Commons Sitting of 5 December 1989

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  FUND ORDER CONFIRMATION BILL
  Considered; to be read the Third time.
Oral Answers to Questions
  EMPLOYMENT

    Training and Enterprise Councils
    Mr. Michael Brown: To ask the Secretary of State for Employment how many training and enterprise councils have received development funding in the northern region; and if he will make a statement.
    The Secretary of State for Employment (Mr. Norman Fowler): I have approved applications for development funding for five training and enterprise councils in the Training Agency's northern region. This means that councils are now being established in all parts of the region—Teesside, Tyneside, Wearside, county Durham and Northumberland. In addition, four further councils are being established in Yorkshire and Humberside.
    Mr. Brown: I am grateful to my right hon. Friend for that encouraging reply. Will he confirm that the number of training and enterprise councils in the United Kingdom is touching the 50 mark? He said that consideration was being given to setting up TECs in Yorkshire and Humberside. Will Brigg and Cleethorpes feature in the list?
    Mr. Fowler: Yes. I understand that Brigg and Cleethorpes feature on the list. They will be covered by the bid for a Humberside TEC, which is expected to be made early in February. I am sure that we shall establish a TEC in my hon. Friend's constituency. On the general position, more than 40 applications have been processed and given development funding and more applications are coming in. I am confident that in the next months we shall cover the whole country with TECs.
    Mr. Campbell-Savours: Is the Secretary of State aware that between 2,500 and 3,500 people are to lose their jobs on the Thorpe construction project in west Cumberland and other construction projects in the nuclear industry? Is he satisfied that the TEC will be able to train all those people so that we can retain them in west Cumberland to rebuild our industrial base for the future?
    Mr. Fowler: I think that it will be a combination of both. The TEC will improve training in the region but in
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    addition we shall need to use the experience and skill of the employment service. I shall look into the matter that the hon. Gentleman raised to see what further action we can suggest.
    Mr. Jack: Will my right hon. Friend do all that he can to ensure that west Lancashire is included in his plans for TECs? Will he tell the House what is happening in the north-west as a whole? Will he concentrate his efforts on areas such as Blackpool which are still unemployment black spots and need particular help?
    Mr. Fowler: Yes. My latest information shows that in the north-west about eight TECs have been given development funding. Other applications are being considered and I have no doubt that we shall consider Blackpool and the surrounding area. Indeed, we shall consider all areas where unemployment is an issue.
    Mr. Blair: Is the Secretary of State aware that only a third of British employees have occupational qualifications compared with two thirds in West Germany, and that Britain has only 30 per cent. of the number of qualified electricians and technicians in France? Two weeks ago a British Minister told the world:
    "We are only just developing in the United Kingdom the recognition of the importance of encouraging a high level of skills."
    Does the Secretary of State agree that the training gap with our competitors is not merely serious but critical? What steps is he taking to ensure that TECs offer not only a Government programme for the long-term unemployed and young people but a strategy for adults already in work, who will form the bulk of the work force?
    Mr. Speaker: Long questions take up a great deal of time.
    Mr. Fowler: The hon. Gentleman almost made an Adjournment speech and I shall try to set out what is happening. With training and enterprise councils we are seeking to narrow the training gap, which has not appeared suddenly in the past few years but has been a feature of this country literally since the war, if not before. The encouraging feature about training and enterprise councils is the way in which employers have responded to them. With the new programmes we shall be able to train some 450,000 unemployed people through employment training and 260,000 young people through YTS.
    Now that the hon. Gentleman has joined the Opposition Front Bench on employment, I hope that he will reverse the Labour party's position and support employment training for unemployed people.
    Ms. Short: That was a long answer, too.
    Mr. Speaker: I know, but long questions lead to long answers, so let us have less of them.

    Unemployment Calculations
    Mr. Holt: To ask the Secretary of State for Employment whether he will make a statement on the calculation of unemployment rates in local travel-to-work areas.
    The Parliamentary Under-Secretary of State for Employment (Mr. Patrick Nicholls): Since October 1989, my Department has published unemployment rates for travel-to-work areas both as a percentage of the work

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    force and as a percentage of the unemployed plus employees. The former provide comparability with the rates published at national and regional level and full details were given in the November edition of Employment Gazette.
    Mr. Holt: Does my hon. Friend agree that these figures are a lot of mumbo-jumbo to most people and that travel-to-work areas should be dropped? Why not simply take constituencies, such as mine? One can find the answer for each ward. We have had a drop of 53·3 per cent. in unemployment since the peak in 1984. Does my hon. Friend agree that all that proves that while Communism is disappearing from eastern Europe, so Socialism is disappearing from north-east England?
    Mr. Nicholls: I am sure that my hon. Friend will be the last person to accuse the Government of producing figures which are mumbo-jumbo. He is right that the figures show how successful the Government have been in reducing unemployment figures. My hon. Friend has personal experience of that in his constituency.
    Mr. Battle: Does the Minister agree that because of the nature of the boundaries, travel-to-work areas disbar cities, such as Leeds which have pockets of high unemployment, from applying for European social fund moneys for inner-city projects? Is he prepared to relax the criteria for travel-to-work areas to ensure that, for example, women's training projects can be supported by the social fund?
    Mr. Nicholls: I accept entirely that there is no ideal way of identifying a particular travel-to-work area, but there must be some basis on which that is done and the present system is probably the best device in the circumstances.

    Training and Enterprise Councils
    Mr. Gill: To ask the Secretary of State for Employment what representations he has received regarding training and enterprise councils in Shropshire.
    The Minister of State, Department of Employment (Mr. Tim Eggar): Representations from a number of groups have been made to Training Agency officials regarding the formation of a training and enterprise council in Shropshire. Discussions are taking place locally to ensure that a training and enterprise council is formed as soon as possible.
    Mr. Gill: What assurance can my hon. Friend give me that any training and enterprise council established in the county of Shropshire will not be dominated by the large concentration of industry in Telford, to the detriment of the surrounding rural areas?
    Mr. Eggar: In forming TECs local business men will have to take account of all parts of their community, particularly the kind of area for which they are seeking to train and into which they seek to introduce and improve enterprise. The national training task force will ensure that those factors are borne in mind when it examines TECs' business plans.

    Labour Statistics
    Mr. Raffan: To ask the Secretary of State for Employment what are the latest unemployment figures for the constituency of Delyn; and what were the figures two years ago.
    Mr. Nicholls: In Delyn, unemployment is about half what it was two years ago. In October 1989 there were 1,892 unemployed claimants in the Delyn parliamentary constituency, compared with some 4,020 in October 1987. The figures are slightly affected by the change in benefit regulations for under 18-year-olds in September 1988.
    Mr. Raffan: Does my hon. Friend agree that the fact that unemployment in Delyn has been dramatically cut by half in the past two years shows the effectiveness of Government regional policy which gave my constituency the highest level of development area status—something that the Labour Government never did—and the Delyn enterprise zone, which the Labour party opposed?
    Mr. Nicholls: My hon. Friend is right. Once again, the figures highlight the experience of his constituents and show how successful the Government have been. Since the last election there has been a reduction in unemployment in Delyn of some 54 per cent. That is a remarkable achievement, and it is obviously one of which my hon. Friend thoroughly approves.
    Mr. John P. Smith: Does the Minister recognise that the October unemployment figures show the smallest reduction in unemployment since January 1987, and an increase in unemployment in the west midlands and in East Anglia?
    Mr. Speaker: Order. That question is not about Delyn.
    Mr. Wigley: In view of the answer given by the Minister, can he confirm that he has detailed responsibility for unemployment in Britain, for example in places such as Delyn in Wales, which was transferred from the Welsh Office? In view of the success of the policy that he has announced in Delyn, can he arrange for a general review of general development boundaries to ensure that those places with substantially higher unemployment than Delyn will have the advantages to which he referred?
    Mr. Nicholls: The hon. Gentleman, with his usual ingenuity, has taken a question about Delyn and asked me to answer it in other terms. The rate of unemployment in Delyn is not only below the average for the United Kingdom, but below the average for Wales. It might therefore be more appropriate if the hon. Gentleman stood up and said, "Thank you".

    Training and Enterprise Councils
    Mrs. Maureen Hicks: To ask the Secretary of State for Employment what response he has received to his plans to create training and enterprise councils in the west midlands areas; and if he will make a statement.
    Mr. Fowler: Five training and enterprise councils are being established in the west midlands—at Birmingham, Walsall, Wolverhampton and Dudley, and in Staffordshire. Work is also well advanced in a number of other areas, and there is no doubt that there has been an excellent employer response from the west midlands.
    Mrs. Hicks: I thank my right hon. Friend for that answer. We are positively encouraged by the speedy response to the TECs in the heart of the manufacturing part of Britain. Will he give an assurance that when the Wolverhampton TEC is established there will be sufficient staff and adequate incentive funding fully to meet training needs and to give the response that we need in the area? Will he tell me, in general terms, whether he recognises the policy of resources for the enterprise element of the councils?
    Mr. Fowler: Yes, I think that I can give my hon. Friend an assurance on both counts. Certainly, we recognise the importance of enterprise. We have considered the position in Wolverhampton and we are satisfied that staffing will be adequate at that TEC.
    Mr. John Evans: Are any of the training and development councils running courses on democracy and the conduct of ballots? If so, will the Minister attend one and explain why trade unionists have to have postal ballots for the election of their leaders, but Tory Members have a workplace ballot for the election of their leader and—
    Mr. Speaker: Order.
    Mr. Simon Coombs: Can my right hon. Friend tell the House what efforts his Department and the national training task force are making to ensure that best practice from those TECs already established, or in the process of being established, is being made available to those still in the process of formation in the west midlands and elsewhere?
    Mr. Fowler: One of the aims of the national training task force, under the brilliant chairmanship of Brian Wolfson, will be to spread good practice around Britain. The west midlands will benefit from experiences in other parts of the country. One of the aims of the TEC movement will be to share best experience.
    Mr. Fatchett: In relation to the west midlands TECs, is it not the case that, as with other TECs, the pressure will be on numbers and reducing costs? Against that background, what steps and assurances will the Secretary of State take and give to make sure that disabled workers, particularly the blind, receive training opportunities of the quality that they previously enjoyed? Is the Secretary of State aware that organisations for the blind are concerned that training courses will be lost as a result of the introduction of TECs?
    Mr. Fowler: I hope that we can set their minds at rest, as there is absolutely no question of that. We want the provisions for disabled and blind people to continue. The purpose of the TECs is not to save money, or to be a cost-cutting exercise, but to provide good training and to ensure that the training is delivered locally. That is the point of the reforms that we are carrying out.
    Mr. Trotter: To ask the Secretary of State for Employment whether he will discuss with the chairman of the training and enterprise councils the need for flexibility in their agreements so as to pay regard to local circumstances and facilitate local initiative.
    Mr. Eggar: My right hon. Friend and I have had a number of meetings with TEC chairmen and other
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    interested individuals. We are confident that TECs will be given the flexibility that they need to enable them to operate effectively in their local area.
    Mr. Trotter: Is my hon. Friend aware that there is enthusiastic support for TECs on Tyneside and Wearside, where it is recognised that such institutions are vital to ensure an adequate and skilled work force for the region in the future? Can he assure us that there will continue to be adequate public funding for those bodies, that there will be sufficient flexibility in their operation to enable them to encourage local initiatives, and that they will not be subjected to undue central control, particularly financial control and regulation?
    Mr. Eggar: I can certainly give my hon. Friend those assurances. Perhaps I can tell those in the community that he represents, through him, that we recognise the widespread support that his local TEC enjoys. We trust that that will continue.
    Mr. Eastham: In response to four questions so far, Ministers have told the House how successful their employment policy is and how many training facilities there are. If that is so, can the Minister tell us how many years it will be before unemployment is brought down to what it was 10 years ago? There are now 1 million more unemployed people than there were in 1979. How many more years will it be before the Government can tell us of a success story in reducing unemployment?
    Mr. Eggar: How many more years will it be before Opposition Members recognise that we now have more people in employment than ever before? Why does the Labour party spread bad news? What about the good news in Britain?
    Mr. Colin Shepherd: Is my hon. Friend aware that the answer that our right hon. Friend the Secretary of State gave in respect of the blind will he much appreciated at the Royal National College for the Blind in Hereford, where a keen interest is taken in these matters?
    Is my hon. Friend further aware that in our part of the world we have a large number of comparatively small employers, all of whom are enthusiastic about TECs? Can he tell us what progress is being made with the TEC for Hereford and Worcester?
    Mr. Eggar: I hope that I can reassure my hon. Friend in regard to the blind and the disabled. It is important that local organisations for the disabled work closely with local TECs so that the needs are fully understood by both sides. Good progress is being made in Hereford and Worcester. I take my hon. Friend's point about the number of small employers.

    Industrial Disputes
    Mr. Wallace: To ask the Secretary of State for Employment how many working days have been lost through industrial disputes in the period January to September 1989; and what was the figure for the comparable periods in 1987 and 1988.
    Mr. Fowler: It is provisionally estimated that 3,237,000 working days were lost through industrial disputes in the period January to September 1989. In the corresponding period in 1987, 3,284,000 days were lost, and in 1988 the figure was 3,427,000.

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    The annual average of days lost through industrial disputes in the 1970s was almost 13 million.
    Mr. Wallace: As recent figures are clearly much lower than those for the 1970s, and as the figures that the Secretary of State gave appear relatively stable for the past three years, why does the right hon. Gentleman see a need in this Session for further hostile measures designed to put even more restraint on people in employment in relation to the right to strike? Is it not time to seek more constructive ways to improve industrial relations through partnership in industry?
    Mr. Fowler: I certainly agree about the importance of partnership in industry, but our proposals concern unofficial action, as a result of which we still lose a tremendous number of days each year. We are also putting an end to the pre-entry closed shop. I hope that the hon. Member will support us and that the Labour party will get its act together and support us, too.
    Mr. Nicholas Bennett: Has my right hon. Friend noticed that whereas in 1979 private sector strikes accounted for three quarters of all strikes, today private sector strikes account for only 50 per cent. of all strikes, showing that the public sector is becoming more irresponsible as the private sector becomes more responsible? Has he also noticed that unofficial strikes are now a third of all strikes and is not that why we need the proposals contained in the Green Paper and a Bill as soon as possible?
    Mr. Fowler: What my hon. Friend says about unofficial strikes is undoubtedly the case. We are losing far too many days through unofficial strike action. I believe that when the House sees the legislation that we propose it will have the support of the great majority of Members.
    Ms. Short: Does the Secretary of State agree that the industrial dispute that concerns everybody in Britain is the ambulance workers' dispute? He will know that overwhelmingly the people of Britain think that the Government are wrong and that the dispute should be settled. Will he now use his office, in the spirit of the approaching period of Christmas, to agree to arbitration so that we can obtain a settlement and get the ambulances back on the road? That is what the people of Britain really want.
    Mr. Fowler: I hear what the hon. Lady says, but the position on the ambulance dispute has been set out only today by my right hon. and learned Friend the Secretary of State for Health in one of the national newspapers. Arbitration has never been inserted into the Whitley council procedure in the Health Service—
    Mr. Cryer: As ordained by God and Mrs. Thatcher.
    Mr. Speaker: Order.
    Mr. Fowler: —and it would not be right to set such a precedent now.

    Channel Tunnel (Tourism)
    Mr. David Porter: To ask the Secretary of State for Employment if he will hold discussions to ensure that, following the opening of the Channel tunnel, Suffolk and Norfolk are fully promoted as tourist centres.
    Mr. Nicholls: My right hon. Friend the Secretary of State announced on 28 November that the Government funds that the regional tourist boards receive to promote and develop tourism in their regions, including East Anglia, will almost double from 1 April 1990.
    Mr. Porter: Will my hon. Friend accept the congratulations of those involved in employment in the industry in East Anglia on his answer, but will he bear in mind that many people are worried that when the Channel tunnel has opened, Suffolk and Norfolk will be rather left behind? Isolation is all very well for tourism, but people need to be able to get to a place in order to enjoy it.
    Mr. Nicholls: My hon. Friend makes a fair point. A number of challenges are open to the tourist industry in relation to the Channel tunnel and we should be mindful of them. The White Paper, "Roads for Prosperity", shows that there could be real advantages for communications between his area and the Channel tunnel. However, it is fair to remind us of that point and I accept it.
    Mr. Michael Welsh: The Channel tunnel will play an important part in tourism and I hope that its opening will come quickly. Will the Minister take steps to ensure that it does, so that business people in the north, especially in Doncaster, can benefit from it?
    Mr. Nicholls: I am sure that the people in the north will want the Channel tunnel as much as everyone else. I accept the implication of what the hon. Gentleman says—that the Channel tunnel has advantages for all areas of the country, not merely the south-east.
    Mr. Patrick Thompson: My hon. Friend accepts the importance of good communications in ensuring that more tourists from the continent and elsewhere visit Norfolk and Suffolk, but does he also accept the need for a greater emphasis on rail links? Will he do all that he can to persuade his right hon. and hon. Friends that the terminal link should be at Stratford rather than King's Cross.
    Hon. Members: No.
    Mr. Nicholls: It seems that I have unwittingly entered into a source of private disagreement and grief. I would only say that in 1988 British residents spent about 40 million nights and £555 million in East Anglia, so whatever the state of the rail links it seems that East Anglia is not doing too badly.

    Health and Safety
    Ms. Armstrong: To ask the Secretary of State for Employment how he plans to extend health and safety protection at work.
    Mr. Nicholls: Increased resourcing for the Health and Safety Commission is enabling new risks from changing modern technology to be tackled on a number of fronts. Excellent progress has been made with our programme to modernise health and safety law, and to extend it as necessary. The Health and Safety Executive's programmes for advice, inspection and published guidance are being expanded to stimulate industry to improve safety performance.
    Ms. Armstrong: How will cuts in the staffing of the Health and Safety Executive enable us to make sure that the regulations about which the Minister has talked, and which I very much support, are put into effect?
    Mr. Nicholls: I shall say something to the hon. Lady that I have to say all too often to Labour Members. There is no question of resources to the HSE being cut. Those resources are at least as good as what was spent under the last Labour Administration. For three years running, its public expenditure survey bid for resources has been met in full. That analysis is the correct one. The analysis that the hon. Lady advances is not.
    Mr. Robert B. Jones: Can my hon. Friend confirm that one of the problems with health and safety lies in the construction industry and the failure of many workers to wear hard hats on site? How can he justify exempting Sikhs from having to wear hard hats?
    Mr. Nicholls: My hon. Friend makes at least one valuable point by reminding us that the prime responsibility for health and safety on constructions sites, and in the workplace generally, has to lie with those who are there. It is not up to the inspectorate to act as the police men of safety on sites. However, my hon. Friend will be the first to admit that the question whether Sikhs should wear helmets on sites is a difficult one and not one on which it was easy to reach a quick and simplistic conclusion. We think we got it right. My hon. Friend thinks that we did not get it right, and on that we shall have to differ.
    Mr. Cryer: As the Minister has plans to extend the health and safety at work provisions, can he tell us what has happened to the legislation on manual handling of loads, which has been in draft form since 1982, and would contribute greatly to preventing industrial injuries? If the Government can pour out a torrent of legislation against trade unions, why can they not produce legislation of this importance, to reduce injuries at work? As the Minister knows, days lost through that far and away exceed the number of days lost through strike action.
    Mr. Nicholls: Presumably, the hon. Gentleman cannot be aware of the fact that the Health and Safety Commission is a tripartite body. Therefore, before any regulations or proposed legislation can be put to Ministers, they have to pass through a complicated process to ensure that all sides of industry have their say. There is no question of the Government having dragged their feet, but if the hon. Gentleman is interested in tripartite structures, he will have to accept that bringing proposals forward might not happen as speedily as he would want.
    Mr. Hind: Is not Britain far ahead of our EEC partners in health and safety protection at work? Does my hon. Friend agree that when it comes to protecting the worker in the workplace, in terms both of employment and health and safety, we need no lessons from the Europeans and certainly no social charter?
    Mr. Nicholls: My hon. Friend is entirely right. We are very much in advance in this, and the Europeans have nothing to teach us either in regard to legislation or in the vigour with which it is implemented.
    Mr. Tony Lloyd: If the Minister is serious in saying that we need no lessons on health and safety, how is it that
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    every year there are over 200,000 injuries at work and that every working day two people die? The Government's response has been to cut by over 100 the number of factory inspectors responsible for monitoring that situation. Is the Minister not guilty of the most disgraceful complacency when he tells my hon. Friend the Member for Bradford, South (Mr. Cryer) that we have to wait for seven years for proposals to see the light of day? Are not the Government simply indifferent about what happens to working people at their place of work?
    Mr. Nicholls: The fact that the hon. Gentleman is even capable of making such a remark shows how unwise it is to write a supplementary question before hearing the answer to the main question. I have already pointed out to the hon. Member for Durham, North-West (Ms. Armstrong) that the resources to the Health and Safety Commission have not been cut, are at least as good as under the last Labour Administration and, for the past three years, have been met in full. If the hon. Gentleman thinks that one can abolish accidents and fatalities at work simply by increasing the number of inspectors, he has an attitude to these matters that is so simplistic that, even coming from the Labour Benches, it is quite staggering.

    Training and Enterprise Councils
    Mr. Harry Greenway: To ask the Secretary of State for Employment how many training and enterprise councils have received funding in London; and if he will make a statement.
    Mr. Eggar: The response from employers in London has been encouraging. Development funding has been awarded to a TEC covering Kingston and Merton; other applications are currently being developed.
    Mr. Greenway: Is my hon. Friend aware that hundreds of new businesses have been established by the Ealing enterprise agency and that thousands of jobs have been created as a consequence since I founded that body some years ago? Is there a chance that we could now have funding for a TEC in Ealing so that the work of my Ealing enterprise agency, which only operates in the private sector, may be furthered?
    Mr. Eggar: I congratulate my hon. Friend on his initiative in the Ealing enterprise agency. I am sure that it has been a significant contributor to the local economy. We understand that representatives from Ealing are participating in the development of a bid for a west London TEC and we anticipate that the application may be submitted by the end of January.
    Mr. Simon Hughes: Can the Minister tell us what efforts will be made to ensure that the interests of education, local government and employees are represented on TECs in London and elsewhere?
    Mr. Eggar: My right hon. Friend the Secretary of State has recently appointed a chief education officer to join the national training task force. A number of chief local government officers and education officers are already represented on different TECs, and we are confident that the education interest will be adequately represented.

    Labour Statistics
    Mr. Pawsey: To ask the Secretary of State for Employment how many people are now in employment; and what was the figure in 1979.
    Mr. Fowler: In June 1989 the work force in employment in the United Kingdom was 26,343,000. This is the highest level ever in the history of this country. The figure for June 1979 was 25,365,000 so there has been an increase of nearly 1 million over the 10-year period.
    Mr. Pawsey: As unemployment in Rugby is now less than 3 per cent., I cannot say that the figures that my right hon. Friend cited are particularly surprising. But does he agree that those figures vindicate the policies of his Department and of the present Government? Does he further agree that our country's economic situation is reflected in growing prosperity and an increasing number of jobs?
    Mr. Fowler: I think that that is unquestioned. My hon. Friend is exactly right. He could have added that our rate of unemployment is now below that of virtually every other country in the European Community.
    Mr. James Lamond: Before the Minister gets carried away with his own boasting, should he not remember that the 26 million people in employment include many hundreds of thousands—perhaps millions—who have been forced into part-time employment? They also include many hundreds of thousands who have lost good jobs—for example in the hospital cleaning services—and who have been forced by privatisation to accept longer hours, shorter holidays and much worse conditions just to get back to work.
    Mr. Fowler: It would be a great pity if the hon. Gentleman sought to give the impression that part-time work somehow does not count. It may not count for him, but every survey conducted by the labour force survey has shown that nine out of 10 people in part-time employment want part-time jobs. That fact should be recognised by the Opposition. [Interruption.]
    Mr. Speaker: Order. May I ask hon. Members to desist from private conversations, as it is very difficult to hear hon. Members who have the Floor, even from this end of the Chamber.
    Mr. Barry Field: Does my right hon. Friend agree that the fact that we have one of the lowest unemployment rates in the whole of the EEC means that we should proceed with the utmost caution in the adoption of the social charter, which is likely to destroy jobs rather than create them?
    Mr. Fowler: The acid test of the social charter must be whether it creates jobs. We must be concerned that a number of provisions set out in the charter and the action plan add to labour costs and will therefore destroy jobs rather than create them.
    Mr. McLeish: Does the Secretary of State accept that between 1979 and 1989, the employment gap between north and south has widened dramatically? Is he aware that while 1,156,000 jobs in civilian employment were created in the south, the north lost 358,000 jobs? Would he describe that as a regional policy or a regional sell-out?
    Mr. Fowler: The hon. Gentleman ignores the reduction in unemployment. The position has improved steadily throughout the country and it has improved in the north and also in every region. It is a great pity that the Opposition do not acknowledge the real improvement in employment in this country.
    Mr. Evennett: How many self-employed people are there in the work force in 1989 and how many were there in 1979?
    Mr. Fowler: There has been a substantial increase of about 1·2 million since June 1979 to 3·1 million today. In other words, self-employment has undoubtedly expanded very quickly to the benefit of the public in this country.

    Job Creation
    Mr. Gareth Wardell: To ask the Secretary of State for Employment if he will make it his policy to discourage the creation of more jobs in south-east England.
    Mr. Eggar: No, Sir. We wish to see more jobs created throughout the United Kingdom, including in the south-east.
    Mr. Wardell: While thanking the Minister for that reply, may I ask him to have urgent talks with the Secretary of State for Transport and the Secretary of State for Wales to ensure that there is a reduction in public expenditure in the London docklands to bail out speculative development in transport which is leading to overheating of the economy and the generation of inflationary pressures? In Wales we continue to suffer because we are the only country in the United Kingdom with an incomplete motorway in the form of the M4. That motorway has still not been completed after 10 years of this Government. Higher tolls on the Severn bridge have been proposed and funding for the road programme in Wales is to be cut as a consequence of EC funding reductions. Will the Minister stop overheating the economy in that way?
    Mr. Eggar: I am surprised at the hon. Gentleman. Why did he not use the opportunity in his question to point out that unemployment in Wales has fallen by over 40 per cent. in the past two years? Why does he not talk to my right hon. Friend the Secretary of State for Wales about the vast amount of public money that is going into the valleys initiative and the redevelopment of Cardiff?
    Mr. Rowe: Does my hon. Friend accept that in Kent we are perfectly willing to share our jobs with the rest of the United Kingdom? However, one of the greatest single obstacles to achieving that will be if British Rail builds a railway line that cannot carry freight wagons of the European gauge. If that happens many firms will choose to set up in Kent because it will be too difficult to get their freight through the Channel tunnel.
    Mr. Eggar: I have nothing but admiration for my hon. Friend's ability to get in questions about the rail link through his constituency and mine under almost any excuse whatsoever. I congratulate him on that.
    Mr. Ron Brown: Is the Minister aware that many jobs in Scotland and the north of England will go down the shute—namely the Channel tunnel—because the Government have put forward no guarantees on jobs?

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    Bearing in mind all the wheeling and dealing backed by Government, is it not an absolute disgrace that they have not come forward with any guarantees for the future of the people who matter? What is the Government's philosophy for the future? Will they say that the EC is all right or do the British people not matter?
    Mr. Eggar: I am not sure whether I entirely followed the hon. Gentleman.

    East Lancashire Training and Enterprise Council
    Mr. Lee: To ask the Secretary of State for Employment if he will make a statement on the progress of the East Lancashire training and enterprise council.
    Mr. Eggar: On 12 July this year my right hon. Friend the Secretary of State announced that development funding had been approved for the East Lancashire TEC. The group is now working on its corporate and business plans with a view to becoming operational in April next year.
    Mr. Lee: My hon. Friend will know of my support for the TEC programme in general and for the East Lancashire TEC in particular. I thank him for his answer. Given the excellent range of training facilities in north-east Lancashire, particularly at the Nelson and Colne college and the Pendle training group, where will the vital pump-priming resources come from to provide lifetime training for those in work?
    Mr. Eggar: I readily acknowledge my hon. Friend's major role in the development of the policy on TECs and the way in which he has supported his own TEC. Of couse, he will want to talk to his TEC, which will want to consider how it can play a role in helping employers in his area in the development of lifetime training.

    New Businesses
    Mr. Fearn: To ask the Secretary of State for Employment if he will detail the number of small firms which have started business in the last year and over the past decade.
    Mr. Eggar: In 1988, the latest year for which figures have been published, the net increase in the number of VAT-registered businesses was 64,000, an average of just over 1,200 per week. Since 1979, the net increase has been 285,000, an average of around 600 a week over the whole period.
    Mr. Fearn: Does the Minister recognise that tourism plays an important part in those figures, which are extremely good, but that it needs help? Does he recognise that some small tourism businesses are in great difficulties because of the withdrawal of section 4 grants? Does he intend to give any more assistance to small tourist businesses?
    Mr. Eggar: Of course, tourism has been a great success story over the past 10 years. There has been a massive increase in employment in tourism, and I note the hon. Gentleman's point.

  PRIME MINISTER

    Engagements
    Mr. Wood: To ask the Prime Minister if she will list her official engagements for Tuesday 5 December.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in the House, I shall be having further meetings later today. This evening I hope to have my regular audience of Her Majesty the Queen.
    Mr. Wood: I thank my right hon. Friend for that reply. Will my right hon. Friend join me in welcoming the reaffirmation of NATO at yesterday's meeting of Heads of Government in Brussels, and also the renewal of the United States commitment to keeping American troops and nuclear weapons in Europe?
    The Prime Minister: Yes, Mr. Speaker. We had an excellent summit in Brussels yesterday, all of us reaffirming the importance of NATO for the stability and security it has brought and also welcoming the reassurance of the President of the United States that he will station significant armed forces and nuclear weapons in Europe as long as his allies wish it. We felt also that the negotiations on conventional weapons take place through the NATO pact and the Warsaw pact and that, therefore, both must continue. Altogether it was a very successful summit, and the President gave us an excellent account of his talks with Mr. Gorbachev. We welcome the changes that are taking place in eastern Europe.
    Mr. Kinnock: Does the Prime Minister agree with President Bush's view that changes in eastern Europe absolutely mandate new thinking on East-West relations and on the European Community? What new changes is the right hon. Lady now making in her thinking?
    The Prime Minister: At the summit yesterday, as indicated, it was agreed that it is important to keep NATO going. Its security and the concept of NATO have been a winning combination and have been the reason for some of the changes that we are witnessing in eastern Europe. It has not been through our being weak with the Soviet Union, but through our being strong with them that we are now seeing some of the moves to freedom.
    Mr. Kinnock: It will be apparent that there was neither newness nor much thinking in that answer. Is it not obvious that the Prime Minister has great difficulty in coping with the great changes that are taking place in eastern Europe? Is that not the reason, as many in her own party agree, that she is being increasingly pushed towards the margin in both the Alliance and the Community? What good does that do to our country?
    The Prime Minister: Nonsense. The right hon. Gentleman was never very much in favour of NATO because he could not underwrite its nuclear deterrent, which is an essential force. Closer European integration causes us no problems. It was we who proposed the single market completion by 1992, and it was also we who implemented most of the directives. With regard to President Bush and his views on the European market, the right hon. Gentleman will be interested to know that he telephoned me shortly before I came into the House to say that his views on European integration had not changed in

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    any way and that there was no change in his position, which is one of full support for completion of the single market in 1992 and for an open and liberal Europe. That is what we stand for, but it is not what the right hon. Gentleman stands for.
    Mr. Kinnock rose—[Interruption.]
    Mr. Speaker: Order.
    Mr. Kinnock: Does that not provide us with an interesting insight into the Prime Minister's present thinking—if she has to receive a reassuring telephone call from the President before she can say anything?
    The Prime Minister: That is absolute nonsense. If the right hon. Gentleman is reduced to making that accusation, I must remind him that he has been totally isolated on NATO for years and isolated in many ways on the European Economic Community. We are up to date. In fact, our actions have been responsible in many ways for the very good changes that we have seen.
    Sir Bernard Braine: Will my right hon. Friend today give consideration to the fact that all the peoples of eastern Europe are now moving towards freedom, but the Poles are experiencing acute shortages of basic foodstuffs and medicines and people will die unnecessarily this winter unless urgent relief is sent? Since the Roman Catholic Church—thank God—in Poland has the necessary means of distribution, will my right hon. Friend order an airlift straight away?
    The Prime Minister: As my right hon. Friend knows, this matter was raised both at the economic summit and at the recent Paris summit. During the last part of the current year, we have provided £60 million to purchase food and to send it to Poland. We are assured that the supplies are getting through, and more will be committed for next year I have also been in touch with some of the voluntary organisations, and in particular with Lady Ryder of Warsaw, who has told me that the organisations are ready to let their lorries roll and to take more food into Poland.I shall be keeping in touch to see whether that is necessary. There is no shortage of money for providing the food.
    Mr. Ashdown: Despite the Prime Minister's words, is it not the case that she will end up totally isolated at the forthcoming summit at Strasbourg—[Interruption]
    Mr. Speaker: Order.
    Mr. Ashdown: What will the Prime Minister do to end that isolation in these last remaining days before Strasbourg, or is she determined to remain in the past and to condemn this country to a future without friends, without influence and without a role in Europe in the future?
    The Prime Minister: What nonsense. The right hon. Gentleman comes out with that question almost every time like a cracked gramophone record. He is isolated if he thinks that this House would accept stage 2 or 3 of the Delors report, because it has indicated clearly that it would not. I hope that he will support us on 1992 and on the measures necessary to complete the single market. I would also hope—although I do not have very much faith—that he will support us on a liberal open-market economy.
    Mr. Gardiner: Will my right hon. Friend act to dispel any baseless suggestions that she is some kind of "narrow
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    little nationalist"? Will she emphasise that she has always advocated a sharing of responsibility and of sovereignty where that is to the clear economic advantage of all members of the European Community?
    The Prime Minister: I think that this country has probably done as much as any other country in the European Community over the years for the freedom of Europe, for staunchness as allies in NATO and to move forward the Common Market. Yes, we continue to act as a sovereign country in respect of everything coming before this House. We believe that the future of Europe is best achieved through sovereign countries co-operating together rather than by trying to force us into a mould which would not fit all the countries of Europe.
    Mrs. Mahon: To ask the Prime Minister is she will list her official engagements for Tuesday 5 December.
    The Prime Minister: I refer the hon. Lady to the reply that I gave some moments ago.
    Mrs. Mahon: Since this might be the last time that the Prime Minister answers questions at the Dispatch Box—[Interruption.]—will she tell us her proudest achievement? Is it the number of homeless? Is it the deeply unpopular poll tax or is it the image of a Government who resort to seedy bribes to get their privatisation programme through?
    The Prime Minister: I shall hope to see the hon. Lady in her place on Thursday as usual, she in her position and I in mine. My proudest achievements have been bringing Britain from the decline of Socialism to the prosperity of Conservatism, spending almost half as much again in real terms on all the social services, being a staunch ally, and known to be a staunch ally, the world over and restoring the respect for Britain overseas.
    Mr. Gerald Bowden: To ask the Prime Minister if she will list her official engagements for Tuesday 5 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Bowden: In making an assessment of the most direct and cost-effective Channel tunnel rail link between the United Kingdom and continental Europe for passengers and freight will my right hon. Friend give full consideration to the advantages of Stratford over King's Cross as the London interchange?
    The Prime Minister: That will be a matter for the Chairman of the Committee which will consider the petitions against the Bill. It will be for British Rail and its joint venture partner, Eurorail, to persuade the Committee that they have made the correct choice of route and terminal.
    Mr. Bidwell: Will the right hon. Lady consider dismissing the Secretary of State for Health for his gross incompetence in failing to solve the ambulance workers' dispute and for his ill-treatment of decent people?
    The Prime Minister: No. As the hon. Gentleman is aware, other workers in the Health Service accepted similar offers to those that had been turned down by the ambulance service way back in April or May. Since then the ambulance workers have been offered more on an 18-months basis. I very much regret that the ambulance service is out. I am afraid it is the sick and ill who suffer.

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    I am glad that the ambulance service is in and operating in a number of places where it is providing accident and emergency services, but where that service is unable to do so the police and army are fulfilling its duties.
    Mr. Hague: To ask the Prime Minister if she will list her official engagements for Tuesday 5 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Hague: Does my right hon. Friend agree that the main pressure for the European social charter comes from trade unions and their political backers in some member states mainly because they fear that the single market is a threat to their long-established restrictive practices and their cosy co-operatives?
    The Prime Minister: Yes, I agree. There are some countries that have high costs in the Community that want to saddle the rest of the Community with high costs so that those who wish to invest in the Community do not go to the lower-cost countries. Those high-cost countries call it social dumping to go to the low-cost countries. That hardly seems very communautaire to me. My hon. Friend will have seen the report that quantifies the employment prospects in this country if we adopted the social charter as presently drafted. If the minimum wages were half male average earnings it could mean that we had some 500,000 extra unemployed within three years. If the minimum wage were two thirds of average male and female earnings it could mean that about 1½ million extra people would be unemployed within three years.
    Mr. Wigley: In view of the impending renewed tragedy in Ethiopia will the Prime Minister give an assurance that this Christmas rich Britain will not be impervious to the plight of those people and will give a full, generous and urgent response?
    The Prime Minister: I do not know whether the hon. Gentleman heard the statement by the Minister for Overseas Development who announced a further £2 million of emergency aid on 27 November. That brings the total commitment of food and emergency aid to nearly £13 million so far this year. We are in regular touch with the British voluntary organisations. The hon. Gentleman will know that one of the problems is distributing that food so that it gets to those in need and, in addition to other things, he will know of the civil war in Eritrea and Tigre.
    Mr. Knowles: To ask the Prime Minister if she will list her official engagements for Tuesday 5 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Knowles: Does my right hon. Friend—[HON. MEMBERS: "Reading."] It is no good the Opposition being envious of Tory intellectual ability. Does my right hon. Friend agree that the sale of Rover to British Aerospace not only ensured that the company remained British, but ensured its long-term viable future?
    The Prime Minister: Yes. The British Leyland-Rover group was a constant drain on the British taxpayer to the tune of £3 billion. At one stage in late 1988 its overdraft, which the Government had to guarantee, was of the order of £1·6 billion and showed little sign of going down. It is good to have got both British Leyland and Rover into the private sector, removed the burden on the taxpayer, kept the confidence of Rover and its distributors, and given its employees good prospects for the future.
    Mr. Ron Brown: On a point of order, Mr. Speaker.
    Mr. Speaker: I shall take the point of order after the statement.

Atomic Weapons Establishment
3.31 pm
The Secretary of State for Defence (Mr. Tom King): With permission, Mr. Speaker. I should like to make a statement on the future organisation of the Atomic Weapons Establishment. [Interruption.]
Mr. Speaker: Order. Will hon. Members who are not remaining for this important statement kindly leave quietly?
Mr. King: In its fifth report 1988–89, the Select Committee on Defence drew attention to the problems that if believed risked delay to the progress of the Trident programme. The Government have been considering the best way to address these issues.
The present position is that we believe we shall achieve the intitial production at Aldermaston and the AWE sites that will enable the Trident in-service date of the mid-1990s to be met. However, the need for increased production from 1992 for later Trident deliveries, against the background of the keen demand for skilled labour in the Thames valley area, poses an increasing challenge, and one for which a greater production management capability is required.
The Government consider that the best way to address these problems is by full contractorisation, with the land, facilities, and other assets remaining in the Government's ownership. Legislation will be required to implement this and will be introduced in due course. Under this legislation, provision would be made for the present work force to be employees of one or more operating companies.
In the meantime, and until the necessary legislation is introduced, the Government intend to appoint a management contractor who will concentrate initially on manufacturing work and site support. The contractor will strengthen the establishment by bringing in, during 1990, a small number of experienced managers from the private sector. The contractor will be selected by competition, and invitations to tender will be issued as soon as possible.
There will be no change in the purpose or direction of the establishment's programme. The first objective is to reinforce rather than to replace existing AWE management, and all the existing AWE sites will continue in operation.
The Government remain fully committed to the Trident programme, together with a strong research base to underwrite nuclear weapon capability for the future. Safety will continue to be the highest priority. A compliance office, led by a senior and suitably experienced Government official based at AWE, will monitor contract compliance and observance of safety, quality and security requirements.
Under the initial arrangements I have described, AWE personnel will remain civil servants. The work force at the establishment's sites are being informed today and consultation is being set in hand with the relevant trade unions. A consultative document which sets out in greater detail the background and the proposals I have outlined will be placed in the Library of the House this afternoon.
These changes will not affect the Aldermaston new building programme, which has been managed satisfactorily since 1988 by a private contractor operating under a Government contract.
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The British nuclear deterrent is committed to NATO in support of the agreed NATO strategy of deterrence based on an appropriate mix of adequate and effective nuclear and conventional forces. The arrangements that I have announced today seek to address the valid concern of the Select Committee about the need for improvements at AWE and to ensure that the Trident programme is successfully implemented. I commend them to the House.
Mr. Martin O'Neill: We have grave reservations about the privatisation of the Atomic Weapons Establishment. Frankly, we shall have to await the publication of the Bill to obtain more details, in view of the thin statement that the Secretary of State has made.
Our first concern is safety. The first report, for 1978, produced by Sir Edward Pochin, criticised the procedures. Although those procedures have been improved, we are anxious to know more about the relationship between the compliance officer and the nuclear installations inspector, for there will exist a totally different set of arrangements from anything that existed previously.
As for security, will the MOD police retain their existing responsibilities? What arrangements will exist for the four AWE sites at Aldermaston, Burghfield, Cardiff and Foulness? Will they be transferred to the same contractors and operate under the same organisational structures as at present, remembering that there is now the concept of a team approach between the four institutions?
The dockyard contractors had to await the passing of the legislation before they could take control. What statutory authority does the right hon. Gentleman have to put in management contractors before they even have any legal standing?
As the main problems concern recruitment and the retention of staff, may we be told what steps the Secretary of State proposes in the short term to ensure that, following his statement, morale will not be further damaged? For example, will he be taking any steps to enhance the pay and conditions of the work force before the contractors come in? Will there be any improvement in the present situation, with about 400 staff needed to reach the establishments' staffing levels? Will there be less need for compulsory overtime? Present staff shortages mean that people must work 12 out of every 14 days.
Does he appreciate that a tight contract the like of which I imagine he will try to introduce will have to sacrifice either staff or wages? It is clear that he will not be able to increase staff numbers and pay, if he expects contractors to come in under the sort of arrangements that were made for the dockyards.
Is the right hon. Gentleman aware that the experience of the privatisation of the dockyards has not been altogether happy? For example, progress at Devonport has been such that we have a long way to go before there is any improvement in the management of that plant as a result of contractorisation.
Is the right hon. Gentleman aware that the morale of the staff in the four establishments, who have already produced the necessary up-to-date requirements of the programme, will be severely damaged by what is proposed? That applies especially to those in middle management who have been looking forward to promotion and enhanced remuneration. Their avenues of enhancement will be blocked by the introduction of a core of professional managers.

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The staff of the establishments, rather than welcoming these steps, will feel a sense of betrayal by the Government, who have not backed them with the money and support that should have been given in the past. The result is the shabby and cheap deal about which we have heard this afternoon.
Mr. King: The hon. Gentleman asked a number of serious questions that deserve serious attention, but in his peroration he got carried away into an unworthy and wholly unconnected series of remarks. I am grateful to him for clearly setting out some of the problems and concerns at AWE. He referred, for example, to the problems of compulsory overtime and of retention of staff. He clearly set out why action is needed—yet when the Government come forward with proposals he accuses us of shabby action.
The Select Committee made it clear that the Government should take action in these respects. I do not accept that our action will lead to a loss of morale. We are seeking to reinforce, not to replace, the existing arrangements. The Select Committee correctly pointed to the fact that this is very much a research-dominated establishment. The production programme has particular requirements and people are being moved across from the research side to contribute to the urgent needs on the production side. The Select Committee criticised that. The hon. Gentleman should reflect on my statement and read the fuller consultative document, from which he will see that we are seeking initially to reinforce the production side so as not to draw on the valuable expertise on the research side.
The hon. Gentleman referred to the different sites; in my statement, I referred to one or more companies. Under the proposals for full contractorisation—the legislation for this will not come before the House this Session but will be introduced as soon as possible thereafter—the whole of the AWE will be covered, but exactly where the contractors are based is a matter for further consideration.
There will be no change in security arrangements or in the role of the Ministry of Defence police—that is important. As the hon. Gentleman may know, since he has taken a close interest in this, we have been taking certain steps to enhance security.
This is not privatisation: it is what is known in the jargon as GOCO—Government-owned, contractor-operated. In case anyone thinks that an incredibly radical and unheard of concept, may I say that the whole United States weapons programme for 40 years, including the Los Alamos research and development by the university of California, has been operated under this system, so it may not be quite as novel as Opposition Members think.
Mr. Michael Mates: Is my right hon. Friend aware that the Select Committee will be gratified to hear that its advice has been taken, and that it is grateful to him for his kind remarks?
Is my right hon. Friend further aware that, far from ruining morale at the establishments, this is likely to cause a great rise in morale and a great sense of relief among the scientists who want to get back to their jobs and of the members of these establishments who do not feel that they have had the best management over the years? An example of this came at the end of my right hon. Friend's statement, when he said that since the contractors went into the new
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building the contract has been working on time and to cost. That is precisely what we all want to happen in the rest of the establishment, and we wish the changes well.
Mr. King: I am grateful for my hon. Friend's comments. He made a valid point—[Interruption] The hon. Member for Dunfermline, West (Mr. Douglas) keeps muttering.
The Select Committee drew attention to the problems of retention of staff and of the difficulties posed by transfers from the research to the production side, and those are the points with which we sought to deal.
We have already moved one contract at Aldermaston from the public sector to the private sector. All who have seen the development of the new facilities there recognise the obvious success of the management of that contract in the private sector.
Mr. Menzies Campbell: Does the Secretary of State accept that there is an apparent paradox in attempting to introduce a greater degree of privatisation into nuclear energy for military purposes so soon after the failure to do so in relation to civil purposes? If suitably qualified staff have been difficult to attrct to Aldermaston because of the existence of higher salaries in the private sector, will not the introduction of a private contractor have the effect of increasing the costs of the programme? What calculation has been made of those costs, and what is the likely effect on defence spending in other areas? Will the Secretary of State take time to consider, in the light of what he has just said, whether the four-boat Trident system cannot be as effectively deployed with the same number of warheads as the existing Polaris system without going to the increased number of warheads that the D5 system apparently requires?
Mr. King: I should take up too much of the time of the House if I deployed the whole argument about the Trident system, about the problem of the sophistication of the threat against which it would be deployed and about our intention to ensure that it remains an effective and credible deterrent. We are committed to that and that is part of our commitment to NATO. I understand that the Labour party supports that position as well and that the next. Labour Government will accept the financial and strategic responsibilities of inheriting the Trident programme. I welcome that, and the whole House recognises the importance of our contribution to NATO in that respect.
There is no paradox, as the hon. and learned Gentleman maintains. I thought that his party recognised that one of the great benefits of privatisation, which eastern Europe now seeks to achieve, is that one can have better wages, better performance and better productivity at lower overall public cost. The message has been learnt in British Steel, in National Freight, in Associated British Ports and in the other organisations that are now privatised. Those benefits are available to the work force in AWE as well.
Sir Geoffrey Johnson Smith: I congratulate my right hon. Friend on his practical solution to a difficult problem. Although we all hope for the day when nuclear weapons are no longer required for our security, I assure my right hon. Friend that Conservative Members do not think that that day has come and we welcome his commitment to the Trident programme.
Mr. King: I am grateful for my hon. Friend's comments. It is true that, although I have made clear beyond question from this Dispatch Box our support for the improvement of relations between East and West, for the conventional arms reduction talks, for the START negotiations and for a reduction in strategic nuclear weapons, neither side believes at present that there is not a need to maintain adequate defences and the credible deterrent of NATO. In that connection, it is necessary to make these changes to ensure that we maintain the credibility of our contributions to NATO.
Mr. John Cartwright: Will the Secretary of State accept that the main threat to Trident warhead production has been the inability of Aldermaston to recruit and to retain the key industrial staff who are needed? Will he assure us that the new arrangements will enable the contractors to operate without the dead hand of Treasury control and to offer the competitive wage rates that are necessary? If that is the case, what additional cost will be added to the Trident programme?
Mr. King: I was quite sympathetic to what the hon. Gentleman said until he came to his final remark. I have sought to make the point that, with the best possible production management expertise, and with properly motivated and rewarded staff, who have properly recruited skills and who are properly organised, we may see rather better remuneration for those working in some of the key areas at Aldermaston and they will be operating under efficient and well organised production systems. That will lead, very possibly, to no increase in costs, but to a far better guarantee of performance and an assurance that the Trident programme will be implemented.
Sir Michael McNair-Wilson: Can my right hon. Friend say what difference contractorisation will make to the role of the director of the establishment? Can he give some assurance about employment security for the 7,000 employees, most of whom are my constituents? Would it not make sense for Burghfield to be included with Aldermaston as both are called atomic weapons establishments and are the only two in the county?
Mr. King: I apologise to my hon. Friend if I did not make that clear. It includes Burghfield, Cardiff and Foulness. It covers all the establishments of the AWE and the Blacknest activity contained within Aldermaston. The director is due to retire in the middle of next summer and I then envisage that the management-contractor will become the chief executive of AWE.
On redundancy, the problem—particularly at Aldermaston—is one of considerable shortage, not a surplus, of people. As hon. Members have said, there is a need to improve recruitment.
Mr. Dick Douglas: Will the Secretary of State accept that, when the Select Committee on Defence examined the contractorisation of the dockyards, it rejected the idea in two reports? Will he also accept that what is being suggested today is the privatisation of plutonium and nuclear warheads? That is not acceptable to the vast majority of Opposition Members. Will the right hon. Gentleman concede that he is creating competition to supply nuclear warheads to Her Majesty's Government?
Mr. King: In kindness to the hon. Gentleman, he should read the document containing greater detail which is in the Library and he will then see how inaccurate his comments are.
Dr. Michael Clark: Will my right hon. Friend take this opportunity to acknowledge the contribution made by AWE Foulness to the overall atomic weapons programme? Is he aware that employees at Foulness do not enjoy all the financial benefits of those employed by AWE in the Thames valley? Will he ensure that those employees have a competitive salary now so that they can be retained rather than pay a competitive salary later to regain them?
Mr. King: I should like to look further into my hon. Friend's point as I have not heard it raised before. I can assure him that either myself or the Minister will look into it.
Mr. Rhodri Morgan: Contrary to the belief of the Secretary of State and the Government that commercialisation can solve all problems, will the right hon. Gentleman give some thought to the probability that the setting up of a single purpose commercial organisation to increase production at Aldermaston may create a different form of problem for Aldermaston and Cardiff, which is where many of my constituents work? If the Trident system becomes the subject of multilateral negotiations, one problem will be how one has a commercial organisation able to handle—with the same flexibility as when it is under Ministry of Defence control—the conversion of factories. For example, the AWE factory at Llanishen needs to be retained as one of the premier precision engineering factories in south Wales so that we do not lose those skills if the Trident programme becomes part of disarmament negotiations in the next couple of years.
Mr. King: This proposal is intended to reinforce production skills and the capability of production organisation and management. That is important as there is a production job to be done. It is generally recognised by all who have studied that problem at Aldermaston that there is a shortage of adequate production management expertise. We are seeking to address that problem in an effective way while retaining Government ownership of all the assets and facilities involved. That must be right.
The compliance office will be responsible directly to me for safety and security, which are obviously of great concern to the House. However, we see no early prospect of any change. We have made it absolutely clear that we are not prepared to leave the country defenceless while other countries retain nuclear weapons. Therefore, although the Trident programme represents only a modest and limited deterrent when compared with the Soviet Union and its scale of nuclear weaponry, we believe that we should maintain our limited but credible and effective deterrent. That is the Government's policy, but others may intend to get rid of it. If I were a constituent of the hon. Member for Cardiff, West (Mr. Morgan), I would be worried about that.
Sir David Mitchell: Can my right hon. Friend assure me that the changes he announced today will have no effect on the status of AWE housing in Tadley, Baughurst and other places where employees are now housed in property owned by those establishments?
Mr. King: I give an absolute assurance about interim arrangements. As far as I know, it will make no difference to subsequent arrangements after the House has approved the legislation for full contractorisation. In the short term there will be no difference, but we shall need to give that point careful consideration when drafting the legislation. I am grateful to my hon. Friend for raising it.
Mr. John McFall: The Secretary of State's statement was extremely thin. As a member of the Select Committee, I do not welcome it because I do not know what it involves. All that the Secretary of State says is that it is contractorisation. The report of the Select Committee referred to the problems with contractorisation at the A90. The "World in Action" programme on Balfour Kilpatrick also referred to those problems. Contractorisation is already causing great problems. Exactly what does the Secretary of State mean by it? The Select Committee found that pay and conditions and staff shortages were a problem. Contractorisation will achieve nothing. It is a smokescreen.
Mr. King: We recognise that there are problems in retaining staff and there have been complaints about pay and remuneration in this area, which is probably the most competitive in the United Kingdom for skilled labour. I say that in respect of Aldermaston and Burghfield; it is not so true for Cardiff. Against that background, as the hon. Member knows—he is a member of the Select Committee that studied the matter—there are real problems in this research-dominated establishment. There is a shortage of production management expertise. With such a shortage of skilled labour, it is important that labour is properly and effectively organised—
Mr. McFall: And properly paid.
Mr. King: Exactly—under schemes that ensure that productivity is achieved and that people are rewarded for it. Perhaps hon. Members did not hear what I said to the hon. Member for Woolwich (Mr. Cartwright). I made it clear that there will be new contractors with properly organised production management and arrangements under which it is likely that people will be better rewarded for productivity in a well-run production unit.
Mr. Gwilym Jones: Although I welcome the statement, nothing that my right hon. Friend has said should he seen as a reflection on the factory in my constituency in Cardiff where an excellent work force strives for the highest standards. On the contrary, he is proposing a way to create a better basis for employment for all the employees in the Cardiff factory and in other AWEs which remain a vital part of our country's defences.
Mr. King: As we know, that has been the experience. We do not have to make extravagant claims because the experience is firmly established. It has attracted the attention of many other countries, not least in eastern Europe, which sees the great damage that state ownership and public control and management can cause and the benefits from contractorisation.
Mr. Alex Salmond: Does the Secretary of State understand that some Opposition Members unambiguously welcome any problems and delays in the implementation of the Trident programme?
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Why does he expect the attempt partially to privatise the military nuclear industry to be any more successful than the attempt wholly to privatise the civil nuclear industry?
Mr. King: The hon. Gentleman and his party are entitled to their view about the need for Britain to maintain a nuclear deterrent and to be a loyal and effective member of NATO. I am not sure what his party's defence policy is, but if it does not support NATO, it is in a small minority in the House and in the country.
Mr. Andrew Hunter: I applaud my right hon. Friend's decision. I believe that it will be widely welcomed. Is he aware that a handful of my constituents who work at Aldermaston will be apprehensive? Will he address himself to the familiar argument, which I expect that we shall hear again, that any delay in the Trident programme has been caused more by private contractors than by public servants and that the introduction of private management will not get to the heart of the problem?
Mr. King: I am grateful to my hon. Friend for his broad welcome. I understand entirely the initial feeling of the workers there. When any change is announced it creates uncertainty and anxiety. That is why I have sought to ensure that full consultative arrangements and consultative documents are available. In that way the proposals can be explained as quickly as possible to the people involved. The proposals can only be of benefit and will he of material advantage to many of the workers because of the problems that we face. Any competent management contractor will need to get the support of the work force if he is to do an effective job. Indeed, that will be one of his objectives and he will seek to address those points. The proposals are not bad news for the work force.
My hon. Friend asked for the reasons for the delays. A shortage of management expertise in production has been identified. We have addressed that shortage in construction, and I reported to the House that that is going well, but we must still address that problem on the production side. That is why I have made the statement. The other issues which hon. Members have raised—what about this, what about that—will become the responsibility of those who can bring considerable expertise and abilities to tackling the problems.
Several Hon. Members rose—
Mr. Speaker: Order. I must have regard to the subsequent business. There is a heavy demand to speak in the debate, so I shall end questions on the statement by 4.15 pm. If hon. Members ask brief questions, I shall be able to call all of them.
Mr. Tam Dalyell: May I voice extreme technical scepticism? Even given the Government's assumptions on Trident, why is more research and a greater capability needed if the programme is going as smoothly as we are told? What does the Secretary of State say in answer to the anxiety expressed at the recent Royal Society meeting that our real problem is that, whereas the Japanese spend 2 per cent. of their research and development budget on military research and the Germans spend 12 per cent., we in Britain spend 47 per cent? A shortage of technical skill is precisely one of the problems of the British economy and British industry.
Mr. Speaker: Briefly, please.
Mr. Dalyell: Is that not adding to the problem? Is not the Secretary of state being taken for a technical ride?
Mr. King: The hon. Gentleman asked my permission to express extreme scepticism. I doubt whether I could prevent him from expressing scepticism on any issue which he chose to raise. I explained the background and said that the programme seemed to be going well, so the hon. Gentleman asked why there was a need for change. As I said in my statement, we believe that we shall achieve the initial in-service dates, but there is a need for increased production for Trident deliveries from 1992. We face real problems with the operation in the Thames valley area and there is no realistic prospect of relocating those facilities. It is perhaps the most difficult area in which to recruit scarce skilled labour resources. Against that background, the Select Committee identified problems of retention and skills shortages, and we have taken the action that we have.
Mr. Robert Key: My right hon. Friend can rest assured that those of us who have major defence interests in our constituencies understand the difference between contractorisation and privatisation, and that we welcome the sensible way forward. Will he, however, clear up the confusion that arose at the start of questions following the statement? Reference was made to the Ministry of Defence police role. Surely what is meant is the role of the Atomic Energy Authority constabulary. Will he confirm that Mr. Reddington, the chief constable of that authority, has been consulted and that operational arrangements in particular for atomic energy transport and for guarding nuclear convoys will not be changed?
Mr. King: I am grateful to my hon. Friend for what he said about the arrangements and for his emphasis on the clear distinction between contractorisation and privatisation. I can confirm that there is no change in security arrangements.
Mr. Alun Michael: Does the Secretary of State accept that safety and security are extremely important matters and that both of them are as important as productivity? Is he not creating a fragmented management structure and chain of command, which is likely to cause difficulties? Is he not insulting the standard of management at the establishments, including the one in Cardiff, in a way that seems gratuitous, or is he simply confessing that he and the Government have not done a good job of managing resources over the years?
Mr. King: The hon. Member is giving the problem serious consideration and I agree with the first part of what he said. On reflection, he may recall that I said that safety will continue to have the highest priority. I also made it clear, when I set up the compliance office, that it will have direct responsibility to me for issues of safety, quality and security. That is important, and I shall certainly insist on it.
Mr. Julian Brazier: Does my right hon. Friend agree that there is nothing radically new in involving contractors in work at the AWE at Aldermaston? When I worked there as a project manager for an outside company in 1985, there were many other companies on site. Does he also agree that the greatest single problem, apart from pay, in terms of job satisfaction which faces scientists there is that they are not able to get
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on with science? They are sucked into production or other peripheral management duties. Does my right hon. Friend agree that the statement will enable them to get back to the work that they want to do and that the nation needs them to do?
Mr. King: I never cease to be amazed by the breadth of my hon. Friend's management experience. The whole House has listened to his first-hand and interesting report, and I am grateful for his strong endorsement of the changes.
Mr. D. N. Campbell-Savours: Is it not true that the real reason for contractorisation is that the Government have lost confidence in the science-based management at Aldermaston? Is it not true that there have been repeated arguments between departmental officials and the people who run the site there? If all that I have said is true, would it not have been better to have cleaned out the management and put in a management representing the state rather than the curious system of contractorisation that is being proposed?
Mr. King: I think all hon. Members know of the hon. Gentleman's ability to translate any situation into the most malign scenario.
There have been problems needing the transfer of people on research, and the Select Committee commented on that in its report. That was due to shortages on the production side. Being science-based does not mean that one is a great expert on modern management and production techniques. We believe that contractorisation is the best way to approach the problem and get the most effective people available.
Mr. Neil Thorne: Will my right hon. Friend confirm that, if the new system works effectively, it will be possible for scientists to get on with their research, and to spend a lot more of their time doing so, rather than being bogged down in red tape? Will he also confirm that security will be considerably enhanced because turnover should drop dramatically, and that will lead to greater stability in the work force and to a more secure work force?
Mr. King: I am grateful to my hon. Friend for raising that important issue. It is not satisfactory when, albeit under public management, a number of people are recruited but not retained. We incur considerable costs and requirements for vetting procedures are obviously necessary. If we can establish a stable and effective private management contractual operation, which will be subject to the normal vetting requirements, the operation will be able to retain people, and we are likely to have a more secure operation than in the present unsatisfactory situation.
Mr. Norman Buchan: When one considers the implications of the subject, is it not the height of folly to introduce any element of profit or privatisation into it? After the events of the past few months, and the talks in Malta and elsewhere, is it not the height of frivolity to continue the production of what are, presumably, bigger and better weapons? Who are we likely to use them against? Is it not true that the only safe way forward for contractors and the rest of humanity is to end the proliferation, and is that not best achieved by Britain taking the lead?
Mr. King: I know that the whole House recognises the consistency of the hon. Gentleman's position, but his argument is really more with his Front Bench and the leader of his party, who made it clear that the next Labour Government will accept the financial and strategic responsibilities of inheriting the Trident programme. The Leader of the Opposition said that Labour has an "absolutely dependable defence policy". The hon. Gentleman had better direct his questions in that direction.
Mr. Jonathan Sayeed: Does my right hon. Friend agree that the explanation is rather more simple than the hon. Member for Workington (Mr. Campbell-Savours) suggests with his conspiracy theory? The very good quality people at Aldermaston were trained as scientists, not as industrial engineers and production managers. They should be allowed to get back to the work they do best and people who can do the other job best—outside contractors—should be brought in. If that were not done, the Government would be failing in their duty to defend the country, as we would not have the fissile material we need for our submarines.
Mr. King: I am grateful to my hon. Friend. He has explained the situation simply, clearly and precisely. That is why we have taken these steps.
Mr. James Lamond: Despite all the Secretary of State's bluster about defence, was he not faced with the straightforward problem of staff shortages and difficulty in recruiting people because conditions of employment do not match up to what can be obtained in outside industry? Instead of allowing the law of supply and demand to work, he has put forward this extraordinary solution of putting the work out to contract. The contractors will have to pay better wages and provide better conditions to attract the men they want. They are not like contractors in the Health Service and elsewhere for cleaning services, who can force people who cannot find work anywhere else to accept low pay and poor conditions. The people whom the Secretary of State is trying to recruit are in what they regard as a seller's market, so it must cost the country more to pursue this solution.
Mr. King: When I was Secretary of State for Employment, we conducted a study of the training needs of, and skilled labour problems in, the Thames valley. Every firm that identified a shortage of skilled labour as the greatest difficulty for the coming 10 years said that it would poach staff from the firm next door. Putting up wages is manifestly not the whole solution to the shortage of skilled labour. We must ensure that skilled labour, which I believe will continue to be a scarce commodity in the Thames valley, is managed and used efficiently and effectively.
Several Hon. Members rose—
Mr. Speaker: Order. I hoped to be able to call all hon. Members who have been rising in their places, but I shall call only two more from each side and then move on to the next business.
Mr. Teddy Taylor: As major changes such as this, however well directed, cause great distress and uncertainty about pensions, promotion and housing, will my right hon. Friend tell many of my constituents who
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work in Foulness whether they will get a small pamphlet, not a bulk consultation document, setting out the implications of the changes for employees and giving the name of someone who can be consulted if there is any doubt? Will he use as a guide the especially bad performance, sadly, of the Treasury's announcement in the Autumn Statement of the decision to move about 700 jobs from Southend? Will he try to consult employees and tell them all the facts promptly and where they can go if they do not know the answers?
Mr. King: I am grateful to my hon. Friend, and entirely agree that statements such as these often confuse more than they clarify. I am willing to respond. If my hon. Friend would like to give me the questions that he thinks his constituents would like to be answered, I shall try to reply to them.
Mr. Bruce Grocott: Does the Secretary of State understand that the real anxieties being expressed, not least by Conservative Members, arise because we all know from reading the history books, not from consulting a crystal ball, that contractorisation inevitably leads to worse working conditions, including pension rights, training and hours of work? What assurance can he give that, under the new arrangements, such rights, which have been hard won, will be protected? In view of recent events, what assurance can he give that a contractorised service will not be a far greater security risk than a public sector service?
Mr. King: I sought to address the hon. Gentleman's last point when I answered the interesting question put by my hon. Friend the Member for Ilford, South (Mr. Thorne) when I said that we faced some unsatisfactory situations with the rapid turnover of employees, some with quite short service. That is not at all satisfactory from the security point of view. The background against which the proposals have been made is an acute shortage of people and a recognition of the fact that there may well have to be some improvement in opportunities for people within the plants so that we can attract people with the skills that we need, and against that background the hon. Gentleman's comments do not stack up. It is not open to the sort of criticisms that he seeks to make.
Mr. Cyril D. Townsend: Should not this be seen as a thoroughly sensible management decision to deal with a particular production problem in this area? My right hon. Friend also mentioned the American experience —publicly owned, privately run—and many of us feel that that example could be followed throughout his Department. Will he give us some guarantee that it will have further application?
Mr. King: I am not sure whether my hon. Friend is suggesting that that is the way that we should operate the Ministry of Defence, but I shall take his suggestion seriously. The application where possible of that principle can have benefits. What it comes down to, as several of my hon. Friends have perceptively said, is the need to get the best people available to do the jobs that need to be done. That is not a radical concept, and it should be applied wherever possible.
Mr. Roland Boyes: In view of the acute shortage of workers, will the Secretary of State reassure the work force on safety at the AWEs under

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the new procedures? The right hon. Gentleman has said that safety is important, and we welcome that, but has he studied the problems in the United States, particularly the Savannah river arms plant in south Carolina, which caused two of its four plants to be abandoned and two others to be temporarily closed because production was placed above health considerations and a safe environment?
Does the right hon. Gentleman recall what Admiral Watkins, the Secretary of State for Energy in the new Administration, said when he first took over his department? He accused America's crumbling nuclear weapons industry of
"ineptitude, mismanagement and deliberately ignoring safety rules".
Will the right hon. Gentleman give us an assurance this afternoon that our work force will not be subject to such conditions and risks?
Mr. King: I am grateful to the hon. Gentleman for his comments. We looked carefully at the American experience in that respect. There have clearly been difficulties in some areas, but I shall say no more because some legal actions are flying around on some of the comments that have been made. We shall learn from America's experiences. There are some aspects of the American contract that we shall not follow. For example, we shall make sure that the contractor's contract includes incentives on the important matter of safety, quality and security, as well as on production matters. But it is interesting that the Americans are convinced that, whatever the problems that they have to sort out, the Government-owned, contractor-operated system—the GOCO method—is the right approach to take.
Several Hon. Members rose—
Mr. Speaker: I am sorry that I have been unable to call all those hon. Members who wished to speak, but I shall bear in mind their undoubted claims when we return to the subject.

Points of Order
4.18 pm
Mr. Roger King: On a point of order, Mr. Speaker, of which I have given you due notice. It concerns an issue of importance to the House—the position of the Chairman of the Public Accounts Committee and his role in a broadcast on Radio 4 this morning on the "Today" programme. I attended, as an observer, the first of several sessions of the Public Accounts Committee on the sale of the Rover Group to British Aerospace.
Yesterday civil servants were interviewed and a number of questions were put to them. No doubt in due course a transcript will be available for us all to read and disseminate. Basically, they adopted a defensive posture, as one would expect. This morning, when I tuned in to Radio 4, the right hon. Member for Ashton-under-Lyne (Mr. Sheldon), the Chairman of the Public Accounts Committee, was being interviewed, and what he said struck me as less than impartial. During yesterday's interrogation of the witnesses, several references were made to sweetners and the fact that the Commission was being—
Mr. Speaker: Order. What is the point of order for me?
Mr. King: If a Chairman of a Select Committee or of an august body such as the Public Accounts Committee has already made up his mind as to what happened in the British Aerospace-Rover deal, what point is there in calling witnesses to determine what happened? Is it not a fact that, from now on, probably no one will get a fair hearing?
Mr. Robert Sheldon: Further to that point of order, Mr. Speaker. I am grateful to the hon. Member for Birmingham, Northfield (Mr. King) for giving me notice that he would be raising his point of order. It is a pity that he did not discuss it with me because I would have been able to inform him of what you, Mr. Speaker, certainly know, which is that it is all here in the National Audit Office report to the Public Accounts Committee. The report was agreed with the Department concerned. What I value most is the unanimity of the all-party Committee. That is of enormous importance to me, and it is the strength of the Committee, for which I work all the time.
Dame Elaine Kellett-Bowman: Further to that point of order, Mr. Speaker.
Mr. Speaker: No. I must make it plain that there can be no appeal to me about the way in which Chairmen of Select Committees see their responsibilities. It is not a matter for me.
Mr. Ron Brown: On a point of order, Mr. Speaker. Earlier, the Secretary of State for Defence said that he could not understand a question. Perhaps that was a mental blockage, perhaps it was political arrogance, but something strikes me about this place these days. It has to do with the noise and the acoustics. Could something be done about that? I am giving the right hon. Gentleman the benefit of the doubt, but something must be done.
Mr. Speaker: It is sometimes difficult to hear in the Chamber with these rather old-fashioned microphones. If the hon. Gentleman were to move a little this way and under the microphone, we could all hear him more easily. I am sorry if his question was not heard, but I shall have the matter looked into.

Statutory Instruments, &c.
Mr. Speaker: With the leave of the House, I shall put together the Questions on the two motions relating to statutory instruments.
Ordered,
That the draft Food Protection (Emergency Prohibitions) (Contamination of Feeding Stuff) (England) (No. 4) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Medicines (Intermediate Medicated Feeding Stuffs) Order 1989 be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Chapman.]

Orders of the Day

  Education (Student Loans) Bill
  Order for Second Reading read.
  Mr. Speaker: I repeat what I said earlier this week. There is a great demand, and I welcome it, for right hon. and hon. Members to participate in our debates these days. There is a great demand today and I shall have to put a limit of 10 minutes on speeches between 7 and 9 O'clock. Again, I appeal to hon. Members who are fortunate enough to be called before that time to bear that limit in mind.
  Mr. Simon Hughes: On a point of order, Mr. Speaker. We are about to debate the Second Reading of the Education (Student Loans) Bill. In the Queen's Speech, the Bill was announced with the following words:
  "A Bill will be introduced to supplement students' grants with loans."
  There is no provision in the Bill that deals in any particular with the loans, their amount, their funding, their arrangements or any other such details. This is a point of order to you to determine whether it is proper that we should debate today a Bill that has none of the detail that we were told that it would have by that short sentence in the Queen's Speech. That is germane and necessary before any proper consideration can be given to the Bill.
  Mr. Speaker: The House has not yet heard the Secretary of State explain exactly what is in the Bill. The hon. Gentleman can raise the matter if he is called, and if he does not like what he hears he can vote against Second Reading.
  4.25 pm
  The Secretary of State for Education and Science (Mr. John MacGregor): I beg to move, That the Bill be now read a Second time.
  I shall be dealing with the matter raised by the hon. Member for Southwark and Bermondsey (Mr. Hughes) at some length during my speech.
  The House debated student loans only recently—on Friday 20 October—and I do not wish to repeat all the points that I made then, but I think that it is worth restating three basic points by way of background. First, the Bill provides for loans as a top-up to student grants for maintenance, and for maintenance only. That is made clear in the long title, at the very beginning of the Bill.
  Our present mandatory grant arrangements were introduced by the Education Act 1962, following the Anderson report, which envisaged higher education student numbers eventually reaching 175,000. There was no conception then of the way in which higher education would expand in the 1970s and 1980s. This autumn, there were more than 1 million full-time and part-time students in higher education, 400,000 of whom are in receipt of maintenance grant awards. That is compared with the 175,000 originally envisaged.
  Dame Elaine Kellett-Bowman: My right hon. Friend has stated clearly that clause I says that the Bill provides for top-up loans for maintenance grants alone. Will he draw attention to the somewhat misleading

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  petition presented by the National Union of Students, which links student loans and tuition fees, as many of us are very much opposed to tuition fees but in favour of student loans?
  Mr. MacGregor: It is made absolutely clear throughout the Bill that the provisions refer to maintenance grants and not to tuition fees. That will be made clear to everybody.
  Mr. Harry Greenway: Will my right hon. Friend give way?
  Mr. MacGregor: Very well.
  Mr. Greenway: I apologise to my right hon. Friend, but it is an important point. I am grateful to him for explaining that the Bill will deal with maintenance grants. Is he aware that those of my constituents who are in higher education have still not been paid their maintenance grants by Ealing council, and that many of them have been forced into debt in connection with housing, food and everything else and so obliged by the inefficiency of Ealing council to take out loans at high interest rates? Ealing council, which is Labour-controlled, says that it opposes student loans but students have written to me and have been to see me to ask me to support the Bill so that they may obtain loans at a reasonable rate.
  Mr. MacGregor: I hope that the Labour-controlled Ealing council will get on with it. There is no doubt that loans at a real interest rate of zero such as those that we propose—I shall deal with that later—would have helped all the students in their present predicament with Ealing council.
  Mr. Jack Straw: Will the Secretary of State give way?
  Mr. MacGregor: I have hardly progressed with my speech, but I shall give way to the hon. Gentleman if he wishes.
  Mr. Straw: I am grateful to the Secretary of State, because, as he says, he has hardly started. He has just said that the Bill will not cover tuition fees. Will he give a categorical commitment to the effect that it is the Government's policy that tuition fees will continue to be met in full from the public purse?
  Mr. MacGregor: I should have thought that what we have done this year has made that absolutely clear, despite some of the suggestions that we heard in advance of the Autumn Statement. It was clear in the Autumn Statement—I cannot make it clearer, and the Bill cannot make it clearer—that the loans are for grants for maintenance.
  I am aware that many right hon. and hon. Members wish to speak. As I have given way three times and I have hardly begun my speech, I hope that it will be understood that, in the interests of those who want to make speeches, I shall have to contain myself and not give way further.
  The expansion in student numbers, unforeseen when the present system was introduced, is reflected in the costs to the taxpayer of the grant system. It has risen, at 1990–91 prices, from £236 million in 1962–63 to more than £600 million in 1989–90. Clearly, both the numbers and the cost to the taxpayer have risen considerably.
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  My second background point is that our system of student support is substantially more generous than that in any other comparable country. The latest comparative figures are for the years around 1984 but the relative position will have changed little since then, and the figures are revealing. They show that the public funding for students is £30 per student in Japan, £40 in Italy, £70 in West Germany, £180 in France, £275 for the United States and £750 for the United Kingdom. The figures are dramatic and bear out my point.
  We anticipate substantial further expansion of higher education numbers in the years ahead. I have already reaffirmed my predecessor's expectations of something like a doubling in the numbers over the next 25 years.
  Mr. Simon Hughes: No, the Minister has not done that.
  Mr. MacGregor: I have said that so many times that I do not know how often I must continue to say it. I have said it again now, and perhaps the hon. Member for Southwark and Bermondsey (Mr. Hughes) will believe me.
  At the time of the Autumn Statement, I announced provision of an extra £750 million to fund an expansion over the next three years, which would take the index of participation of the relevant age groups from 16 per cent. to 19 per cent. in those three years. Here is proof of action backing words: if that rate is carried forward over 25 years, it will actually more than double student numbers.
  It is not going to be feasible to ask taxpayers to bear the extra burden of student maintenance at that rate over the years ahead. We already have a higher proportion of our university expenditure going to student maintenance support than most other countries. We are indeed generous in this area with regard to maintenance, particularly when we consider how other countries provide for maintenance and residence support. Most other countries have loans systems, some depend on loans heavily rather than grant, but none is so grant-oriented. By our proposals we shall in most cases, be moving only some small way in their direction, and their examples demonstrate that loans do not inhibit access.
  It is important for the House to note that most of the taxpayers who are contributing to that support will have earnings levels throughout their working life which will always be lower than the incomes which students can expect to earn for most the time after they have graduated. I must stress that.
  Mr. Dafydd Wigley rose—
  Mrs. Rosie Barnes rose—
  Mr. MacGregor: I must make progress, because I have a lot to say. I have already given way a great deal.
  I have now set out the background to the Bill. Its purpose is to implement the proposals set out in the White Paper "Top-Up Loans for Students" published in November 1988. It is worth repeating the Government's objectives as set out in that White Paper. They are to share the cost of student maintenance more fairly between the taxpayer, students' parents and the students themselves.
  Mrs. Margaret Ewing: Will the Secretary of State give way?
  Mr. MacGregor: I will give way to the hon. Lady in a moment, after I have made a little more progress.
  Other objectives of the Bill are to reduce, over time, the contribution to students' maintenance that is expected

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  from parents and to reduce, over time, direct public expenditure on grants. The objective is also to increase resources available to students and to implement the Government's decision to remove students from the social security benefits system, which was never intended to be a form of support for student maintenance. It is also intended to reduce students' sense of dependency on the state and promote an awareness of self-reliance and investing in their future, which will bring with it, as in other countries, a greater readiness to obtain value for their investment in their courses.
  Mr. Richard Caborn: Will the Secretary of State give way?
  Mr. MacGregor: I will give way in a moment.
  I am confident that that is the right way forward. Our scheme will benefit students. It will increase the maximum resources available to them while they are studying by nearly a quarter and it will give them greater independence from their parents. It will benefit their parents by cutting the contribution expected of them, over time, by nearly half. It will also benefit taxpayers because part of the burden of student support will be shifted from taxpayers at large to graduates.
  Mrs. Ewing: How will the Minister's plans benefit disabled students seeking access to higher education? Additional expenses are built into their courses and they may not find employment at the end of their courses to enable them to repay their loans. In passing, will the Minister refer to the four-year degree course in Scotland and the implications of the new Bill for that?
  Mr. MacGregor: I will refer to the hon. Lady's points about disabled students later in my speech. One of the difficulties with so many hon. Members wanting to intervene early in my speech is that they pre-empt the natural flow of my speech.
  The hon. Lady's point about Scottish student grants was discussed at length in a previous Question Time. I myself am a beneficiary of a four-year course in Scotland. Although I did not have a maintenance grant, I got scholarships and earnings during university vacations. Those who wish to have and can benefit from the four-year course in Scotland—I am aware that a considerable number of English students wish to do so—will not find that the cost of a small additional loan repayment will outweigh the benefits of that course. The choice is for them to make.
  Mr. Alex Salmond rose—
  Mr. MacGregor: I will not give way. I must get on.
  I refer next to the Bill, and, later in my speech, I will deal with a number of general issues arising out of the proposals.
  I have seen some criticisms of the form of the Bill. I believe that they are totally misguided and I wish robustly to defend our approach. I shall spend some time on this matter, because many hon. Members have raised it.
  Our approach is right for three good reasons. First, it follows precedent. The nearest analogy is the Education Act 1962, which introduced the maintenance grant system for which these loans will now be a top-up. This Bill follows pretty well precisely the shape and approach of that Act. [Interruption.] The hon. Member for Blackburn
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  (Mr. Straw) can make his points later. Perhaps he will allow me to develop mine, instead of constantly interrupting me.
  Like the Education Act, the Bill identifies the purpose for which loans may be made and those to whom they may be made, as with grants. Like it, the Bill sets the framework, on eligibility and on qualifying institutions, and the ground to be covered in regulations and other arrangements. Like it, the Bill leaves the detail of loan rates and conditions, just as for award rates, to regulations made under the negative resolution procedure. I have not heard any complaints about the way in which student grants procedures are undertaken, in terms of parliamentary accountability or in other ways. We follow that precedent.
  Mr. James Wallace rose—
  Mr. MacGregor: I will not give way. I must finish my three points.
  My second point is that, like the Act before it, the Bill covers the crucial issues. Schedule I is explicit and precise in its definitions of the categories of higher education courses and the kind of institutions to which the loan system will be applicable. Schedule 2 stipulates in some detail—I will come to it—the ground to be covered in regulations and other arrangements. So the notion that the Bill gives me "unlimited powers" to make loans is utter nonsense. I have not heard such charges made about grants.
  Thirdly, the Bill follows the 1962 Act in providing the flexibility, through regulations, to revise year by year such things as the amounts of loans, the period and manner of repayments, the deferment or cancellation of a borrower's liability, and even changes to eligibility. I should have thought that that is very much in both Parliament's and the students' interest.
  For Parliament, can it really make sense that such details as the size of the loan each year and conditions that we might wish to change in the light of experience should be the subject of regular primary legislation? No one argues that for grants.
  I want to mention specifically a very important point. We shall, of course, monitor closely the effects of the introduction of the scheme. We have already carried out, in 1987 and 1989, three surveys of students' income and expenditure. We shall continue to commission periodic surveys in this matter and others if that is shown to be desirable. [HON. MEMBERS: "So what?"] The flexibility that the structure of the Bill gives us will allow us to act speedily and effectively on the findings of our monitoring. That is "so what", and it is very sensible. That flexibility will also benefit students. They will not wish to wait for a place in the parliamentary primary legislative queue to get an uprating in loan amounts or a beneficial change in eligibility.
  Let me give a specific example. The House should understand this matter, because the critics on this score are totally wrong. This summer, a case in relation to student grants, which is our parallel, was raised by my hon. Friend the Member for Canterbury (Mr. Brazier). It related to a very technical point about a clergyman who, for many years, had worked in another European Community country but who had now returned to live and work in the United Kingdom. Owing to the technicalities of the regulations, without a change, the grossly unfair situation

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  would have arisen that, because the son and daughter of my hon. Friend's constituent had not had three years' ordinary residence in the United Kingdom, they were not eligible for maintenance grants, whereas other European Community citizens resident here for a shorter period would have been. We were able to change that and to make grants available to those students by regulation. Without that approach, as embodied in this Bill, they would have had to wait for primary legislation to make that small change. I do not believe that the House would feel that that is in the interests either of Parliament or of the students.
  Mr. Julian Brazier: Does my right hon. Friend agree with two points on this—first, that it was an exceptionally hard case? The gentleman in question had given his whole working life to the Church and was on an income of less than £9,000 per year, yet he was unable to get any grant for his daughter who was on an extremely expensive music course. Secondly, does he agree that, besides reflecting the sensitive and speedy way in which the Minister concerned handled the application—I saw him about it in July and it had been fixed by September—it could not have been done had we not had a flexible framework in the legislation, depending mainly on secondary legislation?
  Mr. MacGregor: My hon. Friend is right. It would have deprived a student who, through a technicality, would not have been able to undertake that course. My hon. Friend makes his point very well. Indeed, it would have deprived such a student of ever having the chance to go on such a course, because it would not be possible to find a place in primary legislation for dealing with such a narrow technical point. That is what we are proposing in the Bill.
  I hope that the House will agree that these are powerful reasons for having this Bill in the form it is. Those who criticise it have to justify why they are not criticising also the parliamentary arrangements for student grants.
  Mr. Wallace: The Secretary of State has made comparisons between the 1962 legislation and the Bill, so will he tell the House what references that Act makes to Scotland? The only specific reference to Scotland in the Bill appears to be, ominously, with regard to insolvency and sequestration of estates. Will separate regulations be made by the Secretary of State for Scotland? Finally, recognising that in recent years the principal of Aberdeen university has talked about reducing the Scottish university degree course to three years, does the right hon. Gentleman agree that this could be yet another burden that puts a nail in the broad-based traditions of Scottish education?
  Mr. MacGregor: On the first point, the Education Act 1962, which I have with me, contained some technical requirements relating to Scotland. Such requirements are not really necessary in the Bill. Clearly, it will be for us to decide exactly how the regulations are followed through in any case, but I believe that the Bill applies perfectly sensibly to Scotland.
  I turn now to the detail of the Bill itself. The heart of it is in clause 1: this gives the holder of my office power to make loans for student maintenance within the policy described in the White Paper and according to the arrangements set out in schedule 2.
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  Clause 1 and schedule 1 empower the Secretary of State to provide funding for loans for students' living costs. They define the students eligible for loans in terms for the courses they attend. These must be higher education courses of at least one academic year's duration. They must be provided at institutions which receive support from public funds, or at other institutions to be designated for the purpose under regulations.
  The clause also provides for the Secretary of State to prescribe in regulations other conditions of eligibility, such as residence conditions and the exclusion of students aged 50 or over. We intend that students will not be excluded on the basis of their financial record and there will be no means-testing.
  Clause 2 enables the provisions, which extend directly to England, Wales and Scotland, to be extended by order to Northern Ireland.
  Clauses 3 and 4 make the necessary financial provisions—on which more later—and give the short title, interpretation and extent.
  Schedule 2 identifies the main administrative elements of the loan scheme to be prescribed in regulations. It goes into considerable detail and requires the Secretary of State to specify the amount of the loan and the arrangements for repayment, deferment and cancellation. It sets out the basis for calculating the zero real interest rate which will apply to the loans. The Secretary of State shall be empowered to require higher education institutions to issue certificates of eligibility to their students. There is provision to arrange for third parties to undertake administration of the loans, which must include machinery for handling appeals. Finally, the schedule modifies bankruptcy law by excluding from a student borrower's bankruptcy any sum advanced by way of loan and the corresponding debt.
  As I have already explained, the details of the loan scheme will be in regulations, and we shall lay those before the House in the usual way. The arrangements to be made will be built on the basis of clause 1 and schedules I and 2, just as the whole apparatus of mandatory awards is built on section 1 of the Education Act 1962.
  Since I have just mentioned section 1 of the 1962 Act, let me make it clear that that section is to remain on the statute book: local education authorities will continue to have the duty to make mandatory awards: there is no question of abolishing the student grant. Once the loan component of student support reaches the level of the maintenance grant and parental contribution—that, of course, will be some considerable way ahead, in the early part of the next century—we intend that the two will continue in parallel.
  Mr. Straw: The Secretary of State has slid over a central part of the White Paper, which proposes that the real value of the grant should be reduced and that the grant should be replaced by student loans. Is that still the Government's policy?
  Mr. MacGregor: I did not slide over it. It has been clear all the way through and I have made it absolutely clear here that we are intending that the level of the maintenance grant and parental contribution will be reduced in real terms, of course, because I have talked about a fairer distribution of the burden—[Interruption.] I make two points about this. First, that position will not be reached until the early part of the next century, as I have

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  emphasised, and, of course, there is the opportunity for review at any stage during the 1990s. Secondly—I shall come to this later—it behoves those who pretend that we can go on financing that degree of higher education expansion by continuing to place a burden on parents and taxpayers to say how they would do it. I shall come to that later also.
  Mr. Simon Hughes rose—
  Mr. Caborn rose
  Mr. MacGregor: In fairness to the many hon. Members who wish to speak, I should now get on with my speech. I am sure that that is the mood of the House and that that is what people—[Interruption] It is perfectly fair—
  Mr. Simon Hughes rose—
  Mr. MacGregor: No, I am not giving way. It is perfectly fair—[Interruption.] No, I am not giving way, because it is important that we now proceed with the debate.
  I turn now to various issues on which the public debate has also focused so far. I have already referred to the fact that most other comparable countries have loan schemes, but it is worth stressing to the House that we shall continue to be putting more emphasis on grants rather than loans than nearly all of them, and our loans scheme itself will have more generous conditions than most.
  For example, loans are a top-up to existing grants and are concentrated on maintenance only. Others have fewer grants and loans for fees. All students may take out a loan; there will be no credit conditions. The interest rate will he in real terms zero, which is clearly a preferential rate. That means it will be beneficial to those students who currently have commercial loans. Repayment will commence only in the April following graduation, and then only if income is above 85 per cent. of the average wage.
  Let me illustrate that point by giving an example. A student embarking on a three-year degree course outside London and taking up the loans during those three years to the full extent, and then earning a salary just above the likely deferment threshold in 1994—that is, just above 85 per cent. of the average wage threshold—would make an annual loan repayment of little more than 3 per cent. of his or her net income. That puts the position clearly in context. I would add that deferral terms are much more generous than, for example, in the United States, which is why I would expect default rates and individual difficulties to be much different here from there.
  But what is common to other countries is that, even with less generous terms than ours, access to higher education in those countries has not been inhibited. That brings me to access. I do not believe that the introduction of loans to top up maintenance support will impede access. Loans are top-up loans: they will provide more money to students while they are studying— for all students. There will be no credit rating. In that way, the Government will establish the conditions for wider access.
  In addition—this is an important point which has not yet had sufficient attention—the parental contribution over the period will be cut by nearly half. We know that some 40 per cent. of parents—two out of every five—do not pay their student children the full sum for which they are assessed. Our scheme will reduce the burden on families with student children. The aggregate parental contribution, and the average parental contribution, will be frozen in cash terms.
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  The effect is that parents, as their incomes rise in line with the general trend, will pay less and less in real terms. They will feel this as a saving equivalent to the rate of inflation. It will also mean that many students will be less dependent on their parents.
  I have seen a recent survey purporting to show that some young people assert that they would not go on to higher education were a loans scheme in operation. Many will share my scepticism about the usefulness of evidence derived from such surveys. If people are asked if they want a loan rather than a grant, it is pretty obvious what they will reply. One would get the same answer about business loans or grants, and so on, but that begs a lot of questions. It is also important to consider some of the questions posed by that survey.
  The response to the National Union of Students' sample was limited to 40 per cent. of all those asked. Therefore, the response is more likely to have come from those who are against loans—yet, despite that, many more said it would make no difference to their decisions. It is not at all clear whether those questioned were given a proper account of the loan proposals that we are actually making. Was the alternative put to them? It is unrealistic to suppose that the alternative to a loan is a bigger grant. Unless there is a student contribution, the alternative is a continuing decline in the value of the grant.
  Above all, I have serious doubts as to whether such statements represent accurate predictions of what others will do in future. Students know the value to them of a degree—the educational and cash value. Let us fully acknowledge the first and not be ashamed of the second. I have no doubt that increasing numbers of students will wish to invest in their higher education in future.
  Mr. Simon Hughes rose—
  Mr. MacGregor: I shall give way, but this must be the last time.
  Mr. Hughes: The Secretary of State has said that his proposed scheme will not harm access to higher education. He has talked about predictions. Can he predict whether the number of students applying for courses in the next two years, when the loans scheme is operating, will be fewer or greater than those who would apply under a better funded grant scheme? We believe that loans will be a substantial deterrent to access to higher education, and the people share our fear.
  Mr. MacGregor: Since I gave way to the hon. Gentleman, I hope that he will be comparatively reasonable in his speech, as I know that a number of my hon. Friends want to speak. The experience of other countries that operate loans schemes offering much less generous student support than our own is that such schemes do not inhibit access. I do not believe that that survey gives an accurate prediction of the future. There has been a large increase in the number of students going on to universities and polytechnics this year, and they will be the first students to whom the loans scheme will apply. In practice, therefore, the number of students has already increased.
  It is in the nature of a loan that it has to be repaid. Most graduates' incomes are well above the incomes of non-graduates. With a zero real interest rate on the loan, they should not find repayment of their loans a difficulty. I have already illustrated that.

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  We do not propose to exempt any categories of graduate from repayments, but I repeat two points that the Government have already made clear many times. First, those following long degree courses may well need longer periods of repayment, and we are considering that sympathetically. Secondly, as I have already said, students with low or no incomes at any point in time will not be penalised: in those cases, repayments will be deferred.
  Let me take this opportunity to repeat that, in the Government's view, the repayments should be real repayments and should not be hidden away in the tax or national insurance systems. Today, one newspaper said that, although it supported the concept of loans—it is important to stress that support to the Opposition Front Bench—there had been no convincing rebuttal of the suggestion that loans should be repaid through tax or national insurance. I dwelt at length on this in my earlier speech to the House. Our reasons for not adopting such a scheme are practical. We do not wish to add to bureaucracy, or to place additional burdens on employers. More fundamentally, we want to encourage students, through the loans scheme, to see their higher education as their own investment in themselves.
  Mrs. Maureen Hicks rose—
  Mr. MacGregor: I am sorry, but I cannot give way again.
  The students should know that they are borrowing money from, and repaying it to, the taxpayer.
  I know that there are some who continue to argue for a graduate tax. I do not see virtue in a differential tax which affects graduates irrespective of whether their income is low or of how much they contributed to their own higher education costs.
  Our estimate is that the social security benefits received over a full year by the average young single student would amount to £210 in 1990–91. Among those in this group who actually claim, we estimate that the average receipt would be £315. So the top-up loan, averaging £420, will more than compensate most students for any loss of benefits. We are, however, setting up the access funds to cater for students who may need further financial help.
  It is unhelpful and misleading to take the outside, extreme case and to suggest that that will apply to most or all students. It is clear that that is not so, but in cases of extreme difficulty we have set up the access funds. They will be there for those who genuinely demonstrate that they need further financial help.
  Mr. Wigley rose—
  Mr. MacGregor: I am sorry, but I cannot give way again.
  The three access funds will be funded under existing powers. I will make regulations under section 100 of the Education Act 1944 to enable me to pay grant to the governing bodies of direct grant-maintained and assisted institutions of further and higher education, in respect of expenditure they incur in giving financial assistance to their students. Sections 131 and 132 of the Education Reform Act 1988 provide that the Universities Funding
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  Council and the Polytechnics and Colleges Funding Council respectively shall be responsible for administering funds, made available by the holder of my office
  "for the purpose of providing financial support for the provision of any facilities and the carrying on of any other activities".
  That provision will enable the operation of the grant.
  Concern has also been expressed about disabled students and disabled graduates. The existing support provided for disabled students through the social security system will continue, unaffected by the introduction of loans. Unlike other students, they will not be excluded from the benefits system: the loan will be a net addition to their resources. The deferment provisions were designed with the difficulties of disabled graduates, among others, very much in mind.
  As to the banks, I should like to make it clear that we have never asked them to express an opinion for or against the loans scheme as such. That is a decision for Government and Parliament to take.
  Mr. Robert Rhodes James rose—
  Hon. Members: Give way.
  Mr. MacGregor: I believe that it is the wish of the House that I should continue.
  We have simply asked the banks to assist in the administration, on a contractual basis, because they have the branch network—
  Mr. Rhodes James rose—
  Hon. Members: Give way.
  Mr. MacGregor: It is important that I continue. Because the banks have the branch network—
  Mr. Rhodes James rose—
  Mr. MacGregor: I shall give way in a moment.
  Because of the noise from the Opposition Benches, I am not clear whether that point was heard. Let me repeat that all we have asked the banks to do is to assist in the administration, on a contractual basis. We have done so for two good reasons. Those banks have the branch network and the experience of lending.
  As the House knows, I announced on 16 November that I had reached agreement with ten major banks on the next steps. Those banks have formed the company, to be known as the Student Loans Company Limited, which is undertaking the necessary preparatory work.
  I made it clear that, subject to the passage of the necessary legislation and to final agreements being reached between Government and financial institutions, the Government intend to enter into a contract with Student Loans Company Limited for the administration of the loans scheme itself. I have placed in the Library of the House copies of the memorandum of understanding signed by the participating banks and a report by Price Waterhouse on stage 2 of the preparatory work on the scheme.
  It was always clear that some banks would not wish to join in from the outset; that was their decision. We needed enough banks to join in a national network, which is what we have got. Banks and other financial institutions cannot commit themselves to participate in the scheme until they have seen the terms of the brochure which will appear in due course. Those terms are still the subject of negotiations between us. Our aim is to ensure that the scheme is likely

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  to be underpinned by a broadly based network of institutions, the services of which will be available to students. That will also be to the benefit of students.
  Mr. Rhodes James: If the scheme is so marvellous, why is it not in the Bill?
  Mr. MacGregor: I am sorry that my hon. Friend was not listening. I should have thought that the basis was exactly the same as that for the grants scheme. If there are objections on the grounds of parliamentary accountability, they apply also to the grant scheme. I would have concluded that the vast majority of hon. Members would believe that it is to the benefit of students to have the ability to change the scheme, often to their benefit, by secondary legislation, rather than primary. I have already shown by example why that is so.
  Mr. Wigley rose—
  Mr. MacGregor: I cannot give way for the moment. The hon. Gentleman will have plenty of time to make his point.
  Clause 2 concerns expenditure. I take this opportunity to set out again the loan figures, together with our forecasts of expenditure and related matters. Our intention is that the maximum full-year loan facilities for 1990–91 will be: £460 for students attending institutions in London; £420 for students at institutions outside London; and £330 for students living at home, with some adjustment to the corresponding final-year figures.
  Annex E of the White Paper shows the financial effects of the loans scheme, net of access funds and administrative costs. The table in that annex is based on a series of deliberately cautious assumptions, including a constant 10 per cent. default rate. If default were 2 per cent.—a more plausible figure—it would bring forward to 2000 the year in which savings outweigh outgoings.
  Mr. Wigley: On a point of order, Mr. Deputy Speaker. Earlier in the debate the Secretary of State said that he would respond to the point about the needs of disabled students raised by the hon. Member for Moray (Mrs. Ewing). The matter has been raised with the Minister in briefings on behalf of disabled people, and clearly he has not responded. Is there any redress for the House when the Secretary of State refuses to meet commitments that he gave earlier in the year?
  Mr. Deputy Speaker (Mr. Harold Walker): I have no responsibility for what appears in a Minister's speech. We are at the start of the debate and doubtless during the debate there will be opportunities to raise matters relevant to the Bill.
  Mr. MacGregor: In the interests of many hon. Members who wish to speak, I did not want to give way again. I have already referred to disabled students. We take that matter seriously. If points are made during the debate, my hon. Friend the Under-Secretary of State will certainly respond to them when summing up.
  Administration costs will not be precisely known until contracts have been concluded, but will be in the range of £10 million to £20 million in the first three years.
  The hon. Member for Blackburn attempted to make play of the fact that in the early stages the loans scheme would cost the taxpayer more. It is inherent in any loan system that outgoings exceed repayments for an initial period. That indicates graphically that we are increasing
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  resources for students. The hon. Gentleman's criticism brings us to the heart of the matter, which is that we have recognised that some change in student support methods is required for the period of expansion ahead to avoid an increasingly heavy burden on taxpayers—most with lower incomes than graduates—and on parents. We have been clear and realistic about that.
  What is the Labour party's alternative? Although the hon. Member for Blackburn complains about the higher cost, I assume that he would not wish to offer the student less in total than we are. However, he makes it clear that his party's alternative is a continued exclusive reliance on grant. On the assumption of the already published figures and the basis that the grant would not be less generous than the loans policy, but that both would replace social security benefits, that system would cost £145 million in 1990—91, assuming a 100 per cent. take-up of grant, which we would expect.
  In total, the costs of the loans scheme and access funds would be £135 million. That is not a big difference in year one, but is slightly less expensive. However, if the Labour party proposes to continue social security benefits, the extra cost could rise to £65 million in year one. We should like to be clear about the Labour party's position on that.
  During the decade, the amount will accumulate. The extra costs of paying grants instead of loans would continue year in, year out, whereas the loans proposal promises savings for both parents and taxpayers. The loan repayments will then start to come in on an accelerating scale.
  Mr. Straw: No.
  Mr. MacGregor: That is bogus. There are considerable changes in the 1990s, which I am spelling out to the hon. Member for Blackburn.
  Mr. Straw rose—
  Mr. MacGregor: I shall not give way again.
  This shows two things: first, the point at which loan outgoings are overtaken by repayments; secondly, the point at which the totality of repayments is greater than the totality of outgoings—[Interruption.] That is in balance. Obviously, the hon. Member for Blackburn does not understand, and I do not want to spend much more time explaining it to him. The point he misses is that he is being critical of the cost of the loans scheme in the 1990s, but his alternative throughout the 1990s would be more expensive. I am about to tell him by how much.
  I have already said that, in the first year, it could amount to £65 million. During the decade it will accumulate because the extra costs of paying grants instead of loans will continue year in, year out, whereas the loans proposal promises savings for both parents and taxpayers. In the second half of the 1990s, the loan repayments will start to come in on an accelerating scale. Therefore, on White Paper assumptions only, the difference between the schemes would be £165 million in a single year by the year 2000 or £225 million, depending on the Labour party's position on social security benefits. That means that, before too long, we shall see a widening gap in the burden on taxpayers and parents produced by our proposals and that produced by the Labour party's proposals as I understand them.
  However, even more significant, the White Paper assumptions on increased student numbers are already out

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  of date. This year's Autumn Statement expenditure plans are based on considerably higher numbers, so the extra cost of the Labour party's alternative would be a good deal higher.
  What is the Labour party's alternative? Is it the proposal put forward in early-day motion 117 by some of the colleagues of the hon. Member for Blackburn,
  "aiming towards a living grant of two-thirds average wage levels"?
  I hope that the hon. Gentleman will repudiate that now. He has been bobbing up and down, so perhaps he will bob up and repudiate that now.
  Mr. Straw: I am glad that the Secretary of State has given me a chance to intervene in his speech. He refused to do so earlier when I gave the figures, not that we had produced, but that he had produced in answer to questions from the Opposition, to show that there would be no cumulative savings on loans until 2013.
  The Labour party's position is made absolutely clear in the policy review. We shall continue the grant system and increase its real value as resources allow—[Interruption.] There is no dubiety about that.
  How does the Secretary of State's assertion about the cost of the grant system being greater than the cost of the loan scheme fit with annexe E, which shows that in every year between now and 2002 the loans system will be a greater burden on the Exchequer than grants, even if they are uprated in line with prices? The Secretary of State made an important commitment at the start of this debate, when he said that he categorically committed the Government to paying the full cost of tuition fees for the increased number of students to which he is now pledged. That must mean a dramatic increase between now and the end of the century in public expenditure on higher education. Is he committed to that, and to what amount?
  Mr. MacGregor: I have explained the point about cumulative savings. The hon. Gentleman is simply not prepared to accept that the Labour party's alternative during the 1990s will cost taxpayers and parents—or possibly just taxpayers—a good deal more for student maintenance alone. I noted—I assume that this is the point of the hon. Gentleman's answer—that he has already repudiated the proposal put forward by some of his colleagues in early-day motion 117. I hope that he will make his position clear. Alternatively if it is to finance the higher student numbers through a non means-tested grant at the same levels as the totals we are making available today or at higher levels, that will clearly be more expensive.
  In any event, I hope that everyone will have noted the weasel words "as resources allow". No wonder those weasel words came into it, for the right hon. and learned Member for Monklands, East (Mr. Smith) has already spiked the hon. Gentleman's guns by saying:
  "We are all agreed that we cannot spend what has not been earned."
  We recall the experience of the last Labour Government when they failed to earn and thereby totally failed to meet their expenditure commitments. No wonder the hon. Gentleman uttered the weasel words "as resources allow".
  Our position is more honest and is more likely fairly to finance higher education expansion. That is why the hon. Member for Blackburn has been careful not to commit
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  himself to anything today—[Interruption.] He is behaving as though he is still a superannuated students leader—engaging in a massive con trick, giving the impression of spurious promises without substance, attacking us in the hope that nobody will notice his weasel words.
  By contrast, we are making realistic proposals to underpin our objective of substantial expansion in higher education. By making available a loan facility to top up maintenance grants, the Government are providing a valuable extension of the resources of support available to students. The cost of supporting students' maintenance will be shared more equitably between taxpayers, students' families and the students themselves. Students, with a loan on generous terms, will have a greater personal stake in their own higher education.
  I commend the Bill to the House.
  5.11 pm
  Mr. Jack Straw: The Bill contains one operative clause. Three and a half years of public debate and almost universal criticism of the proposed loans scheme are compressed into just three lines. Forty-eight pages of the loans White Paper and 68 papers of two successive consultants' reports are reduced to 27 words. Those 27 words give the Secretary of State power by ministerial diktat to establish whatever loans scheme he chooses and to deny to Parliament and the people who elected us any serious opportunity properly to scrutinise the detailed effect and operation of the scheme, for there is no detail in the Bill.
  We have before us three lines and 27 words by which this wretched Government tell the rest of the world that they have no interest in reasoned argument and the views of others. The Bill is a grave abuse of parliamentary democracy. It is an enabling Bill. It confirms the march of an "elective dictatorship," as the former Lord Chancellor, Lord Hailsham, described the Government earlier this year.
  The Bill gives more power to the Executive, with less parliamentary check on their discretion, than legislation such as emergency powers and defence of the realm measures designed for wartime emergencies, and it is so arbitrary in scope that it would today be thrown out by the Parliaments of East Germany, Poland, the Soviet Union and Hungary—[Interruption.] Indeed, the drafting might even bring a blush to the face of a member of the Russian politburo. Yet the Bill produces no shame in the Secretary of State. When it comes to contempt for parliamentary democracy and abuse of power, he and the Government know no shame.
  It is fitting that the Second Reading of the Bill should take place on the day of the contested election for the Conservative leadership, for nothing symbolises better than this measure the arrogance and incompetence of the Government and the fact that, with honourable exceptions, the parliamentary Conservative party is packed full of cowards, sycophants and wimps who know what is right but vote for what is wrong. The Bill will receive its Second Reading by the same large majority which has driven through ill-considered, half-baked legislation such as water privatisation, social security legislation and the poll tax. Recently, in a newspaper, the hon. Member for Leeds, North-West (Dr. Hampson) issued this warning to his colleagues:
  "We are potentially into another poll tax scenario in which MPs"—

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  Conservative Members—
  "welcome the principle of loans without waking up until it is too late for its practical repercussions."
  The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson): In reliving his past as president of the National Union of Students, perhaps the hon. Gentleman will explain why, if this sort of enabling approach is so inappropriate, the Labour Government, when they had the opportunity for many years, did not repeal section 1 of the Education Act 1962, which provides for making grants in exactly the same way as our proposal for making loans.
  Mr. Straw: There is a profound difference between the 1962 Act and this legislation. First, section 1 of that Act imposes a clear and justiciable duty on local authorities to pay grants. This measure imposes no duty on the Secretary of State to do anything; it gives him the widest possible arbitrary discretion to establish a loans scheme without any possibility of its detail being properly scrutinised by this House. Secondly, the 1962 Act was far longer. Thirdly, it was an all-party measure. Fourthly, it was based on more than 20 years' experience of local authorities and the Department running a grants scheme, whereas this measure is based on no such experience.
  As I was saying, the hon. Member for Leeds, North-West warned his colleagues that they were
  "potentially into another poll tax scenario".
  But this Bill is worse than the poll tax measure, for even that dreadful Bill contained much more detail and constrained the powers of Government to a greater extent. On the BBC Radio 4 "Today" programme on 27 November, the Secretary of State was asked why no detail was contained in the Bill. He declared that that was "a normal procedure." The interviewer then asked:
  "…is it so short because you don't actually know what you want to do?"
  When the Secretary of State replied, "Not at all," he was asked:
  "So what do you want to do?"
  The right hon. Gentleman answered:
  "We will come forward with details of the scheme and we have illustrated one poss … one approach in the White Paper … we can do so partly during the debates but we can do so properly when the regulations come forward."
  Can we take it from that that the scheme in the White Paper is just a possibility, as the right hon. Gentleman suggested on radio? Is it just an illustration and not necessarily the scheme that will be brought into effect? If so, what scheme will be brought into effect?
  Mr. MacGregor: It will be possible for any Secretary of State to come forward with proposals to change the level of loan and to change the eligibility in the light of reviews to deal with the sort of situation that I illustrated in relation to grants when answering my hon. Friend the Member for Canterbury (Mr. Brazier). I should have thought that the House would regard that as a sensible step to take.
  Mr. Straw: Far from being sensible, the right hon. Gentleman is saying that it will be possible for any Secretary of State, by negative resolution or by regulations, to impose a completely different loans scheme from that suggested in the loans White Paper and to do so without any proper scrutiny by Parliament.
  In that BBC interview, the Secretary of State suggested that Parliament could "debate and approve" the detail of
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  the regulations made under the Bill. Who was the right hon. Gentleman trying to deceive? Later tonight the House will have one and a half hours in which to debate a crucial order on teachers' pay and negotiating rights. That instrument will be unamendable, but at least under the terms of the teachers' pay legislation the Minister must, by law, lay the order before Parliament before it can come into effect. In this Bill, the power to make regulations is subject only to the negative procedure, by which Parliament has no automatic right to debate or approve the regulations before they come into effect and no right to amend them.
  Mr. MacGregor: There is considerable detail in the Bill about the kind of scheme that we propose to have; schedules 1 and 2 contain considerable detail. As for giving details when one wants flexibility year by year, we are following the process applied to grants. Is the hon. Gentleman saying that we approach the grants system year by year in the wrong way and that that is a great abuse?
  Mr. Straw: I have already dealt with the fact that there is no parallel between the loans legislation and the grants legislation. What is more, everyone knew how the grant system was to be administered. That was the purpose of imposing a duty on local authorities. Under this scheme there is no detail about the administration of the loans, and no detail will ever by written into law about the administrative arrangements with the banks.
  The scale of the Government's arrogance and contempt for the views of others can only be measured against the ever-growing mountain of opposition to this loan scheme. When the Government started on this road they promised
  "wide consultation before any scheme was implemented"
  —the exact words of the Government's response to the Education Select Committee as long ago as 1979–80. The former Secretary of State, the right hon. Member for Mole Valley (Mr. Baker), said much the same when he announced the student loans review in June 1986. Is it any wonder that people become so cynical about this Government when what has characterised this consultation has been the Government ignoring everyone they have consulted? No institution of any standing and no individual of any standing now supports the measure. Even the Government's best friends have deserted them —[Interruption.] This proposal was not in the manifesto. The manifesto contained a promise to bring in legislation to supplement the student grant system—[HON. MEMBERS: "That is what we are doing."] By their comments, Conservative Members show their ignorance of the effect of the scheme, for this loan scheme does not supplement the grant scheme—it replaces it. That is clear from the White Paper and the Bill.
  Mr. John Marshall: Will the hon. Gentleman accept that university grants will continue under the White Paper proposals?
  Mr. Straw: The Secretary of State has admitted—under duress—that the idea of the loans White Paper is that the real value of the student grant should be cut by half. That is not a supplement—it is the replacement of half the grant.
  Students and parents oppose this scheme. So, too, do vice-chancellors, who say in a scathing note that the form of the Bill means that there will not be a proper opportunity for Parliament to debate the scheme. An overwhelming majority of Conservative Members who have ever bothered to think about the scheme also oppose

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  it. In the debate on 20 October, opposition to the scheme came not only from the predictable Conservative critics of the Government's higher education policies, such as the hon. Members for Cambridge (Mr. Rhodes James) and for Leeds, North-West (Dr. Hampson), but from the hon. Member for Sevenoaks (Mr. Wolfson), who voiced unease about the simultaneous loss of benefits to students and the impact on lower-paid careers. It also came from the hon. Member for Hendon, North (Mr. Gorst), who questioned the practicality of the scheme, from the hon. and learned Member for Feltham and Heston (Mr. Ground), and from the hon. Member for Chichester (Mr. Nelson), who correctly described the Government's arguments about access as bogus—and said:
  "far from helping poorer people to gain access to higher education, the scheme will amount to an indiscriminate subsidy to the middle classes who need it least."—[Official Report, 20 October 1989; Vol. 158, c. 422.]
  Dr. Keith Hampson: As the hon. Gentleman has mentioned me so often, I should remind him that his right hon. Friend the Leader of the Opposition shared many platforms with me when he was Labour education spokesman. He used to attack the middle-class, highly subsidised, elitist higher education system in this country and was prepared to consider a loan scheme so that people from better backgrounds would be able to contribute to prevent poorer families from paying through taxation for the benefit of better-off families.
  Mr. Straw: That is complete fantasy and fabrication.
  Mr. Caborn: I represent a poor constituency in which about 18 per cent. of the young people are unemployed. The removal of social security benefits, rent rebates and income support will have a devastating effect. Contrary to what the Minister has said, it has been calculated—not by the student unions, but by professionals in the DSS—that students aged under 25 currently in receipt of rent rebates and income support will be £1,240 per year worse off. I remind the Minister that since rents were deregulated they have risen by 25 per cent. and students now pay on average £30 per week. Students aged over 25 will be some £1,400 or more worse off. This will have a profound effect on people from inner cities who want access to higher education but who will be denied it by what I have described, quite apart from the loan scheme.
  Mr. Straw: My hon. Friend is exactly right. If we take account of the fact that the real value of the grant has been cut by 23 per cent. in the past 10 years and that it will be cut again under the Government's policies, and that housing benefit will be cut, there is no question but that many students from lower-income families will be plunged into severe hardship.
  Outside the House, the opposition of many Conservatives to this scheme is well known—for example, that of the Tory Reform Group, which counts among its numbers the Leader of the House, the Secretary of State for Wales, the Secretary of State for Health, the Foreign Secretary, and perhaps even the Secretary of State for Education and Science who, in a previous incarnation, was political secretary to the former Conservative Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr. Heath).
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  Today, however, there is opposition to the Bill from inside the very temple of Thatcherism—from the high priests themselves, such as Professor Alan Peacock, who is now executive director of the David Hume Institute. He wrote to The Times after the last debate that it was almost generous to describe the scheme as a dog's breakfast. Opposition has also come from Stuart Sexton of the education section of the Institute of Economic Affairs—a former adviser to the previous Secretary of State, Lord Joseph. He demanded in The Daily Telegraph that the scheme be scrapped, saying that
  "if ever a subject got the Government in a tangle it is the student loan scheme".
  The result
  "is a bureaucratic nightmare and one which produces no immediate savings for the public purse"—
  Mr. Steve Norris rose—
  Mr. Straw: I shall give way for the last time.
  Mr. Norris: Does the hon. Gentleman agree that, although he has listed a great many articulate interest groups who have expressed a view on the Bill, one group who are singularly under-represented in this argument are elderly income taxpayers? What has he to say to them about their tax contributions financing middle-class families and their children to enjoy an even higher standard of living in the future?
  Mr. Straw: Parliamentary answers from the Under-Secretary of State and the debate on 20 October clearly established that the loan scheme between now and 2013, 24 years away, will cost more than the grant system that it replaces. If the hon. Member for Epping Forest (Mr. Norris) does not understand that, he should read annex E to the White Paper.
  Given the extent of the opposition, why are the Government pursuing this madcap scheme? The speech by the right hon. Member for Blaby (Mr. Lawson) on his resignation as Chancellor was one of the strongest and most sustained pieces of controlled invective that I have ever heard delivered by a Member of this House against his own side, but the accolade for the very strongest goes to the noble Lord Beloff, a Conservative with a distinguished record of fighting the implementation of Conservative higher education policy, including the establishment of the private university of Buckingham. Speaking in the other place in the debate on the Loyal Address on 23 November he said:
  "I am convinced that the loan scheme which has been evolved … is so absurdly inefficient and damaging to the students, their universities and colleges and the community at large that one is tempted to wonder how any government department could have come up with so outrageous a set of propositions.
  I remember that when it was first talked about in this House … I warned the Government that if they were trying to act through a consortium of banks, they would find the banks very reluctant to co-operate. That has been borne out by experience. After all, a fishmonger sells fish; that is his business. A banker lends money; that is his business. One does not have to bribe a fishmonger to sell fish, but apparently the Government have to bribe the banks to lend money. Could we get further into absurdity?
  One may ask: who is the author of so absurd a scheme? Some people say that it was thought up by a young man strong on ideology but weak on arithmetic and totally removed from the experience of ordinary students and ordinary families. Some people say, 'No, it was the work of the Under-Secretary of State for Education, Mr. Robert

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  Jackson'. Some people say that those two explanations are not contradictory."—[Official Report, House of Lords, 23 November 1989; Vol. 513, c. 186–7.]
  Mr. Jackson: It is flattering to have a former professor of government at Oxford attribute so much interest to a mere Under-Secretary of State. The important point to note is that the banks have signed a contract to administer the scheme.
  Mr. Straw: The important point to note about what the banks have signed is that, whatever they have signed, it is not a contract. Paragraph 10 of the "Memorandum of Understanding" says:
  "it does not create legal relations."
  I offer the Parliamentary Under-Secretary of State some free legal advice. One of the principal elements of a contract is that it creates legal relations.
  The first charge against the Government is of arrogance and the second is of incompetence. A senior Conservative —not from the Left of his party—said to me in the Lobby that the loan scheme was so fundamentally flawed that he could only assume that it was put together by someone who wanted to discredit the idea of loans for all time. The scheme fails on every test that the Government themselves have set. The Government claim that the scheme will simultaneously reduce the burden of student support on the taxpayer, increase the resources available to students and improve access to higher education by freeing a flow of taxpayers' money for the future expansion of higher education. Each of those claims is utterly bogus, as the Secretary of State must know.
  Mr. Nigel Spearing: Is my hon. Friend aware that on 20 October I presented a petition from 600 medical students at the London hospital and Newham General hospital pointing out the potential damage to medical education in London, where costs will be high and where the students will not have the opportunity of working in their last three holidays, as the Secretary of State did? The scheme will especially affect women doctors and medical education in our capital city. The petition also asks for an inquiry into the damage that the scheme will cause. Is my hon. Friend aware that I have now had a card from the Table Office telling me that the Department of Education and Science is not carrying out its usual courtesy of observation on that petiton? Is that not wholly untypical of the Secretary of State, but wholly typical of the present uncaring and ignorant Administration?
  Mr. Straw: I am not surprised that the Department of Education and Science is not responding to the petition because it has no answer to the fact that the loan scheme will cause immense damage to medical students and their careers. It is a further illustration of the contempt in which the Government hold this House and those who protest against the loan scheme.
  Mr. Nicholas Bennett: Will the hon. Gentleman give way?
  Mr. Straw: No, I have already given way to many hon. Members, including Conservative Members.
  Each claim that has been made by the Secretary of State is utterly bogus. The facts are that under the scheme the burden of student support on the taxpayer will increase. The income of students, especially those from the poorest
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  families, will be cut and access to higher education will be restricted. There will be and can be no freeing of any flow of funds for expansion.
  Mr. Nicholas Bennett: Will the hon. Gentleman give way?
  Mr. Straw: No, I have given way a great deal.
  As we have established in parliamentary answers, there will be an increased cost to the taxpayer between now and at least 2015, more than a quarter of a century away.
  Mr. James Pawsey: Will the hon. Gentleman give way?
  Mr. Straw: I will give way for the last time.
  Mr. Pawsey: Is the hon. Gentleman aware of a parliamentary answer to me on 1 December? It says:
  "the estimated net cost of the scheme is some £13 million in 2000; in 2005 there is estimated to be a net saving of some £37 million rising to some £49 million in the year 2010"—[Official Report, 1 December 1989; Vol. 162, c. 440.]
  Mr. Straw: I am always aware of the questions that the hon. Gentleman tables because they always alert the Opposition to the fact that they are a plant.
  Mr. Pawsey: It was not a plant.
  Mr. Straw: The hon. Gentleman says that it was not a plant on this occasion. If he had bothered to read out the rest of the answer, we should have heard that the Parliamentary Under-Secretary referred the House to the answers that he had given to my hon. Friend the Member for Oxford, East (Mr. Smith). Those answers clearly established, with detailed tables, that cumulative savings will not arise until 2013. Well over £1·5 billion will he wasted in that period.
  An early sign of that waste was given in the announcement by the Secretary of State that £492 million was to be spent on loans over the next three years. While the burden on the taxpayer will increase, most students will not benefit. The only students to benefit will be those who least need the help. Forty per cent. of all students are on a full grant. One quarter of those receive a full grant because they are older and independent of their parents and three quarters because their parents' income is so low that even this Government do not expect the parents to contribute to their childrens' upkeep at university or college. That 40 per cent. will be hit immediately by the loan scheme. Their cost of living increase is cancelled and their housing benefit entitlement is cancelled altogether. All that they receive instead is a loan which, in cash terms, cannot even meet what they have lost and which they will then have to repay. What is true without question for that 40 per cent. of students is almost certainly true of a further 40 per cent. of students who receive some grant and some parental contribution.
  The Government have made much in their social security policy of the case for targeting of benefits, which has been their excuse for abandoning their pledged uprating of universal benefits such as child benefit. For student loans, they have turned the principle of targeting on its head. The rich student from the rich family is targeted for help from the state while the student from a middle or lower-income family will have that help taken away. Under the scheme, there will be no means test for the loan. The rich student can take out a loan at a subsidised rate of interest, invest it in a bank or a building

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  society and at the end of the loan period clear £250 or £300 in interest, while still being able to repay the principal. What kind of public purpose is served by such beneficence to the already rich while students from poor and modest backgrounds lose out?
  Mr. Nicholas Bennett: Will the hon. Gentleman give way?
  Mr. Straw: It is that discrimination against those from low-income and modest backgrounds which gives the lie —for lie it is—to the preposterous claim that loans will improve access, especially for those from working-class and ethnic minority homes. Loans will increase the price of a higher education, and a higher price will mean a reduction in the demand which otherwise would exist.
  From 1962 until the early 1980s, the grant system led to a threefold expansion in the proportion of children from working-class homes who benefited from higher education. Loans will most surely cut down the opportunity that so many of us from such homes have enjoyed in the past.
  Mr. Nicholas Bennett: Will the hon. Gentleman give way?
  Mr. Straw: That fact emerged with crystal clarity from a survey published yesterday by the National Union of Students. Particular groups will be hit by the scheme, such as all those at Scottish universities, medical students and those taking nursing degrees. Entry into key but lower-paid professions will be hit. Teaching is an example.
  A recent study by the Institute of Manpower Studies makes it clear that the proportion of graduates entering teaching has already slumped from 8 per cent. in 1980 to 4 per cent. in 1988. More graduates now train for the law than for teaching. The proportion entering teaching will slump still further if the loan scheme goes through because the income level below which a graduate can defer his loan is set so low that it will catch new teachers. Those with careers with low initial earnings but with high pay prospects will be able to defer loan repayments, but those who go into careers in which the starting salary may be broadly acceptable but which have poor career prospects will not. That will lead to an absurd situation in which young barristers will be able to escape repayment, but young teachers will not. [HON. MEMBERS: "Quite right."] Conservative Members say that that is quite right. It is no wonder that we now face the most terrifying shortage of teachers that we have seen for decades. The Government are not only keeping down the pay of teachers and causing their morale to collapse, but they will impose loan repayments on young teachers when they seek to eke out a meagre living from their salaries.
  Mr. Nicholas Bennett: Will the hon. Gentleman give way?
  Mr. Straw: I have already said that I shall not give way.
  In the debate on 20 October, as today, the Secretary of State sought to link loans with the Government's plans to expand higher education. The House may recall that it was once Government policy—or at least the policy of the former Secretary of State—to double the numbers in higher education over a 25-year period. On 20 October when I asked the Secretary of State how that was to be paid for, he said that I should wait to hear the answer of
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  his hon. Friend the Parliamentary Under-Secretary of State. However, when I asked his hon. Friend in the debate, he said that he had "nothing to add" to the answer given by the Secretary of State. One month later we obtained the answer. The Secretary of State told The Guardian in an interview on 24 November that the commitment to double numbers has been dropped. The article said:
  "he denied that Mr. Baker's commitment had ever been agreed Government policy and insisted that no Government could ever plan beyond three years in financial terms".
  I have read the Secretary of State's rebuttal, which appeared in The Guardian on 27 November. He said that the report was totally misleading. He never once said that it was wrong or that quotations attributed to him were wrong. He said:
  "I reaffirm the points set out by Kenneth Baker in his speech earlier this year … when he foresaw something like a doubling of numbers in higher education over the next 25 years".
  The Secretary of State did not say then or today—if one listens with great care to his words as we did—that he is committed in the same way as the previous Secretary of State to a doubling of numbers. That was not the previous Secretary of State's expectations or foresight—it was his policy. So far the Secretary of State—despite his earlier words—has ducked that one.
  Mr. MacGregor: That is not true.
  Mr. Straw: If that is not true, I will be happy to give way to the Secretary of State. Before I do, perhaps the Secretary of State will answer the question that he refused to answer on 20 October or today. The Secretary of State gave an important categorical commitment that the total tuition costs in higher education of an expansion—whether a doubling or less—would be met from the public purse.
  We all know that the costs of tuition far outweigh the cost to the public purse of maintenance. Therefore, the Secretary of State's statement means that, under Conservative policy, the burden of public expenditure on higher education expansion will increase significantly. That is in complete variance with his other statements, in which he says that the share of public spending borne by higher education cannot increase. If I am wrong, I should be delighted if the Secretary of State would intervene and tell me where I am wrong.
  Mr. MacGregor: I have made it clear in previous speeches that there cannot be a huge increase in the proportion of GNP spent on higher education in any country. That is accepted throughout the Western world. The importance that we attach to higher education expansion is shown by the priority that we gave to it in the Autumn Statement and the public expenditure plans—it is in the public expenditure plans that the reality of expenditure is shown—and by the extra £750 million that we intend to provide over the next three years.
  Mr. Straw: The House will note that the Secretary of State did not use that opportunity to deny the comments attributed to him in The Guardian or to put on record a commitment to a doubling of the numbers in higher education over a 25-year period. The Secretary of State also failed to square his personal commitment given to the House that the public purse should meet the cost of tuition

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  completely with his weasel words that there could be no significant increase in the share of public spending borne by higher education.
  The Secretary of State was once Chief Secretary to the Treasury, where he used to make high-flown speeches about hard work, prudent planning, careful management and how to achieve value for money. It is a great pity that he has not applied some of those principles to the Bill. The hundreds of millions of pounds to be spent on loans does not go into the pockets of students in need but into a vast black hole of defaults, deferrals and administrative costs. It is time that Conservative Members woke up to the fact that there are not only the administrative costs of the loan scheme but the double administrative cost of running a grant scheme, albeit at a diminished rate, alongside the cost of the loan scheme. By 1995, more students will be defaulting or deferring their loans than will be paying them back. An army of debt collectors will be created. Earlier the Parliamentary Under-Secretary of State said that loans will be made available to European nationals, so the army of debt collectors will be chasing around Europe seeking out graduates who have defaulted on their loans. The House has still not been told the full cost of the scheme because the Secretary of State does not know those costs and cannot say what price the banks will finally extract from him.
  If the Government's competence has been sorely tested in the conception of the scheme, it has been completely exposed in its execution. For more than a century the public service has had extensive experience in the administration schemes of benefits, grants and loans to members of the public. All that experience has been cast aside by the Government because of the Prime Minister's pathological obsession with the possibility that the public service might be better able to administer anything than the private sector. Instead of the public service administering the scheme, the banks have been asked to run it, and what a pantomime the negotiations with the banks have become.
  Originally the negotiations were between the Government and the Committee of London and Scottish Clearing Banks. Then three of the committee's members decided to boycott the negotiations. Those three were Lloyds, the Bank of Scotland and the Clydesdale bank. The Government then had to establish their own front organisation for those banks willing—at that stage—to participate in the scheme. Even the remaining banks have shown themselves to be profoundly unhappy about the scheme. In the original Price Waterhouse report the banks said that they wanted an additional payment over and above that needed to cover costs and profit for the remaining risk that they were taking on. The banks said that the remaining risk was
  "not a financial risk but a risk that their reputation could be impaired by their involvement".
  We are told that the participating banks agreed to the so-called "memorandum of understanding" published on 16 November only after panic and arm-twisting by the Secretary of State. On close examination of the document, the banks have agreed nothing. All costs are to be met by the taxpayer and not by the banks. The banks that have signed the document are not bound to participate in the scheme, but can withdraw at any moment. Participants are protected against all liability—and, to ensure double protection, clause 10 of the agreement announces that
  "it does not create legal relations".
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  Since the Parliamentary Under-Secretary of State described a contract that has been signed with the Government, perhaps now or when he replies he will give a categorical undertaking that no private or secret sweeteners have been offered to the banks for them to participate—hon. Members may laugh, but that is what happened over Rover—and that all material documents have been laid before the House. The Parliamentary Under-Secretary of State is also laughing. He seems to dismiss that.
  When I wrote to the chairmen of the participating banks to inform them that the Labour party would end the scheme, the chairman of the National Westminster bank, Lord Alexander of Weedon, wrote to me to say that his bank was in
  "no sense promoting or supporting"
  the introduction of the student loans legislation.
  That statement is welcome but if the National Westminster bank is not promoting or supporting the legislation, it is inexplicable and inconsistent that it should have agreed to throw a lifeline to the Government to bail out the administration of the scheme.
  The National Westminster bank has 42 per cent. of the student market. Students, parents and colleges are not fools. They detest this scheme. They have economic power and are already using that power to shift their accounts to other non-participating banks. I asked the chairman of the National Westminster bank and the other banks whether they believed that the best interests of their shareholders were served by participating in the scheme when they must see that they will suffer grave and tangible loss of market share and serious if incalculable damage to their reputation. Why should any bank these days want to be the lickspittle of a Government supported by barely one third of the electorate?
  The Secretary of State again today repeatedly claimed that the British system of student support is one of the most generous in the Western world. That is untrue in many respects. What is true is that, although the British system may not be the most generous, it is the most efficient. Students spend less time obtaining a degree than in other countries and far fewer drop out. The cost of producing each graduate compares favourably with other countries. In that efficiency, the grants system has played a significant part.
  Loans, by contrast, are unfair and inefficient. In the United States, for every three students who have a loan, one drops out. The default bill is now $1–6 billion and countries which in the past the Secretary of State prayed in aid, such as West Germany and Sweden, are returning to a grant system. The shift to loans began in 1982 in West Germany and has led to lengthening of courses, a high wastage rate and a collapse in the number of working-class students going to college. The same has happened in Sweden. Both countries have announced the reintroduction of a partial grant system.
  The Bill is a fraud. It is a fraud on students, promising them more but giving them less. It is a fraud on parents, promising to reduce their children's dependency but actually making it greater. It is a fraud on the taxpayer, promising to cut the cost of student support but increasing it for each of the next 25 years. Through this Bill, Ministers are perpetrating a fraud on Parliament, pretending that the House can scrutinise a measure without details or reasons being produced. The measure is meretricious and disreputable. It will put a mortgage on knowledge and a

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  debt charge on skills. It shows a contempt for Parliament and a disregard for the needs of higher education and of the economy. It is unworthy even of the present Secretary of State and we shall oppose it in the Lobby today.
  5.50 pm
  Mr. George Walden: Over the years I have followed the evolution of the Opposition's attitude to student loans. It moved from a first phase of intellectual dishonesty to a second phase of political opportunism. Tonight it has entered a third phase, which is procedural disingenuousness.
  No discussion of student loans should ignore the beginning of the era of debate on loans which was Lord Robbins' report in 1963. He produced a highly prescient report on the whole question of student expansion. He is treated by the Opposition and the academic world as a semi-divine entity because the report forshadowed the expansion of higher education. The Opposition and, I regret to add, the academic world failed to recall that, although Lord Robbins rejected loans, he said that as higher education continued to expand and more women entered—as they have done, particularly under this Government—the time would come when there would have to be an experiment with student loans. He gave three reasons, which I should have thought would appeal to the Opposition: first, social equity, secondly, disruptive justice, and, thirdly, the need to encourage a sense of financial discipline and self-reliance among students. It seems to me that his prognostication has come true.
  The hon. Member for Blackburn (Mr. Straw) implied in his criticism of the Government's procedures that they are rushing into student loans, but it is more than a quarter of a century since the Robbins report was published. It seems perfectly reasonable to move ahead with this highly tentative and limited system of loans, but I shall come back to that point later.
  I admit that the Opposition have moved on from the abject intellectual dishonesty of not recognising, even in their own terms of social equity, the importance of student loans in Lord Robbins' report. They have done so at a time when we are once again considering the mass expansion of higher education. They have moved on from their initial stance because they have lost, absolutely and decisively, the public debate which has been going on for several years.
  Anyone who listened carefully to the hon. Member for Blackburn would have discovered that a critique of student loans in principle was almost entirely lacking from his speech. He gave no undertaking to scrap any system put in place by this Government.
  Mr. Straw: I have given that undertaking. I did so on 20 October, and I have done so outside the House.
  Mr. Walden: I am glad that the hon. Gentleman has made that statement. It brings me to the second phase of the Opposition's attitude to student loans, political opportunism. The hon. Member for Blackburn says simultaneously that he will finance a mass expansion of higher education while not charging anyone fees and that he will not only maintain but increase the grants system.
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  He says that all those net costs will fall on the Treasury at precisely the time when there will be a huge expansion in the elderly population.
  We are back to the old Labour party. It is not a new party but the old party of political opportunism which dishes out unsustainable promises to both old and young with complete contempt for public opinion and intelligence. Everyone knows that what the hon. Gentleman promises is unsustainable. It has not been done and cannot be done in any other country, even in countries richer than Britain. I have in mind the United States of America, West Germany and France, each of which has a gross national product greater than ours. It is dishonest for the hon. Gentleman to attempt to assure the House and public opinion that a future Labour Government will give preferential treatment to our students when there will be a distortion in the population balance in a country with continuing economic problems. It is false, and it is political opportunism.
  Mr. Nicholas Bennett: In the event that a Labour Government were elected, a few students would have had loans in the intervening period. The hon. Member for Blackburn (Mr. Straw) did not tell us what would happen to those loans. Would a Labour Government repay the student or the bank, or encourage the student to renege on the loan?
  Mr. Walden: My hon. Friend makes a useful complement to my speech.
  To move on to a more fundamental point, in the past few years we have been in danger of misdirecting our attention to a matter that is essentially peripheral to the expansion of higher education. Even if the arrangements are implemented, students will pay for only between 6 and 7 per cent. of the true cost of their higher education. With an impending expansion of higher education, of course we should focus our attention on cost and who will pay, but above all we must consider quality. What is the point of putting more people through higher education if in 20 or 30 years the degrees awarded are not worth the paper on which they are written? Some countries have gone through that process. In considering how to prevent loss of quality we must ask ourselves how we can deploy the limited available cash in such a way that quality will not be compromised.
  The only future for this country, which is a middle-ranking power facing the resurgence of an economic colossus in Europe in the shape of a united Germany, lies in a highly and extensively educated population with expanded higher education of quality. While we discuss tonight the exact way in which the 6 to 7 per cent. of the cost will be apportioned, what will happen to the prospects for quality? We have seen what has happened with GCSEs. There has been a miraculous increase of 50 per cent. in A grade passes in two years. We all know that that represents dangerous educational inflation. The A-level examination councils are now working to dilute A-levels to increase the number of people who will have the necessary qualifications on paper to go into higher education.
  The danger is that, while we are fiddling around on the periphery with this piddling sum—that is exactly what it is—which is to be repaid by people who will have benefited

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  from higher education to earn relatively high salaries, we shall see a slow erosion in the quality of higher education which has been by far the best aspect of British education.
  I am in favour of the Government's proposal on student loans, not because it will bring in much money in the short term, but because, if it is administered carefully —I have no delusions about the intricacy and complications of that, having handled it a little myself—it will limit the outgoings at a time when we are trying to expand higher education.
  I believe that we should increase spending on education. If a Government have spare money to spend on education, they should invest it in ways which will guarantee the continuing quality of higher education. By that I mean that we should start with nursery schools. We should have 100 per cent. high quality nursery provision if we are to keep up with the future Japanese of Europe—the Germans. Teachers should receive higher pay in return for much higher performance. All that involves large sums of money. Although the hon. Member for Blackburn could say this without any intellectual difficulty, I cannot honestly bring myself to argue for greater public expenditure on nursery schools and greater expenditure in return for quality in secondary education and simultaneously suggest that I shall give students exactly what they want in higher education. That is a dishonest position, and I hope that the hon. Gentleman will reconsider it.
  If an American were in the Strangers' Gallery tonight listening to the Opposition and he knew the position of the National Union of Students in this, he would go away saying to himself, "What gives with the Brits? Are the privileged young who will not be unemployed but will do well and will start on a salary of over £10,000 a year so selfish that they do not want to repay a mere 6 or 7 per cent. of the cost of their education? What kind of young population does Britain have?"
  I do not believe that the Labour party or the NUS represents the true views of young people. If we explain to them the demography that we shall face, the fact that we shall have an aging population and that they will be far better off than the average, we shall appeal to their generosity. If we explain to them that we are asking them to pay only a mere 6 or 7 per cent. in return for which they will get a life chance 100 times greater than anyone else, they will understand the issue. It is a sad day when the Opposition pitch their appeal to the young of this country at such a low level.
  6.2 pm
  Mr. Gordon Oakes: I oppose this ill-conceived Bill on the grounds of principle, practicability and procedure. As the hon. Member for Southwark and Bermondsey (Mr. Hughes) said in his point of order, it is an abuse of the House to present an innovation in four clauses and two schedules and rely entirely on regulations.
  Before you came to the Chair, Mr. Deputy Speaker, Mr. Speaker advised us to make short speeches because many hon. Members on both sides wished to speak. For that reason, I shall not take any interventions. It is not meant as a discourtesy. My experience is that interventions can add up to 50 per cent. to the time of a speech, and once one starts giving way, one must continue, otherwise hon. Members think that they have been singled out in some way.
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  In our debate on 20 October, the Under-Secretary of State for Education and Science said that past Labour Governments had
  "taken a considerable interest in the idea of student loans." —[Official Report, 20 October 1989; Vol. 158, c. 438.]
  That is true. In 1976, I was appointed Minister of State at the Department of Education and Science with special responsibility for higher education. Hon. Members who were Members of Parliament at the time will remember that we were going through an extremely difficult time. All spheres of policy and all Departments were looking at money carefully. Student loans was one of the first questions to arrive on my desk. It had been around for years, but I was a new Minister in a new climate, so we had to consider the matter afresh.
  I was morally opposed to the idea of students having to pay for their education and maintenance, but I had to swallow that and examine the issue on its merits. Several difficulties arose. Whatever the scheme and no matter how one looked at it or tried to avoid it, poorer students would be hardest hit. That was the inevitable result. Then there was the problem of the Scottish universities which have four-year rather than three-year courses of study. It would create a considerable anomaly if we had a scheme in one country and not in the other. There was the problem of medical students and others whose degree courses inevitably take five or six years. The Swedish solution was considered. Social Democratic Sweden had a loans system, but even in 1976 the Swedish Parliament and Government were having doubts about the administration of that system.
  All those objections to the scheme have not gone away. They are precisely the objections that remain today. The scheme will hit the poorest students most, and there is the problem of longer courses at some universities and of longer courses according to the subject being studied.
  I saw an excellent article in The Economist of 15 July which concluded that the Swedish scheme
  "costs more than just giving the students the money."
  The Swedish and West German Governments are beginning to realise that, yet we are considering this discredited scheme.
  I said that I opposed the Bill for three reasons, and I shall deal first with my opposition in principle. The hon. Member for Buckingham (Mr. Walden) said that my hon. Friend the Member for Blackburn (Mr. Straw) had not dealt with the principle. I firmly believe that education is an investment in the future of the country. It is not expenditure. The United Kingdom has coal and some oil, which will eventually run out, but precious few other raw materials. The one asset that we have and on which we have survived for decades is the skill, ability and education of our people. That is the root of the matter. Any Government of any complexion who ignore that do so at their own peril.
  Fifteen per cent. of our population receive some form of higher education. That is half the number of our competitors France and Germany, and one quarter of the United States figure. We live in a highly competitive world and face the prospect of a united Germany, as the hon. Member for Buckingham pointed out, yet that is the percentage of the population receiving higher education.
  According to the Government in a written answer printed in Hansard on 29 June at column 539, 5 per cent. of socio-economic groups 3, 4 and 5—not the poorest. but the poorer sections of the community—are in receipt of

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  some form of higher education. They represent 60 per cent. of that age group. What a waste of talent. If education means anything and if Britain is to survive, let alone progress, we need to use the skills of all young people—girls and boys, black and white, from poor homes or rich homes. We cannot do that if we educate 5 per cent. of the 60 per cent. who make up a certain socio-economic group.
  Student loans will make the situation worse. As my hon. Friend the Member for Blackburn said, there is a sharp difference between a rich young student, who can put the money in a building society, pocket the interest and pay the loan back, and a poor student who will have the burden round his neck if he gets a degree or finishes a course and goes into employment.
  The scheme could not come at a worse time. The Government are perfectly well aware that, demographically, there will be a shortage of young people during the next few decades. If we add to the burdens of young people by reducing access to universities, that will have a disastrous effect. We should encourage more people to take training or degree courses, but the scheme will encourage fewer people to do so.
  On principle, it is a bad scheme. It is the duty of a nation to educate its young people, and pay for the maintenance of those young people while they receive education. That is my firm belief.
  I understand that 120 organisations responded to the Minister about the loans White Paper, and 95 per cent. of those organisations said that they were opposed to the scheme. One Tory county council wholeheartedly supported it. Who wants the scheme, apart from a few people in the Government? I am convinced that many Conservative Members do not want it.
  Who has opposed the scheme? The National Union of Students violently and bitterly opposes it. [Laughter.] Some hon. Gentlemen laugh. They treat the NUS as an outpost of the Albanian Communist party. That is the standing, in Conservative Members' eyes, of the body that represents organised students in Britain. If hon. Members think that the NUS does not speak in accordance with the wishes of its members, let them look at their postbags and the letters that they receive from students. They are not all prepared, mass-produced letters, although we all get that kind. They are carefully thought out, hand-written letters from the students concerned and some are from students whose parents are Conservative voters. Students are opposed to the scheme.
  The universities, polytechnics and institutions of learning are all opposed to the scheme, and I believe that the majority of parents are opposed to it. Parents are not taken in by being told that they may have to pay less money, because they want to secure the best education for their children. Many parents are prepared to pay for that education, if they can afford it. They know that the scheme will not save them money.
  What about the lending institutions? They want no part of the scheme. My hon. Friend the Member for Blackburn mentioned that Lloyds bank, the Bank of Scotland and the Clydesdale bank have pulled out. I have yet to hear of any bank or building society that enthusiastically espouses the scheme, and yet they are in the business of lending money.
  Dr. Hampson: The problem with that argument is that the Clydesdale bank and the Co-operative bank are
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  offering loans. The only question is about the type of scheme. When the Government are subsidising the interest rates—up to £5,000 for borrowing for vocational courses —the banks are happy to participate.
  Mr. Oakes: Yes, but they do not want to administer the crazy scheme on behalf of the Government, and the Government admit that. If one considers the financial effects of the Bill, which was ordered to be printed as late as 22 November, the explanatory and financial memorandum states:
  "The administration costs of the scheme will be in the order of £10 to £20 million and will be settled when contractual negotiations are concluded."
  No firm contractual negotiations have yet been concluded. Discussions are going on, but the banks do not want to know. The reason is that they are in the business of attracting customers, and so are the building societies. They do not want young people, particularly highly educated young people, to think of them as an ogre or as the institution to which they owe money before they have begun to earn. They do not want that image, and so they do not want to participate in the scheme.
  As my hon. Friend the Member for Blackburn said, the cost of the scheme will be horrendous. Considerable concessions were given to the banks. I understand that the banks have been offered a special rate of loan and that student loans will be exempt from the banks' balance sheets. Banks will be guaranteed higher than standard interest rates, and I believe that the Government are promising to indemnify the banks against a change of Government policy or a change of Government. Even with those inducements, the banks still do not want to know.
  What about the procedure of the Bill? It is absolutely disgraceful that we should approach the issue in a four-clause, two-schedule Bill. The Secretary of State said that the Bill was drawn up as a parallel to the Education Act 1962. That was a very different thing. A duty was then placed on the Secretary of State for local authorities to administer a scheme that was already in existence. That Act was not a leap in the dark, but the student loans scheme is.
  Clause 1 introduces the power to make orders and regulations subject to the negative resolution procedure. As my hon. Friend the Member for Blackburn said, such resolutions need not be debated by the House. Many prayers are tabled, but are not debated.
  Clause 2 goes to extraordinary lengths about Northern Ireland. I see that the hon. Member for Antrim, North (Rev. Ian Paisley) is in his place, and I have no doubt that he will want to speak on the subject. Under the Northern Ireland Act 1974, the House assumed responsibility for Northern Ireland, and one of the fears was that orders could be swept under the carpet and dealt with by the House without any debate. It was therefore provided that most orders made under the Act had to be debated under the affirmative resolution procedure, and had to come before the whole House. Why do the Government want to sweep that away for education grants in clause 2, so that a whole province can be hauled into this scheme without any debate in the House?
  Schedule 2 provides that the Secretary of State may make regulations about the amount of a loan, the rate of interest and repayment, and regulations that impose a duty on the governing bodies of higher education institutions to issue certificates of eligibility. All those matters can be decided by regulations made by the Secretary of State

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  without any debate in the House. No Government and no Secretary of State should have such powers, and I would say the same if my party was in government. No Secretary of State should have unbridled and unlimited powers, and the House should not grant them, because the Secretary of State should be responsible to the House.
  This Bill is a bad Bill for a number of reasons. It is bad for students and very bad for young people. It is bad for higher education generally. It is bad for the financial institutions, which do not really want to know it. It is bad for the democratic process in the House, as matters will not be debated but will be decided by Order in Council. Most of all, it is bad for Britain's prosperity, which is what we should all consider.
  The Minister said that the scheme will reduce student costs by 6 or 7 per cent. If, for that, we reduce intake and accessibility to higher education, we shall have done a bad thing tonight for our country's prosperity.
  6.20 pm
  Mr. Alistair Burt: I am grateful to be called so early in this interesting and important debate, the subject of which I have followed for the past three years while I have been Parliamentary Private Secretary to my right hon. Friend the Member for Mole Valley (Mr. Baker). During his stewardship of the Department of Education and Science, he was heavily involved with this issue. I enjoyed that time in the Department, working with civil servants and others there. It was an interesting time.
  We are dealing with a matter that is rather more difficult than it ought to be because we are dealing with a change of culture. As my hon. Friend the Member for Buckingham (Mr. Walden) said at the conclusion of his remarkable and excellent speech, there is a difference of attitude between Britain and the United States. If we had been born and bred in one of the many countries where a loans system exists, we would not be having this debate; we would deal with loans as a matter of course. Whenever we consider a change of culture, or a change from the norm, we have to go through this enormous rigmarole of believing that everything that went before is correct and that any change must be for the worse. In this case, that is simply not true.
  What irks Opposition Members so much is that the debate takes place against a background of higher education receiving enormous support from the Government. There are 200,000 more students in higher education than 10 years ago. There are more part-time and more mature students and there is extremely generous maintenance support. Labour cannot come to terms with that. As a result, Opposition Members persist in suggesting that, by proposing student loans, the Government have abdicated from their support for higher education. We know that that is not true. Higher education is a partnership between the Government, who will continue to fund tuition and the capital cost of buildings, and students. I do not believe that that partnership has been remotely equal—students should make a greater contribution.
  It is important to keep a sense of proportion. It is just such a sense of proportion which puts Opposition Members in difficulty when they say what they might do to ensure that the number of students in higher education increases—something which we are determined to do. The grants system was perfectly adequate for a small higher
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  education scheme, but it is inadequate for a larger and growing one. Robbins suggested that that would be the case.
  Nick Barr of the London School of Economics has calculated how much it might cost to abolish the parental contribution, to return the grant to a serious level and to increase by at least 50 per cent. the number of grants available to expand higher education. He suggests that lit would be about £2·25 billion. I do not believe that any Government could make that sort of commitment to higher education maintenance—we should remember that that has nothing to do with bricks and mortar and tuition. It is not realistic to make such a commitment to students. Labour has been dishonest, suggesting that it can make such a commitment.
  If we want to expand higher education but know that we cannot do it through the existing grants system because it is inadequate for the purpose, the loans system is a useful way in which to supplement student maintenance while the student is in higher education. I believe that the scheme is useful and appropriate on three grounds. First, there is a moral argument in favour of loans. Secondly, they are not a disincentive. Thirdly, I believe that they are flexible.
  I shall deal first with the moral argument. We have heard many statements from Opposition Members of how immoral it is to demand from the student some backing for his or her higher education. What could be more immoral than a student having to depend on the state in the form of social security benefits or on parents? What could be more moral than for the individual student to say, "I have some commitment to my future and I am prepared to make an investment in it"? That seems entirely moral and appropriate.
  Some of my lower-paid constituents are perfectly happy to make a commitment to higher education, although nobody from their families may have seen a university. They know that they and the rest of the country benefit generally from higher education, and they are happy to contribute to the education of doctors, teachers, scientists and others who receive higher education. If, however, they are asked for a greater commitment for the maintenance of students while at university, I think that they are entitled to ask, "What are they doing for themselves? Where is their commitment to their future?" We are presenting the perfect moral riposte. The student who no longer wants to have thrown at him the argument that he is a drain on the taxpayer—I do not believe that students are a drain on the taxpayer—could thus demonstrate his commitment to his future.
  I shall deal, secondly, with whether loans are a deterrent. It has been suggested that the Government should predict, as have surveys done by the National Union of Students, what a deterrent a loans system might be. That is not the right approach. We should consider the experience of other countries and ask whether their loans systems have deterred people from going into higher education. We all travel to Europe and the United States. Do we see there a desperate shortage of people going through higher education because of a loans system? Of course not. They are used to it. They are perfectly happy with it. Moreover, the system suits students from low-income families. A task force that surveyed student assistance under the Canadian student loans programme in 1980 concluded:
  "aid programmes were important and necessary elements in supporting students from lower income families".

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  Loans were as effective as grants at encouraging participation by low-income students, but loans cost less and so enabled federal and provincial Governments to help more students without increasing the cost to the taxpayer.
  If there is one thing we suffer from in Britain, it is lack of access for students from poorer socio-economic classes. The grant system has not dealt with that. I do not believe that access is governed by cost. I shall not go all the way with the argument that the loans system is a necessary adjunct to greater access, because I believe that access is controlled by different things, but there is no evidence anywhere in the world to suggest that the introduction of a loans system deters people from participating in higher education.
  We should note that West Germany has three times as many students in higher education from poorer socio-economic groups than Britain. The average loan there is about £2,000 a year. The system works for them; it is no deterrent. I urge those who are worried by the deterrent argument to look not at predictions or the answers to surveys which suggest replies, but at the experience of countries all over the world. There such questions are answered.
  Several Hon. Members rose—
  Mr. Burt: Would hon. Members be so quick to step into my grave?
  Thirdly, we know that Britain's higher education system needs expanding, and we want a flexible economic system in order to make that possible. The flexibility that the loan system gives in providing an extra channel of resources for the individual student will make an important contribution, particularly to those students who are dependent on means-tested grants from their parents but whose parents do not contribute fully. About 40 per cent. of parents do not make up the proper level of grant and their chidren are deprived of that element of money which they would otherwise receive. The loan will not be means tested so that for those who find it hard to make the parental contribution the loan system will provide a flexible way out. It will provide extra money, non-means tested, for the benefit of their youngsters.
  I have three points of concern, which I have already mentioned to my right hon. Friend the Secretary of State. The first is in relation to disabled students. As my right hon. Friend knows, I have a particular concern for the arguments raised by the Royal National Institute for the Deaf which has lobbied on behalf of those whom it represents and other disabled students. It is clear that deaf students have lower salary prospects than hearing graduates. International comparisons for disabled student support show that many countries provide more generous support for such students than Britain has up to now. The Bill, through access funds, will give Britain an opportunity to top up the support that we currently provide for disabled students. I hope that my right hon. and hon. Friends will consider that matter carefully during the passage of the Bill. We do not have many disabled students in higher education and we want to encourage more. They have particular problems and their anxieties might be set at rest if we were to take the appropriate steps in the Bill.
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  Secondly, we should look carefully at housing costs and the abolition of benefits which are a worry, particularly in some regions. It will do the Government no harm to examine that carefully.
  Lastly, we need to make it clear that, contrary to the allegations made by Opposition Members, the scheme has nothing to do with the raising of loans to pay for tuition fees. It is all to do with maintenance. There is a balance in higher education between the Government and individual students. We all benefit from higher education and, as taxpayers and as a Government, we contribute to its bricks and mortar, to the teaching and to the resources available. But here is a cast-iron opportunity for the individual student to show his or her commitment to his or her future. The youngsters of Britain will respond to that challenge. They will see the loan system as an assistance, not a deterrent, and, in a few years' time, like many other parts of the world, we will wonder what this debate and this fuss have been all about.
  6.32 pm
  Mr. Simon Hughes: This evening there are two bits of bad news. One is the Bill and the other is the result of the leadership election in the Tory party.
  Mr. Jimmy Hood: On a point of order, Madam Deputy Speaker. The result of the leadership election of the Conservative party is that the Prime Minister has only 314 votes—
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. Whatever interest that might create outside the Chamber, we are now dealing with the Second Reading of an important Bill.
  Mr. Hughes: I was going to summarise the result as Finchley 314, Clwyd, North-West 33. There were 24 abstentions, so that means 57 dissatisfied Tories. Are they here now, is what we would like to know.
  Madam Deputy Speaker: Order. I assume that the hon. Gentleman will now speak on the Bill.
  Mr. Hughes: I was going on to say that I guess that that means that, sadly, policies such as those in the Bill will go on unchanged. Therefore, that means that the Opposition will continue having to expose the weaknesses of the argument and the proposed legislation. I want to take head on the arguments as to why this is a wrong Bill.
  Hon. Members have dealt with the constitutional impropriety of the Bill. The inadequacy of the Bill has not only been mentioned in this House. When my noble Friend Lord Addington spoke in the debate on the Loyal Address in the other place, he said that when he picked up the Bill from the Vote Office he thought that the middle must have fallen out of it, it was so thin.
  For the reasons that have been given, no parallel can be drawn with the Education Act 1962, which introduced grants. This is a thin Bill simply because the Government have not yet been able to make arrangements for its proper implementation. No doubt it would have had much more substance had they been able to do so. However, rather than not go ahead with their commitment and find themselves in difficulty, they have introduced this shadow Bill—that is effectively what it is—and we shall no doubt spend all our time in Committee having to debate things that might be or might have been.

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  As a result, the Government may find themselves in some difficulty in the other place, where I gather that even Conservative Members, and not just the noble Lord Beloff, are significantly unhappy about the fact that they will have the substance of the Bill only in secondary legislation. I must warn the Government that, contrary to convention, there may well be votes on this Bill's secondary legislation in the other place if it is earlier deprived of the substantive material which should be in the Bill.
  We are being asked to change from a grant system to something which is not entirely a loan system but which in due course will become half a loan system—half grant, half loans. As has been pointed out, no other country has gone from an entirely grant system to a loan system.
  Dame Elaine Kellett-Bowman: No other country has one.
  Mr. Hughes: That is right. Therefore, all the arguments about the effect of such a change on access elsewhere are invalid. No other country has in the past thought it sufficiently important to invest adequately in students to provide a full grant system rather than a partial grant system. It is no good the hon. Lady shaking her head despondently.
  When the Select Committee on Education, Science and Art considered the matter only a couple of years ago—it had a Tory majority and it was chaired by a Conservative Member—it recommended the continuation of a grant system. It considered whether there should be a loan system and it concluded, without having all the inhibitions of being in government but representing parties across the Floor of the House, that the grant system should be retained because it was the single best way of ensuring maximum access.
  I accept that we have not been very good at that. It is poor that only 8 per cent. of the lower socio-economic groups have gone into higher education, but that does not mean that we should take a step, for which there is no obvious precedent, that points towards a conclusion that will not increase access for people who have the least money to spend. There is no evidence to support the argument that to change from a system whereby people are funded either, if they are poor, entirely without any parental contribution, or, if their parents have larger incomes, partially by parental income, to one whereby they have to decide before they go into higher education whether they wish to take out a loan, will act as an incentive to continuing in education as opposed to going out to work to earn money.
  Dame Elaine Kellett-Bowman: Will the hon. Gentleman admit that the greatest destruction of access to those from blue-collar families was the destruction of the grammar schools? If youngsters can be persuaded to stay on in education after the age of 16, there is a good chance that they will go to university, and in the grammar schools they did. Grammar schools in my constituency have a good access rate for the children of blue-collar workers, including some who are now in the Cabinet.
  Mr. Hughes: First, most grammar schools were destroyed under a Tory Government. Secondly, that is not a provable case. Thirdly, as the Secretary of State was at pains to point out, access has increased in recent years, as it should have done, but we are still falling substantially
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  behind all comparable countries; in some cases so far behind that only 15 per cent. of our students go on to further and higher education compared with more than 50 per cent. elsewhere.
  There is a big difference between addressing that question by saying that people have to pay for a public service before they can benefit and the way that we pay for future increased social security expenditure through people contributing to occupational pensions. The latter is on the basis that, as one earns, so contribution is made. The former is on the basis that one takes on the liability speculatively in the belief that one will be able to make up later that cost incurred at the beginning. They are entirely different arguments.
  No Minister has disagreed when we have said that those countries that have looked at their present mixed grant-loan system—Sweden, the Netherlands and Germany—are moving away from balancing it in favour of loans and towards balancing it in favour of grants, not least because they find that the former is inadequate for giving access to the groups that most need it and because debt repayments are growing rather than being reduced.
  Mr. Jackson: The hon. Gentleman has heard the answer on this several times, but he keeps making the same point, which suggests that he is not prepared to listen. We are moving from a wholly grants system to a 50:50 grants-loans system. The Swedes are moving from a pretty well wholly loans system to a rather less than 50:50 grants-loans system. The Germans are moving to a grant-loans mix along the same lines, with the same sort of balance, as in the system that we are proposing. The crucial difference is that, while our grants and loans will be available to virtually 100 per cent. of full-time students, in Germany they are available to only 30 per cent.
  Mr. Hughes: I have made the point that there is no exact parallel because we start from a different point. It is therefore also invalid for Ministers to say, as the Secretary of State did today, that we do so much better by our students because, per year, they get so much more support. We know the answer to that too. It is because, in many other places, the length of the course is significantly longer. Therefore, the amount that we contribute is good value for money. There should be more contributions, not fewer, and more from the public purse.
  It is no good the Government trying to hide their embarrassment about saying that they are committed to education and the expansion of further and higher education, when at the same time, in public expenditure plans, not only does the Secretary of State start back-tracking on the commitment apparently made in January by his predecessor but we are clearly not funding higher and further education in any way that is likely to produce the increase in student numbers that the country desperately needs.
  Mr. Straw: Is not the point about the international comparisons that, whatever the mix of loans and grants with which one starts, wherever there has been a shift to greater reliance on loans, access has been cut? That is why Sweden and West Germany are moving back the other way.
  Mr. Hughes: That is the point that I made when we debated the White Paper, and it has been made elsewhere. That is why the Minister and his colleagues are under

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  attack, not just from the Opposition and students who have an immediate interest, but from academics and even from Conservative Members.
  The hon. Member for Blackburn (Mr. Straw) has already referred to the noble Lord Beloff, who has no little credibility as an academic and is a Conservative whom the Government have always previously prayed in aid as somebody to whom serious attention should be given. He said that the student loan plan is
  "absurdly inefficient and damaging to the students, their universities and colleges and the community at large".— [Official Report, House of Lords, 23 November 1989; Vol. 513, c. 186.]
  That is partly because of its risk to access for the whole community.
  Mr. Jackson: I am sorry to intervene again, but it is necessary to correct what has been reported incorrectly. In Germany, for example, the proportion of students from working-class backgrounds in higher education has risen from 16 to 18 per cent. since the introduction of the loans scheme.
  Mr. Straw: That is not true.
  Mr. Hughes: The change in other countries has been assessed and analysed, and all those countries that are reviewing their schemes are moving to increase the amount of grant and decrease the relevant proportion of loans. I am happy to sit down with the Under-Secretary and go through the figures, but the trend in all the other countries is in the opposite direction to the trend in Britain. We have the worst record on numbers, and we should be doing everything to increase those numbers.
  We have no detail before us. The Bill effectively comprises one part of one clause and two small parts in the schedule. There was far more detail in the White Paper and in the consultants' reports, which we expected would have been transferred into proposed legislation. There is no mention of access funds, of the administrative body that is to be set up for which the senior executive post has already been advertised, of the way in which the money for the loans will be provided, or of what the intended initial sum would be—£420 has been mentioned—or of the way in which that will be reassessed.
  Furthermore, there is no mention of any arrangement with the banks because, as I hope that the Minister now accepts, no final arrangement has been made with the banks. Some of the banks have agreed to help draw up a proposal, depending on the passage of the Bill and on further details being worked out, but clearly there is no contract and nothing firm. The banks are obviously extremely unhappy because they stand to lose substantial numbers of customers. I hope that students and others will consider carefully which banks are subscribing and which are not subscribing to the scheme. If the Government believe in customer power, perhaps they will respond to the fact that customers of the present and future customers will use their power to tell the banks not just that they are against the scheme and will not support it, but that they will have nothing to do with the banks which commit themselves to the scheme.
  Our opposition is not just that because we have no details and because all that we are being told is that we are changing from grants to loans. We know too that students
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  will be disentitled from housing benefit, unemployment benefit and income support. Those are substantial reductions from the entitlements that people had begun to believe were part of the general panoply of the welfare state. I heard the hon. Member for Bury, North (Mr. Burt) say that he was worried about that. Many people are worried because the combined costs of deregulation of rents and the poll tax that students will have to pay next year, albeit at a reduced rate, will be more than the entire grant.
  Furthermore, in some parts of the country, because of high living costs, the amount of money left in students' pockets will be reduced from about £30 a week to about £6 a week within the year. My noble Friend Lord Ritchie has given the figures on this in the other place. That could be a real loss per student of over £1,000 a year.
  It is wrong and unfair to students to say that attitudes will change if their grants are replaced by loans. Many students find it difficult to survive. Many make substantial sacrifices to go to and stay on at further and higher education establishments. Many do other jobs to bring in money, and the vast majority are entirely financially responsible. At the moment, they have to go into debt to subsidise themselves. The difference that the Government are introducing is that they will have to go into official debt, authorised by the Government and probably at a high level.
  There will also be no great saving. We know that, for at least 13 years, there will be no saving to the public purse. There may be no saving for another decade after that. It is ludicrous to plan against an eventuality of increased access in the long term with a short-term provision that means that it will cost more to introduce a scheme about which there can be no certainty. This is a speculative venture.
  I only wish that we were debating today a measure arrived at in an entirely different way. The reform of student finance could have been tackled completely differently. Consensus could have been sought, as it was in 1962. Instead of bullying the banks and undervaluing the students, there could have been debate with the people who know about these things to try to arrive at an agreed solution. There could have been, as the hon. Member for Buckingham (Mr. Walden) suggested, an experiment. We could have looked at certain systems, without introducing them wholesale with no ability to calculate their consequences.
  We could have worked out a way to reduce dependency on parents. I believe that there should be a reduction in the parental contribution, because many parents do not pay it and students of such parents have great difficulty. There could have been a way to ensure adequate public funding, and I and my colleagues are not ashamed to say that we believe that there should be more public funding, for higher and further education. It is no good the Government saying that they cannot solve the problem simply because they are not willing to put more taxpayers' money into the kitty.
  There is no guarantee that access will not be damaged. No answer has been given to the concerns expressed about deaf students and students suffering from many other disabilities, who will necessarily incur hundreds, if not thousands, of pounds' worth of extra costs in completing their courses. No answer has been given to the concerns expressed on behalf of mature students, many of whom give up well-paid jobs to return to education. Many of them already have difficulties, especially those who have

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  families. Above all, no answer has been given to the concerns about the poorest students of all, who are already finding life extremely difficult and who will find it substantially more difficult in future.
  What about longer courses? In England, no answers have been given to the concern expressed about dentists, medical students, architects and vets. In Scotland one starts from the premise that courses are longer, but hardly anything has been said about Scottish students, either.
  Mrs. Ray Michie: My hon. Friend is aware of the Bill's serious implications for the unique Scottish education system and the broad four-year degree courses that we have north of the border. Did my hon. Friend note that, during the long speech of the Secretary of State, the right hon. Gentleman never once mentioned Scotland? [HON. MEMBERS: "Yes, he did."] He referred only to the four-year degree course. I think that my hon. Friend will agree that that is disgraceful, coming from a supposed Scot—or ex-Scot. I hope that the Minister responsible for education in Scotland will tell us that the Government propose to take Scottish universities out of the ambit of the London-based Universities Funding Council immediately.
  Mr. Hughes: My hon. Friend is right. The Secretary of State mentioned Scotland only once, when he said that he had been a beneficiary of the Scottish system. It is a bit rich for him now to make proposals that will do more harm to Scottish education—the system from which he benefited—even than to education elsewhere in Britain.
  Conservative Members find the arguments against the scheme unpalatable but their logic is fundamentally flawed. They say, "We cannot afford to pay more grant, because more people will be entering higher education and that will cost the Exchequer more." If the argument is that entering higher and further education increases one's ability to earn well, there must surely come a time when more than 50 per cent. of young people enter further education and, presumably, eventually they will all be earning more. They will then be able to pay their way and make their contribution. The logic of the taxpayer funding the student—the person who earns most paying most—is eminently applicable if the Government argue the numbers of students will be expanded.
  The increased resources which the Bill will provide are primarily the increased resources that the students will have to find. The Government's attempt to prevent an increase in dependency will result only in increased dependency on credit. The only access that will be increased will be the use of little plastic cards. It will be a sad day for education in Britain if this shadow of a Bill is passed. My only hope is that, given that the Government have found it so difficult to get anyone to support it so far, it will disappear completely before it completes its stages here and in another place.
  6.52 pm
  Mr. Allan Stewart: Before I come to my remarks on the Bill, I hope that the House will allow me to say one sentence on another matter. May I, on behalf of my hon. Friends, congratulate my right hon. Friend the Prime Minister on the massive and overwhelming vote of confidence that she has received as leader of the Conservative party—
  Hon. Members: Hear, hear.
  Madam Deputy Speaker (Miss Betty Boothroyd): Order. I called the hon. Member for Eastwood (Mr. Stewart) to take part in the debate, and I hope that he will now do so.
  Mr. Stewart: The purple passages in the speech of the hon. Member for Blackburn (Mr. Straw), who opened for the Opposition, had some entertainment value, but what was most interesting about his speech was what he did not say about the Labour party's policy. We have heard from him that he is in favour of grants, but when asked, "At what level?", he says that he is in favour of grants at the level that resources allow. The ringing cry will go round the campuses of Britain: "Trust us lads. We'll see what we can do." Perhaps the hon. Member for Oxford, East (Mr. Smith) would like me to give way to him so that he can tell the House where Opposition Members stand on early-day motion 117 in the names of the hon. Member for Bradford, North (Mr. Wall) and others. Does that reflect Opposition Front Bench policy? I note that the hon. Gentleman is silent.
  The Opposition have failed to understand the basic reasoning behind a loans and grants system. As the right hon. Member for Halton (Mr. Oakes) said earlier, higher education is an investment. Because it is an investment that benefits society, there should be a grant element. But because it is an investment that also benefits individuals, a loan element is also justified.
  The hon. Member for Southwark and Bermondsey (Mr. Hughes) talked about the constitutional argument. Somewhat unusually, Opposition Members have criticised the Bill for being too short; generally Bills are criticised for being too long. As a former Scottish Office education Minister, I had the duty of administering the grant system which in Scotland is run not by local authorities but by the Scottish Office. In the light of that practical experience, I can tell my hon. Friend the Under-Secretary that I would be appalled at the prospect of primary legislation being introduced to cover every change in the grant or loan system. Of course, changes in detail arise from time to time, and it is appropriate to implement them by regulations.
  We have heard the charge that loans would be a disincentive to access by lower income groups. As the very good briefing note available to all hon. Members from the Library explains, experience in Canada, Sweden and America shows that working-class students are willing to borrow to finance tuition or—as in this case—living expenses. The Canadian study is particularly interesting. It points out that those from lower socio-economic groups are more willing to take on loans than those from higher socio-economic groups. That is precisely what one would expect, because the returns from higher education are likely to be more marked for those entering it from low income groups than for those with a higher income background.
  Family resources affect the likelihood of qualified students entering higher education, but the effect is on the parental contribution. That is the potential determinant. Under the Bill, the parental contribution will fall in real terms. Under a top-up scheme, the inability to borrow can no longer be a constraint and willingness to borrow is wholly unrelated to present family income. It is not a charge against a student's present income but will be related to his or her perception of future income—the difference between what he or she expects to earn as a

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  graduate and as a non-graduate respectively. That is why access will be widened. The real constraint imposed by the parental contribution will be lessened and guaranteed loans will be repayable out of future income, not out of present income.
  In a lengthy intervention, the hon. Member for Argyll and Bute (Mrs. Michie) mentioned the Scottish four-year degree. I should point out that there are also three-year Scottish degrees. Like my right hon. Friend the Secretary of State, I am a beneficiary of the Scottish system. Indeed, I gained the same degree in the same course from the same university, although not at quite the same time.
  Let us consider the financial position in 1990. A graduate on a four-year Scottish degree course would incur £600 more in debt than a student on a three-year degree course. People who claim that that extra debt will be a disincentive are saying that the student incurring that debt for the fourth year sees the year as less valuable than the cost of the loan. We are talking about 6 or 7 per cent. of the total cost of the education. If repayment of that percentage is enough to discourage students from taking a four-year degree course, why should the taxpayer pay the extra 93 per cent.?
  Mr. John Marshall: I thank my fellow beneficiary of the four-year Scottish degree system for giving way. Does he agree that the Scottish four-year degree course at the University of St. Andrews has always been heavily subscribed by students from south of the border, despite the fact that there are financial disincentives in the short term in their applying for those courses?
  Mr. Stewart: My hon. Friend is absolutely right. I do not believe that there will be any disincentive with regard to the four-year loan system. Those who argue that there will be a disincentive argue that students place a very low value on the fourth year. If that is their argument, why should the taxpayer pay the rest of the money?
  I am aware of the constraints on time. In conclusion, I believe that the present system is manifestly unsatisfactory. There is an overriding need for the right balance in the payments made by the taxpayer, the students and their parents. In the long term there is an overriding need for a system that is stable and acceptable to society as a whole. I believe that this Bill achieves that.
  Several Hon. Members rose—
  Madam Deputy Speaker: Order. There is a constraint on time. Speeches should be limited to 10 minutes between now and 9 pm.
  7.2 pm
  Mr. Win Griffiths: The only good thing that can be said about the Bill is that it has probably saved a forest or two by its brevity. Apart from that, it is an affront to our democratic procedures. It is a legislative outrage that so little detail can be presented to the House before the Bill enters Committee. The Bill is an educational irrelevance as well as an administrative and very costly nightmare.
  Let us consider the Government's claims for the Bill. They claim that it will spread the costs among the parent, the student and the taxpayer. They really mean that the Government are desperate to cut their commitment to the
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  maintenance of students in higher education. It is no good Conservative Members shaking their heads; that is exactly what the Bill will do.
  Many students receive a full grant and social security benefits because their housing and other costs are so high and the grant is so small. Despite receiving the full £420 loan available for students outside London, they will still be much worse off under the new scheme when the system is changed to a 50 per cent. grant and a 50 per cent. loan. When the Government talk about spreading costs, they are simply using Orwellian "newspeak." The Government want to cut the costs involved in the maintenance of students in higher education.
  I want now to consider the cost forecasts. The figures presented in the White Paper are based on the assumption that there will be no increase in student numbers. They are based on the fact that the Government believe that only 80 per cent. of students will take up loans. The figures assume that in the first year inflation will be 5 per cent., in the second year 3·5 per cent. and 3 per cent. thereafter.
  In the Select Committee on Education, Science and Arts the Minister admitted that he thought that there would be a 100 per cent. take-up of loans and that invalidates the table in the White Paper. As far as we can understand, there is a commitment to a continuation of the increase in student numbers in higher education. The White Paper takes no account of that. Furthermore, we must consider the Government's inflation statistics which seem to come from the Mad Hatter's tea party in "Alice's Adventures in Wonderland."
  Over the past 20 years inflation has been less than 3·5 per cent. only twice. In the Tory years it has averaged 8·7 per cent. and it was just a little higher than that under a Labour Government. The rate of inflation is roughly the same under both Labour and Conservative Governments. However, over a 20-year period, the rate of inflation is more than double the estimates used for calculating the figures in the White Paper. If I had longer than five minutes to speak, I would read out the figures to show that the record of Labour and Conservative Governments on inflation since 1967 are comparable, although the Labour rate was a little higher.
  When the Secretary of State said that the rate of interest on the loans would be nil, he meant that the loans would be revalued every year based on the rate of inflation. If that is not a kind of interest payment, I do not know what is. In two years under the Conservative Government the rate of inflation was higher than the then bank interest rate. I wonder what the real figures might have been if the Government had bothered to consider inflation rates over the past 20 years and then calculated the cost of the scheme. I am sure that if they had done that the picture would have been very different.
  The Government also claimed that the plan is to increase resources available for students. The Secretary of State said that the average amount taken by students in social security benefits is £210 and that the £420 maximum loan would therefore give a student more resources. However, the Secretary of State knows that that average figure is disingenuous. It does not give the House a completely true picture. When the Minister replies, perhaps he will tell us how many students over the past year claimed benefits in excess of the £420 which a student would receive in the first year or above the £310 that it is

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  planned a student should receive in his final year of study. I believe that we will discover that a considerable number of students will be affected.
  Currently, of all students in receipt of mandatory awards where parental incomes are taken into account, 30 per cent. of students receive a full grant. In Wales about 35 per cent. of students receive a full grant. In five Welsh counties the uptake of full grant is even higher. In Gwent and Gwynedd it is almost 45 per cent. and in Dyfed, Mid Glamorgan and Powys it is almost 40 per cent. Students in Wales will be particularly hard hit by a system which provides half a loan and half a grant. Those students will find that, in effect, their incomes will be capped.
  The Government have introduced a new concept in the provision of state services. That is, some people who use the service will be expected to make a substantial contribution to its cost. Conservative Members have asked, "Why should someone who has not used the higher education system make a contribution to the maintenance of students who are involved in it?" They are enunciating a principle which, of course, paves the way for the introduction of a full loan scheme at a later date. They will not be prepared to give a cast-iron commitment that, at some future date, they will not deign to go beyond the 50:50 split and introduce further loans.
  The Government claim that the Bill will increase access. Nothing could be further from the truth. I was the eldest of seven children. I had a full grant, but I still had to work at Christmas time and in the summer. I took a stake in my own future by forgoing the opportunity to take a job at the age of 15. My parents had already made sacrifices for me, and they continued to make sacrifices for my brothers and sisters who went to university. It is rubbish to talk about this scheme giving students a stake in their own future. Many people have taken a stake in their own future by being prepared to forgo the opportunity to earn money from the age of 15 and, instead, take up higher education. Furthermore, I am quite sure that my taxation contributions in the past 20 years or so have more than made up for the cost of my education.
  Education is not a burden. The Secretary of State constantly used the word "burden". Education is an investment in our future, and I sincerely hope that the scheme will be rejected.
  7.12 pm
  Mr. James Pawsey: The explanatory and financial memorandum to the Bill states:
  "The Bill, which gives effect to proposals outlined in the White Paper, 'Top-Up Loans for Students'".
  I mention that because, in a reply to a parliamentary question, my hon. Friend the Under-Secretary of State for Education and Science stated:
  "On the assumptions made in the White Paper, 'Top-Up Loans for Students' . . . the estimated net cost of the scheme is some £13 million in 2000; in 2005 there is estimated to be a net saving of some £37 million rising to £49 million in 2010." —[Official Report, 1 December 1989; Vol. 162, c. 440.]
  In other words, the answer to my question is on the same level playing field as the White Paper, so like is being compared with like.
  Hon. Members with reasonably long memories on education will recall that when the Education Reform Act 1988 was introduced Opposition Members criticised its length. They said that it was too much, too complex and covered too many issues. This Bill is criticised for precisely the opposite reasons. Opposition Members say that the
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  Education (Student Loans) Bill is too brief. Clearly, they are more interested in opposition for its own sake than in opposition for any real, cogent or constructive reason. This Bill is short and concise. It sets out the framework for intended legislation, with detail to be found in regulations. Its raison d'être is the need to attract more students to advanced education and, at the same time, to generate more funds.
  I support student loans because they represent new money. The proposed £420 is additional to the existing grant. That point was made by my right hon. Friend the Secretary of State when he opened the debate. No hon. Member can doubt that there must be a limit to the number of students whom taxpayers can afford to support on the present grants only basis. I do not believe that the taxpayer should be soaked for every single student penny. The loan, which is interest-free and not repayable until the student is earning 85 per cent. of the national average wage —about £9,500 on current standards—will form an important addition to student finance. In addition, women who start families will not be required to repay the loan until they actually start to earn. There will he no such thing as a negative dowry.
  My hon. Friends and I have been touched by the great concern expressed both within and outside the House about the likely level of default and about bankers' profits. We have heard figures from the United States which would curdle the blood of any true blue British banker. As all hon. Members should know, the principal reason for the high incidence of default in the United States is that there is no general provision for graduates to defer payment when their income is low. That contrasts sharply and unfavourably with what the Government are proposing. If we need to seek an indication of student default we can look to Scandinavia, which is much closer to home and where the level of default is between 1 per cent. and 2 per cent.
  It has been argued that a high measure of taxpayer support is necessary to guarantee admission to advanced education, but since 1979 the real value of the student grant has fallen by at least 10 per cent. The hon. Member for Blackburn (Mr. Straw) said that it had fallen by 23 per cent. Despite that real reduction, there are almost 200,000 more students in higher education, and the percentage of 18 and 19-year-olds entering higher education has increased from less than 13 per cent. to more than 14 per cent. There is thus no reason to argue that a reduction in grant equals a reduction in student numbers. That is demonstrably untrue.
  However, I share some students' apprehensions. I have met a number of delegations and, in general, they are apprehensive about the loss of social security benefit. Incidentally, Beveridge, the great initiator, never foresaw a situation in which students would be the beneficiaries of social security payments. If it is argued that with adequate funding for their support they would not need social security benefit, I return to my general principle that the proposed loan will be part of their support.
  With regard to access funds and the part that they have to play, the problem is not their number but their size. The access funds totalling £15 million are inadequate. I again urge my right hon. Friend the Secretary of State and my hon. Friend the Under-Secretary of State to reconsider the amount of funding. The sum should be substantially increased. Access funds will be required to assist young people, especially those from disadvantaged sections of

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  our community, who wish to enter advanced education. If they are to be assisted to any marked extent—and that must be one of our principal aims—access funds must be increased.
  Most graduates can expect to receive substantially more remuneration than non-graduates. As students benefit most from higher education, why should the tax paid by those who leave school and start work at 16 materially assist those attending university? Can it really be fair or just that the non-graduate should be called upon to subsidise the graduate? Economic analysis shows that graduates receive a personal return of about 25 per cent. on their investment in higher education. Society's return by contrast is only between 5 and 8 per cent.
  The hon. Member for Bridgend (Mr. Griffiths) says that loans will discourage young people from blue-collar homes from entering advanced education—
  Mr. Win Griffiths: It will.
  Mr. Pawsey: That point is made as though the present system worked to their benefit, but currently, although they account for 60 per cent. of the population, they only manage 21 per cent. of university admissions.
  Mr. Win Griffiths rose—
  Mr. Pawsey: No, I cannot give way. They account for only 21 per cent. of university admissions or 24 per cent. of admissions to polytechnics, so the present grants system does not seem to be an outstanding success for working-class youngsters.
  A further reason why I support top-up loans is that about 4 per cent. of parents do not make the full parental contribution and students have to make good the shortfall in various ways. Many, for example, borrow and, if they do, they borrow at commercial rates of interest, which compare unfavourably with the zero rate of interest proposed in the legislation.
  I am absolutely convinced that a mixed system of grants and loans is fairer. It at once represents better value for the taxpayer and improved access to higher education. I urge my right hon. and hon. Friends to support the Bill.
  7.21 pm
  Mr. Martin Flannery: In the age in which we live, under this Government, we receive lectures on the Health Service from a Cabinet whose members never use it. We receive lectures on the education service from a Cabinet whose members never use the public service. Practically all the Cabinet come from wealthy homes and went to prep or private schools and to Oxbridge, and although they lecture us about what we should do for our children, they have always depended on mummy and daddy. That is a fact of life for this Cabinet, although I am not saying that it applies to every Conservative Member.
  The scheme is really a cut. It is a cut made in a foundering economy. Indeed, the Government are having to make such cuts—they have no choice. The economy has foundered so badly that one Chancellor of the Exchequer has resigned and his place has now been taken by another. Furthermore, an election has now taken place that nobody
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  ever thought would take place. I have not yet heard the result—[Interruption.] Well, in other words, there is a crisis in the Government and—
  Mr. John Marshall rose—
  Mr. Flannery: No, I shall not give way because I have only 10 minutes in which to make my speech.
  This is not one but two debates, although they are essentially the same. They are both about how to cut the education service. One is about keeping down the wages of teachers and school conditions and the other is about how to cut students' money. That cut is not so much a plot as a necessity. The Government have to make that cut—they have no choice. Having seen the whirlwind coming, Ministers continually visit America to study schools there. The Americanisation not merely of our economy but of our health and education services is now well under way.
  However, the Government who are now making these cuts had access to a boon that no other Government in Europe have had. One of my hon. Friends has costed the money that the Government have received from North sea oil at at least £80 billion. We did not have the benefit of that. From selling the family silver, the Government have received at least £30 billion—even after the massive advertising on a grand scale, hitherto unknown, involving public and taxpayers' money.
  Those are the people who are lecturing us about what we should be doing, yet the Government know full well that they are looting the common exchequer. Although more millionaires than ever are emerging and they are growing richer than ever, just outside the House people are sleeping in cardboard boxes. When Opposition Members try to set that right, the Government drag up all kinds of arguments to try to prove that we are somehow in the wrong; but we are not in the wrong. We know that the students will now take a kicking and a beating from the Government and that many of them will no longer enter areas that they have previously been able to enter.
  As I said a month ago, I am one of only a few hon. Members who had experience of higher education before the grant system. Only a handful of ordinary boys and girls could get to university on the few scholarships available. The others could not go. Many of them took up teaching so that they could get a loan from their local education authority for two years. When I came back from the war, it took me four years to pay back my loan. Despite all the boasting from Conservative Members, some former students in America are in penury as a result of trying to pay back their loans and pay off their mortgages, yet that is what the Government are driving us towards. The Government have driven our economy to such desperation that their own party is now in deep crisis and they are trying to shift that crisis on to us.
  However, there are some who realise the present serious condition of education. The Committee of Vice-Chancellors and Principals has briefed the Opposition on this, stating that it believes that such a scheme should ensure that students have enough to live on while they study and that it does not deter increasing numbers from applying for higher education.
  Although it has been said that more people enter advanced education in America and West Germany, that has nothing to do with grants; it is because those countries have much stronger economies than we have. Indeed, even the Italians and the French now have more powerful

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  economies than we have. That means that they can afford advanced education without the grants that we would give. Nevertheless, ours was the most advanced system when we helped more students to take up higher education, but our economy has foundered since then and has driven the Government into a loans system.
  The hon. Member for Wantage (Mr. Jackson) knows of the Committee of Vice-Chancellors and Principals because he is a former don. The Committee said that such a plan should be simple, that it should provide adequate means and that it should not deter students from poorer families. It concluded that the White Paper failed to satisfy any of those criteria.
  The loans scheme, which Conservative Members have praised so much, will cut, stabilise or freeze grants, yet it will take more money from the taxpayer—and from the students themselves. It will also remove the housing and other benefits that students so urgently need, so it is socially unjust.
  The loans scheme could deter students from entering higher education. Of course, it will not deter the rich students. It will not deter the sons or daughters of the present Cabinet. Like the cuts in the Health Service, the scheme will not affect them because, like the Prime Minister, they can still go private. Members of the Cabinet can do all that, but they still lecture us about how we should deal with our education system—the one that we built. I remind Conservative Members that Robert Peel built the National gallery for the poor—for those who could not afford pictures of their own. However, the Government's hard-heartedness and their lack of care for ordinary people mean that this and similar schemes will be heaped on working people.
  It is likely that the scheme will stop students becoming doctors, teachers and graduate nurses. Conservative Members have no intention of facing reality, but they should study the briefing from the Royal College of Nursing, which deplores the fact that the number of graduate nurses will decrease. I note that several of my hon. Friends nod their heads in agreement, but Conservative Members are not interested in briefs that give them facts. They are interested only in briefs that uphold the necessity to cut the Health Service, and attack the ambulance service and the education system. They are interested in briefs that help their people. Eventually, Conservative Members will leave the scene because they will be kicked out, but they will do so with pockets full of loot from the common exchequer. They have not used that loot on education, on building hospitals and so on.
  The scheme is vicious. It is anti-education and anti the poorer student. It is deplored by nearly every group in this country except those who sit on the Conservative Benches. The scheme should be kicked out, because it is against the interests of ordinary people. Conservative Members may smile, but they are well-heeled, and they know it. They do not like hearing the truth; instead, they give a nice smile. When the Labour party gets the chance, however, the scheme will be thrown out.
  7.30 pm
  Mr. John Maples: The Opposition have sought to confuse the issue and to make it much more complicated than it is. Both parties are agreed that they want to double the number of students in higher education
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  in the next 20 years. The simple problem is who will pay for that increase and how that cost will be shared among taxpayers, parents and students.
  The issue is relatively simple. Will we double the £500 million a year currently spent by the Government on student support? Will we increase parental contributions, or should some of the burden be put back on to students? I believe that the right solution is to put some of the burden back on to students. The other alternatives would never allow us, or any other Government, to double the number of students in higher education.
  The loan proposals will enable the number of students to increase. It will also greatly help those who rely on parental contributions, as we know that those contributions are often not made. More money will be made available for all students. The proposals will especially help students from the poorest families, as the amount of total grant and loan will be increased by 20 per cent. They may be poor students, but they will not be poor graduates and the time when they need help is when they are students.
  The debt repayments will not represent a significant portion of a graduate's income. When the scheme is in operation the maximum debt that a student will be able to incur is about £3,900. To repay that over five years requires a payment of £ 15 per week. Over 10 years, the cost would be £7·50. We know that the average graduate earns about 30 per cent. more than the national average income. After tax, a graduate's income represents an additional £3,000 per year in his pocket compared with the earnings of a non-graduate. We are talking about 25 per cent. of that additional £3,000 being needed over five years to repay the loan, or 12·5 per cent. of that income being needed for 10 years. I do not believe that that is an unreasonable burden, nor is it likely to discourage people from participating in higher education.
  At a time when real incomes are rising extremely fast, it is right to start to shift some of the burden from public expenditure to private, and at the same time to allow the Government to reduce taxes. Student loans are an example of where that can be done to great benefit.
  The Opposition have criticised the scheme as they believe that it will inhibit access and that it will be costly to administer. If I felt that their criticism about access was justified, I should be against the scheme. That scheme, however, will make more money available to students from the poorer families and it will help those who are discouraged from higher education because their parents do not make up the total contribution. In future it will be unnecessary for them to demand so much from their parents.
  We do not need lectures from the Labour party about access. Between 1975 and 1979 the number of full-time students at universities and polytechnics rose by 1 per cent. Between 1979 and 1987 the number rose by 20 per cent. Whatever mistakes we have made, they are obviously nothing like those made by the Labour party. I do not believe that the scheme will have any effect on access, and I believe that participation in higher education will go on growing, as it has in the past decade.
  Germany and Japan are often held out as examples of more successful economies than ours because their education and training are better. During the period of their great success, those countries operated 100 per cent. means-tested loans and offered no grants. A higher percentage of our adult population have degrees than is

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  the case in West Germany. It is extremely difficult to construct an argument to prove that the scheme will hinder access to higher education.
  I suppose that the hon. Member for Blackburn (Mr. Straw) had to find some basis on which to oppose the scheme—after all, that is his job—and, as is common in the Labour party, he followed his prejudices, wrapped himself up in social concern and trailed a lot of red herrings through his argument in an attempt to confuse it. The same goes for the other leg of the Opposition argument, relating to cost.
  The hon. Member for Oxford, East (Mr. Smith) has written articles and asked many questions trying to prove that the cost of the scheme is much greater than estimated. I am not sure whether he is trying to say that we are spending too much on the scheme. He has said that we should do more for students, but at the same time he appears to be arguing that we are doing too much. I should have thought that he would welcome our efforts.
  The Labour party would be likely to spend more and achieve less. In its policy review, it says that it wants to retain grants and to review the parental contribution. Subsequently it has said that it wants to abolish the loans scheme. At the same time, however, the Labour party has said that it wants to double the number of students in higher education. The only way it could do that would be through far more public expenditure than we propose.
  The Opposition argue that the Government scheme will result in an increase of £660 million in public expenditure by 2001. By 2012, however, the net additional cost to public expenditure will be zero and, thereafter, the scheme will result in a negative cost—a reduction in public expenditure—of £200 million per year. If the Labour party simply turned the loans to grants and did not ask for repayment, the deficit by 2001 would be £1,525 million. By 2012, instead of the accumulative deficit being zero, the cost to the Exchequer would be £4·1 billion. Thereafter, the costs would increase by £200 million per year. In other words, the Labour party would incur an additional £400 million per year on public expenditure. If, on top of that, the Opposition sought to make some reduction in the parental contribution, the cost would be even greater. The parental contribution totals about £300 million per year. If the Opposition reduced that by one third, a further £100 million would have to be found from public expenditure. If the number of students doubled, that cost would increase to £200 million per year. That means that the Labour party would be spending about £600 million per year more than we propose to spend.
  If I were Secretary of State for Education and Science and the Chancellor told me that I had £600 million per year to spend on higher education and on encouraging more people to take up such education, I cannot imagine that I—or, indeed a Labour Secretary of State—would spend it in the way proposed by the Labour party. It is all fiction, as we know that the shadow Chancellor has said:
  "We are all agreed that we cannot spend what has not been earned. If that means postponing some of our social ambitions—we may have to do this."
  My right hon. Friend the Secretary of State also quoted that remark. It is a fair bet that the £600 million additional expenditure proposed by the Labour party would be one of the early postponements. The Labour party would be unable to increase public expenditure, but it would not
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  agree to loans, so there would be no way of increasing the number of students. Once again, the Labour party wills the end but not the means.
  We are faced with a simple problem—the problem of who is to pay. I believe that shifting a small part of the financial burden on to students will mean that the number of students will increase and that more support can be given to individual students and we can reduce the burden on taxpayers and on parents. I do not believe that the scheme will affect access and it will certainly reduce long-running costs. It is a truly Benthamite solution and everyone—students, parents and taxpayers—will benefit.
  7.38 pm
  Mr. Peter L. Pike: I wish to speak against the Bill. I do not agree with the hon. Member for Lewisham, West (Mr. Maples) that it is a simple issue. We recognise that money spent on all levels of education represents an investment in the future of our nation which will benefit it. We are prepared to spend money on that important service.
  The Government keep challenging us on the question of payment. We have said that we are prepared to increase taxation for those most able to pay and those earning the most who have benefited the most under the present Government. We are prepared to put up taxation from 40p in the pound to 50p in the pound. This is one service—
  Mr. Jackson: Will the hon. Gentleman tell the House how much money these tax changes will generate and compare that with the £600 million estimated by my hon. Friend the Member for Lewisham, West (Mr. Maples)?
  Mr. Pike: I should not have given way because I do not have time to go into detail about that—[Laughter.] Conservative Members laugh, but I shall deal with that aspect when we have a proper debate without time restrictions. I cannot do so now, particularly as the Secretary of State talked for nearly an hour when he opened the debate. We are debating one of the nation's most important principles: educational opportunity. One reason why my hon. Friends and I are in the Labour party is that we believe that there are some things in life to which all people should have a right regardless of their ability to pay and background. One such is education and another is health care. Fate has determined that this week the Government are trying by various measures to remove people's rights to both these essentials.
  We are anxious to increase the opportunities for people to be educated. Only 5 per cent. of the 18-year-olds in the socio-economic groups 3, 4 and 5 entered higher education in 1987–88, despite the fact that they represent more than 60 per cent. of that age group. That should be a matter of concern for Conservative Members. Why are only 5 per cent. of young people in that group able to take advantage of educational opportunities?
  Mr. Tim Janman rose—
  Mr. Pike: I shall not give way because the 10-minute rule is in operation.
  We must take into account the fact that people within those groups have ability and should receive educational opportunities, which is what we are arguing for. The former Secretary of State for Education and Science said:

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  "I confidently expect that the numbers in higher education, in polytechnics and universities will increase because of our proposals."—[Official Report, 9 November 1988; Vol. 140, c. 320.]
  The Secretary of State's speech this afternoon has not convinced me for one moment that that will be true. I believe that the exact reverse will be the case and fewer people will be able to receive university education if these proposals are forced through. Many people have referred to the opportunities for university education in France, Germany and the United States. It would benefit this nation if we followed their example.
  This is a squalid, enabling Bill in a long series of such Bills. It is time for Conservative Back Benchers to be as concerned as Opposition Members that Members' rights are continually eroded by the powers given to the Secretary of State without those proposals being debated in the House. We are moving in the wrong direction, as is reflected by the Bill.
  Schedule 2(1)(c) provides that the Secretary of State can
  "make provision for the deferment or cancellation of a borrower's liability in respect of a loan."
  While the loan is deferred, it continues to attract interest—although the Government claim that it is not interest. However, to increase the amount owed by the inflation rate is at least the equivalent of an inflation-linked interest rate. Whatever the Government call it, they cannot get over that fact. In many cases the repayments will be deferred for many years which will create tremendous administrative problems. I accept that the Government have said that repayments can be deferred if the borrower is not earning 85 per cent. of the national average earnings.
  This is one proposal—if time permitted I could give several other such illustrations—about which we do not have the nitty-gritty or the facts to debate properly because this is an enabling Bill. That is deplorable and Conservative Back Benchers should be concerned about the Government's increasing tendency to remove hon. Members' rights to debate issues before decisions are implemented.
  On 20 October I asked the Secretary of State whether he accepted—Conservative Members have accepted this today—that people who have had a university education earn on average 30 per cent. above the national average and, therefore, the higher taxes that they pay would cover the cost of maintaining them while they were at university. That seems a perfectly reasonable and sensible proposal. With the exception of the poll tax, which does not take into account someone's ability to pay, most taxes are fair, and income tax is certainly fair because it is based on ability to pay.
  This afternoon the Government have skirted round the loss of benefits that students will suffer. It is clear that many students will lose more in benefits than they will receive in loans, which is regrettable.
  Whenever the Government consider education, they fail to recognise the challenges facing the nation. They fail to recognise that education is an essential investment in this nation's future and the need to ensure that everybody in this country, regardless of background, should have an equal chance to receive education. The Government's dogma, their attitude that come what may they must cut public expenditure and the Prime Minister's—and therefore the Cabinet's—obsession that public expenditure should govern everything the Government do mean that
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  they judge issues only by the amount of Government expenditure. They fail to ensure that we tackle these problems positively.
  This is a bad Bill which does nothing to ensure or enhance people's educational opportunities. When students graduate from university and are faced with the expenditure of setting up their own homes, the Government's proposals will burden them with debt repayments. The Bill is bad for the nation's education and should be rejected.
  7.50 pm
  Mr. David Davis: Much of the case put by Labour Members so far hinges on two arguments: that the introduction of loans will reduce participation overall in higher education, or will reduce the participation of those in the less well advantaged groups. Either outcome would constitute a poor result for our policy, if either were true. In fact, there is no distinguishable correlation between the existence of grants or loans and the take-up of higher education.
  That may seem odd, because one might expect that a subsidy plus the advantage of a 40 or 50 per cent. increase in income would lead to a great take-up of higher education, but experience of take-up in West Germany and Sweden, which have predominantly loan-based systems, is no worse than experience in this country. That should be explained clearly when we say that loans will not curtail higher education for our youngsters but will have the opposite effect.
  In making my case, I will develop a point put first by my hon. Friend the Member for Eastwood (Mr. Stewart) and then by my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey). For this purpose I shall cite three cases—a youngster from a very low income family, a youngster from a very high income family, and one from a family in between. I shall examine those cases from the point of view of parental contribution to see what effect that contribution has on the decision whether to go to university or college.
  We have heard that 35 or even 40 per cent. of students do not receive a full parental contribution.
  Mr. Jackson: It is 40 per cent.
  Mr. Davis: With the very low income family, no parental contribution applies, so I can set that case to one side. At the other extreme, the high income family typically will have a lot of discretionary income and, if it is a managerial or professional family, will have some experience of higher education and therefore an understanding of its value. Indeed, such a family will probably already have been paying school fees, perhaps of £6,000 or more a year. For that family, a payment of £2,000 plus would not represent a great deal.
  The difficult case occurs with what I have heard described as the class three person, perhaps a relatively well paid skilled manual worker. The family income for such a worker is now significantly more than £300 a week. That family will have to find over £1,000 to send its offspring to school, a large sum for such a family.
  We must remember that the head of that household himself probably left school at 15 or 16 and went on to do an apprenticeship for a pittance for several years. He has no experience of the value of higher education and could

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  reasonably reach the conclusion that it was not a good investment, for he or she will see all of the costs but none of the benefits.
  Mr. Harry Barnes: Is the hon. Gentleman aware that the examples he is giving could be of people who are in professions which are badly paid? They may be social workers, school teachers and others who earlier in their lives were graduates and who have the same understanding of higher education as those in higher income groups.
  Mr. Davis: The hon. Gentleman is making my case. I was about to deal with the very cases to which he referred, and I will do so later. Meanwhile, I am making a clear case affecting a large number in the population in the income categories of which I have been speaking.
  Let us not forget that the decision on this issue is not made by the beneficiary—the person who will receive a 40 per cent. gain in income. The decision is pushed on to the parents rather than on to the youngster. The Bill moves that decision, at least in part, back to the beneficiary, the youngster, and that is a key issue in the debate.
  Opposition Members have suggested that what is proposed will become a millstone for that beneficiary later in his or her life. That argument ignores the practicality of the timetable of the imposition of the scheme. It goes through the whole of the 1990s, and we have heard in other debates that throughout the 1990s there will be a demographic shortage of young workers. In other words, there will be more than enough demand for every available graduate leaving university.
  Companies searching for new graduates will pay off the loans. In other words, companies will bid against each other to pay them off. Rather than a millstone, it will enable youngsters to see where they can get the best return on their education. Instead of being a millstone, it will be an economic lodestone.
  7.55 pm
  Mr. Roy Beggs: The proposed student loans scheme, together with freezing parental contributions and grant in cash terms from 1990–91, will cause unnecessary hardship for students in Northern Ireland and in other areas of high unemployment and deprivation.
  To deny most full-time students in further and higher education income support, unemployment benefit and housing benefit is a further attack on the least well off in society. Disabled students will not be well served by the proposals.
  I can only assume that those radical advisers who were responsible for promoting these new measures for financially supporting students have limited knowledge of the struggle to make ends meet experienced by students from less-well-off backgrounds. "Access funds" to provide discretionary support in individual cases of financial need for students losing entitlement to benefit will not be an acceptable alternative. Harold Wilson, when Prime Minister, was given a clear message from Northern Ireland after his "spongers" remark. We in Northern Ireland are not spongers, and the Government should not attempt to make our students beggars and borrowers.
  It is generous of Government not to abolish parental contributions and to provide parents with the option of
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  paying more, thereby requiring the student to borrow less. That may be acceptable in the affluent south and south-east of England, but many parents in Northern Ireland—where there is a higher cost of living, lower than average national income and higher unemployment—cannot afford to pay more.
  Every young person in Northern Ireland and throughout Great Britain, irrespective of class, creed or sex, whose academic achievements qualify him or her for further or higher education should automatically qualify for sufficient grant to enable qualifications to be obtained which will ultimately lead to gainful employment. A highly educated and skilled population will help us to bring economic prosperity to Northern Ireland. Education is the soundest investment we can make.
  I do not believe in encouraging anyone to borrow or to get into debt, and least of all in burdening with loan debt students who have enough stresses and strains to cope with already. Loan sharks are causing a lot of trouble in my constituency. I should hate to think that students would ever get into their clutches. That is why we should pay students grants and let them pay their way.
  It must be a matter of concern, especially to those who have read the huge document, "The Higher Education Demands Survey: Final Report" commissioned by the Department of Education and Science, when the reseachers Cormack, Miller, Osborne and Currie, looking at the proposed change from a grants to a loan-grant system, said that one third of students had reported that they would reconsider their decision to enter higher education in the event of a loans scheme replacing student grants.
  The final paragraph in the chapter dealing with student loans said:
  "Overall, therefore, it must be concluded that the introduction of a loans policy as a replacement to the existing grant system could radically alter both the size and social characteristics of participation in higher education by Northern Ireland students."
  The survey did not take into account the precise loan system being promoted by the Government; it came to general conclusions, however, that back up the fact that there is a real risk that students from poorer backgrounds and Roman Catholics would be more likely to reconsider entry into higher education.
  If the loans scheme is introduced to Northern Ireland, it will more adversely affect the prospects of students from working-class backgrounds of getting into further and higher education than it will affect those of students in Great Britain. At present in Northern Ireland, entrants into higher education reflect a good balance of Protestants, Roman Catholics and females. To deny opportunities to Roman Catholic students from poorer families will lay the Government open to allegations of discrimination against Catholics and provide the very evidence that is needed to confirm them. I firmly believe that no student should be denied the opportunity to realise his or her full potential in our education system, but I have nothing in common with the small Republican group of graduates who offensively dishonour the state that has provided them with a full and free education.
  The proposed system of student loans will not encourage greater participation by students in further and higher education in Northern Ireland. The Government must further examine international evidence which shows that loans schemes and a desire to avoid debt are

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  diminishing the proportion of poorer students entering higher education. There can be no comparison betwen the ability of wealthy West German parents to support their students and that of parents on low incomes in Northern Ireland to do so.
  Dissuading less well-off students anywhere in the United Kingdom from entering higher education may well sentence their offspring in succeeding generations to missing the obvious advantages of higher education. Acknowledging the fact that demand for higher education outstrips its provision in the Irish Republic, can the Secretary of State give us an assurance that the high level of entry qualifications demand in Northern Ireland and the increasing demand from students from the Irish Republic are not already disadvantaging many able Northern Ireland students and preventing them from obtaining places in higher education?
  Ulster Unionists want legislation in this House to be applied to the United Kingdom as a whole, but we cannot welcome this Bill, which will be applied later to Northern Ireland through the Order in Council procedure. All hon. Members should be concerned that we are being asked to approve a blank cheque to cover any sums required by the Secretary of State for making payments under the Act. I fear that the estimated low costs of introducing the scheme may prove higher than those of the present grant and maintenance system in the long term.
  Finally, I ask the Secretary of State to review the additional burden placed on parents in Northern Ireland, who are already paying much higher rates for their homes than are paid in some parts of Great Britain for similar properties and whose children are required to pay the poll tax when studying in Great Britain. That injustice should be removed by exempting Northern Ireland students from the poll tax while they are studying in Great Britain.
  I urge the House to reject this scheme. The Government are gambling with the educational prospects of many potential higher education students. We cannot risk losing opportunities of higher education.
  8.4 pm
  Rev. Ian Paisley: Because of the time limit, I shall sum up my arguments against the Bill in eight points.
  First, I reject and oppose the Bill because it cushions the rich and discriminates against the poor. Secondly, it will discourage students from going in for courses that do not offer a high-salary profession on graduation—art and the social sciences will suffer. Great gifts in these fields could be lost to the nation. An unbalanced student body is bound to lead to an unbalanced society.
  Thirdly, the scheme will harm female and disabled students who, on graduation, do not generally enter high-salary jobs but who will be lumbered with a heavy debt.
  Fourthly, Northern Ireland graduates will suffer even more than the GB counterparts, for graduates of Northern Ireland are underpaid compared with those in the rest of the country and, for them, the paying back will be much harder.
  Fifthly, the scheme discriminates against potential students from working-class backgrounds, whether Protestant or Roman Catholic. I support what my colleague the hon. Member for Antrim, East (Mr. Beggs) said—Sinn Fein has indeed lobbied on this matter. I
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  dissociate myself entirely from that lobby, but decent, ordinary, working-class Protestant and Roman Catholics will be discriminated against by the scheme and the prospect of debt will put many of them off the idea of a university education altogether.
  Sixthly, money will not ultimately be saved. Taxes will eventually have to be increased to pay for the interest not charged and to make up for the many defaulters under the scheme. The scheme does not make good business sense.
  Seventhly, the scheme strikes at the whole structure of further education. In the long run, we cannot afford not to invest money in the education of our families. A fully funded grant system that takes proper account of students' well-being when studying and of the ability of their parents to meet their educational requirements is what we should be planning; we should not be discussing a system of debts.
  Even if everything else in the Bill were in order I would still oppose it, because at its heart there lies a time bomb, specially sent by the Government, to remove another vestige of democracy from Northern Ireland. The explanatory memorandum says that the Bill is not to apply to Northern Ireland, yet in clause 2 the Government remove from the representatives of Northern Ireland the few rights that they have left.
  Those rights are that an affirmative resolution be brought before both Houses when changes are made, but this Bill sacrifices that procedure and introduces the negative resolution, which means that the Order in Council will take effect immediately. It can be prayed against, but when does the House have time to hear those prayers? Many of us have signed such prayers but they have been neither heard nor heeded. I want to know why the Government have put that time bomb right in the heart of the Bill.
  So we are not discussing the Bill; we are discussing a decree to hand over tremendous power to the Secretary of State. But for us in Northern Ireland the Bill goes further than that. We in Northern Ireland have only one opportunity to discuss matters. We had a debate last night and how long did it last? It lasted for one and a half hours.
  I was handed today a massive Order in Council on education, which was like a book. I was told that next week I should have three hours to discuss it. The order changes the whole education system in Northern Ireland lock, stock and barrel, yet our representatives are told that they will be permitted to discuss it for only three hours. We cannot, of course, amend the order or do anything about it.
  I warn hon. Members from Great Britain that they are starting on the same road in this Bill. The medicine that they have served to Northern Ireland and that they have voted for Northern Ireland will be put down their own throats. They will realise that this Government will take from them the vestige of their democratic right to discuss matters properly in the form of a proper Bill. All hon. Members should be concerned about that. They are voting for a decree to hand over immense power to the Secretary of State. That is a carefully laid time bomb with a kick-strap on it which would do honour to the IRA. When we kick the strap, we shall blow up any vestige of democracy.
  Mr. Jackson: No.
  Rev. Ian Paisley: The hon. Gentleman may be annoyed by my remark, but it is a fact. If he were a Back-Bench

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  Member, he would be the first to cry out against the Bill. It is because he has now moved from the Back Benches to the Front Bench that he feels that he should not cry out against it.
  Mr. Jackson: All of us would object to being compared with the IRA.
  Rev. Ian Paisley: I said that the Bill was like an IRA bomb and that when one kicks the strap, it will explode.
  Why is such a power put into the Bill and the order? Why can we not properly discuss and amend the provisions? The Under-Secretary of State knows that I am not suggesting that he is in any way like the IRA. He need not make a big fuss about my comment, because I was using a metaphor. If he does not understand that, he had better come to Northern Ireland to find out how the Ulster people speak. I thought that he had some knowledge of how the Ulster people speak and how they do business.
  When the House votes for the Bill, it will vote away its powers and its authority. The House is giving a blank cheque to the Secretary of State to carry on and it will have no say in what his final plans will be or how they will be executed.
  8.12 pm
  Mr. Gerry Steinberg: I fully support the sentiments of the hon. Member for Antrim, North (Rev. Ian Paisley). The Bill is a disgrace because it contains no details about what is to happen and the scheme will be introduced by regulation with little debate in Parliament. The Government's excuse for the introduction of top-up loans is that it will give students a grasp of economic reality. That is true, although it will be a grim reality. The value of the present grant has fallen so sharply in the past few years that the students' grasp of economic reality is unquestionable. To compensate students for their losses and to sharpen their awareness of money management, they will now have to pay for their education by borrowing the money, presumably on the pretext that the more hardship one suffers, the greater the lesson one will learn.
  Durham university, which is in my constituency, has well over 4,000 students. The Government's loan plan could mean student debts of £7 million to £10 million at universities such as Durham. Many substantial companies are facing bankruptcy trying to repay investment borrowing of less than £10 million, yet the Government want to put students in the same boat. A debt of that size has serious implications for students, for the university and for the city. Some students will have difficulty with their rent and the pressure is likely to result in poor academic achievement and greater stress.
  Despite the huge wave of opposition to the loans scheme, the proposals are for grants and parental contributions to be frozen at their current levels. Students will be debarred from claiming housing benefit, income support and unemployment benefit, and from next year they will have to pay a proportion of the poll tax, which will also affect many of them adversely. Some students will lose social security benefits to a greater value than the amount of the proposed loan, so they will be allowed the dubious entitlement of being able to take out an even bigger loan.
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  There is a misconception that all graduates are irresponsible, lazy, beer-drinking layabouts who are set to move into cosy, well-paid jobs. There may be a few like that, but others after three or four years of study will enter jobs with a salary no higher than if they had not gone to university. The motive for going to university should not be money, but the pursuit of knowledge in an area of expertise. Students should choose a subject for which they have a particular ability and in an area to which they can eventually contribute their skills.
  Will students be expected in future to scan the prospectus for courses that will land them in lucrative jobs for which they have no aptitude? If a potential arts student were persuaded by lucrative rewards to choose a science degree, grave problems would result if and when he realised that the course was not for him. Will aesthetic subjects be pursued only by the rich? The result will be either fewer graduates or graduates of poor quality. Who would want to train to be a teacher with the prospect of a large loan, due to the length of the course, and then a relatively low income with which to repay it? A teacher would almost certainly be in debt anyway if he or she wished to buy a house or start a family. Yet that is the profession which is in desperate need of 18-year-olds who want to train for it.
  The Government have claimed that the scheme will simplify the system. I remember the same fine words being spoken last year when they claimed that the social security reforms would simplify the system. If that is the case, we can all watch out for a system that is hugely complex, impenetrable and unintelligible. If higher education is to be an attractive prospect for students, there must be full provision for student financial support. Financial status should not be a factor when deciding whether to enter higher or further education, as the pursuit of educational goals is in the interests both of the individual and of society.
  The scheme is geared towards creating a student population which is wealthy, white and male. Social groups which are already under-represented in higher education will be discouraged from seeking places and students seeking to follow courses in the arts, social sciences or non-vocational subjects will think twice. The Government say that they intend to expand access to higher education. I am delighted to hear that, but I should be interested to know how that can be achieved if students do not receive adequate financial support. The widening of access would involve attracting groups not traditionally represented at university, such as working-class students and mature students. I cannot imagine that many from those groups will be tempted into higher education when it involves living with a debt burden for several years afterwards.
  The Government will be in a quandary. On the one hand, they want to admit more students despite the demographic trend of a fall in the number of 18-year-olds. On the other hand, they do not want to fund those students through higher education and they want them to exist on increasingly less money. Students deserve a far better deal than that.
  During the present Government's term of office, the parental contribution, which represented 30 per cent. of mandatory awards in 1979, has risen to 86 per cent. and the grant has declined by more than 21 per cent. in real terms since 1979. The spectre of loans must be removed and the grant must be restored to its 1979 level before the

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  Government's fine words about access can be taken seriously. As the present grant is barely adequate, freezing it and encouraging students to take out huge loans and to proceed through their academic life with that burden is hardly an attraction.
  Mr. Janman: Will the hon. Gentleman give way?
  Mr. Steinberg: No. The hon. Member for Thurrock (Mr. Janman) has just come in. He should sit down.
  Loans will increase dependency on parental support, especially over the summer holiday, which is unfortunate for the 40 per cent. of students whose parents do not provide the full amount. A wider variety of students must come forward from more varied backgrounds with varying experiences and ages.
  The banks have poured scorn on the scheme and are not falling over themselves to participate in it. They are no doubt aware of the student opposition to the scheme and understandably they will want to avoid a possible boycott.
  It is a fallacy that the scheme will save taxpayers' money. The setting up of the procedures necessary to administer the scheme will be costly and complicated. The Government are playing down just how costly and complicated the scheme will be. If, as the Government intend, there is a 100 per cent. take-up, the system will not begin to pay for itself until well into the 21st century. It will take even longer if administration costs reach £150 million per year as is estimated by some. By that time it will have taken so long for the system to be remotely worth while that it will be nothing more than a liability.
  Who is the system designed for? It is certainly not designed for the student. It is another Tory money-grabbing exercise. As total student awards are now costing the taxpayer £850 million, freezing them is a desirable prospect for the Treasury—not forgetting the £65 million that it will be saving in stopping eligibility for social security benefits. Increasing grants to a decent standard would encourage more students to consider going into higher education and so cost the Government more money. Although the Government are tight-lipped about the future of the loan system, a decline of the grant in real terms will lead to its gradual disappearance.
  If we wish the universities to be places of restricted access and a privilege for the few, this system is the right way to go about it. Fewer young people receive higher education in the United Kingdom than in South Korea. The scheme is a form of hire purchase which treats education like the latest sports car—fine for those who can afford it, but the majority will have to do without.
  8.22 pm
  Mr. Steve Norris: Like many colleagues on both sides of the House, I went through university on virtually the maximum grant. I know that that experience is not uncommon. However, what distinguishes my case and, I suspect, that of most hon. Members is that my parents, who had little money available, made up the parental contribution required. It was not a large amount but they did make it up. One of the great pleasures that I have in Epping Forest is to represent the mother of the hon. Member for Blackburn (Mr. Straw).
  Mr. Straw: She did not vote for the hon. Gentleman.
  Mr. Norris: There is more room in heaven for a sinner who repents.
  Mr. Straw: Would the hon. Gentleman care to place on record his congratulations to my mother, as she has just been chosen for a safe Labour ward in the Epping Forest district?
  Mr. Norris: I would indeed. I had intended to send her a copy of this Hansard, as she is a frequent correspondent. I am sure that she too paid her full parental contribution.
  It is important to note that 41 per cent. of the parents assessed for a contribution do not make the full contribution. As my hon. Friend the Member for Boothferry (Mr. Davis) pointed out, those entitled to the full grant do not involve themselves in this arena.
  Ironically—I am sure that hon. Members on both sides will accept this—it is by no means the case that that 41 per cent. are the poorest. It is sad and all too common that many of the students finding themselves without the means to survive, from their parents and grant combined, are amongst the wealthiest. As hon. Members have said, that is because their parents do not believe that education is of any particular value and do not know why they should contribute to their child's education at that level. Therefore, they leave the child to fend for itself.
  There was talk earlier of the new arrangements being regressive. It was said that the system of loans was regressive because it impacted most on the poor. However, all the evidence shows that the opposite is true. The evidence shows that what would be regressive—if it were practicable—would be to abolish all parental contributions. That would cost about £2,250 million in a full year. No doubt it would happen "when resources allow", or whatever mealy-mouthed phrase we now have to learn in respect of Labour education policy. More importantly, it would mean that the wealthy would be treated the same as the less well-off. That would be regressive. The advantage of the loans scheme is that it allows the student to overcome regression because, regardless of parental income, the facility will be there. Whether the student is supplementing a full parental contribution or—sadly—using the loan to make up an absent parental contribution, at least a facility would be provided. Such a facility has been denied by successive Governments, especially Labour Governments, since the grants scheme was introduced.
  I am concerned about the way in which the scheme will ensure that we take students out of the social security system. I see in his place—he has been here throughout the debate—my successor, the hon. Member for Oxford, East (Mr. Smith) to whom, as ever, I wish well. He will know—as I do—that in Oxford the Department of Social Security office and the local authority found it difficult to provide a service to the genuinely needy—those in the community who needed instant access to the social security system because they had a pressing need for funds—because at times the office was legitimately besieged—I make no complaint about that—by students in higher education. Whatever definition we adopt for social security, it cannot be used to supplement higher education. It is bizarre to have that element in our funding of further and higher education.
  I welcome the new arrangements, which will mean that officials in the Department of Social Security and in housing benefit offices will be able to concentrate on those who need their help. It will be for students to take

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  advantage of a combination of grant and loan to fund their eduction. Surely that is one of the major advances in the Bill.
  I endorse the concept of the Bill, even if it will take some years to turn the balance. It seeks to redress the balance between the student, the parent and the taxpayer. Opposition Members do not seem to have an answer for the elderly, low-income taxpayer who is funding middle-class children and helping them to become even better off as they enjoy the substantial benefits of higher education.
  It is all very well for Opposition Members to point out that in the first, second and third years the scheme will be more expensive. We accept that—it is obvious. The Secretary of State is in an odd position if he is now to be criticised for spending more on the new system. I am the first to accept that the system means that in due course we will turn the corner to a point at which students will be accepting not a hugely greater but at least to some degree a greater reponsibility for the financing of their own education.
  I welcome that, if only because what distinguishes my earning capacity and that of my brother from that of my father and mother who grew up in Liverpool after the war is that I had the advantage of attending university and, as a result, moved on to a different plain of earnings. They did not begrudge what it cost them to provide me with that finance. By any standards, any student who is given the great advantage of a university education should be prepared to take more responsibility for financing it than the present arrangements allow. I commend that element of the new scheme.
  My last point is about the terms of repayment. I welcome the fact that the Bill is short. I commend one or two important observations on repayment terms to my hon. Friends on the Front Bench. There is an argument for being careful about the relationship between repayments and starting salary. It is important that we do not discriminate against, for example, jobs in research and in less high-profile areas of adult life where salaries are perhaps not high. We want to ensure a steady stream of competent graduates into what are acknowledged to be the less well-remunerated professions. It will be perfectly within the powers of the Secretary of State to ensure that the reasonable attitude that he has said he is prepared to adopt on repayment is extended to ensure that repayments are not burdensome in jobs with low starting salaries.
  Another important element which the Secretary of State should consider is inflation. I enter this caveat on the definition of nil interest rates in real terms. That is fine as long as there is a Conservative Government who believe in combating inflation even at the expense of raising interest rates. In that case, interest rates are likely to be higher than inflation. However, the Labour party's attitude would allow inflation frequently to run ahead of the rate of interest. In those circumstances, everyone would lose and the provision would operate to the disadvantage of the students. The Bill has such merits that I welcome it and commend it to the House.
  8.31 pm
  Mr. Mike Watson: I am grateful for this opportunity to contribute to the debate, as I represent a constituency where some 15,000 students live. Universal opposition to the top-up loans has been expressed to me by those students in several different forms. The last time that the matter was debated in the House, I presented a petition on behalf of some of the students. My hon. Friend the Member for Newham, South (Mr. Spearing) said that he had received a response to those petitions to the effect that no action was to be taken. I have received similar information, which will not be acceptable to my constituents who are students or the parents of students.
  Universal opposition has been expressed to the Bill. As we have already heard, of the 120 or so organisations which responded to the White Paper, 95 per cent. registered opposition. One might ask why the Government bother to consult when, even if such levels of opposition are expressed, they still introduce the legislation in the form originally intended. Opposition is coming from many sources, some of which one would not normally expect to encounter. The Committee of Vice-Chancellors and Principals and the Royal College of Nursing are among them.
  We are already aware that the British Medical Association has been politicised by the Government to an extent that no one would have expected; now the Royal College of Nursing is apparently going the same way. I have received a communication from it asking me to oppose the Bill on Second Reading. It said:
  "the average nurse graduate usually starts on a salary of £8,025 pa … Yet nurses will have to repay the same loan as any other graduate, albeit with repayments strung out over a longer period".
  That is cold comfort. It went on:
  "Applied to nursing, the RCN believes student loans threaten to undermine the future development of the profession, which will ultimately be to the detriment of both the NHS and patient care."
  I also received communications from the principal of the Robert Gordons Institute of Technology and a director of Glasgow college, two of the Scottish polytechnics. Again, they outlined their opposition to the loans plan. They are not individuals or organisations who are normally sympathetic to the policies of the Labour party. Nor are the banks, but to say that they are luke warm would be too kind in describing their reactions to the proposals. After arm-twisting and several concessions, some of the banks are now willing to go along with the plan but, to their credit, two of the three major Scottish banks have said that they will have nothing to do with it.
  It was noticeable that, of the eight Conservative Members who took part in the Adjournment debate on 20 October, only one was in favour of the proposal. It is also noticeable that of those Members, only one has spoken this evening. I take it that the others had other diplomatic engagements.
  I have three main areas of anxiety. First, the proposals will reduce still further access to higher education. Secondly, everyone will be worse off as a result of the introduction of a loans scheme. Thirdly, Scottish students and colleges and universities will be hit disproportionately hard.
  One of the problems of speaking late in the debate is that other speakers have already used up one's arguments. My right hon. Friend the Member for Halton (Mr. Oakes)

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  and my hon. Friend the Member for City of Durham (Mr. Steinberg) have said that take-up of higher education is 15 per cent., some 6 per cent. lower than that in South Korea. That is a damning statistic.
  Particularly damaging for those thinking of going into higher education is the decision to deny students unemployment and housing benefit and income support. That will compound the problem. Conservative Members have said today that the loans scheme is about students being responsible and made to bear a burden. However, many students bear a considerable burden as a result of their studies. For students who cannot rely on their parents to subsidise them, there is already a student loans scheme. They have been bearing the burden through bank loans, bank overdrafts, parental loans or charity from other members of the family.
  No one, from the Minister to Conservative Back Benchers, has explained how top-up loans will increase access to education. They have denied that there will be a detrimental effect, but they have said nothing positive. I and my hon. Friends remain to be convinced, because we have been given no evidence.
  It is a truism to say that everyone will end up worse off. Students will experience greater hardships in two ways. First, as a result of having undertaken studies, they will be required to go cap in hand to their parents for a subsidy or to the banks for loans to make sure that they have enough to get by.
  I have been given some figures by the National Union of Students. I was dismayed that, while the president of that union was in the Gallery, Conservative Members rubbished the organisation. It may not have the resources or facilities of the Ministers' back-up team, but it is a well-resourced and well-respected organisation. It has produced figures which show the extent to which students will be worse off as a result of loans. I refute the figures quoted by the hon. Member for Eastwood (Mr. Stewart). He said that the average loan will be £600. The figures from the NUS research show how the repayments will depend on the rate of interest that the students are asked to pay. The loan will be at least £400 a year and up to £1,400, outwith London depending on the rate that must be paid. The question of who will be worse off refers to parents. It is not true that, because the burden of parental contribution will be raised from parents, they will not have to make a contribution.
  The vacation period is a crucial aspect of loans. If a student cannot find a job, how is he or she to pay his way during the vacation? Housing for students is at a premium, so if they cannot afford to pay for houses or flats over the summer, they cannot be guaranteed housing of a reasonable standard when they return. The only people to whom they can turn are parents. The vacation aspect has been completely disregarded by the Government.
  Then there is the question of the Exchequer and its losses. It has been estimated that the scheme will cost the Exchequer £1·6 billion more than the cost of grants. That was the figure quoted to my hon. Friend the Member for Oxford, East (Mr. Smith) in a parliamentary answer on 21 March this year.
  The Government admit that, as repayments start to be made, we shall reach a point where the scheme will cost less than the present system. The date is estimated to be as late as 2026—in other words 35 years after student loans are first introduced.
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  Students who take out student loans in the first year will be grandparents, if not great-grandparents, by the time the scheme begins to break even. No Government have ever introduced a policy proposal based on financial and economic assumptions over a 35-year period. I ask hon. Members to imagine what they might have thought of 1989 back in 1954. Who could possibly have imagined the position that we face now? To make proposals based on what will happen so far in the future is economic, not to mention educational, lunacy.
  At a time when higher education is seriously under-resourced, it is a disgrace that public money is to be wasted in this way. For the same sum, grants could have been increased, parental contributions reduced and more places funded in higher education over the next decade. The Government should seriously consider that, even at this late stage.
  All too little has been said or thought about Scotland in preparing the legislation. Scottish students will face additional financial burdens. I am pleased that the hon. Member for Eastwood has returned, because I shall address some of my remarks to his earlier comments. He was not in the Chamber when I quoted the figure of £600, which he said would be the total cost of the scheme to students. That is not true. Simply to add a fourth year for Scottish students has a compounding effect which is likely to mean additional costs of 60 per cent.
  We must consider not simply Scottish students or English and Welsh students at Scottish colleges and universities, but courses throughout the United Kingdom for doctors, architects, various art students and vets which are longer than three years. Additional years impose additional burdens. It is particularly galling that the Secretary of State for Scotlnd can say that he has considered the matter but does not believe that any special provision for Scotland is necessary. People who apply for courses at Scottish colleges and universities will weigh that up and see that they are punished for applying to them. That is an insult to Scotland and its unique system of education, which is done a grave disservice by this proposal.
  People in Scotland are not bought off by the proposal that the loans headquarters should be based in Glasgow. Some 250 jobs, most of them debt collecting, are not welcome. We give as firm a no to that as to the remainder of this discredited, costly, unwarranted and unwanted Bill.
  8.42 pm
  Mr. John Marshall: The hon. Member for Blackburn (Mr. Straw) said that a future Labour Government would increase the real value of grants as resources allow. What happy memory has that conjured up? In 1974 a Labour spokesman would have said that he would increase the real value of the hospital building programme as resources allow or that he would increase the real value of nurses' pay as resources allow. British students are far too intelligent to be fooled by a conditional promise. They can look at the record and see how badly the Labour Government behaved and how badly a future Labour Government would behave.
  The White Paper has been warmly welcomed by parents who find the present system of parental contributions a major burden, the thousands of students who do not receive discretionary awards, many of my constituents in Hendon, South, the 40 per cent. of students who do not

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  receive their full parental contribution, and the 40 per cent. of students who have overdrafts at commercial interest rates and who in future will have to pay only a nil real interest rate.
  The White Paper incorporates a simple element of social justice. Both society and students benefit from higher education. We are assured that, generally speaking, those who enjoy higher education subsequently enjoy incomes 30 per cent. above the average for society as a whole. Surely those who enjoy such massively higher incomes should contribute to the benefits of higher education.
  The irony is that we have the most generous system of university support and the lowest percentage of people in higher education. It is no use Labour Members talking about South Korea and asking why it does better. Why do other countries do better? They have a different system of university support. Does that not suggest that our system is failing? It is surely madness for Labour Members to say that the system must not change but that its results are useless. Surely that underlines our case and undermines theirs.
  It must be obvious that our proposals will eventually produce savings which can be used to provide more places in higher education. We must ask ourselves whether it is better for the privileged to go to university with the present grant system or for more places to be provided in higher education. I am sure that everyone will agree that there should be more places in higher education and will recognise that only the Government can provide them.
  We have heard the most cant and hypocrisy from Labour Members talking about access from the lower socio-economic groups. No one has done more to harm the educational opportunities of those groups than the Labour party and Labour local education authorities. It is no accident that the children of inner London have little chance of going to university. The Inner London education authority has the worst education results of any education authority. It is no accident that it was the Labour party which led the campaign to abolish grammar schools. How many children from lower socio-economic groups left grammar schools able to go on to universities?
  Mr. Straw: Will the hon. Gentleman give way on that point?
  Mr. Marshall: No, I have a limited time to speak, unlike the hon. Gentleman who spoke for far too long, which is why I have a limited time.
  How many children leave our state comprehensive schools qualified for university? To increase access to universities for the lower socio-economic groups we need to encourage more children to stay on at school longer and to improve their results. The two great reforms to encourage children to stay on at school have been Conservative reforms. It was my right hon. Friend the Prime Minister who raised the school leaving age to 16 and the Conservative Government who introduced GCSE, which is encouraging more children to stay on at school.
  Mr. Rhodes James: A Conservative Government also introduced student grants instead of loans.
  Mr. Marshall: That was a semi-sedentary intervention without the permission of the hon. Member speaking.
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  The Conservative party, through the Education Reform Act 1988, has done more than any other political party to improve the results in our schools. It is that combined policy of encouraging pupils to stay on at school and to improve their results which will ensure that more children from the lower socio-economic groups go on to university.
  I listened with interest to what the hon. Member for Glasgow, Central (Mr. Watson) said about the Scottish higher education system, and I yield to no one in my admiration of it. My late father spent 30 years serving Scottish universities and I was connected with them for 12 years. The reason why Scottish education has always been deservedly popular is that it has an intrinsic worth and uniqueness not shared by the English system. It may be significant that a large number of students from south of the border have always been willing to go to St. Andrews university where they know that the politics are sound and the education even better. I do not believe that the introduction of our proposed loan system will discourage one student from attending St. Andrews or any other Scottish university. Indeed, it will encourage many more to do so.
  Medical students know that the return that they will get at the end of the course from their salary will be so large that they can certainly afford to repay the relatively modest loan.
  I hope that universities in Britain will become more flexible and more market-oriented as a result of the Bill.
  Why do universities not introduce a four-term year? Is anyone seriously suggesting that the great universities of the United States suffer from lower esteem because they have four terms a year? Of course they do not, and there is no reason why British universities could not do the same. Is anyone seriously suggesting that graduates of Buckingham university suffer because they graduate more quickly than those of other universities?
  Mr Straw: What did Lord Beloff say about the scheme?
  Mr. Marshall: Because a man is right 99 per cent. of the time does not mean that he is right 100 per cent. of the time. Labour infallibility may be a good religion, but it is not good politics.
  The students at Buckingham university do not suffer because they have a shortened academic year. I do not believe that some of our universities have considered the potential of shorter university courses, and a longer university year. If they did that, it would be to the benefit of universities and of their students.
  8.51 pm
  Dr. Dafydd Elis Thomas: The hon. Member for Hendon, South (Mr. Marshall) referred to the fact that politics at St. Andrews university were sound. We can vouch for that because the hon. Member for Banff and Buchan (Mr. Salmond) is a graduate of St. Andrews, and I see that he is sporting the St. Andrews university tie. However, I shall not enter the arguments about Scotland, although I agree with the hon. Gentleman about four terms a year. I have taught in adult education and at the University of Wales—sometimes I still do—and I support the principle of four terms for mature students and first entry students.
  The debate is not about education policy, but it is a debate that we have been having for many years about

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  reductions in state support from the taxpayer for a portion of the cost of supporting students—that is, the cost of their homes and lodgings rather than tuition.
  The Government plan to introduce a loans scheme which will provide a 50:50 grant and loan scheme, although that is not provided for in the Bill, as my hon. Friend the Member for Caernarvon (Mr. Wigley) said on another occasion. What is not clear is how that scheme will interrelate with the changes taking place in income support, unemployment benefit and housing benefit schemes.
  I should like the Minister to respond to a point raised by my hon. Friend the Member for Caernarvon—the way in which the special access funds will be used and applied to disabled people, particularly those with communication difficulties who need communication support. I refer particularly to deaf people. Hon. Members have been lobbied by a number of groups who are concerned that the loan scheme, particularly in the future, will have to bear half the burden of the day-to-day cost of student support as opposed to tuition.
  It is important that we consider the additional support costs required by disabled students. The Minister has not responded clearly enough to that, either during the debate on 20 October or today.
  We have heard the familiar arguments today about how the scheme will affect educational take-up, but the debate is not about that. It is about the Government's attempt to reduce their public expenditure commitment to student support.
  Many of the arguments that are being rehashed about access are unproven. The Government seem to be saying that the scheme is likely to increase access, because at present it is appallingly bad. That seems to be a baseless argument. The fact that we have an age participation rate, a women's participation rate, an ethnic minority participation rate and a class participation rate that are inadequate compared with—
  Mr. Jackson: I have had many friendly discussions with the hon. Gentleman in the past. The argument about access is simply that the main determinant appears to be the scale of education. If one extends the scale, access will get better. The argument behind the student loans scheme is that it will provide more money to expand the system.
  Dr. Thomas: The Minister has clarified the position, and I agree with him that the determinant of participation is the scale of the system. We are returning to the old arguments about universal benefits of the 1960s, when we talk about the need for general provision of social service and of education—of which the Robbins report was the higher education component—in order to ensure greater participation. However, it is not proven to me when I consider the system in other countries and hear the advice of leading academics and people who are concerned about how their schemes operate.
  There was a good study of the American system in the Financial Times of 24 November 1989, just after the Bill was published, which quoted Mr. Roger Koester, the associate director of financial aid at Northwestern university, as saying:
  "Students are no longer making education decisions based solely on their academic talent, but on starting salaries. We are breeding a far more mercenary group of students."
  No doubt that is what the Conservative party would like. It is significant that some experts in the United States say
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  that that country and its great academic system have only a few years grace before they are forced to overhaul the way that students pay for higher education. We may find that United Kingdom students are having a new loans and grants scheme inflicted upon them, whereas the United States is having to move—
  Dr. Hampson: The United States system, of which I have experience, and systems in other countries are having to be reviewed, because the sheer cost of the loans scheme is forcing them to cut back, as we saw in the Reagan years. They do not want a more costly scheme of full grants for all students.
  Dr. Thomas: The whole point of a comparison with the United States system is to consider the level of deferred payments and of defaulting and whether the system is a burden on individual students. We will go down that road if we rely on the loans scheme for our support.
  Concern about the total cost of the scheme, and recovery costs in particular, has been stressed. In the United States, total federal spending on the guaranteed student loan programme component of higher education is one third of £3 billion. That is being spent on substituting private sector bank loans to students and the rest is being eaten up by paying the default rates. That gives us a clear warning about a loans scheme. I see that the Minister is indicating dissent. I shall let him do that from a sedentary position, otherwise I shall not complete my speech in the time available.
  We are also worried by the fact that the Government regard the scheme as a solution to the problem of access to higher education. We must devise a policy for higher education that makes it much more flexible in terms of access. I refer to flexibility of course structure, and flexibility as between the designations of further, higher and recurrent education, so that students are attracted at all stages of their careers. It is extremely unlikely that a loans system which imposes additional burdens on earners will attract people back to the education system, especially for retraining.
  Graduates who return to higher education for further training and others who decide to go into higher education later in life will provide many of the skills needed in the economy in the next century. I know that the Minister cares deeply about this, but any deterrent to people participating in higher and continuing education will inhibit the flexible skilling that the economy needs.
  For all those reasons, we shall oppose the Bill. We are especially worried that the existing hardship schemes that are operated voluntarily by student unions and universities are being used to the full. I have been lobbied by students who tell me that such funds are often swallowed up early in the term. Already students in the grant system are having to borrow or take overdrafts of £300 or £400 a year. That shows the pressure that is already on them. A loans scheme will only increase that pressure. The Government want that. They want a clear financial incentive in higher education. They want to turn it into a marketable commodity, as they have tried to do with the rest of the economy.
  9 pm
  Mr. Anthony Coombs: I strongly support the Bill because it is right, and it is about time that we asked students to repay some of the investment that is made, often by much lower-paid taxpayers compared with students' potential earnings.
  The Bill seems at last to be tackling the new realities at the end of the 20th century and the beginning of the 21st. In the next century, the successful economies will not be those which are natural resource or capital based; they will be the knowledge-based economies. Charles Handy, of the Institute of Personnel Management, has calculated that 30 years ago 30 per cent. of the population worked in knowledge-based industries, but that 70 per cent. will do so by the end of this century. Because we rely purely on a grant-based system and parental contributions, we have unnecessarily handicapped ourselves.
  Mr. Straw: Is the hon. Gentleman suggesting that people who work in factories do not apply any knowledge?
  Mr. Coombs: I suggest—I am sure that Professor Handy does, too—that a significantly higher proportion of jobs in the 21st century will require higher education qualifications. We handicap our scope for economic growth by relying purely on grants and parental contributions.
  Student loans are not exactly new. The Anderson committee of 1960 rejected them only because it estimated an increase in higher education to 175,000 students by the end of the century rather than the 400,000 that we now have. In 1963, Robbins said that once the habit of contemplating higher education is
  "more firmly established, the arguments of justice in distribution and the advantage of increased individual responsibility"—
  through a system of loans—
  "may come to weigh more heavily and to lead to some experiment in that direction."
  In 1985, Lord Glenamara and others in the Labour party—in a paper entitled "Student Financial Support"—effectively accepted the principle, but rejected loans in practice because they were concerned about repayment difficulties, especially for low-paid groups and people who had career breaks.
  The upshot of all that was that nothing was done and Britain was left with a system of student maintenance which was expensive, gave relatively low access and was socially regressive. Britain spends more on higher education than any other European nation except the Netherlands. My right hon. Friend the Secretary of State has already given, at constant 1984 prices, the United Kingdom figures for average maintenance support compared with our industrial competitors. The United Kingdom spent £270 per student, West Germany £70 and Japan only £30. Moreover, grants in Britain are available to 80 per cent. of the student population, which is much higher than anywhere else in the industrialised world, far more than any other country with the exception of the Scandinavian countries. That amply demonstrates the generosity of our system.
  Mr. Janman: My hon. Friend was right to quote Lord Robbins. Another aspect of the early 1960s was the Anderson committee which, in 1960, recommended the current system, envisaging about 175,000 grant awards per
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  year whereas we are now running at more than 400,000 grant awards per year. The system was first started when people did not realise what the total cost to the taxpayer would be.
  Mr. Coombs: That is precisely the point that I was making earlier. I concur with what my hon. Friend says.
  The loan system being introduced will be universally available to 100 per cent. of the population. Comparing that with similar loan facilities available in other countries, we find that in Canada they cover only 30 per cent. of the population, in France they are used for emergencies only and cover less than 1 per cent. of the population, and in Japan they cover less than 12 per cent. of the population. Even in the United States, where they were pioneered, loan facilities apply to only 25 per cent. of the population.
  Despite our generous system of student support, our participation rates are significantly lower than those of our industrial competitors at 14 per cent. compared with 28 per cent. in Germany and 44 per cent. in the United States, and a considerably higher rate is expected in other competitor countries, particularly in south-east Asia. That is the greatest challenge to the mythical proposition that loans will necessarily mean less access.
  One does not need a great amount of cynicism to realise that the National Union of Students will not fall over itself to accept loans when it has previously been offered grants. But even its own survey, showing that at present only 7 per cent. would forgo a university education with a loan scheme, is belied by the fact that figures for student entry this year are some 2 per cent. up, despite the fact that the loan scheme will no doubt impact on their higher education in future years.
  My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) made the valid point that, although the grant has shown a reduction in real value of some 25 per cent. since 1979, there have been 180,000 extra students. In the past two years, social security support has declined, as have parental contributions, but that has had no effect on student access—indeed, rather the opposite, as students have, rightly, increased their employment income, as they are expected to do in other countries in the vacations and at other times by more than 51 per cent. in the past two years alone.
  As my hon. Friend the Member for Bury, North (Mr. Burt) said, the moral argument is that it can only be right that the 15 per cent. of the population who have the opportunity of a university education, and who are subsidised by the 85 per cent. who have not—especially as a quarter of the income tax paid in Britain is paid by people with incomes below £10,400 per year—should make some contribution towards the university education that they receive. Ultimately, access to higher education in Britain will depend on the numbers suitably qualified in our schools, not on the type of student maintenance available.
  The scheme shows no evidence of being a deterrent. It is socially more progressive and it will provide a higher level of income support and encourage independence if parental contributions are halved. Except perhaps in the early-day motion put forward by the hon. Member for Bradford, North (Mr. Wall), which amounts to spending an extra £3·5 billion of taxpayers' money each year, I have heard no credible alternative which addresses the problem of increasing participation in higher education in Britain

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  over the next 20 years and does not involve a loan system. It is a practical alternative and one that will be accepted by the people and by future students. I strongly support the scheme and I congratulate the Government on bringing it forward.
  9.10 pm
  Mr. Harry Barnes: I heard the hon. Member for Cambridge (Mr. Rhodes James) speak in the debate on the White Paper, so I exempt him from the criticisms that I shall now make of the Government and Tory Members. They do not have any serious interest in education. They are interested only in education as real estate. They judge education and educational advances by assessing the real estate of the mind and its development and the price that can be paid for it and the earnings that people can make after receiving a university education. They look at education like that rather than discussing what it is about and how we should be directing it.
  Education should be about opening people's minds and giving them the wit and intelligence to turn their hands to anything and to tackle problems in life. Increasingly, the Government are interested only in closing people's minds, limiting and restricting their horizons and making them pick up specific attitudes and regurgitating them. That is contrary to the spirit of liberal education at all levels.
  The contributions made by Tory Members made me worry about higher education institutions, because many said that they are products of British universities, but they put forward arguments that had no concern for the values that there should be in an education system, or for the notion that education is about understanding situations. It is not about getting facts and regurgitating them, but about analysing and discussing them. If one analyses situations and understands other people's arguments, it is easier to remember the facts and details.
  The hon. Member for Swindon (Mr. Coombs) used many statistics. If one were a university undergraduate going into an exam, it would he difficult to use figures such as those. To do that, one would have to be like Leslie Welch, the memory man, but he did not necessarily understand what he was repeating. The hon. Gentleman had to follow his notes very closely to give us that information. If people investigate and analyse situations, they often find that the information they need is attached to that analysis. Sometimes, they do not understand where it has come from, but they have understood it, not because they have volumes of encyclopaedic information available to them but because they have argued the information out.
  In education, we need a questioning attitude so that we investigate matters, which will give us an opening into what we are investigating. When we have solved that problem, it opens up far more questions than it answers. Such an attitude and approach would help us to handle the economic problems that the hon. Member for Swindon mentioned, because people would have their wits about them and could advance. The flowering of understanding should take place in higher education institutions in particular.
  What is education for? It is to help individuals to develop so that they can lead full lives and realise their potential. In Britain, we place many stumbling blocks in the way of people's progress. We must not find yet another stumbling block in the form of a student loans system. We
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  also want an intelligent society. We want people to discuss and argue, to participate in the democratic process and to make collective decisions. We would do well to remember in Britain the flowering of the democratic process that is taking place in eastern Europe.
  There is another reason why education is especially important at the moment: we are undergoing a technological revolution. We can no longer depend on raw materials for our survival; to survive these days, we must begin living on our intelligence. If we fail to educate our people, we shall fail to earn a position in the world. Economic and social factors are both very much to the fore.
  I shall not detain the House much longer, as I know that the hon. Member for Cambridge wishes to develop the argument further. Among those who will be hit by a student loans scheme are those adults who are prepared to sacrifice a tremendous amount in the present and perhaps some of their earning potential in the future by giving up good jobs, and who are prepared to take risks. No one ever seems to talk about students who fail. How are they to earn the money to pay back the loans?
  No one is in a worse position than women—both those who return to education and those who enter it for the first time later in life. They bear a heavy burden, and when they have completed their education they may have to take time off work to have families and so on. The last thing they need is the additional burden of a loan, especially as they tend also to enter badly paid jobs such as speech therapy.
  People from working-class backgrounds and members of the ethnic minorities will also suffer. They already feel that they have to open many doors to complete their education. If we place yet another closed door in their way, they will give up. We should be encouraging them to push open those doors, and that can be achieved only if the state provides the necessary resources.
  9.17 pm
  Mr Robert Rhodes James: My right hon. Friend the Member for Kincardine and Deeside (Mr. Buchanan-Smith), who is not as well as one would wish, has asked me to convey this message to the House.
  "If I had been able to attend the House, I would certainly have been speaking against the proposals and possibly voting against them as well. I certainly would not have supported the Government's policy."
  I have spoken so often on this subject, in the House, in my constituency and elsewhere, and my views are so widely known that I shall not need to trespass long on the patience of the House. I still find it baffling that, after two years of apparently deep consideration of the problems of student finance, the Government have come up with a widely disliked and extremely complicated scheme, which will be horrifically costly in the initial period and which, in my judgment, will act as a serious deterrent to many potential students. The scheme also runs counter to the Government's declared policy, which I warmly support, of dramatically increasing student numbers. Ministers say that there is no contradiction, but I beg to differ.
  We all know that the extravagant hopes and expectations of the early 1960s, when the Conservative Government embarked on an enormous expansion of higher education and introduced student grants, turned into disappointments. We must look back on that period. Certain academics and former students should reflect on

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  their roles at that time. However, I fear that that is history. The House and the former Labour Government should share the blame of which there is plenty to go round.
  Some time ago, the Prime Minister invited me to take on responsibilities in these matters. I visited every university and polytechnic in the country. I reflect on the fact that I played some part in saving Coleraine from being closed. I learned certain things then. I discovered in certain famous institutions that there were bad debts and in certain not-so-famous institutions I discovered superb debts. I came across wonderful teachers and bad teachers. I was struck by the great diversity.
  I strongly supported Sir Keith Joseph's proposals in 1981 because they were urgently and desperately needed. In private, vice-chancellors told me that they agreed with those proposals, but in public they would denounce the Government. Reforms were urgently needed. I discovered much that was bad and lamentable. However, I discovered a wonderful spirit among students. I attended many public meetings, but did not experience any outcries.
  I recall that Durham university at the time was developing a cricket ball for the blind. It was successful; a superb example of applied technology for a social purpose. In that connection, I sometimes think of Mr. Dexter. [HON. MEMBERS: "Oh, no."] I also recall a professor at Newcastle polytechnic who had the opportunity to go to Cambridge and Oxford, but he decided to stay in the north-east because he had a deep commitment to the area.
  If I had been involved in the Government's new proposal, I would have introduced a real top-up loans scheme to be administered by the institutions themselves and not by the banks or some monster in Glasgow. I would not have proposed a plan in which the loans element would be at the expense of the grant. I dislike the Government's scheme in principle and in practice, and I will vote aainst it tonight.
  9.22 pm
  Mr. Andrew Smith: A distinguishing feature of the Government's students loans proposal is that the more time Ministers have to consider it, the less information they are prepared to put before the House. Instead of learning more about the scheme, hon. Members learn less. We might have hoped that Ministers would have carried this "Alice's Adventures in Wonderland" course to its logical conclusion and made the Bill disappear altogether so that only the grin of the former Secretary of State for Education and Science was left.
  The present unfortunate Secretary of State for Education and Science, on taking up his office, could have taken the opportunity to dump all his predecessor's ill-judged, ideologically motivated measures and set education on a course that was better for the country and for the Conservative party. As it is, he has chosen to stick to the very worst proposals and dilute what was better. The sympathy that hon. Members might have felt for him is accordingly evaporating even more quickly than the information in the Bill.
  As my hon. Friend the Member for Blackburn (Mr. Straw) said, it is nothing short of a constitutional outrage that such an important change in higher education which affects the opportunities of so many people should be
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  brought forward in this shameful fashion, denying the House the information upon which to make a reasoned judgment.
  The key point at issue is that the Bill has been specifically designed to minimise the time and opportunity for public knowledge and debate of the central elements of the legislation to put the scheme into effect. Let us examine some of the important information that Parliament is still not being told about.
  Hon. Members are not being told about the amount of the proposed loans, how they will vary for London, outside London or for home students, or how repayments are to be made. We are not given details of the access funds about which the hon. Members for Bury, North (Mr. Burt) and for Rugby and Kenilworth (Mr. Pawsey) expressed concern. We are not told about the withdrawal of social security benefits or any exemptions. We are not being told what the student loans company is, what it is to do, or how it is to work.
  Hon. Members are not being given any breakdown of the administrative and start-up costs. As several hon. Members have pointed out, we are not being told anything to mitigate the damage that the Bill will do in Scotland. We are not being told anything about the damage to nursing as a graduate profession. That point was stressed by my hon. Friends the Members for Sheffield, Hillsborough (Mr. Flannery) and for Glasgow, Central (Mr. Watson). We are not being told of any measures to help people such as medical students who are on especially long courses and face even greater outstanding debts at the conclusion of their studies. The Secretary of State's advice that longer repayment periods are being seriously considered will be of scant comfort to people in that position.
  We are not being told of any help for disabled students such as the deaf, on whose behalf the Royal National Institute for the Deaf wrote to hon. Members yesterday reminding us that deaf students do not receive social security payments and seeking an access fund and an overhaul of disabled students' allowances. How can Ministers ask hon. Members to approve the Bill without addressing those matters? We are not told much. Hon. Members are being asked to vote in ignorance for ignorance.
  One of the main reasons why the Government are in such a mess with the proposal and why they have resorted to this shabby expedient of an enabling Bill is that they are vague and confused about the purpose that they are seeking to achieve in the legislation. We are told variously that it is to save money and that it will do students good. We are told by the Secretary of State that it will not impede access. But the Under-Secretary of State and the hon. Member for Rugby and Kenilworth and others have said that it will extend access—perhaps a significant difference. It bears repeating that, even on the Government's own figures, there will be no cumulative savings for taxpayers to the year 2026 with the 100 per cent. take-up which the Under-Secretary of State has said that he hopes to achieve, and no cumulative savings until 2014, even with 80 per cent. take-up. Over the next two decades the Government are seriously proposing to spend £1·6 billion on giving students less. That money is being taken from the taxpaying pensioners to whom my hon. Friend referred.
  It is a pleasure to take part in a debate with the hon. Member for Epping Forest (Mr. Norris). He gave an

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  excellent exposition of why he fared somewhat better with the more affluent voters of Epping Forest than he did with those of most modest means in Oxford, East.
  Hon. Members have heard claims and counter-claims about overseas experience. My right hon. Friend the Member for Halton (Mr. Oakes) and others have argued that is makes no sense for the United Kingdom to opt for loans precisely when other countries, notably Sweden and West Germany, are moving from them by increasing the proportion of grant. That view has much to commend it. Other hon. Members such as the hon. Members for Bury, North and for Hendon, South (Mr. Marshall) have argued, as have Ministers, that loan schemes in various other countries co-exist with higher participation rates than in Britain.
  There are two important points to make about that. First, if hon. Members consider the number of students graduating as opposed to entering higher education, they will note that Britain's relative performance is much better. Chart H of the Department's own White Paper shows that 27 per cent. of the relevant age group in the United Kingdom have graduate qualifications, compared with 25 per cent. in France, 21 per cent. in West Germany and 18 per cent. in the Netherlands—all countries that operate student loans schemes. That is testimony to the cost effectiveness of the grants system and to the relative efficiency of British higher education in thereby holding down the rates of drop-outs and retakes which poorer financial systems of support foster.
  Secondly, it is a plain logical fallacy to suppose that, simply because higher participation may coexist with loans schemes elsewhere, the shift to a loans scheme here would in any way increase participation. The proposition that increasing the effective cost of something will, by some mystical means, increase demand or take-up is an affront to common sense and flies in the face of the evidence available.
  Ministers will be aware of the survey that was published yesterday by the National Union of Students which showed that 16·2 per cent. of respondents stated that they would not go into higher education if the Government brought in the scheme. That proportion rose to 23·6 per cent. among students from low-income families.
  Mr. Ian Bruce: When the hon. Gentleman says that students will not take up university places, does he not find it strange that during the past 12 months, when they have been clearly told that there will be a student loans scheme during their period of higher education, they have come forward in greater numbers?
  Mr. Smith: Obviously they have confidence in the prospect of a Labour Government coming to power at the earliest opportunity and repealing the scheme. If the hon. Gentleman had been here for the debate, he would have heard the arguments on that.
  Ministers will also be aware of the survey carried out by the British Medical Association Students Group, showing the serious effects of the scheme for those contemplating studying medicine.
  As for the claim that the scheme will be good for students and, in the words of the Secretary of State, that it will
  "reduce students' sense of dependency on the state, and will promote a proper sense of self-reliance and responsibility."—[Official Report, 20 October 1989; Vol. 158, c. 375.]
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  the Government cannot have it both ways. They cannot expect the House to accept simultaneously the contradictory assertions—on the one hand, that the scheme will hurt and that students will therefore think carefully about what they are getting and how they will pay the loan back, and, on the other hand, that the scheme will attract people who have previously not taken advantage of grants to take advantage of the loans. The scheme can hurt or it can help, but it cannot do both.
  In practice, it will hurt, especially the proposal uniquely to penalise students by taking away their access to income support and housing benefit. There is no doubt that the scheme will most hurt those students from poorer backgrounds, those studying in London and, as the hon. Members for Antrim, North (Rev. Ian Paisley) and for Antrim, East (Mr. Beggs) have said, students in Northern Ireland.
  The Research Services Limited study, "Student Income and Expenditure Survey", which was commissioned by the Government, showed that 70 per cent. of students from C2, D and E backgrounds receive some money in benefit, as compared with 44 per cent. of those whose parents are in social class A. The sums involved are significant, with average students in receipt of housing benefit receiving on average £286, rising to £310 for working-class students and £499 for those studying in London. There is no doubt that the removal of such sums will cause hardship and that cannot but act as a disincentive for poorer students.
  The Government clearly have no idea about how this loans Bill ties in with the previous Secretary of State's commitment to double participation in higher education over the next 25 years. As my hon. Friends the Members for Bridgend (Mr. Griffiths) and for City of Durham (Mr. Steinberg) have ably pointed out in their excellent speeches, there is a glaring inconsistency in the information being provided to the House. All the Government's projections of costs and savings relate to chart 5 in the White Paper, which shows participation of the relevant age group rising from just above 15 per cent. in 1990 to just above 18 per cent. in the year 2000. In the tables estimating the financial effects of the loans scheme it is said:
  "The estimate is based on the hypothesis that the number of students eligible for loans grows in line with the projection shown in Chart 5 up to the end of the century, then remains constant thereafter."
  Ministers talk about increasing access and about doubling the number of students in the next 25 years, but all the costings that we have been able to squeeze out of them—the £1·6 billion cumulative cost in the next 20 years—are based only on a marginal increase in participation between now and the end of the century. No clearer evidence could hardly be available to show that Ministers either have not done their sums on costs or that they do not understand the implication of what they are saying about access, or possibly both.
  I challenged the Under-Secretary about that in a letter dated 19 July to which I have not yet received a reply. That silence speaks volumes for the weakness of the Government's argument on how they will pay for the expansion of access to which they say they are committed.
  Faced with all that, to say nothing of annual default rates of more than 100,000 after 2010 and deferral rates of more than 700,000 in the same year and onwards, no wonder that the poor old banks do not know which way to turn or what to do for the best. I never thought that I

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  would get applause at student rallies for the banks. One need only say the Co-operative bank, Lloyds, Bank of Scotland or Clydesdale to have them cheering to the roof-tops.
  The Under-Secretary should say how the scheme will be administered. In a written answer to me he said that students will be obliged to seek a loan at a branch of one of the participating banks. Will he clarify that a student needing to take out a loan will not need to hold an account at the bank providing it? Will he confirm that a Co-operative bank customer can go along to a participating bank, which, in return for the £12 fee paid by the Government, will do all the administrative work and pass the loan amount provided by the Government to that student's Co-operative bank account at no charge to the student or to his bank? The non-participating bank will incur no risks, no additional administrative costs, and will not face queues of students filling in loan claim forms who will then clog up the counters at the beginning of the academic year. It will also not suffer any damage to its reputation in the eyes of students. It appears that the costs, the risks and the administration will fall on the participating banks in return for which they will receive £12 per application and a pat on the back for acting as an administrative arm of the Government. Will he confirm that that is broadly the picture? Is he surprised that some banks would prefer not to take part?
  Mr. Walden rose—
  Mr. Smith: I shall not give way as I am running out of time.
  The question that has come up time and again is why the Government have not listened to the volume of opposition expressed by all groups that have responded to the White Paper. If the Government will not listen to students, to colleges, informed commentators, the banks or to us, why will they not listen to their colleagues here and in the other place who have no confidence in the proposals?
  The House is confronted with an apology of a Bill. Its very omissions speak volumes for the weakness of the case that Ministers have attempted to put to us. If they are really convinced of the strength of their loan proposals, why have they not had the decency, to say nothing of the constitutional propriety, to set out those proposals in full before us? It is not as though the Government have not had enough advice. So far they have spent no less than £451,223 on the consultants, Price Waterhouse. It looks as though that company and debt collectors will be the only ones to get any benefit from the Bill.
  I agree with my hon. Friend the Member for Burnley (Mr. Pike) that the Bill is squalid. Frankly it stinks as it reeks of Ministers' fear as to what the House and the other place would do if the full details were included in the Bill. It reeks of the sweat that Ministers are now in because they are trying to meet the Government's self-imposed deadline of having the scheme up and running by next autumn. The Bill shows contempt for the House and the best interests of higher education in this country. It will pave the way for entry to higher education to depend more on ability to pay and less on ability to benefit.
  As we heard in the debate on 20 October, many Conservative Members are opposed to the likely practical
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  implications of the Bill, its high administrative—and particularly public expenditure—costs. In addition, others such as the hon. Member for Cambridge (Mr. Rhodes James) rejected it for its effects on access and because it starts to dismantle the system of grants which we believe, and Conservative Members were once proud to believe, most effectively opens up opportunities for higher education.
  This is a thoroughly bad Bill, as expensive in its costs as it is disastrous in its consequences. It will be bad for our country, higher education, students, and especially those people we wish to attract into higher education. It has been brought before the House in a thoroughly shabby way. It invites rejection from hon. Members on both sides of the House who should stand up for educational opportunity and reject it.
  9.41 pm
  The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson): It is always agreeable to follow the carefully prepared diatribes of the hon. Member for Oxford, East (Mr. Smith) and I look forward to our further encounters in Committee when his advice is rejected as it will be today.
  We have had an interesting debate which has been notable for the substantial contributions made by Conservative Members. With all respect to my hon. Friend the Member for Cambridge (Mr. Rhodes James), what has been said from this side of the House has been more representative of Conservative opinion than what was said in the previous debate.
  Many issues have been raised in the debate and I shall make my way through them in turn. These include the nature of the Bill, international comparisons, access, student attitudes to loans, equity and social justice, the disabled, and housing and social security benefit. I shall try to address all those subjects in the short time that I have.
  The structure of the Bill has been raised by many hon. Members, including the right hon. Member for Halton (Mr. Oakes) and the hon. Member for Antrim, North (Rev. Ian Paisley). A great deal of play has been made of the way in which the Bill is drafted. We have been told that it is a constitutional outrage and the hon. Member for Antrim, North compared it with an IRA bomb, which was an analogy in poor taste. The structure of the Bill is identical with the structure of the Education Act 1962 providing for student grants which has not been subject to any complaint during the 20 or so years of its operation.
  The hon. Member for Blackburn (Mr. Straw) gave no cogent explanation as to why it was inappropriate to follow the path laid down in the 1962 Act. Anybody who thinks for more than a minute about how to administer a grant or loan system will see that the legal arrangements that we envisage are the only sensible ones. We are taking power to provide money for loans and to table regulations for the administration of loans on the model of the grant provisions. We had a valuable testimony from my hon. Friend the Member for Eastwood (Mr. Stewart) who has been responsible for running the grant regulations in Scotland, as I have in England and Wales.
  My hon. Friend the Member for Canterbury (Mr. Brazier) made an important intervention in the speech of my right hon. Friend the Secretary of State when he pointed out how it was possible to use the flexibility given

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  by the regulation-making power to the advantage of his constituents. There have been many such cases. Let us hear no more of this totally bogus argument.
  Dr. Hampson: When my hon. Friend is putting flesh on this thin skeleton of legislation, will he consider two developments? One is to try to get more of the banks' own money into higher education by co-operation between the Treasury and the Department of Employment in extending the career development loans system that we already have, which uses some Government subsidy to assist the banks in lowering interest rates so that we can help as wide a range of students as possible. The second is not to go to a full 50:50 loan and grant but to have a higher grant element, as the United States has in its basic educational grant, to help get more participation from families on low incomes.
  Mr. Jackson: I hope that my hon. Friend will assist us in Committee to improve the Bill. It will be open to the House to amend the regulations and it will be possible for the House to take a view about whether it is desirable to have a 50:50 loans scheme or to change it in other ways.
  Mr. Straw: How can this House amend regulations?
  Mr. Jackson: The regulations come before the House for debate, as they have done for a long time in respect of grant legislation.
  The issue of international comparisons was raised by, among others, my hon. Friend the Member for Bury, North (Mr. Burt) and the hon. Member for Antrim, East (Mr. Beggs), and much play has been made of that. There are many different systems of student support. Indeed, if one imagines a sort of spectrum of generosity towards the student, the British system, as my hon. Friend the Member for Wyre Forest (Mr. Coombs) pointed out, is almost certainly the most generous in the world. It provides for free tuition, free maintenance grants for nearly all students—certainly for all full-time students—and at a generous level. The result is that Britain is spending a higher proportion of GDP on student support than any other country and spending a higher proportion of its higher education expenditure on student support.
  At the other end of the scale, Japan is probably the least generous. The Japanese charge for tuition, they have no grants, only loans, and those loans are available to only 10 per cent. of students. I echo the words of my hon. Friend the Member for Hendon, South (Mr. Marshall) in saying that Japan has more students in higher education than we have, which suggests that there is no correlation between student support arrangements and participation.
  Our proposals will create a loans system which will be among the most generous in the world. It will be available to all full-time students. The loans scheme in the Federal Republic of Germany, for example, is available to only 30 per cent. of students. Ours will be at a real zero rate of interest. That is to be compared with the positive interest rates which are commonplace in other loan schemes. We are moving towards a 50:50 ratio of loan to grant. Compare that with the movement in the Federal Republic and with the position in other countries in northern Europe.
  We are making extensive provision for deferral if incomes fall below 85 per cent. of the national average income—about 10,000—a facility that is not available in United States loans system. In view of what has been said
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  about mature students, it is important to remember that under our proposals loans will be available until age 50. Many countries cut off entitlement to a loan at age 30. Our proposals are for a generous loans scheme.
  Mr. Salmond: The Minister will be aware that there is a higher participation rate in university education in Scotland than south of the border. Has he seen the calculations of NUS Scotland? Using the Government's figures, but substituting a 6 per cent. inflation rate, at the end of a four-year degree course the outstanding debt will be 60 per cent. greater than at the end of a three-year degree course. Will that not be a substantial disincentive to participate in the four-year Scottish course? Does the Minister accept those figures, and does he intend to do anything about that?
  Mr. Jackson: The calculations of the NUS are not correct and I believe that the value of the fourth year to many will be such that they will be prepared to pay a reasonable sum for it.
  There has been much discussion about access, and I shall not recite the names of all those hon. Members who referred to that important question. The issue of increasing participation in higher education by students from working-class backgrounds is too important to be left to the superficialities espoused by the Opposition.
  Let us start with the facts. Britain has relatively poor working-class participation, despite 30 years of generous grants which have mainly benefited the children of the middle-class—I do not complain about that, but it is a fact. The hon. Member for Burnley (Mr. Pike), having admitted this, asked why it should be but suggested no answer. The answer has not much to do with student support—it is that working-class children are less inclined to stay on at school after 16. My hon. Friends the Members for Lancaster (Dame E. Kellett-Bowman) and for Hendon, South were right to say that the Labour party is in no position to lecture us on this point as it was largely responsible for dismantling the ladders of working-class opportunity.
  Rather than emphasise that negative point, I wish to emphasise the positive point that if the most important determinant of access is the staying-on rate, we can look forward to an expansion in higher education because the staying-on rate has risen from 34 per cent. when the Labour party was last in office to 42 per cent. now, and the rate of increase is rising. We believe that the number of children staying on at 18 will increase, and the evidence is that there is no class differential in entry to higher education among those who have stayed on to 18.
  Mr. Win Griffiths rose—
  Mr. Jackson: There is no reason to suppose that a working class 18-year-old will be deterred from entering higher education by the introduction of a loan. If he is bright enough to enter higher education, he will be bright enough to see the benefits that will accrue to him not only in educational terms—the hon. Member for Derbyshire North-East (Mr. Barnes) was right about that—but in terms of future income. Such students will see that student loans will add to the resources available to support them while they are studying and they will recognise that it will be a risk-free investment, because they will not be obliged to repay after graduation if they cannot do so. As my hon. Friend the Member for Eastwood observed, it is

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  extraordinary to argue that any price higher than zero will deter someone from higher education. Either that grossly undervalues higher education, or it grossly underestimates the intelligence of younger people.
  Mr. Pike rose—
  Mr. Jackson: Student attitudes to loans were evoked by the hon. Member for Oxford, East. In common with other Conservative Members, I think it a bit of a joke for the National Union of Students to use taxpayers' money to ask students whether they would prefer a free gift to a repayable loan. The union did not need to invest taxpayers' money in that inquiry to derive the answers that it was seeking. The real question is what students are doing, not what students are saying in reply to politically motivated surveys.
  As has been pointed out, this was the first year of recruitment of young people who knew that the Government planned to introduce student loans in their second year, and my hon. Friend the Member for Wyre Forest actually understated the effects. This year the evidence available suggests there has been a 5 per cent. increase in recruitment to universities, a 13 per cent. increase in full-time students going to polytechnics and a 10 per cent. increase in the number of part-time students going to them. Those facts shed light on the false proposition that young people will not enter higher education if there are to be loans.
  Mr. Andrew Smith rose—
  Mr. Jackson: I do not have much time.
  I want to say a word about the argument that the scheme is a subsidy to the rich, which was advanced by the hon. Members for Blackburn and for Antrim, North and, in the last debate, by my hon. Friend the Member for Chichester (Mr. Nelson). No doubt my predecessors shared my experience of dealing every week with letters about young people whose parents refuse to fill in the forms to assess their income and hence their parental contribution. Surveys have shown that 41 per cent. of parents do not pay their full assessed parental contribution, so I must tell hon. Members who think that our loans will be a subsidy for the rich that I listened to their arguments with some bitterness, because I know that many will find that the loans enable them to take part in higher education when their parents refuse to support them.
  The hon. Member for Sheffield, Hillsborough (Mr. Flannery) referred to social justice and equity. In our analysis in the White Paper, we explained how the return to the taxpayer in terms of an economic investment in higher education could be compared with the returns to the individual graduate. As my hon. Friend the Member for Epping Forest (Mr. Norris) argued, there is no doubt that graduate earning power is greatly enhanced by the experience of higher education. At present, the graduate makes no financial contribution and the taxpayer has to pay for the whole of that education. As my hon. Friend the Member for Lewisham, West (Mr. Maples) argued, one quarter of all taxpayers are on incomes below the national average and the difference between their incomes and those that graduates can expect is considerable. From the point of view of equity in public expenditure, student
  254
  grants are a system of taking money from the less well off and giving it to the better off. I wonder about the equity and social justice of that position.
  A number of speakers, especially my hon. Friend the Member for Bury, North, referred to the disabled. I have had several meetings with representatives of groups for the disabled. I have listened carefully—and we shall continue to listen carefully—to what is said. I emphasise that the student loan will be additional for disabled students and that there will be no disentitlement to benefits. In addition, disabled graduates will be able to benefit from the ability to defer repayment if their income is below a certain level. We have made it clear that we are prepared to review the arrangements in relation to grant support and we shall monitor the effects of student loans on disabled students. If the legislation is passed, as the Government propose, we shall have the flexibility to respond to the results of that monitoring by amending the regulations. If we put such provisions in the primary legislation, as the Opposition wish us to do, we should probably not be able to respond for many years.
  The Government have carried out two surveys which provide information about student use of supplementary benefit and housing benefit. From those surveys, we know that as many as 40 per cent. of all students do not claim any benefit. We also know that the average claim amounts to about £315 per year per student claimant, which means that a top-up loan of £420 would be not only a complete addition to the resources of the 40 per cent. who claim no benefit, but a substantial addition to the resources of most of the rest. There will also be the access funds for those who are out of pocket. I note what has been said on several occasions by my hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) and we shall review the question of the access funds to take care of any genuine difficulties. I emphasise that we intend to continue to monitor and to survey the picture. If we have the means to do so—and if the Opposition will allow us to do so—we shall be able to take action through the regulation-making power in the Bill.
  Several hon. Members have raised the question of the cost of not having loans. The Opposition have tried to make much of the simple, natural, logical fact that with loans there is a period when one pays out before money comes back. We have to compare the cost of our proposal with the cost of the Opposition's alternative, about which they have been coy. We were told that they would increase the grant "when resources allowed". Resources do allow, and the Government are making that provision now in the form of the student loan.
  If the Opposition simply replaced our proposed loan with a grant—that is, a grant with a 100 per cent. take-up instead of a loan with an 80 per cent. take-up—and if they kept social security and housing benefit entitlements, their scheme would be more costly than our scheme from year one. Our scheme will yield savings compared with their proposals from year one. I noted that my hon. Friend the Member for Lewisham, West calculated that by the beginning of the next century it stacked up into a difference of hundreds of millions of pounds in the costs of the schemes.
  The burden of repayment will not be all that heavy. For the average course, it will be about £400 per year. which compares with the cost of a ski-ing holiday—and about 1

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  million people from Britain went on ski-ing holidays last year. [Interruption.] My predecessor made a distinguished speech on these issues. When he visited Sweden—
  Question put, That the Bill be now read a Second time:—
  The House divided: Ayes 301, Noes 220.

  Division No. 8]

  [10 pm

  AYES

  Adley, Robert

  Devlin, Tim

  Aitken, Jonathan

  Douglas-Hamilton, Lord James

  Alexander, Richard

  Dunn, Bob

  Alison, Rt Hon Michael

  Durant, Tony

  Allason, Rupert

  Dykes, Hugh

  Amery, Rt Hon Julian

  Eggar, Tim

  Amess, David

  Evans, David (Welwyn Hatf'd)

  Amos, Alan

  Evennett, David

  Arbuthnot, James

  Fallon, Michael

  Arnold, Jacques (Gravesham)

  Field, Barry (Isle of Wight)

  Arnold, Tom (Hazel Grove)

  Fishburn, John Dudley

  Ashby, David

  Fookes, Dame Janet

  Aspinwall, Jack

  Forman, Nigel

  Atkins, Robert

  Forsyth, Michael (Stirling)

  Baker, Nicholas (Dorset N)

  Forth, Eric

  Baldry, Tony

  Fowler, Rt Hon Norman

  Batiste, Spencer

  Fox, Sir Marcus

  Bellingham, Henry

  Franks, Cecil

  Bendall, Vivian

  Freeman, Roger

  Bennett, Nicholas (Pembroke)

  French, Douglas

  Bevan, David Gilroy

  Gale, Roger

  Biffen, Rt Hon John

  Gardiner, George

  Blaker, Rt Hon Sir Peter

  Garel-Jones, Tristan

  Body, Sir Richard

  Gill, Christopher

  Bonsor, Sir Nicholas

  Gilmour, Rt Hon Sir Ian

  Boscawen, Hon Robert

  Goodson-Wickes, Dr Charles

  Boswell, Tim

  Gorman, Mrs Teresa

  Bottomley, Peter

  Gorst, John

  Bottomley, Mrs Virginia

  Gow, Ian

  Bowden, Gerald (Dulwich)

  Grant, Sir Anthony (CambsSW)

  Boyson, Rt Hon Dr Sir Rhodes

  Greenway, Harry (Ealing N)

  Braine, Rt Hon Sir Bernard

  Greenway, John (Ryedale)

  Brandon-Bravo, Martin

  Gregory, Conal

  Brazier, Julian

  Griffiths, Peter (Portsmouth N)

  Bright, Graham

  Grist, Ian

  Brown, Michael (Brigg & Cl't's)

  Ground, Patrick

  Browne, John (Winchester)

  Grylls, Michael

  Bruce, Ian (Dorset South)

  Hague, William

  Buck, Sir Antony

  Hamilton, Hon Archie (Epsom)

  Budgen, Nicholas

  Hamilton, Neil (Tatton)

  Burns, Simon

  Hampson, Dr Keith

  Burt, Alistair

  Hanley, Jeremy

  Butcher, John

  Hannam, John

  Butler, Chris

  Hargreaves, A. (B'ham H'll Gr')

  Butterfill, John

  Hargreaves, Ken (Hyndburn)

  Carlisle, John, (Luton N)

  Harris, David

  Carlisle, Kenneth (Lincoln)

  Hayhoe, Rt Hon Sir Barney

  Carrington, Matthew

  Hayward, Robert

  Carttiss, Michael

  Heathcoat-Amory, David

  Cash, William

  Heddle, John

  Channon, Rt Hon Paul

  Hicks, Mrs Maureen (Wolv' NE)

  Chapman, Sydney

  Higgins, Rt Hon Terence L.

  Chope, Christopher

  Hind, Kenneth

  Churchill, Mr

  Hogg, Hon Douglas (Gr'th'm)

  Clark, Hon Alan (Plym'th S'n)

  Holt, Richard

  Clark, Dr Michael (Rochford)

  Hordern, Sir Peter

  Clark, Sir W. (Croydon S)

  Howard, Michael

  Clarke, Rt Hon K. (Rushcliffe)

  Howarth, Alan (Strat'd-on-A)

  Colvin, Michael

  Howarth, G. (Cannock & B'wd)

  Conway, Derek

  Howe, Rt Hon Sir Geoffrey

  Coombs, Anthony (Wyre F'rest)

  Howell, Rt Hon David (G'dford)

  Coombs, Simon (Swindon)

  Hughes, Robert G. (Harrow W)

  Couchman, James

  Hunt, David (Wirral W)

  Cran, James

  Hunter, Andrew

  Currie, Mrs Edwina

  Hurd, Rt Hon Douglas

  Curry, David

  Irvine, Michael

  Davies, Q. (Stamf'd & Spald'g)

  Irving, Charles

  Davis, David (Boothferry)

  Jack, Michael

  Day, Stephen

  Jackson, Robert

  256

  Janman, Tim

  Price, Sir David

  Johnson Smith, Sir Geoffrey

  Raison, Rt Hon Timothy

  Jones, Gwilym (Cardiff N)

  Renton, Rt Hon Tim

  Jones, Robert B (Herts W)

  Riddick, Graham

  Jopling, Rt Hon Michael

  Ridley, Rt Hon Nicholas

  Kellett-Bowman, Dame Elaine

  Ridsdale, Sir Julian

  Key, Robert

  Rifkind, Rt Hon Malcolm

  King, Roger (B'ham N'thfield)

  Roberts, Wyn (Conwy)

  King, Rt Hon Tom (Bridgwater)

  Rost, Peter

  Kirkhope, Timothy

  Rowe, Andrew

  Knapman, Roger

  Rumbold, Mrs Angela

  Knight, Greg (Derby North)

  Ryder, Richard

  Knight, Dame Jill (Edgbaston)

  Sackville, Hon Tom

  Knowles, Michael

  Sayeed, Jonathan

  Lamont, Rt Hon Norman

  Scott, Rt Hon Nicholas

  Lang, Ian

  Shaw, David (Dover)

  Latham, Michael

  Shaw, Sir Giles (Pudsey)

  Lawrence, Ivan

  Shaw, Sir Michael (Scarb')

  Lee, John (Pendle)

  Shelton, Sir William

  Lennox-Boyd, Hon Mark

  Shephard, Mrs G. (Norfolk SW)

  Lester, Jim (Broxtowe)

  Shepherd, Colin (Hereford)

  Lightbown, David

  Shersby, Michael

  Lilley, Peter

  Sims, Roger

  Lloyd, Sir Ian (Havant)

  Smith, Tim (Beaconsfield)

  Lloyd, Peter (Fareham)

  Soames, Hon Nicholas

  Luce, Rt Hon Richard

  Spicer, Sir Jim (Dorset W)

  Lyell, Sir Nicholas

  Spicer, Michael (S Worcs)

  Macfarlane, Sir Neil

  Squire, Robin

  MacGregor, Rt Hon John

  Stanbrook, Ivor

  MacKay, Andrew (E Berkshire)

  Stanley, Rt Hon Sir John

  Maclean, David

  Steen, Anthony

  McLoughlin, Patrick

  Stern, Michael

  McNair-Wilson, Sir Michael

  Stevens, Lewis

  McNair-Wilson, Sir Patrick

  Stewart, Allan (Eastwood)

  Madel, David

  Stewart, Andy (Sherwood)

  Major, Rt Hon John

  Stewart, Rt Hon Ian (Herts N)

  Malins, Humfrey

  Stradling Thomas, Sir John

  Mans, Keith

  Sumberg, David

  Maples, John

  Summerson, Hugo

  Marland, Paul

  Tapsell, Sir Peter

  Marlow, Tony

  Taylor, Ian (Esher)

  Marshall, John (Hendon S)

  Taylor, John M (Solihull)

  Marshall, Michael (Arundel)

  Taylor, Teddy (S'end E)

  Martin, David (Portsmouth S)

  Tebbit, Rt Hon Norman

  Mates, Michael

  Temple-Morris, Peter

  Maude, Hon Francis

  Thatcher, Rt Hon Margaret

  Mawhinney, Dr Brian

  Thompson, D. (Calder Valley)

  Maxwell-Hyslop, Robin

  Thompson, Patrick (Norwich N)

  Mayhew, Rt Hon Sir Patrick

  Thorne, Neil

  Mellor, David

  Thornton, Malcolm

  Meyer, Sir Anthony

  Thurnham, Peter

  Miller, Sir Hal

  Townend, John (Bridlington)

  Mills, Iain

  Townsend, Cyril D. (B'heath)

  Mitchell, Andrew (Gedling)

  Tracey, Richard

  Mitchell, Sir David

  Tredinnick, David

  Moate, Roger

  Trippier, David

  Monro, Sir Hector

  Trotter, Neville

  Montgomery, Sir Fergus

  Twinn, Dr Ian

  Morrison, Sir Charles

  Vaughan, Sir Gerard

  Moss, Malcolm

  Viggers, Peter

  Moynihan, Hon Colin

  Waddington, Rt Hon David

  Neale, Gerrard

  Wakeham, Rt Hon John

  Neubert, Michael

  Walden, George

  Newton, Rt Hon Tony

  Walker, Bill (Tside North)

  Nicholls, Patrick

  Waller, Gary

  Nicholson, David (Taunton)

  Walters, Sir Dennis

  Nicholson, Emma (Devon West)

  Wardle, Charles (Bexhill)

  Norris, Steve

  Warren, Kenneth

  Onslow, Rt Hon Cranley

  Watts, John

  Page, Richard

  Wells, Bowen

  Paice, James

  Wheeler, John

  Patnick, Irvine

  Whitney, Ray

  Patten, Rt Hon Chris (Bath)

  Widdecombe, Ann

  Patten, John (Oxford W)

  Wiggin, Jerry

  Pawsey, James

  Wilshire, David

  Peacock, Mrs Elizabeth

  Winterton, Mrs Ann

  Porter, Barry (Wirral S)

  Winterton, Nicholas

  Porter, David (Waveney)

  Wolfson, Mark

  Portillo, Michael

  Wood, Timothy

  Powell, William (Corby)

  Woodcock, Dr. Mike

  257

  Yeo, Tim

  Tellers for the Ayes:

  Young, Sir George (Acton)

  Mr. Alastair Goodland and

  Younger, Rt Hon George

  Mr. Stephen Dorrell.

  NOES

  Abbott, Ms Diane

  Davies, Ron (Caerphilly)

  Adams, Allen (Paisley N)

  Davis, Terry (B'ham Hodge H'I)

  Allen, Graham

  Dewar, Donald

  Alton, David

  Dixon, Don

  Anderson, Donald

  Dobson, Frank

  Archer, Rt Hon Peter

  Doran, Frank

  Armstrong, Hilary

  Douglas, Dick

  Ashdown, Rt Hon Paddy

  Dover, Den

  Ashley, Rt Hon Jack

  Dunnachie, Jimmy

  Ashton, Joe

  Dunwoody, Hon Mrs Gwyneth

  Barnes, Harry (Derbyshire NE)

  Eadie, Alexander

  Barnes, Mrs Rosie (Greenwich)

  Evans, John (St Helens N)

  Barron, Kevin

  Ewing, Mrs Margaret (Moray)

  Battle, John

  Fatchett, Derek

  Beckett, Margaret

  Faulds, Andrew

  Beggs, Roy

  Fearn, Ronald

  Beith, A. J.

  Fisher, Mark

  Bell, Stuart

  Flannery, Martin

  Benn, Rt Hon Tony

  Flynn, Paul

  Bermingham, Gerald

  Foot, Rt Hon Michael

  Bidwell, Sydney

  Forsythe, Clifford (Antrim S)

  Blair, Tony

  Foster, Derek

  Blunkett, David

  Foulkes, George

  Boateng, Paul

  Fraser, John

  Boyes, Roland

  Fyfe, Maria

  Bray, Dr Jeremy

  Garrett, John (Norwich South)

  Brown, Gordon (D'mline E)

  Golding, Mrs Llin

  Brown, Nicholas (Newcastle E)

  Gordon, Mildred

  Brown, Ron (Edinburgh Leith)

  Gould, Bryan

  Bruce, Malcolm (Gordon)

  Grant, Bernie (Tottenham)

  Buchan, Norman

  Griffiths, Nigel (Edinburgh S)

  Buckley, George J.

  Griffiths, Win (Bridgend)

  Caborn, Richard

  Grocott, Bruce

  Callaghan, Jim

  Harman, Ms Harriet

  Campbell, Menzies (Fife NE)

  Hattersley, Rt Hon Roy

  Campbell, Ron (Blyth Valley)

  Haynes, Frank

  Campbell-Savours, D. N.

  Healey, Rt Hon Denis

  Canavan, Dennis

  Heffer, Eric S.

  Cartwright, John

  Henderson, Doug

  Clark, Dr David (S Shields)

  Hinchliffe, David

  Clarke, Tom (Monklands W)

  Home Robertson, John

  Clay, Bob

  Hood, Jimmy

  Clelland, David

  Howell, Rt Hon D. (S'heath)

  Clwyd, Mrs Ann

  Howells, Geraint

  Cohen, Harry

  Howells, Dr. Kim (Pontypridd)

  Cook, Robin (Livingston)

  Hoyle, Doug

  Corbett, Robin

  Hughes, John (Coventry NE)

  Cousins, Jim

  Hughes, Robert (Aberdeen N)

  Crowther, Stan

  Hughes, Roy (Newport E)

  Cryer, Bob

  Hughes, Simon (Southwark)

  Cummings, John

  Hume, John

  Cunliffe, Lawrence

  Ingram, Adam

  Cunningham, Dr John

  Janner, Greville

  Dalyell, Tarn

  Jones, Barry (Alyn & Deeside)

  Darling, Alistair

  Jones, leuan (Ynys Môn)

  Davies, Rt Hon Denzil (Llanelli)

  Kennedy, Charles

  258

  Kilfedder, James

  Quin, Ms Joyce

  Kirkwood, Archy

  Radice, Giles

  Knox, David

  Randall, Stuart

  Lamond, James

  Reid, Dr John

  Leadbitter, Ted

  Rhodes James, Robert

  Lestor, Joan (Eccles)

  Roberts, Allan (Bootle)

  Lewis, Terry

  Robertson, George

  Livingstone, Ken

  Robinson, Peter (Belfast E)

  Livsey, Richard

  Rooker, Jeff

  Lloyd, Tony (Stretford)

  Ross, William (Londonderry E)

  Lofthouse, Geoffrey

  Rowlands, Ted

  McAllion, John

  Salmond, Alex

  McAvoy, Thomas

  Sedgemore, Brian

  McCrea, Rev William

  Sheerman, Barry

  Macdonald, Calum A.

  Sheldon, Rt Hon Robert

  McFall, John

  Shore, Rt Hon Peter

  McKay, Allen (Barnsley West)

  Short, Clare

  McLeish, Henry

  Sillars, Jim

  Maclennan, Robert

  Skinner, Dennis

  McNamara, Kevin

  Smith, Andrew (Oxford E)

  Madden, Max

  Smith, Sir Cyril (Rochdale)

  Mahon, Mrs Alice

  Smith, Rt Hon J. (Monk'ds E)

  Mallon, Seamus

  Smith, J. P. (Vale of Glam)

  Marek, Dr John

  Smyth, Rev Martin (Belfast S)

  Marshall, David (Shettleston)

  Soley, Clive

  Marshall, Jim (Leicester S)

  Spearing, Nigel

  Martin, Michael J. (Springburn)

  Steel, Rt Hon David

  Maxton, John

  Steinberg, Gerry

  Meacher, Michael

  Stott, Roger

  Meale, Alan

  Strang, Gavin

  Michael, Alun

  Straw, Jack

  Michie, Bill (Sheffield Heeley)

  Taylor, Mrs Ann (Dewsbury)

  Michie, Mrs Ray (Arg'l & Bute)

  Taylor, Rt Hon J. D. (S'ford)

  Miscampbell, Norman

  Taylor, Matthew (Truro)

  Mitchell, Austin (G't Grimsby)

  Thomas, Dr Dafydd Elis

  Molyneaux, Rt Hon James

  Turner, Dennis

  Moonie, Dr Lewis

  Vaz, Keith

  Morgan, Rhodri

  Walker, A. Cecil (Belfast N)

  Morley, Elliot

  Wall, Pat

  Morris, Rt Hon A. (W'shawe)

  Wallace, James

  Morris, Rt Hon J. (Aberavon)

  Wardell, Gareth (Gower)

  Mowlam, Marjorie

  Wareing, Robert N.

  Mullin, Chris

  Watson, Mike (Glasgow, C)

  Murphy, Paul

  Welsh, Michael (Doncaster N)

  Nellist, Dave

  Wigley, Dafydd

  Oakes, Rt Hon Gordon

  Williams, Rt Hon Alan

  O'Brien, William

  Williams, Alan W. (Carm'then)

  O'Neill, Martin

  Wilson, Brian

  Orme, Rt Hon Stanley

  Winnick, David

  Owen, Rt Hon Dr David

  Worthington, Tony

  Paisley, Rev Ian

  Wray, Jimmy

  Patchett, Terry

  Young, David (Bolton SE)

  Pendry, Tom

  Pike, Peter L.

  Tellers for the Noes:

  Powell, Ray (Ogmore)

  Mr. Frank Cook and

  Prescott, John

  Mr. Martyn Jones.

  Question accordingly agreed to.
  Bill read a Second time, and committed to a Standing Committee pursuant to Standing Order No. 61 (Committal of Bills).

Education (Student Loans) Bill [Money]
Queen's Recommendation having been signified—
Motion made, and Question proposed,
That, for the purposes of any Act resulting from the Education (Student Loans) Bill, it is expedient to authorize—

(a) the payment out of money provided by Parliament of any sums required by the Secretary of State for making payments under that Act;

(b) the payment of any sums received by him by virtue of that Act into the Consolidated Fund.—[Mr. Garel-Jones.]

10.15 pm
Mr. Bob Cryer: I thought that, by popular request, I would make a few comments on the money resolution, which is important for several reasons. It is not so much the amount of money involved—compared with what we discussed last night, it is relatively modest—as the fact that there are some peculiar arrangements regarding the Secretary of State's ability to administer it. That is why I want—[Interruption.]
Mr. Speaker: Order. We are debating the money resolution. I ask the House to listen.
Mr. Cryer: As ever, Mr. Speaker, I am most grateful to you.
We should take some interest in the expenditure that is authorised by the House, sometimes with so little scrutiny. The explanatory memorandum says that 10 to 20 per cent. of the annual outlay will go on administration. I imagine that most people will think that a relatively high proportion. As £109 million is involved in the first year —it will double by 1992–93—it is worth observing that the Secretary of State could spend the money on far more important and pressing things. For example, Bradford local authority has applied for £28 million in capital allocation this year, but the Government, who are of the same political conviction, have awarded it only £8 million.
Buttershaw first school has been partly housed in three temporary classrooms for so long that they are crumbling and have had to be taken out of use. The children have to he bussed for an eight-mile round trip day in, day out, and a school has been reopened to accommodate them. That demonstrates the pressing need for expenditure on educational provision in Bradford.
I should have thought that, rather than concentrate on money resolutions that facilitate a turnover of £109 million in the first year, we should satisfy such a basic requirement as we have in Bradford. I remind the Minister, if he knew it in the first place, that Buttershaw first school, like many schools in Bradford, has been waiting for years for permanent extensions. School rolls in Bradford are increasing, not diminishing.
We have 600 temporary classrooms in Bradford, many of which are reaching the end of their lives. It is time that money was allocated to provide permanent extensions so that our children can have decent facilities. I hope that the Minister notes that. That would represent a far better priority for this money.
One of the rather curious features of the Bill that has not been mentioned so far is that it gives the Secretary of State extraordinary powers, all linked to expenditure. The Bill is basically a thin framework delegating a wide range of powers to the Secretary of State. They include a Henry VIII clause which, as I am sure the House knows well, is a clause which enables the Minister to alter the primary
260
legislation, the Education (Student Loans) Bill, without the necessity of coming before the House for further approval.
Schedule 1, which settles the Bill's ambit, the number of institutions available for students who qualify for loans, can be added to, subtracted from or changed under negative procedure regulations by the Secretary of State without any guarantee that the regulations will come before the House. If, as the Bill makes plain, they are by annulment, the regulations are subject to revocation by a prayer.
As the House knows, there is no guarantee that a prayer will be debated and, even if it is, the debate will last for no more than one and a half hours. If the prayer is down for hearing after 10 o'clock and there is a Division, the time taken by that Division is taken out of the debate. Therefore, only one hour and 10 minutes will be given to debating the regulations, and then only if the Government Whips agree, yet those regulations affect primary legislation. In effect, the Minister is being given the power to produce the equivalent of primary legislation without the House necessarily being involved. That is a wide power, to which attention should be drawn.
Schedule 2 sets out the financial parameters of where the £109 million will be spent in the first year, doubling by 1992, and so forth. When the Under-Secretary of State replied to the previous debate, he made no reference to the arrangement which may provide for the loans to be made and recovered. Arrangements have no statutory meaning. [Interruption.] As a Back-Bench Member says sotto voce, I missed some of that speech because I was chairing the Joint Committee on Statutory Instruments which was taking extensive evidence from civil servants on yet another statutory instrument which in the Committee's view was defective and that will be reported.
Presumably, the arrangements are those provided for by regulation. I know of no statutory provision whereby Ministers simply have the right to arrange things. They must present what they do to the House for scrutiny. If they have the power simply to make arrangements, that does not occur.
Schedule 2, paragraph 3(4), says:
"Regulations made under paragraph 1(1)(b) or (c) above may confer functions on any such person or body as is mentioned in sub-paragraph (1) above, including power to exercise a discretion in relation to any matter for which the regulations provide."
In its strict legalistic phraseology that means that the House is handing over to the Secretary of State power to sub-delegate regulation-making powers. I am sure that the House would not agree to that if there was a clear alternative.
That means that the Minister, through regulations, can confer functions—that is, hand over powers—on any body that is provided for in the first paragraph of this part of the schedule, which means those persons and bodies that will deal with the loans and repayments. It includes a power to exercise a discretion in relation to any matter for which the regulations provide. Therefore, the Minister is handing over a power to a body that can simply ignore the regulations that the Minister, if a prayer is tabled, will bring before the House for debate. This is an important matter and relates specifically to the money, so it is not unfair to raise it on the money resolution.
Paragraph 3(7) of schedule 2 says:

261
"Any person or body having the function of recovering loans under the arrangements may, for appropriate consideration, assign the right of recovery to a third party."
That means that debts can be sold, and that means that the accountability of the Secretary of State to the House for the money resolution—that is, paying all receipts into the Consolidated Fund—is simply moved a stage further. He can say that no money is coming in and he cannot get any money back, because the person or body who had the function of recovering loans—the person or body mentioned in schedule 2—has assigned the right of recovery to a third party, and that party has been wound up in 14, 15 or 100 cases.
The detailed administrative provision for this legislation is through regulations. The accountability for delegated legislation is minimal, and the Minister is abusing it. The Government claimed that they would take government off our backs, but they are producing more delegated legislation each year than was produced by the whole of the 1974–79 Labour Government. The Tory Government claimed that that Administration produced a huge mass of legislation that bore down on manufacturing industry and the population in general. The Government are producing more instruments and it is an abuse of the House to provide for annual expenditure of £100 million to £200 million in such a way that the responsibility is one stage removed, through regulation and delegated powers granted by the legislation. Then, within that framework of legislation, the Government have provided for sub-delegation of legislation. That makes the accountability of the Minister to the House one stage further removed and even more diffuse.
We should look carefully at the money resolution. Having been prepared with a brief because I might speak, the Minister should explain these points. They are reasonably important and merit an answer. The money resolution debate is an important opportunity, brief though it is, to raise these issues and try to get something on the record.
10.28 pm
The Parliamentary Under-Secretary of State for Education and Science (Mr. Robert Jackson): The hon. Member for Bradford, South (Mr. Cryer) has a habit of raising points such as these. He spoke first about the contrast between the estimated administrative cost of the order of £10 million to £20 million and the flow of funds in the early years of the scheme. He made a perfectly fair debating point, but if we are to set up a student loans operation, quite extensive machinery needs to be established before the volume of the business builds up.
262
We shall need staff, a computer and buildings. The amount of money involved will build up eventually to thousands of millions of pounds. As we argued in the previous debate, big savings will be made from the start of the operation of the scheme. Unlike the alternative envisaged by the Opposition, the loans scheme will result in due course in substantial savings building up, in relation to which the administration costs will be rather small.
Let me say a word about the arrangements that are to be embodied in regulations to be brought before the House.
Mr. Win Griffiths: The amounts recorded for loan outgoings in the financial and explanatory memorandum are quite different from those recorded on page 43 of the White Paper. I see no mention of the access funds, which are part of the scheme, in the financial and explanatory memorandum, nor is any account taken of the costs of deferral or default. Are those taken into account anywhere in the memorandum? The memorandum states that loan repayments will exceed the cost of the scheme "in due course". Can the Minister tell us exactly when he thinks that will happen?
Mr. Jackson: That depends entirely on the assumptions made in the projections. The hon. Gentleman knows that perfectly well; we have discussed it on many occasions. The hon. Gentleman asked about access funds. We do not propose to take powers for that purpose in the Bill, because we already have powers to constitute such funds, and we shall set them up under those existing powers. Their cost does not, therefore, arise in the explanatory and financial memorandum, but it is, of course, taken into account in the White Paper. The figures differ because the White Paper refers to the academic year and the financial and explanatory memorandum to the financial year.
Let me finish answering the hon. Member for Bradford, South. The arrangements will be embodied in regulations that will be brought before the House and will be constructed by analogy with the arrangements for the payment of student grants. We discussed all that in our previous debate. We also discussed the regulation-making powers—in that picturesque phrase, "the Henry VIII clause". We have discussed all these matters extensively. I have nothing to add to what was said, and I do not believe that the hon. Member for Bradford, South has added much to the argument.
We merely seek to establish in a flexible and responsive way the legal arrangements for paying student loans that are most sensible in terms of the administration of a loans scheme. That is what we propose, and that is what we hope to be able to achieve.
Question put and agreed to.

Teachers' Pay and Conditions
10.33 pm
The Secretary of State for Education and Science (Mr. John MacGregor): I beg to move,
That the draft Teachers' Pay and Conditions Act 1987 (Continuation) Order 1989, which was laid before this House on 7th November, in the last Session of Parliament, be approved.
Section 6 of the Teachers' Pay and Conditions Act 1987 provides that the Act shall expire on 31 March 1990 unless it is continued by force for a further year by an order laid before and approved by resolution of each House. The order now before the House provides for the Act to continue in force for a further year, until 31 March 1991. This is necessary to enable me in due course to give effect to the teachers' pay settlement for 1990–91, following the report of the interim advisory committee, due next January, and consultation on its recommendations. If the life of the Act is not extended in the way proposed, it will not be possible to deal with the 1990–91 pay settlement.
My predecessor had always hoped to be able to put new pay determination arrangements in place in time for the 1990–91 settlement, but we never expected that it would be easy to devise new pay determination arrangements which, to be worth while, would need to be permanent, stable and effective.
The deep differences of opinion between the six competing teacher unions, the employers and the Government, which were very evident during the events which culminated in the failure of Burnham, the passage of the Teachers' Pay and Conditions Act 1987 and the establishment of the interim advisory committee made that only too clear. The problem is not to obtain complete agreement on new pay determination arrangements—I suspect that that could never be achieved—but enough to ensure that they can operate successfully and are likely to endure. We need more time to achieve that, so it is necessary for the present arrangements to be in place for one more year. That is why the order has been laid before the House.
In 1987, the Government's immediate concerns were to bring pay and conditions together and to establish a proper career structure for teachers. That was achieved in the 1987 settlement, which gave teachers a 16–4 per cent. pay increase. Aspects of that settlement which were controversial at the time are widely welcomed now. Incentive allowances have proved their worth, and following the recommendations of the interim advisory committee, their introduction has been speeded up so that there are now some 170,000 available in schools. The effectiveness of the interim advisory committee itself has been widely praised, and rightly so, and I would like to pay tribute to the committee today for all the hard work that it has put in and which it is doing now.
In October 1987 the Government published a Green Paper discussing the question of new permanent teachers' pay machinery. We stated three key principles relevant to the establishment of new teachers' pay determination machinery which are in the interests of the education service and the nation as a whole.
The principles were that it should be designed to provide that settlements have due regard to the need to recruit, retain and motivate sufficient teachers of the right quality. Secondly, it must ensure that settlements support effective management of the schools and provide for
264
proper career-long development and incentives for teachers. Finally, it should be designed to ensure that settlements have due regard to affordability and to the needs of the national economy.
The Green Paper discussed a number of different possible future pay determination arrangements and proposed the establishment of a teachers' negotiating group with the Government in a majority on the management side and with an ability for the management side to break deadlock by imposing its proposals subject to the approval of Parliament.
It became clear from the written responses to the Green Paper from the interested parties and from the views expressed during meetings with my predecessor in the autumn of 1988 that there continued to be widely differing views about the best way forward. In particular, there was no basis of agreement on such fundamental features as the role and powers of the Government, how to deal with a breakdown in negotiations and how to cover the interests of heads and deputies.
There was no prospect of meeting our original aspiration of having new permanent machinery in time for the 1990 settlement, and no advantage in trying to rush things to this end. The subject is too important and too much hangs on our getting things right for it to be sensible to do that.
It was against that background that my right hon. Friend the present Chancellor of the Duchy of Lancaster told the House in July that he was arranging a further series of meetings with the teacher unions and employers, at which he saw the discussions as ranging more widely than the proposal for a teachers' negotiating group set out in the October 1987 Green Paper.
Mr. Conal Gregory: I am most grateful to my hon. Friend for giving way at such an early stage. Will he confirm that the negotiations took place against a background in which it was clear that teachers' salaries increased under the Labour Government by an average of 6 per cent., while they have increased in real terms by 35 per cent. under the Conservative Government?
Mr. MacGregor: My hon. Friend is absolutely right about the relativities, but he has not got the figure absolutely right. Under the Conservatives, the figure is 30 per cent. However, the relativities are quite correct and his point is absolutely right.
I was referring to what my right hon. Friend the Chancellor of the Duchy of Lancaster told the House in July. He recognised then that it would not be easy to find a solution which was acceptable to all parties, but he reaffirmed the importance of getting the new arrangements right. He recognised that this would take time and said that he was accordingly asking the interim advisory committee to sit for a further year to give that time. He also said that he would in due course ask the House to approve a consequential one-year extension of the Teachers' Pay and Conditions Act 1987. That is what we are considering today.
The remit which I have set the IAC is challenging. In addition to considering what the permanent pay increase for 1990–91 should be, I have asked it to make recommendations for the further expansion of incentive allowances to help local education authorities to tackle their particular teacher shortage problems; to look at the

265
situation in London, where there are particular problems in some inner-London boroughs; and to review the pay of heads and deputies.
In recognition of the task which I have set the committee, I have provided for the teachers' pay bill for 1990–91 to increase by the fair and substantial sum of £600 million—55 per cent. more than this year's remit and twice that of last year. I look forward to seeing the committee's report in January. I am sure that it will match the high standards set by its two previous reports.
Mr. Simon Hughes: Since the Act was passed, as the Secretary of State well knows, the International Labour Organisation has ruled that this method of settling teachers' pay is in breach of the convention to which we are a signatory. How on earth does the Secretary of State justify coming back to the House with not only an extension of what, in international law, has been ruled an unacceptable procedure but restrictions, even if they were more generous than they were before, on the amount available for settling the teachers' pay claim?
Mr. MacGregor: The ILO is well aware that we intend to establish a permanent new pay machinery, and it is content with that. [HON. MEMBERS: "When?"] I have just been talking about that, and I will talk about it again right now. [Interruption.] If Opposition Members will allow me, I will refer to the point right now.
The House will rightly be concerned whether the extension I am seeking today will enable me to bring forward legislation to establish new permanent machinery in the next Session. Obviously, I cannot commit the Government in advance of the next Queen's Speech—any Queen's Speech—but let me tell the House tonight that that is my aim. At the meetings held in July, my predecessor, my right hon. Friend the Chancellor of the Duchy of Lancaster, outlined three new options for consideration: negotiations between employers and unions, with necessary safeguards for the Government's interests; a permanent IAC-type body, possibly linked to a no-strike agreement; and a movement towards greater local flexibility, which might lead to individual LEAs or schools opting out of national negotiations.
I have just completed a helpful and constructive round of meetings with the teacher unions and employees at which I have heard their views on each of these options.
Mr. Jack Straw: The Secretary of State has just spoken about provision for local authorities to opt out of national negotiations. Leaving aside other arguments, does he understand that that will lead to a significant increase in the teachers' pay bill? Is he willing to ensure that the Government will support that increase through the poll tax?
Mr. MacGregor: I must make it quite clear that we have been looking at all the options with all the organisations concerned. We have been receiving a wide variety of views in response. My position is quite clear: I need to consider the position, taking into account the responses that I am receiving, not only from those whom I have met formally but from others who are putting views forward.
Mr. Michael Stern: My right hon. Friend has said that he is considering all the views
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from the organisations he has consulted. Does he agree that there is one particularly difficult body of people whom he cannot consult? I refer to teachers who are either not members of trade unions or would welcome the opportunity, if my right hon. Friend were only to signal it, to leave in droves the unions which they regard as useless but in which they remain only because they can otherwise have no influence on their pay and conditions?
Mr. MacGregor: I have had formal meetings and received representations from all six teacher unions. I am, or course, prepared to receive views from any quarter during the consultation period.
I do not under-estimate the difficulties, but I believe that there is a strong desire on all sides to make progress, and I intend to pursue this matter vigorously. In the meantime, we need this order to pay teachers an increase next year. I commend the order to the House and ask that it be approved.
10.44 pm
Mr. Jack Straw: We oppose the order. It breaks clear undertakings to restore negotiating machinery by March 1990 and is part of a policy approach that has collapsed teacher morale and constricted teachers' pay and is leading to a mounting teacher shortage crisis.
Although the history of the principal Act involved in the order is well known and need not be repeated, there have been the clearest undertakings that negotiating machinery would be restored by 1990. That point was made in January this year in response to a question from the hon. Member for Salisbury (Mr. Key) when the previous Secretary of State said:
"The Government hope to introduce new permanent machinery in time for the 1990 settlement".—[Official Report, 31 January 1989; Vol. 146, c. 159.]
On 27 July 1988, in response to a question from the right hon. Member for Yeovil (Mr. Ashdown), the Minister of State said:
"it is not possible to have negotiations in 1990 with a negotiating body unless such a body has been thought through and some conclusions have been reached by the end of 1989."—[Official Report, 27 July 1989; Vol. 138, c. 483.]
But the Government have already given that commitment. In other words, if there are to be negotiations on pay and conditions, there must be negotiating machinery.
In breach of those undertakings, however, we are being asked to continue with imposed settlements for another year. Those imposed settlements are in clear breach of the convention of the International Labour Organisation. Imposed settlements have already produced a wholly unsatisfactory situation for teachers and teachers' pay. The Government have not even allowed the interim advisory committee the freedom to arrive at its own recommendations, as is allowed to a review body, before the Government then make a decision on those recommendations. Instead, the interim advisory committee has been put in the straitjacket of a prior cash limit.
The IAC has protested about that, saying that that limit has forced it to recommend lower pay increases than it would have wished and than would otherwise have been the case. It has also meant that part of the increase last year—and, no doubt, part of the increase this year—will be borne entirely by local ratepayers and subsequently by poll tax payers without the benefit of any rate support grant.

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The Secretary of State said that this year he set the interim advisory committee "a challenging task". He has not set it a challenging task—he has set it an impossible task. It is impossible to make compatible the requirement on the IAC to bring forward salary recommendations which can solve the mounting crisis of teacher shortages within the cash limits that the Secretary of State has imposed on the IAC in advance of its considerations.
The consequence of those imposed settlements has been a collapse in morale, which has led to a flight from the profession and a grave reduction in the attractiveness of teaching. It is time that the Secretary of State faced up to the scale of the crisis over which he is now presiding.
In the loans debate earlier, I mentioned that in the past eight years the proportion of graduates entering teaching had halved—from 8 per cent. in 1980 to 4 per cent. in 1988. More graduates are entering the law than are entering teaching. Of those who qualify as teachers, three in 10 do not enter the profession the following year, and of those who do, four out of 10 leave teaching within five years. There are as many people with teaching qualifications who are not teaching as there are with teaching qualifications who are teaching. There are teachers everywhere—except in schools. I am surprised that the Secretary of State does not understand just what a serious effect the collapse of morale has had.
Mr. Max Madden: Does my hon. Friend agree that apart from low pay and the denial of negotiating rights, one reason for the collapse of morale among many teachers in places such as Bradford is the determination of local education authorities and the Government to push ahead with doctrinaire education policies in the face of public opposition? Is he aware, for instance, that the Minister of State revealed today that even though Bradford education authority had given an undertaking that it would postpone the magnet schools programme, it has put in bids for nearly £3 million for the development of such magnet schools in Bradford and has had secret meetings with the Minister of State to further that programme? Does he agree that that sort of deceit and duplicity is doing much to damage morale among teachers and to alienate parents from these unpopular and doctrinaire policies?
Mr. Straw: My hon. Friend is absolutely right. It is surprising that the Secretary of State does not understand what effect a collapse of morale has upon the recruitment and retention of teachers.
In June 1976, a newish Conservative Back Bencher complained to the then Secretary of State for Social Services about near-record wastage in a profession. He said that, because of the low state of morale in the profession, the poor terms and conditions and the poor salary prospects, there had been a flight of individuals from it. That Back Bencher is now Secretary of State for Education and Science. He was referring to the medical profession, but the case that he made then applies equally to the teaching profession now.
Mr. James Pawsey: Medicine is an old and long established profession.
Mr. Straw: The point is exactly the same. In June 1976, the Secretary of State, then a Back Bencher, said that low morale and low pay had led to a flight of people fom the
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profession. Exactly those circumstances are now leading to a flight from the teaching profession and to problems of retaining teachers.
Mr. Nicholas Bennett rose—
Mr. Straw: I shall not give way, as I am about to conclude.
In his first three and a half months in office, this Secretary of State managed to visit just one school outside his constituency but did not manage to speak to any of the pupils about the effects of Government policy upon their school. Only someone who has kept himself holed up in Elizabeth house could possibly introduce this order or come out with the complacent claptrap that he and the Minister of State peddle about there being no serious problem in terms of a teacher shortage or teachers' pay.
Educational standards depend critically on the number and quality of teachers in our schools. Those requirements and teacher motivation will be maintained and increased only if negotiations are restored and teachers are better rewarded. We therefore oppose the order.
10.52 pm
Mr. David Madel: I welcome what my right hon. Friend the Secretary of State said about the cash increase for next year's financial settlement for teachers' pay. In common with my right hon. Friend, I hope that this will be the last occasion on which we must debate such an order. I hope that we shall have some form of new negotiating body in place next year. I also welcome what he said in his remit to the interim advisory committee about its need to extend local flexibility for teachers' salaries in 1990–91.
I hope that the IAC will pay exceptional attention to the high housing costs and the high travel-to-work costs in certain parts of the country. I hope that it will also remember the extra costs of implementing the national curriculum and all the extra work involved.
There is a move towards a common recognition of educational qualifications within the European Community. People hope that that policy goal will be achieved by 1993. To attain that goal, the highest educational standards and the best teaching must be achieved throughout the EC. It also demands the full implementation of the national curriculum in Britain. I hope that the Government will consider whether there are some areas where the European social fund could be used to tide us over when we run into difficulties about the payment of teachers' costs and salaries.
Educational reform has gone ahead at a tremendous speed and my right hon. Friend has already said that the implementation of that reform should not go ahead at such breakneck speed. The introduction of the important reforms relating to the national curriculum should be introduced at a slower pace. For 1990–91, the IAC should pay particular attention to the rates of pay for supply teachers and remember that different aptitudes are needed for being a supply teacher in a secondary school as opposed to a primary school.
Another point which I welcome, and to which my right hon. Friend the Secretary of State has referred, is that he wants the education services and local authorities to consult widely with industry about how industry can help to alleviate teacher shortages. When we look at what industry already does in education, with the technical and

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vocational education initiative and city technology colleges, it seems that industry is almost subsidising teachers' salaries. When the interim advisory committee is asked next year to consider the modification of selective payments in relation to teacher shortages in some subjects, it should also consider whether industry can temporarily directly subsidise teachers' salaries in some parts of the country for a certain period.
The impact of greater local flexibility in pay scales has an effect on the looming community charge. Local education authorities must be compensated properly from central Government if they have to bring in a host of local additional pay scales to ensure not only that the national curriculum is met, but that shortages elsewhere are overcome.
My right hon. Friend the Chancellor of the Exchequer has already given warnings about what inflation may do in the next financial year, and certainly in the next calendar year. Therefore, what the IAC recommends for 1990–91 could have an effect on the community charge and how it works out in relation to Government and the revenue support grant. Therefore, all I ask is that the Government do not contradict themselves. They must push ahead, quite rightly, with the national curriculum and solving teacher shortages, but they must not load the extra financial burden on areas which, through no fault of their own, have to grapple with teacher shortages.
With regard to the new negotiating machinery, I hope that we can reach a new teachers' incomes forum, call it what we will. However, three factors must be right before we can do so: first, the trade unions must work out a common position and speak with a single voice in any such forum; secondly, if we are to have a forum which has direct talks with employers, we must have a fallback position —a board of mediation which intervenes to overcome difficulties—rather than having teachers resorting to industrial action in the classroom. Built into the system there must be an automatic form of conciliation and mediation so that we do not slide into the classroom disruption that we experienced earlier this decade. Thirdly, if employers are to agree to this they must have a system which ensures that the settlements they make are met with the resources necessary to implement them.
I hope that my right hon. Friend will succeed in bringing forward new negotiating machinery, but if he fails we must accept that we cannot have a new negotiating system which takes local authorities into account. In that case we would have to pay teachers centrally, and grasp the financial nettle which that would entail.
10.58 pm
Ms. Harriet Harman: I am glad of the opportunity to speak in this debate because I, like many parents in So,uthwark, am concerned about the teacher shortage in the borough. I shall give some examples of how the teacher shortage is hitting schools in Southwark and say how the Government should respond to it.
Some children at primary schools in my borough turn up at school not knowing whether they will be sent home or who their teacher will be. They may be in the same classroom as usual but with a different teacher. It may be
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that their class and the children with whom they are used to working are divided into two and placed into other already overcrowded classrooms.
At one school in my constituency, children had been prepared by their parents during the summer holidays to begin school in September. But the school had to tell parents not to bring their children for the first day because there was no teacher for the reception class. Imagine the feelings of the parents and children, the children having talked to brothers and sisters about starting school and the parents having prepared them for the occasion. Because parents in that situation cannot tell their children when they are likely to start school, a great feeling of insecurity is created among parents and children. However secure and stable the home background, an insecure and unstable school situation creates a feeling of insecurity in the child.
A high percentage of probationers teach in my area, and there is a terrible dearth of experience. Heads and deputy heads cannot do the important work in school that they should be doing, because they are having to cover classes. Section 11 teachers are having to be in the classroom instead of doing the valuable work that they should be doing. Supply teachers are filling permanent vacancies instead of being available to cover for teachers on maternity and sick leave.
All that has a terrible effect on standards. Schools must hang on to their teachers and, when there are vacancies, there is no question of selecting from a mixed group of qualified teachers. Heads must take anybody who offers himself or herself for teaching. That, too, creates a feeling of insecurity among parents. The teacher may be perfectly adequate, but if it is known that there was no competition for the vacancy and no choice, morale is undermined. So, in addition to the problem of children being sent home, we have the insidious undermining effects of insufficient teachers and the result of that on the quality of education in primary schools.
The Government can do something to improve the situation. They are constantly talking about market forces. They cannot be paying teachers enough when we canot obtain sufficient teachers to teach in Southwark's primary schools. But it is also a question of the value that the Government place on teachers.
When attending the Labour party conference Brighton, I stayed with a friend who is a primary school teacher there. She was always awake at 6 o'clock in the morning preparing for the day's work and, however late I arrived home after conference fringe meetings, she was doing her papers and preparing for the following day's classes. Although she has two children, she assured me that the hard work and insufficient pay to meet her increased mortgage payments were not the only problem. Being committed to her work, she feels that the job is not given enough public recognition and value. The Government have an important role to play in that context.
Housing is another problem in that people cannot afford on a teacher's salary to buy or rent housing in Southwark. The Government must consider that problem if we are to resolve the teacher shortage.
In speaking of primary school teachers, we are referring to a largely female work force. If they are to return to teaching after maternity leave, they must be able to combine their working and family life, and that means more flexible hours, with the Government encouraging the provision of high quality child care for teachers, with after-school and school holiday provision. With female

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teachers being expected to work to a male employment pattern, we must not be surprised if they do not return to teaching at the end of their maternity leave. It is not only a question of leaving this to the local education authority. The Government should take a lead in financing the provision and in highlighting and fostering good practice.
A child's first term and years at school are vital. The teacher shortage is jeopardising that start for the children of Southwark. The Secretary of State has a clear duty, and he must act.
11.5 pm
Mr. Robert Key: I declare an interest as a long-time member of the Assistant Masters and Mistresses Association. Like the hon. Member for Southwark and Bermondsey (Mr. Hughes), I am a parliamentary adviser to that association.
I congratulate the Secretary of State on his comments of recent months, in which he has fully acknowledged the commitment, dedication and professionalism of teachers in this country. Those qualities are widely recognised. There is certainly a problem of low morale in the teaching profession, but, like the president of the AMMA, I must say that too often teachers talk themselves down. That is a major problem, and it is not helped by some of the comments that have been made here this evening. I very much hope that problems of morale will start to be tackled by the teachers themselves.
I do not doubt that there is a strong case for better pay and conditions and for a better career structure for teachers. There are new and serious problems. There are teacher shortages, for instance, but as my right hon. Friend said, they represent about 1 per cent. of the work force. In many other professions, that would not be regarded as exceptional, and the problem is unevenly spread throughout teaching; it is uneven geographically and by specialty.
Attracting people back into the teaching profession will be a succsssful answer, I believe. As the hon. Member for Blackburn (Mr. Straw) said, there are as many graduate teachers outside as inside the profession. We should surely welcome them back with open arms. I advocate bringing into the classroom well qualified graduates who can be trained on the job.
I received an unsolicited letter from a constituent about this only this week. She says:
"Having seen, on South To-Day last night, Jack Straw pontificating on the question of employing graduates in schools without training except in school, I felt constrained to write to BBC South to point out that graduates could be employed in state schools without any further training in teaching until the 1970's."
My constituent graduated in modern languages. In 1965 she decided to teach and answered an advertisement placed by the Labour-controlled ILEA for graduates to teach in primary schools:
"I was then appointed as a qualified teacher, with no experience or training whatsoever, to a London Primary School. I learnt on the job with help from another untrained graduate! This was Labour Party policy when they were in office to overcome the shortage of teachers in London.
After moving to Salisbury I was employed in Secondary Schools both by Wiltshire and Hampshire County Councils as a qualified teacher…
It seems disgraceful that the BBC gives such prominence to Labour Party propaganda in suggesting that this is simply Conservative policy and therefore to be denigrated."
I must concur with that.
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There is now in the teaching profession, particularly among its professional organisations, a welcome feeling of glasnost which I do not wish to upset. It must be recognised that there is a great deal of disquiet about the financial constraints—£600 million—on the interim advisory committee. They are widely resented, largely because they are misunderstood. I have tried as a former economics teacher to explain the nature of public spending rounds and the way in which we run the financial affairs of this country, but I must be rusty as I have not got very far. I invite my right hon. Friend to explain these constraints.
As my right hon. Friend said, we must move towards a permanent pay system. I hope that it will include a full and open role for Government. I do not want a return to the Burnham system, which led to breakdown. There is a spirit of realism in the teaching associations now, and the AMMA has written to me as follows:
"We hope that proposals will now evolve…towards a system where the Government has a full and open role, where the evidence and reasoning of particular cash figures can be debated sensibly."
It adds:
"We regret the continuation of the Act's provisions for another year, although we fully recognise that there is no better alternative yet available."
That is important, and that is why I shall support my right hon. Friend the Secretary of State this evening.
I have for a long time agreed with my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) that we must face the issue of teachers being paid centrally. A few years ago, with the hon. Member for Sheffield, Hillsborough (Mr. Flannery), I visited Germany and became acquainted with the interesting system of mixed funding that prevails there. Teachers' salaries are paid centrally, but local communities have great autonomy over the extent to which they support their local schools. That is important, and with the advent of the community charge it will become more important. The system provides for parental support, and local taxation is accepted by the community, which recognises needs and wishes to meet them. That sort of flexibility would be allowed under the system which I have in mind.
We all want to see a well motivated, well paid, fully trained and effective teaching service. I believe that that is the aspiration, too, of my right hon. Friend the Secretary of State.
11.11 pm
Mr. Simon Hughes: We live in a strange world—one in which teachers are asking to be allowed to negotiate but being told in effect that the matter will be arbitrated for them, while ambulance workers are asking for arbitration and being told that they must resume negotiations.
I am happy to take up the remarks of the hon. Member for Salisbury (Mr. Key) who, like the hon. Member for Dewsbury (Mrs. Taylor) and me, is parliamentary adviser to one of the six leading teaching unions. One of the interesting pieces of background to the debate is that there is unanimity among the unions in opposing the idea of an imposed cash limit, which the Secretary of State has introduced. That idea effectively predetermines the outcome of the decisions of the interim advisory committee in January.
My right hon. and hon. Friends will vote against the order unless the Secretary of State or the Minister of State pulls something out of the fire. I think that the teaching

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profession would accept only two courses. One would be a commitment that the day when negotiating rights are reinstated will never again be postponed, especially in the light of the ILO ruling. Secondly, there would have to be a commitment that the Secretary of State would lift the announced £600 million limit. If the right hon. Gentleman fails to take that action, we shall oppose the implementation of the order for strong reasons of principle as well as of practice, and I hope that some Conservative Members will take the same course.
It was my right hon. Friend the Member for Yeovil (Mr. Ashdown) who elicited a response from the Minister of State to the effect that it was the Government's intention that a negotiating procedure should be in place by now. It is not as though the planning for that has taken place only in recent months. The Secretary of State gave us a date, and the Green Paper was submitted for consultation two years and two months ago. Yet there is still no sign of a conclusion to the deliberations on the Government's proposals. Clear undertakings were given by the then Secretary of State and the Minister of State, but they have been breached.
We are in clear breach of our undertakings as signatories to the ILO convention. Article 4 makes it clear that the Government are obliged to offer voluntary negotiations between employers and employees with independence of negotiating bodies, and that that is the way to regulate the terms and conditions. When the Government argued against that in their submissions to the ILO they were told that submissions to the IAC did not constitute voluntary negotiations, so commitments made both in the House and internationally have been broken.
A further constraint on the £600 million limit is not acceptable. It represents approximately a 7·4 per cent. increase across the board. The Secretary of State will know that to restore the morale of the profession and to reverse the trend of people leaving, we shall need a greater increase in many areas. It is paradoxical that, although the limit is fixed, the teachers have been asked in recent weeks to give their views on what the pay settlement should be. That is like appointing a judge and telling him or her to reach a judgment before hearing the evidence.
It is noticeable that the differences between the unions have faded away. The Secretary of State will have seen the letter which has been sent to all schools by the salaries campaign 1990. It bears the signatures of the general secretaries of the six unions. They are in agreement and state that they are in "unanimous opposition" to a predetermined constraint. They say that they have made that point to the current and previous Secretaries of State and they ask, even at this late stage, for the constraint to be lifted.
That is the prelude to tonight's debate. The hon. Member for Peckham, (Ms. Harman) mentioned the experience of people in one of the areas of acute teacher shortage and crisis. I am her parliamentary neighbour. On a practical basis, as I told the Minister of State a few days ago when she was good enough to see me, there is neither sufficient action nor sufficiently urgent action. That shows a lack of commitment. Teachers do not believe that the Government are committed to them, to their profession or to education. Because they do not believe that, they are not staying. Heads and teachers who have been in the
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profession for 10 years or more are leaving because they do not feel sufficiently valued. Teachers are not applying to schools in high-stress areas, and some of the advertisements are going unanswered in areas which are in desperate need of teachers. That is taking place at the same time as reception and nursery classes are sent home and teachers are doubling up, covering for each other and coming under increasing stress.
Mr. Richard Livsey: Does my hon. Friend agree that the loss of status implied by the award is having a severe impact on morale when teachers are working harder than ever to bring into play local management schemes and the national curriculum? That is putting a great strain on them, and they are not being rewarded adequately.
Mr. Hughes: My hon. Friend is right. It is the same in rural areas of Wales as in urban areas of England. As a result of the Education Reform Act 1988, teachers have been charged by the Government with considerably greater responsibility. They are being asked to take on the consequences of recent legislation, but they are finding it difficult to sustain the additional level of commitment when there is no recognition of their right to negotiate or any prospect of adequate remuneration. I wish that the Secretary of State and Ministers were more aware of the profession's concern. People in the profession want to convince the Government of that but, sadly, the Government do not seem to have been convinced. For that reason, we shall vote against the order.
11.18 pm
Mr. Ken Hargreaves: I listened with interest and reassurance to my right hon. Friend the Secretary of State. Hon. Members on both sides of the House will agree that the withdrawal of the right to negotiate one's wage or salary is a serious step. I supported that step for teachers' salaries in 1987 because at that time, once the majority of those involved in the teaching profession agreed that the Burnham arrangements were unworkable, there seemed to be no alternative. However, we are now two and a half years on. During that time it should have been possible to set up new negotiating machinery.
The Government may blame the unions for the failure to reach agreement, and the unions will undoubtedly blame the Government. I am not interested in allocating blame. My concern is for the teachers. Whoever is to blame, the Government had the overriding responsibility to ensure that the new body was set up in the time scale allowed in 1987. Their failure to do that and the resultant need to extend the order are difficult to accept, especially at present.
I could not in any way support the industrial action taken by some teachers in the mid-1980s, but since then teachers have coped admirably with the education reforms introduced. Change is never easy. For teachers, the changes in education have coincided with changes in society which have resulted in less respect for people in authority. Teachers come face to face with the results of that change every day.
The cumulative effect of all that, the trauma of the reforms, the changes in behaviour of pupils, the reductions in teachers' standing in the community and their inability to negotiate their pay are responsible for so many

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long-serving, dedicated, experienced, excellent teachers leaving the profession. That is extremely worrying. Applications for entry into teacher training may well have increased by 15 per cent. this year, but we must stop the loss of teachers with years of experience.
The Government can do little about changes in society, but they can show their support for teachers and show that they understand the problems, first, by constantly recognising publicly the excellent work that the vast majority of teachers do—I am pleased that the Secretary of State does that—and, secondly, by paying teachers at a level which compensates for the additional problems that they face and which improves their standing in the community.
That cannot be done while this order is in place. It is a matter of regret that the order must be renewed, and I hope that this is the first and last time that the Government will seek to renew it. I hope that the establishment of the new negotiating body will be dealt with as a matter of the utmost urgency, as the Secretary of State promised. Otherwise, there will be a further loss of morale and of experienced teachers.
11.22 pm
Ms. Mildred Gordon: The Government's refusal to negotiate pay and conditions with the teachers' unions causes great resentment and makes our teachers feel that they are enslaved—in worse conditions than teachers anywhere in Europe.
In Tower Hamlets the position is critical. Hundreds of children cannot be placed in schools and hundreds more are in the hands of supply teachers—sometimes as many as 15 different teachers a year. That is child-minding, not teaching. When the matter was mentioned in the House the other day, the Prime Minister's reply was, in effect, "What a pity that they cannot come to my constituency where they would get the best education." What a solution. It would be nice if children could all be removed from the east end to a leafy suburb. However, a couple of days later I read in the Hendon Times, which covers the Prime Minister's constituency, that the London borough of Barnet was taking on licensed teachers—I nearly said unlicensed teachers, because that is what we used to call unqualified teachers—so the position cannot be so happy there either, although it is probably easier than in Tower Hamlets.
Teachers cannot come to Tower Hamlets because of the housing shortage, the high cost and difficulty of travel and because they cannot afford a place to live. The worse the shortage of staff, the more reluctant teachers are to come. In some areas teachers will not even apply for a post as head or deputy head because the task is impossible.
Recently the National Association of Schoolmasters/Union of Women Teacherscarried out a survey which revealed the degree of stress on teachers. Sixty-six per cent. of serving teachers said that they would leave if they had the chance. There is a great increase in mental illness among teachers who are suffering from severe stress. Throughout the country there are people who have left teaching who have no intention of ever returning, whatever is offered. When the Government ask women who have left teaching to start a family to come back to teaching at the same time as the number of evening meetings is being increased, they are being ridiculous, as
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such meetings make it quite impossible for mothers to take on a teaching job when, increasingly, they have to stay behind at school when their children have come home.
All teachers worthy of their salt keep good records and know how important good recording is, but the Government's new measures have introduced an entirely unbalanced situation of recording, with yearly profiles and formative and summative reports. Teachers are having to keep their classes quiet while they sit in front of them ticking boxes. They cannot find time to teach or prepare work because of the amount of recording and ticking of boxes that is required. They do not have enough free time to do their recording. Their task is becoming impossible.
Teachers bitterly resent the Baker days. They bitterly resent the fact that, throughout the country, in other professions, people are getting longer holidays, but five days of their holidays have been stolen. That rankles very much.
Mr. Nicholas Bennett: They have 12 weeks.
Ms. Gordon: They do not do nothing in those 12 weeks. They take children on trips, they prepare their work for the coming year, and they need a restorative period because teaching is a profession of great physical and mental stress. If the hon. Gentleman has never taught, he should come and try it for a day or two in one of our local schools—he will see why teachers need a restorative period.
Hon. Members: He used to be a teacher.
Mr. Roy Beggs: I have been a teacher. Does the hon. Lady agree that Conservative Members appreciate teachers taking their children away for holidays and educational experiences, but that they need a holiday themselves when they come back?
Ms. Gordon: Yes, indeed, because they are working a 24-hour day on such holidays.
Another form of stress on teachers is the introduction of the national curriculum without sufficient teachers and without sufficient money. Teachers have marked the fact that the national curriculum is not being forced upon private schools. We have the worst working conditions in Europe. I hold my surgery in a sixth form centre. The women's toilet is partitioned off a room where there is a butler sink and a gas ring. It looks like something out of the 1930s, not the 1980s. That is where teachers are expected to prepare their lunch. The conditions in many schools are a crying disgrace.
We are scouring the world for teachers. We cannot get our own teachers to come back because of the appalling conditions. Yet when we get teachers from abroad, we treat them in a very uneven fashion. Teachers from New Zealand, for instance, sometimes have to spend years, waiting for their qualifications to be recognised. Teachers from Bangladesh with 14 years' experience who speak the mother tongue of the children in the schools are considered unqualified, but teachers from European countries, who often cannot understand the children, are considered qualified.
Teachers in our schools are watching the money that is being poured into the city technology colleges while their own schools are being starved of money. This order is just another nail in the coffin of state education. It will increase resentment and the seepage away from the teaching profession of well qualified, experienced, good teachers.
11.28 pm
Mr. Michael Carttiss: I declare an interest in that some years ago I was a member of the National Association of Schoolmasters/Union of Women Teachers, but I do not advise it. I believe that free advice is a waste of time and that paid advice is a waste of money. I speak simply as someone who has been in the classroom as a teacher. When I left teaching, I eventually became chairman of an education committee. My right hon. Friend the Secretary of State for Education and Science and I met many times in Norfolk to discuss education before he reached the office which I know that he will adorn with great success and to the great benefit of the education service nationally.
I welcome the fact that my right hon. Friend the Secretary of State said that this is an interim order for one more year. My hon. Friend the Member for Hyndburn (Mr. Hargreaves) said that he hoped that this was the first and last time that such an order would come before the House. In fact, it is the third time that we have been asked to continue the life of the interim advisory committee.
I understand all the points that my right hon. Friend the Secretary of State made in advancing the case for our supporting the measure today and I will have no difficulty in doing so because I know my right hon. Friend to be a man of his word. He was cautious in saying that it would be his aim to have the new negotiating machinery in existence in time for the next round of pay awards. I am sure that he will do his best to meet that aim, but we have to tell him that he must meet it.
I have strongly supported the Government's employment legislation because it is important that in a free society everyone should have the right not to belong to a union. I also believe, however, subject to the obvious constraints of national security and the public interest which apply to some occupations, that people should equally have the right to belong to a union and that that union should be able to represent them. I regret that the teachers' unions are denied the opportunity to engage in negotiations on their pay. I do not blame the Government for that. Teachers must accept a large measure of responsibility. I cannot understand why the teachers' organisations have never been able to sink their differences and get together to approach the Government with a clear-cut idea of how they would like their salaries and conditions to be dealt with. They never come along.
The hon. Member for Blackburn (Mr. Straw) quoted my right hon. Friend the Secretary of State talking about a shortage of doctors in 1966, as though that had anything to do with us now. The power of the British Medical Association, lately abused in its idiotic approach to the National Health Service reforms, has nevertheless enabled that profession to achieve a great deal for its members, which teachers, too, should be able to obtain if they were united in their approach to their problems.
I would not go along with my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) in all that he said, but he made one of the most powerful speeches that we have heard on this subject. Everyone has spoken extraordinarily well, but my hon. Friend encapsulated succinctly many of the concerns that inform all of us who are keen to see a successful education service.
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Teacher shortages go in cycles. I do not want to minimise the problems that the education service is experiencing today. My right hon. Friend the Secretary of State will know that on the schools sub-committee agenda for Norfolk county council tomorrow for the first time ever there is an item dealing with teacher shortages. We have never had difficulties recruiting teachers in Norfolk, but we are beginning to do so—and if we are beginning to have problems in Norfolk, whatever must it be like in other parts of the country?
It is no good my right hon. Friend pretending that the problem does not exist. It is no use pretending that, while money will not solve everything, we can expect a highly motivated teaching profession if we do not reward teachers accordingly.
Many teachers do not deserve as much as they get. I deeply regret that in the one reform with which the Government should have gone ahead rapidly—teacher appraisal—they have backed off because they are not prepared to fund the additional teachers who would be necessary to introduce the properly run teacher appraisal scheme that many teachers would like to see. If I am wrong on that and my hon. Friend the Minister of State can reassure me when she replies, I will take back what I have said. Nevertheless, I am still worried about the attitude on some of these issues.
The teacher shortage is cyclical. The year 1966 has been quoted, but I started teaching in 1959, as a student with no qualifications. We were so short of teachers that we were appointing people on the basis that they had A-levels and the offer of a place at college. We were also appointing teachers with just one year's mature training, straight out of the services. I trained with some of those people and they were first class, but let us not pretend that it is good for the teaching profession to solve shortages in that way.
The Government must get their act together on teacher negotiations. There must be a body to deal with conditions. Teachers must also stop bleating about low morale. There have always been teachers who do not like their jobs. I know that they are required to do more, but the more they tell us about their suffering and their breakdowns, and how difficult their job is, the more one wonders whether they are the right people to be in those jobs. If they are not the right people, the negotiating body must be the right mechanism to attract more of the right people into the profession.
11.36 pm
Mr. Martin Flannery: The hon. Member for Great Yarmouth (Mr. Carttiss) ended on a sad note. Nobody hearing that ungracious remark would ever think that he had taught.
The last negotiated pay settlement for teachers was in April 1986. In 1987, the then Secretary of State imposed the interim advisory council and settlements for 1988 and 1989. The year 1990 is now coming, and if this continues for a year after, it will mean that, for five years, the democratic machinery of trade unionism will have been abandoned by the Government. As my hon. Friends have said, the Government were denounced for violating the International Labour Organisation convention, which has existed for a long time. The ILO is a United Nations body, so the Government have contravened international law. No other nation has done this. it is disgraceful that that should have been imposed on the teachers when at the

279
same time the Secretary of State was attacking the teaching profession and trying to split its ranks. Instead, they have been united because the Government have driven them into such a corner that they have decided to get together.
The Teachers' Pay and Conditions Act became law early in 1987, and the Government said that it was only a temporary measure. They needed such a draconian measure because they could not get what they wanted to impose on the teachers through free democratic negotiation, because the teachers were resisting them. Therefore, they imposed their diktat and destroyed the negotiating machinery, saying that it would be for only a year.
It is sad to see how easily Tory Members go along with violations of democracy when they are done by their Government, but denounce everybody else. I would never have thought to hear from the hon. Member for Salisbury (Mr. Key) some of the things that he said today. He jollied us along with a heap of anti-democratic proposals under the guise that they came from the Assistant Masters and Mistresses Association. It is one of the bodies that have written to the Secretary of State demanding the right to a negotiating machinery. The letter says:
"We are equally agreed that teachers should have genuine participation in the determination of teachers' pay and conditions whatever the nature of the machinery."
If I read the whole letter, it would strengthen what I said. Five other bodies, including the Professional Association of Teachers, signed that letter.
During the period of consultation on the Education Reform Bill, head teachers drew attention to the teacher shortages, and in his evidence to the Select Committee, the general secretary of the National Association of Head Teachers pointed out that the shortage was becoming "a catastrophe". Conservative Members who have cited the figure of 1 per cent. grossly under-estimate the problem. It is as though they do not want to solve it and will not face reality.
Now that the Government have imposed this draconian measure, they are in such an economic mess that they cannot find their way out. They have decided once again to hold down teachers' pay and conditions and imperil the education of our children. Let me make it clear that it is not the education of their children—
Mr. Key: Will the hon. Gentleman give way?
Mr. Flannery: No, I do not have time to give way to the hon. Gentleman, although I would if he had spoken more briefly.
All the members of the Cabinet—with perhaps one exception—went to public and preparatory schools. Conservative Members criticise a Health Service that they do not use and an education service into which they do not send their children. [Interruption.] One of them may have done, but the reality is as I have explained.
The Government were condemned by the ILO in May 1988 for denying teachers their negotiating rights and breaking a convention to which they themselves were a signatory. We appeal to the Minister to fulfil his promise, although if the Government can remove negotiating rights for five years, there is no reason to have any faith whatever that they will restore them at the end of the fifth year. They are eminently capable of imposing the conditions once more. They have got themselves into an impasse by their actions, their leadership election and all the other nonsense that they are crying about, and they are ready once again
280
to impose the conditions on teachers. It is the Government who are the cause of the low morale in the teaching profession and of the shortage of teachers, about which the Select Committee is trying—against the Tory party's wishes—to publish an important report. It is vital to show the real picture.
Mr. Beggs: Does the hon. Gentleman agree with me, as a long-standing teacher, that since the early 1970s, when teachers had their morale restored and were given a decent salary increase arising from the Houghton report, teachers' morale, the conditions in which they work and the rewards that the Government make available to them have continued to deteriorate, and that the responsibility now lies with the Government to put matters right?
Mr. Flannery: The hon. Member for Antrim, East (Mr. Beggs) is absolutely right that things have gone downhill since 1974—[HoN. MEMBERS: "1974?"] In 1974, the Houghton report gave teachers the lift to which the hon. Member for Antrim, East referred. Did not Conservative Members know that? But in the past 10 years, things have gone steeply downhill, to the plaudits of Conservative Members. It is up to the Government to set matters right. Otherwise, the education of our children will be as ruined as the British economy now is.
11.43 pm
Mr. David Evennett: As a former teacher and also a member of the Select Committee on Education, Science and the Arts, I was appalled at the speech made by the hon. Member for Sheffield, Hillsborough (Mr. Flannery). He finds it easy to criticise and condemn, but his speech lacked any constructive suggestion. Opposition Members generally have had nothing constructive to say about teachers' pay and conditions; their remarks have been appalling.
Conservative Members believe that teachers are a vital part of our education service and our nation and that they should be paid a decent salary for the important job that they have to do. The education of our children is vital, both for individual children and for the future of our country. Historically, Opposition Members seem to have forgotten how the Burnham committee worked. It was a total and complete failure. It did not work effectively, because the whole aspect of teachers' pay and conditions was not considered. It considered only the annual pay review. In the past few years, the interim advisory committee has been quite successful at formulating teachers' pay. However, it is interim and temporary. As my right hon. Friend the Secretary of State said earlier, we are looking for a permanent structure to determine teachers' pay in the future.
We have heard many reasons why no permanent structure has been created to date. One of the most important of those reasons must be that the teachers' unions are not united in their approach. It has been very difficult to achieve agreement across the teachers' unions. We have heard that the teachers want more money, but there has been no general agreement about the machinery to formulate teachers' pay negotiations in future. The IAC has therefore been necessary.
As my right hon. Friend the Secretary of State said, there are already shortages of teachers in key subjects and in certain regions. However, we must not overstate the

281
problem. It is easy to talk about the problems and make them worse. There are limited problems but that does not mean that they are not serious, because they are.
As a Member of Parliament representing an area in greater London, I believe that the problems are greater in London than elsewhere. The London allowance is totally inadequate for teachers working and living in London today. My right hon. Friend the Secretary of State told the House today, as he told the Select Committee on Education, Science and Arts last week, that the IAC is considering that, and we look forward to the Select Committee's comments.
I should like to see more emphasis on supply and demand in teaching recruitment and pay, more local bargaining and more regional agreements. I believe most passionately that living costs in greater London are different from those elsewhere in the country. That factor must be considered when we are looking at teachers' pay.
We obviously need a well trained, well paid professional teaching force. We owe teachers a great deal. The hon. Member for Bow and Poplar (Ms. Gordon) was wrong to say that Conservative Members do not appreciate the difficult job that teachers have to do. We want them to be paid a decent salary, but we must look at the whole problem and not just at specific parts of it.
We need a new body to negotiate teachers' pay and conditions, and we look to next year with great interest. Conservative Members hope that this is the last time that we have to debate and discuss an interim advisory award and an extension of the Teachers' Pay and Conditions Act 1987. Under my right hon. Friend the Secretary of State, we shall get there, and we shall have a good new negotiating body which will do the best for the teaching profession.
11.48 pm
Mr. Derek Fatchett: Two main themes have run through the debate—the quality of education, and the democratic rights of teachers. It was very interesting to note that every hon. Member who spoke was prepared to accept that we are now facing a crisis in the supply of teachers and that we have a teacher shortage. The hon. Member for Great Yarmouth (Mr. Carttiss) even went so far as to say that, if the problems had come to Norfolk, they must be deep elsewhere.
I suspect that one discordant voice will not recognise the problem of teacher shortage, and it will be that of the Minister of State. At the beginning of this term, when she was presented with the figures on teacher shortages and vacancies, she said that they were "very encouraging". They do not seem to encourage Conservative Members, nor do they encourage parents. As my hon. Friends the Members for Peckham (Ms. Harman) and for Bow and Poplar (Ms. Gordon) and others have said, parents are concerned about the quality of education. They are concerned in London and in the inner-London boroughs because there may not be a teacher in front of the class. Parents in many parts of the country are concerned because there are hidden shortages and because a teacher in front of a class may not be qualified to teach the subject on the timetable. They are concerned because they know that the problem of the supply teacher may get worse.
282
The Minister may have recourse to the Prime Minister's response to me during the debate on the Queen's Speech. The answer, she said, for all parents and children in inner London is to live in Barnet. Does that not show total contempt and disregard for the children and parents of this country and for the quality of our children's education?
Conservative Members talk about teacher supply and say that they are now concerned about teachers. I am pleased that Central Office has now supplied them with a new script and that they are talking to it. In the early years of this Government, every Conservative Member used to denigrate the teaching profession and run down teachers' contributions.
Mr. Key rose—
Mr. Fatchett: I cannot give way.
That is why there has been such a collapse in teacher morale. The Secretary of State shakes his head and says that that is not true. Let me pose two more questions to him about teacher supply and morale. First, I refer to the £600 million envelope on the interim advisory committee recommendations for this year. The right hon. Gentleman knows, as every Conservative Member knows, that that figure will lead to a reduction in teachers' real living standards. How will we attract people into the teaching profession if we are to run from paying teachers what they need and what they deserve? This country should value their contribution to our society and economic well-being.
My second question is about democratic rights. How are we to restore teachers' morale when we hear from the Minister of State that teachers' democratic rights are still not to be restored and there is still no definite promise from the Secretary of State? As the hon. Member for Great Yarmouth said, the Secretary of State chose his words very deliberately. It is his aim to restore collective bargaining machinery. We heard those words from the previous Secretary of State in 1986, 1987, 1988 and 1989, and we have heard them from the Minister of State. When will the Government act and turn that promise into reality?
The Government are quickly turning an interim, temporary arrangement into a permanent arrangement. I suspect that teachers will simply not believe the Secretary of State and the Minister of State when they say that this year is the final year for the interim advisory committee. Teachers have good reasons for that. The previous Secretary of State, backed up by Conservative Members, at a stroke wrote away teachers' democratic rights to bargain with their employer, so why should they believe the Government now? Why should they believe a Government who, under section 222 of the Education Reform Act 1988, challenged the employment rights of teachers and others in the teaching professions? Why should they believe a Government who take away from workers at GCHQ the right to belong to a trade union? Why should they believe a Government who, in consecutive Employment Acts, have taken away from workers rights that are enjoyed throughout the rest of western Europe? Why should they believe a Government who so passionately and dogmatically resist the social charter? This is a Government whose record on employment rights stinks, and that is why teachers simply do not believe them.
What we want to hear from the Minister of State is not just a name or an objective but what the hon. Member for Hyndburn (Mr. Hargreaves) said, a real commitment and

283
a real promise that this is the last occasion on which teachers will have their pay fixed by the Secretary of State. We want to hear a real commitment to the restoration of collective bargaining.
We shall oppose the order in the Division tonight and make one final promise to the teachers: in two years, when there is a Labour Government, we shall restore collective bargaining to teachers.
12.56 am
The Minister of State, Department of Education and Science (Mrs. Angela Rumbold): We have had an interesting debate and I have noted with pleasure the number of hon. Members who have made a contribution this evening. It has been interesting not only because we have heard from several hon. Members who represent London constituencies and who have expressed their concerns about the situation of teacher supply, recruitment and retention in the London area, but because we have also heard from colleagues of all parties who have been teachers in the past.
At the outset, I should say that I hope that all hon. Members will vote for the order, if for no other reason, for the very good reason that without a clear vote for the order, the recommendations that my right hon. Friend the Secretary of State will receive from the interim advisory committee will not be able to pass through the House and into teachers' salaries next year, which would be a great mistake. Of course, many teachers throughout the country will note those hon. Members who did not wish to give them the rewards to which we believe they are entitled.
Several hon. Members have spoken about teacher morale and have made their points in various ways. Some have said that teacher morale is low because of the circumstances in which they find themselves, especially in inner cities and in London—[HoN. MEMBERS: "Everywhere."] It is particularly important to realise that there are difficulties for hon. Members representing London. We have been talking with the London education authorities-to-be following the abolition of the Inner London education authority. A number of those authorities are taking the retention and recruitment of teachers extremely seriously and are making intelligent plans, such as those to which the hon. Member for Peckham (Ms. Harman) referred, including recruiting married women back into the profession.
Like several of my ministerial colleagues, I spend a considerable amount of time in schools talking to teachers about their conditions and about the new national curriculum and many of the things coming into schools at present. When one discusses with teachers the introduction of the national curriculum and of local management schemes, one finds a great deal of enthusiasm for the new ways in which the schemes are going to be taken on in their schools. They recognise the great improvements for the children of this country from the introduction of the national curriculum and the ability to run their own schools with their own budgets. They see possibilities in that for the schools to achieve better value for their budgets and for better resourcing, because they are managing their schools as governors and teachers.
When it comes to considering the interim advisory committee and the discussions that my right hon. Friend the Secretary of State and his predecessor have had with the teacher unions, it has been said that we have not been
284
moving very fast. I must point out to the Opposition that discussions have taken place for a number of months about, for example, the Green Paper published for discussion with the unions. That document made important proposals for a teacher negotiating group that gave some rights to the Government to intervene should that group not reach satisfactory conclusions.
After extensive discussions with the teacher unions over a considerable time, it was not possible for the unions to agree. For that reason, a new set of proposals were put to the teacher unions and to the local education authority employers earlier this year. My right hon. Friend has already said that those proposals included the possibility of a new negotiating body composed of the unions and local education authority representatives, which might also include Government participation. Another proposal related to local negotiations. I note that my hon. Friend the Member for Bedfordshire, South-West (Mr. Madel) warmly welcomed the possibility of introducing some form of local negotiation. My hon. Friend and others have recognised the difficulties encountered in the home counties and in London in recruiting as successfully as other less costly parts of the country. The third possibility related to some form of review body.
Those various proposals are currently under discussion by the unions and the employers, and they are showing considerable interest in them. My right hon. Friend wants those talks to reach a satisfactory conclusion. Although he has been in office for only a relatively short time, he has already managed to conclude a complete round of discussions with the interested parties. That shows conclusively that he is extremely interested in making progress on this matter. Hon. Members must therefore accept the good faith that he has demonstrated.
My right hon. Friend, other Ministers and myself have been accused tonight of under-estimating and undervaluing teachers. My right hon. Friend has gone to great lengths to demonstrate his genuine belief that teachers are doing an excellent job.
My hon. Friend the Member for Great Yarmouth (Mr. Carttiss) asked about appraisal. My right hon. Friend asked the teachers if they would postpone the introduction of appraisal because he understands the pressures to which our teachers are now subject with the introduction of the national curriculum and local management schemes. That request was not made because my right hon. Friend does not want appraisal to be introduced—he knows full well that the teachers are anxious for such appraisal to be introduced. As soon as the national curriculum and the local management schemes are operating, it will be possible to introduce the appraisal scheme. I believe that all hon. Members want that.
The hon. Member for Southwark and Bermondsey (Mr. Hughes) noted the letter that had been signed by the six leaders of the teacher unions. We are glad that those unions have agreed on at least three points in that joint letter. That letter is significantly briefer than the individual representations from those unions to my right hon. Friend. Therefore, we must continue to have discussions. We shall have those discussions in good faith, and I hope that the House will vote for the order.
Question put:—
The House divided: Ayes 221, Noes 181.

Division No. 9]

[12.3 am

AYES

Adley, Robert

Gardiner, George

Aitken, Jonathan

Garel-Jones, Tristan

Alexander, Richard

Gill, Christopher

Alison, Rt Hon Michael

Goodlad, Alastair

Amess, David

Goodson-Wickes, Dr Charles

Amos, Alan

Gow, Ian

Arbuthnot, James

Grant, Sir Anthony (CambsSW)

Arnold, Jacques (Gravesham)

Greenway, Harry (Ealing N)

Arnold, Tom (Hazel Grove)

Greenway, John (Ryedale)

Ashby, David

Gregory, Conal

Aspinwall, Jack

Griffiths, Peter (Portsmouth N)

Atkins, Robert

Hague, William

Baker, Rt Hon K. (Mole Valley)

Hamilton, Hon Archie (Epsom)

Baker, Nicholas (Dorset N)

Hamilton, Neil (Tatton)

Baldry, Tony

Hanley, Jeremy

Batiste, Spencer

Hannam, John

Bendall, Vivian

Hargreaves, A. (B'ham H'll Gr')

Bennett, Nicholas (Pembroke)

Harris, David

Bevan, David Gilroy

Hayward, Robert

Biffen, Rt Hon John

Heathcoat-Amory, David

Blaker, Rt Hon Sir Peter

Heddle, John

Body, Sir Richard

Higgins, Rt Hon Terence L.

Bonsor, Sir Nicholas

Hind, Kenneth

Boswell, Tim

Hogg, Hon Douglas (Gr'th'm)

Bottomley, Peter

Howard, Michael

Bowden, Gerald (Dulwich)

Howarth, Alan (Strat'd-on-A)

Boyson, Rt Hon Dr Sir Rhodes

Howarth, G. (Cannock & B'wd)

Brandon-Bravo, Martin

Hughes, Robert G. (Harrow W)

Brazier, Julian

Hunt, David (Wirral W)

Bright, Graham

Hunter, Andrew

Brown, Michael (Brigg & Cl't's)

Irvine, Michael

Browne, John (Winchester)

Jack, Michael

Bruce, Ian (Dorset South)

Jackson, Robert

Buck, Sir Antony

Janman, Tim

Budgen, Nicholas

Johnson Smith, Sir Geoffrey

Burns, Simon

Jones, Gwilym (Cardiff N)

Burt, Alistair

Jones, Robert B (Herts W)

Butler, Chris

Jopling, Rt Hon Michael

Butterfill, John

Key, Robert

Carlisle, John, (Luton N)

King, Roger (B'ham N'thfield)

Carlisle, Kenneth (Lincoln)

King, Rt Hon Tom (Bridgwater)

Carrington, Matthew

Kirkhope, Timothy

Carttiss, Michael

Knapman, Roger

Channon, Rt Hon Paul

Knight, Dame Jill (Edgbaston)

Chope, Christopher

Knowles, Michael

Churchill, Mr

Knox, David

Clark, Hon Alan (Plym'th S'n)

Lang, Ian

Clark, Sir W. (Croydon S)

Latham, Michael

Colvin, Michael

Lawrence, Ivan

Conway, Derek

Lee, John (Pendle)

Coombs, Anthony (Wyre F'rest)

Lester, Jim (Broxtowe)

Coombs, Simon (Swindon)

Lightbown, David

Couchman, James

Lilley, Peter

cran, James

Lloyd, Sir Ian (Havant)

Currie, Mrs Edwina

Lloyd, Peter (Fareham)

Davies, Q. (Stamf'd & Spald'g)

Lyell, Sir Nicholas

Davis, David (Boothferry)

Macfarlane, Sir Neil

Day, Stephen

MacGregor, Rt Hon John

Dorrell, Stephen

MacKay, Andrew (E Berkshire)

Douglas-Hamilton, Lord James

Maclean, David

Dover, Den

McLoughlin, Patrick

Dunn, Bob

McNair-Wilson, Sir Michael

Durant, Tony

McNair-Wilson, Sir Patrick

Dykes, Hugh

Madel, David

Eggar, Tim

Malins, Humfrey

Evans, David (Welwyn Hatf'd)

Mans, Keith

Evennett, David

Maples, John

Fallon, Michael

Marland, Paul

Field, Barry (Isle of Wight)

Marlow, Tony

Fishburn, John Dudley

Marshall, John (Hendon S)

Fookes, Dame Janet

Marshall, Michael (Arundel)

Forman, Nigel

Martin, David (Portsmouth S)

Forsyth, Michael (Stirling)

Maude, Hon Francis

Forth, Eric

Mawhinney, Dr Brian

Fox, Sir Marcus

Maxwell-Hyslop, Robin

Freeman, Roger

Miller, Sir Hal

French, Douglas

Mills, Iain

Gale, Roger

Mitchell, Andrew (Gedling)

286

Mitchell, Sir David

Shaw, Sir Michael (Scarb')

Moate, Roger

Shelton, Sir William

Monro, Sir Hector

Shephard, Mrs G. (Norfolk SW)

Montgomery, Sir Fergus

Shepherd, Colin (Hereford)

Morrison, Sir Charles

Shersby, Michael

Moss, Malcolm

Skeet, Sir Trevor

Moynihan, Hon Colin

Smith, Tim (Beaconsfield)

Neale, Gerrard

Spicer, Sir Jim (Dorset W)

Nelson, Anthony

Squire, Robin

Neubert, Michael

Stanbrook, Ivor

Newton, Rt Hon Tony

Stanley, Rt Hon Sir John

Nicholls, Patrick

Steen, Anthony

Nicholson, David (Taunton)

Stern, Michael

Nicholson, Emma (Devon West)

Stevens, Lewis

Norris, Steve

Stewart, Allan (Eastwood)

Page, Richard

Stewart, Andy (Sherwood)

Patnick, Irvine

Stradling Thomas, Sir John

Patten, John (Oxford W)

Sumberg, David

Pawsey, James

Summerson, Hugo

Peacock, Mrs Elizabeth

Taylor, Ian (Esher)

Porter, David (Waveney)

Taylor, John M (Solihull)

Portillo, Michael

Thompson, D. (Calder Valley)

Price, Sir David

Thurnham, Peter

Raison, Rt Hon Timothy

Trippier, David

Renton, Rt Hon Tim

Twinn, Dr Ian

Riddick, Graham

Walker, Bill (T'side North)

Ridley, Rt Hon Nicholas

Wheeler, John

Rost, Peter

Widdecombe, Ann

Rowe, Andrew

Wiggin, Jerry

Rumbold, Mrs Angela

Wood, Timothy

Ryder, Richard

Sackville, Hon Tom

Tellers for the Ayes:

Sayeed, Jonathan

Mr. Sydney Chapman and

Shaw, David (Dover)

Mr. Greg Knight.

Shaw, Sir Giles (Pudsey)

NOES

Abbott, Ms Diane

Crowther, Stan

Adams, Allen (Paisley N)

Cryer, Bob

Allen, Graham

Cummings, John

Alton, David

Cunliffe, Lawrence

Anderson, Donald

Cunningham, Dr John

Archer, Rt Hon Peter

Dalyell, Tam

Armstrong, Hilary

Darling, Alistair

Ashdown, Rt Hon Paddy

Davies, Rt Hon Denzil (Llanelli)

Ashton, Joe

Davies, Ron (Caerphilly)

Barnes, Harry (Derbyshire NE)

Davis, Terry (B'ham Hodge H'I)

Barnes, Mrs Rosie (Greenwich)

Dewar, Donald

Barron, Kevin

Dixon, Don

Battle, John

Dobson, Frank

Beckett, Margaret

Doran, Frank

Beggs, Roy

Douglas, Dick

Beith, A. J.

Dunnachie, Jimmy

Bell, Stuart

Dunwoody, Hon Mrs Gwyneth

Benn, Rt Hon Tony

Eadie, Alexander

Bermingham, Gerald

Evans, John (St Helens N)

Bidwell, Sydney

Fatchett, Derek

Blair, Tony

Faulds, Andrew

Blunkett, David

Fisher, Mark

Boyes, Roland

Flannery, Martin

Bray, Dr Jeremy

Foot, Rt Hon Michael

Brown, Gordon (D'mline E)

Foster, Derek

Brown, Nicholas (Newcastle E)

Foulkes, George

Brown, Ron (Edinburgh Leith)

Fraser, John

Buckley, George J.

Fyfe, Maria

Caborn, Richard

Garrett, John (Norwich South)

Callaghan, Jim

Golding, Mrs Llin

Campbell, Menzies (Fife NE)

Gordon, Mildred

Campbell, Ron (Blyth Valley)

Gould, Bryan

Campbell-Savours, D. N.

Grant, Bernie (Tottenham)

Canavan, Dennis

Griffiths, Nigel (Edinburgh S)

Clark, Dr David (S Shields)

Griffiths, Win (Bridgend)

Clarke, Tom (Monklands W)

Grocott, Bruce

Clay, Bob

Harman, Ms Harriet

Clelland, David

Henderson, Doug

Clwyd, Mrs Ann

Hinchliffe, David

Cohen, Harry

Home Robertson, John

Cook, Robin (Livingston)

Hood, Jimmy

Corbett, Robin

Howells, Geraint

Cousins, Jim

Howells, Dr. Kim (Pontypridd)

287

Hoyle, Doug

Pendry, Tom

Hughes, John (Coventry NE)

Pike, Peter L.

Hughes, Robert (Aberdeen N)

Powell, Ray (Ogmore)

Hughes, Roy (Newport E)

Prescott, John

Hughes, Simon (Southwark)

Quin, Ms Joyce

Ingram, Adam

Radice, Giles

Janner, Greville

Randall, Stuart

Jones, Barry (Alyn & Deeside)

Reid, Dr John

Jones, leuan (Ynys Môn)

Robertson, George

Jones, Martyn (Clwyd S W)

Robinson, Peter (Belfast E)

Lamond, James

Ross, William (Londonderry E)

Leadbitter, Ted

Rowlands, Ted

Lestor, Joan (Eccles)

Sedgemore, Brian

Lewis, Terry

Sheerman, Barry

Livingstone, Ken

Sheldon, Rt Hon Robert

Livsey, Richard

Shore, Rt Hon Peter

Lloyd, Tony (Stratford)

Short, Clare

Lofthouse, Geoffrey

Skinner, Dennis

McAllion, John

Smith, Andrew (Oxford E)

McAvoy, Thomas

Smith, Rt Hon J. (Monk'ds E)

McCrea, Rev William

Smith, J. P. (Vale of Glam)

Macdonald, Calum A.

Soley, Clive

McFall, John

Spearing, Nigel

McKay, Allen (Barnsley West)

Steinberg, Gerry

McLeish, Henry

Stott, Roger

McNamara, Kevin

Strang, Gavin

Madden, Max

Straw, Jack

Mahon, Mrs Alice

Taylor, Mrs Ann (Dewsbury)

Marek, Dr John

Taylor, Rt Hon J. D. (S'ford)

Marshall, David (Shettleston)

Taylor, Matthew (Truro)

Marshall, Jim (Leicester S)

Turner, Dennis

Maxton, John

Vaz, Keith

Meacher, Michael

Wall, Pat

Meale, Alan

Wallace, James

Michael, Alun

Wardell, Gareth (Gower)

Michie, Bill (Sheffield Heeley)

Wareing, Robert N.

Moonie, Dr Lewis

Watson, Mike (Glasgow, C)

Morgan, Rhodri

Welsh, Michael (Doncaster N)

Morley, Elliot

Wigley, Dafydd

Morris, Rt Hon A. (W'shawe)

Williams, Rt Hon Alan

Mowlam, Marjorie

Williams, Alan W. (Carm'then)

Mullin, Chris

Winnick, David

Murphy, Paul

Worthington, Tony

Nellist, Dave

Wray, Jimmy

Oakes, Rt Hon Gordon

Young, David (Bolton SE)

O'Brien, William

O'Neill, Martin

Tellers for the Noes:

Orme, Rt Hon Stanley

Mr. Frank Haynes and

Paisley, Rev Ian

Mr. Frank Cook.

Patchett, Terry

Question accordingly agreed to.
Resolved,
That the draft Teachers' Pay and Conditions Act 1987 (Continuation) Order 1989, which was laid before this House on 7th November, in the last Session of Parliament, be approved.

PETITIONS

  Wages Councils
  12.15 am
  Ms. Joyce Quin: I wish to present a petition on behalf of about 8,000 people in Gateshead and other parts of the county of Tyne and Wear who wish to protest against the proposal to abolish the wages councils. The petitioners are concerned at the large number of people in the north-east who have to live on very low wages, below the Council of Europe decency threshold, and who have fewer employment rights than people in virtually every other country of the Community.
  The petition reads:
  Wherefore your petitioners pray that your Honourable House urges the Secretary of State for Employment to withdraw the proposals on the abolition of the wages councils and work towards the introduction of a basic minimum wage and an extension of current Employment Protection in line with TUC agreed policies.
  To lie upon the Table.

  Broadcasting (Deaf People)
  12.16 am
  Dame Jill Knight: I seek to present a petition signed by 650 people, not all of whom are my constituents, but all the signatures were collected by my constituents. The petitions asks for more access to television for deaf people through the use of teletext. The part of the petition to which I draw particular attention is:
  Wherefore your petitioners pray that your Honourable House will ensure that legislation be passed placing an obligation on television channel operators to make their programmes more accessible to deaf people by using teletext, subtitles, sign language or other means, and to reach complete coverage by a fixed date.
  And your petitioners, as in duty bound, will ever pray.
  To lie upon the Table.
  12.18 am
  Mr. Iain Mills: I should be most grateful to be allowed to present not one but two petitions, both on behalf of those who would like better access to the entertainment and interest of television but who are deaf.
  The first petition has been presented to me by Mr. Austin Reeves of Balsall Common who, despite the handicap of deafness, is secretary to the Deaf Broadcasting Association and a tireless worker on behalf of those who try to achieve better facilities for deaf people. I have supported his work for many years.
  The second petition is from Mrs. Lister of Knowle in my constituency, whose son Jonathan prompted her to take tireless trouble to ensure that there are so many signatures that I hold two huge bundles of thousands of them. The petition reads:
  Wherefore your Petitioners pray that your Honourable House will ensure that legislation be passed placing an obligation on the television channel operators to make their programmes more accessible to deaf people by using teletext, subtitles, sign language or other means and to reach complete coverage by a fixed date.
  Adding a final thought about the coverage of this House on television, I beg leave to present the petitions.
  To lie upon the Table.
  12.19 am
  Mr. Andy Stewart: I am pleased to present a petition, which is signed by my constituents and others, on behalf of the deaf and the hard of hearing. It bears more than 500 signatures, and urges that the 4 million of our fellow citizens who have little or no hearing should be able to enjoy television programmes through the far greater provision of teletext subtitling and sign language to accompany programmes. The advent of television in the House emphasises the need for such facilities, and the forthcoming broadcasting Bill provides an opportunity to oblige the BBC and television companies to provide it.
  The petition reads:
  Wherefore your Petitioners pray that your Honourable House will ensure legislation be passed placing an obligation on television channel operators to make their programmes more accessible to deaf people by using teletext subtitles, sign language or other means, and to reach complete coverage by a fixed date.
  And your petitioners, as in duty bound, will ever pray etc.
  To lie upon the Table.

Homelessness (West Yorkshire)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Patnick.]
12.20 am
Mrs. Alice Mahon: I wish to highlight the lack of awareness shown by the Government of homelessness outside London and the south-east. I do not begrudge a penny that is used to alleviate homelessness wherever it occurs.
I draw the Minister's attention to the excellent report that has been produced by Shelter in Yorkshire and Humberside, which is entitled "Housing Myths—Northern Version". By using Government and local authority statistics, Shelter firmly exposes the myth that there is no homelessness in the north. In 1988, almost 9,500 households were accepted as homeless by local authorities in the Yorkshire and Humberside region. In west Yorkshire alone, there were 4,551, and more than 12,000 presented themselves as homeless. These figures relate only to households eligible for housing under the Housing Act 1985, which places a responsibility on councils to house those who are homeless and in priority need. I believe that the definition set out in the Act is inadequate and needs redefining.
In the local authority of Calderdale, which comes within my constituency, 271 households were accepted as homeless in 1988, yet 1,158 presented themselves as homeless. The director of housing, Mr. Brian Fairclough, said:
"For every homeless person known to the authority, there are at least twice as many who we do not know about. Most young single homeless do not show up on the statistics, and nobody knows exactly how many there are."
We know, however, that in the past five years homelessness has doubled in Calderdale, while in the country as a whole it has taken 10 years to double. That is a worrying trend by any yardstick. In the past 12 months there has been a increase of over 20 per cent. Even more worrying is the fact that, during July, August and September, 281 single-parent or parent-with-children households were recognised as homeless. That is an increase of 17 per cent. on the previous quarter.
These figures expose the myth that homelessness is only a big city problem. Most housing experts recognise that that is so. In its briefing on the Autumn Statement, the Institute of Housing stressed that areas other than London and the south-east needed resources. I contend that that means areas such as west Yorkshire.
There is a growing national problem and local councils find it increasingly difficult to deal with it. At the beginning of 1988, 43 per cent. of homeless households, as accepted by councils, were living outside the inner cities. In Calderdale, as I am sure that the Minister is aware, there is 75 per cent. owner-occupation. That is a higher than average percentage, because there is much low-cost terrace housing in the area. Also, we are faced with the same problem as many other authorities in that we have been badly hit by the right to buy and by Government restrictions on council building. That has led to a shrinking of housing stock at an affordable rent. As a result, people on low incomes are stretching themselves to the limit in order to buy. Those are the very people who can least deal with the current high interest rates, and will end up as part of the homeless statistics.

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Until now, many people have sold up before repossession because they have seen a way out and tried to find rented accommodation or some other alternative. Also, building societies have been tolerant and have acted responsibly. However, time is running out. Building societies are answerable to shareholders and accountants and there is a time bomb ticking away of which we are not yet aware. The Government are betraying the very people they say they want to help. With the high number of home owners in my constituency and the high incidence of low pay, I am sure that the Minister will understand why I am worried about the problem.
Young homeless people are totally ignored by the Housing Act 1985 and by the Government's review of homelessness. When that group become homeless, they are not eligible for rehousing. No matter how caring a local authority is, they are not a priority under the 1985 Act. Recent research carried out for the Government showed that, on average, single people under 26 represent only 7 per cent. of acceptances by local authorities.
Mr. David Hinchliffe: Is my hon. Friend aware of the direct consequence in terms of homelessness for young people in West Yorkshire of the provisions of the Social Security Act 1988? Is she aware of the growing concern among social workers and probation officers in West Yorkshire about the increasing number of young people—male and female—who become involved in prostitution because they have no other means of survival?
Mrs. Mahon: I also attended a briefing at which social workers told us about that problem. I know that my hon. Friend has had to deal with such cases in his surgery. It is a tragedy.
In 1988, my local authority, in partnership with Stonham housing association, put forward an imaginative scheme for the provision of furnished flats—Hebble court in Mixenden—for 16 to 25-year-olds. Some of them were ex-offenders and the scheme had the support of the Home Office. That scheme has now collapsed because of Government cuts in benefit. That confirms the point made by my hon. Friend the Member for Wakefield (Mr. Hinchliffe).
The targeted age groups could not afford to meet their outgoings from income support and housing benefit. It is a disgrace to have in Halifax a problem of homelessness of the young coupled with empty but usable buildings and no mechanism to bring them together. The costs of the project were economical and effective, especially when compared with the high cost of institutional care. The cost in human terms is immeasurable.
In Halifax last year the housing department estimated that there were over 1,000 young people with nowhere to live. Those are the people we know about. Many do not bother to apply to the council because they know that they do not stand a chance. It is a fallacy and it is cruel to suggest, as did the previous Secretary of State for the Environment, that they have a roof over their head and that they demand a free home. We are often talking about youngsters who have had little chance in life, who have lived in care and who do not have the support of a loving family. We may also be talking about youngsters who have been abused at home or who left the family because of some form of breakdown. It is disgraceful for a Secretary of State, who is supposedly responsible for the more vulnerable in society, to make such a remark. I should love
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to recommend the Minister to read the report of case studies that I have received from Shelter in West Yorkshire. It links poverty and homelessness among 18-year-olds to the Government's benefit cuts in 1988.
Earlier this month, the Government announced a £250 million package to help the homeless in London and the south-east. We welcome any help for the problem wherever it is, but it is worth pointing out that Shelter and other reputable organisations have estimated that the £250 million is enough to repair 10,000 houses only. Not a penny is coming to the north. It goes to areas where the Government are embarrassed by the visible presence of the homeless or to constituencies in the south-east of Tory Back Benchers who have got on to them. We are entitled to ask about the 9,500 homeless households in Yorkshire and Humberside. Why are they invisible? Why cannot the Government recognise the problem in Bradford, Kirklees, Leeds or Wakefield? Why do the Government think that only one part matters? They have a nerve to say that they have no intention of subsidising inefficiency. They have deliberately starved councils of money for repairing and building housing.
This year, my authority is asking for £35 million for its housing investment programme. Last year, it was granted less than £2·5 million. The local authority estimates that it will cost about £8 million to bring the stock up to date. Government policy is inadequate and disastrous. The Government should give the local authorities the resources that they need to cope. Most of all, we need the Government to recognise that a home is a fundamental right.
12.31 am
Mr. John Battle: I thank my hon. Friend the Member for Halifax (Mrs. Mahon) for allowing me to take part in this brief debate. It is inexcusable that so far the Government have not initiated a debate on the homeless crisis in Government time so that it can be given a proper airing and full consideration by Parliament. I shall highlight one feature where the interaction of social policy in the social fund is compounding the problem of homelessness because people in hostels cannot move from them.
It was encouraging that the Government's recently published homelessness review at last accepted that homelessness was caused by a shortage of homes to rent, especially for those on low incomes. The northern region has experienced a 10 per cent. rise in homelessness during 1988. It also has the highest proportion of poor quality housing. The money recently made available for the next two years will be divided between councils which will get £117 million and housing associations which will get £73 million. It will go to schemes in the London boroughs and the following districts: Essex, Bedfordshire, Buckinghamshire, Hertfordshire, Surrey, Oxfordshire, Hampshire, East and West Sussex, Kent and the Isle of Wight. It is difficult not to ask why none of those resources can go to West Yorkshire, which has the same needs.
In the current financial year, Leeds city council hid for permission to borrow £97·6 million for its housing investment programme. The Government approved an allocation of only £15·5 million. This year's bid document states:
"The regional office of the Department of the Environment are satisfied that last year's submission represented a comprehensive statement of needs across a

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whole range of housing problems of the city and do not require repetition in detail…A further year, therefore, has started where it is not possible to make significant inroads into the range and scale of housing problems. If anything this lack of investment compounds the problem for the future."
It is that lack of investment, that short-termism, which is the real waste and the real test of inefficiency in the Government's policy.
The practical impact of reduced resources in Leeds has been an escalation of homelessness, to the extent that it is now estimated that 300 people are accepted as homeless each month, 150 of them young people. During the past few weeks, that number has increased as a result of relationship breakdowns and people finding themselves in difficulty with mortgage repayments because of high interest rates. Meanwhile, there has been a decrease of more than 2,000 in the number of local authority properties during the past two years. Because the housing stock is diminishing as a result of discount sales under the right to buy, there is little permanent accommodation on offer. As a result, more people have to go into the hostels in Leeds such as Brett Gardens, Richmond Court or Mount Cross.
The problem is that the pressure on temporary accommodation is such that two or three families have to share units. They even have to sleep on the floor or be put up in the play room. There are 70 families in units for 31 —and that is temporary accommodation.
There is one barrier to which I want to draw the Minister's attention. It is the working of the cash-limited social fund which, in 1988, replaced single payments. The cash-limited arrangements for social fund loans and community care grants means that the local Department of Social Security office cannot make an offer of assistance, sometimes for up to six weeks, because it has spent that month's allowance. More than half the 70 families in the units for 31 have had offers of a transfer to permanent accommodation lined up by the council, but they cannot move because the grants and loans designed to help them set up a new home are not available. In other words, the DSS social fund arrangements are trapping people into temporary hostel accommodation when they could be in their own homes.
The Government should not tell us about empty properties that are kept empty by councils when the social fund makes it impossible for people to move into their own homes. The Minister should ask his counterpart in the Department of Social Security to break that logjam, otherwise care in the community will unfortunately remain one of the Government's slogans but be beggared by the inefficient working of the social fund.
Today I received a report from Leeds citizens advice bureau entitled, "Homes and Money". The covering letter said:
"At Leeds CAB we are very concerned currently about the growth in our housing caseload, particularly in connection with homelessness and householders faced with possession proceedings. Our experience confirms that actual and threatened homelessness is an increasingly severe problem in Leeds."
My surgery experience and what my colleagues in Leeds tell me bear witness to the accuracy of that statement.
On Friday, the Yorkshire region's radio station is to have a phone-in programme on homelessness. I am informed that the Minister for Housing and Planning, the
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hon. and learned Member for Folkestone and Hythe (Mr. Howard), has said that he cannot take part in the questioning session but that he will make a telephoned-in statement at the end. I invite the Minister to ask the hon. and learned Gentleman to reconsider that decision. The people of West Yorkshire are not convinced that housing can be provided by the market alone. They want their questions about the right to a home being a basic need to be answered. They want the right to rent at a price that they can afford. If the Minister is not prepared to take part properly in that programme, the only conclusion that the people of West Yorkshire can draw is that the Government's housing policy is calculated, callous and indefensible.
12.38 am
The Parliamentary Under-Secretary of State for the Environment (Mr. Christopher Chope): The hon. Member for Halifax (Mrs. Mahon), who was lucky enough to secure the debate, has spoilt her case slightly through exaggeration and a rather negative attitude, which was perpetuated by the hon. Member for Leeds, West (Mr. Battle).
All hon. Members recognise that homelessness, wherever it occurs, is a problem that must be tackled, and that is true whether the homeless are in west Yorkshire, or anywhere else in the country. However, fair-minded hon. Members will accept that the scale and intensity of the problem varies greatly from one place to another.
The Government have recently completed their review of homelessness and I was disappointed that there was only the most grudging acceptance on the part of the hon. Members for Halifax and for Leeds, West of the Government's conclusions in that review. It has been generally welcomed by people who do not have a party political axe to grind, and it will make a genuine contribution to solving the problems of homelessness.
One of the most striking features of that report is that it reveals that 50 per cent. of the homelessness acceptances are concentrated in 10 per cent. of the local authorities. Although statistics have to be treated with caution, it is clear that the hardest hit areas are in London and the south-east. That is why we have designated those as the pressure areas, and we shall be making an additional £250 million available over the next two years to reflect their special problems.
I can understand that hon. Members from west Yorkshire and other parts of the country are disappointed that local authorities and housing associations in their areas will be unable to bid for the additional £250 million of resources. But I hope that hon. Members will accept that, if we are to tackle the problem sensibly, we should recognise the geographical incidence of the problem and target resources accordingly.
Mr. William O'Brien: Will the Minister advise hon. Members from West Yorkshire and other parts of the country what level homelessness in their areas must reach before the Government will give assistance? Will the Government allow time to debate in the House the report to which he has referred and the issue of homelessness?
Mr. Chope: The Government help local authorities with problems of homelessness not just by this additional £250 million, but by the general housing investment programme

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and the credit approvals. The new system that we are introducing for next year is designed to target more resources to the sort of authorities represented by Opposition Members. It is nonsense to suggest that the only money provided by the Government is the £250 million. That is £250 million extra to go to the particularly hard-pressed areas of London and the south-east.
A brief examination of the relevant figures in the housing investment programme returns shows that the five local authorities in west Yorkshire recorded 4,900 homelessness acceptances in 1988–89, around 4 per cent. of the total in England. By comparison, the London boroughs of Southwark and Islington alone accounted for 4,900. The total for London and the south-east was more than 40,000. Some London boroughs are having to allocate 70 per cent. of their new lettings to homeless people, compared with a national average of 32 per cent. and an average for West Yorkshire authorities of 17 per cent. The hon. Member for Halifax quoted many statistics, but she declined to quote those. However, they show the relative scale of the problem and the ability of the respective local authorities to deal with it.
In West Yorkshire, 17 per cent. of the lettings are going to families and to other individuals accepted as homeless. In some parts of London, the figure is as high as 80 per cent. and in many boroughs it is 70 per cent. I hope that hon. Members will agree that, in the light of such comparisons, it would have been irresponsible of the Government if they had not targeted the additional resources for the homeless on the pressure areas in London and the south-east.
In the past three years, more than £139 million has been allocated to authorities in west Yorkshire for their general housing needs. Spending can also be supplemented by the ability of authorities to use capital receipts for housing purposes and additional allocations totalling nearly £19 million were made available for Estate Action to tackle problems of rundown estates and to bring vacant property back into use in the West Yorkshire area. A further £1·6 million has been allocated specifically for the homeless projects, enabling the provision of 148 units of accommodation, including 41 in hostels for the homeless.
We shall shortly be informing local authorities in West Yorkshire and elsewhere of their housing allocations for next year, in the form of their annual capital guidelines. The amounts calculated for individual authorities will, as always, take into account their responsibilities for the homeless. This year, the new capital control system will enable my right hon. Friend the Secretary of State to distribute resources more accurately in accordance with housing needs, to take account of the authorities' ability to generate resources through receipts as well.
I emphasise that it is for each authority, within the guidelines and controls laid down by Government, to determine its own priorities. [Interruption.] If Labour Members are so concerned about the subject, I am surprised that they are spending so much time talking among themselves during my reply to the points that they have made.
Mr. Battle: Will the Minister give way?
Mr. Chope: No, I will not give way now. The hon. Gentleman has not been taking any notice. I am just coming to what I understand will be a sensitive point—empty properties.
In Calderdale, where in 1988–89 there were 265 homeless acceptances, there had been 250 in 1986–87. That is hardly a massive increase. In 1988–89, there were 508 vacant properties in Calderdale—3·5 per cent. of the housing stock. That shows that Calderdale has considerable resources available to help the housing problems in the area, and has not been making sufficient use of them.
Mrs. Mahon: The Minister knows that 200 of those properties are tower blocks, and I have already explained that the Government prevented one of the blocks from being brought back into use. The council is waiting for the right to borrow to do something about the other tower block. It is cynical of the Minister to make that comment.
Mr. Chope: The Government have already allocated money to help to meet the cost of improving one of the tower blocks. Specific money was allocated for that purpose, but the local authority, which has the right to spend money as it wishes, chose to spend that money in a different way. The Government believe in giving local authorities discretion to spend their resources, but if the local authority chooses to spend its money in one way, it ill behoves it to do so and then to blame the Government for the consequences.
It is right that there are empty tower blocks in the hon. Lady's constituency, but they could be brought back into use if the local authority had the will to do so. Strong hints have been given to the local authority that an Estate Action submission on those blocks would be considered favourably by the Government, but no such application has been made. I can only assume from that that the local authority lacks the will to put its house in order.
Mr. Battle: Will the Minister give way?
Mr. Chope: No, I shall not give way again; because of the time taken by Labour Members, I have little left to conclude my remarks.
The Government recognise that there is a need to ensure that help is available for people who have problems with their housing, and that includes young single people who leave home and come to London and other cities. We are currently examining the way in which various departmental policies interact, and how they might better work together and we shall make further announcements on that.
I was asked about the social fund. My hon. Friend the Under-Secretary of State for Social Security has said that, if people between the ages of 16 and 18 are experiencing genuine hardship, their cases will be looked at by Ministers at the Department. Loans are available and there is little evidence to suggest that people who need and find accommodation are priced out of it. Housing benefit is widely available, and all that is needed is for proper advice to be given to people at local level—
The motion having been made after Ten o'clock, and the debate having continued for half an hour, MADAM DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
Adjourned at ten minutes to One o'clock.