors and Principals accepts that there are technical weaknesses in amendment No. 339 that would prohibit the earmarking of money. I hope that my brief contribution will direct my right hon. Friend to address that problem.

Mr. Kenneth Baker

The debate has been interesting because it has highlighted quite a lot of important points, in particular the relationship between the Government and the new UFC and between the UFC and its powers over the funding of universities.

First, there are certainly changes. I was asked what the changes would be. The most important change on funding is that the UFC is more distant from Government. The UFC will have more non-academic members, and over the years I certainly expect it to become more independent.

Mr. Andrew F. Bennett

Who appoints them?

Mr. Baker

I, or the holder of my officer, will appoint them. Nonetheless, the idea of a UFC with more outside members has been welcomed by both sides of the House.

I thank my hon. Friend the Member for Buckingham (Mr. Walden) for what he said about the need for the Lords amendment to be set aside. I certainly recommend to the House that that should be done. I also thank my hon. Friend the Member for Cambridge (Mr. Rhodes James) as I think that he meant it as a compliment to me when he said that I was a Back Bencher at heart. It is certainly not my intention for the arrangements that will operate in future to reduce the autonomy of the universities. I have made it clear that I should like the universities to move to a more autonomous position.

I was asked why the universities would not be depressed. I do not believe that the universities would be depressed by this measure because many of them welcome the clarity that comes from the arrangement of the UGC over the past few years for agreeing to academic plans. They would also welcome the clear clarification in the changes that we are recommending. The Committee of Vice-Chancellors and Principals has said in a press release that it welcomes the proposed terms and conditions which would produce a degree of certainty for earmarking funds, particularly for the engineering and technology incentive and for the restructuring funds which I secured from the Treasury.

I must say to my hon. Friend the Member for Rutland and Melton (Mr. Latham) that the clear advice that I have is that it would be very difficult for the Public Accounts Committee to operate a scrutiny and hold the UFC to account if it did not have terms and conditions.

I was asked about the nature of the contract. Again, contracting was not an idea devised by the Government. I refer again to paragraphs 5.14 and 5.16 of the Croham committee report: Both the grant definition by the UGC at the end of the distribution exercise"——

It being a quarter to Eight o'clock, MADAM DEPUTY SPEAKER proceeded, pursuant to the Order [18 July], to put the Question already proposed from the Chair, that this House doth disagree with the Lords in the said amendment:—

The House divided: Ayes 301, Noes 206.

Division No. 422]	[7.45 pm
AYES
Adley, Robert	Day, Stephen
Aitken, Jonathan	Devlin, Tim
Alexander, Richard	Dorrell, Stephen
Alison, Rt Hon Michael	Douglas-Hamilton, Lord James
Allason, Rupert	Dover, Den
Amery, Rt Hon Julian	Dunn, Bob
Amos, Alan	Dykes, Hugh
Arbuthnot, James	Emery, Sir Peter
Arnold, Jacques (Gravesham)	Evans, David (Welwyn Hatf'd)
Arnold, Tom (Hazel Grove)	Evennett, David
Ashby, David	Fairbairn, Sir Nicholas
Atkinson, David	Fallon, Michael
Baker, Rt Hon K. (Mole Valley)	Farr, Sir John
Baker, Nicholas (Dorset N)	Favell, Tony
Baldry, Tony	Fenner, Dame Peggy
Banks, Robert (Harrogate)	Field, Barry (Isle of Wight)
Batiste, Spencer	Finsberg, Sir Geoffrey
Beaumont-Dark, Anthony	Fishburn, John Dudley
Bellingham, Henry	Forman, Nigel
Bendall, Vivian	Forsyth, Michael (Stirling)
Bennett, Nicholas (Pembroke)	Forth, Eric
Bevan, David Gilroy	Fowler, Rt Hon Norman
Biffen, Rt Hon John	Fox, Sir Marcus
Biggs-Davison, Sir John	Franks, Cecil
Blackburn, Dr John G.	Freeman, Roger
Blaker, Rt Hon Sir Peter	French, Douglas
Body, Sir Richard	Fry, Peter
Bonsor, Sir Nicholas	Gale, Roger
Boswell, Tim	Gardiner, George
Bottomley, Mrs Virginia	Garel-Jones, Tristan
Bowden, A (Brighton K'pto'n)	Gill, Christopher
Bowden, Gerald (Dulwich)	Gilmour, Rt Hon Sir Ian
Bowis, John	Goodhart, Sir Philip
Boyson, Rt Hon Dr Sir Rhodes	Goodson-Wickes, Dr Charles
Brandon-Bravo, Martin	Gorman, Mrs Teresa
Brazier, Julian	Gorst, John
Bright, Graham	Gow, Ian
Brittan, Rt Hon Leon	Gower, Sir Raymond
Brooke, Rt Hon Peter	Grant, Sir Anthony (CambsSW)
Browne, John (Winchester)	Greenway, Harry (Ealing N)
Bruce, Ian (Dorset South)	Greenway, John (Ryedale)
Buck, Sir Antony	Gregory, Conal
Burns, Simon	Griffiths, Peter (Portsmouth N)
Burt, Alistair	Grist, Ian
Butcher, John	Ground, Patrick
Butler, Chris	Hamilton, Neil (Tatton)
Butterfill, John	Hampson, Dr Keith
Carttiss, Michael	Hanley, Jeremy
Cash, William	Hannam, John
Chalker, Rt Hon Mrs Lynda	Hargreaves, A. (B'ham H'll Gr')
Channon, Rt Hon Paul	Hargreaves, Ken (Hyndburn)
Chapman, Sydney	Harris, David
Chope, Christopher	Haselhurst, Alan
Churchill, Mr	Hawkins, Christopher
Clark, Hon Alan (Plym'th S'n)	Hayward, Robert
Clark, Dr Michael (Rochford)	Heddle, John
Clark, Sir W. (Croydon S)	Hicks, Mrs Maureen (Wolv' NE)
Colvin, Michael	Hicks, Robert (Cornwall SE)
Conway, Derek	Higgins, Rt Hon Terence L.
Coombs, Anthony (Wyre F'rest)	Hill, James
Coombs, Simon (Swindon)	Hind, Kenneth
Cope, Rt Hon John	Hogg, Hon Douglas (Gr'th'm)
Cormack, Patrick	Holt, Richard
Couchman, James	Hordern, Sir Peter
Cran, James	Howard, Michael
Critchley, Julian	Howarth, Alan (Strat'd-on-A)
Curry, David	Howarth, G. (Cannock & B'wd)
Davies, Q. (Stamf'd & Spald'g)	Howe, Rt Hon Sir Geoffrey
Davis, David (Boothferry)	Howell, Rt Hon David (G'dford)

Hunt, David (Wirral W)	Patten, Chris (Bath)
Hunt, John (Ravensbourne)	Pawsey, James
Hunter, Andrew	Peacock, Mrs Elizabeth
Hurd, Rt Hon Douglas	Porter, David (Waveney)
Irvine, Michael	Portillo, Michael
Irving, Charles	Powell, William (Corby)
Jack, Michael	Price, Sir David
Jackson, Robert	Raison, Rt Hon Timothy
Janman, Tim	Rathbone, Tim
Jessel, Toby	Redwood, John
Johnson Smith, Sir Geoffrey	Renton, Tim
Jones, Gwilym (Cardiff N)	Riddick, Graham
Jones, Robert B (Herts W)	Ridley, Rt Hon Nicholas
Kellett-Bowman, Dame Elaine	Ridsdale, Sir Julian
Key, Robert	Rifkind, Rt Hon Malcolm
Kilfedder, James	Roberts, Wyn (Conwy)
King, Roger (B'ham N'thfield)	Roe, Mrs Marion
Kirkhope, Timothy	Rost, Peter
Knapman, Roger	Rowe, Andrew
Knight, Greg (Derby North)	Rumbold, Mrs Angela
Knight, Dame Jill (Edgbaston)	Ryder, Richard
Knowles, Michael	Sackville, Hon Tom
Knox, David	Sainsbury, Hon Tim
Lamont, Rt Hon Norman	Sayeed, Jonathan
Lang, Ian	Scott, Nicholas
Latham, Michael	Shaw, David (Dover)
Lawrence, Ivan	Shaw, Sir Michael (Scarb')
Lawson, Rt Hon Nigel	Shelton, William (Streatham)
Lee, John (Pendle)	Shepherd, Colin (Hereford)
Leigh, Edward (Gainsbor'gh)	Sims, Roger
Lennox-Boyd, Hon Mark	Skeet, Sir Trevor
Lightbown, David	Smith, Tim (Beaconsfield)
Lilley, Peter	Soames, Hon Nicholas
Lloyd, Sir Ian (Havant)	Speed, Keith
Lloyd, Peter (Fareham)	Spicer, Sir Jim (Dorset W)
Lord, Michael	Spicer, Michael (S Worcs)
Lyell, Sir Nicholas	Squire, Robin
McCrindle, Robert	Stanbrook, Ivor
Macfarlane, Sir Neil	Stern, Michael
MacKay, Andrew (E Berkshire)	Stevens, Lewis
Maclean, David	Stewart, Allan (Eastwood)
McLoughlin, Patrick	Stewart, Andy (Sherwood)
McNair-Wilson, Sir Michael	Stokes, Sir John
McNair-Wilson, P. (New Forest)	Stradling Thomas, Sir John
Madel, David	Summerson, Hugo
Major, Rt Hon John	Tapsell, Sir Peter
Malins, Humfrey	Taylor, Ian (Esher)
Mans, Keith	Taylor, John M (Solihull)
Maples, John	Taylor, Teddy (S'end E)
Marland, Paul	Temple-Morris, Peter
Marlow, Tony	Thompson, D. (Calder Valley)
Marshall, John (Hendon S)	Thompson, Patrick (Norwich N)
Marshall, Michael (Arundel)	Thorne, Neil
Martin, David (Portsmouth S)	Thornton, Malcolm
Mates, Michael	Thurnham, Peter
Maude, Hon Francis	Townsend, Cyril D. (B'heath)
Mawhinney, Dr Brian	Tracey, Richard
Maxwell-Hyslop, Robin	Tredinnick, David
Mellor, David	Trippier, David
Meyer, Sir Anthony	Trotter, Neville
Miller, Sir Hal	Twinn, Dr Ian
Mills, Iain	Vaughan, Sir Gerard
Miscampbell, Norman	Viggers, Peter
Mitchell, Andrew (Gedling)	Waddington, Rt Hon David
Mitchell, David (Hants NW)	Wakeham, Rt Hon John
Moate, Roger	Walden, George
Monro, Sir Hector	Waller, Gary
Morris, M (N'hampton S)	Walters, Sir Dennis
Morrison, Sir Charles	Ward, John
Mudd, David	Wardle, Charles (Bexhill)
Neale, Gerrard	Warren, Kenneth
Nelson, Anthony	Wells, Bowen
Neubert, Michael	Wheeler, John
Nicholls, Patrick	Whitney, Ray
Nicholson, Emma (Devon West)	Widdecombe, Ann
Onslow, Rt Hon Cranley	Wiggin, Jerry
Page, Richard	Wilkinson, John
Paice, James	Wilshire, David
Parkinson, Rt Hon Cecil	Wolfson, Mark
Patnick, Irvine	Wood, Timothy

Woodcock, Mike	Tellers for the Ayes:
Yeo, Tim	Mr. Robert Boscawen and Mr. Tony Durant.
Young, Sir George (Acton)
NOES
Allen, Graham	Fraser, John
Alton, David	Fyfe, Maria
Anderson, Donald	Galbraith, Sam
Archer, Rt Hon Peter	Galloway, George
Armstrong, Hilary	Garrett, John (Norwich South)
Ashdown, Paddy	Garrett, Ted (Wallsend)
Ashley, Rt Hon Jack	George, Bruce
Banks, Tony (Newham NW)	Godman, Dr Norman A.
Barnes, Harry (Derbyshire NE)	Golding, Mrs Llin
Barron, Kevin	Gordon, Mildred
Battle, John	Gould, Bryan
Beckett, Margaret	Graham, Thomas
Beith, A. J.	Grant, Bernie (Tottenham)
Bell, Stuart	Griffiths, Nigel (Edinburgh S)
Benn, Rt Hon Tony	Griffiths, Win (Bridgend)
Bennett, A. F. (D'nt'n & R'dish)	Grocott, Bruce
Bermingham, Gerald	Hardy, Peter
Bidwell, Sydney	Harman, Ms Harriet
Blair, Tony	Haynes, Frank
Boateng, Paul	Healey, Rt Hon Denis
Boyes, Roland	Heffer, Eric S.
Bradley, Keith	Henderson, Doug
Bray, Dr Jeremy	Hinchliffe, David
Brown, Nicholas (Newcastle E)	Hogg, N. (C'nauld & Kilsyth)
Brown, Ron (Edinburgh Leith)	Holland, Stuart
Buchan, Norman	Home Robertson, John
Buckley, George J.	Hood, Jimmy
Caborn, Richard	Howarth, George (Knowsley N)
Callaghan, Jim	Howell, Rt Hon D. (S'heath)
Campbell, Ron (Blyth Valley)	Hughes, John (Coventry NE)
Campbell-Savours, D. N.	Hughes, Robert (Aberdeen N)
Canavan, Dennis	Hughes, Roy (Newport E)
Cartwright, John	Hughes, Sean (Knowsley S)
Clark, Dr David (S Shields)	Hughes, Simon (Southwark)
Clarke, Tom (Monklands W)	Illsley, Eric
Clay, Bob	Ingram, Adam
Clelland, David	Janner, Greville
Clwyd, Mrs Ann	John, Brynmor
Cohen, Harry	Jones, Barry (Alyn & Deeside)
Coleman, Donald	Jones, Martyn (Clwyd S W)
Cook, Robin (Livingston)	Kennedy, Charles
Corbett, Robin	Lambie, David
Corbyn, Jeremy	Lamond, James
Cousins, Jim	Leadbitter, Ted
Cryer, Bob	Leighton, Ron
Cummings, John	Lestor, Joan (Eccles)
Cunliffe, Lawrence	Lewis, Terry
Cunningham, Dr John	Litherland, Robert
Dalyell, Tam	Lloyd, Tony (Stretford)
Darling, Alistair	Loyden, Eddie
Davis, Terry (B'ham Hodge H'l)	McAllion, John
Dewar, Donald	McAvoy, Thomas
Dixon, Don	McCartney, Ian
Dobson, Frank	McKay, Allen (Barnsley West)
Doran, Frank	McKelvey, William
Duffy, A. E. P.	McLeish, Henry
Dunnachie, Jimmy	McNamara, Kevin
Dunwoody, Hon Mrs Gwyneth	McTaggart, Bob
Eadie, Alexander	McWilliam, John
Eastham, Ken	Madden, Max
Evans, John (St Helens N)	Mahon, Mrs Alice
Ewing, Harry (Falkirk E)	Marek, Dr John
Ewing, Mrs Margaret (Moray)	Marshall, David (Shettleston)
Fatchett, Derek	Marshall, Jim (Leicester S)
Faulds, Andrew	Martin, Michael J. (Springburn)
Fearn, Ronald	Martlew, Eric
Field, Frank (Birkenhead)	Maxton, John
Fields, Terry (L'pool B G'n)	Michael, Alun
Fisher, Mark	Michie, Bill (Sheffield Heeley)
Flannery, Martin	Michie, Mrs Ray (Arg'l & Bute)
Flynn, Paul	Millan, Rt Hon Bruce
Foot, Rt Hon Michael	Mitchell, Austin (G't Grimsby)
Foster, Derek	Morgan, Rhodri
Foulkes, George	Morley, Elliott

Morris, Rt Hon A. (W'shawe)	Shore, Rt Hon Peter
Morris, Rt Hon J. (Aberavon)	Short, Clare
Mullin, Chris	Skinner, Dennis
Murphy, Paul	Smith, Andrew (Oxford E)
Nellist, Dave	Smith, C. (Isl'ton & F'bury)
Oakes, Rt Hon Gordon	Smith, Rt Hon J. (Monk'ds E)
O'Brien, William	Spearing, Nigel
O'Neill, Martin	Steinberg, Gerry
Parry, Robert	Strang, Gavin
Patchett, Terry	Straw, Jack
Pike, Peter L.	Taylor, Mrs Ann (Dewsbury)
Powell, Ray (Ogmore)	Turner, Dennis
Primarolo, Dawn	Wall, Pat
Quin, Ms Joyce	Wallace, James
Radice, Giles	Walley, Joan
Randall, Stuart	Wardell, Gareth (Gower)
Redmond, Martin	Wareing, Robert N.
Rees, Rt Hon Merlyn	Welsh, Michael (Doncaster N)
Reid, Dr John	Wigley, Dafydd
Richardson, Jo	Williams, Rt Hon Alan
Roberts, Allan (Bootle)	Williams, Alan W. (Carm'then)
Robertson, George	Wilson, Brian
Robinson, Geoffrey	Winnick, David
Rogers, Allan	Wise, Mrs Audrey
Rooker, Jeff	Worthington, Tony
Ross, Ernie (Dundee W)	Wray, Jimmy
Rowlands, Ted
Ruddock, Joan	Tellers for the Noes:
Salmond, Alex	Mr. Allen Adams and Mr. Frank Cook
Sedgemore, Brian
Sheldon, Rt Hon Robert

Question accordingly agreed to.

Lords amendment No. 293 disagreed to.

MADAM DEPUTY SPEAKER then proceeded to put forthwith the Questions necessary to dispose of the business to be concluded at that hour.

Amendments (a) to (h) were made to the words so restored to the Bill.

Lords amendment: No. 294, in page 113, line 9, at end insert— (6A) In exercising their functions in relation to the provision of financial support for activities eligible for funding under this section the Council shall have regard to the desirability of not discouraging any university in respect of which payments are made under subsection (6) above from maintaining or developing its funding from other sources.

Read a Second time.

Amendment made to the Lords amendment: (a), in line 4, leave out 'payments' and insert `grants'.—[Mr. Kenneth Baker.]

Lords amendment No. 294, as amended, agreed to.

Lords amendment: No. 299, in clause 116, page 114, line 32, at end insert— (7B) In exercising their functions in relation to the provision of financial support for activities eligible for funding under this section the Council shall have regard to the desirability of not discouraging any institution within the PCFC funding sector in respect of which payments are made under subsection (7) above from maintaining or developing its funding from other sources.

Read a Second time.

Amendment made to the Lords amendment: (a), in line 4, leave out 'payments' and insert `grants'.—[Mr. Kenneth Baker.]

Lords amendment No. 299, as amended, agreed to. [Special Entry.]

Lords amendment: No. 303, after clause 117, insert the following new clause—Inspection of accounts—

"(1) The accounts of—

1. (a) any university;
2. (b) any higher education corporation; or
1014
3. (c)any institution designated under section 113 of this Act as an institution eligible to receive support from funds administered by the Polytechnics and Colleges Funding Council;

shall be open to the inspection of the Comptroller and Auditor General.

(2) In the case of any higher education corporation or of any such institution as is mentioned in subsection (1)(a) or (c) above—

1. (a) the power conferred by subsection (1) above; and
2. (b) the powers under sections 6 and 8 of the National Audit Act 1983 (examinations into the economy, efficiency and effectiveness of certain bodies and access to documents and information) conferred on the Comptroller anti Auditor General by virtue of section 6(3)(c) of that Act;

shall be exercisable only in, or in relation to accounts or other documents which relate to, any financial year in which expenditure is incurred by the corporation, or by the governing body of the institution in question, in respect of which payments are made to them under section 115 or 116 of this Act."

Read a Second time.

Amendment made to the Lords amendment: (a), in line 19, leave out 'payments' and insert `grants'.—[Mr. Kenneth Baker.]

Lords amendment No. 303, as amended, agreed to. [Special entry.]

Lords amendments Nos. 295 to 298 agreed to, some with special entry.

Lords amendments Nos. 300 to 302 agreed to. [Special entry.]

Lords amendments Nos. 304 to 342 agreed to.