Lords Sitting of 12 March 1990

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Gloucester
The Earl of Snowdon—Took the Oath.

Community Charge
Lord Dean of Beswick Lord Dean of Beswick asked her Majesty's Government:
What is the national average of the community charge of those local authorities that have so far declared the level of community charge they need to charge in order to carry out their functions on behalf of their residents.
The Parliamentary Under-Secretary of State, Department of the Environment (Lord Hesketh): My Lords, charging authorities are not required to set the amounts of the personal community charges until 1st April. Over half of the 366 charging authorities in England have yet to provide the department with this information. The information is therefore inadequate to provide a national average.
Lord Dean of Beswick: My Lords, is the Minister aware that I am extremely grateful for that non-Answer? Is he also aware that responsible newspapers published graphs this morning showing a charge level of approximately £330 to £350? If one takes the difference between Labour authorities and Conservative authorities based on the national average, it is less than 50p a week. Does that not destroy Mr. Kenneth Baker's idea that the sole cause of the difference is due to high-spending, profligate Labour authorities when the overwhelming cause of the situation is lack of government funding?
Lord Hesketh: My Lords, with regard to the noble Lord's first point concerning responsible newspapers, the news he brings to the House is encouraging, because the original figure was £370. I am no statistician, but it is entirely reasonable to say that we cannot judge these figures until they are all in.
Lord Stoddart of Swindon: My Lords, what does the noble Lord have to say about the Berkshire County Council and the Maidenhead and Windsor Borough Council, both of which are Tory controlled? In the Maidenhead and Windsor Borough Council the community charge is £449. That is far above the average, as the noble Lord will appreciate. Would he like to comment as to whether these Tory councils are profligate spenders?
Lord Hesketh: My Lords, as I said last week to the noble Lord, Lord Stoddart, I shall be more than
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happy to answer a Question with regard to a specific council if he wishes to put a Question down on the Order Paper.
Lord Stallard: My Lords, will the noble Lord confirm that in constituencies where the actual poll tax is higher than the Government's assumed poll tax, rebates and transitional relief will be worked out on the Government's assumptions and not on the actual figure? That will mean that thousands—perhaps millions—of people will pay more poll tax than the Government are pretending that they will.
Lord Hesketh: My Lords, it would be entirely impractical to pay transitional relief unless we were able to base it on the figure that we suggested in the first place, which is based on standard spending.
Lord McIntosh of Haringey: My Lords, the Minister is referring to transitional relief and to the safety net. Will he confirm that the London Borough of Wandsworth, which has been so praised in the Tory press, is obtaining £170 per poll tax payer from the safety net, whereas conspicuously poorer boroughs, such as Hackney, Brent, Camden and Islington, are contributing to the safety net?
Lord Graham of Edmonton: Never! That cannot be true.
Lord Hesketh: My Lords, if the noble Lord, Lord McIntosh, wishes to table a specific Question on a particular borough, I shall be more than happy to answer. The noble Lord, Lord Graham of Edmonton, is speaking from a sedentary position. The fact is that there are 366 authorities. I should love to be in a position to answer on behalf of each one of those authorities; however, I believe that is an impracticality.
Lord McIntosh of Haringey: My Lords, even if the Minister's department does not have the opportunity to do so, surely the Minister can read the papers. He can find out and brief himself properly.
Lord Milverton: My Lords, are my noble friend and Her Majesty's Government aware that there are many people who are deeply worried about how they will manage to pay the community charge—the poll tax? I say that because several people have mentioned it to me. I refer to old and young people. Are the Government aware of the position? I must admit that I rather wish I had had the courage to vote against it when it was first introduced.
Lord Hesketh: My Lords, one of the difficulties concerning Lord Dean's Question is this. From the snapshot of the figures available—because that is all we have so far—the levels of the community charge raised, taking, to use his phrase, the reputable press into account, equate to an increase in domestic rates this year of 35 per cent. That is a very worrying fact.
Lord Callaghan of Cardiff: My Lords, are we likely to have any further recantations from confessed sinners such as the noble Viscount, Lord Whitelaw,

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who declares that something must be done? Is there any likelihood that he will be recalled to the Cabinet in order to do something about it?
Lord Hesketh: My Lords, I am always very grateful for an intervention by the noble Lord, Lord Callaghan. It would be fair to say, however, that that is a matter which is above my station.
Lord Hatch of Lusby: My Lords, will the noble Lord answer the second part of the question of my noble friend Lord Dean? Is it the case that Conservative councils are fixing poll taxes at over 30 per cent. above the Government's estimate? If that is the case, does the noble Lord expect them to be rate-capped in the same way as is threatened to Labour councils?
Lord Hesketh: My Lords, as I have already said, it is important that we should wait to see the true statistical evidence rather than the suggested statistical evidence. It is the difference between the position of those who wish to speculate and that of the Government who wish to act on concrete evidence.
Lord Molloy: My Lords, as a result of the Government's experience of the implementation of the Act in Scotland and the reaction of people in England and Wales, would it not be sensible to call a halt and re-examine the entire situation so that the ultimate legislation will be acceptable to the British people as a whole and not merely to stalwarts of the Conservative Party?
Lord Hesketh: My Lords, the so-called reaction experienced during the past few days has not been entirely representative.
Lord Dormand of Easington: My Lords, given that the Minister has at least a point when he says that he would like to wait until all local authorities have set the poll tax rate, will he say now that all local authorities, be they Tory or Labour, whose rate is above that set by the Government are high spenders and irresponsible?
Lord Hesketh: My Lords, we must wait to see the result—and the noble Lord, Lord Dormand, gave me the benefit of the doubt—and judge the situation after 1st April.
Lord Dean of Beswick: My Lords, the Minister gave a figure of 25 per cent. Is he aware that whereas, some time ago, the Prime Minister said that the poll tax must provide for 25 per cent. of local authority spending, it must now provide for 37 per cent.? Who got the sums wrong?
Lord Hesketh: My Lords, I gave the figure of 35 per cent., to which my right honourable friend the Prime Minister referred, with regard to the effect on domestic rates this year. That was on the basis that the projected figure—and there is no certainty as yet in the figures—as gleaned from the reputable press, is the eventual outcome.
Lord Dean of Beswick: My Lords, will the Minister answer the second part of my question? The Prime Minister said that the poll tax would be expected to cover 25 per cent. of local authority spending but, in fact, it must now cover 35 per cent. Who got the sums wrong?
Lord Hesketh: My Lords, we could end up with a complicated and, I suspect, extremely lengthy mathematical discussion. It is a question of whether you make an assumption on the basic level of spending or add to that an increase in expenditure of 16 per cent. and then say that the sum suits you.
Noble Lords: Next Question! Eight minutes!
Lord Wallace of Coslany: My Lords, the Minister uses the phrase "community charge" but the questioners referred to "poll tax". What is the difference?
Lord Hesketh: My Lords, if 100 per cent. of local authority expenditure was paid for on an individual basis it would be fair to call that a poll tax. However, when the expenditure is one-quarter it is reasonable to call it a community charge.

Electric Vehicles
2.46 p.m.
Lord Ironside Lord Ironside asked Her Majesty's Government:
Whether the number of electric vehicles now registered for use on public highways in the United Kingdom for commercial and private purposes is increasing, and whether they are taking steps to encourage their wider use.
Viscount Davidson: My Lords, the number of electric vehicles licensed in Great Britain and Northern Ireland fell from 33,138 to 31,296 between December 1985 and December 1988; that is a 5·6 per cent drop.
With a view to exploring the potentialities of electric vehicles the Government have funded a considerable programme of research in the last decade. In addition, no excise duty is charged on electric vehicles or electricity used as fuel. The department continues to keep in close touch with electric vehicle research and developments worldwide.
Lord Ironside: My Lords, I thank my noble friend for coming clean with that Answer, disappointing as it is. It shows that environmentally clean electric vehicles are still struggling hard to keep up with the sea of internal combustion engine vehicles now on our roads—
Noble Lords: Question!
Lord Ironside: In spite of the considerable government aid that has been given over the past 10 years, which is welcome, is my noble friend aware that tough clean air legislation is about to be enacted in the United States to force car makers to use cleaner fuels? Does he agree that the Government

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should have discussions with the electric vehicle industry in this country to ascertain how high-tech and high-powered new electric vehicles can be introduced on to our roads?
Viscount Davidson: My Lords, a considerable amount of money was funded during the past decade, including more than £11 million by the DTI. United Kingdom companies are actively involved in the work overseas and officials are keeping in touch with developments.
Lord Underhill: My Lords, despite what the noble Viscount has said I do not believe that he has quoted fully the reply given by the Minister responsible for roads and traffic on 13th February. He said that a fair amount of research had been carried out by TRRL and the Departments of Transport and Trade and Industry and that no further funding would be given. Surely, it is an important matter that the Government should continue to fund, despite the present lack of attractiveness of electric vehicles. Should not the Government encourage research and be prepared to fund it?
Viscount Davidson: My Lords, all options which might help to reduce vehicle emissions are being kept under review, although I agree that no direct assistance is being given to electric vehicles at present.
Lord Ezra: My Lords, in reply to his noble friend the Minister said that the department was keeping in close touch with developments abroad. Can he say whether, statistically, what has happened here is mirrored by what is happening in other countries?
Viscount Davidson: My Lords, I am afraid that I cannot, but I shall try to find out and write to the noble Lord.
Lord Stoddart of Swindon: My Lords, does the noble Viscount not agree that it would help in the development of electric vehicles if preferential treatment were given to such vehicles either by means of reduced VAT or the abolition or waiving of the special car tax on such vehicles?
Viscount Davidson: My Lords, incentives such as free parking have a marginal effect on running costs and would not ease urban congestion. There will be an indirect incentive for electric vehicles because of the extra costs incurred in meeting more stringent vehicle emission standards for other types of vehicles.
The Viscount of Oxfuird: My Lords, I wish to declare an interest in that for the past 25 years I have worked for one of this country's major electric vehicle manufacturers, Materials Handling. Is my noble friend aware of the very great savings that can be achieved by the use of battery-electric equipment of this type? In America recently an analysis was made of an airline operation using battery-electric tow tractors. The costings were 70 per cent. lower than for internal combustion engine equipment. We have to remember that the battery is a major
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investment and that it is amortised over a four-year period. It is not like petrol; you do not fill up a tank. There is a consistent and determined level of pre-investment when the original battery-electric equipment is bought.
Viscount Davidson: My Lords, I am sure the whole House will join me in welcoming back my noble friend after his serious accident. I was a little stymied by his last remarks. They were slightly too technical for me to take on board immediately. We welcome initiatives by individual companies. The greatest incentive must be the production of vehicles which are attractive and which the public are willing to buy.
Lord Glenamara: My Lords, one of the great disappointments of the present age is that we have not discovered how to store electricity in a reasonably small space. Does the noble Viscount not agree that it would be worthwhile putting a major research effort into this matter? The widespread use of electric vehicles could make a major contribution towards cleaning up the atmosphere. However it cannot be done until we have solved the storage problem.
Viscount Davidson: My Lords, I shall certainly draw my right honourable friend's attention to what the noble Lord has said.

Nuclear Submarines: Inspections
2.52 p.m.
Lord Graham of Edmonton: My Lords, at the request of my noble friend Lord Jenkins of Putney, I ask the Government the following Question:
Whether they will make a statement on cracking in the reactors of British nuclear submarines.
The Parliamentary Under-Secretary of State, Ministry of Defence (The Earl of Arran): My Lords, I assume the noble Lord is referring to the recent discovery of a technical defect in one of the Royal Navy's nuclear-powered submarines, following which a programme of inspections of all such vessels has been set in hand as a prudent precautionary measure. These inspections are being carried out in close consultation with the department's independent technical and safety advisers.
Lord Graham of Edmonton: My Lords, I am grateful to the Minister for that reply. Can he tell us the rate of progress on the checks being carried out? For example, can he say whether 10 per cent., 20 per cent. or 50 per cent. of the vessels have been checked? Can he further tell us whether any progress is being made on monitoring the possible effect on, and damage to, the health of the submariners and those who work ashore?
The Earl of Arran: My Lords, I can assure the noble Lord that the programme of inspections will progress as soon as possible. As regards the

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possibility of any danger either to submariners or those ashore, I can again reassure the noble Lord that there has been no accident or injury to anyone.
Lord Mayhew: My Lords, can the noble Earl say whether the Government are seriously considering ways of lessening the burden on the Polaris fleet during its last years? There are ways of doing that.
The Earl of Arran: My Lords, that question is rather wide of the Question on the Order Paper.
Lord Hailsham of Saint Marylebone: My Lords, can my noble friend tell the House when the results of the inspection or tests are likely to be available; when they will be published; and to what extent?
The Earl of Arran: My Lords, I can reassure my noble and learned friend that the programme of inspections will be completed as soon as possible. As regards publication of the results, that will be a decision for my right honourable friend the Secretary of State.
The Earl of Halsbury: My Lords, can the noble Earl tell the House that there will be a counterpart statement on the cracking of the pots in anti-nuclear lobbies?
The Earl of Arran: My Lords, I apologise; I did not get the gist of the noble Earl's question.
Lord Hatch of Lusby: My Lords, can the Minister confirm that the technical fault which has been discovered is leading towards consideration of the necessary decommissioning of these nuclear submarines in the very near future? Can he tell the House what plans the Government have made for the decommissioning of the nuclear submarines and where it is to be done?
The Earl of Arran: My Lords, that is a question of high hypothesis. It is total speculation. There is no truth in what the noble Lord has said. I believe he is trying to conjure up a host of nuclear nasties which do not exist.
Lord Hatch of Lusby: My Lords, I asked a perfectly simple question. The nuclear submarines will have to be decommissioned: that is not in any doubt. Can the Minister say what preparations the Government are making for the decommissioning, where it will take place and what it will cost?
The Earl of Arran: My Lords, the noble Lord, Lord Hatch of Lusby, is dwelling on too much hypothesis here. It is a mask for speculation. The situation described by the noble Lord does not exist.
Lord Graham of Edmonton: My Lords, the Minister referred to being satisfied that no illness or damage had manifested itself in the health of the submariners or those ashore. Can the Minister take on board my question: what steps are being taken to monitor the situation? Monitoring is a positive review arrangement; it is not simply a matter of
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waiting for the manifestation of something being wrong and then having to chase it. The people who work on and around the submarines are entitled to be assured that the Government recognise that prevention is far better than cure.
The Earl of Arran: My Lords, the noble Lord is not quite right. The words I previously used were,
"no accident or injury to anyone".
As regards monitoring, I believe that the noble Lord is fully aware that independent advice to the Ministry of Defence is being provided by the Nuclear Powered Warship Safety Committee, which has at its heart all the points made by the noble Lord.

Dangerous Cargo: Losses at Sea
2.57 p.m.
Lord Campbell of Croy Lord Campbell of Croy asked Her Majesty's Government:
Whether existing international agreements require the reporting to coastal countries concerned of the loss from ships at sea of dangerous cargo, including chemicals.
Viscount Davidson: My Lords, I can confirm that the International Convention for the Prevention of Pollution from Ships (MARPOL 73/78) does require the ships of signatory states to report the loss of substances harmful to the marine environment, including chemicals, to the nearest coastal countries. It is also strongly recommended for other dangerous goods.
Lord Campbell of Croy: My Lords, I thank my noble friend for his reply. As the ship which lost the potassium cyanide recently found on south coast beaches is registered in Qatar—a country which is not a party to the relevant convention—what is being done to encourage other countries to participate in international agreements to improve safety and to ensure that there are adequate warnings when dangerous chemicals are lost overboard?
Viscount Davidson: My Lords, the Government have already asked the Qatar authorities to investigate the incident. We have received assurances from them that they will do so. When the ship next visits the UK marine surveyors will board the vessel to ascertain whether the cargo is being loaded in accordance with our regulations. Meanwhile, inquiries are being made in this country to establish how the goods were stowed. The international maritime organisation is trying to obtain more signatures to the convention: at the moment there are 134. Unfortunately, there are one or two countries which have not yet signed. This incident was made even more difficult due to the fact that it occurred in international waters.
Lord Hatch of Lusby: My Lords, can the noble Viscount tell the House whether there is any further news of the lindane containers which were lost in the English Channel nearly 12 months ago and about which very little, if anything, has been heard since?
Viscount Davidson: No, my Lords. I believe that the loss occurred in French territorial waters. But if the noble Lord cares to put down a Question on that subject I shall try to find the answer.
Lord Underhill: My Lords, reference has just been made to the loss of the lindane containers. When the House discussed this matter on 9th May 1989 I asked about the position of the International Maritime Organisation. I wonder whether the noble Viscount can repeat what he has said. Has the matter been raised with the IMO since then, and has pressure been brought to bear under the international convention?
Viscount Davidson: My Lords, under the International Convention for the Safety of Life at Sea, hazardous substances are categorised as being dangerous to humans, and under the International Convention for the Prevention of Pollution from Ships, hazardous substances are categorised as being harmful to the marine environment. In the case of the former, reporting is strongly recommended by the IMO. With respect to the latter, reporting is a requirement under the MARPOL Convention. Some substances fall into both categories. The noble Lord asked about the IMO. I shall have to find out the position, but it is making the most strenuous efforts to solve all these problems.

Business
3 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Brabazon of Tara will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on the sentences imposed on Mr. Bazoft and Mrs. Parish by a court in Iraq.
It may also be for the convenience of the House to know that the Committee stage of the Education (Student Loans) Bill will be adjourned at about 7 p.m. for about an hour and that during this adjournment the Appropriation (Northern Ireland) Order 1990 will be taken.

Education (Student Loans) Bill
3.1 p.m.
The Paymaster General (The Earl of Caithness): My Lords, I beg to move the Motion standing in my name on the Order Paper. In doing so I wish to apologise to the House for not having put down the Motion earlier last week. I beg to move.
Moved, That it be an Instruction to the Committee of the Whole House to whom the Education (Student Loans) Bill has been committed that they consider the Bill in the following order—
Clause 1,
Schedules 1 and 2,
Clause 2, Clause 3,
Clause 4.—(The Earl of Caithness.)
On Question, Motion agreed to.

British Railways Order Confirmation Bill
Read a third time, and passed.

Education (Student Loans) Bill
3.2 p.m.
The Earl of Caithness: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill. In doing so I know that the House will wish to take note with very great regret of the sad news of the death on Saturday of Lord Stewart of Fulham. Not only was he a former Secretary of State for Education and Science but he was also a good friend to the House. We shall miss him particularly in our debates on this Bill. I beg to move.
Moved, That the House do now resolve itself into Committee.—(The Earl of Caithness.)
Lord Peston: My Lords, I thank the noble Earl for his kind remarks about Lord Stewart of Fulham. I am sure that all Members of the House will wish to be associated with them. Lord Stewart was a major figure in government. On the subject of education, which is our concern today, I believe that he took part in every debate on every education Bill that came before the House during his period here. He was a kindly man. We shall miss his good sense, his constructive and intelligent contributions and his ready wit. We shall certainly miss him this afternoon.
Baroness Seear: My Lords, from these Benches I should like to say, first, that I know that my noble friend Lord Jenkins of Hillhead deeply regrets that he is unable to be here at the start of the Committee stage. He would like to have spoken in appreciation of his former very much respected colleague. I should also like to say that we shall miss him very much, and that this afternoon particularly we shall miss his wise contribution to education. He was a true professional in the field of education and understood the enormous importance of this question. We greatly regret that he will not be here for our debates.
Viscount Eccles: My Lords, I knew Lord Stewart for very many years. We sat on opposite sides of another place and of your Lordships' House. I admired his judgment and his honesty. I shall miss him.
Lord Greenhill of Harrow: My Lords, on behalf of the Cross Benches may I associate myself with those who have paid tribute to Lord Stewart? As a former member of the Foreign Office I pay a special tribute to him. When he came to the Foreign Office he was little known to anybody. In a short time he earned affection and respect. I travelled abroad with him many times. I never heard the British case more cogently presented to our opposite numbers abroad.
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 1 [Loans for students]:
Baroness Young Baroness Young moved Amendment No. 1:
Page 1, line 5, after ("may") insert ("subject to the provisions of subsection (5A) below").
The noble Baroness said: On behalf of my noble friend Lord Rippon of Hexham I move Amendment No. 1 and speak at the same time to Amendments Nos. 26, 27 and 28, which are linked to it. My noble friend greatly regrets that he is unable to be here at the start of our deliberations this afternoon.
As the Bill is presently drafted, there are three aspects to the setting up of the scheme. First, there is the running of the scheme itself. This is to be covered by the arrangements made by the Secretary of State under Clause 1(1). As matters stand, the arrangements will be made without parliamentary scrutiny.
Secondly, any amendments to the range of courses to be covered by the scheme, which would need to be made by an order to Schedule 1, would be subject to the negative resolution procedure. Indeed no order need be made if the Secretary of State is satisfied with the list of courses which are stated. Thirdly, the financial terms of loans, including their amount, the period of repayment, the rate of interest and the arrangements for deferment and cancellation, are all to be made by regulations under Schedule 2. These too are also to be subject to the negative resolution procedure. The effect of the four amendments is to leave the structure in place for the development of the scheme in subsequent years but to introduce a requirement that any orders, regulations or arrangements made with respect to the first year of operation of the Act should receive approval under the affirmative resolution procedure in both Houses of Parliament.
At Second Reading I referred to the considerable concern in the universities and in all parts of the House at what might generally be called the constitutional aspects of the scheme. It was quite clear at Second Reading and from re-reading the report of the debate in preparation for the discussion this afternoon that a great many noble Lords were concerned about the inadequacy of the information on the face of the Bill. To a large extent this was put right when my noble friend Lord Caithness circulated detailed information to everyone taking part. Nevertheless noble Lords wanted further information and in particular the opportunity to debate at a later stage what might be in the regulations. Indeed they were concerned—and my noble friend Lord Rippon will put this point himself—that the Government were legislating in general terms, leaving the particulars to be made by regulation, not written on the face of the Bill and not debatable. My noble friend raised this point when he introduced a short debate only a few weeks ago. He specifically referred to the Education (Student Loans) Bill as being one that concerned him on these constitutional points.
Those points were raised in another place and raised quite particularly by the honourable Member for Berwick-upon-Tweed, Mr. Beith. I read the report of what he said and I also read in detail the
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reply given on that occasion by my honourable friend Mr. Jackson. I fully appreciate that the present legislation is based upon the 1962 Act, which introduced student grants, and that the form of the legislation is similar. Indeed, my noble friend Lord Caithness explained that point in considerable detail in his speech on Second Reading. However, it would be fair to say that on this particular occasion there is a difference.
The 1962 Act introduced a grant scheme and one which, not surprisingly, was extremely welcome to the universities and to the students. After all, who does not welcome a government saying that they will give more money to some particular cause? Although I was not in this Chamber on that occasion, nor indeed, I regret to say, did I follow in detail the legislation passing through this place, I can well understand that at that time the negative resolution procedure would have been acceptable and people would not have had the concerns which they have today.
We are today introducing a loans scheme. It is something which I entirely accept. I also accept the principles of the Bill. It is quite unrealistic to believe that we can achieve an expansion in the number of students which we all want to see without a loans scheme. Indeed, on re-reading the Second Reading debate I felt that most noble Lords who spoke accepted the need for some change in the present arrangements and recognised that no government of the future would be able to meet the very high costs which would follow if our present very generous arrangements were to be maintained.
In putting these amendments before the Committee it does not mean that I am in any sense against the principle of the Bill. However, they are amendments which would give an assurance, especially to those in universities who have been concerned about the legislation, and would also, I hope, answer points raised from all sides of this Chamber on Second Reading.
I very much hope that, when my noble friend winds up the debate, he will feel able to accept the amendments or, if he cannot accept them exactly as drafted—and I know only too well, having been in his position, that this is quite often the case—perhaps he will take them away and undertake to bring back other amendments which meet the points raised.
The amendments will not alter the principle of the Bill, which is one that I fully support. Moreover, they will not in any way prevent the implementation of the Bill. However, they will allow, for one year only, a debate to take place both here and in another place on an affirmative resolution on the regulations. Afterwards the matter would be dealt with by negative resolution. I very much hope that the amendments will be seen as meeting what I believe to be the justifiable concern which has been expressed by many people. I beg to move.
3.15 p.m.
Lord Simon of Glaisdale: Having put my name to these amendments I rise to express my support for them. However, if the noble Earl would like to

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intervene and say that he accepts them in principle, I shall sit down at once. I am sorry to see that he remains seated. The noble Baroness spoke to these amendments in persuasive terms. They are quite limited: they are limited to the initial scheme, and the regulations setting it up are to be subject to affirmative resolution. However, all subsequent modifications are still to be subject to negative resolution.
The difference, as noble Lords know and as was pointed out on Second Reading, is that Parliament has a greater control over regulations when they are subject to affirmative resolution. That is more so in the other place than here because Members of this Chamber are at present largely subject to a self-denying ordinance which inhibits them from voting against a body of affirmative resolutions. That is not an absolute rule; it is a convention and it has in the past given way to convenience, notably on the Rhodesian sanctions order.
The amendments are in fact of fundamental constitutional moment because they concern the age-long tension about who has control of legislation: it is the Executive or is it Parliament? That question was resolved after a century and more of bitter conflict and the revolution of 1688. That was, in a famous phrase,
"the cause for which Hampden died in the field and Sidney on the scaffold"—
the cause of parliamentary control of legislation. That decision remained unquestioned for nearly two centuries. Then, after the 1914–18 war and even before that, a great deal of legislation was vouchsafed into the hands of the Executive because Parliament found it convenient to do so. But there crept in one anomaly which is present in this Bill too, in Clause 1(4). This is known as a Henry VIII clause because it reflects to some extent a power that Henry VIII secured from Parliament; namely a power himself, as the Executive, to amend Acts of Parliament.
The issue came into prominence again in the 1920s. The locus classicus as regards subordinate delegated legislation was the Donoughmore/Scott Report of 1932. It disapproved quite clearly in other than exceptional circumstances of the Henry VIII clause and sounded a note of warning generally about delegated legislation. It differentiated between normal delegated legislation and extraordinary delegated legislation, which it enumerated under four heads, two of which are relevant to our deliberations. One was the Henry VIII clause, to which I have referred, and another concerned situations where a very wide discretion to legislate was given to the Minister. That is surely present in the Bill which is now before the Committee. On Second Reading it was described as a "blank cheque" and a "pig in a poke". The noble Earl, Lord Russell, compared it to a company at the time of the South Sea Bubble which is supposed to have solicited money for a scheme to be declared later.
Therefore there can be no question that this is extraordinary delegated legislation and, being so, does it not follow inevitably that it should be subject to the closest parliamentary control—namely, the affirmative legislation procedure? The difference is
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a practical as well as a constitutional one. In the affirmative resolution procedure, the Minister lays the instrument before the House and explains and justifies it to the House. In the negative procedure he lays the instrument, which is then subject to be prayed against. The advantage of the former, affirmative, procedure is that the Minister explains what he is about and what is responsible for the instrument.
On Second Reading this point was referred to by a number of noble Lords, every one of whom—except for one—was in favour of the affirmative resolution procedure. The sole exception was the noble Lord, Lord Harmar-Nicholls, who made the perfectly valid point that the negative resolution occupies less parliamentary time because it will come before Parliament only if it is specifically prayed against. However, the noble Baroness met that point. It is only the initial scheme which is subject to affirmative resolution and it is hardly conceivable that no noble Lord and no Member of the other place would fail to wish to discuss it. Therefore that point is met.
Of the two points which were made in the other place, one has been dealt with by the noble Baroness—namely, that this follows the 1962 Education Act. I only add that that is not a true analogy. The 1962 Act made grants mandatory, whereas they had previously been at the discretion of the local authorities. However, the local authorities had been operating such a scheme for many years and it was only the modifications and alterations which were therefore the subject of negative procedure. Here it is the initial scheme that the noble Baroness seeks to have subject to affirmative resolutions. All the subsequent alterations and modifications are exactly as they were in the 1962 Act—namely, subject to the negative resolution procedure.
The other argument put forward was that a proposal such as that of the noble Baroness might delay the institution of the scheme. But again that is not so. As soon as the Government have made up their mind, they can lay the scheme before Parliament and justify it. There is one type of affirmative resolution procedure whereby the regulations can come into effect at once but are defeasible unless approved by Parliament. Therefore all three arguments fail entirely, and I support the amendment of the noble Baroness.
Lord Airedale: I understand that we are to discuss my Amendments Nos. 29 and 30 together with this amendment. Perhaps therefore it is timely for me to speak now to my amendments. They simply take the whole scheme, the order, out of the negative procedure and put it into the affirmative procedure.
On 20th January we received an order about mushroom growing. It was an important matter which came under the affirmative procedure. We had an interesting debate initiated by the noble Baroness, Lady Trumpington, and it was an interesting occasion. That was an affirmative order. However, one wonders how it comes about that with a highly controversial scheme of this kind, exciting tremendous interest outside as well as inside

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Parliament, the Government can contrive to try to slip it through on the negative procedure. They hope no doubt that it will not be discussed at all in Parliament. They rely only upon agitation from private Members trying to secure that the matter is discussed in Parliament.
I can well understand the Minister desiring that course. If I were in his shoes, anticipating flak from all sides of the House in the course of defending such a scheme, I should be poring over Erskine May into the small hours, trying to find reasons for putting it under the negative procedure. I wonder about this. When the people outside Parliament who are keenly interested in this matter find out for themselves that as it stands the scheme will not be discussed in Parliament at all and that that is the Government's wish and intention, I believe that they will feel that it injures the reputation of Parliament itself.
Lord Boyd-Carpenter: I have one specific point which I should be grateful if the noble Earl on the Front Bench would deal with when he comes to reply. It is my understanding of the scheme that it is proposed to withdraw the social security benefits to which students are at present entitled: unemployment, income support and housing benefit. That was clearly stated both by my noble friend on Second Reading and in paragraph 11 of the leaflet which he was good enough to circulate.
There is no reference at all to these benefits in the Bill. It is presumably therefore intended that the regulation-making power shall be exercised in order to withdraw the benefits. As the Committee know, I have had some by now rather remote experience of social security administration. Perhaps as a result of that it has always seemed to me that to withdraw existing social security benefits is a serious and important matter. Indeed, when I was in the department concerned I was always advised that, as it was rather crudely put, there were great dangers in taking a bone out of a dog's mouth.
I therefore wish to ask my noble friend whether the regulations, the treatment of which we are now discussing, include exercising a power to withdraw these substantial social security benefits. If they do, can the noble Earl tell me of any precedent for withdrawing not marginal social security arrangements but substantial social security benefits by the negative resolution procedure? It may well be the case that that is so. I do not instantly recall a precedent, but it would be helpful if when he replies my noble friend would deal with that matter. Perhaps he could say whether I am right in assuming that it is intended to abolish these social security rights by the regulations; and whether there are any precedents for major social security changes being made using only the negative procedure.
Lord Flowers: I wish to support this group of amendments and I shall briefly say why. There has been almost no opportunity for the universities—and I speak as a vice-chancellor—to discuss the details of the Government's proposed loans scheme. That discussion depends quite a lot upon the details. The Government did not release
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the details until just before Second Reading, and there has been very little time to discuss them since. Contrary to what was said on Second Reading, other schemes are possible which seem to meet the Government's requirements. I hope to speak to one of those schemes at the proper time on a later clause. However, if these amendments are carried, they would ensure that any scheme had to be discussed by Parliament. That seems to me to be highly desirable. I therefore support the amendments.
3.30 p.m.
Earl Russell: I believe I can enlighten the noble Lord, Lord Boyd-Carpenter, at least a little on the subject of the social security regulations as I received a letter about them from the Clerk's Office earlier this morning. The statutory instrument has been tabled and it is at present before the joint committee. I am told that it will come to this House shortly after Easter. But having so far only heard the contents of the letter read quickly by my wife over the telephone, I cannot say whether it involves the affirmative or the negative procedure. That point is worth some attention. I entirely agree with what the noble Lord said about taking a bone out of the dog's mouth. We might also reflect that there is a social security Bill before Parliament at present in which these changes could perfectly properly have been embodied.
More generally, I wish to support the amendment standing in the name of my noble friend Lord Airedale and also the much milder amendment of the noble Baroness, Lady Young, and the noble and learned Lord, Lord Simon of Glaisdale. Like the noble and learned Lord, Lord Simon of Glaisdale, I felt a certain disappointment at seeing the noble Earl on the Government Front Bench remain seated. I felt also a certain surprise. He has here a mild amendment which he could easily accept. He has also a rather stronger amendment which, if I were in his position, I might fear to have accepted. That point is perhaps worth a certain amount of thought on the Government Front Bench.
The difference between the affirmative and the negative procedure is of less importance in this House than it is in another place. In this House, as yet, we are still able to put down a Prayer and to debate a negative instrument. However, in another place there are many more Prayers to debate negative instruments than can be heard. The power of prayer in another place is being very much diminished. Therefore, frequently things are tabled under the negative procedure and are prayed against but are not debated at all. As we have here a Bill in which a quite exceptional proportion of the detail is to be embodied in the regulations, it would be a misfortune, to put it no higher, if another place were to be denied the opportunity to give it scrutiny. It might even give the impression that the Government had something to hide.
I also wish to draw attention to Clause 1(4) which is the clause which gives the Minister power to alter the primary legislation by altering the contents of Schedule 1. This is the so-called Henry VIII clause. Some Henry VIII clauses are worse than others. I try to be a reasonable man, and I believe this is not a particularly heinous clause. In fact I have, at least

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privately, been given assurances on the way it is likely to be used. I am prepared to be reassured about that. On the other hand, I wish to ask the noble Earl whether he will give some thought to the recommendation of the Donoughmore Committee, to which I have heard the noble Lord, Lord Rippon of Hexham, and the noble and learned Lord, Lord Simon of Glaisdale, draw attention in times past. The committee recommended that where such a clause is used, in effect giving the Minister power to change the law, there should be an explanatory memorandum, like the Explanatory and Financial Memorandum. That explanatory memorandum should be put at the front of the Bill to explain why such a procedure was thought to be necessary in that particular case.
It would be perfectly possible for the Government to put such an assurance on the front of this Bill—there is room for a little more on the paper—stating only things which they have already said. That would, in terms of the precedents which this House is likely to leave behind it for use in future Parliaments, give a much more reassuring impression. We have to take into account the fact that we are setting precedents. What we do now may look perfectly all right in the context of the business that we know we are discussing and the intentions we know in some cases are behind it. However, a precedent outlives its context. Therefore if we leave a clause like that in the Bill without an explanation we shall be giving wider currency to the idea that the Secretary of State, by himself and without parliamentary consent, may make law. I would regard that as unfortunate. I wish therefore to ask the noble Earl whether he can give a certain amount of thought to accepting the Donoughmore proposal that such a memorandum should be put in the front of the Bill. I do not believe that would cost him anything, and we might find it distinctly helpful.
Lord Harmar-Nicholls: I do not know what experience the noble Earl has of another place because the whole of his speech argued the case for powers for another place to use. Those who have experience of another place over the years can tell the noble Earl that providing Parliament is alert, the difference between an affirmative and a negative resolution is infinitesimal. There is no difference at all between them. It depends upon the alertness of Parliament itself as to whether or not the negative power would be used. In order to avoid silly waste of parliamentary time, the negative procedure has many advantages. If the issue at stake is flippant and not of major importance, another place would not use its powers to obtain time to use the negative resolution procedure, which is the alternative. However, if the significance of what would be done is of the importance that the noble Earl has in mind, those in another place will see to it that their parliamentary time is allocated for the negative procedure. The fear that an affirmative resolution has a greater power of being discussed than the negative procedure depends 100 per cent. upon the decision and the alertness of Parliament itself.
Lord Molloy: I hope that when the noble Earl replies to the points that have been made by the
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noble and learned Lord, Lord Simon of Glaisdale, the noble Lord, Lord Boyd-Carpenter, and the noble Earl, Lord Russell, his reply will, right from the beginning of this Committee stage, have a serious effect on how this entire wretched Bill is to be conducted. The speeches that we have heard from the Members of the Committee that I have mentioned are the quintessence of the anxieties that are felt in Parliament and outside. Therefore the reply of the noble Earl must show whether it is the intention of the Government to commit themselves to normal parliamentary procedure or to find other methods of pushing this Bill through.
Baroness Carnegy of Lour: I, too, was disappointed that my noble friend did not rise when he was invited to do so by the noble and learned Lord, Lord Simon of Glaisdale. On Second Reading I mentioned that I thought that a selective use of the affirmative resolution procedure would be helpful. I said that because it was quite clear from the debate on Second Reading and from the discussion outside the House that there was still a lot that people wanted to discuss concerning the details involved in the setting up of the arrangements. However, that did not alter my view that to make everything always subject to affirmative resolution, as I believe the amendments of the noble Lord, Lord Airedale, suggest, is quite unnecessary.
As I said on Second Reading, it seems to me that this Bill can only be a framework because changes will constantly have to be made as the scheme develops and figures will probably be altered year by year for many years ahead. I should have thought that that should not be done by affirmative resolution. It would take too much time. Therefore it seems an excellent idea that in the first year the affirmative resolution procedure should be adopted as my noble friend Lady Young has suggested.
I hope that my noble friend will pay attention to that suggestion. I have no idea what his point of view is, but I was disappointed that he did not respond promptly to the suggestion of the noble and learned Lord, Lord Simon.
Lord Glenamara: I shall not detain the Committee for more than two or three minutes. I am absolutely opposed to the principle embodied in the Bill. As a parliamentarian of about 40 years' standing, the Bill offends me. It is an affront to Parliament. At a time when democracy is breaking out all over Europe, in South Africa and central America, the Government have introduced this Bill into Parliament.
When I left Newcastle this morning I was seen off at the station by the president of the students union of Newcastle University. That is a very large university, one of the largest in the country. I do not believe that the Government realise the opposition to the Bill throughout the whole of the academic world and in families throughout the country. It will affect the budgets of students and of families all over the country. In addition, the Government are to withdraw other benefits this year. As I pointed out previously, on 1st April this year every student will be required to pay an average £70 for the community charge. It is a shocking affair.

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This Henry VIII provision, which says that the Secretary of State may by order amend Schedule 1 to the Act, is alarming. It is worth while for the Members of the Committee to refresh their memories about the Schedule which gives the Secretary of State the power to prescribe the maximum amount of the loan, to make provisions as to the time and manner in which the payment of loans may be made and to make provision about deferment and cancellation. Worst of all is the question of interest. The Government persist in saying that the loans are interest free. Schedule 2 says:
"Loans shall bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State".
He has to have regard to the retail prices index, but he can change that without coming to Parliament. He can change the provision regarding interest without coming to this Chamber.
Why do the Government oppose the amendments? I have been a government business manager and a Chief Whip in the other House and I know a little about scheduling government business. All the amendments mean is a few more hours for debate in the whole parliamentary year. That is all that is at stake here. This provision, which adopts the negative rather than the positive resolution procedure, is one of the main reasons for objections to the Bill. Why does not the noble Earl stand up and accept the amendments now? It would not cost the Government anything except three or four hours in a parliamentary year.
I know also that any government put their main legislative programme in their first two years in office. Therefore the next two years, or the time from now until the next general election, will be very thin in terms of legislation. There will not be any shortage of parliamentary time. Why does the noble Earl object? Why does he not stand up now and accept the amendments? It is beyond my comprehension.
Noble Lords: Hear, hear!
3.45 p.m.
Lord Peston: I rise to speak on the amendment with some trepidation. I am not a constitutional expert. I have not had the privilege of serving in the other place and I have been in this Chamber for only three years. However, I am learning as I go along. I assume that for the moment the noble Earl has not accepted the amendment because, like me, he was waiting to hear the speeches and hoping to learn something.
I believed, and having listened to the speeches I still believe, that the amendments would make a difference. I shall proceed on that assumption unless the noble Earl can convince me that the noble Lord, Lord Harmar-Nicholls, is right in arguing that the amendments mean nothing. I believe that they make the difference which the noble and learned Lord, Lord Simon of Glaisdale, emphasised; namely that they impose a positive obligation on the Secretary of State to justify what he does. They do not prevent the Secretary of State from getting his own way. I
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do not believe that, on the whole, Secretaries of State ought not to get their own way but I believe that they ought to make their case.
The trouble arises because of the nature of the Bill. If the loan scheme had been specified on the face of the Bill we could have debated the loan scheme, we could have amended it and we could have left some aspects to be dealt with later by regulations. The objection—and the cause of the frustration and the puzzlement outside the Houses of Parliament among those in the academic world—is that this peculiar Bill prevents us from debating what we ought to debate.
My first point, therefore, is that we should not have the problem in the first place. We should have had a Bill which included a student loan scheme of some sort, if that is what the Government want. There is still time for the Government to take the Bill away and come back to us with a Bill which reforms student maintenance and which we and the other place can examine and debate properly. My first plea is not that the amendment should be accepted—that is well down my list—but for a proper Bill that corresponds to the subject that concerns us.
If we had had an appropriate Bill the Government themselves could have taken the opportunity to introduce some amendments. The Committee will notice that the Marshalled List contains no government amendments. I find that objectionable.
I regard the Secretary of State as an honourable man. He felt it appropriate to call a meeting of Peers last week to tell us more about his thinking on the matter. I welcomed that meeting. However, that material should instead have been brought forward for debate on the Floor of the Chamber. We have the bizarre state of affairs in which just before Second Reading, when it was apparent that many Peers were concerned at knowing very little about the Bill, we suddenly received a series of documents which told us about the Bill. Mine arrived about an hour before the debate. Last week we heard that there was more that the Secretary of State wanted to tell us, so he called a meeting. We went dutifully. We are grateful for that, but I believe that the Houses of Parliament are the places for such statements to be made and debated.
I do not believe that it is too late to make amends. It is not too late for the noble Earl, who on this occasion speaks on behalf of the Secretary of State, to say that he will tell us within this Chamber precisely what the Bill is about.
I shall support the noble Baroness if she divides the Committee and we do not have the good fortune of hearing the noble Earl tell us that he accepts the amendment. I hope that she will forgive me for saying that, although, as I said in my Second Reading speech, I believe strongly that we need to look again at systems of student maintenance, that does not mean that I care for the government loan scheme currently being introduced. There is an enormous gulf between those of us who believe that we have to look at systems of student maintenance as a preparation for a very considerable expansion of higher education which this country needs and those

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who support the loan scheme. This loan scheme is not what is required. Something quite different is needed. In supporting that approach, I am not for one moment supporting the loan scheme.
Perhaps I may make two or three other remarks. I should like the amendment to be accepted; even better, I should like the whole scheme to be abandoned or postponed and started again. Following the remarks of the noble Lord, Lord Boyd-Carpenter, on the social security aspects, I am concerned that, even if one way or another we have the opportunity to talk about it—I am not clear whether we shall have such an opportunity—we shall not do so in the context of an education maintenance or loan scheme system. It will be dealt with as a matter of social security. I do not deny that it is partly a matter of social security—that is true in the Government's mind as well as in ours—but it is clearly meant to be placed in the context of student support generally. Yet again, therefore, I am unhappy that a matter as important for students as this will not be dealt with as a student or education matter. It will be dealt with rather differently. Our principles and methods here are therefore wrong.
Perhaps I may make one other remark in response to the noble Earl, Lord Russell. I particularly object to private assurances. I am not in the least interested in private assurances. I regard the Secretary of State as an honourable man. I regard the noble Earl as an honourable man. I regard the noble Baroness as an honourable woman. But that is not the way that legislation is meant to proceed in a parliamentary democracy. Someone else might well sit on those Benches one day who is a good deal less honourable and a good deal more ruthless than they are. I should prefer that legislation protected us rather than private assurances.
In summary, my main view is that we deserve a proper Bill to debate. My second view is that this subsection, which I believe is significant, helps us a little. I shall certainly advise my noble friends to support the noble Baroness.
Lord Peyton of Yeovil: Perhaps I may briefly tell my noble friend what his refusal to accept the amendments would do for me. It would persuade me of one of two things: either that the Government have made up their mind what they want to do, know how they will do it and will not tell Parliament; or. alternatively, that the Government do not know how they will achieve the purpose that they have in mind. In those circumstances I am bound to say that I should find it difficult to support my noble friend in rejecting what seem to me to be modest amendments.
The Earl of Caithness: We have before us two sets of amendments. One set, in the name of my noble friend Lady Young, has, as I have heard, an impressive array of support from all sides of the Chamber. I have to say that, if I were on the Back Benches, I should have supported my noble friend and, because I am on the Front Bench, my support is in no way diminished. We accept the principles that my noble friend Lady Young has put before the Committee. I have listened with care to the debate.
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That is why I did not rise to the bait of the noble and learned Lord, Lord Simon of Glaisdale. I wished to hear what all noble Lords had to say.
Perhaps I may make it plain that we now intend that, when the loan scheme is introduced, the secondary legislation required to establish it should not be subject to the negative resolution, as the Bill at present provides, but to the affirmative procedure. Thereafter, when further secondary legislation is needed to revise or develop the scheme, the negative procedure would apply. That is what the amendments propose and that is the approach that we are happy to follow. Perhaps I may tell my noble friend, as she led me into this, that I hope that she will withdraw the amendment. Subject to being checked by parliamentary counsel, I can assure the Committee that the amendment, either in the same or slightly revised form, will be back before noble Lords at a later stage.
It follows that I do not accept the amendments tabled by the noble Lord, Lord Airedale, as they would require affirmative resolution for every adjustment to the scheme over the years. The support for the amendments tabled by my noble friend Lady Young indicates that the mood of the Committee is that that would be excessively cumbersome. For instance, for an annual uprating of a loan, it would be exactly the same procedure as has been followed under the 1962 Act with good effect and without complaint.
Perhaps I may now deal with a couple of important points, the first of which was raised by my noble friend Lord Boyd-Carpenter who said that students would lose their social security benefits. As usual, my noble friend is right. However, on this occasion he is not entirely right because disabled students will not lose the benefits to which they are entitled. The benefits will be withdrawn as the loan scheme comes into operation. The loans will be brought into effect and there will then be the access funds about which I shall say more in due course. As I understand it, the amendments to social security for non-disabled students will not be dealt with under the Bill but under social security legislation.
The noble Lord, Lord Peston, is the first member of the Opposition whom I have heard demanding government amendments. That was an interesting point. The meeting last week that he mentioned was one that my right honourable friend the Secretary of State and I thought would be advantageous to noble Lords who spoke on Second Reading. The meeting sought to concentrate on the alternatives. The scheme which the noble Lord wishes me to explain in detail will be covered in far more detail at this stage of the Bill. I hope that by the end of the debate noble Lords will be convinced that the scheme is ready to be up and running and will be successful.
I take the point made by the noble Earl, Lord Russell. I shall study with particular care the point that he asked me to consider, but the changes to Schedule 1 will be subject to parliamentary scrutiny as they are in a schedule.
Perhaps I may recap. We accept the principles behind the amendment of my noble friend Lady Young. An amendment will be forthcoming at a later

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stage to put into effect exactly what I said. However, I regret to say that I cannot accept the amendments of the noble Lord, Lord Airedale.
Baroness Young: I should like to start by thanking my noble friend Lord Caithness for accepting the principle of the amendments. I am happy to withdraw the amendment on his word that he will bring back, as I thought he almost certainly would want to do, correctly drafted amendments. We shall look forward to seeing the amendments at a later stage.
I am also grateful to the noble and learned Lord, Lord Simon of Glaisdale, who set out the constitutional point clearly. It is extremely helpful to have that on the record. I am grateful too for the support that the amendments have received from all parts of the Committee. I have never served in another place. I defer to my noble friend Lord Harmar-Nicholls who believes that there is not much difference between a negative and an affirmative resolution. I am told, however, by those who are at present in another place that there is a difference. I also believe that to be the case.
It is easy to say that anyone who is alert may raise matters on a negative resolution. That is true. We can all do things if we are present and alert and have a bit of luck. However, it is an assurance to know that that end can be achieved by affirmative resolution. I believe that I speak for all noble Lords and those outside the House when I say that we are grateful to my noble friend. I shall not at this stage attempt to say anything further. The debate has somewhat widened from my original remarks. It is important that my noble friend has accepted the principle. I am grateful to him and look forward to seeing the amendments redrafted at a later stage. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blatch: I think that this would be an appropriate moment in which to hear a Statement which is being held in another place. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Mr. Farzad Bazoft and Mrs. Daphne Parish
4 p.m.
The Minister of State, Foreign and Commonwealth Office (Lord Brabazon of Tara): My Lords, with the leave of the House I shall now repeat in the form of a Statement the Answer to a Private Notice Question being given in another place by my right honourable friend the Minister of State on the sentences imposed on Mr. Farzad Bazoft and Mrs. Daphne Parish by a court in Iraq. The Statement is as follows:
"The whole House will join me in expressing dismay and horror at the unjustified sentences which Mr. Bazoft and Mrs. Parish received from the Iraqi Revolutionary Court on Saturday. These
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sentences are out of all proportion to any offence which may have been committed. In particular, we deplore the death sentence passed on Mr Bazoft.
"Before the trial opened last Thursday, we had made over 50 separate representations to the Iraqi authorities making clear our concern for the wellbeing of Mrs. Parish and Mr. Bazoft. Our major concern at that stage was to try to secure a fair trial for Mrs. Parish and Mr. Bazoft.
"In addition to this constant pressure on the Iraqi authorities, the Prime Minister wrote to President Saddam Hussain on 21st February, before the trial took place, to express her concern about the two cases. President Saddam Hussain replied to the Prime Minister on 28th February assuring her that the trial would indeed be a fair one. From the account we have received, it is clear that no evidence was presented which would justify such harsh and disproportionate sentences.
"Our immediate aim is to save the life of Mr. Bazoft and to secure a review of the sentence imposed on Mrs. Parish. As soon as the outcome of the trial was known on Saturday, the Prime Minister wrote again to President Saddam Hussain asking for both sentences to be reduced on humanitarian grounds. At the same time we summoned the Iraqi ambassador and made clear to him the Government's reaction.
"We have asked our friends and allies in the Middle East and elsewhere to approach the Iraqi Government and support our call for clemency. The European Community has already taken action. The Irish, French and Italian ambassadors in Baghdad, on behalf of the Twelve, delivered a message to the Iraqi authorities urging them to reconsider the sentences.
"In all this, we should not forget the plight of Mr. Ian Richter, another British prisoner serving an unjustifiably harsh sentence in a Baghdad prison.
"Iraq has recently shown herself to be concerned about what she would call the misrepresentation of her policies abroad. She can be in no doubt about the damage which would be done to her standing in the world, let alone her relations with the UK, if these unacceptable sentences were to be confirmed."
My Lords, that concludes the Statement.
4.2 p.m.
Lord Cledwyn of Penrhos: My Lords, we are grateful to the Minister for repeating the Statement in response to the Private Notice Question asked in another place. We fully support the Prime Minister's plea to the President of Iraq, and the other diplomatic measures taken by the Government. We also thank those who have made representations to President Saddam Hussain, including King Hussein of Jordan as well as the Irish, French and Italian ambassadors acting for the Community, as the noble Lord just said, and other organisations.
We are deeply dismayed and shocked to understand that the Government of Iraq have rejected the pleas made to them, but I hope that the President may be persuaded to exercise his

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prerogative even at this stage and stay the execution of Mr. Bazoft. This is not the moment to go into detail as I do not wish to prejudice the position. I say only that the evidence against Mr. Bazoft and Mrs. Parish does not begin to justify the findings or the sentences of the Iraqi revolutionary court.
Does the Minister agree that the consequences of carrying out the sentence against Mr. Bazoft could cause grave and lasting damage to relations between Britain and Iraq? Can he say whether the Government have in mind any further steps, for example through the United Nations or indeed through the United States Administration? Is he aware that the Government have our total support in any effort made to avoid this tragedy taking place?
Lord Tordoff: My Lords, we also are most grateful to the Minister for making this Statement. It is very right and proper that this House should express its total abhorrence of what happened in Iraq over the weekend. I am grateful that the Minister explained so clearly what has been done by the Prime Minister and the Foreign Office and also our allies and friends in Europe.
It is a horrifying sentence that has been passed on this person. Innocent or not, he was invited there as a journalist by the Iraqi Government. He was carrying out his journalistic tasks. Yet he has been treated as though he were a horrendous spy, which a reading of the weekend newspaper will make clear to everybody is not the case. If the Iraqi Government wishes to be treated as a civilised member of the community of nations, it must take steps to commute that sentence.
I hope that the Government, without wishing to say at this stage what further steps could be taken, will make it quite clear to the Iraqi Government that if this sentence were to be carried out, Iraq would not only isolate itself from the opinion of people in this country and their ability to carry out diplomatic relations with a country that has behaved in such barbarian fashion, but also isolate itself from the rest of the community of nations.
Lord Brabazon of Tara: My Lords, I am most grateful for the reception given by the noble Lords, Lord Cledwyn and Lord Tordoff, to the Statement. It shows that the House is united in its condemnation of what the Iraqis propose to do. Like the noble Lord, Lord Cledwyn, I do not wish to go into too much detail this afternoon. Our main, primary and perhaps sole consideration at the moment should be to do everything possible to work for the release of Mr. Bazoft and Mrs. Parish or for having another look at the sentences passed on them.
As I think both the noble Lords said, if in particular the death sentence were carried out, it could cause grave and lasting damage to our relations with Iraq. I also believe that it would cause grave and lasting damage to Iraq's relations with many other countries. That is why we have enlisted the support of the European Community and other friendly powers. Regarding the United Nations, the Secretary-General is personally concerned and is doing all he can to help.
4.7 p.m.
Lord Molloy: My Lords, I should like to ask the Minister this question. What representations were made before and immediately after the arrest of these people and during the so-called trial? There was no democratic trial whatever but a totalitarian trial by military men who had to do what they were told. They were probably instructed to find those people guilty and no doubt to say what the sentences were.
In view of that, this whole matter becomes an appalling crime against humanity. It does not affect only the two people involved. Despite the endeavours of the Prime Minister, which frankly have revealed that the President of Iraq treats our Prime Minister with contempt—as also the Irish and other ambassadors—does he think that it would now be right for our Government to mount a worldwide campaign to ensure that such things can never happen again; to ensure that two people brought up in a democratic way of life should not have to suffer in this way when as journalists they are following the normal procedures of their profession?
This cannot be allowed to remain just a matter between Great Britain and Iraq. It is now a matter for world opinion to be garnered to defend the fundamental principles of democracy.
Lord Brabazon of Tara: My Lords, as I said, we have enlisted support from the world community and in particular, the European Community. The EC troika made that representation on behalf of the whole Community.
The noble Lord suggested that the trial was not a fair one. It is certainly true to say that the Iraqi revolutionary court does not provide for the same full consideration of a case that would be expected here in a British court. However, I do not think that I can add much to what I have already said. We shall consider all options as events unfold, but our prime objective at this moment must be to save the life of Mr. Bazoft and to have both sentences reduced.
Lord Callaghan of Cardiff: My Lords, I hope that the House will not object if I underline what my noble friend Lord Cledwyn said; namely, that the whole country will be united behind whatever steps the Government find themselves able to take and that the President of Iraq should understand that there is a united view in this country that to carry out this sentence would offend—and deeply offend—everyone in this country. We wish the Government well in their efforts.
Perhaps I may finally ask this. We do not press the Government to say much, but will he convey to the Prime Minister that she should bring Mr. Kinnock into her discussions about these matters so that whatever cannot be said publicly should at least be conveyed privately to the Leader of the Opposition. I am sure that she would find that a help and not a hindrance.
Lord Brabazon of Tara: My Lords, the House will be grateful to the noble Lord, Lord Callaghan, for the remarks that he has made. As I said earlier, it is

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not only the condemnation from all sides of this House and from the whole of the United Kingdom, but by others also which is important. I shall certainly relay the remarks of the noble Lord about the Leader of the Opposition and the Prime Minister to my right honourable friend.

Education (Student Loans) Bill
4.10 p.m.
House again in Committee on Clause 1.
Lord Jenkins of Hillhead Lord Jenkins of Hillhead moved Amendment No. 2:
Page I, line 5, after ("arrangements") insert ("to take effect from 1st September 1991").
The noble Lord said: The effect of the amendment is to give the Government a short, one year pause for breath in order to try to sort out some of the many uncertainties relating to the operation of the scheme. I do not believe that the existence of these uncertainties can be denied for a moment.
I shall give a few examples. First, the detailed allocation of the three access funds remains largely a mystery. Secondly, the chances of processing all the applications by September/October are slim to the point of non-existence. By any calculations, it will be an almost impossible burden on the inevitably hastily recruited staff of 130 in the Student Loans Company. That would seem manifestly inadequate to make these complicated assessments in a considerable rush. Thirdly, the social security consequences and provisions remain vague and undescribed.
It is very difficult to understand what the Government would lose by such a pause. It is very easy to see that a great deal would be gained. I am delighted that the noble Earl began well this afternoon by accepting an amendment. I hope very much that he will also accept this amendment. It is difficult to see what the Government would lose by doing so. There can be no possible public expenditure urgency because postponement of the scheme could mean no public expenditure burden; if anything, the reverse. The scheme does not begin to save public expenditure until well over the next horizon—almost certainly into the 21st century. There may be some force in the assumption that some loan scheme, or a scheme carrying special graduate obligation, is a necessary concomitant of a big and desirable expansion of student numbers. However, that is not an argument for making it overwhelmingly urgent in 1990 compared with 1991.
Nor can it be argued—as the Government in another place have been disposed to do—that a postponement would be unfair to the interests of students. That is certainly not the view of any whom I have encountered. It is not only the organised, perhaps overcommitted, opinion expressed through the National Union of Students, but the much less committed, less organised, bodies of students with whom I have come in contact who would much rather that the scheme were introduced a little later,
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if at all. It is a very castor-oil theory of government to believe that it is for the students' own good that we must have it in 1990 and not 1991.
The benefits to the Government of such a postponement would be great. In the first place, they could discuss the matter further and try to sort out some modus vivendi with the universities on whom an immense and yet still wholly vague burden will be placed by the need for certification. That comes on top of certification for the poll tax and all being done in a great and unnecessary rush.
The noble Lord, Lord Beloff, spoke with peculiar force and eloquence in the Second Reading debate about how the purpose of his life in this Chamber had been to try to prevent occurring an unbridgable breach between the Government, of which he is in most respects a committed supporter, and the academic community, in which he plays such a distinguished part—the academic community of all branches of political opinion and at all levels. I believe that he saw the Bill as a symbol of his failure, despite the most gallant efforts.
For the Government to accept the amendment, at least to stay their hand for a moment to avoid rushing deeper into confusion and unnecessary conflict, might give him and many other people a glint of hope of achieving some more sensible solution.
To my great regret I was unable to be present for the Second Reading debate until almost the end of it. Members of the Committee will understand that in my position, such as it is, in this Chamber, and with my responsibility to the University of Oxford, I would not have missed the debate had I not had a compelling and conflicting engagement. I was committed to give in Oxford the last of a series of six lectures to commemorate the centenary of the death of Cardinal Newman. They culminated a week later in an ecumenical service at which the Archbishop of Canterbury preached the sermon. It was a great commemoration. Compelling though the reasons for being in my place here were, I decided that I could not be present except for the vote. As a result, I read the debate with particular attention and read it as a whole. Perhaps for that reason it made an even bigger impact on me than if I had listened to it seriatim as it was delivered. Most powerful speeches were made in the debate, and some towards the end raised points that were entirely new. For instance, my noble friend Lord Addington, produced a very powerful argument suggesting that the University of Aberdeen—a 500 year-old university—might literally be killed through inadvertence because of two special reasons that he outlined as a result of this rather ill-thought out scheme.
However, I was struck in particular by the impact of the first 12 speeches in the opening three hours which followed the gallant opening—for such it was—by the noble Earl, Lord Caithness. Only one of those 12 speeches could be regarded as supporting the Bill for the Government's scheme. It was the speech of the noble Baroness, Lady Young. I fell upon it avidly, having the greatest possible respect for the cool clarity of her intellect, of her knowledge of universities, and of her support for sensible causes

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in general. What did I find? I found that she announced that she was going to support the Bill. She then raised certain criticisms, and I then waited for the crushing argument that would give me the Government case.
I was reminded irreversibly, possibly because of my experience on that day or the day before I read the speech, of Cardinal Newman's argument at the end of his first discourse in Dublin which led to this notable book, The Idea of a University, when he had gone to Dublin to be founding rector of a Catholic university. Pope Pius IX had laid down that it should be a purely Catholic university, which Newman did not like very much. However, he had to accept it. He made no attempt to pretend that it was not awkward. Therefore, he fell back, with the richest possible imagery—I must say that his imagery was somewhat lusher than that of the noble Baroness—on papal authority. He said that it was the decision of the Holy See, that St. Peter had spoken. "It is he who has enjoined that which seems to us so unpromising". He then went into a prose poem—for such it was—of glorious oratory, asking for it to be accepted on the basis of the proven record of 1800 years of the papacy.
The noble Baroness said that she had been to see the Secretary of State because she said, "I wanted to satisfy myself before coming to this debate. I took the opportunity to discuss the position with my right honourable friend the Secretary of State. I at least assured myself that he has considered these matters closely". I believe that we all have a considerable respect for Mr. MacGregor, but even with the assistance of Mr. Robert Jackson it can hardly be claimed that he rivals the 1800 years of wisdom of the papacy in this or any other respect. However, that was what the noble Baroness seemed to be saying. And yet I thought that if anyone was going to present a wholly convincing case it would most certainly be the noble Baroness.
I hope that the Government will not feel that they must be rigid. One cannot say that one hopes that they will not push through this Bill in a particular form because it has no form. I hope that they will not push the Bill through without listening to the views of the House.
I suppose that this Government are not unique in that respect. There seems to be a fatal frenzy which seizes governments when their basis of support becomes ever narrower. I shall never forget my last months in the House of Commons. I particularly regret one act which was under the premiership of my noble friend Lord Callaghan of Cardiff. In the autumn of 1976, which was an autumn of collapsing sterling and rampant inflation, and the Government were not very strong in the country or in public opinion polls, they insisted on pushing through a measure for the nationalisation of the ports and of the aerospace industry. Looking back, that was extraordinary. I believe that I voted for it. Occasionally we are all guilty of voting for things which we should never dream of voting for if we were free, unfettered citizens.
Let this Government remember that, when they are beleaguered, saying, "We will batten down the hatches, listen to nobody and push ahead with the
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utmost dogmatism", is not the course either of wisdom or of statesmanship.
Lord Harmar-Nicholls: Nobody is more aware of the real meaning of parliamentary words than the noble Lord who has just moved this amendment. He is a past master. I believe that he and Mr. Crosland were perhaps the two most effective Back-Benchers in the other place for many years. The noble Lord spent time being poetical about Cardinal Newman, and then he took up part of his 12 minutes by giving my noble friend Lady Young a basin of broth; he ended by hitting her on the head with a spoon. However, the effect of this amendment would be to negate the decision which we made on Second Reading. It is a negation of the principle to which we agreed on Second Reading, which was the right time to do that.
I feel that this is another desperate effort, using means which are quite unconventional in many ways, to twist the procedures of Parliament, which are usually designed to arrive at the right sort of answer, so that we cannot deal with the matter. It is not without significance—and my noble friends in particular will have noticed this—that the noble Lord spoke for 12 minutes and said hardly anything about the merit of the amendment which he asks the Committee to accept. He made a most attractive speech, as he always does, but there was no argument to justify his amendment. He knows better than most Members of the Committee that if ever there is a need for a delay, the time to discuss it is after the Committee stage. Who knows what this Bill will be like after the Committee stage? That is the object of this stage.
The noble Lord on the Cross-Benches was very interesting when speaking to the last amendment. He said that he wanted to get on because he had a number of practical amendments and points of view which he wanted to put to the Committee. I do not know how many of those amendments will find favour and, if they find favour, what effect they will have upon the Bill.
I believe that we must beware of being beguiled by a past master, because that is what the noble Lord, Lord Jenkins, is. He has held high offices of state, he headed the Commission in Europe and has written books. If Members of the Committee have not read them, I advise them to do so. They are very well written, delightful and informative. However, on this occasion his speech is a complete and utter red herring designed to do no more than negate what we did on Second Reading. He said that for very good reasons he could not be here. We were here, we went through this matter, we arrived at a decision and the majority then should justify us saying that that is the end of the discussion on principle. We should now get down to the Committee stage and see what we can make of the Bill.
Baroness Seear: The noble Lord says that we went through this matter on Second Reading and voted against it. Most of the people who voted against it were not here when we discussed it.
Lord Harmar-Nicholls: The noble Baroness is being unfair and she is usually very fair. She knows that what happened on that day was identical to what happens on almost any Second Reading day. We have to take for granted—I hope that it is true in most cases, although we all know that it is not true in every case—that people satisfy themselves as to what the issue is before voting. I do not believe that the Second Reading of this Bill was any different to other Second Readings over many years and under different governments.
Baroness Elles: Listening to the noble Lord, Lord Jenkins of Hillhead, for whom I have the greatest respect, I was very much reminded of Andrew Carnegie, who said that he was always being told by experts why he should not do something but quite ordinary people were sent to tell him to get on with it. I am here to tell my noble friend Lord Caithness to get on with the Bill.
I was surprised that the noble Lord, Lord Jenkins, said that this matter would not make any difference to the Government. However, I am not concerned with the Government but with students. Students are now expecting to have loans. On Second Reading I raised the fact that many students have overdrafts with banks. As with loans, they will have to repay that money but will be charged considerable interest on the bank overdrafts. Therefore, it is in the direct interest of students that we get on with this loans Bill. On that ground alone—I am thinking of the benefit to students, not to the Government, this place or another place—we should get on with the scheme, especially as my noble friend has undertaken that there will be discussions and that information will be given as to how the access funds will be used, which are matters that concern everyone.
4.30 p.m.
Lord Walton of Detchant: I support the spirit of the amendment. I was of course concerned to hear the arguments which have just been expressed, but I support the amendment because I wish to invite the Government to think again seriously about what many of us in the academic world see as major deficiencies in the Government's proposals in relation to the Bill.
In an ideal world, and in a country rich beyond the dreams of avarice, I am sure that the Committee would agree that education at all levels should be free to the consumer and that there should be, in particular, total equality of opportunity so that all those capable of benefiting from higher education would be enabled to attend an appropriate educational institution able to capitalise upon all of their talents, thus allowing them to contribute more effectively to the nation's future economic health than would have been the case without such education.
It follows that such opportunities should be freely available to rich and poor alike, without the fear of crippling financial hardship which can provide a powerful deterrent. Despite the recent well-publicised, no doubt well intentioned but in my view singularly ill-informed comments about the alleged failure of our British universities to
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contribute to the so-called enterprise culture, I am in no doubt that we need significantly to increase our university and polytechnic student population, especially in science and engineering, if the country is to expand its technical and science base to help keep pace with its many overseas competitors, many more of whose young people attend higher education institutions. But we do not live in an ideal world, nor in an immensely rich country, and hence, unlike many of my academic colleagues, I am not totally opposed to the principle of student loans for reasons which I hope to explain.
I believe that it is proper that those who will benefit from the privilege of higher education, with the probability that such education will increase their ultimate earning capacity, should properly be asked, like their parents, to bear a part of the cost of the expensive education which the country has agreed to provide. However, having accepted the principle, I am deeply concerned about the scheme originally outlined in the Government White Paper, which is now depicted in the Bill with such a broad brush that the Secretary of State will effectively be capable of modifying it in almost any manner he or she pleases.
My principal anxieties, and indeed my objections to what The Times last week properly called "An unloved scheme", are many. First, I believe that the scheme will be potentially most advantageous to the wealthier students while acting as a potential deterrent to the poorer. Secondly, if, as the Government intend, the scheme is to be introduced in the 1990–91 academic year, students will be faced with what, with a degree of licence, I may perhaps call not double but triple jeopardy.
First, there is the loan itself, which must of course ultimately be repaid; despite the safeguards relating to graduate income and flexibility in relation to the period of time over which repayment will have to be made, the burden will be more severe upon those graduates entering less well remunerated employment but that which is above the 85 per cent. cut-off point. School teachers after a four-year course will be among those who could suffer inequitably, and so too would graduate nurses, junior hospital doctors after a five or six-year medical course and even those young dentists, veterinary surgeons and architects after equally prolonged courses who choose to undergo specialised postgraduate training. They would find a graduate tax much easier to bear than a loan repayment.
The second form of jeopardy to which several Members of the Committee have already referred, which this year's students will face, will be the loss of housing benefit and income support. The decision to withdraw such benefits at this stage is unfortunate, to say the least. I have been informed by the Oxford University students' union that of the 4,000 Oxford students living out of college in private rented accommodation, most are paying weekly rents of between £35 and £40, while the element allowed in the present student maintenance grant is £14·80 weekly. If the right to housing benefit is withdrawn, a student could lose £560 a year in term time alone, and if income support is also lost it has been calculated that within one year some Oxford students

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could lose up to £1,600 in benefit; and that is likely at a time when the average student, with a full maintenance grant and the recommended parental contribution, is thought to be accumulating debts already amounting to some £400 per annum.
The third form of jeopardy is of course that all students will now be required to pay 20 per cent. of the community charge, adding yet another financial burden. Not only will that burden fall most heavily upon students on longer courses; it is likely to act as a serious deterrent to those wishing to read for a higher degree who may well be dissuaded from doing so by the knowledge that they have already accumulated a substantial debt during the undergraduate course.
It has of course been suggested that many of those problems will be met for those in special difficulty by the access fund, for which a sum of £5 million has been allocated. There are at present about 700,000 undergraduates in Britain. Even assessing 10 per cent. of those as likely to become worse off under the proposed scheme, there will be only £70 a year available for each student. In addition, the access fund will be administered separately by individual higher education institutions, thus multiplying administrative costs. The proposed access fund seems on the present estimate to be inadequate.
Of course the scheme's administrative costs will be high. I am no economist but I am informed that Dr. Nicholas Barr of the London School of Economics has calculated that by 2006, when the Government claim that the scheme will pay for itself, the administrative costs will be likely to total £150 million, if the cost of defaults and write-offs reach anything like—
Lord Elton: I wonder whether the noble Lord will forgive me. My noble friend Lord Harmar-Nicholls pointed out that this place has agreed in principle to go ahead with the Bill. My noble friend Lady Elles has pointed out that there is pressure to do so swiftly. The amendment is one which proposes the postponement of the decision that this place took at the last stage. The noble Lord appears to be addressing that decision, whereas what we should be addressing are Committee points. The noble Lord will forgive me if I say that the Committee wishes him to address himself to the amendment so that we can decide it quickly.
Lord Walton of Detchant: My reasons for supporting the amendment are that, while I wholly accept the need for some form of loan scheme for the reasons I have already given, I ask Her Majesty's Government to think again and to give serious consideration to the alternative proposals from the Committee of Vice-Chancellors and Principals about the possibility of repayment through some form of graduate tax. My whole purpose in supporting the amendment is to invite the Government to take time to reconsider the details of the Bill and to postpone it therefore for 12 months so that they can do so.
Lord Jenkin of Roding: I shall resist the temptation to make a Second Reading speech because, as the noble Lord, Lord Jenkins of Hillhead, said, I could
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not reach the Second Reading debate until late in the evening although I listened to a good deal of it. We are discussing an amendment that would seek to postpone the Bill for a year. Many of the changed financial arrangements for students described by the noble Lord, Lord Walton—for instance, the community charge—will happen anyway. I sometimes wonder whether those who are so strongly opposed to the Bill recognise—this point was brought out on Second Reading—that something over 40 per cent. of parents do not meet the full parental contribution, partly because they feel unable to do so and partly because their student offspring are anxious not to be too beholden to their parents.
We will therefore have the position that students will find these additional costs falling upon them. An integral part of that must surely be that the Bill will provide a 25 per cent. increase in the resources available to the students, partly in the maintenance grant and partly by the top-up loan.
The amendment of the noble Lord, Lord Jenkins, seeks to persuade the Committee to recognise that all those other things will happen without recompense. He did not say anything with regard to increasing the grant. He simply said that the loan, which will be available if your Lordships pass the Bill and it reaches the statute book, will not be available to the students next October. It seems to me that once the students—and perhaps not least the students from Oxford University—recognise that that will happen, they will have a thing or two to say to the noble Lord, Lord Jenkins. The top-up loans are now an essential part of what will be the maintenance of students from October.
Like my noble friend Lady Elles I hope that the Government will stand very firm on this point. The principle of the Bill has been accepted in both Houses and it would be a great pity if it were not now to proceed, subject to amendments on detail that the Committee may wish to discuss. It cannot be put off for a year. Loans must be available for the generation of students who will be in university next October; otherwise they will suffer considerable hardship.
Lord Peston: We are indebted to the noble Lord, Lord Jenkins of Hillhead, for introducing the amendment. When he broke off initially in the way he did when reminiscing about rampant inflation and collapsing sterling, I thought he was talking of today, not 1976. The difference is that in 1976 my noble friend Lord Callaghan was determined to see that economic policy was adjusted in the interests of the nation and, indeed, eventually in the interests of sterling. I for one wait to hear similar statements coming from the Benches opposite.
Perhaps I may also make a point on procedure. I am sitting here slightly irritated. I thought that this was a serious Committee stage. We on this side intend to scrutinise what we can in any way we can. If the Government wish to play the games that are being suggested, I suggest that they put down a Bill and we will do it that way. If the Government choose to proceed by presenting regulations with no detail whatever, then I intend to proceed as the noble Lord, Lord Walton, and others have done and expose that

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fact hour after hour, because that is all that is left to us. This is not the kind of Bill where one can say, having had a proper Bill put before us, "We accept it in principle". As the noble Earl, Lord Russell, mentioned at Second Reading, this is a Bill which says, "We will do something about student maintenance. You will discover what we do if you attend meetings that the Secretary of State calls, or read the newspapers, etc.".
I am not happy at the two interventions made so far, which suggest that we should limit what we say. I warn the Committee that I have no intention whatever of limiting what I wish to say. I intend to discuss student loans and student maintenance and have the Bill scrutinised one way or another. I feel I must say that.
Let me also say—and I had this slight argument with the noble Lord, Lord Harmar-Nicholls, before—that I accept that we do not intend to destroy the Bill. However, every time I make a speech I do not intend to accept being told that I am destroying the Bill. That simply will not do. I am now playing according to the rules and it is my desire to produce a rational piece of legislation. If the Government claim that those of us who are seeking to produce a rational piece of legislation are destroying the Bill, that seems to say more for the Government than for our side. I simply say that because we have no alternative but to proceed in the way that many of us on this side are trying to proceed.
Briefly, the case for postponement is overwhelmingly that the Secretary of State has revealed that he does not know what he is doing. He has also very clearly revealed that he would like to get the legislation right. I have heard him say so on more than one occasion. He would like to get this change in student maintenance worked out properly. We agree with that. The reason we seek postponement is to help him get it right. I do not want to see—and I should have thought noble Lords opposite would agree—the Secretary of State making it up as he goes along, relying on the peculiar company which we have not yet debated making it up as it goes along, and then doing what happens every so often. Apropos the Education Reform Act 1988, the Secretary of State said, "Do not panic". Again during the course of the coming year we will be told, "Do not panic. We will somehow sort out the student loan position. Ministers will introduce regulations", and so on. We would rather it was done properly.
Perhaps I may add as my contribution to the debate a point which worries me greatly and which refers to the graduate tax. I came across the graduate tax 25 years ago. I used to lecture on it when I lectured on the economics of education. Its origin is not from this side of the Chamber; it is from economists who were very much of a free market variety and who were originally connected with the Institute of Economic Affairs. The graduate tax is prescisely the way of dealing with the problem that we thought the Government would feel was a good thing.
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That does not worry me. I know the noble Baroness, Lady Elles, does not seem to like anybody who knows anything about a subject contributing to it, but I hope she will bear with me if I say that I spent 25 years on it. Having spent 25 years on it, I rather resent a casual letter from the Secretary of State to the noble Lord, Lord Annan, saying that he and his officials can now dismiss the whole 25 years of economics; that it does not make any sense; that it is unworkable, and so forth. A Secretary of State or a department who can associate themselves with a letter of that sort inspire no confidence in those of us who are worried about the problems we are supposed to be debating. That is why I believe that postponement and time to think further, as the noble Lord, Lord Jenkins, suggests, is the way forward.
My final point is that if we are given a little more time, as I said in my Second Reading speech, I will contribute all I can to make what at the moment is an unworkable piece of legislation into a workable piece of legislation.
4.45 p.m.
Baroness Elles: Before the noble Lord sits down—he mentioned my name—would he accept that we are a debating Chamber and on all sides we are entitled to approve one method or another? Just because a system was thought of 25 years ago does not impose any obligation on any of us to accept that particular system.
Lord Peston: Perhaps I may say two things to the noble Baroness. I do not suggest for one moment that it should be accepted. I suggest it should be taken seriously. Equally, as I, in all humility, always take seriously that which someone who says "I am not an expert" says. I require as a slight quid pro quo that someone might also take seriously what I say.
Viscount Eccles: The noble Lord, Lord Jenkins of Hillhead, and the noble Earl, Lord Russell, have had very bad luck. If their amendment had come first there might have been some reason to approve it. The first amendment gave us the assurance that the Government's plan would be subject to the affirmative procedure. Therefore we will see what they propose to do and will have a chance to discuss it.
It is difficult to weigh the balance between the interests of the students. I was in Oxford all day on Saturday and it is nonsense to say that some of the students there are not very keen to take loans. I do not know what proportion of them have overdrafts from the bank, but I am told that it is fairly high. One then hears from the noble Lord, Lord Glenamara, that they will soon have to pay the poll tax. These young people want more money. There is not a great deal of money in this Bill. I wish there was more, but still there is some money and therefore we are on the way—a little way, but on the way—to providing a little more money for higher education. If there is much else to be done perhaps there will be an opportunity to say so during the course of the debate.
Both noble Lords who put their names to this amendment are Liberals. I should like to tell them

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that one of the most famous Liberals of this century—John Maynard Keynes—was fond of telling his students that it is better to be roughly right than to be precisely wrong. In the Bill before us we can be only roughly right. I am sure that all Members who have had anything to do with education legislation know that 50 per cent. of a Bill on the statute book cannot be carried out. It must be altered, and so forth; and that is the nature of education. The reason is that every school and university is different, as is every pupil and student. One cannot generalise on a piece of paper for them all. However, a good Ministry and a good local authority will help to get it right and they will do so in respect of this Bill.
It is not fair to students to say that we can pick around this and that argument and that we will get it right. We must leave it to the Secretary of State. For instance, the noble Lord, Lord Peston, mentioned a graduate tax. He was at the meeting when the Secretary of State disposed of that suggestion. If he was not convinced by what the Minister said, he will not be convinced by anyone. Let us get on with the Bill. My noble friend Lady Elles was right and I support her.
Baroness David: I have added my name to the amendment together with those of Liberal Members. I should like to take up several of the points raised by the noble Viscount. I do not believe that students are longing for the Bill at all. We have received letters from many undergraduate students at polytechnics and universities and they show a good deal of hostility towards the Bill. It would be different if they were to receive more money as a result, but, as was pointed out by the noble Lord, Lord Walton, many will be much worse off having lost housing benefit and income support during the long vacation.
We should take warning from previous Bills which the Government have rushed through in the same way. They brought the Bill forward before they had any scheme for paying out the money, and the banks withdrew. We have not yet heard any details about the student loans scheme. Many troubles have arisen as a result of the poll tax because the Bill was pushed through in a great hurry.
I led for the Opposition when the Education Reform Bill was debated in this House. On many occasions we warned that the Government were taking on more than they could cope with and we are now finding that to be so. The complicated scheme of assessment is causing real problems. That is why last Saturday, when speaking in Norfolk, the Secretary of State had to tell the teachers not to panic. He said that the situation would not be as bad as they feared because they would not have so many assessment tasks. However, there are already 40 assessments for the four subjects on which the working parties have reported.
There is a great deal to be said for delaying the Bill and having a little consultation. The noble Lord, Lord Flowers said that there was no consultation before the Bill was brought forward. It would be wise to allow those who will have to work the Bill and work with it to have a proper chance of expressing
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their views. That is what a delay of a year would make possible and I hope that Members of the Committee will support the amendment.
Baroness Young: Time is not on our side as regards the Bill. I listened with great care to what was said by the noble Lord, Lord Jenkins, in moving the amendment. I was delighted by his speech, particularly his early remarks about myself. My only regret is that, when he was being so flattering, my dear father was not here to hear his comments. He would have been astonished.
However, the sting was in the tail. I point out to him that I did not repeat all the arguments in favour of the Bill because my noble friend Lord Caithness had done that so well and it required no repetition. Therefore, I shall again address myself to the amendment now before the Committee. As was said by my noble friend Lady Elles, it is right that at least 41 per cent. of students now have an unofficial loan scheme through the banks. It is also right, as was said by my noble friend Lord Jenkin, that they will need the extra money which is coming to them.
But it is a beguiling argument on the part of academics to say, "Put it off". I have lived for almost all my life in the academic world and I know that academics are clever people who are able to put a bad case extremely well. One needs to examine this case in particular. Delay, which is beloved of academics, will not produce the further information that is required. The deficiencies in the Bill alleged by the noble Lord, Lord Walton, must be debated in Committee.
As my noble friend Lord Nugent properly said on Second Reading, we need the Bill because of the Government's successful policy in increasing the number of students at universities. We wish to see that continue and the Bill is designed to meet it. Delay would only make the situation worse. Indeed, as costs escalate there is always the danger that a government may say that there must be a limit on the number of students—and nobody would want that—because the Government cannot meet the cost. It is a most serious issue.
My view about the graduate tax—which has never been stated although the Secretary of State came close to doing so the other afternoon—is that the Treasury would never agree to a hypothecated tax which it would see as the thin end of a wedge. On other occasions in this Chamber I have heard it asked: why not have a tax to support the National Health Service? I can hear someone asking: why not have a tax to support the arts or any good cause that you like? I do not believe that that is a runner, and we delude ourselves.
I raise the issue only because I was distressed to hear some of the remarks made about my right honourable friend the Secretary of State. Much as I admire him, I have not elevated him to the status of the papacy or a saint. He was most helpful in holding the meeting last week. I regret some of the comments made about that meeting show that it was not regarded in the proper spirit. It provided an opportunity to discuss many serious technical points which arise in the Bill.

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At this stage the last thing we need is to delay. We need to proceed with the Committee stage and discuss the detail of the Bill. I hope that the Government will not support the amendment and that we can proceed as quickly as possible.
5 p.m.
Lord Beloff: There appears to be an inclination on the part of the Bill's few supporters in this Chamber to put forward factual points which are invalid. I do not wish to deal with the graduate tax, which will be the subject of the final amendment to the Bill. However, there is no question of hypothecation. A hypothecated tax is one directed to a particular form of expenditure. The universities propose an alternative form of contribution to the general income of the Treasury. Therefore, it is misleading and prejudicial to call it a hypothecated tax.
Secondly, the noble Lord, Lord Jenkin, persists in a view which is contradicted by Members who are much more intimately acquainted with the university scene: that students will be better off under the scheme than at present. There is no mathematical argument which has convinced anyone who is responsible for students and their welfare that that will be the case. On the contrary, they will be worse off than if the present system is continued for another year and an alternative and much better scheme is devised.
Thirdly, I am baffled by the position taken by my noble friend Lady Elles. I can only assume that she is one of the unfortunate people in north-west London whose letterbox has not been visited by the postman for some time. I have received innumerable letters from students; from vice-chancellors, including the vice-chancellor of my own university; from schoolteachers who are horrified at the idea that they may have to be referees and in some sense guarantors for 17 year-olds when three or four years later they have disappeared into university; and from schoolchildren approaching the question of what to do when they leave school. I have found no one among those correspondents who has anything whatever to say in favour of this Bill or of it coming into operation as soon as possible. I suspect that the noble Baroness may live on a desert island and imagine these things, because they are certainly quite untrue.
The reason for demanding postponement is partially because people feel that, quite apart from when the Bill should come into operation, this Committee has been given a timetable for the various stages of the legislation which is unusually and unnecessarily crowded. I know that we shall be told that this is a matter for the usual channels. But the usual channels are supposed to operate in order to give effect to the will of the House and not the other way round. The will on all sides of the House, as manifest at Second Reading debate, was that we wanted more time to think and to consider. There is no argument against that other than one which has certainly not yet been put before us.
I refer to a Romanian colleague who was sent over here to look at our parliamentary procedure. He
1340
visited the other place and he spent some time in your Lordships' Gallery. I asked him what he thought and he said, "Well, as I expected, you have Securitate too, but you call them Whips". Then he said: "Perhaps I should explain that there is a difference: in order to preserve the regime the Securitate bussed in workers; the Whips fly in drones".
Having settled that point—that is, that we are being made to go through the Bill at breakneck speed—one asks the question, why? I believe that the authority of the noble Lord, Lord Boyd-Carpenter, on matters of pubic finance is accepted on all sides of the Committee. He pointed out at Second Reading, and if he speaks this afternoon no doubt he will point it out again, that if one looks at this matter from the point of view of public expenditure, which perhaps rightly worries the noble Lord, Lord Jenkins, or my noble friend Lord Eccles, there is no possible argument for haste since the benefits to the Treasury will not accrue until after the turn of the century.
It is very mysterious that a government should be so interested in the buoyancy of their revenues in the year 2003. I have one explanation which may have occurred to other Members of the Committee. It may be that the author of this Bill, the Parliamentary Under-Secretary for Higher Education, visualises himself progressing up the ministerial hierarchy so that in the year 2003 he will be Chancellor of the Exchequer. Then he can visualise a paragraph by one of those teenage scribblers on, for example, the Financial Times: "The buoyancy of revenues on the student loan scheme is such that the Chancellor of the Exchequer, Mr. Robert Jackson, confidently expects to cut 10p off the standard rate of income tax in his forthcoming budget". One should not mock dreams. Seventy years ago I used to visualise newspaper headlines such as: "Beloff's double century clinches the fight for the Ashes". The difference between me and the Under-Secretary of State for Higher Education is that I grew up.
There is a great deal which the Government are asked to explain. If it is a good idea to have this Bill, why is it absolutely essential that it should be pushed through in a way which gives very little opportunity to discuss it, not merely because of the form of the Bill but also, as I have said, because of the unusual hurry?
We have not had much time between the successive stages of the legislation to work out amendments or to seek briefings from experts. Unlike the noble Baroness, Lady Elles, I like taking advice from people who are reputed to know something about the subject under consideration. I should have liked more time to visit other universities to find out what other students might think or, even more important, what those who look after the students think of the scheme. We have been told that the Bill must be through by Easter, and I ask why. Until the Committee is given an explanation by my noble friend the Minister of the reasons for haste, I cannot see that anyone who wishes to get matters right can fail to support the amendment tabled by the noble Lord, Lord Jenkins of Hillhead.

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In this sense, my noble friend Lord Eccles is right, as is so often the case. We are in a very difficult situation. The system that we have had is clearly buckling under the strain of university expansion and because of other calls on the economy. But that is an argument for looking thoroughly at the whole question of financing students and including all of them. What about graduate and part-time students, whom we wish to encourage? If we had time there are a great many matters which a proper Bill dealing with student maintenance could encompass with the agreement of those involved in higher education.
It is because of the absence of any understanding on the part of the Government and this little peck at one corner of the subject matter—irrespective of its deleterious effects, which they have been told about from all sides of the Committee—that I very much hope that either the Government will accept the amendment or the Committee, through its vote, will insist that they do.
Earl Russell: I try to be a practical man. I have two questions which particularly concern me about any scheme of student support, and they are more important than whether I like the scheme or not. The first is, should the scheme put money in the pocket of the student at the time when it is due to be spent, and the second is, if it is a loan scheme, should the money be returned to the pocket—if that is the correct word—of the Consolidated Fund? It is the purpose of this amendment to show that the Bill is not yet ready to pass these tests. I do not think the scheme should come into force until it is. If that opposes the central principle of the Bill, I can only say that I am very sorry and rather surprised to hear it.
It is not a plea by the back door for an alternative scheme, but if it led to one I should not regret it. If we are to have this scheme and no other, than I should like to have it and no other when it is sufficiently worked out to be operative. The Price Waterhouse Report lays down the timetable under which the Government are operating. The report proposes a very tight schedule of activity, which is a guarded and a pointed phrase. It argues that it is essential, if the scheme is to be in force by September 1990, that the Bill should complete its passage by the end of March 1990.
I understand that the Bill was due for Third Reading on 19th March. That was already uncomfortably tight. Every line of the report assumes the participation of the banks. Inevitably, the withdrawal of their participation had led to a great deal of rethinking. We were given the fruits of some of that immediately before our Second Reading debate. I believe it to be new thinking and it certainly was not made available when the Parliamentary Under-Secretary wrote to give information to my honourable friend Mr. Hughes on 25th January. The leaflet states that some details are still subject to change and some remain to be settled. That would be fair enough with the scheme coming into effect in 1991, but under these proposals the money is supposed to be in the pockets of the students within five months. It is a little late to be settling details.
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There are three areas where I think the scheme is simply not yet capable of operating. The first is certification, where the procedure is still to be agreed. We have left agreement on certification too late for it now to be possible to certify students for September 1990. As the noble Baroness, Lady Blackstone, pointed out, there is a bottleneck in university registries in September, when A-level results come through, people accept or decline offers, and pieces of paper are being shuffled at very high speed. If the universities are to do the certification it would be essential that a preliminary documentation should be begun when interviews start at the beginning of the academic year. If the scheme had been worked out at the beginning of the academic year we could have done it. As it is, it is too late. There will be a delay on certification. A delay on certification will have a multiplier effect on delays on payment. I remind the Committee that the Secretary of State himself admits that the scheme for payment is yet to be decided.
There is room for further misgiving here because the staff of the Student Loans Company has now been reduced from the original 250 to 130. My honourable friend Mr. Hughes calculated, using the Price Waterhouse figures, that a staff of 250 could process 3,575 applications a day. It would accordingly take a staff of 130 seven and a half months to process applications. I am not particularly surprised that at that point my honourable friend was interrupted by the honourable Member for Brent, South. He must have thought that the Government were about to be compared with Brent Council.
Repayment is in even more confusion. The proposal for referees was first known to us barely two weeks ago. It is not clear from the leaflet exactly how it will work. The noble Earl, Lord Caithness, clarified it slightly at Second Reading. He said:
"In addition, students will be asked on taking out the loan to nominate referees who will be able to provide their addresses if they seek to evade repayments".—[0ffictal Report, 27/2/90; col. 716.]
That needs more thought. This is part of the process, of which companies have complained this morning in relation to local government finance, of the privatisation of law enforcement. Personally, I should be extremely reluctant to sign such a certification as a referee on behalf of anybody. I will of course try to persuade anybody to pay his just and due debts but I am extremely reluctant to be used as a machinery for shopping him if he does not.
Nor do we have an explanation of how the money is to be recovered from people who go abroad. The Parliamentary Under-Secretary of State has affirmed persistently that he will do it. He has given us no information on how. I remind the Committee that any aspiring postgraduate who wishes for an academic career is now automatically advised by his or her supervisor to go abroad on the ground that no jobs are available in this country. So we may expect that considerable numbers are likely to go abroad. We should not go ahead until we have some idea as to how the money will be recovered from them.
In the Independent last October, back in the days when Berlin still had a wall—and it makes the point

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that this scheme has not progressed since the days when Berlin did have a wall—a German academic wrote asking whether those who take out student loans will be required to take out exit visas. It was not a frivolous question. It deserves an answer. We are told also that those applying for the loan must supply their national insurance number. To keep track of people who move and change their names it will be necessary to use either the tax machinery or the national insurance machinery. But, if that machinery is to be used anyway, there is a case for thinking again about whether a scheme can be based on it.
I listened carefully and with respect to the arguments of the noble Baroness, Lady Elles. They sounded a powerful set of points. I am well aware that it is painfully easy to speak on behalf of people without being quite certain what they think. So before putting down this amendment I decided that, rather than assuming I knew what students thought, I should go and ask them. I went first to the officers of my college students' union. I have considerable respect for students' unions. The people there are very much the kind of people we are used to seeing at briefing meetings. They were quite clear. But just to be sure I took a spot check on my individual pupils. The only dissenters from the view that we should try to put forward this amendment were two people, both of them active members of the Conservative Party. Frankly, if the sample had been unanimous, I should not have believed it.
We ought to reflect on quite how much it affects one's outlook to be living on a very tight budget at very high interest rates. The top priority of most students is not to rely on support which may not in the end be there when they need it. That is why I support the amendment.
5.15 p.m.
Lord Boyd-Carpenter: As my noble friend the Paymaster General knows, I am able to keep my enthusiasm for the Bill within the limits of proper decorum. I have listened closely to this debate, which seems to have been concerned not so much with the main merits or otherwise of the Bill as with the quite difficult question of timing. I say with respect that I do not agree with my noble friend Lord Harmar-Nicholls that, were the Committee to adopt the amendment, that would negate—that was his word—the decision taken at Second Reading. The amendment itself provides that the Bill shall come into effect on 1st September 1991.
Lord Harmar-Nicholls: At Second Reading we voted on the principle of when the scheme would start. This amendment would make it impossible for it to start at the time set out when we gave the Bill a Second Reading. That is a negation of the decision made at Second Reading.
Lord Boyd-Carpenter: My noble friend is quite wrong. At Second Reading we did not vote on when the scheme should start. We voted to give the Bill a Second Reading. My noble friend is misleading
1344
himself and perhaps some Members of the Committee when he says that. But I do not think that a particularly important point.
The decision which we are now asked to take is whether the scheme should come into operation on 1st September 1990 or on 1st September 1991. I am bound to say that I share the wonder of my noble friend Lord Beloff as to why the Government are in such a hurry to put this into effect. As he quoted my own earlier speech as having pointed out, there will be no relief to public funds in any event until we are well into the next century. There is also the fact to weigh—in this respect I agree with my noble friend Lord Beloff—that among those directly affected the scheme is very unpopular.
I too have received a mass of correspondence from, on the one hand, vice-chancellors of the greatest eminence, and on the other hand, students whose degree of literacy would appear to be limited. All are highly critical of this measure. I confess to having no enthusiasm for it. But, with respect to my noble friend Lord Harmar-Nicholls, that is not the issue we are concerned with on this amendment; we are concerned simply with the question of whether the implementation should start from 1st September 1990 or 1st September 1991.
As one who dislikes the material of the Bill, the question of whether the scheme is to come into effect this year or next does not seem to be of any great importance. However, what is relevant is the question of whether this Chamber will be able, within the limited time available, to do its constitutional duty on the Bill. I shall try not to weary Members of the Committee, but it has been said time and again that the Bill is a mere framework and that it is difficult to consider and discuss it without knowing a great deal more of what is actually intended.
I turn now to what my noble friend the Paymaster General said as regards the previous amendment. It is of very great significance in affecting the Committee's decision on the matter. As I understood my noble friend—and he will correct me when he replies to the debate if I am wrong—he said that before we parted with the Bill, if it continues on its present schedule, he would be providing a great deal more information as to what the Government are actually going to do, how they will do it and by what methods, covering, for example, the whole question of obtaining repayments, the limitations on post-graduate students and all those extremely important considerations. I appreciate that my noble friend cannot give that information this afternoon. To ask him to do so would be unreasonable. However a clear statement that we shall be given much fuller information while the Bill is passing through this Chamber would determine how I cast my vote should the matter come to a Division. If my noble friend is not able to confirm what I think he said—although I am not 100 per cent. certain about this—on the earlier amendment, I shall feel bound to vote for the amendment. If he can give a clear indication that while this Chamber is considering the Bill much fuller information will be provided to enable Members of this place to discuss, correct and, if

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necessary, amend, then I should feel that one must choose the lesser of the two evils when considering the two dates.
There is no doubting the fact that there is a great deal of force in what has been said; namely, that to leave the whole matter in a state of uncertainty for another 18 months or so will not make much sense. It will certainly not be terribly helpful to those students who will be going up to university either this autumn or next. It is also perhaps not very fair to those members of the university faculties who have great problems to face in dealing with the matter. A degree of certainty as to the date of implementation even of a rather bad measure is probably better than uncertainty on the subject.
As I said, I do not wish to weary Members of the Committee but my own vote will turn entirely on what my noble friend says as to the action which the Government propose to take to enable this Chamber to discharge its duties properly on a Bill of the greatest importance.
Lord Callaghan of Cardiff: I shall not take more than two minutes of the Committee's time in what I have to say. It may be that the noble Lord, Lord Boyd-Carpenter, is correct when he says that if we have more information it will influence opinions. However, I should like to report to the Committee the fact that, although I am no expert, I have a small connection with the University of Wales. It is a peculiar institution because it was founded initially on the small subscriptions of slate quarrymen in Wales and was built up literally without funds or foundations from a very small beginning. Because of that fact it has a very peculiar constitution. It is not merely made up of distinguished academics, although they play a substantial part in the constitution of the court of the University of Wales which is a very lively body. It also includes very well-known people in the public life of Wales; for example, businessmen who certainly are not particularly influenced by what students say and members of trade unions in their representative capacity in Wales. And trade unions play a significant part in that respect. There are many academics and representative of arts, culture and the libraries. Indeed, almost every facet of Wales is represented in the court. There are also some students involved, but only a handful—no more than half a dozen out of 150. They attend the meetings and debate matters, as we tend to in Wales, very passionately.
I should like to tell Members of the Committee, and I ask the Minister to take this into account, that in a recent discussion in a full court of the University of Wales, which comprises an average attendance of about 150 of the men and women I have described, drawn from every part of Welsh life, this scheme was rejected. I put my argument rather differently to the noble Lord, Lord Boyd-Carpenter. I want the Minister to take account of the fact that there is no opinion in favour of the scheme. I do not know whether he could win support for a different scheme—I hear different reports in this respect—but I should certainly be ready to support a scheme
1346
which could at least find some modicum of support among those who are to benefit, or so we are told, from it.
With respect to the noble Lord. Lord Boyd-Carpenter, I do not find that students are ill-informed about the matter. They are very well informed. Indeed, I learnt most of what I have had to say from them. Of course I would not take what they say without first checking the facts. I never took anything from a constituent without first checking up on the matter. But students know perfectly well what is involved in the scheme.
I have had experience of a similar situation. I well remember, when I introduced my first Budget so many years ago, the Permanent Secretary at the Treasury Sir William Armstrong, coming to me and saying, "Chancellor, please put it off for 12 months. You will get better opinions and be able to learn far more about it." In my impetuous youth—and I do not claim that the noble Earl, Lord Caithness, is either impetuous or youthful—I rushed ahead. I made a mistake. That was the corporation tax. I thought I had had a good idea; I was very proud of it. I wanted to see it on the statute book as quickly as possible, so I rushed it through. I was wrong.
I ask the Government—although I do not know why I should be interested in saving their bacon, except that I want to see good administration and some acquiescence in what is done—to think about these matters and to consider whether there might be something better. I do not join in the attacks on Mr. Robert Jackson. I do not think that I know him well enough to be able to attack him, much as I should like to do so if he is in fact responsible for what is proposed. I ask the Government to take a wide spectrum of opinion which has not so far been able to express itself, despite the White Paper and the consultations.
It would be preferable if the Government could come out at the end of another 12 months with a scheme which at least met with some consent from those who are supposed to benefit from it, whether they are due to do so or not, and with the support of a responsible and sober body like the court of the University of Wales. It does not command that support at present.
5.30 p.m.
The Earl of Caithness: We have had a good wide-ranging discussion, in some respects almost a Second Reading debate. I have listened with great care and attention to what Members of the Committee have said. Perhaps I may start with what I consider to be common ground. I believe that we are agreed on all sides of the Chamber on the importance of expanding higher education. But, as noble Lords have heard me say before, it is not possible for taxpayers and parents alone to support the living costs of an increasing number of students.
The loan introduces a new source of support: anticipation by students of a portion of the high income they can expect in later life as graduates. And, as the Committee knows, those who do not receive a direct financial benefit from higher

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education will be protected by the deferment provisions, which will allow repayments to be deferred if their income is low.
There is widespread agreement in the university world and outside that this additional source of support must be tapped. The question is how to secure the graduate contribution. Contrary to what the noble Baroness, Lady David, and other Members of the Committee intimated, the scheme that the Government propose has been long matured. The possibility of introducing a top-up loan was canvassed in the manifesto for the last general election. There was then a lengthy review, chaired by two successive Parliamentary Under-Secretaries of State at the Department of Education and Science. That culminated in the White Paper of November 1988. We have heard the argument that the scheme is not ready and the details not yet available. The noble Lord, Lord Jenkins of Hillhead, did not surprise me when he said that it was ill thought out and there was confusion. I hope to refute that.
The Government have made it abundantly clear how the scheme will operate. The terms of the loan were set out in the White Paper, which explained which students would be eligible, the size of the loan and how it would relate to the grant, how it would be indexed to inflation and the repayment arrangements, including the crucial provision for deferment for low income. This information was set out again in the Notes on Clauses and again in the administrative outline published on 26th February. I say to the noble Lord, Lord Callaghan of Cardiff, that a wide spectrum of opinion has been canvassed and taken into account.
The detailed administrative procedures are now being developed. I have seen this work in Glasgow. I went up there last week specifically so that I could inform the Committee about it. It is complex and challenging. I can report that excellent progress is being made with the preparatory work approved by Parliament. The company is on schedule to provide the extra resources for students this autumn, subject to Parliament's approval of the Bill.
Perhaps at this stage I could correct something that the noble Earl, Lord Russell, said about the number of staff. Of course the number of staff at the beginning of a scheme like this will be lower than at the end. There has been no change. The numbers will be phased in because, as the noble Earl reminded us on the question of repayments, there will be no repayments until the loans have been up and running for a bit. Therefore we do not need the staff for that at an early stage. I assure him that the programme for recruitment of staff is well in hand for a full complement of about 250 people.
I was impressed by what I saw when I visited the company in Glasgow. The senior management tier is in place. I have spoken to the management director, the loans administration director, the finance director and the personnel manager. I was impressed by their commitment and enthusiasm as well as by their keen appreciation of the complex issues with which they are dealing.
1348
Work on the central computer system is well in hand. Acceptance testing is due to begin this week. New premises have been acquired, and I also toured that building. Fitting out of the building is well in hand and on schedule for staff to enter in the near future. So there is determined activity on all fronts. It is an impressive set-up. Subject to Parliament's approval of the Bill, the company clearly has the will and the means to deliver loans to students this autumn.
However, the noble Earl, Lord Russell, was absolutely right to say that on one aspect of administrative detail we have not yet settled how application forms from individual students should be handled. My right honourable friend the Secretary of State had hoped that the academic institutions would be ready to play their part in this matter in the interests of their students. I have to say that we were surprised and disappointed when they said that they would play only any role imposed on them by legislation. As I have said before, if they wish to discuss the matter, my right honourable friend's door is open.
We are considering whether to bring forward an amendment to ensure that the higher education institutions will co-operate in passing on their students' applications to the central loans administration in Glasgow. The alternative is for students to apply direct. In either event we are determined to introduce as student-friendly a scheme as can be devised. I give the Committee an assurance that this matter will be determined very shortly and the outcome announced in both Houses. In other respects the Student Loans Company will handle transactions with individual borrowers. We have made it clear how it will handle payment of the loans, indexation, repayment and deferment.
I was surprised that the noble Lord, Lord Jenkins of Hillhead, gave no example of what he considers to be missing or what cannot be discussed later today or at the next stages. In contrast, the noble Lord, Lord Walton of Detchant, made some interesting points about the details of the scheme which are the subject of later amendments tonight. That is the right place at which to discuss them.
I have to say to the Committee that perhaps after a full discussion noble Lords can better decide whether the answers to the amendments put forward reach the satisfactory standard that they require and whether I am found wanting. I hope that that will appeal to my noble friend Lord Boyd-Carpenter, who will be keen to hear the full arguments. If I can give any further details as we go along, I shall be only too happy to give the Committee those details.
The loans scheme proposed by the White Paper was based on thorough and detailed consideration. Since taking office in July 1989 the Secretary of State has, as he has made clear, taken time to consider alternative proposals. He has decided that the loans scheme remains the best way of providing more resources to students from 1990–91 while reducing the burden on parents from 1991–92 and on the taxpayer in the medium term.
The noble Lord, Lord Walton of Detchant, again raised the question of the graduate tax. It is a tax

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which of all the countries in the world only Australia is operating. That country has been operating it for just over a year. All the other countries that operate some form of student contribution are doing what we propose to do, which is a mixture of a grant and a loan scheme.
As the noble Lord, Lord Walton, will know, my right honourable friend the Secretary of State has given careful consideration to whether a graduate tax scheme or something based on the national insurance contribution would be better. However, he has come down in favour of the proposals that we have as being the best scheme.
Far from being unready, we are keen to provide the loans as soon as possible, for one very good reason: not providing the loans this autumn would deny students access to increased resources. As my noble friend Lord Jenkin of Roding reminded the Committee, the maximum grant plus loan in 1990–91 represents a 25 per cent. increase on the grant alone in 1989–90.
Lord Peston: Perhaps I may interrupt the noble Earl. I am sorry; I know that to do so is disconcerting. Is he saying that the Government could not technically simply raise the maintenance grant by the relevant amount, using the regulations of the 1962 Act? There need be no connection between giving students decent grants and the loans scheme. It seems to me to be rather threatening to suggest that either one agrees to the loans scheme or one does not receive the money.
The Earl of Caithness: As the noble Lord knows full well, the grant is being uprated this year. The loan on top is new money; it is in addition. That is what the students would not be able to have at their disposal. The amendment would take this facility away from students in 1990–91. I suspect that students would not thank the noble Lord, Lord Jenkins, for that.
I have listened carefully to what my noble friend Lady Elles and the noble Lord, Lord Walton, as well as the noble Baroness, Lady David, have said about students who may nevertheless find themselves in financial difficulty. I know that my right honourable friend the Secretary of State will also study very carefully what has been said today. I recognise that this is an important issue and one that we shall debate in its own right later on in the Committee stage. However, at this stage perhaps I may give the Committee the assurance that my right honourable friend will consider sympathetically what has been said and he may well wish to respond. I too wish to make note of what Members of the Committee have said.
I repeat that with Parliament's approval for the preparatory costs, preparations are well in hand for the scheme to start this autumn. There is no need to delay implementation artificially by a year. It would, for reasons which I have sought to explain, be undesirable to do so. The noble Lord, Lord Jenkins of Hillhead, said that he hoped that the Government would not be rigid in pushing this Bill through. I give the Committee one example—the last amendment.
Lord Jenkins of Hillhead: I thank the noble Earl for his reply. However, except for the interesting description of his visit to Glasgow—I have no doubt to Hillhead, where the office is situated—I do not think that he provided us with much that was new in the way of argument or information. He based the greater part of his case on the fact that in his visit he found the Student Loans Company to be working well. I must say that ministerial visits can be useful for morale, but in his place I would hesitate, following a brief visit of this kind, to pronounce ministerially upon the efficiency of the unit being set up. I think that the noble Earl may be unwise to place too much weight upon that visit before we see how the company performs.
I shall detain the Committee for only a moment or so. The Government should not be too discouraged. Opinion has moved a good deal in favour of the suggestion that in order to finance university and polytechnic education one needs some contribution from students, whether it be through a student loans scheme or a graduate tax scheme. The Government should recognise that that is an advance.
However, it is not necessary to reject the amendment and what lies behind it. We are not asking, as was suggested, for delay for the sake of delay. This is an extraordinarily tight schedule in which a Bill that has practically no detail with it is not yet on the statute book in mid-March, yet the scheme is to be in full operation in September. That is a quite exceptional timetable for any statute, even for one which has great detail within it. We are not asking for delay for the sake of delay but, in addition to what I have already mentioned, there is the exceptional situation of total criticism of the scheme itself among nearly all interested and informed opinion. It would be wiser for the Government to undertake some further discussions to see whether, having moved opinion on the substance of the measure, they can change it from being regarded as a rather partisan little measure to one which commands wider support. However, I have sufficient faith in the amendment to ask the Committee to divide upon it.
5.40 p.m.
On Question, whether the said amendment (No. 2) shall be agreed to?
Their Lordships divided: Contents, 118; Not-Contents, 137.

DIVISION NO. 1

CONTENTS

Addington, L.

Bottomley, L.

Adrian, L.

Bradford, Bp.

Airedale, L.

Broadbridge, L.

Aldington, L.

Brooks of Tremorfa, L.

Ardwick, L.

Bruce of Donington, L.

Attlee, E.

Butterfield, L.

Aylestone, L.

Callaghan of Cardiff, L.

Baldwin of Bewdley, E.

Campbell of Eskan, L.

Barnett, L.

Carmichael of Kelvingrove, L.

Beloff, L.

Birk, B.

Carter, L.

Blackstone, B.

Cledwyn of Penrhos, L.

Blyth, L.

Cobbold, L.

Bonham-Carter, L.

Dainton, L.

Boston of Faversham, L.

David, B.

1351

Davies of Penrhys, L.

McCarthy, L.

Donaldson of Kingsbridge, L.

McGregor of Durris, L.

Dormand of Easington, L.

McIntosh of Haringey, L.

Ennals, L.

Mais, L.

Falkland, V.

Mason of Barnsley, L.

Fisher of Rednal, B.

Mayhew, L.

Fitt, L.

Meston, L.

Flowers, L.

Mills, V.

Gallacher, L.

Milner of Leeds, L.

Galpern, L.

Milverton, L.

Gibson, L.

Monkswell, L.

Gladwyn, L.

Mulley, L.

Glenamara, L.

Nicol, B.

Graham of Edmonton, L. [Teller.]

Northfield, L.

Ogmore, L.

Grey, E.

Peston, L.

Halsbury, E.

Phillips, B.

Hampton, L.

Pitt of Hampstead, L.

Hanworth, V.

Ponsonby of Shulbrede, L.

Harris of Greenwich, L.

Prys-Davies, L.

Hatch of Lusby, L.

Rochester, L.

Houghton of Sowerby, L.

Roll of Ipsden, L.

Howie of Troon, L.

Ross of Newport, L.

Hughes, L.

Russell, E.

Hunt, L.

Sainsbury, L.

Hunter of Newington, L.

Seear, B.

Hutchinson of Lullington, L.

Seebohm, L.

Hylton-Foster, B.

Serota, B.

Irvine of Lairg, L.

Shackleton, L.

Jacques, L.

Shaughnessy, L.

Jay, L.

Shepherd, L.

Jeger, B.

Stedman, B.

Jenkins of Hillhead, L.

Stoddart of Swindon, L.

Jenkins of Putney, L.

Strabolgi, L.

John-Mackie, L.

Tordoff, L. [Teller.]

Kearton, L.

Turner of Camden, B.

Kilbracken, L.

Underhill, L.

Kilmarnock, L.

Wallace of Coslany, L.

Kirkwood, L.

Walston, L.

Listowel, E.

Walton of Detchant, L.

Llewelyn-Davies of Hastoe, B.

Warnock, B.

Williams of Elvel, L.

Lloyd of Kilgerran, L.

Winchilsea and Nottingham, E.

Longford, E.

Lovell-Davis, L.

Winterbottom, L.

Lucas of Chilworth, L.

Young of Dartington, L.

NON-CONTENTS

Alexander of Tunis, E.

De La Warr, E.

Alexander of Weedon, L.

Denham, L. [Teller.]

Allerton, L.

Downshire, M.

Annaly, L.

Dudley, E.

Arran, E.

Eccles, V.

Ashbourne, L.

Eden of Winton, L.

Balfour, E.

Elles, B.

Barber, L.

Elliott of Morpeth, L.

Bauer, L.

Elton, L.

Belstead, L.

Erroll, E.

Bessborough, E.

Fanshawe of Richmond, L.

Blatch, B.

Ferrers, E.

Boardman, L.

Forbes, L.

Borthwick, L.

Forte, L.

Brabazon of Tara, L.

Fraser of Carmyllie, L.

Bridgeman, V.

Fraser of Kilmorack, L.

Brookes, L.

Gainford, L.

Brougham and Vaux, L.

Glenarthur, L.

Byron, L.

Goold, L.

Caithness, E.

Gray of Contin, L.

Campbell of Alloway, L.

Haddington, E.

Campbell of Croy, L.

Haig, E.

Carnegy of Lour, B.

Hailsham of Saint

Carnock, L.

Marylebone, L.

Carr of Hadley, L.

Harmar-Nicholls, L.

Carrington, L.

Hemphill, L.

Clanwilliam, E.

Henley, L.

Colnbrook, L.

Hesketh, L.

Colwyn, L.

Hives, L.

Constantine of Stanmore, L.

Holderness, L.

Cottesloe, L.

Home of the Hirsel, L.

Craigmyle, L.

Hood, V.

Davidson, V. [Teller.)

Hooper, B.

1352

Ingrow, L.

Reay, L.

Jenkin of Roding, L.

Remnant, L.

Johnston of Rockport, L.

Renton, L.

Joseph, L.

Renwick, L.

Kaberry of Adel, L.

Rippon of Hexham, L.

Kimball, L.

Rockley, L.

Kinnaird, L.

Rollo, L.

Lauderdale, E.

Saltoun of Abernethy, Ly.

Liverpool, E.

Sanderson of Bowden, L.

Long, V.

Selkirk, E.

Lyell, L.

Sempill, Ly.

Mackay of Clashfern, L.

Shannon, E.

Manton, L.

Skelmersdale, L.

Marsh, L.

Slim, V.

Marshall of Leeds, L.

Somers, L.

Merrivale, L.

Stockton, E.

Mersey, V.

Strange, B.

Montgomery of Alamein, V.

Strathclyde, L.

Mottistone, L.

Strathcona and Mount

Mountevans, L.

Royal, L.

Mowbray and Stourton, L.

Strathmore and Kinghorne, E.

Munster, E.

Murton of Lindisfarne, L.

Swansea, L.

Nelson, E.

Swinfen, L.

Nelson of Stafford, L.

Terrington, L.

Newall, L.

Teviot, L.

Norfolk, D.

Thomas of Gwydir, L.

Nugent of Guildford, L.

Tranmire, L.

Oppenheim-Barnes, B.

Trumpington, B.

Orkney, E.

Ullswater, V.

Orr-Ewing, L.

Vaux of Harrowden, L.

Peel, E.

Vestey, L.

Pender, L.

Westbury, L.

Peyton of Yeovil, L.

Wigram, L.

Prior, L.

Wise, L.

Pym, L.

Wynford, L.

Rankeillour, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
5.49 p.m.
Lord Kilmarnock Lord Kilmarnock moved Amendment No. 3:
Page 1, line 6, after ("students") insert ("whether full-time or part-time").
The noble Lord said: This is a simple amendment to include part-time students within the scope of the Bill. My main concern over the Bill is that I do not see how it will contribute to the expansion of higher education. That is of course not its avowed purpose. Nowhere is such an aim mentioned. However, it must surely be seen in the broader context of ministerial speeches about doubling the numbers of students in higher education over a determined period and the widespread agreement of virtually all informed opinion that we shall remain an undereducated and underskilled country unless such an expansion takes place at a fairly rapid rate.
I am reinforced in my concern by the projected figures given in reply to a Question for Written Answer from Mr. Andrew Smith in another place on 24th July 1989 (at col. 442 of the Commons Hansard). The number of loan accounts is frozen at 427,000—which is barely more than the number of students drawing grant today—from the year 2000 to the year 2027 when the projection will end.
When the Secretary of State kindly came to address some of us at a meeting which has already been referred to by a number of Members of the Committee, I raised that point. I was told that the projections were illustrative and that it was impossible to forecast the situation so far ahead.
However, the fact remains that if the savings are to exceed the outgoings of the loan scheme in the early part of the next century as the Government plan there will have to be a ceiling on student numbers unless the break-even point is deferred indefinitely.
Both on those grounds and for demographic reasons I am led to the conclusion that virtually the whole expansion will depend on mature students entering by non-traditional routes. In particular it will depend on part-timers, who are at present excluded from the Bill.
Between 1981 and 1987 the number of mature students starting higher education courses, excluding the Open University, rose by 34 per cent. That is encouraging so far as it goes. The salient factor about those students is that two-thirds of them were part time. That clearly is the growth area which we have to stimulate.
At this point the noble Earl may be tempted to ask why, if that is happening anyway, it needs any stimulus. That would amount to dangerous complacency. We shall require a steady and constant increase in mature students to counteract the steep decline in the numbers of the 18 to 24 year-old age group which will take place between now and the end of the century. Even if the age participation rate rises so as more or less to maintain the current numbers of that group, we shall still be left with little or no improvement on the status quo unless the mature part-time student expansion continues apace.
It must be remembered that very few discretionary grants are available for mature part-time students. That means that assistance is almost totally barred. Some mature students are able to finance themselves. Others no doubt receive some help from their firms or professional bodies, but many do not.
It is interesting to note from Open University statistics that there has been a large increase in recent years in the proportion of its students who are unemployed or housewives. Surely those are just the people we want to draw back into education. Think also of the fund of unused talent which must exist among the million mothers in the single-parent category, 700,000 of whom are receiving benefit. Many of them long for further education and training to enable them to become independent. However, I am willing to bet, although I do not have figures, that because of their circumstances their participation in higher education is proportionately lower than that of the rest of the population. If the participation of such people is not made easier the part-time movement will reach a plateau and we shall remain almost as far from the high peaks of participation to which we aspire as we were when we started.
When the Secretary of State came to talk to us the other day I got the impression that he was not against the inclusion of part-timers in the Bill on principle but on grounds of cost. Obviously there will be some additional cost, but we have to make up our minds what we are aiming at and how we are going to get there. In my view it is perfectly legitimate to aim for a larger student population at a lower per capita cost. However, that will still require an overall increase in the education budget. It cannot be done at nil cost.
In the case of part-time students it is most unlikely that there will be the 80 per cent., 90 per cent. or 100 per cent. take-up that the Government have calculated for full-time students. Mature people, by definition, are more likely to have resources of their own. My guess is that the take-up will be considerably lower. However, we must not rule out those who do not have such resources. It would be unfair to them and would be shortsighted in terms of the national economy.
I may be asked why, having spoken against the government scheme at Second Reading, I seek to make it available more widely. The answer is simple. I hope that we shall be able to improve the mechanism of the Bill in Committee. However that may be, we shall clearly have a scheme of one sort or another. It seems to me to give quite the wrong signal to exclude by definition many of those on whom we shall depend for the increase in student numbers which we all seek.
At Second Reading I was encouraged by the number of speakers who drew attention to the importance of part-time students. The noble Baronesses, Lady Young, Lady Carnegy, Lady Cox and Lady David—. I do not think that I take any of their names in vain—all expressed concern on that subject, as did the noble Lord, Lord Annan. The noble Lord, Lord Peston, whose amendment also addresses the problem and has been grouped with this amendment, also spoke on the subject. Today I am fortunate in having the support also of the noble Lord, Lord Butterfield, and, I hope, of other noble Lords on the Cross-Benches.
I very much hope that the message of this debate to the Government will be that this Chamber is determined to secure on the face of the Bill some form of statutory entitlement for part-time students. I beg to move.
Lord Butterfield: I am very pleased to have the opportunity to support the amendment. I have been drawn into the debate very much by concern on the one side about individual student finance and on the other by the country's need for increased participation in education, higher education in particular.
I first became interested in the potential that exists in our community for part-time students when, following in the footsteps of the noble Lord, Lord Dainton—who is sitting in front of me—I became vice-chancellor of the University of Nottingham. In Nottingham in the 19th century there were very strong mechanics' institutes. That is also true of many university towns in the North. Through the middle of the 19th century those institutes provided all manner of people with an opportunity to extend their range of interest and knowledge. I believe passionately that we shall be held to account by historians if we do not succeed in increasing the proportion of our young people who move into higher education. Equally, I believe that those who may have been drawn into motherhood early in life or into employment soon after leaving school should be given an opportunity to pursue educational interests later in their lives. Therefore I have no

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hesitation in rising to speak in support of the amendment.
What is proposed may be seen by the Government to be expensive. However, it is one way in which we can give mothers of small children the possibility of continuing with their education once their children are a little older. People who have taken the wrong track but find that they have a passionate interest in a subject may return to education and increase the pleasure and fruitfulness of their intellectual lives.
6 p.m.
Baroness Seear: I rise to support the amendment strongly, particularly in the interests of older women who have not had great educational advantages or have not taken advantage of them in the past. Many women, while they are at home with small children, can embark on periods of part-time study and get themselves to the point at which, when they are free to come back into the labour market, they are well on the road to, if not completely arrived at, the level of qualification which will enable them to take a job at a higher level. They are the people whom we badly need in the labour market, capable of doing the more demanding and skilled jobs.
I should also argue the case strongly on economic grounds if the Government would take anything other than a short-term view of the cost of providing that part-time education.
When those women—it is not only a matter of women, but it is to them that I particularly wish to speak—get back into the labour market, they will start to pay tax quickly. If the Government can look at that over a 10-year period rather than over a 12-month period, they will find that they can recoup the money invested in those additional opportunities very satisfactorily.
However, women will need some support. If a married woman wishes to undertake part-time study, even if she is out of the house for only a relatively small number of hours a week she must make additional provision. There are costs. Although I have no experience of the difficulties of getting money out of husbands, I can well imagine that to ask husbands to pay the extra costs involved in a woman taking courses of that kind if she has no grant or support to enable her to do so is to ask something which many women would not want to do and at which some women would find that they were not successful. It is a worthwhile investment and I sincerely hope that the Government will accept the amendment.
Baroness Blackstone: Since neither the noble Lord, Lord Kilmarnock, nor the noble Lord, Lord Butterfield, mentioned it, perhaps I should mention that Amendments Nos. 3 and 8 are grouped together. I want to speak to both of them.
Perhaps I should begin by declaring an interest as the Master of Birkbeck College which I believe I can claim is the leading university institution for the education of part-time degree students in this country.
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I should like to support the amendment that has been put forward by the noble Lord, Lord Kilmarnock. It is vital that we establish the principle that part-time students should be included in the Bill and should be able to benefit from student loans. That is not to say that I support the principle of student loans and the way in which the Bill is being implemented, but if we are to have a student loans scheme it seems entirely wrong that part-time students should be excluded. There are a number of reasons for that.
Let me begin by saying something about the question of access and about trying to increase the overall number of students in higher education in this country. We have heard several times the Government making a commitment to doubling the numbers. I very much welcome what the noble Earl, Lord Caithness, said about that on Second Reading. However, if we are to double the number of students in higher education, we cannot simply rely on increasing the number of 18 year-olds. We must bring back mature students in much larger numbers than we have done in the past.
Many mature students cannot study full time. They have family and work commitments which mean that they must fit in their degree-level courses with their jobs. The very fact that they are willing to do that, that they are willing to turn up in the evenings and that they are willing to sit in libraries at the weekend indicates just how committed and dedicated they are to both improving their own qualifications and making a better contribution, so far as concerns their employment, by having greater skills. Surely we should value those students rather than treat them on all occasions as second-raters. They are not. I can assure the Committee of that from my day-to-day contact with students at Birkbeck College.
Some 67 per cent. of part-time students are over 25. We have had a large increase in the number of part-time students in recent years, but if we want that increase to continue we must do something to help them. At present part-time students have no help whatsoever with respect to maintenance and they must pay their fees. That must deter some potential part-time students. It seems to me to be quite incomprehensible that we should discriminate against them yet again in another piece of legislation.
The question of costs has been raised. We were told by the Secretary of State when we met him last week that he had nothing against the inclusion of part-time students, but that there was a problem of whether the Treasury would agree to that. Part-time students are already much cheaper than full-time students simply because they receive no maintenance grants and because they contribute to the cost of their tuition. Surely we should look at the costs from that point of view. If we can increase the number of part-time students, we shall in the end save on the costs of higher education.
Individual part-time students must bear many additional costs as a result of taking on a course, and there is also the fact that they pay fees out of their own income after tax. First, they must buy books and equipment. Everyone in the Chamber knows there has been a great increase in book prices. By

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definition, part-time students have much less time to go to libraries and to fight for the small number of textbooks that may be available in a particular subject. They are therefore more dependent on having to buy their books so that they can fit in their study at home and at weekends when libraries are often closed. We know that in any case there has been a large cut in library expenditure in higher education, which means that libraries are less adequate than they used to be. That is another factor affecting part-time students and their study.
They often have to bear considerable travel costs to reach their evening or day release courses and those can be expensive in cities such as London. If they are studying a subject where field trips are involved, as in such subjects as geology or geography, or a foreign language where they may need to visit a European country, they will have to bear the costs of those educational activities. If they are students at the Open University, where summer courses are an integral part of their study, they must give up their annual leave and must again pay to go on such courses. There are also the extra costs of having to eat out between lectures or before lectures start in the evening.
While loans are not the ideal solution to the problems of part-time students, they could at least help them. Not all part-time students will take up loans, but many would use them to ease the financial burdens they face. It is a matter of great sadness to me that those most motivated and committed students should be excluded. We exclude them at our peril. We shall lose potential students because of that. Some existing students might drop out because of the cost of their courses. I could give many such examples at Birkbeck College where students have not been able to complete their studies because of their financial difficulties.
Above all, if the amendment is not accepted the Government will have signalled that yet again part-time students are at the bottom of the pile so far as concerns government support. The acceptance of either of the amendments would help to reverse the shabby way in which they have been treated in the past. It is not acceptable simply to say that they may be included later. They should be a top priority now on the grounds of equity, of access and of encouragement to people who are committed to improving themselves and to working to improve the quality of graduates in this country. I support the amendment.
Lord Addington: I should like to support both the amendments. The part-time student is regarded as something of a misplaced beast in universities. Everyone is glad to have part-time students there, but they are not sure what they are. They do not receive the full support that they should have. Anyone who takes on a course of part-time education—I assume that about a third of it is course work—takes on a commitment over and above those hours for the simple reason that he has to get himself to and from the establishment to attend certain lectures at certain times. Even when special evening classes are arranged these people will have to sacrifice a certain amount of time which may mean
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that they are not able to work. Therefore they will need some form of funding to replace that which they are losing.
We can then discuss what it costs to buy what is necessary for a student. One important item is books. I personally could talk for hours on that point. I assume that any library of whatever university, no matter how well equipped, will not have available a copy of the particular book that one wants and one will have to buy it. Moreover any student such as I was will have to read it two or three times in order to get anything from it.
One has to ensure that students are properly funded to enable them to get through the courses that they have to do in increasing numbers. At the moment there are saints—people who have the commitment and the drive to get through the courses on a part-time basis. It requires dislocation of the normal type of economic life—that is to say, work—over a long period of time. If one is studying part time, one cannot complete the work in the same period. Therefore I suggest that any extra funding, even this loan scheme, will be very gratefully received by them.
Lord Dainton: I want to make two brief points which relate to my own direct experience of the part-time student. To be personal for a moment, I had an elder brother who went through that process in the late 1920s. I know the degree of hardship involved in studying while one is employed. But that is not the major point. In connection with operating a charity, of which I am chairman, I have had a good deal of contact with the students at Birkbeck College about whom the noble Baroness, Lady Blackstone, spoke. I want to assure the House and the Government that in my long experience within higher educational life I have never come across any other persons so deeply committed to the process of education, not just for themselves but also for what they can subsequently give to the community. On those grounds alone I believe that it is worth while to support the two amendments.
The other point that I should like to make concerns women in higher education. Many years ago I remember hearing an address by Gunnar Myrdal which moved me considerably. Quite simply she said: if you educate a man, you educate an individual; if you educate a woman, you educate a family. In that statement she was expressing the simple fact that the effect on the next generation of educating a woman is far more potent than of educating a male parent.
So there are the two grounds on which I believe that these amendments should be strongly supported. The first relates to quality and commitment. The second is the fact that for very little money expended one achieves a result for the state which is far more beneficial than would be obtained from a full-time student. That is not in any way to derogate the role of the full-time student, who is much younger. On the whole, however, this country has neglected its part-time students and is paying a heavy price for it. This is now an opportunity to redress that situation and for the Government to get an extremely good bargain if they

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will consider applying this Bill pro rata as suggested in these two amendments to the part-time and mature students.
6.15 p.m.
Baroness Carnegy of Lour: I should like to declare an interest as a member of the governing body of the Open University which, despite the remarks of the noble Baroness, Lady Blackstone, about the admirable record of Birkbeck College, still has two-thirds of the undergraduate part-time students. There is no question but that some financial help would be of enormous benefit to Open University undergraduates.
In the case of the Open University the situation is a little different from that of the students of Birkbeck and other colleges, when we remember that it represents two-thirds of part-time undergraduates at the moment. There is no travel to college involved because one works at home. Morever, three-quarters of Open University undergraduates are in employment so that studying is done when home from work for three-quarters of the people and at home (not home from work) for the rest. As the noble Baroness said, there are summer school expenses. That costs a lot.
People who take a degree at the Open University, which may take five years, seven years, or even longer, spend several thousand pounds out of their own pockets to do so. So there is no question—a loan scheme would help. However, I am not sure—I have not in fact spoken to the Open University about this matter in the past week—whether just grafting Open University students on to this Bill is necessarily the best way. This is a maintenance grant and therefore any help would have to be a proportion of the maintenance expended because of what one was doing as a part-time student. That seems to me to be awkward.
In the Open University the problem in the main is fees and not maintenance. Of course some people have increased maintenance costs because they are studying, but in the main it is a matter of fees. Also I do not know what will be the implications for the scheme. I hope that my noble friend will tell us. How many part-time students are there in relation to full-time students? What is the extent to which the scheme would be enlarged and the extent to which it is possible in the case of part-time students? It seems to me that that is tricky.
I am extremely glad that the amendment was moved. At this stage I hope that it is an exploratory one. It has produced a very powerful little debate about the importance of encouraging part-time students. If it is possible through the medium of this Bill at some point to extend the scheme to part-time students, no one will be more delighted than I. But at this point, unless there is some very convincing argument that it is the most relevant way to help part-time students and unless my noble friend can convince me that this is a valid way to help them, that it is possible and reasonable in so far as concerns public expenditure at the outset and so on, I doubt whether it is right simply to graft this amendment on to the Bill. Nevertheless, that does not mean that
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it is not vital for us all to realise the importance of encouraging a greatly increased number of part-time students in this country.
Viscount Eccles: Unless we bring part-time students into the Bill, we shall simply show that we do not know the way that the world is going. More and more people, especially women, have two jobs: one full-time and one half-time. But some people have only one job, which is half-time. Why is that? It is simply the result of technology. The advance in technology means that one must use modern equipment right round the clock; otherwise, one makes no profit. To make a profit one has to operate a shift system and thus create a great many more part-time jobs.
Technology does something else. It provides us with small machines which we can use in the kitchen or some small room at the back of the house. There will be a great deal more working at home than there has been in the past. That is a very good thing. It will increase the production of everyone. It ill becomes us to disparage part-time working. What are we? We are all part-timers.
Lord Boyd-Carpenter: The Minister is not.
Viscount Eccles: I beg the Minister's pardon. He works all the time, but he gets better pay. For well over a century Parliament has started at half-past two in the afternoon. It did so in order that Members should have the morning in which to gain experience—that was very important—and some money on which to live. When I entered the other place I was paid £400 a year. I could not live on that so I earned some money in the mornings. It was a very good, balanced life. I believe that such a balanced life will come back in our society as a result of advances in knowledge.
Of course, all that depends on how much it will cost and I should like to hear about that from the noble Earl. I do not think that he can possibly give us accurate figures. I do not believe that anybody knows either how many part-time students there are or what it would be necessary to give them to help them. However, if I had a certain amount of money to spend on all kinds of higher education, I would say that part-time education for mature people was at least as good a way of spending £1 million in higher education.
That is what is wrong with us today. We never consider education as a whole from nursery school right through to part-time education for old age pensioners such as myself. It is a great mistake. If we did, we should find various links in the chain that were weaker than others for historic reasons. I give as an example the 16 to 19 year-old group. We ought to put these matters right. Under the Bill we ought to give part-timers something. My approach to the amendment depends on my noble friend telling me the cost and showing that this would be so enormous that we ought not to consider the proposal. I wait to hear what he has to say.
Lord Glenamara: I shall take only a few minutes of the Committee's time. Some time ago the

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Government announced their aim of a massive increase in the number of students in higher education. On this side of the Chamber we support and applaud that aim. However, it seems that these huge numbers can come from only two sources. The first is working class homes. If one looks at the figures one will see that those numbers have hardly increased since the 1960s. The second is part-time students. I agree very much with the noble Viscount, Lord Eccles.
Perhaps I may digress for a moment. I believe that the noble Lord, Lord Beloff, has shown, based on his own experience how the cost of higher education can be reduced, enabling first year first degree students to be financed without recourse to such a scheme. Most of our first degree courses could be undertaken quite easily in two years, as at the University of Buckingham. There is no reason why arts courses should take three years, no earthly reason why universities should close down for 12 weeks every summer. If industrial plant were used as inefficiently and as little as educational plant, it would be regarded as a tremendous scandal. A great upheaval is required. But that is the way to use resources in education much more efficiently.
The second source from which government could gain massive increases is part-time students. I believe that there will be many more. But it is a very big problem. Of all students in higher education, 37 per cent. are part-time. There are 358,000 of them. In the main they are older students. Three-quarters of them are over 25. That means that in many cases they have family responsibilities. There is a problem especially for women. In the past 15 years the number of women part-time students has increased by over 400 per cent. Women are concerned with running a home, bringing up children and so on. I believe that we ought to do a great deal more to encourage them.
It is utterly illogical that the Government should bring forward such a Bill without mention of part-time students. They are tremendously important now, as I have shown. They will become much more important in the future, as the noble Viscount, Lord Eccles, has stated. I hope that the Government will consider this point.
Three weeks or a month ago the famous Mr. Robert Jackson interviewed a delegation of, I think, Open University ex-students, or a body of that kind, and turned down any further help for part-time students. That is very sad and very short-sighted. If Mr. Jackson wishes to achieve the Government's aim of a huge increase in the number of university and polytechnic students, that increase will have to come largely from part-time students. I hope that the Government will consider the matter. If they do not accept the amendment perhaps they will put something into the Bill at a later stage that will provide help for part-time students.
Lord Beloff: Perhaps I may make a small point in relation to what the noble Baroness, Lady Carnegy, said about Open University students. There is the problem that we are dealing with a Bill about student maintenance. However, I should have thought that attendance at a summer school involves costs largely
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of maintenance. If a contribution under the heading of maintenance can be made towards the cost of attending one of these summer schools, that would give some relief to the students concerned and some indication of a genuine interest in part-time studies.
Baroness Elles: I must apologise to the noble Baroness, Lady Blackstone, that I did not hear her speech which introduced the amendment. I was outside the Chamber. I apologise for that.
I should like to make one brief point on part-time students. We have been considering part-time students as a lump. There are many kinds of part-time students. In the area that I had the honour to represent in the European Parliament, the Thames Valley, I saw the number of part-time students increasing monthly if not yearly. Small and big companies were recognising the value of training their young employees in skilled work.
As Members of the Committee have said, the training is not for one period of their lives; it is a continuing process. Many part-time students at polytechnics in that area were fully employed and their companies were contributing to the technical college fees. One increased its student membership from 7,000 to 9,000 in the three years while I was dealing with the problem. It was a tremendous increase. That will be occurring throughout the country and I am sure that we all support it.
As regards opportunities for women, I have always been the strongest supporter of the Open University. If one had to thank the noble Lord, Lord Wilson of Rievaulx for something, it is that. The opportunity for women, while looking after their families at home to study through the Open University has been a tremendous benefit to more than 50 per cent. of the students of the Open University. I believe that over 50 per cent. of the students are women.
One has to bear in mind that there are different categories of part-time students. They cannot be regarded in the same way. I very much hope that my noble friend Lord Caithness is able to say that the Government will undertake to consider helping those part-time students who may be in financial difficulties with regard to maintenance although not necessarily including that in a regulation now.
Baroness Blackstone: Perhaps I may follow on from what the noble Baroness has just said. I should hate the Committee to have the impression that most part-time students are paid for by their employer. They are not. While some part-time students are undertaking short courses that are specifically training courses from which their employers—companies, public sector bodies, or whatever it may be—believe they will benefit, we are talking this evening about part-time students doing undergraduate degree level courses. Most of them are not supported by their employers and have to cover all their costs themselves.
Lord Carr of Hadley: I should like briefly to add my voice to those Members of the Committee who stress the importance of part-time education. I am convinced that if one looks ahead a few decades we

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shall not manage to meet this country's need for a much larger number of men and women of all ages in higher education unless we take positive action further to increase the quota of part-time students.
I wish to make a strong appeal to the noble Earl who will reply to the debate not to shut the door on the issue. This is an enabling Bill: so enabling that that in itself is a cause of dismay to many Members of the Committee. If it is such a wide enabling Bill I feel that it would be a great disaster if we put it to bed without the power in it to enable the Government to help part-time students even if they could not do so immediately. To need further primary legislation to be able to help part-time students seems to me to be ridiculous in a Bill which is, to such a large measure, enabling. I hope that the Government will pay much attention to that point and hesitate hard and long before they close the door to including something in this Bill although it may not be that which is proposed in these amendments. However, I ask them to consider including something in this Bill which will give part-time students help which, for economic and social reasons, will urgently be required.
6.30 p.m.
Baroness David: I add my support to the many voices which have spoken in favour of helping part-time students. As the noble Lord, Lord Beloff, said, the Bill is to provide for the making of loans to students towards their maintenance in higher education. The noble Lord suggested one way round this and I am quite sure that if the noble Earl is feeling kindly he will be able to think of some way in which part-time students could be helped.
In this Chamber we are rather university orientated but we must remember that the vast number of part-time students are at polytechnics or colleges of higher education. One point which the noble Baroness, Lady Carnegy, omitted to make about the Open University is that in the 20 years since it started there have been 933,000 applicants for undergraduate studies but the resources available have enabled the registration of only 422,000, which is less than half. Therefore, there is a vast pool of untapped talent there which could be of help. I very much hope that we shall have some response and that if these amendments are not accepted as they are a gesture will be made towards part-time students.
The Earl of Caithness: I am grateful to Members of the Committee for linking Amendment No. 3 with Amendment No. 8, which is rather more specific in that it seeks to make available loans to part-time students on a proportionate basis; but, as Members of the Committee have realised, the principle of the two amendments is the same.
As it stands the Bill provides for students in higher education generally to have access to loans. There is no need to amend it to bring part-time students into the scope of the loan scheme. Therefore, that meets the major concern of the noble Lord, Lord Kilmarnock, and the noble Baroness, Lady Blackstone. To my noble friend Lord Carr of Hadley I say that primary legislation is not needed to bring in part-time students. The door is already open.
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Having thought about this long and hard, the Government made clear in their White Paper that part-time students will be excluded. The Bill empowers the Secretary of State to set eligibility conditions. One condition which my right honourable friend intends to make when the scheme is introduced is that the loan will be available only to full-time students. The exclusion of part-time students is to be effected by regulations. As I said, those regulations will be made subject to the affirmative resolution procedure for their first use. That was agreed in principle by the Committee earlier this afternoon. If it were decided subsequently to extend the loan scheme to part-time students new regulations would have to be made subject to parliamentary approval. However, there would be no need for primary legislation.
In passing, I should say that that illustrates the advantage of the structure of the Bill. It enables the eligibility conditions and other features of the scheme to be modified without waiting for primary legislation.
The present system of mandatory awards caters for full-time study and the Government's intention is that the loans should also do that. As Members of the Committee will know, there has been a rapid growth in part-time study since 1979. Until 1988 in universities there has been a 48 per cent. increase in student numbers, at the Open University there has been a 23 per cent. increase and at polytechnics and colleges a 38 per cent. increase. The total number of part-time students in higher education in 1988 was 368,000.
The key point, which I am sure the Committee will take on board, is that those increases have taken place while part-time students have been outside the scope of mandatory awards. Support for part-time education is available in the form of discretionary awards by local education authorities. Some part-time students are also supported by their employers. Many support themselves. The essence of part-time study is that it can be combined with employment.
I should like to remind the Committee that part-time students will also continue to be eligible for benefits for the same reason; that is, that part-time students do not exclude themselves from the labour market. Of course I agree with all Members of the Committee who have said that we wish to increase the number of both part-time and full-time students. However, our first priority is to introduce extra support for full-time students. There may be a case for increasing the support available to part-time students. On the other hand, the increase in numbers suggests that the present arrangements are not inhibiting that form of study. If it is decided that loans should be offered to part-time students, the Bill as it stands will allow that. However, I must repeat that that is not the priority for this autumn.
The noble Baroness, Lady Blackstone, made many good points but I believe that the gist of what she said was that the funding of part-time students is a separate issue of which loans are but a part. I give an assurance to the Committee that my right honourable friend will continue to monitor the situation with very great care to see whether the scheme can be expanded in the future.

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I now turn to a point made by my noble friend Lord Eccles; that is, the question of cost. He is right to say that it is difficult for me to give exact figures. However, on the basis that a part-time student received £300 per annum, the increase in public expenditure would be something in the order of £70 to £80 million per annum, depending on take up.
Notwithstanding what the noble Baroness, Lady Seear, says, I must put it to to the Committee—I think it is worth stressing—that of course it is the job of this Chamber to reform a Bill but I wonder whether it is the job of this Chamber to bring in a completely new scheme involving public expenditure once it has been through another place. I shall leave that to Members of the Committee to decide.
When the noble Lord, Lord Dainton, said that this was a good idea, I thought that he made many good points. However, I ask him who he thinks will pay for it. It is worth bearing in mind that if I am right—and I stand to be corrected—about 50 per cent. of taxpayers earn under £11,500 which is the starting point for any repayment of loans. Therefore, it is those who have the potential of high earnings in the future who will be receiving the benefit of tax paid by those at the lower end of the tax scale.
I conclude by saying that on no account are we disparaging part-time students. All Members of the Committee realise their value and the contribution which they have to make. At this stage we believe that it is right that priority should be given to full-time students, but our mind is open for the future.
Lord Peston: Before the noble Earl sits down, will he clarify parts of his answer? The first part of his answer did not seem to be connected with money at all but he was simply arguing that part-time students were not a priority. In answering his noble friend Lord Eccles, he switched to referring to what he called a lot of money. I must say that £70 or £80 million is not what I would call a lot of money for such a desirable objective, especially as the noble Baroness is entirely right in saying that this scheme will be self-financing very quickly. Can we be told which argument the Government most rely on? Is it that this is not a priority, or do they not want to spend the money?
The Earl of Caithness: It is both. I thought that it was absolutely right to give the argument of the question of priorities but I was asked a specific question by my noble friend Lord Eccles and I thought it right to answer it.
Baroness Blackstone: Given what has been said in this Committee about the value of part-time students, their commitment, motivation and anxiety to improve themselves, can the Minister give us further enlightenment as to why they should be given lower priority than full-time students? That is not fair.
The Earl of Caithness: I tried to answer the bulk of what the noble Baroness said. It is not a question of our giving part-time students no priority at all. However, they are already treated differently under
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the 1962 Act. That is why I took the noble Baroness up on her point and said that the point to which she was referring was really the funding of part-time students, which was rather greater than the element of the loan which we are now discussing. Having gone out to consultation and having made it clear that we thought the first priority was for full-time students, I then went on to stress that the door is not closed for the future.
Baroness Seear: The Minister did not answer the points I made about women at home who are not being paid for by anyone. He said that many part-time students are paid for by their employers. Women at home are not paid for by anyone. They or their husbands have to meet all the expenses that they inevitably incur. They are the very people who could, for example, be trained to be teachers. That is the job that they are likely to take up. We have the greatest difficulty in getting teachers. Even with what they are paid when they start teaching, teachers will start repaying quickly what they have been given as part-time students. Do we or do we not want more teachers? Where shall we get them unless we tap the big reserves of women who wish to get back into the labour market? To ignore them could not be more economically short-sighted or educationally foolish.
The Earl of Caithness: As I said at the beginning, the noble Baroness makes some important points. I am sorry if I did not answer her as she would have wished. The emphasis at the moment is on getting the scheme for full-time students up and running, but I have at no stage closed the door for the future. In the Bill as it stands, merely by regulation—that shows the Bill's flexibility—we could extend the scheme to part-time students. I agree with the noble Baroness that we need more full and part-time students. That is what the Government want as much as she does.
Lord Renton: Having listened carefully to the whole debate it seems to me that the two amendments that we are discussing do not alter the terms of the Bill or prevent the Government from doing what my noble friend has said that they intend to do. The Bill refers to "eligible students" and defines them as those,
"who are attending courses of higher education".
Part-time students, to whom reference has been made, will be doing just that, and so the expression "eligible students" could include whole-time or part-time students. To amend the Bill to amplify that definition adds nothing.
Lord Kilmarnock: I have been encouraged by the general tone of the debate. There has been support for the amendment, or for the spirit of it, from all sides of the Committee. Several Members of the Committee made the point that the expansion of higher education for mature part-time students will be crucial to the achievement of that expansion of higher education as a whole to which we all aspire. That point was made from all sides. It was made by the noble Lords, Lord Glenamara, and Lord Carr of Hadley, and the noble Viscount, Lord Eccles.

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The noble Baroness, Lady Carnegy, wondered whether it was appropriate to introduce a measure into the Bill for Open University students and other part-time students. Both she and the noble Lord, Lord Beloff, said how important it could be for summer schools, which are an essential part of Open University studies.
On the question of whether the Bill is the appropriate one, there is of course no other Bill before us, which was a point made by the noble Lord, Lord Carr. Now that we are discussing student support, it would be absurd to require new primary legislation, even supposing that the time could be found for it, merely to legislate for part-timers.
The noble Baroness, Lady Elles, made the valid point that a number of part-time students are supported on various courses by their employers. I acknowledged that point in my speech. The noble Baroness, Lady Blackstone, correctly pointed out that by no means all students are paid for in that way. We need also to address the problems of individual students.
I had hoped that the Minister would give me more encouragement than he did. I had hoped that he would say he would look at the proposal or perhaps meet those of us who had spoken in the debate. I believe that over a dozen Members of the Committee have spoken in favour of the idea. I had hoped that he would offer to meet us and discuss conceivable ways ahead. He might have suggested some kind of phased introduction: that he would introduce it in the first place for first degree courses, teacher training courses, or something of that nature. I am afraid that he did not give us any such encouragement. I am willing to sit down if he would like to make such a proposal, because no such proposal has come from him.
The Minister mentioned the fact that there are 367,000 part-time students and that that figure represents a considerable increase, mainly through the polytechnics, which has taken place outside the scope of mandatory awards. He also said that part-time study can be combined with employment, which of course is true. In his speech I detected no sign of urgency to increase that number to perhaps double (700,000). I do not see how that increase will take place without some kind of mandatory assistance. His speech lacked a sense of urgency in stimulating the growth of those numbers.
The Minister said that the Government's mind was not entirely closed and that it would be possible to introduce the proposal by regulation, but he did not show any disposition to proceed in that way soon. In fact he referred on a number of occasions to the top priority being given to full-time students. We agree on that point, but, as I said in my opening speech, there is no way in which we shall increase the numbers in higher education without an increase in part-time students as the principal means of achieving that aim. Arithmetically there is no other way to do it. With much regret, I have no alternative—I had hoped not to—but to divide the Committee. The Minister mentioned the figures (£70 million to £80 million) to which the noble Lord,
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Lord Peston, referred. That is considerably less than I had expected. If that is a realistic assessment of what it might cost to bring those people into the main stream of higher education I should have thought that it was cheap. As the Minister has not given me any encouragement, I have no option but to ask for the opinion of the Committee.
6.47 p.m.
On Question, whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 87; Not-Contents, 110.

DIVISION NO. 2

CONTENTS

Addington, L.

Kirkwood, L.

Adrian, L.

Listowel, E.

Airedale, L.

Llewelyn-Davies of Hastoe, B.

Ardwick, L.

Aylestone, L.

Lloyd of Kilgerran, L.

Baldwin of Bewdley, E.

Longford, E.

Beloff, L.

Lovell-Davis, L.

Birk, B.

Lucas of Chilworth, L.

Blackstone, B.

McCarthy, L.

Blyth, L.

Mason of Barnsley, L.

Bonham-Carter, L.

Milner of Leeds, L.

Bottomley, L.

Monkswell, L.

Brooks of Tremorfa, L.

Nicol, B.

Butterfield, L.

Northfield, L.

Carmichael of Kelvingrove, L.

Ogmore, L.

Peston, L.

Carter, L.

Ponsonby of Shulbrede, L.

Cledwyn of Penrhos, L.

Prys-Davies, L.

Dainton, L.

Rippon of Hexham, L.

Darcy (de Knayth), B.

Rochester, L.

David, B.

Ross of Newport, L.

Davies of Penrhys, L.

Russell, E.

Dormand of Easington, L.

Saltoun of Abernethy, Ly.

Ennals, L.

Seear, B.

Falkland, V.

Serota, B.

Fisher of Rednal, B.

Shackleton, L.

Fitt, L.

Shepherd, L.

Gallacher, L.

Slim, V.

Galpern, L.

Stedman, B.

Glenamara, L.

Stoddart of Swindon, L.

Graham of Edmonton, L. [Teller.]

Strabolgi, L.

Tordoff, L.

Grey, E.

Turner of Camden, B.

Grimond, L.

Underhill, L.

Halsbury, E.

Walston, L.

Hampton, L.

Walton of Detchant, L.

Hatch of Lusby, L.

Warnock, B.

Houghton of Sowerby, L.

Whaddon, L.

Irvine of Lairg, L.

Wigoder, L.

Jeger, B.

Williams of Elvel, L.

Jenkins of Hillhead, L.

Winchilsea and Nottingham, E.

Jenkins of Putney, L.

John-Mackie, L.

Winstanley, L.

Kearton, L.

Winterbottom, L.

Kilmarnock, L. [Teller.]

Young of Dartington, L.

Kirkhill, L.

NON-CONTENTS

Allerton, L.

Bridgeman, V.

Arran, E.

Brookes, L.

Balfour, E.

Brougham and Vaux, L.

Barber, L.

Caithness, E.

Bauer, L.

Campbell of Alloway, L.

Belstead, L.

Carnegy of Lour, B.

Bessborough, E.

Carnock, L.

Blatch, B.

Carr of Hadley, L.

Borthwick, L.

Coleraine, L.

Boyd-Carpenter, L.

Colnbrook, L.

Brabazon of Tara, L.

Colwyn, L.

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Craigmyle, L.

Mills, V.

Crickhowell, L.

Milverton, L.

Davidson, V. [Teller.]

Mottistone, L.

Denham, L. [Teller.]

Mountevans, L.

Dilhorne, V.

Mowbray and Stourton, L.

Downshire, M.

Munster, E.

Eccles, V.

Murton of Lindisfarne, L.

Eden of Winton, L.

Napier and Ettrick, L.

Elles, B.

Nelson, E.

Elliott of Morpeth, L.

Nelson of Stafford, L.

Erroll, E.

Newall, L.

Ferrers, E.

Norrie, L.

Fraser of Carmyllie, L.

Nugent of Guildford, L.

Glenarthur, L.

Onslow, E.

Goold, L.

Orkney, E.

Gray of Contin, L.

Orr-Ewing, L.

Haig, E.

Peel, E.

Hailsham of Saint Marylebone, L.

Pender, L.

Prior, L.

Harmar-Nicholls, L.

Rankeillour, L.

Henley, L.

Reay, L.

Hesketh, L.

Renton, L.

Hives, L.

Rollo, L.

Holderness, L.

Sanderson of Bowden, L.

Home of the Hirsel, L.

Selkirk, E.

Hooper, B.

Shannon, E.

Hunter of Newington, L.

Skelmersdale, L.

Hylton-Foster, B.

Strange, B.

Ingrow, L.

Strathclyde, L.

Jenkin of Roding, L.

Strathcona and Mount Royal, L.

Johnston of Rockport, L.

Joseph, L.

Strathmore and Kinghorne, E.

Kaberry of Adel, L.

Killearn, L.

Swansea, L.

Kimball, L.

Swinfen, L.

Kinloss, Ly.

Thomas of Gwydir, L.

Lauderdale, E.

Tranmire, L.

Lawrence, L.

Trumpington, B.

Liverpool, E.

Ullswater, V.

Long, V.

Vaux of Harrowden, L.

Lye11, L.

Wigram, L.

McColl of Dulwich, L.

Wise, L.

Mackay of Clashfern, L.

Wyatt of Weeford, L.

Manton, L.

Wynford, L.

Merrivale, L.

Young, B.

Mersey, V.

Resolved in the negative, and amendment disagreed to accordingly.
6.55 p.m.
Baroness David Baroness David moved Amendment No. 4:
Page 1, line 6, after ("receive") insert ("top-up").
The noble Baroness said: This is a probing amendment. It seeks to probe the Government's intentions. Are loans really top-up loans? Will they remain top-up loans? The White Paper was entitled Top-up Loans for Students. The leaflet prepared by the DES and distributed last month in a belated effort to give a little information was called Top-up Loans for Students—The Government's Proposals. The document produced the day before Second Reading in this House—in my case it did not reach me until the day of Second Reading—was headed Top-up Loans—Rules and Procedures. However, the Bill before us makes no mention of top-up loans at all.
The first sentence of the February leaflet reads:
"The Government intends to offer a loan facility to students to top up their maintenance grants from autumn 1990".
The rules and procedures document outlines the administrative procedures for the operation of the student loans scheme and adds, predictably,
"Some details are still subject to change, and some remain to be settled".
Is this really a sensible way to legislate when the promoters of the Bill do not know how the Bill will be made to work? We know from what the Secretary of State said to us in the meeting—I still think that it is unusual for the Secretary of State to call a meeting between Second Reading and Committee stage to try to explain more about the Bill—that the costings of the Student Loans Company have not been completed.
The word "top-up" implies an optional extra. I suppose in some ways it is, as the student can decide whether to apply or not. When the loan rises to half the sum that the student can obtain for his higher education course, it can hardly then be an optional extra. Will it still be called a "top-up loan"? "Optional" perhaps it will be, yes, but "extra", no, particularly when one thinks of the loss of benefits.
We should like some enlightenment from the Minister as to why the phrase was used and is being used and whether it will continue to be used. What exactly is its meaning? One suspects that it is a con to try to make the education world think that the change that the Secretary of State is planning is less revolutionary than it really is. There is no sign of the Government returning the real value of the money to what it was in 1979, even with the loan added in. We know that the value of the grant has gone down by 23 per cent. since 1979. If one considers that, plus the loan, what the students will receive is very much less in real terms than they did 11 or 12 years ago.
We want a little explanation of "top-up". I beg to move.
The Earl of Caithness: This is a small but significant amendment. The noble Baroness, Lady David, is not concerned merely that the reference should square with the title on the White Paper Top-up Loans for Students; she wishes to ensure that this remains a top-up loan by nature as well as by name.
If I understand the noble Baroness correctly, the loan should be described in this fashion in the legislation so as to ensure that it remains supplementary to some alternative provision. It may also imply that, for those students who receive the mandatory grant, the loan should never exceed the grant. In other words, the loan should not develop beyond the point at which it provides half the public support available to students.
I can give some assurances on this last point. It is not our intention to move beyond a fifty-fifty division between loan and grant. That is the point at which the scheme reaches full maturity. Moreover, the trend in other countries with considerable experience of loans, such as Sweden and West Germany, appears to be towards such a balance. However, "steady state" will not be achieved for some years; probably not until early next century. A decision to stabilise at that point will be a matter for the government then in power to settle.
It would of course be wrong to describe the loan as a top-up loan for those students who will be able to receive it but do not receive the mandatory award; those who receive discretionary awards, for example,

1371
and those who finance themselves. We have deliberately decided that the loans will be more widely available than the mandatory award.
The noble Baroness was right to say that the top-up loan is an optional extra. She was also right to say that in some circumstances it is an inaccurate definition. I must agree with her about that.
I was a little perturbed by the noble Baroness's comments on the meeting attended by my right honourable friend. The welcome given to the meeting by the noble Baroness and her noble friend Lord Peston was not what I had hoped for. My right honourable friend was trying to be helpful and I was surprised by what they said.
I hope that my comments have clarified the position with regard to the use of the phrase "top-up loan" used in the literature which accompanies the Bill.
Lord Peston: I wish to clear up a misunderstanding. The noble Earl has referred yet again to the famous meeting with the Secretary of State. I welcomed the meeting and thought that it was useful. I did not wish to be discourteous to the Minister or to his right honourable friend. However, I believe that such discussions should take place in another way and that was my only point. As the noble Earl is aware, I attended the meeting and listened carefully. I learnt a lot from doing so and therefore I welcomed the meeting. I had no desire to be discourteous or to discourage the Minister's right honourable friend from calling another meeting to tell us more. I made what I still believe to be a valid constitutional point: that the place for such a discussion is across the Floor of the Chamber. I had no desire to do other than to make that constitutional point.
I was a little puzzled by the noble Earl's answer about top-up loans. We shall not divide on the amendment because it was tabled as a probing amendment in order to discover more about the scheme. The Bill describes itself as being:
"An Act to provide for the making to students in higher education of loans towards their maintenance".
I am a little lost, as is my noble friend Lady David. We are not clear whether the Government are saying that it is a top-up loan or that it is not. The earlier tenor of the debate was that they believe in maintenance awards, and the noble Earl has not backed down from that. However, for reasons with which we may disagree, they believe that the maintenance awards should be topped up by a loan. We want the noble Earl's reassurance that that remains the Government's view whatever the wording in the Bill, where the words "top-up loans" do not appear. It is a probing amendment tabled to ascertain whether the Government remain committed to the idea of maintenance awards for students topped up by loans. Is that the Government's position, whether or not they accept our amendment?
The Earl of Caithness: I had hoped that I had clarified the matter and I apologise for not making myself clear. Perhaps I did not go to the right
1372
university; agricultural college did not provide the training for a debate of this nature. At the moment it is a top-up loan because it is in addition to the grant; an increase in resources; a new increase of money coming in next year. However, when the loan takes a larger share, up to 50 per cent., I agree with the noble Baroness that it cannot then be classed as a top-up, as one would now describe it. For those who do not receive mandatory awards it is new money and not necessarily a top-up loan. However, as regards presentation it is top-up at present.
Baroness David: We are a little clearer, and I take it that my amendment is not acceptable. However, I do not believe that the noble Earl said that in so many words. It is odd that the Government have persisted in referring to top-up loans in all the recent literature; that is, the February leaflet and the rules and procedures document which we received the day before Second Reading. For that reason we were a little mystified and decided to table this simple amendment in order to clear the air. I believe that it has and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blatch: Perhaps this would be an appropriate time to break for dinner. I suggest that the Committee should not return to the Bill before five minutes past eight. I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Appropriation (Northern Ireland) Order 1990
7.5 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Skelmersdale)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Skelmersdale) rose to move, That the draft order laid before the House on 13th February be approved.
The noble Lord said: My Lords, this is one of a series of routine financial orders for Northern Ireland which come before the House each year.
The draft order has two purposes. The first is to authorise the expenditure of some £71·8 million in the 1989–90 spring supplementary estimates. Your Lordships may wish to refer to the 1989–90 Northern Ireland Spring Supplementary Estimates booklet, which gives full details of the sums sought and which is available in the Printed Paper Office. The £71·8 million is additional to the £4,223 million previously approved by the House and brings the total Estimates provision for Northern Ireland departmental services to some £4,295 million for this financial year, within a public expenditure total of some £5·8 billion.
The second purpose of the order is to authorise the Vote-on-Account of some £1,816 million for 1990–91. As the House will be aware, this amount is required to enable the services of Northern Ireland departments to continue until the 1990–91 Main

1373
Estimates for Northern Ireland are brought before the House later this year. The Statement of Sums Required on Account, which gives details of this expenditure, is also available in the Printed Paper Office.
I shall start with the Supplementary Estimates for the Department of Agriculture's Vote 1 which provides for Northern Ireland expenditure on United Kingdom-wide support schemes. Some £2·4 million is sought mainly for increased payments under agricultural improvement schemes to meet higher than anticipated uptake and value of claims. In addition, £1 million is required under the Hill Livestock Compensatory Allowance Scheme. These increases are, however, fully offset by lower than expected demand on capital grant schemes resulting in a token increase of £1,000 in the Vote.
In the Department of Agriculture's Vote 2, covering local support measures, some £1·8 million is required to meet increases in professional fees and compensation payments under the disease eradication programme. In addition, £0·6 million is required for laboratory modifications and scientific equipment and £0·2 million is required for the Woodlands Grant Scheme to reflect a welcome increase in participation by the private sector in afforestation. These increases are fully offset by reduced requirements under the Northern Ireland Agricultural Development Programme.
I now turn to the Department of Economic Development, which has Supplementary Estimates for three Votes. In Vote 2 net additional provision of £12.5 million is sought. Of that £10.7 million is in the section of the Vote relating to assistance to the aircraft and shipbuilding industries which inter alia provides for expenditures connected with privatisation. The House will recall that under the agreement with Bombardier for the sale of Shorts, the Government undertook to fund losses incurred by Shorts from 1st April 1989 until the completion of the sale on 4th October 1989. The additional funding now required will discharge the Government's obligations in this area.
Your Lordships will wish to note that since the Estimates were printed and laid it has become apparent that some £5.6 million of the 1989–90 provision previously sought for Shorts will in fact be used to cover expenditure on Harland and Wolff in the same year. This remains consistent with the ambit of the Vote. There will be consequential adjustments to provision for Shorts in 1990–91.
In the same Vote an additional £4.2 million is required for the Local Enterprise Development Unit (LEDU), Northern Ireland's small business agency. This will enable LEDU to continue its important work of stimulating growth in the small business sector in Northern Ireland. These increases are offset by reductions of some £2 million elsewhere in the Vote.
A token Supplementary Estimate is sought for the Department of Economic Development's Vote 3, where various increases in expenditure are offset by savings elsewhere within the Vote. As part of the Government's plans to rationalise the training system in Northern Ireland, a single training
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organisation, the Training and Employment Agency, will be established in April and £0.6 million is required towards the costs of winding up the existing Northern Ireland Training Authority.
An additional £5.8 million is sought for the Department of Economic Development's Vote 5, mainly for financial assistance to the gas industry. This includes accelerated payments in connection with the rundown and closure costs of Belfast Gas. The Department of the Environment's Vote 1, which covers roads, transport and ports, requires a net additional provision of £3.5 million: £2.9 million of this relates to grants paid by the department to bus companies for capital expenditure on the purchase of new buses.
A token Supplementary Estimate is required for the Department of the Environment's Vote 3. The main increase is in respect of consultants' fees for design work on water and sewerage schemes associated with compliance with EC directives. An additional £1.9 million is sought for that department's Vote 5, mainly for capital expenditure on public sector office accommodation and office furniture. Of this, £1.6 million relates to the accommodation requirements of the operational strategy computerisation programme in the Department of Health and Social Services.
Turning to the Department of Education, a net increase of £9·9 million is sought for Vote 1 and £11·1 million is required for grants to education and library boards. Of this £7 million is for pay awards and price increases and for the youth training programme and £4·1 million is required for capital grants. An extra £1·8 million is for capital expenditure by voluntary schools, including the purchase of sites and properties for integrated schools. Your Lordships will note that some £1 million is for expenditure in support of the Government's proposals for education reforms, bringing the additional resources made available for this purpose to over £5 million in 1989–90. In the Department of Education's Vote 2, an additional £2·6 million is sought on a range of services. The main increase of £1·6 million is for grants to universities and includes the 1989 lecturers' pay settlement and capital expenditure on information technology.
Finally, for health and personal social services, an extra £29 million is being sought in Vote 1. Of this total, some £17·6 million is for the health and social services boards, largely to meet the cost of pay settlements. It will also allow further progress to be made in the transition from institutional to community care for those in long-stay accommodation. A further £4·7 million is required for family practitioner services to meet increased demand and higher costs. These additions bring Vote 1 provision for the current year to £865 million, within a total health and social services budget of over £960 million.
Your Lordships will note that included in the additional sums sought, £3·5 million is for initial work on the implementation of health service reforms in Northern Ireland. These are designed to give patients better health care, a greater choice of services and better value for money.
I appreciate that I have listed a range of figures dealing with a large number of services conducted by Northern Ireland departments for the benefit of the whole population of the Province. I hope that noble Lords will have found helpful this summary of the main components of the Spring Supplementary Estimates. I therefore commend the order to your Lordships. I beg to move.
Moved, That the draft order laid before the House on 13th February be approved.—(Lord Skelmersdale.)
7.15 p.m.
Lord Prys-Davies: My Lords, I thank the Minister for having given the House a fair summary of the contents of the order. I propose to confine my comments to a few items which are related to the Votes of the Department of Economic Development, the Department of Health and Social Services and the Department of Finance and Personnel, respectively. It is appropriate that I start with the economy. The strengthening of the Northern Ireland economy continues to be a major priority of the Government. There is nothing between the political parties on the importance of that objective. We know that unemployment remains exceptionally high. It is at an average of about 16 per cent. of the working population compared with an average of about 6 per cent. on the mainland. We know that the growth of output is still disappointing.
There is a tendency in some quarters to think of a regional support budget as some kind of philanthropy, but those of us who come from the present disadvantaged regions know that regional grants and incentives are essential if those regions are to rebuild their shattered and depressed economies. Nevertheless, I accept that we have constantly to look closely at the operation of regional aid policies to see whether they are capable of being improved. If experience shows that there are difficulties which are not being resolved, they should not be skated over out of loyalty to a concept.
Against that background the Northern Ireland Economic Council published on 22nd February last a valuable but worrying report on the Industrial Development Board, selective financial assistance and economic development policy. We are greatly indebted to the Norther Ireland Economic Council for that contribution. If noble Lords look at the summary of the primary recommendations on pages 84 to 86 of the report, I believe that they will find reasons for concern.
I shall give the House three examples: first, of the 23,000 jobs which were promised by the IDP and LEDU between 1982–83 and 1987–88 only 9,263 were actually created. Even if we take out the failure of the Lear Fan project the gap between what was promised and what has been achieved at the end of five years is still disturbing. I assumed that the economic council's report had been delivered to the department at the end of last year. Therefore, it is a little surprising that in the speech of the Minister for the economy on 9th January last there is a total absence of awareness of the gap between promise
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and reality. The Minister promised that up to 12,000 new jobs would be promoted in 1990 by the recipients of grants from the IDP and LEDU. So the job gap is worry number one.
Secondly, two-thirds of the total number of new jobs created during the five-year period in question were in the electrical engineering, clothing and textile industries, which are the more traditional industries of Northern Ireland. The grants paid out by the two organisations were usually of a capital nature. So why is it that the industrial base has not been broadened and diversified to a much greater degree? Has there been an over-reliance on grants of a capital nature? Has too little attention been paid to the training of a more skilled labour force? Has too little attention been paid to research and development? I note that research and development grants account for less than 7 per cent. of the total grant expenditure in 1988–89. The failure to achieve a more diversified industrial base and greater investment in research and development is worry number two.
Thirdly, the Northern Ireland Economic Council calls for an overall development framework, setting out objectives with respect to job creation and performance indicators for specific sectors of the economy to be achieved over a given number of years. Without such a framework, without goals, targets and a timetable by which to assess progress, how can one measure what is being achieved? Without such a framework, will one bring about the scale of change which is required? The absence of such a framework is worry number three.
I wonder whether the Minister is in a position to tell the House how the Government are likely to respond to this report. Do they intend to continue to rely on job promotion rather than on jobs which are created? Will a positive effort be made to diversify the industrial base, to invest in research and training and to take a more rounded view of the economy? I wonder whether I can draw the Minister out on these serious matters.
I should now like to turn to the noble Lord's department, the Department of Health and Social Services. This department is, as one would expect, the highest spending of all the Northern Ireland departments. Here again I want to base my comments on another report, the 36th report of the Public Accounts Committee, relating inter alia to the Department of Health and Social Services and the health boards and also to the department's response to that report. The report identifies a need for improved management information. We want a systematic collection and analysis of statistics in order to monitor day-to-day operations, and we want it for planning the service.
I note that the department comes in for some criticism for having failed to issue guidelines on an occasion on which they should have been issued. Again it is the subject of some criticism for having failed to develop performance indicators. I have no wish to undermine the position of the health boards; on the other hand, I do not want to underestimate what the proper role of the Department of Health and Social Services should be in relation to the health boards. Of course the relationship is one of principal and agent, which involves a parcel of rights

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and duties. That relationship is very easy to state in abstract terms. But one is prompted to ask whether the department should be making more vigorous use of its powers as a principal to set standards and to monitor. Is the Minister giving consideration to strengthening the management structure at departmental level? I wonder whether I can draw the noble Lord on this issue.
Perhaps I may now turn to the speech delivered by the noble Lord on 2nd February in which he announced the Government's proposals for the reform of the health service in Northern Ireland—a speech, incidentally, which contained no reference to the need to assess the quality of therapy. The noble Lord claimed that the proposals would match resources with services and would ensure success for hospitals and units. We have had an echo of that speech from the noble Lord his evening. I say with deep respect that the assertion contained in the speech of 2nd February is at best an expression of hope.
Arising out of the speech I should like to touch very briefly on three issues. First, the Minister said that the funds would be distributed to the health boards in accordance with the size and health characteristics of the population. Is it envisaged that the distribution will be any different from the present distribution? If it will differ, will the noble Lord kindly give particulars?
Secondly, the noble Lord said that the health boards would develop contractual relations with their hospitals, with their units, with GP fund holders and with the private sector. To work out a reliable and viable contract for pricing medical services is an exceedingly complex process requiring accountancy skills of a high order. To put a price on a treatment involves an apportionment of salaries of doctors, nurses, paramedical staff and ancillary staff, and of theatre costs, pathology costs, lighting, heating and cleaning costs, hotel expenses, ambulance costs and no doubt other items of expenditure. On these Benches we have a deep anxiety that the Government are overlooking the fact that the NHS does not have a sufficient supply of top accountants to undertake the complicated pricing which will be required at hospital and unit level. My anxiety is in no way allayed by the reply given to question 4364 recorded in the report of the Public Accounts Committee to which I referred. In the result we fear that we shall have a cut-price service and a second-rate treatment.
Has the department considered whether the NHS in Northern Ireland has an adequacy of accounting staff fitted for the tasks? Even if the Government have convinced themselves that the new model will work miracles in hospitals, we would urge the department not to seek to implement the model in Northern Ireland until it has been tested in one or two health districts and the results show that there is no reduction in the quality of service. The Government should not bequeath to the people of Northern Ireland a dreadful legacy founded on rhetoric when at long last they are discharged from office.
My last point concerns an item of expenditure by the Department of Finance and Personnel. It is
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the sum of £536,000 granted towards community relations. It is not clear to me why this item appears where it does in the vote to the Department of Finance and Personnel. Neither is it clear to me how it is related to the total expenditure above £3 million or £4 million which I understand from a recent speech of the education Minister is being spent on community relations. I should like to take this opportunity to express my appreciation of the efforts of the education Minister in this field and in regard to the education reform order. The credit for achieving the recent initiatives in community relations must go in particular to the education Minister. I am glad to acknowledge his contribution.
I welcome the Minister's action in setting up the community relations unit which is administered by civil servants in Stormont and for setting up the independent Community Relations Council to encourage co-operation between the communities. The Minister was right to describe the setting up of the council as a significant milestone on the long, hard road to bringing the two communities together. I should also say that I welcome the promise of funding for the new charity, Ultach, which was set up last September to co-ordinate the work of the various bodies interested in promoting the Irish language. Of course, in that area we also need co-operation between the two governments.
The Broadcasting Bill is at present before the other place and I understand that a broadcasting Bill is being considered, or soon will be considered, in the Dail. I believe that there is considerable scope for co-operation between broadcasters north and south of the Border in order to provide a totality of television and radio services for the island. It seems to me that that is an item which could possibly be placed on the agenda of the inter-governmental conference.
I have taken up more than my allotted time with my remarks and I await with great interest the response of the noble Lord, Lord Skelmersdale, to the few questions which I addressed to him and to those which other Members of your Lordships' House will put forward.
7.30 p.m.
Lord Bonham-Carter: My Lords, I too should like to thank the noble Lord, Lord Skelmersdale, for introducing the appropriation order with his account of various crucial items of government expenditure, presenting us with, as he rightly described it, a whole range of figures. I should also like to thank the noble Lord, Lord Prys-Davies, for his characteristically meticulous analysis of the issues about which he wished to hear more from the Minister. Like him, I should like to hear in the noble Lord's reply a slightly more broad-ranging account of his expectations of the performance of the economy in the coming year. It is upon this that so much will depend. It will be interesting to know whether he expects the gap between promise and achievement, to which the noble Lord, Lord Prys-Davies, drew attention, to be closed or whether it is to remain in much the same rather disappointing order that it stands today.
In that connection I should also like to know what progress the noble Lord feels has been made in the

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approach towards equality of employment, irrespective of religion, which was the subject of earlier debates in your Lordships' House in regard to Northern Ireland. In my view there is in Northern Ireland an extremely wide-ranging and what should be an extremely effective anti-discrimination law. However, how is it working and what is the appreciation of the results? Is it just holding matters as they were, or is there any evidence that it is making progress? It is that and the community relations picture to which the noble Lord, Lord Prys-Davies, referred which is really crucial to the future of the Province.
Within that area there is one particular aspect about which I should like to hear from the Minister. I refer to integrated education. It seems to me that integrated education is one of the most important constructive steps that has been taken in the Province. It is a crucial issue which can have enormous consequences and which has been greeted, according to my information, with considerable optimism by a variety of educational establishments.
As I understand it, there are today 10 integrated maintained-status schools which receive 85 per cent. capital funding, three unsupported integrated schools and two which are due to open in September. The absolutely crucial issue in this respect is whether government funding will be sufficient to cover the commitments made in the education reform order. According to my information, a number of state schools wish to find out more about becoming integrated schools. That is surely an interest which we would want to encourage and support. There are also a number of smaller projects in the pipeline.
However, a number of funding bodies—not governmental funding bodies—in the United Kingdom and in Northern Ireland are withdrawing funds, or are thinking of doing so, because they think that the Government are committed to supporting that movement. Can the Minister tell us whether this is the case and whether the Government are prepared to produce the resources which are essential if the integrated education movement is to go forward? It would be extremely unfortunate if the unintegrated schools thought that their funds were being diminished because of support for integrated schools. Therefore what we need to hear from the Government is not merely that they are committed, as they indicated, to supporting integrated education, but also that this will not in any sense be at the expense of other educational establishments.
The noble Lord, Lord Prys-Davies, referred in his remarks to the Broadcasting Bill. It is indeed extremely relevant. When I was at the BBC in the late 1970s and took a particular interest in the broadcasts in Northern Ireland, I found that at that time almost the only educational material which was not written from a particular position and which was available in schools was that which was provided by the BBC's education service. Therefore it seems to me to be extremely important that the educational activity of the broadcasting authorities should remain a central part of their duties in the new Broadcasting Bill. It is most certainly a matter which I and my noble friends will raise. Therefore my first
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question to the Minister is whether he can tell us what progress is being made on that front and how it is being handled financially.
The second point, about which I have spoken to the Minister, sounds a little wide of what we are discussing but nonetheless it is crucial to the prosperity of industry in Northern Ireland. It arises from the second report of the Defence Committee in another place about a payment to Harland and Wolff. It is a most extraordinary and complicated story with which I do not propose to bewilder your Lordships at this hour of night. I shall simply point out that paragraph 32 of the report says:
"While the outcome of this bizarre fiscal gavotte has been that the defence budget is shielded from the effects of the settlement, we cannot as a Committee of the House of Commons pronounce ourselves as content that the Treasury have sought and obtained parliamentary authority for MoD to make a payment to Harland and Wolff plc, who pass on the funds to the Northern Ireland Department of Economic Development, who surrender it to the Exchequer, whence a matching amount is found in the next financial year as 'a claim on the Reserve' ".
It is an absolutely astonishing story. In conclusion, the committee said:
"The evidence before us suggests that a subterfuge has been attempted upon Parliament".
It is quite a serious state of affairs and I should very much like to hear the Minister's comments on the matter.
Finally, there is a relatively small question upon which I simply require information. One way in which you can measure the prosperity, the progress or otherwise of the economy in Ulster is by the rate of emigration. Does the Minister have any figures in this respect and, if so, how do they compare with the rate of emigration from the Republic? Moreover, what are the forecasts for the coming year? I should be grateful if the Minister could tell us something about that. I thank him for his introduction and look forward to hearing his reply.
Lord Lyell: My Lords, once again I reiterate how grateful we are to my noble friend for presenting in such a succinct way the appropriation order before us this evening. I have a note saying that this is quite like old times. However it is not. My noble friend is far briefer than I ever managed to be in the whole of my career. On the other hand, he will know that this is a double-edged sword, because we look at the clock. We are not necessarily up against a time limit, but with that in mind I shall restrict my remarks.
I have not had the opportunity which we very often used to have in debates of this nature of entering into collusion with the noble Lord, Lord Dunleath. We used to agree that I would not cover points on the agricultural front which he might wish to raise. However, with that risk in mind, I wish to ask the Minister whether he can give me some help, if not tonight then perhaps he will let me know at his leisure or that of the Department of Agriculture and in an appropriate form.
The Minister and your Lordships will know the magic letters of the alphabet, "BSE". I am told that they stand for something in the nature of bovine spongiform encephalopathy, mad cow disease. It has

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an unfortunate effect upon the bovine population of Great Britain and Northern Ireland and I understand that there are one or two cases in the Republic. It also has an unfortunate effect upon the beef trade within the European Community. Would my noble friend be able to inquire how many cases of the malady have been notified in Northern Ireland in approximately the last 12 months? If he could obtain that information I should be grateful. Further, does he or the Department of Agriculture have any good news as to how the disease is being contained and whether any potential spread is being controlled?
When we consider any animal disease or the health of animals in the agricultural industry in the Province, I am sure that my noble friend and your Lordships will accept, as would the noble Lord, Lord Dunleath, that there is a need for every individual farmer to notify his local district veterinary office. That office can then take the necessary steps to attempt to find the reason for the diseases at the best diagnostic laboratory certainly in the British Isles and I suspect on the Continent of Europe. I refer to the Veterinary—Research Laboratory at Stormont—part of the Department of Agriculture—which never ceased to amaze me during my career in that department.
If we wish to notify every farmer in Northern Ireland we must never forget the far-flung areas such as County Fermanagh and County Tyrone. I am sure that the remarks made by the Minister and by your Lordships this evening will be noted in the impartial reporter, the Fermanagh Herald, that excellent newspaper in the West, the Tyrone Constitution, and I seem to remember the Tyrone Democrat in another connection in East Tyrone dealing with veterinary problems.
I was entirely stunned by the figures announced by my noble friend when he opened his dissertation concerning the low take-up by the agricultural industry of capital grants. I wonder what has happened since my time in the Department of Agriculture, which was always marked by the slogan in every newspaper, "Act fast while grants last". Can my noble friend give me an indication—perhaps not tonight—of the reason for the lack of take-up of capital grants? I do not doubt that there will be a suitable reason.
My second major question deals with the computerisation of bovines within Northern Ireland. I am sure that my noble friend and your Lordships will be aware that in regard to veterinary matters in Northern Ireland each district was to have a computerised record of every bovine animal in the area. This was, first, to assist in tracing animal diseases such as tuberculosis and brucellosis. It would make it far easier to track down any reactors or breakdowns in the tests. Further, the computerised records will go a great way towards reducing the enormous paperwork necessary in Northern Ireland.
One example pointed out to me was that in Dungannon movement permits were required for each beast. If it left the home farm and went to market the farmer might decide that the price offered was not satisfactory, he might move on to another market, then a third and fourth market and then gradually go home. For each stage of the journey a
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separate movement order was required. I hope that the computerisation of bovines will go some way towards alleviating the enormous amount of paperwork. I was aware that the district veterinary office at Newtownards was up and running in regard to this aspect.
My third question concerns fisheries. I understand that the poor weather has had quite an effect upon the fishing fleet in Scotland. I believe that it has also affected the fishing industry at Portavogie, Ardglass and Kilkeel. Can my noble friend give me brief information or instructions on the reason for that this evening? It might be the poor weather, but there could also be problems of reduced quotas for the pelagic or submersal catches taken by the industry.
I thank my noble friend the Minister and look forward to any answers that he can give tonight. However, I understand that it may be necessary for him to get in touch with me in writing.
7.45 p.m.
Lord Dunleath: My Lords, I too wish to thank the Minister for the way in which he has introduced the Appropriation Order. I thank him also for his kind letter inviting prior notice of any points which noble Lords might wish to raise in the debate. Regrettably, however, the letter did not reach me until Saturday morning and there was no opportunity for me to reply. As I pointed out to the predecessor of the noble Lord on the Front Bench, the noble Lord, Lord Lyell, degrading though it may seem, I do not live in the Palace of Westminster. The delay was incurred through the letter having to be forwarded to my home address, for which I apologise.
The additional 1 per cent. of milk quota is extremely welcome. However, I wish that there were some way in which it was possible for farmers to be notified further in advance so that they could carry out business planning. Inconvenient though it may be, if a product in a factory is in surplus the production line can be stopped for two or three weeks. If there is an unexpected demand, double shifts can be worked. Unfortunately that is not possible with a dairy herd. We can regulate it to a certain extent by the amount of concentrates we feed but genetically if a herd is geared to high production it will run into health and fertility problems if the herd is run too short of concentrate rations during the winter.
If it were possible for the Department of Agriculture in Northern Ireland and the Ministry of Agriculture, Fisheries and Food in Great Britain as well as the people in charge of the common agricultural policy in Europe to give us more advance warning of what is likely to happen, it would save a great deal of trouble and be extremely welcome.
On the subject of beef, it is true that beef farmers throughout the entire United Kingdom have had a fairly rough time over the past six months. However the Minister will probably be aware that we in Northern Ireland are even more disadvantaged because of the proximity of the Republic of Ireland. It is worth while for the meat plant owners to buy cattle in the South, bring them up across the border to the North, collect the monetary compensation and then have the beef processed in the North. That
sara
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tends to cause a glut in what is already a depressed market. Therefore beef farmers in Northern Ireland have suffered badly this winter. I am told that an average of £70 per head has been lost by most of the finishers.
I could say with hindsight that had we only joined the EMS when the pound was strong by comparison with the Deutschmark and inflation was low this problem would not have arisen, but the way things are at the moment devaluation of the green pound is a matter of urgency. However, that will not recompense those who have already suffered. Therefore, I join with the Ulster Farmers Union in recommending that there should be a headage premium, retrospective to perhaps 1st December 1989.
Those involved in agriculture in Northern Ireland have not been unique in suffering severe storm damage in recent months. I am not sure what plans, if any, are in train for compensation for those who have suffered in Wales, but I know that in the Ballykelly area of County Londonderry hundreds of acres have been under three feet of salt water. Many of those hundreds of acres had been planted with winter cereals which have been lost completely. That was due to the fact that the sea defences for which Her Majesty's Government are responsible were inadequate to cope with an exceptionally high tide coupled with an adverse wind. I sincerely hope that some compensation will be payable to the farmers in question.
I now turn to the Department of the Environment. Pollution continues to be a current topic. However, when all is said and done, I am afraid it transpires that much more has been said than has been done. Unfortunately the River Lagan, which flows through Belfast, is still filthy. Sewage and domestic and industrial waste are still being pumped into it despite all that has been said and all that has been promised. Lough Neagh is increasingly used as a source of public water supply but the water in that lough is not fit to drink. It may be treated with chlorine and it may be subjected to other processes, but with its enrichment of phosphates, nitrates and other elements it is not a healthy source of drinking water. The problem is that the Department of the Environment is responsible for much of the pollution but it is also responsible for monitoring pollution. Therefore it is hardly surprising that the department is reluctant to prosecute itself. I therefore respectfully suggest that the answer is to have a completely independent authority to monitor pollution of watercourses, the sea, lakes and the environment generally.
I now turn to the Department of Education. Many of the changes that have been announced are welcome. We welcome particularly the encouragement to integrated education that was mentioned by the noble Lord, Lord Bonham-Carter. Integrated education is getting off the ground now. The pace of progress is accelerating. That is greatly to be welcomed. However, looking at the general field of education, the changes that have been announced are putting a considerable strain on schools. I am told that many more resources are
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required for the retraining of teachers and for the re-equipping of schools. I am told that there is a shortage of books and that morale among teachers is low. Her Majesty's Government may not have anticipated the resources that would be required to bring about the changes which, on the whole, are welcome.
I now turn to the Department of Health and of Social Security. I wish to offer special thanks to the Minister for his personal interest in the Northern Ireland hospice movement and for the way in which he has responded to the representations made to him about that. That is greatly appreciated. We know that the Minister has taken a particular interest in the hospice movement. However, on a more controversial note, I must ask what the outcome will be of the alleged scandal at the Kincora boys' school. That scandal is only "alleged" because no one knows the truth about it. That is the problem. I respectfully suggest that unless there is a full public inquiry into the matter, a broad spectrum of public opinion will perceive that there continues to be a cover-up on the issue. What about the documents produced by Mr. Colin Wallace? Are they authentic? We do not know the answer to that question, but we need to know. I am afraid that is something that cannot be swept under the carpet.
Finally, I have a point to make as regards the department responsible for finance and personnel. This point may not be relevant, but I hope your Lordships will forgive me for mentioning it. I wish to say how grateful I am to Her Majesty's Government for the facilities they provided for the recent first sitting of the British/Irish inter-parliamentary body. The noble Lord, Lord Prys-Davies, attended that occasion, as did the noble Lord, Lord Lyell. I hope they agree with me that the mood was good. Contentious issues were not dodged, but all present made a conscious effort to avoid being contentious.
I am hopeful as regards the future of this body. The Northern Ireland Office may have had little to do with the event, but I still wish to pay tribute to Her Majesty's Government for having made it possible. I regret that the Unionists did not see fit to participate despite the fact that in a document that they submitted to the Secretary of State two years ago they advocated such a body. I sincerely hope they will change their minds but, for all that, I am glad that the event took place and I look forward to further progress in the future.
8 p.m.
Lord Fitt: My Lords, when discussing an appropriation order of such magnitude, I sometimes feel totally inadequate as regards giving it the attention it deserves. This House to some extent must be in the same position. I received a letter about the order from the Minister, as I an certain the noble Lord, Lord Dunleath, did. We are discussing an appropriation estimate of £1,816 million. That is a figure of nearly £2 billion. The expenditure has to be discussed within one hour or one and a half hours. I do not think it is right that such an amount of money should be considered in those circumstances.

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In another place there is a different situation. There are 16 Members of Parliament who live in Northern Ireland and who represent Northern Ireland constituencies. As I know from experience, if one lives in a particular constituency in Northern Ireland and one has a Northern Ireland electorate, one is much more aware of the everyday happenings there and of the events that can be linked to one or other of the parts of this order.
Tonight we have heard two noble Lords dwell specifically on agriculture, but there are many more issues that could have been discussed had we been more aware of the subject. I understand that the elected Members of Parliament at the other end of the building will probably be discussing the order at this time of the day. I repeat that totally inadequate provision has been made for consideration of such colossal expenditure—almost £2 billion—for an area as small as, and with the population of, Northern Ireland. If we were discussing Wales or Scotland the elected Members in another part of the building would co-operate with many Members of your Lordships' House to allow a more reasoned and understanding approach to the issues involved in expenditure of this size.
I now turn to representations that have been made to me as someone who formerly represented a constitutency in Northern Ireland and who is still known in the Province. I have advised the Minister's office of the issues. Peter Stott Martin House in County Antrim cares for a number of patients who suffer from multiple sclerosis. Evidently the inmates of the home are well looked after by well-trained staff. They are happy in the home, which has aids—enabling them, for instance, to climb stairs—which are necessary for people suffering from such a serious disablement. It appears that, without any consultation of the people who support it, the home is to be closed and the patients relocated to the Dalriada Hospital in Ballycastle. I understand that concern is being voiced by the staff and also by the patients who have found that the home has served them well in the past in their serious disablement.
The Minister will be aware that a deputation from Northern Ireland attended this House early last month. They were protesting against the relocation of services from the Moyle Hospital in Lame to another part of County Antrim. It may be said by the department that the services are being relocated because that will be cheaper in the long run. However, the needs of the people who use the facilities have to be taken into account. I understand that the medical staff and people in the surrounding area are protesting vigorously at the department's intention to relocate the acute services at the Moyle Hospital without giving any consideration to the representations that have been made.
Those are two of the issues that I wanted to bring to the Minister's attention tonight. I have also had a number of letters on a further subject, possibly because I was myself a victim at one time. It appears that there is a very long waiting list in Northern Ireland for coronary bypass operations. I was very lucky: I felt the pain one day and I had the operation the next day. However, people have been designated
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to have the operation and have been put on to the end of a very long waiting list. I can understand how that can affect their whole outlook on life.
There is a similar situation regarding cataract operations. I have spoken to the eye specialists at the Royal Victoria Hospital, which is renowed throughout the United Kingdom for its specialist eye services. There is a tremendous waiting list of people needing cataract operations. I do not suppose that the Minister will have tonight the figures concerning the number of people on the waiting lists, but I ask him to write to me. More importantly, I ask whether he can take steps to see whether the waiting list could be reduced and the operations expedited. That would be in the interests of all those people who are living in fear either of coronary problems or of going blind. I am sure that he will also look into the other cases that I mentioned.
I feel that those few words are inadequate because I am certain that in the context of this colossal figure of nearly £2 billion there are many more questions which could be asked and should be asked in the interests of all the people of Northern Ireland.
Lord Skelmersdale: My Lords, the noble Lord, Lord Fitt, is absolutely right. He will see from my letter—which he had in his hand—that I regard any question as fair game. I appreciate that this very wide-ranging debate could have been even more wide-ranging. Nevertheless I am grateful to noble Lords who have spoken for their concern in putting those points which they regard as important.
Last week I was privileged to receive a visit from my noble friend Lord Long. At one point during his discussion with local people the point was made that Northern Ireland could not progress in any sense of the word without increased economic activity. The Government were praised for what they had done in recent months. I have to confess that, rather like my son's school report, it was tempered by the words "could do better". Therefore, I was particularly interested that the noble Lord, Lord Prys-Davies, and the noble Lord, Lord Bonham-Carter, voiced their concerns in that area. I suspect that for many of your Lordships such concerns were subliminal.
As in the rest of the United Kingdom, the improvement owes much to the Government's determination to create a business environment in which enterprise can flourish. The success of Northern Ireland's manufacturing industry in achieving a 9 per cent. increase in output in the year to December 1989, which we might compare with a 3 per cent. increase for the United Kingdom as a whole, shows that industry can rise to the challenge of increasingly competitive markets. However, we cannot afford to be complacent, with unemployment remaining stubbornly high. I agree with the noble Lord who said that. The fact that the number of unemployed has fallen by 25,000 over 1 he last three years and by 9,000 last year alone shows the resolve with which the problem is being tackled. As the House will know, further figures will be announced later this week. I confidently expect that they will show a continuation of that trend.

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Nonetheless it is vital to the long-term future of the Northern Ireland economy that not only should jobs be created but they should be jobs with a future in industries which can compete in world markets. To that end the Government are concentrating their efforts on strengthening the Northern Ireland economy through measures which will encourage enterprise and thus promote the long-term regeneration of industry to the point where government assistance ceases to be necessary. I agree with the noble Lord, Lord Prys-Davies, that that looks like being a long way off.
In that context the successful return to the private sector of Harland and Wolff and Shorts is particularly encouraging and has confirmed the Government's resolve to carry through an equally successful privatisation of Northern Ireland Electricity.
On the investment front, the recent announcement that Fruit of the Loom, a major USA company, is to establish a factory in Londonderry with the potential for 500 jobs is good news, more so when it follows hard on the heels of another major investment for Londonderry—the £65 million Foyle Street development project with a potential of some 1,100 jobs. There have been other notable major international investments attracted to Northern Ireland also in the recent past—Montupe from France, Di-wheel Electronics from South Korea, Bali from Hong Kong and Harris Laboratories from the USA. They demonstrate the attractiveness of Northern Ireland and the growing confidence of the international business community that the Province is a place for profitable investment opportunities.
Looking further ahead, the 1990s will be a period of rapid change. The European market will be opened up by the removal of legal barriers in 1992 and of physical barriers a year later, with the opening of the Channel Tunnel. That will be a challenge to Northern Ireland industry as Continental European firms will gain easier access to the United Kingdom market, but it will also be an opportunity to sell Northern Ireland products to over 320 million people in the world's largest consumer market. The Government will do all they can to create a climate in which the spirit of enterprise can thrive. It is for the Northern Ireland business community to meet the challenge and to seize the opportunity.
I am sure that the House will join with me in wishing them every success in that venture.
The noble Lord, Lord Bonham-Carter, suggested that the health of the economy could be measured by the Northern Ireland emigration figures. I can advise him that figures have varied considerably over the years reflecting economic circumstances. I would not go quite as far as his words might suggest. In the early 1970s, migration was running at some 24,000 a year. It fell to some 5,300 a year in 1978 and peaked again in the early 1980s. The latest figure is 8,700 in 1987–88.
I am grateful to the noble Lord, Lord Prys-Davies, who gave me advance warning that he would comment on the Northern Ireland Economic Council report on industrial development. As the
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report acknowledges, the Industrial Development Board operates against the most difficult background in Northern Ireland. I dare say that few other such agencies in the British Isles envy its task and it is important to keep that perspective in mind when looking at the findings of that particularly useful report.
The development board had itself recognised the need some time ago to develop wider and better indicators of performance than job promotions or promises alone. For that reason it decided to invite the council to look at the matter in more detail and co-operated fully in providing it with information. The outcome has been valuable and, at a time when the DED and IDB are focusing on future strategies, I am sure that we shall find that they will reflect much of the council's thinking. However, it is unfortunate that the media have tended to concentrate on the figure of 41 per cent. job creations from those promised. That is a misleading figure, including as it does the closure of Lear Fan which had a major disturbing effect on the final figure, yet the offer to the company was signed only two weeks after the IDB came into existence. Otherwise, the figure would have been 48 per cent. In addition, a recent update of the NIEC figures show that, for the year 1987–88, 67 per cent. of the jobs promised were in place by September 1989. In any circumstances, that is a most creditable performance, but particularly so in Northern Ireland.
I agree that it is also important that grant payments are kept in line with job creations. The figures contained in the report show that the Industrial Development Board had obtained good value for money. Excluding the distortions that I mentioned earlier caused by Lear Fan, the industrial development board paid only 43 per cent. of assistance offered to create 48 per cent. of the jobs originally promised. The tight conditions applied in all cases ensured that the IDB paid only for what was achieved on the ground by the companies concerned. The IDB will continue to liaise closely with the council on how these findings can be used as a foundation for the future.
The noble Lord touched on the need for training. It goes without saying that the Government attach great importance to assisting employees to gain the relevant skills that they need in a modern economy. As I said in my opening speech, a Training and Employment Agency will be established at the beginning of April. The principal task of that agency will be to implement those training and employment functions which are currently the responsibility of the Department of Economic Development. The agency will have approximately 1,700 staff and resources of £165 million, which the noble Lord will accept is hardly chicken-feed. That is clear evidence of the Government's commitment to help to assure a well-trained, skilled work force in the Province.
The Industrial Development Board will publish a new strategy within the next few months to cover the early years of the 1990s. Obviously, that is fundamental and takes into account various views expressed and reports published by bodies with an interest in the economic and industrial health of Northern Ireland. One clear message coming out of

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the review is that there is a need to place even more emphasis on increasing the competitiveness of Northern Ireland industry and to develop methods of achieving that, particularly against the background of the completion of the single European market. The Government have always encouraged research and development work by companies in Northern Ireland and the Industrial Development Board's future strategy will continue that emphasis.
I can tell the noble Lord, Lord Bonham-Carter, that the Government are wholly committed to promoting equality of opportunity and to eliminating discrimination on the grounds of religious belief, political opinion, sex and against married people in general. As a major component in that commitment, the Fair Employment (Northern Ireland) Act 1989, which came into force on 1st January, aims at ensuring that both communities enjoy fair participation in employment. It is a little unfair to cross-question me this soon on the operation of that Act, but I shall bear the noble Lord's comments in mind and we may perhaps return to the subject at a more appropriate time.
The noble Lord, Lord Prys-Davies, referred to the 36th report of the Public Accounts Committee in another place, particularly regarding the need for improved information and performance indicators. The Department of Health and Social Services has accepted the PAC's conclusions lock, stock and barrel. The department is directing considerable resources towards information technology projects designed to bring about significant improvements in management and financial information and to enable the dissemination of information regarding good practice.
The noble Lord also asked about the size and health characteristics of the population of Northern Ireland and about possible changes in the distribution of resources. In essence, the new regime of funding will mean that boards are funded based on the needs of their own populations rather than on what I would describe as the ad hoc accretion of services provided by them.
The noble Lord referred to the new arrangements for contracting and the availability of skilled staff. The health service in Northern Ireland has an extra year in which to develop contracting. It will be introduced in April 1992. There is therefore time to acquire and develop the necessary skills. Health boards and their staff already have a groundwork of experience in contracting, but I accept that training for staff will be an important component of the near future. Northern Ireland is learning from demonstration projects in the Great Britain health authorities. Furthermore, boards will develop a small number of shadow contracts in 1991–1992.
Improving community relations is one of the Government's highest priorities. That is reflected in the range of programmes developed over the last two years. Towards the end of 1987 the Government decided that community relations should be given a higher profile and a new central community relations unit was established to ensure that at the centre of the decision-making process in government community relations issues received full consideration. The increase in resources has been from £0·7 million to
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around £4 million in 1990–91, which has enabled a major expansion of cross-community contact programmes—the creation of a district council programme to support community relations in their areas, the establishment of a Northern Ireland community relations council (about which we know) and the development of a major cultural traditions programme including support for the Irish language. I shall pass on to my honourable friend the Minister with special responsibility for education the comments that have been made.
There are two small matters to which brief reference was made. Nonetheless I believe that they are important. I can tell the noble Lord, Lord Bonham-Carter, that the report of the Defence Select Committee of another place deals with defence estimates and their handling by the Ministry of Defence. Therefore, while it would not be appropriate for me to comment at this moment, there is no connection between this matter and expenditure on the Northern Ireland Vote. However, the Ministry of Defence has taken note of the report which, as the noble Lord said, has given it something upon which to cogitate. I am advised that it will not be cogitating very much longer.
The noble Lord, Lord Dunleath, mentioned, I suppose inevitably, the Kincora Boys' Home. I remind him that there have already been two very thorough investigations by Sir George Terry and His Honour Judge Hughes respectively. The Government have repeatedly stated that if Mr. Wallace has evidence to back up his allegations, he should make that evidence available. That would be the time to consider whether a further inquiry is either sensible or desirable. At the moment quite clearly it is not.
Lord Dunleath: My Lords, I hope the Minister will forgive me for interrupting but is it not true to say that a right honourable Member in another place has a letter from Mr. Colin Wallace? Has that letter been authenticated either through fingerprints or other forensic means?
Lord Skelmersdale: It has not to my knowledge, but I repeat the point that this matter has been explored twice very thoroughly. Therefore, there would need to be real evidence. I cannot say at the moment whether that letter provides such evidence.
Not surprisingly, both the noble Lord, Lord Dunleath, and my noble friend Lord Lyell referred extensively to agriculture. So far as concerns bovine spongiform encephalopathy, I can advise the House that there have been 40 confirmed cases of BSE, as it is known, in Northern Ireland to date, compared with over 10,000 in Great Britain. At present six animals are under restriction in Northern Ireland as suspect BSE cases. The Republic of Ireland has confirmed 18 cases of BSE.
We have implemented legislation to make BSE a notifiable disease. Suspect animals are slaughtered and all carcasses are destroyed. The feeding of ruminant protein—the most likely source of BSE—to ruminants is prohibited. My own department has paralleled the recently announced Great Britain legal ban on the use of specified bovine

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offals for human consumption. The Department of Agriculture has also raised the rate of compensation for affected animals from 50 per cent. to 100 per cent. of market value in line with the increased GB levels announced by my right honourable friend the Minister of Agriculture on 13th February.
We acknowledge the adverse effects on Northern Ireland trade of West German restrictions on exports of United Kingdom beef since November 1989. The EC Standing Veterinary Committee, on the advice of the Scientific Veterinary Committee, accepted that there was no public health risk in meat with specified offals removed derived from cattle in countries in which BSE occurs. Subsequent to that decision, the Germans have reduced their certification demands which now require that bone-in meat does not originate from animals affected by BSE or their progeny. The United Kingdom is considering its response to the German conditions for bone-in beef.
Perhaps I may write to my noble friend Lord Lyell about the computerisation of divisional veterinary offices. Briefly, I have been in contact with share fishermen through the good offices of their Member of Parliament but I have to say that, despite recent very heavy and adverse weather conditions, it is not appropriate to compensate them from the agricultural Vote.
Like the noble Lord, Lord Bonham-Carter, the Government believe that integrated education has a great part to play in overcoming community divisions in Northern Ireland but that will happen only where parents wish it. The Government also continue to recognise and respect the wishes of parents who want to retain the present position with regard to school provision. We had a very long and somewhat intractable debate on that subject the other day. I shall look at the noble Lord's comments and elsewhere in the debate to see whether there is anything of use I can add to assist him. The same will apply to the comments on education made by the noble Lord, Lord Dunleath.
I should like to refer briefly to green pound devaluation. The noble Lord may not know that a green pound devaluation is being considered as part of the 1990–91 EC price fixing proposals. The Commission has proposed a devaluation of one-third of the real monetary gap that exists at the time that the price fixing is agreed. My right honourable friend the Minister of Agriculture, Fisheries and Food will be negotiating for the best possible deal in the price fixing round. Any devaluation agreed would have the effect of raising support prices for the producer.
The noble Lord will also have seen the reports of my honourable friend the Minister with special responsibility for agriculture as a result of the flooding at Ballykelly. Once the breach on the Banfoot river has been repaired and the water removed, the department's county agriculture staff will give free advice on the restoration of land. I am advised that it is too early to cost remedial works expenditure on the necessary repairs to the flood banks for the river. The cost in respect of valuable
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embankment areas is estimated to be in the region of £140,000 and expenditure will be carried out by the Department of Agriculture. However, the Government do not normally compensate for insurable losses. The Department of Agriculture is not liable for damage resulting from the accidental failure of an embankment or flood bank. The question of negligence does not therefore arise.
I appreciate that this has been a very rapid gallop over many of the points adduced by your Lordships on this appropriation debate. The House has had to look at several very different areas of expenditure on this order, which was a point made by the noble Lord, Lord Fitt, but I am afraid that that is the nature of the Supplementary Estimates. Many of your Lordships probably believe that in this House we are privileged in that this is the only government expenditure that we can examine at all. I am sure that those noble Lords with an interest in Northern Ireland affairs appreciate these opportunities to discuss significant changes in public expenditure in the region. I trust that the House will be content to approve the order.
On Question, Motion agreed to.

Education (Student Loans) Bill
8.29 p.m.
House again in Committee on Clause 1.
Earl Haig Earl Haig moved Amendment No. 5:
Page 1, line 6, after ("maintenance") insert ("but not their tuition").
The noble Earl said: This amendment explains more clearly the purpose of loans. At present the wording of the first paragraph is incomplete. It is not explicit. It should mention both aspects—maintenance and tuition—within each of which there are problems over funding. On the tuition side the Government have something about which they can feel proud. An undertaking was rated at £750 per student in 1984. Extra moneys available from universities have been added. The problem of university funding was highlighted by the Oxford appeal.
Financial difficulties also affect art schools. In London there have been closures and amalgamations. In Edinburgh, due to cuts, students are being asked to find their own materials. This is particularly expensive in the craft departments. On the credit side, students are learning to economise and to save on materials. However, this makes experimentation difficult because mistakes and breakages—for example, in the stained glass department—are expensive. Students have to pay for the gas used in their kilns and sand blasters. At the end of the year they are faced with heavy bills for materials.
It is an expense which comes under the heading of maintenance although rightly it should come under the heading "tuition". Under the proposed scheme there will be a heavy welfare debit when on top of materials there will be the cost of food, lodging, poll tax and clothing. To art students, the

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loan scheme is unpopular. It is vital to phrase the wording of the Bill in as attractive a way as possible to make students feel that they will be on solid ground. The Bill aims to increase the numbers of students in particular from lower income families who will be able to play their part in the years ahead. It is all the more important to word it properly in order to attract students. Perhaps I may use an analogy about fishing. If one wishes to catch a fish one puts as attractive a fly at the end of one's line as possible.
At present the Bill is seen as a disincentive to students who hope to embark on lower paid careers in arts, teaching, nursing, the Church, social work and, in the short term, in medicine. For them, we must be clear about the bottom line which includes tuition as well as maintenance. Tuition is an expensive undertaking. It must be spelt out in the Bill as part of a good selling exercise. Otherwise we are bad communicators. I beg to move.
Lord Peston: I rise briefly to support the amendment of the noble Earl. His eye has caught a point that some of us missed. It is worth underlining it.
The Bill says in its introductory statement:
"An Act to provide … loans towards their maintenance".
There is no doubt that that is what it states. The noble Earl may well say that when the Bill states "towards their maintenance" it means towards their maintenance and nothing else. If it means that, the point of the noble Earl, Lord Haig, is well taken and will be met by the Bill. I hope that is what it means and that the noble Earl, Lord Caithness, will be able to say that is exactly what it means. He will then have satisfied the noble Earl, Lord Haig, and those of us on this side of the Chamber.
Lord Renton: I agree with the noble Lord that the word "maintenance" used by itself implies that it does not cover tuition fees, and so on. I do not have a copy of the White Paper with me. Can my noble friend tell us how tuition fees will be paid for by those who do not have the means to pay them? Will they be paid for by grants, as frequently happens at present; or in what way?
Lord Adrian: Perhaps I may ask the Minister whether there is any planned intention to change the method of payment for tuition fees from that in place at the moment. In effect, is there any difficulty in accepting the amendment which implies that at least for the present there is no intention to change? To refuse the amendment might suggest that there was such an intention.
The Earl of Caithness: As the noble Lord, Lord Peston, pointed out to my noble friend Lord Haig, the amendment is unnecessary. That is due to the Bill's first substantive sentence in Clause 1(1) which would empower the Secretary of State to make arrangements only,
"for enabling eligible students to receive loans towards their maintenance".
I can confirm to my noble friend that there are no powers in the Bill for the Secretary of State to make
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loans towards student's tuition costs. I noted exactly what my noble friend Lord Renton—who is the expert on drafting in this Chamber—said: that the concerns of my noble friend Lord Haig are already met in the wording of the Bill as it stands.
However, I do not rest my case at that. I understand the concerns that lie behind my noble friend's amendment. I wish also to respond to those directly. I can say to him and to the noble Lord, Lord Adrian, that the Government have no plans to change the arrangements whereby, in the case of students in receipt of a mandatory award, standard tuition fees are met from public funds as part of that award. Payment is made direct to the institution attended by the student. That element of the award is not means tested. The fees element is payable whether or not the student's parents are assessed on income grounds to make a contribution to the grant for living costs.
When the noble Lord, Lord Adrian, rose, I thought that he was going to argue against my noble friend's amendment because I know that it is part of the vice-chancellor's scheme that tuition fees could be catered for under a graduate tax principle. Let me just confirm again to my noble friend Lord Haig that I absolutely take his point, but I believe that it is already well catered for in the wording of the Bill.
Earl Haig: I thank the Minister for his undertakings and explanation. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blackstone Baroness Blackstone moved Amendment No. 6:
Page 1, line 13, after ("State") insert—
("(aa) are commencing their courses on or after the academic year 1990–91").
The noble Baroness said: The amendment raises a simple issue. It is whether it is right to alter the conditions of study for existing students who started with an expectation of being able to complete their courses with grants rather than that half-way through their courses they would be asked to shift into a partly loan supported maintenance system.
The Government argued at Second Reading that students who started their course in October did so in the knowledge of the forthcoming student loans scheme. That would not be true of students who started their course a year earlier; in other words, third year students in October 1990. In any case, there is no evidence for the claim that students starting their courses last October were fully aware of the implications of the student loans proposal. More significantly, the proposal has yet to receive parliamentary approval and a student would be wholly entitled to think that the matter was still under discussion and that the principle might not be adopted.
For the Government to endorse any other assumption is to demonstrate very clearly their view of parliamentary sovereignty. Even if a student had accepted the likelihood of the Government getting the Bill through, there is nothing in the Bill which spells out to an existing student the level of the loan

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which he or she will receive, or any of the detail about how it will be paid. The Government confirmed at Second Reading the figures contained within the White Paper. But those figures could still be changed and in any case are likely to be changed very substantially in future years.
There are also practical arguments for phasing the scheme over a three-year period. First, existing students are more than likely to have incurred debts through having to supplement their grant. We know that many of them do so. The Bill proposes that second and third year students should effectively incur a new form of debt to set alongside those incurred from the beginning of their studies at the start of their first year. It would surely be better to enable students joining the scheme to do so with a clean sheet and to let them make their own decisions on spending arrangements within the known constraints of the loans which they are to be given.
The Government argue that loans at a nil rate of interest are advantageous to students who are otherwise forced to borrow commercially. In fact, it is difficult to avoid the conclusion that, the grant having been reduced by 21 per cent. in real terms since 1979—and indeed the Government have confirmed those figures—the financial difficulties of students are now being used against them in order to justify loans.
Imposing loans on students who have had to struggle financially during their first and second years—or, in the case of those students on longer courses, third and fourth years—will multiply those difficulties. Students in rented accommodation are dependent on housing benefit, which they will lose together with any income support which may have been claimed during the summer vacation. That will be the price for receiving a loan part of the way into their period at university or polytechnic. Therefore, students faced with a real cut in their income in their second or third years will question very seriously why the new scheme could not have been introduced gradually from October 1990 starting only with new students.
In addition, surely it would be better to bring in the changes gradually so that any of the administrative difficulties can be ironed out with one cohort of students rather than three years all being pushed into the scheme at once. In a discussion on Amendment No. 2 we heard about the benefits of delaying rather than rushing through this legislation to try to start all students on the scheme in 1990. I know that the views of higher education institutions will be very much in favour of starting on a more gradual basis.
When we discussed that amendment earlier this afternoon, the noble Baroness, Lady Young, said that academics always wanted to delay things. Speaking as an academic, in this case I am not in any sense asking for a delay and I am not concerned about delay. I am concerned about order and efficiency. I foresee administrative chaos this summer if this amendment is not accepted and if we are going to ask higher education institutions to process not only new students but all existing
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students, all in the course of two or three months over this summer.
The prime reason for moving this amendment is that the Bill retrospectively changes the conditions of study in our universities for approximately two-thirds of all our undergraduate students. Surely that is an undesirable precedent. I beg to move.
Baroness Young: When my noble friend comes to reply to this amendment I believe that it would be very helpful if he could set out in some detail just what will be the figures. When I read this amendment on the Marshalled List I could see the point which the noble Baroness was making. At first glance it appears that somebody will be disadvantaged. Therefore, I wish to be sure that my own understanding of the position is correct.
I may not be right but I should have thought that it was unlikely that students coming up next October do not know about student loans, because there has been quite a lot of talk about the subject in the newspapers and in the media generally for some considerable time and undoubtedly it will continue to be debated over the next summer term.
However, the point I particularly wish to make is that, as I understand the scheme, next October—and that is why I want to be quite clear—the grant will be increased (and there are three levels) and at the same time in the autumn of 1990 students overall will receive an increase in the amount of money available; that is, the £125 million. Of course, they will be eligible for a loan.
Therefore, my understanding is that in October students will be returned approximately in real terms to the position in 1979. In that sense, to delay an introduction of this scheme could put students coming up next October at a disadvantage vis à vis everybody else. I believe that it is quite difficult fully to understand all the figures. I hope that I have got this right. If so, it seems to me that it is to the advantage of students to be in the scheme next October, and that is what we want to see.
8.45 p.m.
Lord Addington: I support this amendment. The real issue here is that students who have entered on an undergraduate course prior to October 1990 will have done so through a system under which they have been funded by grants and not by loans. Therefore, they may have made their assessments of going into education on different grounds.
Effectively, we are changing the terms under which students are entering upon their educational studies. Students going back one year may well have just been aware, when they entered their courses, of a proposal similar to that at present before us. Any student going back further than that—that is, any student in his third, fourth or fifth year, because there are undergraduates on courses of that length—will not have known of or considered this loan scheme when he started his course.
I believe that there is a strong case for allowing students to finish their courses under the same terms as they entered into them. It simply is not fair to expect them to have this decision forced upon them

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as opposed to letting them finish their courses under the terms on which they started them. I believe that this is a principle of basic fairness which we should address.
Lord Boyd-Carpenter: There seems to me to be something in favour of this amendment in respect of current students. Students who have embarked upon their courses at universities or other institutions of higher education started on a certain basis, no doubt believing, rightly or wrongly, that that basis would continue during the normal term of their studies.
Therefore, unless they are prepared willingly to agree to change to the new position, it would seem reasonable that they should be entitled to hold to the position at which they started as students. That may seem to my noble friend to be unduly favourable to them. On the other hand, there is much to be said for saying that if people have undertaken obligations on a certain basis, they really should be allowed to complete their studies on that basis if they so wish. If they are prepared to waive that, that is another matter.
Earl Haig: I support the amendment which is designed to make sure that arrangements and agreements made with current students are adhered to and that provisions made for their support are not changed while in midsteam. Unless previous commitments are adhered to, there could be grave problems of financial adjustment for students from low income families who will be unable to make ends meet and will thus have grounds for resentment. We should not impose new regulations upon students who were already enrolled and who were unaware of the scope of the new regulations. Their positions would be safeguarded by exemption from the provisions of the Bill and the regulations.
Lord Adrian: I am much in agreement with what has been said already. However, I have one further concern; that is, that if students who are currently at the universities or polytechnics are not to come under the operation of the loan scheme, as I understand it, they will lose their social security benefits whenever that is promulgated, laid on the table or put forward under whatever mechanism is to be used.
Therefore, I believe that, if students in course are not to become eligible for loans, they should continue to be eligible for social security benefits, because, if they are not, they will be quite seriously disadvantaged.
Lord Renton: It is always wrong, as the noble Baroness said, for us to legislate in retrospect if we can possibly avoid it. It is especially wrong in financial matters, and it may be harsh on students who, for example, have done two years of a three-year course and who are just coming up to their final year, which is the most anxious of the three years. For them to find that the financial foundation of their studies is to be changed in a way that some of them may find less agreeable is something that we should avoid. I shall be interested
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to hear what my noble friend the Minister has to say about the amendment. I too, for the reasons given by my noble friend Lord Boyd-Carpenter, and others, have some sympathy with the amendment.
Earl Russell: I am in full agreement with what has been said by the noble Lords, Lord Boyd-Carpenter and Lord Renton. I do not believe that I am straining things by saying that we have here an argument of implied contract, which is something about which universities are careful when dealing with their students. When new courses and new degree regulations are introduced, it is pretty well invariably on the understanding that these apply only to those who will be admitted in the future and not to those who are already admitted. It is a principle which was accepted by the Government in a case about which they felt strongly—the abolition of academic tenure. That measure was to apply only to appointments made or contracts signed after 20th November 1987. That was a good. equitable principle. I was glad to see it there; I should like to see it here.
There is also some force in the points made by the noble Baroness, Lady Blackstone, about the risk of administrative chaos. The Committee knows that I am somewhat concerned about September 1990. It will be difficult to get the processing done in time. A reduction of one-third in the burden of work to be done in the first year could be helpful. It could even possibly just make the difference between a scheme which may just creep through and work and one that will not.
Now that we have passed Second Reading, if it works I shall be relieved. If the Minister were to accept the amendment, I hope that he will also give thought to the point about the social security regulations made by the noble Lord, Lord Adrian. That instrument, which I have now discovered is by the negative procedure, has not yet been published. I hope that it is not too late to introduce consequential revisions into it. I support the amendment.
The Earl of Caithness: The intention of the amendment is to make loans available only for students starting their courses in the academic year 1990–91 and thereafter. It is the Government's intention that loans should be available to all eligible students in the autumn of 1991, not just new entrants in that year. Of course, it is up to the students whether they take the loan or not. The reason is the one that I gave earlier this afternoon: the loan offers students more resources and we want all students to have access to the addition as soon as possible. My noble friend Lord Renton has misunderstood the scheme.
The uprating of the grant that we have already announced will be available in the forthcoming academic year is 5 per cent; but, as my noble friend Lady Young said, with the loan added—it is a genuine top-up loan—the total public support available to students will be increased by 25 per cent. compared with this year's grant. We think it fair that all students should have access to that loan. I have to disagree with the noble Lord, Lord Addington, who said that that was unfair. The grant

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is being uprated. In addition there is the loan scheme available with new money which will top up the resources available to students by 25 per cent. That is an excellent opportunity for students who wish to make use of it.
If the loan were denied to students already part way through their course, we should consider what other public support would be available to them. One alternative is that they should receive a grant equal in value to the grant and loan combined. The Government rule out that proposal on two grounds. One is equity and one is cost. It would not be equitable to have two parallel systems of support running together, with individual students allocated to one or the other according to the accident of the date of their entry into higher education. Providing the additional resources as grant rather than loan to all but first-year students—that is, to some 60 per cent. of the student body—would delay the point at which repayments would start to offset the cost to the taxpayer of supporting students' living costs. From the Benches opposite we have heard complaints about the cost of introducing the scheme as if its generosity were a fault. I am therefore surprised that Members opposite now want substantially to delay the date at which the scheme offers relief to taxpayers.
I was also interested in the argument about the complexities and extra administrative cost of the Government's proposal. If one envisages two parallel schemes of student support—the old one alongside the new—that is a more inequitable system than the one the Government propose. If there is to be, as in the words of the noble Baroness, Lady Blackstone, administrative chaos, there is far more likely to be administrative chaos with two schemes than with the one scheme proposed by the Government.
The noble Lord, Lord Adrian, raised the important question of social security and access funds and I have no doubt we shall come on to that in more detail later. I take on board what the noble Lord said. His concern to get that point right is shared by the Government.
My noble friend Lady Young picked up the argument that some students presently in higher education would not have chosen to start their courses if they had known that the loan scheme would be in place next year. The applications for places tell a different story, as my noble friend knows. The Government's proposals for loans have not had a disincentive effect. Applications for autumn 1990 stand at 6 per cent. higher than applications at the same point a year ago. Those applications have been made in the knowledge that the Government intend to supplement the grant with the loan and access funds. I am not at all surprised that the applications are higher than last year. Next year student resources will increase. The grant will be uprated and with the loan in addition students will have access to 25 per cent. more than this year. All eligible students should be able to make use of the loan facility if they wish and take advantage of the additional resources that it provides.
Lord Boyd-Carpenter: Before my noble friend completes his argument, will he consider the point that I ventured to put forward that, if as he suggests the changeover is to the advantage of current students, they should be given the option of whether to go on to it or to remain on their present basis?
The Earl of Caithness: That leads me back to the argument that that suggestion would involve two schemes and a great deal more administrative complexity. My noble friend will wish students to be clear as to where they stand. The grant will be uprated in the forthcoming year. The loan scheme is in addition to it. One can see that the students are not put off and that they are enrolling in increased numbers for next year.
Lord Renton: I wanted to hear what my noble friend's explanation would be. Having heard it, I must withdraw my suggestion that for those students starting their third year the scheme would be disadvantageous. It would not on the facts given by my noble friend.
Earl Russell: The Minister never ceases to surprise me. He discussed the option, if the amendment were accepted, of paying to those affected a sum in grant that would be equivalent to the loan. He said that he ruled that out on the grounds of cost. I do not understand that, because the sum concerned is equal in both cases. The cost to the Treasury would be the same. All that would happen is that the Government would save the costs of administration. How that could amount to a net extra cost is more than I can understand.
I was also a little surprised by the noble Earl's insistence that we could not have two systems running together, because that is precisely the principle which in the case of academic tenure the Government accepted. I do not see the difference.
9 p.m.
The Earl of Caithness: It is a great compliment from the noble Earl that I keep him on his toes by surprising him. I did not say that one could not have two systems. I said—and I stick by it—that to have two systems was more complex and administratively more costly.
Baroness Blackstone: Does the Minister not agree that we will have two systems any way under the Government's proposals? We will continue to have a mixture of grants and loans. Local authorities will continue to spend quite a lot of time and effort dishing out grants.
To return to what the noble Lord, Lord Boyd-Carpenter, said, I think that it was an extremely pertinent and relevant question. If students will be so much better off under the Government's proposals, why not give them a choice and let them decide whether they wish to continue with the existing scheme with the grant uprated and remaining on social security and housing benefits, or opt for a loan? I can assure the Committee that the vast majority of students, given that choice, would prefer not to take on the additional debt of a

1401
student loan but to stay with the existing schemes. It is absolute nonsense to say that this will lead to additional administrative costs because two schemes already exist and will continue to exist.
Baroness Carnegy of Lour: Before my noble friend replies, does he agree with me that what the noble Baroness is suggesting—and also, rather more surprisingly, my noble friend Lord Boyd-Carpenter—that some people might be on benefit and some people might not be, that the change in the arrangements with regard to better housing benefit and so on will apply to some students and not to others, seems extraordinary. I would not have thought it was tenable.
The Earl of Caithness: My noble friend Lady Carnegy makes an extremely good point. I say to the noble Baroness, Lady Blackstone, however, that the loan is optional. To have two schemes side by side would add to the complexities and the costs.
Lord Peston: I am sorry to join in the debate, but we must get the economics and finances right. The fact is that we are starting from a base on which the Government have cut the real value of the grant by around one-quarter. That is the key initial fact. During the lifetime of this Government the real value of the grant has fallen by one-quarter. The correct base line, therefore, is to put the grant back by that quarter. That is the key base line.
The Government cannot claim that what they are now offering is something extra. It is not extra. It is remedying a defect from the past. The extra starts at that base line and there is no suggestion that the Government will provide anything above that base line. The noble Earl's argument therefore is quite simply wrong. That is the first point to bear in mind when debating this issue.
To add insult to injury, what essentially one is saying to the students who are already at university is that they ought to have gone there assuming that the Government were going to cut their grant even more in real terms, and now they are not going to cut it, are they not being kind? That is absurd. In other words, having done damage to students, the Government are then asking the students to thank them for removing some of the damage.
We should at least get the logic of the argument right and decide where we are starting from. Given that, it seems to me that the amendment tabled by my noble friend Lady Blackstone is entirely correct. We are behaving rather badly towards students who are already at university—unless we take a very cynical view that they expect the Government to behave badly and therefore the Government are not behaving badly. I cannot believe that the noble Earl wishes to proceed on that basis. The least he can do is to offer to think about the points raised.
I am sorry to say that I think the noble Lord, Lord Renton, was too easily convinced by his noble friend. The fact remains that a third year student at present is entitled to ask "Why can I not have a decent grant in the first place, because that is how I was admitted to university?" That is the question that has not been remotely answered by the Minister. I hope he
1402
will not now play the card which we have heard about, the so-called "new money". In the world of economics and finance there is no "new money"; there is only "money". That is what one discusses. The idea that there is some part of it which can be called "new" is simply a term of art which the Treasury, for reasons which are beyond me, uses. When I was in the Treasury there was no concept of "new money" and I am amazed that the Treasury has been taken in by the idea of "new money". All that we are concerned about is "money".
Baroness Seear: I do not wish to prolong the debate, but surely the position is quite straightforward—that these students came in under the expectation of certain conditions; a grant plus social security benefits. To put it bluntly, the noble Earl has not answered the accusation of bad faith. If he wants to keep faith with the contract which, formally or informally, was entered into, he needs to say to the students who are already at university that next year or until they finish their course they will have in real terms the grant that the Government offered them; it will not be increased by 5 per cent.; it will be at least 8 per cent. to 9 per cent. by the time we reach next year. They thought they were being offered 9 per cent. plus the maintenance of their social security benefits when they went to university. The noble Earl shakes his head, but that is what they understood they would receive.
The morality of the situation is wrong. Not only are we encouraging the young to get into debt in order to complete their education, but we are also saying that their lords and masters do not mind breaking a deal. I do not know what kind of youngsters one expects to produce if that is the standard which is set for them.
With new students one can make completely different contracts. But I see no difficulty in having those two sets of arrangements for students who entered under quite different conditions. Perhaps the noble Earl will answer that breach of faith accusation.
The Earl of Caithness: I do not think there is a breach of faith at all. I contest that because I contest the very basis on which the noble Baroness makes her assumptions. If a student qualifies for a grant—because a grant is means tested as the noble Baroness will be aware—there is no guarantee with regard to uprating. It is uprated annually by a varying amount. The noble Earl is highly critical of this Government. But I would draw his attention to the White Paper. He will find on page 6, Chart 4, which indicates that ever since 1962, when my noble friend Lord Boyd-Carpenter was Chief Secretary to the Treasury, the real value of the grant has been decreasing year by year. That is the beginning of the problem facing us in higher education.
There has been a reduction in the real terms value of the grant; there has been an increase for the need for parental contribution; and parents have not been able to make up that shortfall. All governments have faced exactly the same problem. Therefore we are in a new position and we wish to encourage more students to enter higher education. If we achieve

1403
that by getting back a contribution from the students we are providing new money—and it is new money, whatever the noble Earl may say. It is new money which, on top of an uprating of the grant this year, will be equivalent to a 25 per cent. increase.
The loan will be paid back in due course if certain criteria are fulfilled for the graduate. It eases the burden on the taxpayer and on the parents. As a majority of Members of the Committee now agree, it is right that students should contribute something. This year, with the uprating of the grant and the loan, we are able to increase the resources available to students by 25 per cent. That should be available to all students whether in their first, second, third, fourth or fifth year.
Lord Boyd-Carpenter: Will my noble friend answer my question? If the changeover in respect of a current student is to his advantage that should be apparent to him. Why should he not be given the option either to continue on the basis on which he became a student or to accept the, as my noble friend argues, more agreeable alternative? What is the objection to giving him the option and therefore not appearing to be going back on the basis on which he became a student?
The Earl of Caithness: While such a person was a student one would be running two parallel schemes which would add to the cost and the complexity of the operations.
Baroness Blackstone: I am disappointed with the Minister's reply in answer to concern on all sides of the Committee about the problems for existing students. The amendment deals with the guarantee given to existing students at the beginning of their courses that they would receive a grant subject to means teasting and other regulations associated with the grant. Now we are saying, "You will no longer receive a grant; instead you will receive a loan"—
The Earl of Caithness: No, with respect, they will continue to receive a grant which this year will be uprated by 5 per cent.
Baroness Blackstone: I take back my comments. Yes, they will still receive a grant; but it will be a grant plus a loan rather than a grant uprated by a more significant amount taking into account inflation and other costs.
A further point has been forgotten in the debate on the amendment. It is not the case that all students will be better off as a result of the new combination of grants and loans. Some students will lose their social security and housing benefits. Students who claimed both benefits because they were in need will be worse off, even with the 25 per cent. increase in the form of an uprated grant and a loan.
Many existing students have housing obligations. They live in rented houses or flats and have told their landlords or landladies that they hope to rent the accommodation until they complete their courses. They may now be in a situation in which they will be unable to do so.
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A serious issue of principle is involved. I do not believe that such changes should be introduced retrospectively. It is impractical to do so because of the increasing demands that will be made on higher education institutions, which must certify three times more students if we accept the amendment. In view of both those factors and the concern shown on all sides of the Committee I must ask that we divide—
The Earl of Caithness: Before the noble Baroness takes a final decision I wish to take up an important point which was also raised by the noble Lord, Lord Adrian. I am sorry if I did not deal with the matter fully. The Government are concerned about students who are now in areas of high-cost housing and are in receipt of housing benefit. It is of concern to the Government to get the provision right. Currently it is being dealt with by the access funds, of which there are three, of £5 million.
I wish to reassure Members of the Committee that I shall listen to their comments on that matter and discuss them with my right honourable friend to make sure that we get it right. We are sympathetic and realise that some students in high-cost housing areas are in that position. We wish to make sure that the matter is properly sorted out and in forthcoming debates I shall be listening to Members' comments about that.
Baroness Blackstone: There are going to be very many demands on the access funds, which are not very large sums of money. I am doubtful whether they will cover all the claims that will be made on them. The issue of principle still remains and on that basis I ask the Committee to divide.
9.14 p.m.
On Question, Whether the said amendment (No. 6) shall be agreed to?
Their Lordships divided: Contents, 34; Not-Contents, 47.

DIVISION NO. 3

CONTENTS

Addington, L. [Teller.]

McCarthy, L.

Adrian, L.

Mackie of Benshie, L.

Airedale, L.

Mason of Barnsley, L.

Baldwin of Bewdley, E.

Ogmore, L.

Barnett, L.

Peston, L.

Beloff, L.

Ponsonby of Shulbrede, L.

Blackstone, B.

Prys-Davies, L.

Bonham-Carter, L.

Ross of Newport, L.

Boyd-Carpenter, L.

Russell, E.

Buckmaster, V.

Saltoun of Abernethy, Ly.

Butterfield, L.

Seear, B.

Carter, L. [Teller.]

Shepherd, L.

David, B.

Strabolgi, L.

Dormand of Easington, L.

Tordoff, L.

Haig, E.

Winchilsea and Nottingham, E.

Hatch of Lusby, L.

Jenkins of Hillhead, L.

Winstanley, L.

Kirkwood, L.

1405

Arran, E.

Hives, L.

Balfour, E.

Home of the Hirsel, L.

Bathurst, E.

Johnston of Rockport, L.

Belstead, L.

Long, V. [Teller.]

Blatch, B.

Lothian, M.

Borthwick, L.

Lyell, L.

Brabazon of Tara, L.

Mackay of Clashfern, L.

Brougham and Vaux, L.

Mersey, V.

Caithness, E.

Mills, V.

Carnegy of Lour, B.

Mountevans, L.

Carnock, L.

Murton of Lindisfarne, L.

Colnbrook, L.

Peel, E.

Colwyn, L.

Reay, L.

Davidson, V. [Teller.]

Redesdale, L.

Downshire, M.

Renton, L.

Eccles, V.

Sanderson of Bowden, L.

Elton, L.

Stevens of Ludgate, L.

Ferrers, E.

Strathclyde, L.

Fraser of Carmyllie, L.

Strathmore and Kinghorne, E.

Goold, L.

Harmar-Nicholls, L.

Trumpington, B.

Hemphill, L.

Ullswater, V.

Henley, L.

Wynford, L.

Hesketh, L.

Young, B.

Resolved in the negative, and amendment disagreed to accordingly.
9.21 p.m.
[Amendments Nos. 7 and 8 not moved.]
Earl Baldwin of Bewdley Earl Baldwin of Bewdley moved Amendment No. 9:
Page 1, line 15, at end insert—
("() The Secretary of State shall when designating institutions under subsection (2)(a) above and when prescribing conditions under subsection (2)(b) above secure that students traning as health care practitioners shall be treated not less favourably than other categories of student.").
The noble Earl said: Under Clause 1(2)(a) students at publicly funded institutions will be eligible for loans. Of those students at private insititutions, by inference some will be eligible and some will not. We do not yet know who the list will consist of. The purpose of the amendment is to secure that prospective health care practitioners will be among the sheep rather than the goats.
The particular concern that prompts the amendment centres on the British School of Osteopathy. Many Members of the Committee will have consulted osteopaths and will know the good work that they do. The BSO, founded in 1917, is an entirely private educational institution in central London, with charitable status and with no endowments. It runs a four-year full-time degree course, recently validated by the CNAA, which includes full clinical training. The current number of students on the degree course is 365, of whom quite a proportion are mature students.
It would be most undesirable if those training in this valuable field were put at a disadvantage compared with other students if a loan scheme came into force. It would be bound seriously to affect recruitment and the supply of good osteopaths would decline. The same is true of chiropractors, who do a similar job. The Anglo-European College of Chiropractic is another private college offering degree level training to aspiring health care practitioners. If these students are discriminated
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against, we can be sure that significantly fewer professionals will be available to deal with problems in our spines, muscles and joints in the future.
The Minister said at Second Reading (at col. 603 of the Official Report) that the list of designated courses at private establishments was now being settled. Can he now give us an idea of the kinds of course that will be designated, and in particular can he assure the Committee that those in the categories I have spoken of will be included? I beg to move.
Lord Colwyn: I support the amendment. As we have heard from the noble Earl, Lord Baldwin, students studying courses that are supplementary to medicine are playing an ever increasing role in the maintenance of our health today. It is important that this role is recognised and clarified in this clause of the Bill.
Earl Bathurst: I must declare an interest as one undergoing a course on chiropractic. I hope that nothing in the Bill will prevent future practitioners of this branch of medicine being attracted to it. The same applies to osteopathy, which is another valuable branch of medicine. I hope that the Minister will consider the amendment most carefully to ensure that the Bill does not disadvantage future chiropractors—I think that is the right way to describe them—or osteopaths. I support the noble Earl.
Lord Peston: I should like to say a few words on the matter. We are indebted to the noble Earl, Lord Baldwin of Bewdley, to the noble Lord, Lord Colwyn, and to the noble Earl, Lord Bathhurst, for raising a matter which we all seek to raise for the sake of clarification. The noble Lord, Lord Colwyn, put his finger on the key issue, which is not simply osteopathy or chiropractic but generally professions ancillary to medicine. What we know—and I think that this is an entirely correct development—is that these people are moving on from diploma level to the degree level. That is wholly to be welcomed. Many People are doing this and they are doing it via the CNAA, which is a helpful body in this regard. I do not believe that the Government would remotely wish to have any of those developments held back. It would be a great pity if the loans scheme could not accommodate such people.
I hope that the Committee will not be too shocked at what I am about to say. If the schools which undertake this training are regarded as being in the private sector, I hope that the Government do not regard this as a bad thing and that they are willing at least to show a certain tolerance towards private enterprise in the higher levels of education on occasion.
Obviously the matter was raised to enable the noble Earl to clarify the situation or, if he is unable to do so, to come back to us at some time in the future to tell us what the position will be generally of these professions which are broadly ancillary to medicine.
Lord Addington: I should like to support the amendment for the simple reason that people are studying to a degree level in a subject which is deemed to be useful and beneficial to society as a whole. Therefore, it would seem only just that they should receive as much support as anyone else who is undertaking a similar course. There are grounds for a certain amount of equity in the matter and I think that we should give these people that support.
Lord Butterfield: Is the Minister prepared to indicate whether he has made any inquiries of the Royal College of Nursing and members of the nursing and allied professions who are intending to make theirs a graduate profession in the coming century? It could involve quite large numbers of people proceeding to some kind of degree in nursing. I think that it should also be regarded as a form of training which is valuable to the community. I should just like the Minister to indicate whether he has had the opportunity to talk to the nurses about the matter. I am thinking of the steps taken to bring into being the Briggs report of about 10 years ago.
The Earl of Caithness: I hope that I shall be able to settle all the concerns expressed by Members of the Committee in regard to this important amendment. I know full well the important part that osteopaths and chiropractors have played in keeping me in this Chamber in some sort of sensible shape.
Perhaps I may deal first with the point made by my noble friend Lord Colwyn about the wider basis. Many medical students take an intercalated science degree in the midst of their medical studies. The mandatory award is not automatically available for the science degree: it depends on the structure of the course. However, I am happy to reassure my noble friend that the loan will be available in every case. Medical students without the mandatory award for the science degree will therefore find the loan especially helpful.
The noble Lord, Lord Butterfield, asked about nurses. I think that he was referring to those taking part in Project 2000, as it is known. As he will know, the courses are supported by a bursary from the Department of Health and do not receive student support from the education system. The bursaries will be paid at a higher rate than student grants. It is for that reason that people following this training will not be eligible for the student loan.
I turn now to a point raised by the noble Earl when he moved the amendment. He referred to the other professions supplementary to medicine. I hope that the position is straightforward. The present support arrangements will continue. Where this takes the form of a mandatory award, the student loan will be available on top.
As regards osteopaths, the list of courses at private institutions is at the moment being settled. I can assure the noble Earl and the Committee that it will not be less extensive than the list covered for mandatory awards and that loans will be available more widely. I shall try to give more details to the noble Earl. I know he is concerned about these matters, as are others who have spoken. I shall obtain this information as soon as we have gone further with the finalisation of the list.
9.30 p.m.
Earl Baldwin of Bewdley: I am grateful to the Minister, but before he sits down perhaps I may say that I did not quite catch the last point. Was it that if students qualify, as they will, for mandatory awards in the private sector they will be eligible for loans? Is it as simple as that?
The Earl of Caithness: If they qualify for mandatory awards they will certainly obtain the loan. It is more extensive than just pure mandatory awards, so other people may benefit as well.
Earl Baldwin of Bewdley: I think I understood that. Obviously I shall not press the amendment. It was merely a probing amendment in order to obtain information. I shall carefully read what the noble Earl said. I am grateful for the clarification and I beg leave to withdraw the amendment.
Amendment, by leave. withdrawn.
[Amendments Nos. 10 and 11 not moved.]
Baroness Blackstone Baroness Blackstone moved Amendment No. 12:
Page 1, line 15, at end insert—
("(2A) Notwithstanding the provision of subsection (2) above as to eligibility, the Secretary of State shall by regulations made under Schedule 2 below secure that no person who has one or more dependants during a period of not less than five years at any time after the date for the commencement of repayments, and who does not in one of those years receive a personal disposable income above the level of any threshold for repayments applicable by virtue of regulations under paragraph 1(1)(i) of that Schedule, shall continue to be liable for outstanding repayments or interest after the end of that period.").
The noble Baroness said: Amendments Nos. 12 and 13 are grouped together. Their principal aim is first to deal with the potential disincentive that students with dependants may face in taking up a course of higher education. Secondly, they are to deal with the disincentive that graduates on low incomes with dependants may face when deciding whether to enter more highly paid employment later.
The concern is that graduates who have dependants with low or non-existent incomes will face having to repay much higher amounts by virtue of the effect of increasing the sum of the loan to be repaid according to inflation than people who would have higher incomes and would be able to repay much sooner.
Amendment No. 12 suggests that for people on incomes below the 85 per cent. threshold of national average income their liability to repay the loan should be ended after five years. Amendment No. 13 takes a slightly different approach. It suggests that students with dependants on low incomes should not have to repay any interest on their outstanding loans if they have spent five years below the earnings threshold. They will instead pay only the original sum loaned.
During the Committee stage in another place assurances were given by the Parliamentary Under-Secretary that various allowances in the mandatory award scheme for dependants would continue to be uprated to students with dependants. However, while this is welcome, it does not deal with the potential disincentive that arises out of the

1409
operation of the proposed scheme to students with dependants when they graduate. People who have child care responsibilities are more likely to be women than men. If access to higher education, particularly for women, is to be encouraged we must ensure that they are not put off by the fact that they will have to repay loans at a much higher level than others if they come back into full-time or more highly paid work after looking after young children.
Currently there are some 7,000 students in receipt of dependants' allowances. However, many students are likely to have children soon after the completion of their courses. Why should they not? It is almost certainly the case that the number of students and graduates falling into this category within two or three years of graduation is much larger.
Perhaps I may illustrate my concern. A woman graduate who decides to become a teacher may have two children within two, three or four years of graduation. As a result she then works part time for the next 10 to 15 years and earns below the threshold. She then wishes to return to full-time teaching—something which I am sure we all hope she would do since we desperately need the services of experienced women teachers in the context both of the current and the likely future shortages of teachers. She then finds that she faces a whacking great loan repayment the moment she passes the threshold. Is this really the way we wish to treat women who have decided to work part time in order to be able to spend more time with their children and who then wish to return full time to the labour force into socially valuable but not terribly highly paid work?
Many women nurses with families—an increasing number of nurses will be graduates—may come into the same category. I hope that in the interests of those with family responsibilities that they take seriously we shall accept Amendment No. 12 and release those with dependants who have remained below the earnings threshold after five years from the obligation to repay. I beg to move.
Earl Russell: I wish to support the noble Baroness, Lady Blackstone, on Amendment No. 12. I also wish to speak to Amendment No. 13. I well remember a debate initiated by the noble Baroness, Lady Turner of Camden, on 21st June last on the need to enable married women to rejoin the labour force should they wish to do so. During the past few minutes I have looked again at that debate, which was a good one. The Chamber seems to me to have been in general agreement on two propositions. The first was that this was properly an area where we should not interfere with freedom of choice. The noble Lord, Lord Henley, speaking for the Government, said that he regarded the Government's role as an enabling one. The second point that the whole Chamber seemed to be in agreement on was that it was very much in our national economic interest to make it easier for those married women who wished to rejoin the labour force to do so.
Those were powerful points. The question I wish to raise here is whether the Bill as it stands at the moment will assist in achieving those points. The effect of the scheme is that, when a woman takes out
1410
a loan and then marries and stays at home to look after children, as is her right if she wishes to do so, her debt will continue to accumulate. That means that when she considers the possibility of returning to work, with possibly fairly considerable additional expenses of child care to enable her to do so, a much increased poverty trap arises. The effect of that is to create a considerable incentive for the married woman to postpone returning to work until the age of 50, when the loan will be cancelled. Therefore there is an incentive to postpone entering the labour force perhaps for 10 years or five years or for however long it may be.
That deprives the economy of the woman's services for that period of time. That itself is a loss, but there is the further point that there are a great many employers who are not sufficiently appreciative of the merits of employees above the age of 50 and who are perhaps rather reluctant to give them appointments at all. I am sure every Member of the Committee regrets that fact. Therefore the net effect of this proposal, as the Bill has it, is to create a poverty trap which may keep married women permanently out of the labour force. I cannot see that that can possibly be in the country's interest.
We should also consider a possible Treasury view of this amendment. It is something that has to be faced with any amendment passed in this Chamber sooner or later. I think it is much better that we should consider the argument ourselves. When we propose any change involving a net public expenditure, we should consider whether it is likely to lead to further public expenditure or to an ultimate saving and possibly even to an ultimate net saving. We all know that if someone enters the labour force and takes a highly qualified job, perhaps as a teacher, he will pay taxes and national insurance and make a considerable contribution to the revenue from which the Exchequer will in the end benefit. We desperately need more people to enter teaching.
I can see the Exchequer's interest in recovering its loans. That is a perfectly valid point and one which I do not wish to ignore. However, if in the course of its determination to recover its loans, it ultimately has the effect of keeping women out of the labour force and deprives itself of its income tax, national insurance and possibly even of a considerable expenditure in VAT, the Treasury would be cutting off its nose to spite its face. In the long run not only would the amendment have a liberating effect on married women, which is badly needed, and reinvigorate the professions, which is badly needed. I believe it would also effect a net saving to public funds.
The Earl of Caithness: The amendments are intended to protect graduates who are believed not to be provided for adequately under the standard arrangements proposed. In both cases—Amendments Nos. 12 and 13—their liability for repayment or repayment at zero real interest would be disapplied.
The basis for the Government's opposition to the amendments is that there is no strong case for such special provision. The proposed arrangements offer

1411
sufficient protection, and do so without unnecessarily complicating the administration of the scheme. However, if in the light of experience it is found appropriate to make special provision for particular groups, that can be achieved through regulations. That highlights the value of the structure of the Bill. Enshrining special arrangements for particular groups in the primary legislation would be an inappropriate approach.
Perhaps I may deal with the amendments in detail. I turn first to Amendment No. 12 in the name of the noble Baroness, Lady Blackstone. I found the wording of the amendment rather strange in that the special advantage of cancellation of any outstanding loan is awarded after the five-year period when the need for such a concession would be greatest. That seems to me like locking the door after the horse has bolted.
The amendment raises the issue of cancellation of liability. It was not the Government's intention that cancellation should be used as a mechanism to specify groups exempted from the standard provisions. Cancelling a loan effectively means that the graduate is being given a non-means-tested grant. Such a provision may operate as a perverse incentive: people may deliberately seek to fulfil the criteria necessary to escape repayments. Cancellation also has a cost: additional administrative arrangements are needed and part of the stream of repayments is lost. Members of the Committee who have followed our debates closely are aware that repayments will be of the order of £400 a year—£8 a week—and will not be required on incomes under about £11,500 a year in current terms. I suggest to the noble Baroness that that is not a whacking great amount. There is no reason why graduates in those circumstances should not be able to manage repayments on that scale whether or not they have families. It is for that reason that I found it difficult to agree with the noble Earl, Lord Russell, that that would create a poverty trap for the wife in the circumstances he suggested to the Committee.
Amendment No. 13 brings into focus two of the terms of the scheme: what income should be taken into account in assessing their entitlement to deferment and the indexation of the loan. Let me comment first on the assessment of income. The Government's intention is that when deferment is claimed on low-income grounds it is gross income that should be taken into account. There will be no allowances such as are made in the tax system for individual commitments. The reason for that is in the tax system: since such commitments as mortgage interest are allowed for under income tax, allowing for them again in the student loans system would result in a double subsidy. There is no reason why a graduate with a mortgage, for example, should have a subsidy for it under the student loans scheme when a non-graduate with a mortgage could not.
Indexation is to apply throughout the life of a loan. The reason is straightforward: it ensures that the sum repaid is the same in real terms as the sum borrowed. Without indexation the graduate has an incentive to avoid repaying by one means or another for as long as possible, while inflation erodes the
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value of the debt. We believe that we should not provide incentives to avoid repaying. Nor is it right that graduates with families should enjoy their loan without indexation and so receive a second subsidy from the taxpayer. As I said a moment ago, reliefs for individual circumstances are properly provided through the general income tax system and should not be duplicated by parallel subsidies targeted on graduates only.
Let me sum up. Repayments will be modest and will not be received from those on low income. There is no basis for reasoning that the graduates in those circumstances singled out in the amendments will be unable to manage their repayments. However, if experience proves that special loan terms are needed for those or other groups, it will be possible to provide them through new regulations. It would be wrong to write special terms into the Bill at this stage without any evidence that they are needed or are the right solution for the difficulties which it is supposed that those groups will face. I repeat assurances already given. The effect of the loan scheme will be monitored carefully and, if adjustments are found to be needed, the structure of the Bill provides special flexibility to enable them to be introduced.
9.45 p.m.
Baroness Blackstone: I thank the Minister for his clarification. I am not sure whether I followed all the details about the offsetting of income tax, but perhaps I may read carefully what he said and come back on Report. Nor am I sure that I understood why repayments would necessarily be so modest if someone were to return to full-time employment after some years, by which time I should have thought he would have incurred quite high interest repayments. However, I am grateful to the Minister for telling us that there will be careful monitoring and that special provisions will be made for those groups which, on the evidence of that monitoring, appear to require additional help. On the basis of that promise, I beg leave to withdraw the amendment.
Amendment, by leave withdrawn.
[Amendment No. 13 not moved.]
Lord Peston Lord Peston moved Amendment No. 14:
Page 1, line 15, at end insert—
("(2A) The Secretary of State shall by conditions prescribed by regulations subsection (2)(b) above or by regulations under Schedule 2 below secure that no terms of any scheme of loans made under this Act shall operate to reduce the proportion of women students below the proportion of such students attending courses to which Schedule I applied at the date of Royal Assent.").
The noble Lord said: The amendment concerns explicitly women's participation in higher education. Some of the points have already been raised under the previous two amendments and I shall not cover that ground again.
If we look at the Government's White Paper, we see some information to the effect that, happily, despite the great discrimination against women in our society, the fraction of women in higher education has risen. That is a good thing. Sadly, in lower socio-economic groups the fraction has not

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risen so drastically and women within those groups are not doing as well as we should like.
Those of us with direct experience of higher education can see. simply as a matter of experience, that there is more female participation. There are many courses on which women are now the dominant students where they were much more strongly discriminated against in the past. Although in terms of undergraduate experience matters have been improving, none of us would wish to be complacent and say that things had improved enough. The purpose of my amendment is to go beyond that and at least utter a word of warning that there is a danger that the Government's proposals place the position of women at risk. I put it no more strongly than that.
I shall concentrate simply on the proportion of women students going into higher education. There are further ramifications connected with discrimination against qualified women from that point on which one must consider. Various questions as to what is an incentive and what is a disincentive have been bandied around.
Women have an extra significance in the context of the amendments concerning part-time students which we debated earlier. Again, we have gone over that ground and I have nothing further to add. I simply underline the fact that I am aware of the position. My worry is that the Government say that students will bear a larger share of the costs of their maintenance in higher education. They regard that as one of the benefits of the changes that they are introducing.
The expression has to be "a larger share" because some noble Lords seem to be suffering from the misunderstanding that at the present time their students do not already bear a very large share of the costs of their education. They already bear an extremely large share of the costs of their education.
However, the Government said in their White Papers, and Government Ministers have said in various statements, that they expect students to bear more of the cost. On my own analysis, which I put forward at Second Reading, it would be particularly the case that women from the poorer socio-economic backgrounds are affected because, by definition, they get a full grant now whereas they will not do so under the new rules. If that is the case my fear is that we shall go back to the bad old days. Many of us have had personal experience of those days when the boys could go on to study and the girls could go out to work. I personally had experience of that. I was the beneficiary of it but my sisters were not. I fear that we place such women in danger.
I tabled the amendment simply to alert noble Lords to that matter. I noticed that when commenting on the two previous amendments the noble Earl said (I think these were his words): "We shall monitor the whole scheme very carefully". I suppose the worst that could happen is that we should see a cohort or two of women who would suffer and then the Government would step in. That is some reassurance although I am not sure it is as much as I should like. However, it is some reassurance.
Let me add—it is not something that is specific to this amendment, but, as the noble Earl appreciates, I cannot avoid rising to the bait—with regard to cancellation that occasionally in various debates in this Chamber—certainly in the debate on the Education Reform Act 1988—I predicted various events, most of which happened. Certainly I predict that as a result of the student loans Bill, within a not very long period of time the Government will be in the wholesale cancellation business. It may not be the desire to cancel but I assure the Committee that within the next 10 years it will be amazed to find how many of these loans are cancelled. That does not appeal to me. I should rather not be involved in this nonsense anyway. However, if the Government believe that they will not be involved in the cancellation business they have little idea of how these things work.
That is en passant. It is not about the amendment. However, as the noble Earl appreciates, I can never resist responding to points. The main point is to move forward particularly with regard to women in the poorer socio-economic groups. I do not wish us to take any more risks. I beg to move.
Baroness Carnegy of Lour: There is a point which needs to be considered in this amendment. It relates very much to the amendment of the noble Baroness, Lady Blackstone, and may refer to others to which we shall come. We are all thinking very hard of how the scheme will affect individual categories of students, and we are quite right to do that. We must think about it very hard and vote very carefully. But we are not thinking about how everybody else will react, and, if there is to be a shortage of teachers in the future, about the need to get women to return to teaching. Certainly if I were the leader of a local authority in the future and knew how desperately one needed women teachers to return to work, I would consider how to attract them.
Often one way to attract a particular person into a job is to pay removal expenses, or whatever. In this case perhaps one will simply say, "We shall write off your student loan". There would be absolutely nothing wrong with that. Employers outside the public sector will certainly do that if they want to obtain somebody. I should have thought that local authorities would also do it. It is very possible.
In a scenario in which so many people will have a student loan of this kind allowed for by legislation, that is something which may become a habit. I do not believe that the only solution is to suggest that people do not have to pay. There will be other ways as well. It will become a part of the labour market.
Lord Peston: I must reply to the noble Baroness. It is a matter to which I have given a very great deal of thought. It is a broader point than the question of women that we now raise. Let me add that I certainly would expect the employer to meet the cost of the loan. To take an obvious example—the brilliant young economists I produce—I shall say to them, "When you go to an interview you should ask whether they are going to pay off your loan". That will be my advice to them.

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I can see the class of person I am considering being able to do that. I cannot see the local authorities, given the present financial stringencies, having to recruit teachers and being able to compete in that market—quite the contrary. I should like to refute the noble Baroness's point that the cost of the loan will not be borne by the student. The cost will be borne by the employers. They will then pass the cost forward so that in the end, in a very roundabout way, it will be borne by the taxpayer via the cost of consumer goods. That is the economic argument, if anyone is interested in the esoterics.
My key point is this. I have given the matter much thought. I believe that there will be a distinction between the private and the public sector. In areas such as teaching the money will not be there.
Baroness Carnegy of Lour: I am thinking of the scale of the sum. When a person finishes, for example, a three-year degree course, between £1,500 and £2,000 will have been borrowed. In a few years that will increase by £1,000 or £2,000. To write off a loan of £4,000 or £5,000 to obtain a new teacher in current financial terms is not out of the way for a local authority when one considers the other factors involved in attracting people. If Members of the Committee ask their local government friends how they attract the right people into the right job, they will find that that is not out of the way. It is not the answer to the proposals in the Bill, but it is part of what will happen in the future.
Baroness Seear: The point overlooked by the noble Baroness, Lady Carnegy, is not what may happen when a person applies for a job, having undertaken a degree course perhaps some years earlier and then having started a family. The debts will have built up. I do not much fancy the idea of a labour market in which one relies on going to the employer and saying, "By the way, you will pay off my debt, won't you?" I do not think that that is good practice. However, that is another matter. What is being overlooked in this discussion is whether people will take the courses in the first place. I find the vague prospect that in the future, when one has passed all one's exams, the employer will like one so much that he will pay off all the debts an unconvincing argument. Will a young woman who is deciding whether or not to go to university, or an older woman coming back to take a course—we have now been told that they will receive no encouragement to do
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so part-time while they are at home—say, "I shall pile up the debts in the hope that they will be paid somehow later on"? Or will she say, "I shall not bother to go to university. The risk is too great. I do not want the debt. I do not know what will happen in the future"? That is what requires monitoring. The issue is whether it will freeze the numbers entering the courses.
I agree with what the noble Lord, Lord Peston, said about the practice in many families where there is a choice between the boy and the girl. If money is short in the family they put it on the boy. It may be very regrettable but we have all seen it happen. I do not believe that it has disappeared.
I have been connected with a company scheme providing a supplement for employees to go to university. Once it was under way, the percentage of girls attending university shot up because the family income was being supplemented. When families could receive the money from another source to send the girl, the ratio of boys to girls was fifty-fifty. There is good evidence to support that. The scheme has been running for 10 years. When the money is not the issue, girls get a look in; when money is short, girls do not. I do not believe that the prospect of an employer 15 years later paying off the loan will be a counter argument of any great strength.
Baroness Blackstone: I very much agree with everything that the noble Baroness, Lady Seear, has said but I should like to return to the remarks of the noble Baroness, Lady Carnegy. Her argument seems to be totally self-defeating.
The purpose of the Education (Student Loans) Bill, as I understand it, is to pass on some of the maintenance costs of higher education to the students who benefit so that the taxpayer has to contribute less. If all employers, including local authorities, end up paying off loans for students we shall be back to the taxpayer paying for higher education by the most extraordinarily roundabout route involving a complicated student loans system and through employers having to negotiate with graduates on whether they pay, how soon they pay, and so on. In addition we shall be faced with even higher community charges (or should I call it a poll tax?) than we have at the moment. I cannot think that that will be terribly popular.
10 p.m.
Baroness Young: I believe that everybody in this Chamber understands the point of the amendment of the noble Lord, Lord Peston, and, indeed, the two preceding amendments because in a sense they all deal with a similar point; namely, access for women, whether they are women undergraduates or women graduates who wish to return to full-time employment and who have families.
I believe that we all share a concern about this because clearly it is a very important point. Perhaps I may try to interpret what my noble friend Lady Carnegy said. I do not believe that she was saying that every student would have his loans paid off but I can envisage individual cases where that could be the case. However, if we return to the students who will not have their loans paid off, which is the point of this amendment, I should like to make three points.
First, one must remember that, whether we like it or not, many students are currently in debt to the bank. I am sorry to say that in many cases they are in debt to more than one bank and the more I have discovered about this Bill the more such cases I have found. At any rate, they are already in debt, so that the debt question arises from that.
Secondly, I believe that we should all be very pleased about the fact that the number of women undergraduates has risen considerably over the past 10 years from 42 to 46 per cent. of all students. That is still not quite high enough, but the numbers are increasing. The point about that statistic is that the numbers are increasing against a background in which the value of the grant has declined. Therefore, although every undergraduate is worse off in real terms, the number of women has increased. In a sense the argument that it has become more difficult has not applied in the past 10 years for whatever reason. I am not sure that I am particularly pleased that the value of the grant has declined, but that is a fact. I am pleased that the numbers of women have increased, and, hence, the unofficial loan scheme.
It seems to me that, once we get into a position where people do know much more precisely what they will receive, there is no reason to suppose that the future will be more difficult for women than the immediate past has been. However, in case that were to happen—and this is where I hope my noble friend will reiterate what he has already said—I think it very important that the scheme should be monitored. It is a new scheme and none of us knows how it will work out.
Perhaps I may tell the noble Lord, Lord Peston, who has told us about his gloomy predictions all of which have come true, about an experience of mine in education. When I was first a Minister in 1979 in the DES, I had to take through your Lordships' House our proposals on charging overseas students full fees. I well recall a debate at about Christmas time 1979 when I had the entire House against me. A colleague of the noble Lord, Lord Peston, said to me, "I was watching how you were going to get out of that debate". The upshot was that there was horror
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on all sides of the House and 10 years later we have more overseas students than ever before.
Baroness Seear: Yes, but—
Baroness Young: Before the noble Baroness leaps to her feet, I was very interested to read in the Oxford magazine, which dropped through our letterbox on Saturday, that universities are now starting to worry about the number of students coming from the European Community. Therefore, all sorts of things happen and work out differently.
The noble Baroness, Lady Seear, may well say they are not the same sort of students. However, all I am saying is that the terrible prognostications that there would be no overseas students have not come to pass and things have worked out rather differently. The truth of the matter is that we do not really know what will happen in this case. What is important—this is a very serious point—is that, if the statistics are adverse as regards women, the disabled or poorer students, then the Bill should make it possible to monitor the position.
Baroness Seear: I cannot let the noble Baroness get away with that about the overseas students. It is of course true that the numbers have increased, but she is well aware that the universities and colleges have gone hawking their courses around the world attracting the wealthy student, as against a time when I was teaching them at the London School of Economics when we had large numbers of students from developing countries who were hard up and paid for in all sorts of ways—fifth cousins sending contributions, and not sending them which was even worse. That is how they reached the colleges. We have the students, but we have kept out many good students whom we previously had.
Earl Russell: I feel that I should apologise to the noble Baroness, Lady Carnegy of Lour, for joining the queue to answer her, but for the moment she seems to have volunteered for the part of lightning conductor. The repayment of loans by employers is among the obvious possibilities. It causes some misgivings on these Benches: first, because if it is done by private employers it is capable of increasing our industrial costs, which is something that concerns Liberal Democrats considerably. A small increase in industrial costs can be a major disadvantage in competitiveness, which is often a matter of narrow margins. I am not convinced that that is the best place for costs to fall.
As for local authorities paying off student loans, I am doubtful about that. It may be possible in some places, but we have a measure which has just come into force and which was designed, so we have many times been told, to restrict local authority spending. It is tending to have that effect. I cannot see any local authority in London possibly being able to take on the job of paying off student loans. They have enough to do to recruit teachers, even at the fairly low salaries they have at present. Also, I do not see how the noble Baroness's proposal relates to the alleged discriminatory effect of loans set out in the

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amendment. The point of that is of course that women, because they tend to bear children, are often out of the labour force for a number of years. I do not believe that the noble Baroness proposes paying off loans for women and not for men. To address the point of the amendment, there would have to be reverse discrimination, which I do not think that she was proposing.
I should also like to comment briefly on the point that the noble Baroness, Lady Young, was making, which we have heard many times in these debates, about the decline in the value of the grant not having a deterrent effect upon applications. The crucial question, of course, is whether entering undergraduates are aware of how hard up they will be. We see them all during their first week. Almost invariably the answer turns out to be no. In fact, if one looks at other circumstances, people are incurable optimists. If one looks, for example—to take a slightly out of the way example, but it is the first that comes into my head—at statistics on Elizabethan privateering, most people lost money out of it, but there was always the dream that they would be the lucky ones. That is what is keeping them coming. It is not the actual facts of the case. If the actual facts of the case become more widely perceived, we may be in bad trouble.
Baroness Blatch: The supporters of the amendment, as with others that we shall debate later, are clearly concerned that the loan scheme will adversely affect certain groups' participation in higher education. There is no evidence from the operation of loan schemes in other countries that they have had that effect in practice. On the contrary, the government scheme is designed to increase participation. It will do that in two ways: first, by increasing the resources available to students; and, secondly, by relaxing the constraint on the number of students the taxpayer can afford to support.
I should like to assure my noble friend Lady Young on the point that she makes about monitoring and to remind her of the commitment contained in the White Paper, that the Government will continue to monitor the effects of the introduction of the loan scheme. If the proponents of the amendment are right in perceiving adverse effects—I do not agree with them—it will be possible to make the necessary changes swiftly by amending the regulations. I have made the point before but it is worth repeating, that the regulation-making power is essential to ensure that the scheme can be refined and developed.
Amendment No. 14, moved by the noble Lord, Lord Peston, refers to the participation of women in higher education. It requires the Secretary of State to make any necessary changes to the regulations, and the noble Lord seems to appreciate the flexibility of the regulation-making powers when it suits him.
There is no evidence that women have been deterred from higher education by loans. In the United States, where reliance on loans is heaviest, women now make up more than 50 per cent. of entrants to higher education. There is not there the general provision for repayments to be deferred
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when income is low, which will be an especially important feature of our scheme for women. Deferment will be assessed against their income only; it is important to note that a husband's income will not be taken into account for the purposes of assessment. That means that a woman graduate who is without personal income while raising a family will not be required to make repayments. Therefore the negative dowry argument is a myth as far as our scheme is concerned.
I am grateful for the remarks made by my noble friend Lady Carnegy of Lour with regard to the range of inducements which will apply or could apply to persuade women to return to work. One need only think of the number of schemes that are already in place from local education authorities and indeed the Government to encourage people to return to teaching. It is also important to note that it will be a matter for employers. However, I am not detracting from that group of women for whom this will not apply.
It is also important for me to comment on the points made by a number of people, including the noble Baroness, Lady Seear, with regard to the inability of women to pay. It has been repeated throughout the debate that inability to pay is addressed by extending the period over which people will repay loans. If we refer only to current prices, I do not think the requirement of paying approximately £400 a year, which is around £8 a week, for those earning above £11,500 a year will act as a deterrent for people to return to work.
I return to the point at which I started. I believe that the loans scheme will be a help to all students. It does not discriminate against women and therefore I do not believe that it will be necessary to make special provision for women. I also want to repeat that we shall monitor the effect of the scheme carefully. If experience shows that special arrangements are needed for this or any other group, the regulation-making powers provide the flexibility needed to allow such arrangements to be introduced, subject to the scrutiny of Parliament. However, it would be quite wrong to fix in the Bill special provision for these groups before there is any evidence that there is a need for them or that the solution proposed would be the right one for their circumstances. In the light of what I have said, I hope I can persuade the noble Lord to withdraw his amendment.
Baroness Seear: Before the noble Baroness sits down perhaps she can answer the question which I raised on a number of occasions and to which I have not yet had a reply. We are constantly told that loans will not be a deterrent to people in this country because they have not been a deterrent in other countries. That seems to me to be a very odd argument. Up till now these courses have been free; students have not had to pay. While they were free they have not attracted sufficient women and people from lower income groups. On the Government's own labour market argument, if the idea of education cannot be sold when it is free, do they think it can be sold when it is not free?
Baroness Blatch: It is probably an over-simplification to say that education is free. We know that in the combination of parental and state support a large number of students have a shortfall because parents are not meeting their obligation to the student. In that case students resort to banks and other institutions for their loans at very high rates of interest, and, indeed, have to cope with repayments while they are still students. If we add to that the students who are in receipt of full grant by a combination of parent and state support but who still resort to expensive loans, whichever way one looks at it to describe the situation as a "free" service is not entirely correct.
I return to the basic assumption that we make and repeat the caveat that the scheme will be monitored. If we believe that it adversely affects women or any other groups it will be reviewed. But the extension of the period over which people repay the loan so that the value of the repayment is kept at around £400 a year—equivalent to £8 a week—I do not believe will act as a serious deterrent to students. It is an act of faith. We promise to monitor the situation and if there are any adverse effects the system will be reviewed.
10.15 p.m.
Lord Peston: I wish to make three concluding comments which I had intended to save until next Monday. However, I may as well make them now. The Government often make an international comparison, but they must stop the ad hoc approach. Either they make a full set of international comparisons or none at all. For example, in Sweden there is massive state support for 16 to 18 year-olds; then they have loans, whether or not they are reducing those. If the Government are about to announce massive support grants for 16 to 18 year-olds I should be interested, but they are not. In many countries there is enormous subsidy of student housing and food but I have not heard the Government mention that. In the United States there is open access to higher education and a completely different system. Therefore, one cannot make such simpliste comparisons. That is not an acceptable way of looking at the issue. I had intended to save that point until Monday but I have made it now. One cannot say, "They have loans and such and such", without looking at all the other relevant matters.
Secondly, I thought that my noble friend Lady Blackstone clearly put forward the point of who would bear the cost of the loans even better than I did. When the Government have had time to think the matter through I shall be interested to know whether their ultimate position is that students will not bear the cost of the loans. Essentially that was said by the noble Baroness, Lady Carnegy; that they will be borne by firms and in the public sector therefore they will be borne by the taxpayer. If the Treasury economists can think of something clever between now and next Monday I shall be interested to hear the rebuttal of that view. I was more convinced by it than by my own argument.
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The noble Baroness, Lady Blatch, said that it was an act of faith in terms of the effect on women. I do not agree; I believe that it is an empirical proposition. It is a straightforward issue. We shall see. The noble Baroness does not believe that it will have an adverse effect on women; I say that it will have such an effect on women from poorer socio-economic groups. We do not need to look for divine response. In a few years we shall have the relevant data and one of us will rise in your Lordships' House and say that we were mistaken. If that happens early enough—which it will not—the Government will agree to modify the loan scheme in order to take account of that, as the noble Earl said. We shall not do that: we shall abolish the scheme so we shall not have the same problem.
I emphasise that it is not an act of faith but a straightforward test of the scheme: will it work one way or the other? I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved Amendment No. 15:
Page 1, line 15, at end insert—
("(2A) The Secretary of State shall by conditions prescribed by regulations made under Schedule 2 below secure that any scheme of loans made under this Act shall make adequate provision in respect of eligible students who are likely by reasons of the nature of their course to incur additional costs in respect of equipment, in materials or other expenditure, such that those students are not disadvantaged in relation to other eligible students.").
The noble Earl said: The amendment is designed to meet the problem of equipment. It is specially designed to meet the problems of particularly expensive courses—for example, medicine—where the cost of equipment can amount to a substantial proportion of the total student costs. They can give rise to significant problems.
A more general problem lies behind the issue. It is an area in which the thinking of the DES is far from adequate. I am sure that the noble Earl will correct me if I am wrong, but I understand that the theory is that the present maintenance grant is putatively assumed to include an element for the provision of equipment. First, it does not cater for the problem of the many particularly expensive courses. Secondly, I do not believe that anyone teaching in a university supposes that undergraduates can spend money from their grants on books or equipment.
Since the introduction of this Bill, on three occasions I have set fairly recent books, which were available in the bookshops, for study by undergraduates. They came back to me, as they regularly do, saying, "We are sorry. We cannot do this essay because someone has taken the books out of the library." That happens to all of us every day and all the time. I have tried saying to the students, "If you want you can buy these books at the bookshop across the road. They are available in paperback." The cost was perhaps £3·95, £7·95, or thereabouts.
On one of the three occasions I was successful. Judging by what she wears I deduced that this particular undergraduate is probably one of those lucky few whose parents pay a good deal more than

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the required parental contribution. On the faces of the other two undergraduates I saw an expression of real and intense fear which was about to turn into real anger until I hastily reassured them that if the situation created difficulties I would set a different essay on a different topic with different books available.
There is simply not the money available to pay for equipment. Even the alleged 25 per cent. increase, which is in fact a good deal less, having been calculated at 1988 prices which are now out of date, will not be sufficient. Unless we have some separate provision for equipment and that separate provision is to some extent calibrated to the particular courses that undergraduates are taking, we shall find a worsening of our present rapidly increasing difficulties in teaching people what we ought to teach them because students cannot afford what they need. I beg to move.
Lord Renton: One understands and has some sympathy with the purpose of this amendment. But it is beyond the scope of the Long Title of the Bill; beyond the powers given to the Secretary of State in Clause 1; and beyond the scope of Schedule 2 to which the amendment is attached. In the circumstances I do not see how the Committee can possibly accept the amendment.
The whole of this scheme is for the provision of finance for student maintenance. We understand that in the course of technical studies, for example, there will be equipment used and maybe materials also. But that is not what this Bill is about. Therefore, it would surprise me very much if my noble friend on the Front Bench were to do more than utter sympathy. He cannot accept the amendment.
Baroness David: In answer to the noble Lord, Lord Renton, the present maintenance grant for students is supposed to cover items like books. So why should this maintenance grant be expected not to do that?
Lord Addington: I wish to reiterate the last comments for the reason that under the current grant system people are expected to purchase a certain number of books. It is accepted that students buy books. It is realised by very many people that the current grant level means that students are almost totally dependent on the library. The problem gets worse as students proceed with their courses because the books they have to buy become more and more complicated and specialist.
Thus libraries suddenly find themselves with one or two copies only of a book and 30 or 40 students trying to borrow them. The libraries try to fight back by saying that they have a short-term loan system for their books. So students spend hours and hours queueing up to use a book for two or three hours. Where student finance is involved, attention should be paid to such basic factors as the ability to obtain the right textbook. If the Bill does not address this point—and the noble Lord, Lord Renton, is usually correct on these matters—steps should be taken to enable people to get their hands on the money they require for certain tools. Textbooks are the most
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glaring example. I did not undertake a science course or a course in medicine so I cannot comment on other specialist equipment. But if people are expected to use books, and if libraries are not to be expanded dramatically, we must provide the means to enable students, especially students on full grants to whom we should devote most attention, to meet these demands. Otherwise, the measure will be a total failure.
Earl Bathurst: I declare an interest as a trustee of a small charity which is able to give grants for exactly the purposes described by the noble Lord who has just spoken. I am surprised by the amount of equipment and the cost of equipment which boys and girls require. It is regrettable that the charity has little money but it is able to help.
I take note of the point made by my noble friend Lord Renton. Perhaps the Bill addresses this point and perhaps it does not. But I beg the noble Earl who is to reply and his colleagues to bear in mind the increased costs borne by students, especially those who are studying technical subjects and, funnily enough, artistic subjects. Sometimes students have to attend extramural courses. We can give only a small contribution but to the students it is a considerable contribution. If the Bill in any way endangers the ability of students to obtain equipment and clothing too, which is important on certain courses, I hope that the noble Earl and his colleagues will be able to consider the point at another time.
Baroness Seear: I ask the Minister to recognise that to skimp on books is to spoil the ship for a ha'p'orth of tar. In any decent university, one can manage without staff better than one can manage without books. We shall be down to this ghastly business which one sees in a few places where students rely on taking down lecture notes. That is the absolute opposite of anything that can be described as a decent university education. One has to have books or one might as well shut up the whole place.
The Earl of Caithness: The present grant system provides for special circumstances with a range of additional allowances. These include, for example, allowances for extra weeks' attendance, vacation hardship and costs incurred by disabled students as a result of attending their courses. For 1989–90 the extra weeks' allowance is worth £45·05 for someone studying away from home outside London; up to £50·95 a week is payable during the vacations in cases of hardship; and the disabled students allowance is worth up to £765. As I understand the scheme before the Committee, these will not be affected by the Bill.
The top-up loan facility will be offered at different rates, according to whether the student studies away from home in London, or elsewhere, or continues to live in the family home. This will parallel the differences which already exist in the rates of mandatory grant. We do not think that further differentials should be introduced. The loan offers students a facility that they can draw on to the extent that they wish, and use for whatever purpose they

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wish. I believe the Committee will agree that it would not make sense to earmark a part of the facility for a particular purpose. We believe that the choice over how to use the money should be a matter for the student.
At this point perhaps I may take up a comment made by the noble Earl, Lord Russell, about the 25 per cent. increase. It is a 25 per cent. increase on current cash prices, not the 1988 prices; so the noble Earl, who thought that students were not getting such a good deal as I said they were getting, is wrong and they are getting the deal which I said they were going to get.
Specific mention was made of the grants for special equipment. We all know from experience with the special equipment grant—which was abolished in 1986—that there were all kinds of problems with making differentiated provision for this purpose. As I undertstand it, although I am certainly not an expert in the matter, one of the reasons why the special equipment grant was abolished was that the scheme was so costly and complex to administer.
10.30 p.m.
Earl Russell: I must confess to being disappointed with that reply. I am truly surprised to hear books described as a "special circumstance". They are a circumstance without which people cannot be adequately educated. I entirely agree with my noble friend Lady Seear that it would be better to do without all the staff and keep up the number of books.
I also think that when the noble Earl says that students may draw on the loan facility to the extent desired he is not facing up to the extent to which the maximum sum being proposed, even now, is not adequate. If people have to choose between buying a book and having a meal, they will normally choose to have a meal. Moreover, young people tend to have healthy appetites. Unless there is a sum set aside for provision of equipment—that is, books or whatever else may be necessary to do the course—we shall find our teaching becoming impossible.
I listened very carefully to what the noble Lord, Lord Renton, said. I fear that he may be right. But at least tabling the amendment has served to draw attention to an ambiguity. The word "maintenance" as contained in the Bill is used in ways which may or may not cover equipment. Tabling the amendment has served to draw attention to the question of whether maintenance does or does not cover equipment. That is a question to which I should be glad to hear the noble Earl say that further consideration will be given.
I must admit that the underlying thrust of the amendment is that equipment ought not to be considered under maintenance as it seems to be at present and that in future it ought to be considered as a separate matter. Nevertheless, in view of the remarks made by the noble Lord, Lord Renton, I should not dream of pressing the amendment to a Division. In the circumstances, therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Addington Lord Addington moved Amendment No. 16:
Page 1, line 15, at end insert—
("(2A) The Secretary of State shall by conditions prescribed by regulations under subsection (2)(b) above secure that any student otherwise eligible in accordance with subsection (2)(a) above who is attending the fourth or subsequent year of a course of higher education (or vocational training forming part of such a course) shall for any period in which they are not earning as part of such a course or training, incur no liability in respect of any loans payable for that period.").
The noble Lord said: The amendment is designed to ensure that those who are undertaking courses of more than three years—which is the length of course which is talked about virtually without exception in the White Paper and thus I perceive it to be behind the Government's thinking on the Bill—do not incur extra loan debt as a result of the course.
The groups which would benefit, or rather be put on a more even footing, by not incurring this extra debt would include such people as those studying for a BA in order to become teachers and those studying foreign languages. The first case has already been discussed at great length in this Committee tonight and the current shortage of teachers is a matter about which I do not think anyone could have failed to hear ad infinitum over the past few years. When it comes to languages, 11 believe that, with 1992 hard upon us, we should be considering whether everyone should have more access to language teachers and that we should tie the two points in together. Also people with better language training would be available to businesses. Some of the people doing these language courses are paid, but many are not.
Personal experience leads me to refer to one group which has stuck in my mind—Scottish students. In Scotland higher education is based on a four-year honours course. This means that the basic four-year course which leads to an honours degree—that is, a degree of the same standard as the English three-year degree—will actually be worked against by the Bill. The four-year course in Scotland is based on two years of general study, which means that a student can go on to take a non-specialised three-year general degree which is not of anywhere near the same standard or the four-year course, which is of honours standard and the equivalent of the English course.
The reason for this is primarily that Scottish students do not do A-levels; they do highers over one year, in several subjects. They do not do the English specialist A-level course. This A-level specialisation is currently under review by the Government, or so we have been told, on the grounds that it is far too specialist far too soon. In other words, the A-level is a wonderful exam for getting people ready to go to university in certain specific subjects. Thus at the beginning of the courses in England and Wales students' options on the course are already decided by their A-levels to a large extent. The students are already channelled. If they make a mistake with their A-levels they are thus channelled into a situation where their "any choice" degree work is curtailed.
In Scotland they do not have this problem because they take a wider range of subjects to begin with. Their groundwork preparation has a wider basis.
That is why they have the course. Thus, if people are affected by the extra debt incurred by the extra year in Scotland, their choice of places where they can take their degree will be dramatically limited because they are not as well prepared as their English counterparts to do a degree in England or Wales.
The English students who go to Scotland have far more choice but may have decided that they want to take the more indirect approach to their degree, or they may not be quite so sure about which degree they want to do. Thus they will want a greater choice. This has the benefit that fewer people will drop out if they find themselves studying subjects that they do not like or for which they are unsuited beyond their school education.
There were certain movements afoot in England to apply for a first-year introduction course that gave students a better taste of a subject which has disappeared over the past few years. When I first thought about going to university, this was an option at several places, but it rapidly disappeared under financial strictures.
Effectively, we must consider whether all those who are on four-year courses will face a far greater disincentive than those who choose to do three-year courses. We must also consider that students coming from the normal schools in Scotland who do not have access to the A-level exam will have a very much reduced choice and also be under far greater financial stringency when they come to make that choice. I beg to move.
Lord Colwyn: I have some sympathy with this amendment which covers in a much broader sense my own Amendment No. 45 which we shall discuss next Monday. It is much more important to me to hear what my noble friend the Minister has to say this evening, rather than rehearse any arguments that I shall use for my amendment, which is concerned with loans for the longer courses for health care practitioners. I hope that the noble Earl will be able to give some encouragement to students about to embark on four, five or six-year courses. I look forward to returning to the matter in more detail next Monday.
Lord Butterfield: I rise to make a few remarks about the problems facing students in medicine, veterinary medicine, dentistry and increasingly in engineering. I do not wish to pre-empt what may be discussed under a later amendment, but it seems to me that ways may well have to be found so that students who are going to embark on these long courses are able to be covered by grants or bursaries for what we would call the clinical part of their subject.
A very important part of the argument for that is that once a person becomes part of the clinical services in medicine, dentistry or veterinary work, his opportunities for augmenting his income by vocation work disappear. I wish to make the point that if we do not take such steps we shall have an interesting swing of the pendulum from the present delightful mixed social class, high ability classes in
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these subjects. There will be a slow drift back to the kind of medical students the Committee may remember were depicted in the film "Doctor in the House". It is inevitable that the deans of the medical, veterinary, dental and perhaps even the engineering schools may find that, to an increasing extent, they are receiving applications from people who can undertake such long courses without feeling that they are incurring too large a debt.
I wish to refer to some calculations that were sent to me by the Royal College of Physicians. I know that these calculations correspond closely with some that the noble Lord, Lord Flowers, was going to present. They show that by the end of the fifth year examinations, assuming a 5 per cent. inflation rate and roughly present prices, medical students will be in debt to a level of about £8,000. That is the kind of debt which may inhibit poorer households and that is what I am worried about. I hope we can find a way of treating the first three years, which constitute the scientific, psychological and general foundation to the course, as if they constituted an ordinary undergraduate BA course, and of making some special arrangement for the clinical course with its special circumstances where, although I dread to put this on the record, the plain fact is that the students will be apprentices. I believe some kind of special arrangement will have to be made in the latter case.
Lord Peston: I hope the noble Earl will take the opportunity to clarify one or two areas of this amendment. I shall not deal with the matter of long courses per se which has been spoken about adequately. However, I should like some information on how the loans scheme will work for degree courses which involve a vocational year. This year often comes in the middle of such courses. Will the loans incurred in the academic years ahead of the vocational year build up at the implied rate of interest during the vocational year? That would act as a disadvantage for courses with a vocational year, which many of us think are very good.
Further, I should like some information on the position regarding what one might call the professional year. A pharmacist, for example, may obtain his degree but he cannot become a professional pharmacist until he has had a year's experience in a pharmacy. If he is earning a sufficiently small sum of money he may not have to repay the loan, but as I understand it he will certainly incur a growing cost to the loan because of the implied interest during that year. Many other disciplines may involve at least one year, if not more, of such professional training when students are earning a sufficiently low income not to repay the loan, but as I understand the scheme they will not merely retain the liability to repay but that will grow at the rate of inflation. It seems to me that the danger there is that that will act as a disincentive to precisely those kinds of activities which on all other grounds are highly desirable. Many of us believe that pretty well all degree courses should include a vocational year and that the straight old-fashioned three year degree is somewhat obsolete.

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I raise these points entirely for information purposes, as I could not quite understand how the suggested regulations will take those matters into account. I have expressed the worst scenario and the noble Earl may well have something more positive to say. However, I believe the situation could be threatening to a number of rather important professions, most of which but not all are connected with medicine.
10.45 p.m.
Earl Russell: I should like to support the amendment. I support both what my noble friend Lord Addington said about Scotland and what the noble Lords, Lord Colwyn and Lord Butterfield, have said about medicine. Other people are also affected, and the British Dental Association, for example, is very much concerned. Before the subject is left, somebody ought to put in a word for Greats at Oxford, which, as many Members of the Committee know, is capable of providing an excellent education.
The inevitable effect of a fourth year is that the cost increases. If the Government's principles have any force at all they must recognise that increasing the price of a particular subject to the student is liable to deter students from undertaking that subject. We have to consider whether that is socially desirable. Do we, for example, really want fewer doctors? Do we want fewer people going to university in Scotland?
Scotland has a very distinctive education system, although I was extremely surprised to see that the Parliamentary Under-Secretary, speaking in Standing Committee B, denied that there was such a thing as a separate Scottish education system. I very much hope that that is not the view of the Government because it is a piece of anglocentricity of the sort which from time to time puts the principle of the Union under threat. I very much hope that it will be withdrawn.
I hope that the Government can find it in their hearts at least to say that they will think about the effects of the problem of the course of longer than three years. I am sure that there are other examples that we have not thought of and that if we leave the Bill to go on the statute book in the form in which it now stands we shall be distorting the market for graduate intake for many years to come.
The Earl of Caithness: This is another amendment intended to protect a certain category of student—those on long courses—by cancelling part of their liability for repayment. My general comments with regard to Amendments Nos. 12 and 13 apply here as well. We believe that the arrangements proposed offer sufficient protection but, if experience shows that special provision is necessary, it can be made through regulations. It would be inappropriate to make provision in primary legislation when we are not clear that such special provision is necessary or that we have identified the most appropriate solution for the problem.
The amendment in the name of the noble Lord, Lord Addington, provides for cancellation of loans covering any additional years of a course beyond the
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first three years. We take the view that a loan facility for each year of a course, irrespective of length or subject, is the right approach. I acknowledge that this will lead to a larger debt but the long courses in many cases lead to higher incomes.
I look forward to debating Amendment No. 45 in the name of my noble friend Lord Colwyn. When at this hour of the night one has only reached Amendment No. 16 the thought of getting to Amendment No. 45 is a great excitement. However, I do not see why my noble friend wishes to restrict the provision to health care. It was the noble Lord, Lord Butterfield, who broadened the scope of the debate. As I believe the Committee is aware, the Government are examining the possibility of allowing longer repayment terms for those on courses longer than four years so that the annual repayments are not too burdensome.
Lord Peston: Perhaps I may interrupt the noble Earl, because I am trying to learn. In the case of a four-year sandwich degree course, of which one of the years would be a vocational year for which I believe a mandatory award is not available in usual practice, is he now saying that a loan would be available for the vocational year?
The Earl of Caithness: I had intended to come to that specific point, otherwise I shall deal with it later because I want to make sure that I have the right answer. Perhaps I may repeat, because this is an important point for all those Members of the Committee who are concerned, that we are looking at courses which are longer than four years so that annual repayments do not become too burdensome.
The noble Lord, Lord Addington, drew a distinction between A-levels and the broader range of highers in Scotland. What he said is generally true, but about 80 per cent. of Scottish pupils going directly into higher education now do a sixth year at school before doing so, as I am sure he will be aware. About 25 per cent. of entrants to Scottish four-year degree courses are from out with Scotland and generally have A-level qualifications. That points to the value of a four-year course in its own right.
The noble Lord, Lord Addington, was sensible to have gone to a Scottish university from Norfolk. What he said did not fall on deaf ears. My noble friend Lord Sanderson of Bowden is listening carefully and, as I am sure the Committee is aware, my right honourable friend the Secretary of State received the benefit of a four-year course in Scotland. That is why we shall ensure that annual repayments for those courses longer than three years will be manageable for borrowers. It would be pointless to introduce a scheme under which a significant minority of borrowers found it extremely difficult to repay their loans. We are considering whether provision is necessary from the beginning of the scheme and we shall continue to monitor that aspect of the scheme once it is under way. If changes are necessary, they can be introduced through regulations.
I have failed to answer the noble Lord, Lord Peston. Perhaps I may do so at another time.
Lord Addington: I must apologise for my zealousness as a convert to the Scottish education system, having suffered under the A—level system. I am glad that the distinction between the two is being made clear. A—levels channel you very early into the specific subjects and you do not have much chance to break out, especially if you follow a single honours course in England or Wales. The Scottish system is nearer what we are told exists and I am glad to hear that it is receiving some consideration. The noble Earl did not put down a blanket shutter on any form of review in the future.
Even after sixth-form study, the highers are probably not quite of a sufficiently high technical level for someone entering a straightforward course in England. I hope that the Minister will bear that point in mind because even sixth-form study, which is more a preparation for the method of studying rather than the acquisition of technological knowledge, is not that good a preparation for entering such courses. The A—level is good for preparing you over two years to study for one subject if you happen to be good at that subject. That was one of the problems that I tried to point out, but the noble Earl has given a hint of sufficient light at the end of the tunnel to allow me to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness David Baroness David moved Amendment No. 17:
Page 1, line 15, at end insert—
("(2A) The Secretary of State shall by regulations made under subsection (2)(b) above secure that any scheme operable under arrangements made in accordance with this section and Schedule 2 below shall make such provision for the maintenance support of mature students as appears to him to be necessary to promote access by such persons to higher education.
(2B) In this section, "mature student" means a person otherwise eligible for a loan who is at or above the age of 25 years.").
The noble Baroness said: Both these amendments involve mature students. The first requires the Secretary of State to monitor closely and review regularly the maintenance support for mature students in the interests of safeguarding and encouraging access to higher education. The second allows all mature students to be eligible for loans without an age limit.
With numbers in the 18 age group declining, mature students will be a large and important element in higher education. They already form 25 per cent. of students. It is essential both to attract them and to keep them when one has enough of them. During the Standing Committee stage in another place, the needs of mature students were recognised in part. In principle at least the Government recognise that mature students require special attention. The main evidence of that is in the maintenance of the mature student allowance—a special allowance for certain students over 26 when they begin their course. The Minister, Mr. Jackson, stated:
"I also give him [Andrew Smith, higher education spokesman for Labour in the Commons] the assurance that he seeks on the mature student allowance. That will continue. It will not be frozen and it will be uprated each year in the same way as other allowances".—[Official Report, Commons, Standing Committee B; 25/1/90; col. 502.]
Despite several pleas from Members on all sides of the Chamber, there seemed to be no recognition of the existing problems of mature students, of the possible disincentive effect of loans for students or of the effect of the exclusion of students over 50 years from the loans scheme. The Equal Opportunities Commission, in an otherwise neutral response to the White Paper, stated:
"Whilst we consider that the proposed scheme will treat women and men equally in respect of availability, access and repayment, we are nevertheless concerned that people aged 50 and over will be excluded from its provisions. Our experience of the financial needs of mature women returning to education after a period of domesticity, or seeking a new direction, leads us to doubt the White Paper's assumption that people over 50 will be better able to rely on other resources during their studies. We would therefore welcome the removal of this age-related eligibility criterion, so reflecting the new regime's ultimate aim of widening access to higher education".
According to the DES leaflet produced last month, Top up loans for students: the Government's proposals, the reasoning behind the no loan over 50 proposal is that students embarking on higher education at that age can be assumed to have accumulated other resources on which they can rely in place of the loan.
I think that that is not at all a safe assumption. Many women, particularly if they are from non-traditional student backgrounds, are unlikely to have savings over £4,212. This is the sum in today's monetary terms that students will eventually be required to contribute towards their maintenance costs.
think it is worth noting that as the retiring age for men has come down, that for women has risen slightly. In 1971, 51 per cent. of women aged 55 to 59 were economically active; in 1988 the figure was 53 per cent.
There are a few facts which are worth noting from the Office of Population Censuses and Surveys survey, which was commissioned by the DES, on mature students' incomings and outgoings. It showed that 54 per cent. of mature students received at least one state benefit in addition to child benefit; 76 per cent. of mature students had an outstanding debt of 12 months' duration; there were proportionately fewer mature students from social classes 1 and 2 than in the rest of the student population; and students from social classes 3, 4 and 5 were most likely to have higher debts.
With the increase in numbers of mature students and the desire of the Government to encourage more, it is clear that there will be considerable extra hardship for a sizeable proportion of the student population as a result of abolishing benefits. I hope that we shall be told some of the Government's thinking on mature students, many of whom have absolutely no help with fees or maintenance. Older people—those 50 and over—have a powerful case for improved educational opportunities. Almost all of them missed out on the post-war improvement of education. Only one in 10 of those now aged 50 carried on at school after the age of 16 compared now with one in two. Yet it was their taxes which paid for the schooling and higher education of a much larger proportion of the next generation. I think that they deserve some consideration.
As I said at Second Reading, I believe that noble Lords who are actively engaged and most of whom are well over 50 will take a sympathetic look at this amendment. I beg to move.
Lord Renton: There is nothing in the Bill to prevent what the noble Baroness wants to have done. However, no doubt she is anxious about what may or may not be in the regulations. That is the point we are on.
I do not believe in legislation by White Paper, but the Government have invited us to consider the White Paper in order that we may see how the Bill may be implemented by them. If we turn to page 13 of the White Paper, at paragraph 3.3 again there is encouragement for the noble Baroness in regard to people up to the age of 50. It says:
"The loan facility will be offered to all full-time home students in higher education … up to the age of 50"—
that is, except for post-graduate students.
Then in paragraph 3.5 a very important principle is laid down which I do not think we should ignore. It is stated like this:
"A student embarking late in life on study at first degree level has not the opportunity thereafter to repay the loan".
That must be the normal situation and one that we should not ignore. The paragraph goes on:
"The facility will therefore be available to students aged 50 or over at the start of their course. Students embarking on higher education at that age can be assumed to have accumulated other resources on which they can rely in place of the loan. They will continue to have access, as now, to the other elements of the mandatory awards regime".
I would just add this. The Treasury will always be looking at the amount of money spent on the student loans scheme. Although it may be of only marginal influence, shelling out money to any great extent to students aged over 50 means that students of a younger age who need the loan facilities much more might not receive them. I hope that my noble friend Lord Caithness will not accept these amendments.
Baroness David: I must make an apology to the Committee. Although I said that I was speaking to two amendments, I did not name the second amendment. It was Amendment No. 22 which states:
"No scheme made under arrangements in accordance with this section or regulations made under Schedule 2 below shall exclude any person from eligibility for a loan on grounds of age".
I apologise for that omission. However, I made the point that it is not correct to think that that age group will have accumulated enough money necessarily to be able to repay the loan easily. However, I made the point that women are working until a later age now and will be earning for longer. With increased qualifications they could therefore earn a higher sum and would then be able to repay their loan.
11 p.m.
Earl Russell: I should like to support Amendment No. 17 and speak also to Amendment No. 22. The presence of mature students is a vital part of the education of other people in a university. It is important for a community that all are involved. That was a factor I missed badly at an American university. The vast majority of students were drawn
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from one nationality. Similarly, if they are too uniformly drawn from one age there is a loss of educational value. I remember very vividly, for example, when teaching a police inspector on secondment from Bramshill. I set him a question on why the 15th century ecclesiastical authorities failed to root out heresy. He immediately pointed out, first, that the main centres of heresy were on jurisdictional boundaries; and, secondly, that even if other people did not agree with the heretics they did not mind them enough to inform on them. I was watching the face of an 18 year-old sitting across the room who suddenly realised—in a way that I could never have got over to him—that these were real problems about real people. For that reason I should be very sorry to see mature students discouraged.
I take the point of the noble Lord, Lord Renton, about legislation by White Paper. I agree with him that there is no other way that we can go about it. It is the 50 years cut-off that concerns me. The point that the noble Lord, Lord Renton, made about the period of repayment demands thought. But we are told in the government leaflet—again not in the Bill—that we are looking at a period of repayment of five years. A person aged 50 to 55 can be presumed to have five earning years in front of him or her in which repayment is possible.
I find the point about savings unconvincing. That comes from what I regret to say seems to be becoming a vanished world. It comes from a world before the explosion of mortgage debt that we are currently seeing, from days when it was a great deal more possible to build up a body of saving on a professional income than it is now. I do not think that we are facing up to the extent to which we are becoming an indebted country. My honourable friend, Mr. Taylor, in a Question in another place on 30th November last, elicited the information that the total volume of private debt in this country, including mortgages, has now risen to the startling sum of £378 billion. It is in the light of that figure that I am not entirely convinced by the argument in the White Paper about savings. I should like to support the amendment.
The Earl of Caithness: Before I reply to Amendments Nos. 17 and 22, perhaps I could return to the previous amendment and answer the point made by the noble Lord, Lord Peston, who asked about sandwich courses. If a grant is available during a sandwich year, the loan will also be available. However, I understand that a grant is not generally available if the student is paid during the sandwich year, in which case there will not be a loan available either in those circumstances.
Mature students, who are the subject of Amendment No. 17, have everything to gain from the loan scheme. Those with families will not in general lose access to benefit. For them, the loan will be a net increase in resources. In many cases mature students already incur substantial debts at commercial rates. For them the opportunity to substitute borrowing under the very favourable terms of the scheme will be major help. For all, the 25 per cent. increase in the new package compared with this year's grant will be welcome.

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Amendment No. 22 in the names of the noble Baroness, Lady David, and the noble Earl, Lord Russell, relating to a student's age would remove the age limit proposed by the Government for the loans scheme. The Government propose that the loan should not be available for students aged 50 or over at the start of the course. Although the noble Earl, Lord Russell, did not like that, I am sure that he will be pleased to know that that age limit is generous compared to other countries which operate loans schemes where I gather that the limit is more commonly fixed at 30. The grant will continue to be available to students over that age although inflation will erode its real value. As the Committee knows, the grant includes payment of the standard tuition fees, but we judge that students over the age of 50 should not benefit from a further subsidy from the taxpayer towards living expenses through the medium of the loan.
I put it to the Committee that students of that age can be expected to rely in part on their own resources. Of course my noble friend Lord Renton was right to point out that it would also be inappropriate that students of that age should take on a repayment obligation when their remaining years of earning will be limited. The age restriction would be imposed as a condition of eligibility by regulations made under Clause 1(2)(b).
One specific point was raised by the noble Baroness, Lady David, when she referred to mature students and child benefit. I assure her that child benefit is not affected by the Government's proposals. Students with dependent children will retain their entitlement to social security benefits, including child benefit.
Baroness David: I thank the Minister for that reply although I cannot say that it pleased me very much. I do not quite understand the argument that because mature students already have debts, they will want to involve themselves in more. I do not believe that that follows at all.
I disagree with the point about the over-50s not having the opportunity to repay. I think that as women are staying in work longer, they will not have great problems in repaying the loan before they are 65.
I shall not pursue this matter tonight. However, I shall certainly return to mature students on Report. This evening, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn. [Amendment No. 18 not moved.]
Baroness Seear Baroness Seear moved Amendment No. 19:
Page 2, line 10, at end insert—
("(3A) The Secretary of State shall in respect of any eligible student who is a parent at the date on which a loan will be payable in any year make available adequate additional provision to such a person in respect of childcare costs.").
The noble Baroness said: This is a narrow but rather important point about certain categories of mature student whom we seem to be discussing at
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some length, although this may also apply to some younger students; that is, the question of help with child care for those students who have responsibility for children.
Many women wish to train in order to return to work at an age at which in many ways it is highly desirable that they should. An obvious example is women who wish to return to teaching but who need to study in order to obtain the required qualifications. That is very desirable. Those students will have children for whom they are responsible. The point has been made in previous debates in this House that the cost of such child care can be prohibitive. Women who are responsible, who want to take that kind of course with teaching in mind, are not going to allow their children to be looked after, not only at pre-school age but during school holidays and other times, unless they are satisfied that the provision is good.
Good provision is expensive. The Government recognised that fact in relation to employment training for single parents. If one has child-care costs in addition to the costs of study in many cases one will not study. A generous allowance of £50 a week for child care has been allowed to single parents when they take such courses. The same is necessary for women in higher education. The argument that they have husbands who can pay does not meet the problem. Husbands may be reluctant to see them take those courses. They involve costs to the family. If in addition they have to meet the child-care costs—many of those women are at the right age to take such courses—the women will not take the courses.
I urge the Government to look seriously at this proposal. This evening's discussion about mature students has revealed some curious attitudes on the part of the Government. There is the idea that resources are available for married women. What resources? A great many of them have not earned any money for a long time. They have no money of their own. They have to persuade their husbands to pay for anything of that kind.
The Government want to tap that valuable source of woman-power, especially for all the occupations that they are likely to choose—we hope they will not be restricted—where we know that there will be shortages: teaching, nursing and social work. We are short of people for those jobs. For Heaven's sake, surely the sensible thing to do is to invest money in this type of provision so as to get those women back to work. They will pay back the cost in tax in a short time. I beg to move.
Baroness David: I strongly support the amendment. The need for child-care facilities is beginning to be recognised more and more readily. I have an interesting list of the various universities and colleges which provide help in this way. It is also interesting to see how expensive such provision is in a good many cases. A joint college nursery for staff and students was set up at Cambridge University in the 1970s. It has now been almost entirely taken over by the staff. The students have been pushed out.

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It is also interesting to note that in another place Mrs. Gorman has introduced a Bill (the Tax Relief for Household Employers Bill) which will allow tax relief on earned income in respect of the earner's employment of home helps, child minders and other workers in cases where such employment is essential to the earner's availability for work. It should equally be available for women taking degrees. All that is very much in the air, and I hope that the Government are paying attention to the matter, because as the noble Baroness has said, education is an investment. II is an investment to have more of those people better qualified. Goodness knows, we need them. I hope that we shall receive a sympathetic response.
Baroness Blatch: The Government are committed to broadening access to higher education. Mature students are presently among the groups which are under-represented. We all accept that it can be especially difficult to study and at the same time care for young children; but to make additional provision in the form of a bigger loan would be inequitable because students with children would be faced with relatively larger repayments—
Baroness Seear: I was hoping that instead of a loan the Government would stump up and pay for child care.
Baroness Blatch: Paragraph two of my reply may be more helpful. Instead, we shall retain the dependants' allowances payable with mandatory grant. The 1989–90 allowance was worth up to £1,455 for a spouse or adult dependant or a first child where there is no dependent spouse or other adult dependant. Additional allowances are payable for other children, depending upon their age. The 1989–90 allowances range from £305 for a child under 11 to £1,165 to a young person aged 18 or over. Eligible students will also continue to receive the mature students' allowance, worth up to £840 in 1989–90. The level of the 1990–91 allowances will be announced shortly.
In addition, both single parents and students' dependants will retain their entitlement to social security benefits. For single parents the entire top-up loan will be an additional resource. Student parents will also be candidates for assistance from the access funds.
Child care is not just a matter of cost. The growing recognition of the need to provide childcare facilities such as crèches for working mothers and single parents will not pass by the higher education institutions. There will be increasing demand from students and they will choose institutions with reference to the extent and quality of the provision offered. This is, however, entirely a matter for the institutions concerned.
The Government believe that the scheme they propose is appropriate to the needs and circumstances of all eligible students, including those with children. The additional allowances payable with the mandatory grant will continue. As well as being unnecessary, additional provision of this nature would add cost and complexity to the scheme.
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I invite the Committee to reject the amendment, but before I sit down, it is important to say that the Government consider this issue to be very important. However, it is a question of how we help these young people. In the light of what I have said I hope that this amendment will be 'withdrawn but if it is pressed I hope that it will be rejected.
11.15 p.m.
Baroness Young: Before the noble Baroness, Lady Seear, replies, perhaps I could clarify one point. The comments of my noble friend Lady Blatch were extemely helpful. However, a very important point for the future and one about which people are very concerned is child care costs. It was difficult to take in all the figures given on dependants' allowances, but I assume that they apply separately to the wife and do not include the salary of the husband. If the answer is not available immediately I should be happy if the noble Baroness gave it a later stage, either in Committee or on Report, to clarify the point. I assume that that is the case because I think that that applied at earlier stages of the Bill. It is important that the assessment should be quite separate.
Perhaps I may raise one other point. A married woman with small children considering a degree course—which will be a complicated matter no matter how generous the provision for child care or anything else—is unlikely to contemplate a full-time course away from home. Presumably she will be living at home and attending a reasonably local university or polytechnic. That said, do I understand that not only the allowances but also the grants would still apply as they would to a student living at home?
Baroness Blatch: I take my noble friend's latter point first. With regard to the person studying from home, maintenance costs would probably not apply. Grant would apply and allowances would continue to apply depending upon the particular circumstances of the person concerned.
With regard to the initial matter my noble friend raised, I am afraid I shall have to write to her. I understand that the answer is rather complicated and concerns means testing. I assure other noble Lords who may be interested in the reply that copies of the letter will be sent to all who wish to see it.
Baroness Seear: I should like to digest at leisure what the noble Baroness said when I am rather more awake. However, I hope that the whole question of child care and the cost of it will be very carefully considered if it is desired to persuade these women to return.
In so far as the grant will be means tested, I hope the husband's income will not be taken into account. In many cases that would mean that the very people whom it is desired to have back would not find it easy to return. The husbands may have the money but it does not in the least mean that they would part with it for this particular purpose.
Throughout the evening we repeatedly heard as an argument against carrying out various suggestions

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that it will make the scheme more administratively complex. We must not allow the administration tail to wag the educational dog—if that is not too complicated a way of putting it. It is a remarkably bad argument to say that something which should be done cannot be done because it is inconvenient for the administration. That is an argument put forward by administrators and should always be fiercely contested and I do so now. At this time of night, and until I have seen the allowances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved Amendment No. 20:
Page 2, line 10, at end insert—
("(3A) The Secretary of State shall by regulations made under paragraph 1(1)(c) of Schedule 2 below provide that a person who has been an eligible student for the purposes of this section but who, by reason of illness or accident is unable to complete the relevant course of higher education, shall cease to be so eligible and their liability shall by such regulations be cancelled.").
The noble Earl said: I wish to speak also to Amendment No. 21. These amendments deal with students who must intermit their course. They provide that in that case the interest shall not accumulate; that the debt shall not grow during the period of intermission. Secondly, in the case of students who are unable to complete their course, it is provided that the debt shall be cancelled.
Often one does not realise how many people suffer misfortunes. During the past three months I have come across someone who nursed a girlfriend through a psychiatric breakdown; someone nursing a dying mother; and someone recovering from a third attack of malaria. Fortunately, all those people will complete their courses. However, regularly we find that for one reason or another some people must be advised to withdraw or to take a year off because for medical or other reasons they are too far behind to be able to do themselves justice.
It will become more difficult to advise such people if one is in the process of advising them to take on a much larger debt. Furthermore, we must accept that a high proportion of those who will be affected by the amendments are psychiatric cases who often make a full and complete recovery. However, by definition, psychiatric cases are not always rational. Therefore, faced with the prospect of additional debt, they are likely to become much more agitated. It can make the situation more difficult to deal with.
It would be better if one were able to advise those facing such difficulties on genuine educational grounds. University teachers should not have to act as auxiliary bank managers in advising people about what they will do to their future financial prospects. This is a simple humanitarian amendment and I do not believe that, in the end, it will cost much. In the case of people who do not complete their course the reason behind the loans proposal would not apply. The loans proposal is justified on the grounds that it is equitable because graduates earn higher incomes. However, such an argument cannot apply in the case of those who do not graduate.
I hope that, although he may not agree to the amendment here and now, the noble Earl will find it in his heart at least to say that he will take it away and think about it. I beg to move.
Baroness Blackstone: The reasoning behind the amendments is that it is unjust that someone who fails to complete a course through no personal fault should be further penalised by having a debt to repay. Similarly, it is unfair that a student who takes longer to complete a course because of illness should face an additional repayment burden. The extra interest accrued would increase the repayments compared with those of a student who completed a course within the usual period.
Students who have the bad luck to fall ill for a considerable period of time will be particularly disadvantaged. Students who are unfortunate enough to be forced to drop out of higher education because of illness or accident have a double handicap. At first they have the disappointment of failure to gain a degree. They will feel that it is failure not to get the degree that they and their parents very much hoped for. Students who have not managed at the end of their course to obtain a higher education qualification are very unlikely to benefit from the increasing earnings which the Government have constantly told us is the basis for this Bill and for recouping some of the maintenance costs of higher education from the students themselves.
Since that is a central principle behind the Bill it would be quite wrong to expect students who are not graduates either to repay the capital or the interest on the loans. I support these amendments.
Earl Bathurst: Will the noble Earl extend his amendment and, if not, what will my noble friend who is to reply say about the position of a student who is injured in a genuine sport or game at university and who may be out of action for five or six months or even a year? Would that situation apply to the noble Earl's amendment? If so, I shall be very interested to hear what the noble Earl has to say in reply because such incidents happen.
The Earl of Caithness: Once again we are discussing amendments which are intended to protect a certain group of graduates. I refer the Committee to the comments that I made concerning Amendments Nos. 12, 13 and 16 which I shall not repeat now except to emphasise that the flexible structure of the Bill permits changes to be made through regulations should monitoring reveal that adjustments are necessary.
Amendments Nos. 20 and 21 would make special provision for students who leave their courses or delay completion as a result of illness or injury. My noble friend raised a point about injury and I saw the noble Earl, Lord Russell, nodding his head in agreement with what my noble friend said. The noble Earl, Lord Russell, was right to say that it is anticipated that graduates will have a potential for a higher salary when they leave. Therefore, I wonder whether he will agree with me that even those who have sat for part of a course of higher education can have an additional value in the labour market.

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Someone who has successfully completed part of a degree course may expect to achieve higher earnings on average than someone without any higher education. Therefore, it is surely right that that person should be asked to repay the loan which he has taken up. We do not believe that it would be equitable for the taxpayer to give a further subsidy to former students in such circumstances. I reassure my noble friend on that point because I can understand his concern. We must remember that what we are asking a graduate, or someone who has taken part of a course, to repay is the loan only when lie reaches 85 per cent. of the national average earnings which at the moment is £11,500.
If the work that the person did on the higher education course does not lead to a salary that takes him above that level he is under the deferment provisions that we have provided for and he is protected in that way.
Baroness Blackstone: Can the Minister tell the Committee what evidence there is that students who have failed to complete a degree course actually have higher earnings than other people with similar earlier qualifications, like two or three A—levels?
The Earl of Caithness: I did not say that it was a guarantee. I asked the noble Earl, Lord Russell, whether he would agree with me that there was potential for that. I answer the noble Baroness by saying that if that person does not receive the expected income that he might have got from completing the course, and that income does not take him above 85 per cent. of the national average wage, then the deferment provisions arise.
11.30 p.m.
Baroness Young: Perhaps I may ask my noble friend to consider a further point. There could be one or two very hard cases indeed. It is arguable that if one has completed one and a half years of a university course the chances are that one will get a better job. But I can envisage the case of a student who has a terrible accident—I do not know whether this is what the noble Earl, Lord Russell, had particularly in mind—and is therefore seriously handicapped. Such a student will not earn very much at all. Is there no provision within the Bill or the regulations to remit a loan if it is clear that because of illness or accident it will not be possible to repay it? I do not know the answer to that question but it is matter which should be considered at some stage.
I am certainly not in favour of a general proviso to remit a loan for someone who drops out of the course for a rather feeble reason. One has to take care not to open a door which it would be quite improper to open and which it is not intended to open. But I see that there could be a few hard cases. I wonder whether my noble friend would like to consider this point and perhaps tell us at a later stage what he thinks.
Baroness Seear: I should like to reinforce what the noble Baroness has just said. Those who have worked with students know that a small percentage drop out as a result of breakdown. I assure the noble Earl that any idea that those people will get good jobs because they have had one and a half years at university, a breakdown and psychiatric treatment, is absolute pie in the sky. They are the most difficult people to help. To say that they will not have to pay it back because they are not receiving 85 per cent. of average national income is only deferring repayment. They still have that debt.
Only a small number drop out but these cases happen all the time. Those in higher education know that it happens. Such people are terribly difficult to help and to place afterwards. Some of us have had them around us for a very long time. I ask the noble Earl to take the point away and consider whether something can be done to cancel the debt so that such people do not have this additional worry. They are a difficult group to help.
The Earl of Caithness: I have listened with particular care to what my noble friend Lady Young, supported by the noble Baroness, Lady Seear, has said. The deferment provisions which I mentioned earlier will come into effect if their income is not up to the expected level for repayment and in due course the stage will be reached when the person is aged 50 and the loan is cancelled. But without any commitment I should like to study carefully in the Official Report what my noble friend has said.
Earl Russell: Those words offer a valuable small crumb of encouragement. I welcome them. I welcome also what the noble Baroness, Lady Young, has said. I do not believe that one should talk about the higher potential earnings of non-graduates. As my noble friend Lord Addington has reminded me, employers ask about qualifications. They do not ask about educational experience. I know that we used to be told once upon a time that there were regular applications from people claiming to be failed B.A. We do not get those now.
The Minister might usefully think—and I hope he will—about increased debt for those who intermit for a year. This also covered cases of physical injury. I remember a recent case of a smashed elbow joint which is healing extremely slowly. That is the sort of situation where the pupil ought to be able to think freely, without financial anxiety, about the possibility of intermitting for a year to allow recovery and, therefore, more efficient writing.
The point which underlies all this is that many of us would like to be able to advise our pupils on educational decisions on educational grounds. The intrusion of financial calculations into this kind of decision may perhaps be a part of market forces, but I am not convinced that it leads to good education. However, the Minister has offered a crumb of comfort and I too should like to read very carefully what is recorded in the Official Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 21 to 23 not moved.]
Baroness David Baroness David moved Amendment No. 24:
Page 2, line 11, after ("may") insert ("after consultation with such persons as appear to him to be concerned").
The noble Baroness said: The purpose of this amendment is to probe the likely use of the power to add, or remove, types of course from the list giving rise to eligibility. Schedule 1 defines courses of higher education for which an eligible student can receive a loan. Clause 1(4) provides for the Secretary of State to amend Schedule 1 by order. I assume from the Explanatory and Financial Memorandum that this is a negative instrument and therefore that there may be no discussion in Parliament on the matter.
The amendment asks for consultation prior to the Secretary of State making the order and provides an opportunity to find out what changes the Government have in mind. The definition in Schedule 1 of higher education includes all courses defined as higher education by the Education Reform Act with the exception of postgraduate courses and with the addition of the Scottish Vocational Education Council courses and courses higher than the higher level of the Scottish Certificate of Education. The list is comparable to that for which mandatory grants are available, but includes Higher National Certificate and other sub-degree courses and professional examinations above A-level standard. At present these are excluded from mandatory awards.
The White Paper states in paragraph 3.39 that one of the conditions will be that students must be full time. However, that condition is likely to be a condition referred to in Clause 1(2)(b). The principal extension to eligibility is courses in further education; for example, A-level and sub-higher education vocational courses. Many students undertake these courses full time and are likely to lose housing benefit under the new regulations, although some may receive funding from the further education access fund. Although we welcome the fund, the £5 million that the Government are proposing to devote to further education is minimal. When questioned about the matter in the Standing Committee on 23rd January 1990, the Under-Secretary of State, Mr. Jackson, (at col. 418) thanked MPs for proposing new categories of student who would be eligible for loans and stated:
"Our general position is that although it may be desirable to extend the scope as resources allow, it is important to get the scheme up and running first. Any case for extending its coverage will have to be considered not only in the light of general policy and availability of resources but on the merits of the argument in each instance. I intend …. to pay close attention to the impact on recruitment of the extension of student support through the broadening of the categories of course that the loan can cover".
Will the Government please state what indication they will use to monitor the recruitment of higher education students in order to extend the student loans to further education students, especially to those on courses that will enable them to gain access to a higher education course? Further, will they consult on those indications? The amendment seems to me to be very reasonable and one to which I should have thought the Government would certainly agree. I beg to move.
The Earl of Caithness: I always find the noble Baroness, Lady David, convincing in her arguments and sometimes she is even more convincing than usual. I thought that she was particularly persuasive tonight. As she will be aware, the Government always consult before taking any action. In my view it is probably right that we should put this on the face of the Bill. I should, however, like to check between now and the next stage of the Bill's proceedings the wording of what is proposed. In the circumstances, if the noble Baroness feels able to withdraw her amendment, I shall see whether something can be done in the matter at a later stage.
Baroness David: I am delighted and, I must confess, even slightly surprised. It is not very often that the Government agree to an amendment. I thank the noble Earl very much and agree to withdraw the amendment. I look forward to that of the noble Earl.
Amendment, by leave, withdrawn.
[Amendments Nos. 25 to 31 not moved.]
Clause 1 agreed to.
Schedule 1 [Courses of higher education]:
Lord Peston Lord Peston moved Amendment No. 32:
Page 3, line 4, at end insert:
("1A. A taught second degree course.")
The noble Lord said: I am aware that it is late at night but this is an important amendment and therefore it is necessary for me to speak to it. I implied or stated in my Second Reading speech that if we were interested in experiments with loan schemes what we should do is precisely not what the Government are doing. We should take an area like taught masters degree courses where no mandatory awards are available. One can go for competitive awards but students largely finance themselves.
My inclination for many years has been to say that since I have always been interested in exploring loan schemes—as an economist naturally I would be—the area of exploration would be the taught masters degree. There we could gain some experience of how to run a loan scheme. We could check what I believe to be the case, namely, that the taught masters degree is a particularly good investment.
It is also an area where, taking the longer view of the future of the economy, we shall have more people taught at that level. My own view is that the taught masters course is a more sensible way of proceeding than the extension of the undergraduate degree to four years. For a great many reasons I have felt that this is precisely the area where we ought to examine loan schemes. To use the words of the noble Earl, since quite a number of my students finance their masters degrees by borrowing from the banks, I should be happier—and certainly they would be happier—if they were then able to borrow from the Government at possibly more favourable rates.
There are many grounds for saying that that is where I should have liked to have seen the experiment. Where I particularly did not wish to

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see the experiment with loans, as opposed to other methods of repaying the grant, was in the undergraduate area. I feel that I ought at least to delay our proceedings this evening for a few moments to place those remarks on record. As an economist I feel so strongly about this that if it were not this hour I should wish to divide the Committee in order even more strongly to place on record my views. However I hasten to assure noble Lords that 1 have no intention of doing that.
To summarise, as someone who takes the question of student finance seriously and who is open to arguments, including those on student loans, if I had a free choice and it were up to me where we carried out our first experiments, this is the area I would select. I am particularly disappointed that this is precisely where the Government say that they will absolutely not do it. If ever we had a case where the Government had got the whole matter completely wrong, it is this one. I beg to move.
Baroness Seear: I wish to support this amendment very strongly. I was interested to hear what the noble Lord, Lord Peston said. A long time ago, I, like the noble Lord, arrived at the conclusion that there was a strong case for loans for taught masters courses. It is extremely important that the Government should recognise that finance for these courses is highly desirable. By definition, the people coming on the taught masters courses are, by and large—but not exclusively—the cream of the undergraduate population. We talk about quality. If we want quality we must develop the ablest people among the students to the highest degree possible. That means the taught courses with expansion in undergraduate courses. I do not know whether the noble Lord, Lord Peston, will agree with me, but I have observed a tendency, to put it bluntly, to do a slightly more mass produced job on the undergraduate courses than some of us would think desirable. This has partly been because there has been an increasing reliance on the fourth year of the taught masters in order to give the quality of teaching to the people with the greatest level of ability. What I can see happening, if we do not provide loan provision for taught masters courses, is that the mass produced approach to the undergraduate courses—undergraduate students are apparently to be taught without books according to what we have been discussing recently—will go ahead and we shall lose the quality in the undergraduate courses without picking it up again by providing good masters courses for the people who are capable of taking them.
If we want to keep quality in the academic world and in the world outside where the graduates go to work—we desperately need to maintain quality—it is important that these courses should continue. However, they will not continue if no loan finance is available to them. Once these youngsters have acquired loan debt at the end of their undergraduate courses, they will not be willing to finance themselves, with a debt already round their neck, if they can obtain some kind of a job at the end of their undergraduate courses. We shall lose heavily by not developing the potential of people of the
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highest level of ability. I hope that the Government will not make up their minds firmly about this measure and that they will at least lake it back and think about it again.
11.45 p.m.
Lord Addington: I should like to add a few words to this discussion. Many acquaintances of mine and my brothers and sisters who have finished their first degree courses were confronted with the possibility of undertaking higher academic work. Many of them were worried about the financial problems that that implied and about the fact that they may not be suitable for a different type of academic work that was more research based. Surely a taught masters degree which provided some form of financial support so that they did not face quite the same degree of financial burden would be a good idea. I am of course assuming that the Government would not charge these students competitive interest rates but interest rates at the same level as those for undergraduates. That would mean that these students would at least attempt to find out whether they were capable of undertaking higher academic work.
As our technical burden for industry and virtually any form of commercial activity we are engaged in in an increasingly complex world increases, we shall need more experts who have extended their academic training. Therefore I suggest that any scheme that gives people at least some form of cushioning and some guaranteed form of financing as they attempt to find out whether they are capable of following a more specialised path would be advisable.
The Earl of Caithness: Let me make it absolutely clear that the Government are firmly committed to improving the supply of very highly qualified manpower. This commitment is reflected in the number and value of awards available to postgraduate students and in the care and rigour with which these are allocated.
The needs for support of postgraduate students are different from those of undergraduates. This is recognised in the very different arrangements currently made for them. These arrangements are closely targeted on the areas of work for which postgraduate courses, especially the specialist taught courses, prepare students. Thus the majority of government support for them is channelled through the research councils which are well placed to make sure that the money is efficiently and effectively deployed. The students apply on a competitive basis; this ensures that only those of very high calibre are successful. Some 7,000 students are supported through the research councils on a mixture of taught courses and supervised research and 1,000 through British Academy studentships.
Postgraduate awards are tax-free and are mostly larger than mandatory awards. In 1989–90 the rate of grant was £3,725 for a research council studentship living away from home outside London. The Committee will be pleased to note that unlike mandatory grants, research council awards have

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retained their value and are worth more in real terms than in 1979. The rates for 1990–91 will be announced shortly.
I believe that the current system of support for students on taught postgraduate courses is fair and efficient. The level of the award will continue to be uprated annually, unlike mandatory awards, and the students will thus not need loans for their support.
On the question of loans I should like to take the noble Lord, Lord Peston, up on one point. He said that he would like to abolish our scheme. I should like him to make clear what he would put in its place, because I believe that that is important for our discussions; how much that would cost; and whether he has cleared those proposals with his right honourable friend the Member for Monklands, East. I do not expect him to reply tonight but I hope that he will have time to consider the matter for a later stage.
On the other hand, I was greatly encouraged by the fact that the noble Lord, Lord Peston, appeared to see some advantages in the student loan scheme. Although he preferred loans for the taught second degree course rather than what we have proposed, the mere fact that he showed enthusiasm for them gives me hope of convincing him of the full merits of our scheme.
At this time of night I should obviously like to read with care what the noble Lord and the noble Baroness have said. I hope that they too will in due course read what I have said.
Lord Peston: I thank the noble Earl for that reply. I repeat that we shall abolish the scheme. The noble Earl will have to wait—not very long now—for an exchange of positions. He will then hear precisely what I have to say on these matters.
I think that it is a bit thick. I was advocating this sort of scheme before the noble Earl or the Government had thought of loan schemes.
Baroness Seear: Is there not some doubt about that? I thought that the noble Lord's party was going to abolish us, so he will not be in a position to do that, will he?
Lord Peston: We appear to be having a great number of different debates on what we are going to do. I assume that I at least and perhaps the noble Baroness will be here for a little longer. If we are not I shall have to go back to being a retired professor of economics. Indeed, that might be a much more satisfactory way of spending my time.
As I said, I have lectured on the subject for a great many years. The people who have come lately to it are the Government. Many of us thought the matter through much earlier. The Government have latched on to it. They do not understand it and have got it wrong. It is too late for me to go over the history of thought on repayable grants, loans, and so on. I resent the fact that it is suggested that I am the one who has been converted when I can produce writings going back a long time.
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Where were we? Despite all the badinage, my main point is that what I said about the masters degrees was not concerned with research council awards. I am perfectly well aware of the research council awards. They are good schemes. My point is that I do not see us expanding the full awards in order to finance masters degrees. I see the need to expand masters degrees. I believe that a worthwhile experiment could have been undertaken via the loans approach.
It is late. The noble Earl said that he would think about what one or two of us had said, and so we may come back to the subject anyway. With those remarks, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blackstone Baroness Blackstone moved Amendment No. 33:
Page 3, line 4, at end insert—
("1A. A course of supervision in connection with a research degree.").
The noble Baroness said: Some of us on this side of the Chamber had hoped that we would complete the first day of Committee on 12th March rather than running into 13th March. I shall be very brief in the hope that we may still achieve that, although it is rather doubtful.
Some of the arguments have already been put by my noble friend Lord Peston in relation to postgraduate students on taught masters degrees, and they apply also to postgraduate students on research degrees. It is vital that we continue to have a substantial number of our most intellectually able and talented students continuing to study for Ph.D. and D. Phil. degrees or whatever a particular university terms the degree that is awarded at the end of the period of research. Those students obtain awards through the research council on a competitive basis, but those awards are very low and quite difficult for students to live on. For students on science, engineering and medical postgraduate courses, the rates last year were £3,700 outside London and £4,600 in London. The rates were rather lower for students in humanities.
Students who decide to study for a research degree which normally takes not less than three years make considerable sacrifices in living on that low income while they obtain their higher degree. Many of them are dependent on housing benefits in order to allow them to live in reasonable accommodation and make ends meet. As I understand it, the Bill will make postgraduate students ineligible for housing benefit just as undergraduate students are to be made ineligible, yet, at the same time, postgraduate research students will not qualify for a loan. In other words, we are taking something away from them and we are giving them nothing in return other than the possibility of going to an access fund where they will have to plead poverty to a new group of people when, under the present system which is set up and running, they may receive housing benefit.
I am not clear what the advantage is of taking that group of students out of housing benefit where there is an established scheme under which their income is properly assessed and regional differences in housing costs are already taken into account, to establish

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another scheme involving an access fund. Even if they were able to obtain support through an access fund, it seems strange that we should exclude that category of students from the possibility of taking up a loan if they are in financial difficulties on the low amount of money that is available for funding postgraduate awards for research students. Many will find it hard to make ends meet. It seems to me that that category should be included in the Bill. I beg to move.
The Earl of Caithness: I explained at some length on the previous amendment why the Government do not intend loans to be made available to postgraduate students. I said then that I should look carefully at what had been said, so I now say to the noble Baroness that I hope that she will read what I have said.
The arguments apply with particular force in the case of students working for a research degree. Those students have access to a system of government studentships designed to ensure that a sufficient number of our brightest young people continue to take research degrees, especially in subjects which are important to the future economic health of the country. As I understand the situation, many of them are able to supplement their income with earnings from teaching or related work. Thus, they do not need loans in quite the same way as undergraduate students. The noble Baroness was right to mention the question of housing benefits and to draw attention to the access funds. Again, I noted that point carefully for my future discussions with my right honourable friend the Secretary of State.
Earl Russell: Before the noble Earl sits down, perhaps he will answer the point made by the noble Baroness, Lady Blackstone, regarding the logic of taking postgraduate students out of the social security system without giving them access to loans. I must confess that the logic of the Government's position escapes me.
The Earl of Caithness: We believe that not all students should receive housing benefit, although those who are disabled will still be able to claim housing benefit. That was a basis of the scheme. We then thought it right to have the access funds for areas of particular hardship, as the noble Earl knows. We should then separate the students who are studying on a first-time course from those whom we are discussing under the terms of the amendment. As I said, I understood the situation of the two types of student to be different. That is why within the resources available we have been able to offer loans to one which are not means tested but not to the other.
12 midnight
Baroness Seear: If I understood what the noble Earl said, there will be a restricted number of places and resources for people doing research—supervised research students—and they will be selected according to somebody's criteria of what are important subjects to study. I should dearly like to
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know who are the people who will say which subjects are to be studied. It is in the nature of research that you do not know what people will come up with; otherwise it would not be research. Who is it? What are the qualifications of the people who will make the judgments about what should be researched?
Is the noble Earl aware—I am sure that he is—that, for example, there has been a big demand in American industry for people with degrees in philosophy? I very much doubt whether that would have been a subject picked out as being of particular value. In many ways nobody is in a position to know what are the best topics to research. One has to take people of real calibre who will discover things of real value. The idea that there is somebody outside to tell us what should be researched is an insult to the intellectual community.
The Earl of Caithness: As I understand the situation, support is provided for postgraduates through government funded bursaries and studentships, which are distributed mainly by the research councils and the British Academy. Some are paid for by the department itself. Therefore it will be the research councils that will make the decisions about which the noble Baroness asked.
Baroness Blackstone: I am still not quite clear why postgraduate research students should have benefits removed from them but not be eligible for loans. I do not think that we have had a satisfactory answer on that. I was also interested in what the Minister said about the possibility of research students supplementing their income with teaching and other related work. It was true at one time but it is becoming more and more difficult for postgraduate students to do, partly because of the financial constraints under which universities are operating, which mean that there is very little spare financing available to take on research students to do that kind of teaching. It happens a little but on a very small scale and many of them cannot get such work.
But I am grateful to the Minister for his reply. Certainly I have no intention of pressing this amendment tonight. I shall read what he said. Meanwhile I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness David Baroness David moved Amendment No. 34:
Page 3, line 23, at end insert ("including a course in the performing or visual arts").
The noble Baroness said: The purpose of this amendment is to make students on courses in the performing or visual arts eligible to receive loans. Under the Bill as it stands only students on advanced courses in the arts, such as drama or music degrees, would be entitled to loan support. This would mean that many students on other arts courses would be left to the mercy of the discretionary award system.
The NUS Local Authority Awards Survey 1989—which is the only national survey of discretionary awards that is recognised by the DES as authoritative—allows that there is a wide variation in the policies of local authorities in making discretionary awards for visual or

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performing arts courses. While many authorities offer awards, the total numbers per authority vary, as do the amounts. Of the 92 (out of 104) authorities responding to the survey, 11 did not make any awards for art college diplomas and 12 did not make awards for vocational arts courses. In the field of dance some authorities would only offer assistance with tuition fees.
In view of these wide variations both in the availability of awards and in the amount, often due to the low level of funding that local authorities face as a result of the low level of priority accorded to such courses, it is vital that the problem of finance for arts students is considered. There are many examples of famous artists and dancers who have made it the hard way. What we rarely hear about is those who fail to make it because of lack of finance and not owing to lack of ability.
Music students have a particular problem. They cannot supplement their income by working in vacations because they have to practise every day for many hours a day. Another problem is with the conservatoires in England. Five top ranking institutions are in London where we know that the cost of living is particularly high.
I have a great deal of interesting information about music students. However, as the hour is so very late I shall restrain myself and not talk about them now. There is a very real problem, I assure the Minister. I hope that he will carefully consider the amendment. It is of great importance. I hope that the Government—who are occasionally accused of being philistine—will take a very nice view of the amendment so that we can change our assessment of the way in which they consider these matters. I beg to move.
Baroness Blatch: The overall effect of Schedule 1 taken as a whole is to provide for all courses of higher education below post-graduate level to attract the loan, subject to being provided on a full-time or sandwich basis and being of at least one year's duration. The fact that the schedule takes more words to say that is due to the need to make it quite clear which courses these are in practice.
So far as I am aware, no course of the kind I have described is excluded; nor is it the Government's intention that any should be. Against that background, courses of the kind mentioned by the noble Baroness may be covered by one of several provisions in the schedule. If they lead to a qualification of the kind specified in its first three paragraphs, then they are designated by virtue of those paragraphs. If they do not, but lead to a professional examination of a high enough standard to be regarded as higher education, they are covered by paragraph 6. If they do not lead to a professional examination but are still of a sufficiently high standard to qualify as higher education, then they are designated under the terms of paragraph 7.
I make no apology for labouring the point because it is as well to be absolutely clear. I hope that I have persuaded the Committee that the amendment is not necessary and therefore can be withdrawn.
Baroness David: I thank the Minister for what I think is an encouraging response: that these courses are probably covered under those paragraphs under Schedule 1. I shall read carefully what the noble Baroness has said and consult. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Schedule 1 agreed to.
Baroness Blatch: I beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Standard Life Assurance Company Limited Bill [H.L.]
Committed to an Unopposed Bill Committee.
Mersey Docks and Harbour Bill [H.L.]
Committed to a Select Committee.

British Film Institute Southbank Bill
Reported from the Unopposed Bill Committee with amendments.
House adjourned at eight minutes past midnight.