HL Deb 24 July 1990 vol 521 cc1392-408

7.35 p.m.

Earl Russell rose to move to resolve, That this House calls upon Her Majesty's Government, in the light of the draft Social Security Benefits (Student Loans and Miscellaneous Amendments) Regulations 1990, to amend the Education (Student Loans) Regulations 1990 so as to raise student support above benefit levels, and to provide a mechanism for ensuring that it should remain so in view of concerns expressed by the Social Security Advisory Committee and to ensure that postgraduate students maintain their right to benefits.

The noble Earl said: My Lords, I know it is a hot night. On a night like this I cannot help remembering the city in ancient Greece where anyone bringing a proposal for a new law before the legislature had to come in with a halter round his neck. If that halter was not worn, the person was hanged. Fortunately we do these things rather more gently these days. However, I am aware that anyone introducing a contentious proposal at this time, two days before the Recess, on a night as hot as this, does so at his own risk.

I shall not waste the time of the House in saying that this proposal is important. One's own proposal is of course always important. It may be more to the point to promise the House that I have no intention of making a habit of this. This Motion is not in any way intended to reopen the principle of student loans. In fact, it asks the Government to increase student loans. I hope that my noble kinsman will not therefore hail me as a convert to the principle of student loans. It is the form in this Parliament in which educational support is likely to be increased. But in saying that, I know perfectly well that no Parliament can bind its successor. I say that without prejudice to whatever form of educational support may be regarded as appropriate in another Parliament.

The Motion is not an attempt to challenge the principle of the regulations which are to come before us shortly disentitling students to social security benefits. I still think that disentitlement of a group of citizens to social security benefits comes in the same category as denial of free speech, denial of the due process of law or denial of the right to vote. However, we have had that argument. Another place has asserted its privilege on it, and I do not intend to reopen that argument this Session.

This Motion is directed to one simple question—whether the total package of student support now on offer is big enough. I believe it is not. The reason why we come to this matter so late in the progress of the whole measure is that this is the first time we have been able to address the question in isolation because the whole problem has been divided between two Bills. It is not until we are facing a situation where the whole package of student support is seen as coming from one source that we can consider voting on the question of whether that package is big enough.

As your Lordships may remember, the size of the loan was never specified in the student loans Bill. This is the first time we can address the question of whether it is big enough. It is my contention that it is not big enough. I know well that the Government believe they have increased the level of student support. However, it is my contention that they are mistaken, that they have their sums wrong and that they have inadvertently severely reduced it.

I shall set out the Government's case as it was put by the noble Baroness, Lady Blatch, on 28th June at col. 1786 of Hansard. She calculated an addition of £178 million for student support in the loans, plus the access funds. There was a subtraction of £68 million. That was the Government's figure for the amount that students had been drawing in social security benefits. Thus a net increase of £125 million was produced. That figure sounds good if the figures are correct. However, it is my contention that they are not.

The key figure here is the £68 million which the Government believe to be the amount that students were drawing in social security. That figure rests entirely on a survey carried out by Research Services Limited. Everyone who knows anything in this field, including myself, believes that that survey severely miscalculated the position. That survey had a 38 per cent. completed response rate. Among that 38 per cent. 14 per cent. of those who had made housing benefit claims indicated that their claims were still unprocessed. The survey allowed for that possibility but the figure that it allowed was, of the necessity of the case, conjectural. I believe that the figure was very badly wrong.

The Government are now a good deal less confident of that figure than they were earlier in the year. When asked about the total amount that students have been drawing in social security benefit they normally reply, "The information is not available in the form requested". The Social Security Advisory Committee, at paragraph 53, says: Accurate statistical information to test this fully is not available", to which the Secretary of State in his forward to the report replies that the Government firmly believe that the majority will benefit from the change. Deprived of the evidence, the Secretary of State has fallen back on faith.

Those of us who deal daily with students form our figures the other way, from the bottom upwards on the basis of knowing roughly what an individual student has to spend. We think that the NUS's figures are a great deal closer to the mark. The NUS has calculated that in London an average student will lose £1,126 a year and in the provinces an average student will lose £576 a year. In my opinion the NUS has undersold its case, not by any inaccuracy but because the NUS's figures were calculated in October 1989. Since then the 1988 Housing Act has led to the effect that the noble Earl, Lord Caithness, predicted when he introduced it in this House of a very rapid increase in rents. October 1989 figures are already out of date.

Clearly, the access funds are quite insufficient to meet losses of that order. It has been calculated, dividing the access funds by the number of students, that they come to £27 per undergraduate and £126 per postgraduate. In fact they are addressed to the wrong type of need. They are addressed, as the Government themselves have said, to meeting occasional cases of hardship. They are not addressed to meeting a massive loss of income in almost all the student population.

My Motion calls for student support to be raised to benefit levels. My noble kinsman will no doubt ask questions about the definition of the phrase "benefit levels". I am aware that it leads to problems. I mean something in the region of income support level—£28 a week after rent. It is not an exorbitant level of support. In London most students now pay something in the region of £50 a week in rent. Paying rent for 40 weeks of the year takes £2,000 out of £3,110, leaving them, if one divides the remainder between 52 weeks as the Government argue that one should, with £17.50 a week of which during the term at least £8 a week will go to London Transport to pay for fares.

The honourable Member for Cambridge, Mr. Robert Rhodes-James, speaking in another place, calculated that in Cambridge undergraduates living out of college will have £11.08 a week left after rent and those living in college will have £22 a week. That is still below benefit levels, although it is a bit better. It illustrates that although this is primarily a problem of students living in rented accommodation it is not only a problem of students living in rented accommodation. There will be hardship for them all.

The Motion also asks for a mechanism to keep student support above benefit levels because if they are above benefit levels this year it only takes one inaccurate forecast of inflation by the Government—and that is something of which they are perfectly capable—to take students below benefit level without any safety net. So we need an index-linking formula to keep student support above benefit levels. Otherwise students will join 16 and 17 year-olds as the only people in this country without a legal right to a basic level of subsistence. Your Lordships will know that I do not find that precedent encouraging.

The Motion also asks for reconsideration of the question of postgraduates, who do not receive a loan. I have never followed the reasoning behind the Government's proposals. It is not enough for their grant to be sufficient—which I do not admit—because there is the same problem of whether it will remain sufficient. There is also the problem of what happens when it runs out. The Government's ideas of how long it takes to complete a postgraduate thesis are as unrealistic as their ideas of how much it costs to run community care. Very few postgraduates can produce a piece of work acceptable to the examiners in the time available. Even if they do they will normally, if they want an academic job—and most of them do not get one—have to wait around for four or five years afterwards before they can have it. If they have no visible means of support they will not wait; they will go into employment and that employment will be non-academic. So when there is a vast flood of retirements, as there will be, there will be nobody to fill the vacancies.

My noble kinsman will of course tell me that this costs money. I am perfectly aware that the amount of public money is limited. I am also aware that it is a waste to spend money without achieving the desired effect. When I see an undergraduate, as I have, decide when his overdraft reaches £2,000 that he has to go down from university without a degree I see an academic and a human waste. As a Member of this House I see a waste of public money. There is a point beyond which, if money cannot be spent efficiently, it is better not spent at all.

In this country we have a three-year degree. I know that in other countries undergraduates work their way through university. That is perfectly possible if there is enough time. Where that system operates there is a fourth year. We are not going to be given a fourth year, as I am sure my noble kinsman will confirm. In its absence we simply cannot prepare undergraduates for a competent degree if they have to work regularly during term.

We have two options. Either we keep up our standards and classify students according to their parents' bank balances instead of their abilities, or we devalue the standard of the degree and destroy precisely that for the sake of which the Government propose to expand. That, it seems to me, would be a waste. I beg to move.

Moved to resolve, That this House calls upon Her Majesty's Government, in the light of the draft Social Security Benefits (Student Loans and Miscellaneous Amendments) Regulations 1990, to amend the Education (Student Loans) Regulations 1990 so as to raise student support above benefit levels, and to provide a mechanism for ensuring that it should remain so in view of concerns expressed by the Social Security Advisory Committee and to ensure that postgraduate students maintain their right to benefits.—(Earl Russell.)

Lord Carter

My Lords—

Lord Harmar-Nicholls

If the noble Lord will allow me to speak first I have a point which may help him in his approach to the matter.

When I first saw the words of the Motion I wondered whether the noble Earl was being mischievous or deliberately disruptive of the procedures of the House. I prefer to conclude that he was being mischievous, as he often is in a delightful way. I come to that conclusion because he is a pleasant colleague and the way he presents his case is attractive and always worth listening to. However, I should have thought that the noble Earl more than anyone would have recognised that to amend a regulation is contrary to the understood practice of this House. I do not think that we ought to move down the road of having written rules laid down in the kind of detail that obtains in another place. Our strength lies in our self-discipline. We keep within the powers of our remit. I suggest to the noble Earl that by using this time to move a Motion to amend a regulation he is stepping outside the accepted practice of self-discipline.

Earl Russell

My Lords, I had hoped to save the time of the House by not developing that argument. Among many recent examples, this procedure was used in 1977 by Lord Duncan-Sandys on the Town and Country Planning Order to prevent roads being put through national parks. That Motion was pressed to a Division. It was won and the Government did what was asked.

Lord Harmar-Nicholls

My Lords, I suggest that Lord Duncan-Sandys was just as wrong as is the noble Earl in the terms of the effect that his Motion could have on our procedures—perhaps inadvertently but certainly that would be the result. It cuts across so many principles that make our job in this House bearable.

If carried, the noble Earl's Motion would mean spending money. This House is not answerable for the spending of money. I thought it might be helpful to precede the noble Lord who will speak from the Opposition Dispatch Box. If he were made aware of the feelings of those of us who have some respect for the procedures which are necessary for the House to exist, it might help him to give a view on the rights and wrongs of the issue.

I do not intend to take up much time. However, the noble Earl must be aware that he did not produce one new point when he introduced his Motion to amend the regulations. Every one of the points made was argued in detail during the long passage of the Bill through its various stages. I respect people who are tenacious in pursuing to the bitter end matters about which they feel strongly but not to the point at which it is likely to disrupt the working of the machine that enables Parliament to carry through its legislation.

If this Motion or the meaning behind it is to have any strength, it should come from another place. They are the people who have to answer to those who provide the money which this Motion would cause to be spent.

On the grounds of adhering to the generally accepted procedures of this House, which are based on self-discipline and not on trying to get around written rules (which we do not have), my hope is that the noble Earl will take an early opportunity to indicate that, having once again placed on record the views that he strongly holds, he will not carry the Motion to a point which will undermine the working of the place that we serve.

Lord Carter

My Lords, from these Benches I am very pleased to support this resolution. It has been most carefully drafted. I can assure the noble Lord, Lord Harmar-Nicholls, that considerable work has been done behind the scenes to ensure that it is within the conventions of this House. It has been carefully drafted to ensure that in accepting the Motion the House also accepts the regulations which will be taken formally after this debate.

The Motion calls on the Government to take action to deal with the very real injustice that will befall some students, especially postgraduate students, as a result of the interaction of the student loan scheme and the social security regulations. It is not unknown for governments to ignore what either House may call upon them to do. With regard to the question of financial privilege, the noble Lord has been a Member of this House much longer than I have, but page 121 of the Companion to the Standing Orders will tell him that: the Lords need not anticipate what view the Commons may take of any Lords amendments with respect to Commons financial privilege". That is well known to the House. As noble Lords will know, the regulations disentitle most students from housing benefit, income support and unemployment benefit. In other words, a group of our citizens whose level of income is such that they are entitled to those benefits are to be disentitled solely on the grounds that they are students. The Minister no doubt will argue that students should be maintained by the educational support system. We do not argue with that as a principle. However, it presupposes an adequate level of educational support.

Student grants are to be frozen and supplemented by repayable loans. In other words, students are to be treated in exactly the same way as claimants under the Social Fund. From previous debates on this subject the House will know that the Social Security Advisory Committee expressed considerable reservations about the operation of the student loan scheme and particularly the access funds, which together are intended to replace the social security benefits.

There is a quite extraordinary statement from the government advisory committee in paragraph 69 of its report on the regulations. It says: However, we believe unanimously that there must be a safety net which ensures that students are not left destitute". In this day and age and in the midst of an economic miracle, the government advisory committee asks the Government to ensure that students are not left destitute.

The advisory committee was divided as to how the problem should be dealt with. Eight out of 14 members recommended (paragraph 69) 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". A minority of the committee believed that: there must be strict legal entitlement to claim in these circumstances and that students should continue to be able to claim income support". Either way, the members of the advisory committee place firmly on the Secretary of State the responsibility to ensure that students are not left destitute. It is a duty which the Secretary of State has resolutely failed to implement. He has shuffled off responsibility on to those administering the access funds.

There is an extraordinary situation. A legal entitlement to social security benefits is being replaced by a system of inadequate access funds whose disbursement is left entirely to those administering educational institutions without any detailed guidance from the Government and with a resolute refusal from the Government to supply such guidance.

The Government's philosophy is revealed subliminally in their response to the advisory committee and the criticisms of the system of access funds. Paragraph 14 of the report states: The experience and capability already acquired by administrators in educational institutions in the handling of charitable funds will be sufficient to enable them to disburse the Access Funds effectively". Exactly—the experience of administering charitable funds is called in aid to deal with students who face destitution. I feel that nothing could more clearly reveal the rationale behind so much of the Government's attitude towards their policy on social security.

The noble Earl, Lord Russell, referred to the situation of postgraduates. I know that there are other noble Lords present who will speak on this subject with much more experience of the situation than I have. It seems to me that the Government's attitude towards benefits for postgraduate students is both illogical and unfair. The whole of the rationale behind the withdrawal of student benefits is that they are now to be replaced by student loans. That was clearly stated in the government response to the Social Security Advisory Committee. In paragraph 13 of the report it states: The Government estimate, however, that the average benefits received by students in 1990/91 would have been £315 for those expected to claim. The top-up loan of £420 will, in most cases, more than compensate for that". Nothing could be clearer. Loans are not to be provided for postgraduate students and the amount available to them from the access funds will be minimal.

On the issue of postgraduate students and postgraduate awards, the Minister, the noble Lord, Lord Henley, was kind enough to write to my noble friend Lord Peston regarding the uprating of postgraduate awards, following questions raised during our debates on the Social Security Bill because it was extremely unclear as to what would happen with postgraduate awards. I have read his letter with great care. It is one of those masterpieces of officialese which I am sure read much better in the original Sanskrit. I should therefore be grateful—I have given him notice of this question—if the Minister would be kind enough when he replies to spell out to the House the exact situation regarding postgraduate awards.

In conclusion, the majority of students will be denied any insurance against their income falling below the poverty line. Grave reservations have been expressed by the Social Security Advisory Committee and educationists regarding the adequacy and machinery to disburse the access funds. There is some doubt about the exact legislative status of the access funds whose disbursements seem to have been quite deliberately removed from parliamentary scrutiny.

Figures produced by the National Union of Students indicate substantial losses for students depending upon whether they are in London or outside. As we have seen, postgraduate students are particularly harshly hit by the removal of benefits.

For all those reasons, we support the resolution moved by the noble Earl, Lord Russell. I should make it clear that supporting the resolution does not mean that we accept the principle of student loans. But they are for the time being a fact of life—at least until the return of the Labour Government. The resolution recognises that fact. If the noble Earl decides to divide the House on the resolution, I shall follow him into the "Content" Lobby. I hope that noble Lords will do the same.

8 p.m.

Lord Beloff

; My Lords, the noble Lord, Lord Harmar-Nicholls, always displays a lively interest in what goes on at the other end of the Palace. He may therefore have noticed that there has been a Government reshuffle. In the light of that, I come this evening to bury Robert Jackson, not to praise him. It is no good saying that the good that men do is interred with their bones unless they do some good. It is difficult to see in his record any good. On the other hand, the evil may survive but is capable of correction.

My main reason for supporting the noble Earl is that I believe it worthwhile putting on record as soon as possible for the edification of the new Minister for higher education the worries that this House has in relation to student finance.

I do not support in theory either the noble Earl, Lord Russell, or the noble Lord, Lord Carter. I have always taken the view that the Government were quite right to say some years ago that it was inappropriate that social security should be used as an important method of student support although there might be elements in a student's life, in particular if he has a partner and children, where social security might come in. Basically, however, it is a matter for the education budget and should always be so.

I do not dissent from the view—of which the student loans scheme is a poor and ill-formed expression—that there is a good deal to be said for students who profit by their education putting something back into the system at an appropriate stage. However, it has been our consistent quarrel with the former Minister for higher education that the arithmetic is essential to the success of the principles. If the arithmetic is wrong, the principles may be ever so right but they do only harm. I do not think anyone who has either followed the report referred to by the Social Security Advisory Committee, or the very detailed and useful speech made by the noble Earl this evening, can possibly doubt that the arithmetic is wrong.

I am not strong on arithmetic. I wish only to emphasise two points which have been made by previous speakers. In the first place, there is an undoubted threat to the three-year British degree. It may have been thought that because the noble Earl, Lord Russell, comes from London—where the financial pressure on students is particularly great—that this is somehow a problem of London. During the weekend I had occasion to talk to a vice-chancellor of a university which is some 50 miles from London—a plate-glass university in the common parlance. He tells me that his professors are already very worried that students are beginning to find opportunities of paid employment not during vacation but during term time; that this is beginning to affect the standard of their work; and that it is an issue which the university regards with great and understandable anxiety.

If the Government are prepared to come forward and say, "We shall align our degrees with those of our Continental neighbours; we shall accept four or five years as the length of time for a degree," then financial considerations for student support would be very different. But if Ministers, even with their arithmetic, calculate the amount that it would mean in grants to universities for the two extra years of undergraduate teaching, I think they will find that the sums do not help Her Majesty's Treasury.

A further point which has been borne in upon me by people in universities other than London is the status of postgraduate degrees. It was rightly pointed out that no one has explained why a loan scheme should arbitrarily take one class of students—namely, postgraduate students—out of the scheme. If it is a good way of financing students, rather than grants, why are postgraduate students not allowed to avail themselves of this facility?

As I have said in this House, the effect will be to minimise the number of British nationals who can afford to take postgraduate degrees. For that reason, and for others which the noble Earl, Lord Russell, has spelled out, we shall face a major problem of recruitment in the sciences and other subjects, not only in universities but in our technologically advanced industries. It is the most extraordinary decision, reached without ever being explained or defended in any of the debates either in another place or in this House. I should like therefore to put on record that the first thing that the new Minister should do is to look at the problem relating to postgraduates and to ask himself, "What is the Government's plan about the future of science in this country?"

Lord Addington

My Lords, I should briefly like to raise some matters. They may pick up some points already made but I believe that I can still throw a little more light upon the subject from the angle of a student. When the issue was first raised, I said that I was closer to it because of my age than any other Member of your Lordships' House. I do not think that that has changed.

First, the Government were quite right to say that the student grant was becoming out of date. It was not sufficient, but it was supported and subsidised by the social security system. The Government brought in extra financing. I do not like the manner in which the loan system was introduced but I knew that it had to arrive. Some form of loan system was almost inevitable. But the Government have brought in the system at too low a threshold for more than half the students. They have not brought it in at a high enough threshold to take into account the variation in the cost of living throughout the country.

The London student has always received more money and has always been the worst off. I have talked to many people about deciding where to study. Many said, "We shall go to London. It will be so much more fun. There will be so much more to do." There is indeed more to do and to see but the students have no money to spend because their rent is so much higher. The same is true of many other cities, parts of south-eastern England, and certain parts of Scotland, primarily the east coast. Rents are high. It puts the remainder of a student's economy out of kilter. A great lump of income has to go on rent. Where there are high rents the cost of living is also higher. Everything will cost more money, including food and entertainment. Someone once asked me why I was worried about students being entertained and why they do not go to university merely to learn. I said, "Very well, why don't you send them to a monastery for three years, give them some textbooks and let them get on with it?". People will not wear it and they do not.

In reducing social security benefits, especially for housing, the Government have taken away the great support of the old grant system. In certain areas of the country students will be better off under the new system, and for that I thank the Government. As for the rest—words fail me! If you live in a higher costing area you lose heavily across the board. The magic figure is about £30 per week in rent but the gain from the loan system is outweighed by the loss of housing benefit.

The Government have failed to take that on board. In considering the question they have paid a certain amount of lip service to the idea of a regional variation. However, nothing has ever been said that will lead to a concrete conclusion. Therefore, I suggest that all noble Lords present support the Motion for the simple reason that the Government's system has failed to take into account something which every other part of the economy has realised —that it costs more to live in some areas than in others. Why on earth have the Government missed that point? They have accepted the London allowance in part but have decided that only London is more expensive than Bradford. They have decided that Guildford, Canterbury, Norwich, Bristol and Exeter are not—and we could go on. The Government have missed the point about the huge variation in costing. All industry knows that one must pay higher rents in the South East than in the North West. I suggest that this is an issue which we cannot overlook and that we should support my noble friend's Motion.

Lord Glenamara

My Lords, when I entered the Chamber this evening I had no intention of speaking. However, I feel that I must say a few words. We have heard detailed speeches from the noble Earl, Lord Russell, and the noble Lords, Lord Carter and Lord Beloff. I shall not make a detailed speech; I shall make a cry from the heart for our students.

I am chancellor of Newcastle Polytechnic, which has 15,000 students—more than most provincial universities. They are suffering the most acute hardship at the present time. For the past few years the Government have carried out a war of attrition against our students. Today student support is 20 per cent. lower in real terms than it was when the Government came into office. As a result our students are suffering. In the coming year the situation will be infinitely worse. They will lose their housing support and social security benefits, and their rents are rising rapidly. We have to take in more and more students in order to make ends meet. The landlords know that and they are putting up rents everywhere. It is common for our students to pay £50 per week in rent. I can show the Minister dozens of such cases in Newcastle.

The Government's only answer to that is student loans. We are going back to the system of 60 or 70 years ago. When we debated the subject originally I told your Lordships that I went to college on a loan, and therefore I know what I am talking about. Every step that the Government have taken in the field of education has set back the clock. Their Statement this week about teachers' salaries put back the clock to pre-1925 and now they say that student loans are the answer. On behalf of our students, I protest. I have great pleasure in supporting the Motion tabled by the noble Earl and I invite all noble Lords who care about our students and about the future of higher education in this country to support him.

8.15 p.m.

The Parliamentary Under-Secretary of State, Department of Social Security (Lord Henley)

My Lords, my noble kinsman mentioned his fear that he might be hanged if the Motion were defeated. I remind him of a historical fact of interest. A forbear of mine was ennobled in order that he could preside over the trial of a forbear of my noble friend Lord Ferrers. Sadly, the trial resulted in the hanging of my noble friend's forbear. I hope that my noble kinsman will bear that in mind.

I welcome the support of my noble friend Lord Harmar-Nicholls. I do not believe that this procedure is in keeping with the traditions of the House. I know that the noble Lord, Lord Carter, claimed that it was within the conventions of the House, and he quoted from the Companion. It may technically be so, but the noble Lord knows perfectly well that it certainly is not within the spirit of the way in which we conduct our business.

In responding to the Motion proposed by my noble kinsman I shall speak also to the draft Social Security Benefits (Student Loans and Miscellaneous Amendments) Regulations 1990 which I shall move formally later tonight. I begin by saying quite bluntly that the Government have no intention of amending the Education (Student Loans) Regulations. Under the affirmative resolution procedure those regulations were fully debated and approved by this House on 28th June and by another place on 9th July. In addition, many hours of debate were devoted to the Education (Student Loans) Bill earlier this year. During those debates it was always clear what financial support the Government intended that students should have.

Top-up loans together with the uprated grant will increase the full-year resources available to students by 25 per cent. compared to grant alone in this academic year. In 1990–91 we expect to make available in loans £178 million—more if the take-up of loans exceeds 80 per cent.—in addition to the uprated grant. There will also be £25 million for the access funds. That is the package referred to by my noble kinsman. It will far outweigh the benefits that students would otherwise have been able to claim, which we estimate at £68 million.

We must base our position on independent research. The noble Earl does not accept the research conducted by Research Services Limited, an independent and reputable body. Instead, he bases his figures on those provided by the National Union of Students. Surely the noble Earl accepts that the National Union of Students is not necessarily totally independent on the issue.

Earl Russell

My Lords, I wish to make a small correction. I base my figures on my own experience. I believe that the National Union of Students understated its case.

Lord Henley

My Lords, I said that obviously the National Union of Students is not an independent body. As regards its figures, perhaps I may paraphrase what someone else said on a more famous occasion: "It would say that, wouldn't it'?".

I return to the research conducted by Research Services Limited which my noble kinsman criticised. The estimated savings in benefit have been calculated using details of benefit claims made by students. As regards income support, a 100 per cent. count of student claims was carried out during the 1989 summer vacation in my department's local offices. It identified 135,000 claims made by students during a period of six weeks and showed that a total of £25 million was paid in benefit. Housing benefit details taken from the annual 1 per cent. sample of claims showed that in May 1988, the most recent year for which figures are available, 78,000 student claims were made and an average of £7.80 per week was paid in benefit.

That survey has been useful in identifying the income and expenditure pattern of students and in arriving at an estimate of the benefit claims of individual students and not the overall public expenditure saving. I believe that we can rest on those figures produced by an independent and reputable body and it is right that the Government should do so.

I turn to some of the points made about the report of the Social Security Advisory Committee. The noble Lord, Lord Carter, said that the committee had asked that my right honourable friend the Secretary of State should have discretion in awarding income support to students. We welcome the acceptance by the majority of those on the committee of the proposal that students should not have an automatic legal entitlement to income support. We recognise also that access funds totalling £25 million are intended to provide a safety net for the minority of students facing financial difficulties.

The Government are confident that the access funds will be able to meet the demands placed upon them. As my noble friends and my honourable friends in another place have said on many occasions, we shall monitor their adequacy and operation. In that light I can say that we shall monitor their adequacy from a regional point of view, which was a point made by the noble Lord, Lord Addington.

The existence of a residual income support scheme based on the discretion of my right honourable friend would do little more than duplicate the access funds and provide no incentive for the access funds to be administered prudently. I should point out also that local education authorities can make severe hardship awards to undergraduates in the long vacation.

Perhaps I may briefly touch on another point about access funds. It will be for the individual higher education institutions to decide how to allocate those access funds. We feel that they are best placed to do that because they are closest to their students and, therefore, better able to judge their needs.

We are pressing ahead with our intention to introduce loans for students in the coming academic year. As I said, we shall be closely monitoring the operation of the support systems which are available for students. However, the proper time to review the loans scheme will be after the first year of its operation.

Lord Carter

My Lords, on access funds, if it is left to the individual institutions, what is the departmental or parliamentary sanction on an institution if it gets a disbursement badly wrong?

Lord Henley

My Lords, as I said, we are leaving it to the institutions. However, we shall monitor the position after a year. If I came before this House and said that we were going to tell the institutions exactly what they must do, I imagine that there would be howls from noble Lords opposite. They would say that we have no faith and that we are unable to trust the academic institutions.

I turn briefly to the regulations which I shall later ask the House to approve. These regulations do not simply remove students' entitlement to housing benefit, income support and unemployment benefit. They define also those vulnerable groups of students who will retain entitlement to housing benefit and income support, apart that is from the special arrangements which we propose to introduce for deaf students which, subject to consultation with the local authority associations, will be covered by regulations to be laid separately within the next few weeks.

The regulations before the House tonight also provide for the treatment of top-up loans and payments from the access funds in the income-related benefits. The regulations providing for these new forms of student income apply not only to students who retain entitlement to income support and housing benefit but also to the partners of students who will continue to have access to all the income-related benefits as now, including income support, housing benefit, community charge benefit and family credit. Finally, the regulations provide for the new rate of student rent deduction and allowances for the next academic year.

My noble kinsman Lord Russell, the noble Lord, Lord Carter, and my noble friend Lord Beloff sought further clarification on the question of postgraduate students. Perhaps I may say a few words on that to try to help the noble Lord understand what I thought was a very clear letter that I wrote to the noble Baroness, Lady Blackstone, and the noble Lord, Lord Peston. I am sure that the noble Baroness and the noble Lord understood the meaning of the letter. However, if that is not the case I shall explain its meaning briefly to the noble Lord, Lord Carter.

As postgraduates will not generally have access to top-up loans, I can understand the reason for those anxieties, but postgraduate grants already cover for the whole of the academic year and will continue to be uprated in the future. DES postgraduate studentship awards will be uprated in September of this year by £600—an increase of 19.2 per cent.

Reserve funds from the science budget are to be allocated to the research councils in addition to their annual budgets to enable them to increase their basic postgraduate awards by £400 in April 1991. I should point out also that when April's increase is taken into account the average annual increase for Research Council postgraduate awards between September 1988 and September 1991 is 13 per cent., considerably higher than the rate of inflation. In addition, postgraduates who face financial difficulties will be able to call on the access fund for assistance. I stress that £6 million is being made available specifically for postgraduates, proportionately far more than the sum available to undergraduates. Noble Lords will know, for example, that there are 10 times as many undergraduates as there are postgraduates. The postgraduate access fund will be £6 million and the undergraduate access fund £14 million.

Finally, I would remind the House that postgraduate students in the vulnerable groups, including those with dependent children, will retain entitlement to housing benefit and income support; and of course the partners of postgraduate students will be able to claim the full range of social security benefits in the normal way.

I hope that I have succeeded in allaying at least some of the concerns expressed in this Chamber. I realise that much of what we are doing in terms of students' entitlement to benefits rests on our belief that the educational maintenance system is equipped to meet the needs of students. On hearing the terms of this package, I hope that the noble Earl will accept that. I firmly believe that this is the case. I would therefore ask the House to reject the Motion which is before us tonight.

Earl Russell

My Lords, I thank my noble kinsman for that reply. It contained no surprises. He asked why I did not table this Motion on 28th June. The answer is, as the noble Baroness, Lady Blatch, made perfectly clear, that it was not then certain what was to happen to students' social security entitlement. This is the first time that the total package of support has been clear before us. Therefore, this is the first appropriate moment at which to judge its size.

My noble kinsman asks why I do not rely on the survey carried out by Research Services Limited. The answer is that his honourable friends in another place also do not rely upon it. When asked for figures, they say that they do not know. The honourable Member, Mrs. Shephard, on 19th June said that she was setting up another survey on student income and expenditure, which I am glad to hear. The Government might have waited for that. However, this Government are not very good at waiting. Perhaps they feel that they do not have very much time left.

The issue of cost is worthy of thought. I am not asking for peanuts. The loan needs to be at least doubled. However, the net cost of that must be calculated against the savings which the Government are making on social security. I argue that that is very much greater than the Government believe. Therefore, the net cost will be a great deal less than they suppose.

Indeed, it need be nothing at all because they have the option of either increasing the amount of money or of decreasing the number of students. Everyone has spoken in favour of expansion but I am prepared to argue that this country cannot have more students than it can afford. If it attempts to do that, it is wasting money as surely as is the employment training programme, which has set out to train people in carpentry without being able to afford any wood. I commend the Motion to your Lordships.

8.29 p.m.

On Question, Whether the said Motion shall be agreed to?

Their Lordships divided: Contents, 60; Not-Contents, 94.

Division No. 3
Addington, L. Hylton-Foster, B.
Airedale, L. Jeger, B.
Ardwick, L. Jenkins of Hillhead, L.
Avebury, L. Kinloss, Ly.
Beloff, L. Llewelyn Davies of Hastoe, B.
Birk, B. Lloyd of Kilgerran, L.
Blackstone, B. Lockwood, B.
Blease, L. McNair, L.
Bonham-Carter, L. Mayhew, L.
Bruce of Donington, L. Meston, L.
Butterfield, L. Nicol, B.
Carter, L. [Teller.] Ogmore, L.
Cocks of Hartcliffe, L. Park of Monmouth, B.
Dormand of Easington, L. Peston, L.
Dunrossil, V. Pitt of Hampstead, L.
Ewart-Biggs, B. Rea, L.
Ezra, L. Ritchie of Dundee, L.
Falkland, V. Robson of Kiddlington, B.
Foot, L. Rochester, L.
Gallacher, L. Russell, E.
Galpern, L. Seear, B.
Glasgow, E. Seebohm, L.
Glenamara, L. Swann, L.
Graham of Edmonton, L. Taylor of Blackburn, L.
Hampton, L. Thomson of Monifieth, L.
Harris of Greenwich, L. Tordoff, L. [Teller.]
Holme of Cheltenham, L. Walston, L.
Hooson, L. Walton of Detchant, L.
Howie of Troon, L. White, B.
Hunter of Newington, L. Winstanley, L.
Arran, E. Elliott of Morpeth, L.
Ashbourne, L. Elton, L.
Balfour, E. Ferrers, E.
Beaverbrook, L. Fisher, L.
Belstead, L. Fraser of Carmyllie, L.
Blatch, B. Gisborough, L.
Blyth, L. Glenarthur, L.
Boardman, L. Goold, L.
Borthwick, L. Gray of Contin, L.
Brabazon of Tara, L. Grimthorpe, L.
Brigstocke, B. Harmar-Nicholls, L.
Brougham and Vaux, L. Henley, L.
Butterworth, L. Hesketh, L.
Caithness, E. Hives, L.
Caldecote, V. Holderness, L.
Campbell of Croy, L. Hooper, B.
Carnegy of Lour, B. Jenkin of Roding, L.
Carnock, L. Johnston of Rockport, L.
Cavendish of Furness, L. Joseph, L.
Colnbrook, L. Kimball, L.
Colwyn, L. Lane of Horsell, L.
Crickhowell, L. Lindsey and Abingdon, E.
Davidson, V. [Teller.] Long, V.
Denham, L. [Teller.] Lothian, M.
Donegall, M. Lucas of Chilworth, L.
Downshire, M. Lyell, L.
Elliot of Harwood, B. McColl of Dulwich, L.
Macleod of Borve, B. Redesdale, L.
Manchester, D. Renton, L.
Manton, L. Sanderson of Bowden, L.
Margadale, L. Sharples, B.
Massereene and Ferrard, V. Shuttleworth, L.
Mersey, V. Skelmersdale, L.
Montgomery of Alamein, V. Soulsby of Swaffham Prior, L.
Morris, L. Stockton, E.
Mottistone, L. Stodart of Leaston, L.
Mountevans, L. Strange, B.
Mountgarret, V. Strathclyde, L.
Mowbray and Stourton, L. Strathmore and Kinghorne, E.
Murton of Lindisfarne, L. Swinton, E.
Onslow, E. Thomas of Gwydir, L.
Oxfuird, V. Thorneycroft, L.
Pearson of Rannoch, L. Trumpington, B.
Pender, L. Tryon, L.
Peyton of Yeovil, L. Ullswater, V.
Plummer of St. Marylebone, L. Vinson, L.
Reay, L. Whitelaw, V.

Resolved in the negative, and Motion disagreed to accordingly.