HL Deb 11 July 1990 vol 521 cc283-93

4 Before Clause 6, insert the following new clause:

("Exemption for full-time students

. In section 20(12) (h) of the 1986 Act, at the end there shall be inserted the words "provided that no person shall be so treated solely on the ground that he is a full-time student." ")

5 Before Clause 6, insert the following new clause:

("Exemption for postgraduate students

. In section 20(12) (h) of the 1986 Act, at the end there shall be inserted the words "provided that no person shall be so treated solely on the ground that he is a postgraduate student." ")

6 Before Clause 6, insert the following new clause:

("Housing benefit: students

.In section 21(6) of the 1986 Act, at the end there shall be inserted the words "and may provide for the regional or local level of housing costs and any payment for the purpose of meeting such costs to be taken into account in determining the maximum housing benefit where the claimant is a full-time student." ")

The Commons disagreed to Amendments 4, 5 and 6 above for the following reason—

6A Because these amendments would affect charges on public funds; and the Commons do not offer any further reason, trusting that this reason may be deemed sufficient.

Lord Henley

My Lords, I beg to move that the House do not insist on their Amendments Nos. 4, 5 and 6 to which the Commons have disagreed for the reason numbered 6A.

The House will appreciate that what I said in regard to Amendments Nos. 1 to 3 as regards privilege applies equally to these amendments. Again, the other place has elected to exercise its financial privilege in this matter and I do not believe that it would be right for this House to look beyond that, even though I appreciate that the House may wish to debate the matter again.

Moved, That the House do not insist on their Amendments Nos. 4, 5 and 6 to which the Commons have disagreed for the reason numbered 6A.—(Lord Henley.)

Baroness David

My Lords, as the original mover of the amendments, I am naturally extremely disappointed that the Commons have turned them down. However, as this is a matter of privilege we can no longer pursue the subject further. Nevertheless, I should like to make a few comments and ask one question.

It is a great pity that the conclusions of the Social Security Advisory Committee were only made available to Members this week, when in fact the consultation period was completed on 11th March. It would have been helpful to have those conclusions available before our discussions. I should like to quote one or two comments made by the committee. It said that sufficient information is not available to make accurate judgments. The number of students involved may not be vast but those who are may be considerably worse off. It is impossible to judge at this stage if the amount of money being put into the access funds is adequate. The committee had reservations as to whether the machinery for disbursement of the access funds will be sufficiently sophisticated to meet the need effectively and in a way which is consistent throughout the country. Again it is impossible to judge at this stage if the machinery will be adequate. The committee added that adequate monitoring is essential.

In the committee's final conclusion, at Paragraph 69, it states—I hope the Minister is paying attention: However, we believe unanimously that there must be a safety net which ensures that students are not left destitute. Our overriding concern is that the Access Fund arrangements may not prove adequate to cater for the minority of students who find themselves with no means of personal support during the long vacation. If for any reason the Access Fund is not able to make a payment a small number of students could suffer severe hardship. A minority of the Committee believes that there must be strict legal entitlement to claim in the circumstances and that students should continue to be able to claim income support… However, the majority recommend that the Secretary of State for Social Security should have discretion to authorise payments of income support for a limited period during the summer vacation to avoid hardship as is the case for unemployed 16 and 17 year olds". I hope that the Government are paying attention to what their Social Security Advisory Committee said and that the Minister will comment on that when he replies. I have heard, but the Minister did not mention it, that post-graduates who are not getting loans are to be given an additional £400 a year. What is not clear—and I should like to know—is whether they are to receive it this October or whether they will not receive it until 1991. There appears to be some uncertainty in that respect. However, it has been pointed out to me that even if they receive the £400 increase this autumn it is to be funded from allocated funds within the science budget, and after taking inflation into account, they will be only slightly better off this year. If they are not paid the extra £400 until next year they will be considerably worse off than before.

Finally, I quote from a letter which I received from the National Postgraduate Committee and which I only opened after lunchtime today. It puts the point of view of postgraduates. The Minister will remember that we were particularly concerned about these in regard to housing benefit because they are not to receive the loan. The letter states: We entirely agree with your views about benefits for students as a whole, and remain entirely baffled by the Government's insistence on removing postgraduates from the housing benefit structure. None of the arguments they put forward for removing undergraduates apply—we arc not eligible for loans; we live in one place for three years or more, so are no more complicated to administer than anybody else, and we cannot earn much in the 6–8 week vacations that we are given. Even government ministers privately admit that the Access Fund is a farce (I make an exception for Robert Jackson MP, who admitted that he had no information on the financial situation of postgraduates when we met him, yet still seemed confident his scheme was infallible)". I hope that the Minister has taken note of my comments. As I said, we do not press these amendments but regret that they have been turned down. I hope that the points I have raised will be remembered throughout the year.

Lord Carter

My Lords, like my noble friend, I am extremely disappointed at the Government's decision to reject the amendments. We should be clear that the effect of the rejection is to create citizens who, irrespective of their level of income, will not be eligible for certain benefits but who would have been eligible had they not been students.

Speaking in another place the Minister, Mr. Nicholas Scott, admitted that the effect of accepting these amendments would be small in terms of the numbers affected. However, as my noble friend said, it is serious for those actually covered by the Government's decision. Since the effect is so serious for those caught by it, why could not the Government have phased in the withdrawal of benefits so that the effect would be mitigated? That was suggested by a number of Conservative Members in another place when the subject was debated on Monday.

When he replies the Minister will no doubt try to hide behind the safety net of so-called local authority hardship payments; but what about the pressure on local authorities to hold down expenditure with the threat of charge-capping hanging over them if they do not? In fact, a range of parliamentary Answers from different Ministers reveals that the Government have no real idea of how the removal of benefits will work out in practice, who will be affected nor how seriously they will be affected.

We hear endlessly of the Government's policy and of targeting benefits. At the same time the Government are quite prepared to accept a situation where certain people are denied benefits for no other reason than that they are students although they are below the line for claiming benefit. They will be required to exist on levels of income that for any other group would automatically qualify for benefit. As I said, a number of Conservative Members in another place expressed grave reservations about the Government's policy. The Social Security Advisory Committee was also adamant, as my noble friend said, that there must be a safety net to ensure that students are not left destitute. I repeat, in this day and age students should not be left destitute.

The SSAC was also sceptical about the access funds under the student loans scheme and questioned whether they would be adequate. Incidentally, that point was also made by the noble Lord, Lord Boyd-Carpenter, when we debated the student loans Bill.

The SSAC was scathing about the removal of entitlement to unemployment benefit. It stated: We believe that it is a fundamental principle of the national insurance scheme that a person who satisfies the rules for a particular benefit and who has paid the necessary contributions should be entitled to that benefit. Traditionally, students have sought work during the vacations and particularly in the summer vacation". It then emphasised: If a student satisfies the normal contribution rules, is available for and is actively seeking work during the long vacation but is unable to find employment then we believe that they should get unemployment benefit". Those are the words of the Government's own Social Security Advisory Committee.

The Government have ignored their advisory committee and also a number of their own Back-Benchers in another place besides the arguments accepted by this House. They guillotined the debate in another place on your Lordships' amendments and they rammed through rejection of them. That is a poor way to treat students, whom we all regard as one of the nation's most valuable assets.

3.30 p.m.

Baroness Phillips

My Lords, I hope that the Minister will explain to us his reasons, which seem rather curious. He referred to the Money Resolution. Why was that not explained when the amendments were originally drawn up in this House? It seems very curious that they have to go to the other place and come back again before a reason is discovered. Surely a briefing should have been given to the Minister. This kind of situation happens all too often.

Earl Russell

My Lords, I agree with everything that my noble kinsman has said about the privileges of another place. I am well aware that each House is sovereign over its own privileges and that we have no more power here to discuss the privileges of another place than we have to put down amendments to change the education policy of the Government of Italy. Nevertheless, I must excuse myself against any charge of having inadvertently misled the House in my speech of 2nd July which gave the impression that some Members of this House might attempt to insist on these amendments. I made that speech because I had not expected that Amendments Nos. 4 and 5 would be covered by privilege. I was mistaken.

Having said that I was mistaken, I say that on the major point of substance the Government are mistaken. I say that for two reasons. The first is that the principle of disentitling any category of our fellow subjects to social security benefits is a more serious one than we have yet taken on board. I quote from paragraph 47 of the majority report of the Social Security Advisory Committee: Disentitling most students from income support and housing benefit creates a group for whom there is no benefit safety net. At present, only a very limited number of people such as prisoners, strikers and unemployed 16 and 17 year-olds are excluded—for rather different reasons than those given for excluding students". Prisoners are clearly a special case because they are supported at Her Majesty's expense. But the House knows that the exclusion of 16 and 17 year-olds is becoming a long-running issue. As soon as we exclude any category of people from benefits we label them as second-class citizens. There is also a knock-on effect. There is a kind of financial mark of Cain signalling that those who find them may discriminate against them. That has been seen in the severe hardship provisions for 16 and 17 year-olds. I believe that we may be finding cases of that here. It is an important principle that everyone should be entitled to an adequate level of social security benefits. Those who wish to argue against that principle should accept that a very heavy burden of proof lies on them.

My second major objection is simply that the amount of money provided is not enough. I argued that case on 28th June and I shall not bore the House by repeating it now. I wish to draw the attention of the House to the remarks made last Monday in another place by Mr. Robert Rhodes-James, the Member for Cambridge. On his calculations, after housing costs and basic subsistence during term time, undergraduates have £11.8p left per week, which is well below benefit level. Those figures are fairly closely in line with my figures for London. Similar figures can be compiled for other places.

We have not yet come anywhere near taking on board the fact that our students will be left short of funds. Inevitably, the effect is that they will be under severe pressure to take jobs not only in the vacation but during the term. There is a casual allusion to that in the White Paper. The noble Baroness, Lady Blatch, remembers, I believe, that she told me on 28th June that she thought that no institution had the right to prevent its students from taking jobs during the term. That is something which calls into doubt the notion of a full-time student. A full-time student has to mean what it says. It is a heavy commitment.

If jobs are taken in term time we shall find rather severe problems in the administration of the degree. I know that undergraduates work in other places, but they have four years to do the amount of work that we do in three. I do not think that we are going to get anywhere by pressing for a fourth year. The choice facing academics—I do not see how we shall make it—is whether or not we should keep up our standards, penalise people for not doing work that we know they do not have time to do and classify our students according to their parents' bank balances rather than according to their ability or industry. That would be repugnant to academic values. The alternative would be to bring down the level of work required and therefore, in effect, devalue the standard of the degree, because the amount of work set is necessary for learning from practice as well as for the factual content. That would also be repugnant to academic standards. It makes us feel in the position of Elizabeth Bennet; we do not know what to do about it. It is a matter on which I would very much welcome advice.

The Government rely on the continuing number of applications. It would be unwise to do so. Applicants have listened to ministerial statements claiming, wrongly, that the amount of money has been increased and claiming, even more wrongly, that the amount of support is adequate. There is a basic trust among most 18 year-olds that the Government would not ask them to go to university with sums of money on which they cannot live. If the students find that trust misplaced I would not answer for the electoral consequences.

Lord Beloff

My Lords, I wish to take up a point made by the noble Baroness, Lady David, about postgraduate students. Of all the categories that we are considering—not from the point of view of human rights or rights to income but from a national point of view—they are the most important of all. The universities cannot reproduce themselves. We cannot have a system of higher education and training or have research in our industries and look towards industrial competence unless there is a supply of postgraduate students native to this country and intending to remain and work in it.

If the Government are content, as has been explained, to allow the number of postgraduate students to fall—Mr. Jackson has not even bothered to find out what is going on—they cannot then go on talking about applications. There will be applications but they will not be from people in this country. They will not be from people who wish to continue their careers in this country and to contribute to this country. I know that we can do nothing about the matter now. On this occasion I would like it to go on record that the Government are taking an appalling risk not only with Britain's educational future but its industrial future for the sake of what they themselves admit is a very small sum of money.

Baroness Seear

My Lords, I wish very much to support what the noble Lord, Lord Beloff, has said. Like him, at this stage I do not think any good can be done at all. I wish to add one point. There is no doubt at all that the graduate students are the people on whom the future development of higher education in this country is bound to depend. If we skimp and cut down on the number of postgraduate students, we shall have to rely even more on the quality of the first degree.

My noble friend Lord Russell pointed to the problems that students taking the first degree will face if they have to work in order to maintain themselves. The House should reflect that in this country the first degree takes place in a period of 32 weeks. The term starts in October and the exams take place two years and eight months afterwards. That means 32 weeks or at the most 33 weeks, according to the differences at the various universities. One cannot get the standard of work that one needs in order to produce people of the highest quality—for research, for universities and for industry—unless they can go flat out during that time. Other noble Lords have said that students work in other countries. That is true, but in those other countries which are quoted so frequently—for example, the United States—the period of study is longer and the opportunities for postgraduate work are very much greater. We are killing the goose that lays the golden egg. The goose is not the goose but the student.

Lord Renton

My Lords, the noble Baroness, Lady Phillips, wondered why the cost of implementing the amendments had not been mentioned when they were before your Lordships' House. The answer is that it was self-evident that each of the amendments would cost more money. I see the noble Lord, Lord Carter, nodding his head in agreement. That is perfectly plain. We need to bear in mind that we have a responsible Government, and especially a responsible Chancellor of the Exchequer, who in order to help the country to defeat inflation is trying to limit government expenditure, however great the pressures, and sometimes however good the causes.

Lord Carter

My Lords, on a point of information, when I nodded I thought that the noble Lord was about to say that the amendments involved financial privilege. We knew that because amendments always do with regard to social security. But he actually said somet ling else.

Lord Renton

My Lords, the noble Lord and I were not of the same mind about what I was saying.

The noble Lord, Lord Carter, recognised that financial privilege is involved but said that the numbers will be small. That is not so. Indeed, what my noble friend Lord Beloff pointed out with regard to postgraduate students indicates that if the amendment relating to them were to be allowed there would be a considerable number. He wants it that way.

It is a mistake for us to approach this matter on the basis that the increase in government expenditure would be small, the numbers would be small and that we had not been told about this before. The point is that public expenditure has to be saved when it can be saved. For better or for worse and however strong the arguments in favour of these amendments, the Government advised another place not to accept them. Quite frankly, not only is there nothing that we can do about it but in my opinion there is nothing that we ought to do about it.

Baroness Blackstone

My Lords, I should like to take up a point made by the noble Lord, Lord Renton. We are not asking under this amendment for more money. We are simply asking that the money currently spent on housing benefit should continue, and in particular that it should continue for postgraduate students. I support what was said by the noble Lord, Lord Beloff, and the noble Baroness, Lady Seear. It is postgraduate students in particular who will suffer under these arrangements. They will not be eligible for student loans.

The amount of money that postgraduate students currently receive is already extremely low. Perhaps I may quote the figures. At present the studentship awards are £4,690 for London and £3,725 for outside London. Those figures were set in place in October 1989. The Government have announced a £400 increase but that will not take place until April 1991. With inflation running at its current rate the London amount should be increased by nearly £400 this autumn and the outside London amount by nearly £300 by next April. Postgraduate students will be worse off in relation to their basic grant let alone as a result of cuts in housing benefit.

Recruiting good postgraduate students is an investment. It is an investment for our country and an investment for our system of higher education. It is already the case that some universities are finding difficulty in recruiting good postgraduate students, especially in science and technology. Do we want this situation to continue? We should think very hard about how we are going to provide adequate financial support for our postgraduate students. Unless we do so our higher education system and the level of highly qualified manpower in this country will suffer. By retaining housing benefit for postgraduate students we would at least have got some way there.

3.45 p.m.

Baroness Seear

My Lords, I believe that I quoted a figure of 32 weeks. I should have said 32 months.

Lord Peyton of Yeovil

My Lords, I have wondered over many years both here and in another place whether there is anything which at any time affects governments when it is spoken from the Back Benches. I still cherish a rather vague hope that from time to time government may listen and even react to what is said from behind them.

When my noble friend Lord Beloff spoke just now he aroused in my mind more than just a ripple of anxiety. I shall listen with careful attention to what my noble friend the Minister says. I hope that he is able to say something which conveys the impression that he has heard, marked, learnt and inwardly digested every word that my noble friend said.

Lord Henley

My Lords, my noble friend said that the Government do not listen and do not respond. I thought that I had made clear when speaking on the first three amendments that the Government had listened to the concerns of this House and of another place, had responded and had come forward with a concession. If my noble friend will bear with me, once we have dealt with this collection of amendments we shall move on to the final set of amendments. I shall then be able to show my noble friend that we have responded to concerns raised, although sadly not in this House because we were prevented from discussing the amendments that we are about to come to by the procedures of noble Lords opposite.

The noble Baroness, Lady Phillips, referred to Commons privilege and implied that it should have been for the Government to make this clear in this House and possibly save a great deal of time. I have made clear before, as have others in this House, that it is not a matter for us; it is a matter for the authorities in another place as to whether they claim financial privilege. The noble Baroness may have looked at some of the amendments which she and her noble friends put down and decided that it was quite likely that another place would claim financial privilege. But in the end it must be a matter for another place. It would have been wrong for me when speaking during earlier stages of this Bill from the Dispatch Box to second guess what another place might decide.

The amendments which another place has turned down would shift into reverse a major part of the Government's policy on student support. They would perpetuate the entitlement of all students to housing benefit. I hardly need say that such a change of policy would have substantial implications for public expenditure and therefore for the taxpayer.

The House is now all too familiar with the principle underlying government policy in this area that students should be supported by the education system and not by social security benefits. We believe that the introduction of student loans and the access funds will provide sufficient resources for students. We do not believe that pouring more than £100 million of additional funds into student support will result in hardship. On the contrary, we are confident that the loans scheme and the access funds will be fully up to the demands put upon them; and, as my right honourable friend the Secretary of State for Education and Science has repeatedly stated, the new arrangements will be closely monitored.

I shall now try to answer just a few of the points which were raised in the debate. However, as I said at the beginning, although the Commons has claimed privilege, I believe that it is perfectly right that this House should be able to debate such matters if it so wishes. But in the end we must come back to the question of privilege and it is upon that matter that these amendments should be decided. Nevertheless, as I said, I shall respond to some of the points which were made.

The noble Baroness, Lady David, mentioned the report of the Social Services Advisory Committee and asked why it has not been published earlier. Reports of this committee are not normally made available until the regulations are laid. On this occasion, we made special arrangements in view of speculation in the press and in this House about the contents of the SSAC's report on the draft student loans regulations. Much of that speculation was ill-informed. The House will note in particular that the committee supported the Government's proposals on housing benefit which are the subject of the amendments we are discussing today.

The position of postgraduates was mentioned by many noble Lords. The noble Baroness was the first to raise it and my noble friend Lord Beloff and the noble Baroness, Lady Seear, among others, also mentioned it. I was pleased that the noble Baroness corrected the term of 32 weeks to 32 months in connection with the period of student study. My noble friend Lady Blatch had already pointed this error out to me. I was going to correct the noble Baroness on that point, but she beat me to it.

There are many important points to be borne in mind when considering the position of postgraduates. For example, postgraduates are already funded differently in that their grants are intended to cover their financial needs for the full academic year, including the long vacations falling within their period of study. Moreover, the level of grant awarded to postgraduates is not being frozen. In addition, there will be an access fund of £6 million devoted specifically to the needs of this group.

In the course of debates on the position of postgraduate students it has on occasion been suggested that they will be particularly hard hit by the withdrawal of housing benefit because they are more likely to have dependent partners or children. I should like to make quite clear that partners of students will be able to claim benefits as they do now. If partners are unemployed or on a low income they will have access to income support or housing benefit just like any other non-students. We are also making special provision to ensure that couples where both partners are students will remain entitled to these benefits if they have dependent children. Of course, disabled or lone-parent postgraduates will also remain eligible.

There has been some confusion about a point raised in another place earlier this week with regard to the uprating of postgraduate awards in October and April. I think that the noble Baronesses, Lady David and Lady Blackstone, raised this point. The DES postgraduate awards are to be uprated in the autumn, while the research councils' postgraduate awards will be uprated in April 1991. DES postgraduate awards will be uprated to bring them in line with current research council awards.

I turn now to deal with my noble kinsman's point as regards the Government's view on students working throughout the year. He quoted the words of my noble friend Lady Blatch, who dealt with the point in Committee. The Government's policy on student support is not based upon the assumption that students must work to supplement their incomes. It is up to the individual student to decide whether he wishes to increase his income in this way. I feel that I have now covered enough of the points that were raised during the course of the debate.

Lord Peston

My Lords, I trust that the noble Lord will forgive my intervention, but he was speaking very fast. There is one point I should like him to clarify. He referred to the uprating of research council awards. Am I correct in thinking that he said that they will be uprated in April 1991? Does that mean that the uprating will then be payable from the following academic year so that the point made by my noble friend Lady Blackstone is entirely right; in other words, it will be another full year before research council awards are actually uprated?

Lord Henley

My Lords, I think that we are becoming a little confused on this matter. I do not want to mislead the House. My understanding is that they will be uprated in April 1991. However, if I am wrong on that point and this does not come into effect until the following financial year, I shall certainly inform the noble Lord and the noble Baroness accordingly. However, as I said, my understanding is that the uprating applies from April 1991.

Baroness Blackstone

My Lords, awards are normally paid from the beginning of the academic year. Therefore, I would be extremely surprised if the uprating were to take effect in April. Perhaps the Minister will confirm that point. Is it not the case that the vast majority of postgraduate students are in fact on research council awards and that the DES scheme is a very small part of the total? In that case, what I said earlier still stands: most postgraduates will be worse off during the greater part of the next academic year than they have been in the last academic year, in addition to losing housing benefit.

Lord Henley

My Lords, I shall have to write to the noble Baroness on that point. As I said, my understanding is that they will be uprated from April 1991. Therefore I must for the moment leave the matter there. I have tried to answer some of the points which were raised during the debate. In the end one must return to the fact that another place has elected to exercise its financial privilege. Therefore it is not right for the House to look beyond those reasons. We must appreciate the fact that the House has once more had an opportunity to consider the matter.

On Question, Motion agreed to.