HL Deb 17 December 1981 vol 426 cc338-44

3.10 p.m.

The Parliamentary Under-Secretary of State, Department of Health and Social Security (Lord Elton) rose to move that the draft regulations laid before the House on 2nd December be approved.

The noble Lord said: My Lords, the Government put the assisted places scheme on the statute book in order to give able children from less well-off families the opportunity of attending good independent schools, to widen their educational opportunities by helping with the cost of tuition fees where parents could not afford the full cost. The scheme has got off to a good start. This September 4,185 children took up assisted places for the first time. One-third of them received completely free places and two-thirds of the pupils come from families with incomes below the national average.

To start with the main amendments proposed in the regulations, the main provision in these draft amendments is the revaluation of the income scale on which parental contributions are assessed in order to take account of inflation. Regulation 10 increases the income disregarded in respect of dependent relatives to £800. That is a proportionately larger increase than inflation over the last year and reflects our concern that the assessment of parents' income should allow for the number of dependents in each family. Because of that increase, the revised threshold levels for the income assessment scale which we propose in Regulation 12 are correspondingly lower than if they has been revalued directly in line with inflation. The shape of the assessment scale however remains the same, with a very steep gradient once income levels rise above the national average; and this accords with our continuing aim of directing the bulk of the assistance to less well-off families. Taken together, the increase in the dependents allowance and revaluation of the incomes scale corresponds to the increase in average incomes since previous regulations were made. Parents' contributions to tuition fees will, therefore, remain the same in real terms.

I should now draw the attention of noble Lords to Regulation 4. This corrects a technical error in the original regulations. The Government have always intended that parents' incomes should be assessed gross without deductions for superannuation contributions, mortgage interest and other tax allowances. The original regulations were drawn up accordingly. It has, however, recently become apparent that the regulations' reference to tax law relating to super-annuation contributions were incomplete. Regulation 4 remedies this from 1st January. For the school term just ending—and this is why I thought it worth mentioning this small adjustment—parents' income was assessed on the assumption that the regulations had achieved what they had set out to achieve.

Consequently, some parents will be entitled to a small refund, so that their contributions for this period are in line with what the regulations actually said. The department will be arranging for those refunds to be paid through the individual schools as soon as possible.

Regulation 7 reduces the period of ordinary residence normally required from three years to two. This is because the school year starts normally about September, but the calendar year, by which residence is calculated starts in January. The effect of the present residence requirements is therefore that they have to be in residence at the right address for 3¾ years rather than three years, and the change by reducing the calendar years to two reduces the qualification period to 2¾ years. I hope that I have made that clear. The remaining regulations are the kind of tidying up amendments which one would expect after running in a new scheme for its first year. I will not mention them in detail; but I will be happy to reply to any noble Lord who has a query upon them.

It remains to point out something that is not in the regulations and which some noble Lords may have expected to be there. I refer to any curtailment of the power of local authorities to veto a transfer under the scheme. Noble Lords will recall that my right honourable friend the previous Secretary of State originally included that, with the power of veto in response to strong representations by local authorities that sixth forms in some maintained schools might be rendered unviable if there were unrestricted transfers to assisted sixth form places.

Events have shown, however, that these fears were unjustified. This was partly because we restricted the number of assisted sixth form places in any one school to five at the most, and partly because demand for the places was not quite as great as many authorities had anticipated. Even so, authorities collectively vetoed about 100 potential sixth form transfers. This attitude became well known and may well have influenced some parents in their decision on whether or not they should take up the offer for their children. The implacable hostility of a local education authority to a scheme such as this, whether its motives are educational or ideological, is something that parents cannot be expected entirely to ignore. These authorities may well therefore have frightened the parents of some children out of joining the scheme.

To close the door of opportunity in the face of children of talent is something which my right honourable friend and I most strongly deplore. The Secretary of State has therefore considered this misuse of the veto very carefully and has decided that it would for the time being be wrong to penalise those authorities which use the veto properly to protect their smaller sixth forms as a response to those who use it for purposes for which it was never intended. He has therefore decided to let the present arrangement run for another year, but if the abuse continues I doubt very much whether he will let it remain.

Those are the principal points in the amendment regulations. If noble Lords have other matters they wish me to elucidate I will endeavour to do so. I beg to move.

Moved, That the draft regulations laid before the House on 2nd December be approved.—(Lord Elton.)

Baroness David

My Lords, I must thank the Minister for his explanation of the new draft regulations. As the noble Lord will know, 1 have no enthusiasm for the subject of assisted places and these new regulations, it seems to me, will bolster up what I regard as a very unwise scheme, and particularly unwise and unimaginative at a time when the state education provision is being damaged by extensive cuts on local authorities.

On 13th January 1981, Dr. Boyson said that the cash limit on Government money for the ASP scheme would be £3 million. This would involve 5,500 children, of whom 950 would be at sixth form level. On 1st December last in answer to an Oral Question, Dr. Boyson said that 4,185 places had been taken up: that is 1,315 less than expected. Of those 4,185 places 525 were for sixth formers: 425 fewer than had been expected.

The Minister has just mentioned that no action is to be taken on the veto. I am very glad about that because I think that any further action against local authorities would have been highly unwise at this point. The way the Minister spoke really assumed that it was not an opportunity for people to do A-level and other higher level work in the state provision, which I think in a way is rather insulting. The cost of those 4,185 places one would expect to be less than the £3 million budgeted for, as explained by Dr. Boyson in January. Not so, my Lords; it is £3.2 million, which is 6 per cent. over the cash limit.

When the Government are being so tough with local authorities about their overspending, I think we should have some explanation from the Minister as to why this has been allowed to happen. Are the estimates for 1982–3 of £7.7 million, and for 1983–4 of £12.3 million, to be allowed to rise in the same way? Is there to be any limit imposed or is it only the state sector which is to be penalised for over-spending?

On 1st December in a Written Answer Dr. Boyson said that on average parents contribute £285 towards fees and the Department £1,038; plus £60 per pupil towards the cost of incidental expenses. That is, the department is paying about 80 per cent. of the cost. Does it need to be kept at that level? Apparently the Government think it does, because the whole point of the new regulations is to make sure that parents pay less.

The memorandum for the Joint Committee on Statutory Instruments says in its explanation of draft Regulation 12: This relaxation of the means test (taken with the increase in the income disregard where parents have a dependent relative) … is requisite to maintain the real value to parents of the fee remission arrangements. I repeat— to maintain the real value to parents of the fee remission arrangements". To achieve this the draft regulations raise the level of income at or below which fees are to be remitted from £4,766 to £5,266. This raises the level by 10 per cent. in line with inflation. The increase in the income disregard, where parents have a dependent relative, has gone up by £200 from £600 to £800—a 25 per cent. increase. The Minister skated over this by saying that there is a "proportionately larger increase than inflation". I call 25 per cent, quite a large increase over 10 per cent.

I should like to remind your Lordships that student grants are to go up by only 4 per cent.—well below the rate of inflation. In April, the Government announced that they were going to increase pensions by 1 per cent. less than the estimated inflation rate of 10 per cent. The unemployed and the sick were also affected by this 1 per cent. cut, but in their case it came on top of a 4 per cent. cut, compared with inflation, last November. The real value of short-term benefits will therefore fall by 5 per cent.—more for those with children. Moreover, in his latest statement, the Chancellor announced that there will be no increase of the lower exemption limit, at which workers start to pay national insurance, in line with inflation.

According to the Social Service Statistics 1981, the unemployed are now living at a lower level than at any time since 1971. By last month, unemployment benefit for a single person was worth £21.08 a week at April 1981 prices, which is a drop of 93p per week compared with the November 1979 level. How can the Government justify treating those who are making use of the assisted places scheme considerably better than the unemployed, the sick and the pensioner?

I also want to ask the Minister to whom the private schools are accountable? They check the parents' declaration of income—not the department. Is there any outside observation at all on this? Whether the Government are being so generous to the parents of these pupils because they are fearful that fewer places will be taken up and their scheme will appear unsuccessful, I do not know. But there seems to be an overall anxiety not to discourage in these regulations—a certain fussiness.

For instance, in Regulation 3 we have the words added, and it is hereby declared that, notwithstanding the definition in section 114(1) of the 1944 Act 'child' includes a child over compulsory school age. As Section 38(4) of the 1980 Act defines a child as, anyone who has not attained the age of 19 years". and Section 114(1) of the 1944 Act defines a 'senior pupil' as one who has attained the age of 12 but not of 19, this seems a bit unnecessary. The Government must be very nervous about someone making trouble over 16-year-old entry into sixth forms.

I should like to comment briefly on draft Regulation 7, which reduces the residency requirement from three to two years. Again, this shows efforts to get more people able to take up places. Are the Government worried that there will be insufficient suitable applicants? I want to ask the Minister whether this relaxation will mean a general relaxation. The student grant regulations impose a three-year residential requirement. The National Union of Students has been trying to get this changed for some time. Is this now to happen and, if not, why not?

The Minister said that the academic year starts in September and that is the reason for changing this from three to two years. May I remind him that university and other higher degree courses also start in September? It is the same situation. And what kind of people will the relaxation affect—people who have just had jobs in Brussels? It would not seem likely to affect many working-class people.

As regards draft Regulation 13, relating to the computation of income, I confess to not being sure whether this is a relaxation or a tightening-up of the earlier conditions. But I doubt whether any working-class families claim relief for losses on unquoted shares in trading companies, or investment in new corporate trades. I hope that the Minister will answer the questions I have put to him.

3.24 p.m.

Lord Kilmarnock

My Lords, we on this Bench are not particularly enamoured of the assisted places scheme. We do not believe that it is the right way to go about closer liaison between the public and the private sectors. However, that being said, and looking at the present amendments and regulations, one or two points arise. Incidentally, I should like to ask the noble Lord in passing, as a question of curiosity, why in Regulation 3(3) after the words "including the United Kingdom" he wishes to add the words "as constituted from time to time"? Is the noble Lord contemplating an early disintegration of the United Kingdom? Similarly, he wants to add the same words after "European Community". That could be interpreted as meaning the accession of Spain and Portugal, but I am wondering what precise weight is to be attached to the words "as constituted from time to time" in relation to the United Kingdom.

Turning to the other amended regulations, there is the question of the disregard in respect of certain persons under 10(3) rising from £600 to £800. With respect to the noble Baroness, that is an increase of 33 per cent., which seems to me to be a very steep increase. I do not have with me my pocket calculator but in Regulation 12 there is a rise in the disregard from £4,766 to £5,266, which is certainly over 10 per cent.

When the noble Lord or any of his colleagues eventually bring before the House uprating proposals for social security benefits and for unemployment benefit, we shall want to look at them very carefully in relation to the advantages offered to parents participating in this scheme.

Turning to Regulation 11, if a parent's income falls dramatically and is assessed, on a previous year's assessment, at 85 per cent. of what it had previously been, that parent will be entitled to an immediate reassessment. However, in Regulation 11(3)(b) we see that paragraph (3) will apply if the school, though not satisfied as aforesaid, are satisfied that the relevant income in the current financial year is likely to be so much less than the relevant income in the preceding financial year that financial hardship would result from remission questions being determined by reference to that year …". That seems to put into the scope of decision by the school whether the parent's income has fallen sufficiently to demand an immediate reassessment. If that is the case, would not the noble Lord agree that the revision is too open-ended and too loose?

3.27 p.m.

Lord Elton

My Lords, I was about to say that I was grateful (the usual form of words) to the noble Baroness for her reception of these regulations, but I am not altogether sure that I am. I should remind the noble Baroness that the scheme is rendered necessary only by her party having destroyed the direct grant system and blown up the bridge between the private and the public education systems.

Baroness David

My Lords, if I could interrupt the Minister, I should like to say that if the Government had had confidence in the state system and put money into it there would be very good provision in the state system.

Lord Elton

My Lords, we do not want to open up a massive debate. I cannot agree with the noble Baroness. We must have a bipartite system. If she were to—no, I will not follow her down that road because it is late in the afternoon. Neverthleless, I am very tempted. I must meet her again on the road we are following regarding the cost of the scheme. She is under a misapprehension. The scheme is not cash limited. The original estimate of the cost of the scheme was £3 million. That was in 1979 prices. The estimate for this year, which was approved by Parliament, was £4 million at current prices. The now expected cost is £3.2 million. That is what she is looking at, in current prices. This represents a saving for exactly the reason she expected: the shortfall in the take-up of assisted places. It is a question of comparing the value of money, which changes from year to year, not its arithmetical equivalent.

The changes we have made are exactly in step with the average increase in earnings. Therefore, the adjustments which the noble Baroness looked at with such detailed comparison work out in the end at keeping the contribution, as I said in my opening speech, exactly in step with the change in the value of money and the value of average earnings. Parents will contribute the same in real terms as they have contributed in the past.

I have already explained the reasons for the change in the residence requirement. I do not think that the noble Baroness should draw any inference from that decision for policy relating to residence requirements for other kinds of students. The noble Baroness is naturally anxious to remind us of the high levels of unemployment. This does mean that people—not only stockbrokers but others—have to travel from one place to another to get jobs. We do want to limit the upset that this may impose on the expections of their families, and that is why we do not want the residents' qualification to be longer than necessary.

The noble Lord, Lord Kilmarnock, asked an interesting question about the definition in paragraph 3, and, with many noble Lords here awaiting the opening of the debate on Nothern Ireland, I can imagine that there is an unnusual level of interest in this. May I reassure the noble Lord, Lord Kilmarnock, and other noble Lords by referring them to the principal regulation which this regulation amends. The noble Lord has taken it out of context. The full context is that the definition of a national of a member state of the European Community is a person who is a national of any state within the European Economic Community, including the United Kingdom. The European Community is changing its membership and may well do so in the future, and that is what this refers to. The United Kingdom is a bracketed, parenthetical part of the European Community in that pargaraph in the regulations.

The noble Lord had another question. I thought that I should not pursue the question from the noble Baroness, Lady David, relating to the value of social security benefits, but there was one further question about Regulation 11(b), On the question of monitoring, I should say that the responsibility to Parliament for the proper expenditure of this money rests with the Department of Education and Science, and that therefore it is not the schools which in the last analysis are responsible for getting this right. The money is not simply let go with blind trust.

As to Regulation 11 (b), the noble Lord, Lord Kilmarnock, was anxious about an adjustment allowed by a school in advance of an expected change in financial circumstances. Quite often one can predict, when a works closes or when some other kind of reorganisation takes place, the change in the circumstances of the finances of the family. I consider that I would be wrong for a parent not to be able to embark on the scheme because he knew it would be only after he had paid the first 12 months' worth of fees that he would be able to be reassessed to a level where he could afford to pay. I believe I have answered all the questions which were asked but, if I find upon reading Hansard that I have omitted any, I shall write to those concerned. I beg to move.

On Question, Motion agreed to.