Education (Student Loans) Bill

HL Deb 12 March 1990 vol 516 cc1327-72

4.10 p.m.

House again in Committee on Clause 1.

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, 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 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 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 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 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 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 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.

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 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 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.

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 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.

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.

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 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 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 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 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 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.

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 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.

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.

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 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 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.

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 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 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 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 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 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 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 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.

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.

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 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.

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, 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.

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 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, 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 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.