HL Deb 19 March 1990 vol 517 cc10-77

3 p.m.

The Earl of Caithness

My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.

Moved, That the House do now again resolve itself into Committee.— (The Earl of Caithness.)

On Question, Motion agreed to.

House in Committee accordingly.


Schedule 2 [Loans for students]:

Earl Russell moved Amendment No. 34A: Page 3, line 34, at end insert ("for the purposes of this Act, including protection against unauthorised disclosure or use of information").

The noble Earl said: I rise to move Amendment No. 34A. I should like to speak also to Amendments Nos. 39C, 39D, 39E, 47B, 49 and 49C. That, I am afraid, is quite a mouthful of amendments. However, there is a common purpose which informs all those amendments, which is why I believe that they are properly grouped together. They form a civil liberties category of amendments.

The process of debt collection is obviously a necessary incident to any measure for student loans. It is also necessary that where there are loans there should be repayments. Those must, of course, be pursued. The question which concerns us is how. The Price Waterhouse report, which is by way of being the Government's operating manual on this subject, very properly makes the point that the ultimate financial destiny of the scheme depends on successful recovery of debt. Its proposed remedy for meeting that danger is what is described as "enthusiastic" debt collection. The Committee will understand why that adjective causes me a certain amount of misgiving. I should have been very much happier if it had said "efficient" debt collection, for efficient debt collection there must indeed be. However, enthusiastic debt collection, in an area of commercial credit in which error is by no means unknown, is something which I believe we should view with a certain amount of caution.

The amendments deal, first, with the question of unauthorised access to records. It is a very proper and very strongly felt concern of many commercial borrowers that they do not want all their neighbours knowing their affairs. I can see no legitimate reason why that concern should not be satisfied.

The amendments deal with protection against destruction of records. The Committee may consider that that represents an excessive anxiety. In fact there is precedent for it. The main United States' social security computer was once struck by lightning, with the result that the social security records of a good many thousand people were destroyed. The error first came to light when an old lady in San Francisco was presented with a pension cheque for five million dollars. Believe it or not, she paid it back. I do not know whether the Student Loans Company will be as lucky. I hope that it will be, but I should very much prefer it if the necessity did not arise. In any case where there is a risk of the destruction of records by an electrical failure some form of back-up system is essential for the preservation of liberty.

Amendment No. 39D, which deals with the requirements of the Data Protection Act, is one of the most vital of this group of amendments. The idea has been floated in the press— and I know that the noble Viscount, Lord Davidson, will tell us that he does not believe everything that he reads in the papers, but we should like to know that we could disbelieve it— of the Student Loans Company being fully privatised and financing itself from the proceeds of selling its mailing list. The Department of the Environment may have misgivings about the generation of a vastly increased quantity of waste paper in this country. That apart, a good many undergraduates feel a good deal of misgivings about the thought of details of their names, addresses, financial liabilities and debts being sold on the open market for all and sundry to bombard them with junk mail. We receive enough of that already.

I should like the most categoric assurance from the Minister that the mailing list of the Student Loans Company will not be parted with, will not be made over to third parties, will not be sold and will not be used as the basis for financing the Student Loans Company as a commercial business. That is vital to any confidence in the scheme. There are people who would be extremely reluctant to take a loan on such a basis, even if they could see no way to live without it.

Finally, the amendments provide for confidentiality of records and access to information. That again is a vital provision. Errors have been made in matters of commercial credit. Perhaps I may give an example from personal experience. I was once threatened with proceedings for failing to pay instalments on a debt which I had paid off completely some months before. Fortunately the payment had been discharged by my lawyer, who had full and proper records and had some words to say on the subject. That error, we discovered, had arisen because in arranging for the payment of the debt the company had given us the wrong file number, which we had then virtuously used. That is the kind of error that might happen to anybody, but not everybody concerned will have a first-class lawyer in the background. I can foresee a great deal of error occurring here. I believe that it is vital that there should be some means of checking those errors.

None of the amendments is meant in any way to interfere with debt collection. The amendments are meant to ensure, in so far as it is possible, that it should be done efficiently. I beg to move.

Lord Peston

My Lords, I too shall speak to this very long group of amendments which, as the noble Earl, Lord Russell, rightly said, have a common theme concerning the protection of the individual and particularly the individual's privacy. It is interesting that we start with an apparently simple scheme for student loans and end up dealing with matters of very great significance for civil liberty.

One reason for concern about the matter is the remarks made by the noble Earl, Lord Caithness, in his winding-up speech in the Second Reading debate. He responded to the fact that many noble Lords on all sides of the Chamber were concerned about the question of default. The noble Earl said that it was right that defaulters should be pursued vigorously. He said that there was no need to be apologetic about that and that: Graduates who fail to pay their debt to the taxpayer deserve no one's sympathy— [Official Report], 27/2/90; col 716.] There is a slippery slope. We start with the idea of a loans scheme, which Members of the Committee who support it believe is conducive to higher education, and end up threatening graduates with prison sentences in due course.

Although I am second to none in my belief that those who incur debts have to face up to the responsibilities that are connected with those debts, I am still more concerned about where a Bill of this kind leaves us. I do not seek to make a cheap party political point in referring en passant to the similar remarks that were made about the poll tax. That also began as something that some noble Lords believed to be a highly desirable step, and one which even enhanced our democracy. However, we still do not know the legal consequences and the consequences for the liberty of the subject of that Bill.

A young person aged 18 will set out on a course of higher education. That is what such young people are interested in. I still believe that the main reason they do so is that they believe education at the higher level is desirable. Some of them will gain financially from it, although not all, as we shall demonstrate with regard to other amendments. Some do it for vocational purposes. As an academic, I believe that studying at that level for its own sake is highly desirable and in the national interest.

Those young people start off at that point. They incur the loan because it is available and perhaps because it is their only means of support. Some years go by and they might then find themselves with the most complicated and vigorous procedures for repayment, if I may quote essentially what the Government said, arising possibly from a misunderstanding. Some people might well take out loans with a view to not repaying them, although I do not think that that is likely to be the case. Given all the complexities of when the people who take out loans start to repay them and all that happens to them in the years that go by, they might not repay them, either through oversight or because of their circumstances which, as we have again argued fairly vigorously, are not simply connected with being below 85 per cent. of the national average wage. They will either forget to repay the loan and will be in default or will find it impossible to repay the loan. That is the nature of the problem. That is why some protection is needed, particularly against the ad hoc pursuit of such people.

That leads me to the second reason the amendments are so important and why I was glad to attach my name to them and support them. It is a consequence of the enabling nature of the Bill, which gives the Secretary of State power to make regulations, that matters of fundamental importance to the liberty of the subject will not, unless the amendments are accepted, appear in the Bill. Speaking for myself and my noble friends and, I hope, for other noble Lords, I should not accept either a ministerial assurance that the Government believe that the loans company will behave reasonably or a statement from whoever runs the loans company that he or she is willing to behave reasonably. Amendments of this kind are required to ensure that those people behave reasonably with due regard to the civil liberties aspects of the matter.

A further cause for concern results from the nature of the Bill. It is not a necessary consequence of introducing a loans scheme but a consequence of the way in which the Government have set about it. We do not know what data the Student Loans Company may collect. We hear rumours and statements and we see pro formas, but we do not know precisely what it can collect. Unless the amendments or others like them are accepted, we shall not know what it can collect. That is an important point. As I see it, there is nothing to that effect in the form that will eventually be sent out to students. We should not forget that the first draft of the form will not necessarily be the one that exists over several years. The Student Loans Company may ask for all kinds of information which, if noble Lords knew about it now, they might think was wholly inappropriate.

Those are the thoughts that I place before noble Lords. I place before them the problem of default. Much of that default will result from chance and from oversight. In particular, the problem is that here, as elsewhere, we are asked to accept reassurances and a pig in a poke— indeed, several pigs in several pokes. All those points should be in the Bill, which is of great importance to the people concerned.

3.15 p.m.

Lord Hailsham of Saint Marylebone

I speak out of ignorance and in the hope that my noble friend Lord Caithness will be able to correct me if I am wrong. With respect, it seems to me that the two speeches to which we have listened deal with two totally different subjects. The noble Earl, Lord Russell, raised the question of confidentiality. I am sure that he was right to do so and that the Committee will be extremely interested to hear what safeguards will be proposed by the Secretary of State when it comes to the confidentiality of the information obtained before or after the grant of a loan.

The noble Lord who spoke from the Front Bench for the Labour Party raised a totally different question; namely, the status of the loan in relation to enforcement. Here is the point at which I hope that my noble friend will correct me if I am wrong because I have not, as I perhaps should have done, researched the matter adequately. As I understand it, the loan will in effect be a contract debt and have the status of a contract debt. If that is so, since the implementation of the report of the Pain Committee some years ago, that does not yield the right to imprison the person. There is no threat to liberty in that sense. That point should be made plain if it is so. If it is not so, it should equally be made plain.

Baroness Phillips

As the noble and learned Lord has pleaded ignorance, perhaps I may again raise a point with the Minister, although I am sure that it has been explained. I find it disturbing that the effect of the Bill on public service manpower is that there will be no net increase in civil service manpower. Student loans will be administered by the Student Loans Company Limited. The moment we have a limited company, presumably set up by the Government, surely there can be no real control in the sense that any information it has is liable to be used. We all receive frequent letters from banks. They are notorious for selling addresses. The amendment seems to me to be particularly relevant as we are dealing with the Student Loans Company Limited.

Lord Milverton

I shall support the amendments unless Her Majesty's Government can give a more satisfactory answer and assurance. Morally speaking, the question of student loans is a dangerous one. It is perhaps a case of taking advantage of young people who, as the noble Lord, Lord Peston, said, rightly see not only what their higher education will gain them but the importance of taking part in learning at that high standard.

Baroness Carnegy of Lour

I shall listen with great interest to my noble friend when he replies to the amendments, particularly on the question of how confidentiality is to be maintained. I hope that he will tell us how confidentiality will be maintained when the information is not on computer as well as how that is done when it is on computer, as I believe that the law is different.

Baroness Blackstone

I should like to add a few words to what the noble Earl, Lord Russell, and my noble friend Lord Peston have said about the amendments. As the Bill has gone through the House, many of us have been extremely concerned with the question of access and of being convinced that the proposals will not put off young people from starting the process of higher education, particularly young people from working-class homes. A number of us have registered our concerns about the fear of debt among young people from that social background, but there could be fear about what might happen if those who have taken out loans have some difficulty in repaying them.

Therefore it is vital that we are absolutely sure that we shall be purer than pure on the question of protecting civil liberties, both in the collection of debt and dealing with defaulters. My reason is that any fears that lists of students who have loans will be given to any other body will get round very fast. It could act as a further disincentive to some students. Any fears that the individual's privacy might be jeopardised could also affect access. So we need safeguards on confidentiality.

However, I also think that we need safeguards on the whole subject of what we do when people fail to repay. The document, Top-up loans: rules and procedures, sets out what will happen to secure repayment in the case of default. Let me quote from that document which says: to secure repayment: i. persuasion, backed by warning of credit blacklisting and of litigation, leading ultimately to attachment of earnings, seizure of goods, charge on fixed property. ii. transfer of debt to debt collection agencies for recovery at agency's discretion". I accept that it will be necessary to instigate procedures for repayment where students have failed to repay. It may be that the noble and learned Lord, Lord Hailsham, is quite correct to say that there is no threat to liberty. But I shall be very grateful for some clarification in the light of what I have just quoted from the rules and procedures document.

These amendments seek to ensure that we set out clearly in the Bill acceptable mechanisms to protect individuals being pursued for debt relating to their loan with respect to their civil liberties. I support the amendments.

The Earl of Caithness

As I understand these amendments, they seek to ensure that the Student Loans Company, and any companies to which it sub-contracts, will act in accordance with the requirements of the Data Protection Act 1984. The Student Loans Company will, like any other organisation holding data, be subject to the Data Protection Act 1984. The Act both protects the individuals— which is very much a concern of all Members of the Committee— while recognising the importance of controlling the exchange and use of personal data. It is there covered in an Act which Parliament has already approved.

Borrowers under the student loans scheme will be entitled to exactly the same protection as they would if they were borrowing from any lender in the commercial sector. The loans company may hold personal data only if it is registered under the Act, and may only use the data for registered purposes. Data may not be disclosed without the authority of the individual to whom the information relates; and an individual is entitled to a copy of any data held relating to him by a data user, on payment of a fee.

Provided that the company acts in accordance with the Data Protection Act 1984 it is entirely appropriate that it should be able to pass details of defaulters to debt collection agencies, in keeping with normal commercial practice. There may be some graduates who, despite earning a respectable salary, wish to ignore their obligation to repay their debt. I am sure that the Committee would agree that such defaulters should be pursued with all the conventional commercial means.

The company and any companies to which it subcontracts are required under the Data Protection Act to take appropriate security measures to protect personal data.

The Student Loans Company will also need the option of passing information to credit reference agencies. It is quite wrong that those who renege on a debt to the taxpayer should be able to borrow further money from respectable lenders, without the lenders being able to ascertain that they are unreliable. It would also be unfair on other would-be borrowers who would enter into loan agreements in good faith. The threat of being blacklisted will be a powerful and wholly legitimate inducement to borrowers to meet their obligations.

That is why these amendments, and in particular Amendment No. 34A moved by the noble Earl, Lord Russell, together with Amendments Nos. 39C, 39D, 39E and 49, are unnecessary. They seek merely to oblige the Student Loans Company to comply with an existing statute by which it will be bound in any case.

I turn now more particularly—

Lord Peston

Perhaps I may interrupt the noble Earl. I think it would be useful if we clarified this point simply so that we understand the Government's position. I should like to ask him again whether I understood him correctly to say that the Student Loans Company will be just like any other company offering loans to the personal sector— I think those were the words that he used— and would operate just like any other company.

So in a sense there is nothing special about student loans at all. That is what he is arguing. Indeed there is nothing special about students and, putting this matter in context, there is nothing special about the fact that what we are doing is helping to finance higher education. Is that precisely the impression that the Government wish to create about the Bill and its consequences? If so, I think that that is extremely serious in terms of the judgments that many people will make about what the Government are up to.

The Earl of Caithness

There is no wish on the Government's part to put the Student Loans Company in a different situation from that of any other lending agency. The noble Lord went on to talk about student loans. Of course they are different from commercial loans. They are arranged on a very generous basis. They are granted to all students who wish to take them up irrespective of a means test. It puts them in a different category from other loans.

That brings me to another point made by the noble Lord. I wish to make the position absolutely clear. We are talking here about a company that the Government are setting up which by law will be required to comply with the Data Protection Act 1984. That is why the amendments which I have just been addressing are unnecessary.

Lord Taylor of Blackburn

I rise because I thought that the noble Earl was about to depart from this subject and go on to the next part of his reply. One of the things that he said was that the information would be available subject to a fee. Does he have any idea of what that fee would be?

The Earl of Caithness

I think I am right in saying that it will be a fee not exceeding £ 10. Perhaps I could come back to the noble Lord, Lord Peston. In view of what I said, there is no need for reassurance from me or from the person who heads the Student Loars Company. It is there in the legislation. That is where the noble Lord ought to seek the reassurance that he wants.

I turn to Amendments Nos. 47B and 49C. There is perhaps a small misunderstanding that needs to be corrected. These amendments state that a person would have a liability, for example, to the Student Loans Company: by virtue of having qualified for a loan". That is incorrect. A person will not have a liability to the company by virtue of having qualified, i.e., being eligible for a loan, but only if he proceeds to take out a loan. That is the option that a student has, without a means test, to take out a loan if he or she so wishes.

In so far as the amendment would apply to data held electronicially, it is unnecessary for the reasons that I have already given. However, my noble friend Lady Carnegy of Lour was absolutely right to bring to the Committee's attention the question of information that is held manually. As I am sure the Committee is aware, such data is not covered by the Data Protection Act.

The Government do not believe that the Student Loans Company should be subject to restrictions to which other perfectly respectable private sector companies are not subject. The Student Loans Company will be providing credit to eligible students on very favourable terms. It would be quite wrong to impose a host of restrictions on its activities to which other lenders are not subject. The company will have to provide access in accordance with the provisions of the Data Protection Act. That Act provides important and, we believe, sufficient protection.

I go on to deal with the important point raised by my noble and learned friend Lord Hailsham. He was absolutely right to say that the noble Lord, Lord Peston, was wrong in thinking that a debt of this kind could lead to imprisonment. My information is that it cannot. It is a civil debt and can be pursued through the normal means but not through imprisonment. But I await the definitive answer on that. I think that my answer is in accordance with the views of my noble and learned friend.

Baroness Seear

Before the noble Earl sits down, in view of what he has just said and his admission that manual records are not covered by the Data Protection Act, perhaps I may ask him whether that means that manually held records of students' loans could for example, be sold for mail order purposes. Is tha: what it means? Could we have an answer yes or no to that question?

The Earl of Caithness

I should want to be absolutely certain before I gave a yes or no to the noble Baroness. Quite obviously I do not wish to mislead the Committee. The Student Loans Company would be in no different a situation from any other respectable lending agency. I pick up here the point made by the noble Baroness, Lady Blackstone. She talked about loans in general. As many Members of the Committee know, students at the moment have loans. A great many of them already have overdrafts in the commercial sector through normal lending agencies such as banks or companies which operate credit cards. The Bill provides a loan to the student on much more favourable terms than he has been able to receive so far. The borrowing of the loan is entirely voluntary. The Studnet Loans Company Limited is a body where the data which are electronically held will be subject to the Data Protection Act and with regard to other information will be in no worse and no better a situation than agencies from which students are borrowing at the moment.

Lord Stallard

I am not a lawyer. Will the noble Earl clarify this point? He mentioned civil courts procedure for the repayment of loans. Could there not come a stage in the procedure where the student could find himself in contempt of court, for which offence he could be imprisioned?

The Earl of Caithness

As the noble Lord, Lord Stallard, knows, I am no lawyer either. I wonder whether my noble and learned friend can help. Otherwise I shall obtain a definitive answer for the noble Lord.

Lord Peston

Perhaps I may thank the noble Earl for the response to some of my questions. I am still puzzled by the prison question. I should like to be assured that no question of imprisonment arises. Perhaps we ought to wait for a definitive statement on that which the noble Earl may give us at some other time.

I do not wish to take us away from the issues of confidentiality and so on— they are very important. However, I am genuinely concerned at the concept that the Student Loans Company Limited is being portrayed to us as just like any other loans company and therefore requiring no special restraints on how it behaves. We are talking about 18 year-olds at a very impressionable and exciting time of their lives. They are extremely unlikely to think through the consequences of involving themselves with loans, especially as the Government are vigorously telling them that loans are the right thing for them to have.

I do not wish to become involved in the moral issues of whether it is right for the Government to tell 18 year-olds, "We think it highly desirable for you to go into debt at this stage for your maintenance". Some Members of the Committee have expressed doubts about it; others are less concerned; but it is not a trivial matter. However, will the noble Earl reflect on this? The Government's position with regard to default, as has been stated, is that it is just a loans company which lends money to people and will then pursue them to the very ends of their resources in due course to obtain its money back. Perhaps I may put this point. It is not obvious to me, even though it is the taxpayers' money, that the taxpayers would wish the Government to take that line. The noble Earl may care to reflect on that.

I do not know whether any of our banking friends are in the Chamber today. On the whole, the banks do not go out of their way to emphasise the vigour with which they will ill treat their customers, in particular when they are 18. As a public relations exercise, I should have thought that the approach of the noble Earl might be more temperate. Noble Lords may feel that that is a slightly frivolous point. However, we ought not to forget that we are talking about lending money to 18 year-olds where the consequential debits are many years ahead and can concern very large sums of money indeed.

The Earl of Caithness

Of course I shall reflect on what I have said. I am sure that the noble Lord, in his normal way, will reflect on what I have said when he reads it in the Official Report. I am sure that that is the right thing to do.

I was a little surprised by what he said. I know full well that if I did not give the information that I have given the Committee, I would be accused of not giving the full information now. Because I have given the full information, I am accused of frightening off potential clients of the Student Loans Company Limited. When one takes a loan from a bank or takes on a credit card, one is advised to read all the small print. There is quite a lot of it. Perhaps some people do not read the small print with the care that they should. With the help of the Committee, I am making absolutely certain that that small print is spelt out clearly so that it is clear exactly what we are doing. We are not obviously trying to put students off. We believe that it is beneficial to higher education and the numbers going into higher education. But it would be quite wrong for me to hide anything that we propose to do.

Baroness Seear

The Minister refers to reading the small print. Would it not have been a good idea to put more of that into the Bill?

Baroness Young

My noble friend has given us a lot of very useful information in the remarks that he has just made in answer to the noble Lord, Lord Peston, and the noble Earl, Lord Russell. Between now and the next stage of the Bill, would he also consider the anxieties that have been expressed? I felt that his answer on the question of confidentiality went a long way to meet fears on that point. He was quite right to say to the noble Lord, Lord Peston, that he could not have it both ways. One cannot ask for information and then complain when one has the information, as if the Student Loans Company Limited was going to behave in some improper way.

Lord Peston

I am not objecting to the fact that I was answered. I did not like the answer, as the noble Baroness is well aware.

Baroness Young

Perhaps I may complete what I was going to say. It is a very important point. My noble friend has quite properly explained the scheme. That is very helpful to the Committee. If I have understood him correctly, he stated that the Student Loans Company Limited will act as a responsible lending authority. One of the concerns that lies behind this issue is that all of us nowadays are deluged with information about borrowing money. The number of organisations that seem to want to lend money is quite extraordinary. I do not believe that all of us would regard them as always responsible in the sense that my noble friend means.

Perhaps he can give us a closer definition. Will it behave as the clearing banks would behave? That may well be what he has in mind. If so, perhaps he can say so; or can he assist us with more information? I do not expect an answer this afternoon because he will wish to consider it. But we do not want a position where the Student Loans Company might act in the way that an irresponsible lender would act. That is what we wish to avoid. It would therefore be helpful to know how the Government see this matter.

Lord Hailsham of Saint Marylebone

I do not wish to bully my noble friend about this, but there is a point about which I should like a little more precision than I have had in my own mind.

I understand perfectly what he said about the difference between manually obtained information and protected information. We passed an Act about three or four years ago. I understand that perfectly. I should like to know this. I have a bank and, like all banks, it can lend me money on overdraft or whatever. But it owes me a duty of confidentiality. That is to say, although there are many people from whom I obtain goods on credit— for instance, I buy by post because I am unable to walk about— who undoubtedly sell the information they have about me, which leads other people to pester me with junk mail, they owe me no duty of confidentiality. I brought it on myself. I do not complain. That is perfectly all right.

However, when my noble friend can give the information, I should like the clear understanding from him that the relationship between the Student Loans Company and the borrower is analogous to the duty which a banker owes its customer and that there is therefore the same duty of confidentiality towards the student borrower as is owed by the bank to its customer. I do not think that it was absolutely plain from his answers that that was so, because whereas the bank was in a purely contractual relationship with me, and the relationship of the banker and customer is perfectly well established by law, this is a statutory body. There must be a contractural relationship or the loan would not be granted. But does it give rise in addition to a confidential relationship in respect of manually obtained data?— that is, the company would not be free, as an ordinary salesman by post is free, to publish what is known about me; for example, how extravagant and stupid I am, and so on. It would have to keep what it knows about me with the same confidentiality as between a banker and his customer.

If young men or young women of 18 borrow money and at a later stage do not repay it, they can be taken to court in the ordinary way for non-payment of debt. There can be bailiffs and judgment summonses, as they are called, when the man is interrogated as to his means. There are also attachments of earnings. That is the sort of information which I should like.

I had assumed from what my noble friend said that when the time comes for repayment, there will be the ordinary court procedures but they will be limited to those: of a civil debt and not to any special category of debt like a secured debt or something protected by the criminal law.

I do not want to bully my noble friend into giving instant answers to complicated questions. The recovery of loans is a complicated sphere of law and I should not dream of trying to deliver a lecture on it without looking up the books. However, I hope that ray noble friend has my point.

Baroness Faithfull

I should like some clarification. Is it certain that there is no relationship between the Student Loans Company and the universities?

The Earl of Caithness

There will be a relationship of some sort between the Student Loans Company and the universities, otherwise the Student Loans Com] 5any will not know who are the students. There has to be some connection. If my noble friend Lady Faithfull would like more information, I shall deal with that separately.

I was grateful for what my noble friend Lady Young said. I understand the anxieties of the Committee. I know that some Members of the Committee have children at university. I have not yet reached that stage, but my children may go there. Therefore I have equal anxieties. I wish to see that the anxieties of the Committee are nullified.

My noble and learned friend raised a most important point which I should wish to study in detail before I come back to him. However, subject to what I said about defaulters, I understand that the names will not be disclosed to third parties without the knowledge or consent of the individuals concerned, and that the Student Loans Company will be under the same duty of confidentiality as a bank and will treat data, regardless of whether it is computerised or manual, with equal care.

Lord Beioff

While the Minister considers this matter further, will he understand why there is so much anxiety about having something written on to the face of the Bill? He appears to have overlooked the fact that in Committee in another place it was suggested by the Minister that the Student Loans Company might be sold. Indeed, it was suggested that one of its assets would be the information which it had.

I am well aware that after pressure from other Members of the Committee in another place, that suggestion was withdrawn. However, the fact that that suggestion was made at all explains why many Members of the Committee are particularly worried about confidentiality, especially in view of the fact that the Data Protection Act does not extend to written records. Therefore, if the Student Loans Company puts everything on paper and then puts up its assets for sale, that would be something which many of us would find wholly deplorable. I ask the noble Earl to take that into consideration because that has not so far been mentioned in our discussions.

The Earl of Caithness

I did not overlook what had gone on in another place. Indeed, I read that with great care. I hope that my noble friend will not overlook what I said about the Data Protection Act for records which are held on computers, or indeed, what I said subsequently about records held manually.

Baroness Seear

The point about manual records is very important. The noble Earl said that the same rules will apply to written records as to computerised records. However, as I understand it, that is not in the Data Protection Act and is not written on the face of the Bill. Therefore, the only guarantee which we have is what the noble Earl has said; but that is no guarantee at all when one comes to a court of law. The noble Earl believes that and wants that to happen; but if it is not in the Data Protection Act or written into this Bill, then there is no protection.

Baroness Fisher of Rednal

Can the noble Earl comment on what is the Student Loans Company? According to the press today, a vacancy for a general manager is being advertised with a suggested salary and a car. Two persons who will be part of that company are a senior civil servant and perhaps a lesser civil servant. So there will be the general manager with the fantastic salary and car and two or three other people. Can the noble Earl tell us what is the Student Loans Company?

3.45 p.m.

The Earl of Caithness

I fully understand the anxieties of the noble Baroness, Lady Seear. I should like to make certain that I have given the answers to her points, and that there have been no contradictions. I know that there is a difference between what is held on computer, which is covered by the Data Protection Act, and that which is not so covered. I made that clear. However, I said that both would be treated with the same care. The same confidentiality applies to the Student Loans Company as to banks.

I understand the anxieties of the Committee. That aspect is something which I should like to look at again between now and another stage. I am sure that all Members of the Committee would like to read what I said. I hope that I have covered most of the points and I shall elucidate further should any Member of the Committee so wish it.

As regards the point made by the noble Baroness, Lady Fisher, I went into some detail about the Student Loans Company last Monday; but unfortunately I do not have the Official Report of that debate with me. I went so see the Student Loans Company in Glasgow. Perhaps I can write to the noble Baroness more fully on the points which she raised.

Lord Jay

Can the Minister make one fact perfectly clear? He said, as regards the manually-held data, that that would be treated with the same confidentiality as would a loan from a bank. Is that on the face of the Bill or is he merely asking us to accept that from his verbal statement?

The Earl of Caithness

That is one of the points on which I wish to be clear.

Lord Boyd-Carpenter

When my noble friend studies this matter, as he has been good enough to say that he will in the light of the anxieties expressed from all quarters of the Committee, will he particularly direct his mind to the following situation? When a student has taken his degree, he starts applying for jobs. Knowing, as a future employer will, that this legislation, if it passes, is in force, the prospective employer may be anxious as to whether he is taking on a man subject to a substantial debt liability. There are a number of jobs where an employer is rightly anxious, and he will not employ someone who is in debt and subject to all the obvious pressures and difficulties which being in debt may produce.

Can my noble friend say whether, either at present or when he has looked into the matter further, it will be quite clear that a prospective employer will not be able to approach the Student Loans Company and ask whether, in respect of the graduate whom he is about to employ, there is a debt and how much is still outstanding?

The Earl of Caithness

I shall certainly look into that. However, I know that my noble friend will be the first to acknowledge that there are many students at university at present who are in debt because they have overdrafts or have built up borrowings on an Access card or another form of credit card. The significant difference, which I know my noble friend will wish to take on board, is that we are not asking the student to pay back the loan, as he would do at present. If a student takes out a loan now he starts to repay from day one. We do not ask students to repay the loan. We are asking graduates to repay the loan and not until nine months after the course has been finished and not until an income is received, which is 85 per cent. of the national average wage; that is, £ 11,500.

Then we have to look at the loan. At the moment the loan will be something in the region of £ 400. That is what we shall ask the student to repay. That equates to £ 8 a week out of a salary of £ 11,500. That puts into context what we are asking of students, or what we are offering students. It is up to the student whether to take it up. If, as they do at the moment, they prefer to take on commercial credit on commercial terms, then my noble friend is faced with exactly the same dilemma as he posed to me just now.

Lord Boyd-Carpenter

With respect, my noble friend has the point wrong. A prospective employer does not know whether a student today has or has not borrowed any money commercially from a bank but he will have a very good idea once the Bill is law that the former student whom he is about to employ has a debt. That is the great difference.

The Earl of Caithness

I am not so sure that I see it as my noble friend does. However, I gave him the assurance— and I repeat it— that I shall look into the specific point he raises. But as so many students have debts at the moment I think that what he is hypothesising is the same as the situation which exists now.

Lord Cockfield

The essential point here is one of confidentiality. The point which my noble friend Lord Boyd-Carpenter is making is that if an employer goes to a man's bank and asks if he has an overdraft the bank must not reply. My noble friend is asking whether, if the student goes to the loans company, the loans company will be enabled to reply. This point is crucial.

There is a further matter. I should be grateful if my noble friend could also look at the first reply he gave in his first intervention and compare it with some of his later replies. In his first intervention he appeared to be defending— I am not saying that he was defending— the right of the loans company to sell information to other commercial operators in the debt field. He said that it was only right that these other people should know whether the student had defaulted. A bank will not provide information of that kind to other creditors.

The Earl of Caithness

I absolutely understand the two points made by my noble friend. I have said on previous occasions this afternoon, and I repeat it now, that those are the points, among others, which I shall be considering.

Earl Russell

Perhaps I may first say something which I think I may say without infringing Standing Orders. I am aware that I have something of a cold today which occasionally leads to coughing. Should that incommode the House I would of course withdraw until it was over. I hope that is understood in the spirit in which it is meant.

I should like to congratulate the Minister on having made the best of an extremely bad brief I should not like to congratulate those responsible for the brief The brief has not included answers to a good many of the vital points contained in these amendments. It has attempted instead to raise the issue of reneging on a debt to the taxpayer. I hoped I had made it plain that it was no purpose of any of the amendments to encourage any attempt to renege on a debt. It is, though, a matter of legitimate concern that attempts should be made to recover the right sums from the right people and without any unnecessary sacrifice of civil liberties in the process. We have not had any real answer to the point about access to records. That, to me, was one of the important points in these amendments. Without access there is no way in which error can be checked, and without checking error there is no way in which there can be any redress against that error.

I was also a little taken aback by the Minister's argument that the loan is voluntary. In a purely technical sense that is no doubt so, but the Minister is, I am sure, familiar with the concept of the captive market. This sense of the voluntary reminded me of Thomas Hobbes's argument that the man who jumped out of the top floor window of a burning building was quite free not to. If one did not have the money available from one's family there is no way one could go to university without taking one of these loans. The voluntary element, though I concede it exists, is minimal. That creates some difference between this and other commercial debts.

The point about manual records is vital. It makes it the more important that we have had no answer to the point in the amendments about the destruction of records. It seems that the Government are on a fork here. Either they have only the computer record, in which case it is vulnerable to destruction, or they have a manual backup, in which case the assurances about the Data Protection Act, though I warmly welcome them and heard them with great pleasure, are not sufficient to meet the case in hand. If there is also a manual record, that manual record enjoys no protection under the Act.

I am grateful to the noble Lord, Lord Beloff, for reminding us what the Parliamentary Under-Secretary of State said about this in the other place. I was unable to lay my hands on the quotation before speaking and did not use it. But that reminds the House that these issues have been before the Government for quite some time. The brief which has come back to us has not convinced me that they have yet received sufficient attention. I cannot see now how any resources can be made sufficient unless by being written on the face of the Bill. I commend the amendment to the Committee.

3.56 p.m.

On Question, whether the said amendment (No. 34A) shall be agreed to?

Their Lordships divided: Contents, 110; Not-Contents, 126.

Addington, L. Graham of Edmonton, L. [Teller.]
Adrian, L.
Allenby of Megiddo, V, Grey, E.
Attlee, E. Hampton, L.
Aylestone, L. Harris of Greenwich, L.
Beloff, L,. Hayter, L.
Birk, B. Henderson of Brompton, L.
Blackstone, B. Hirshfield, L.
Blyth, L Houghton of Sowerby, L.
Bonham-Carter, L. Hunt, L.
Boston of Faversham, L. Hylton-Foster, B.
Bottomley, L. Jay, L.
Brooks of Tremorfa, L. Jenkins of Hillhead, L.
Bruce of Donington, L. Jenkins of Putney, L.
Buckmaster, V. John-Mackie, L.
Carmichael of Kelvingrove, L. Kearton, L.
Kennet, L.
Carter, I. Kilmarnock, L.
Cledwyn of Penrhos, L. Kinloss, Ly.
Cocks of Hartcliffe, L. Kirkwood, L.
Congleton, L. Leatherland, L.
Dacre of Glanton, L. Listowel, E.
Darcy (de Knayth), B. Llewelyn-Davies of Hastoe, B.
David, B.
Davies of Penrhys, L. Lockwood, B.
Dean of Beswick, L. Longford, E.
Donaldson of Kingsbridge, L. Lovell-Davis, L.
Dormand of Easington, L. McGregor of Durris, L.
Ennals, L. Mackie of Benshie, L.
Ewart-Biggs, B. Mais, L.
Ezra, L. Masham of Ilton, B.
Fisher of Rednal, B. Mason of Bamsley, L.
Flowers, L. Mayhew, L.
Gallacher, L. Milner of Leeds, L.
Galpern, L. Milverton, L.
Mishcon, L. Shaughnessy, L.
Molloy, L. Shepherd, L.
Morton of Shuna, L. Sherfield, L.
Nathan, L. Simon of Glaisdale, L.
Nicol, B. Stallard, L.
Northfield, L. Stedman, B.
Ogmore, L. Stoddart of Swindon, L.
Peston, L. Strabolgi, L.
Phillips, B. Taylor of Blackburn, L.
Pitt of Hampstead, L. Taylor of Gryfe, L.
Ponsonby of Shulbrede, L. Thomson of Monifieth, L.
Porritt, L. Thurlow, L.
Prys-Davies, L. Tordoff, L, [Teller.]
Ridley, V. Turner of Camden, B.
Ripon, Bp. Underhill, L.
Roskill, L. Wallace of Coslany, L.
Russell, E. Walston, L.
Sainsbury, L. Walton of Detchant, L.
Seear, B. Wedderburn of Charlton, L.
Seebohm, L. Williams of Elvel, L.
Serota, B. Winterbottom, L.
Shackleton, L.
Alexander of Tunis, E. Hooper, B.
Allerton, L. Ingrow, L.
Annaly, L. Johnston of Rockport, L.
Arran, E. Joseph, L.
Auckland, L. Kaberry of Adel, L.
Balfour, E. Killearn, L.
Beaumont of Whitley, L. Kinnaird, L.
Belstead, L. Kitchener, E.
Bessborough, E. Layton, L.
Birdwood, L. Long, V.
Blake, L. Lovat, L.
Blatch, B. Lyell, L.
Boardman, L. McColl of Dulwich, L.
Borthwick, L. Mackay of Clashfem, L.
Boyd-Carpenter, L. Manton, L.
Brabazon of Tara, L. Margadale, L.
Brougham and Vaux, L. Marsh, L.
Butterworth, L. Marshall of Leeds, L.
Caithness, E. Mersey, V.
Campbell of Croy, L. Mountevans, L.
Carnegy of Lour, B. Mountgarret, V.
Carnock, L. Mowbray and Stourton, L.
Cawley, L. Munster, E.
Cockfield, L. Nelson, E.
Cottesloe, L. Norfolk, D.
Cox, B. Norrie, L.
Davidson, V. [Teller.] Nugent of Guildford, L.
Denham, L. [Teller] Oppenheim-Bames, B.
Dilhorne, V. Orkney, E.
Donoughmore, E. Orr-Ewing, L.
Downshire, M. Pender, L.
Eccles, V. Peyton of Yeovil, L.
Effingham, E. Platt of Writtle, B.
Elliott of Morpeth, L. Pym, L.
Erne, E. Quinton, L.
Erroll of Hale, L. Rankeillour, L.
Faithfull, B. Reay, L.
Ferrers, E. Renwick, L.
Eraser of Carmyllie, L. Rodney, L.
Fraser of Kilmorack, L. Romney, E.
Gainford, L. St. Davids, V.
Goold, L. St. John of Fawsley, L.
Gray of Contin, L. Saint Oswald, L.
Gridley, L. Sanderson of Bowden, L.
Haddington, E. Savile, L.
Haig, E. Selkirk, E.
Hailsham of Saint Shannon, E.
Marylebone, L. Skelmersdale, L.
Harmar-Nicholls, L. Somers, L.
Harris of High Cross, L. Stockton, E.
Havers, L. Strange, B.
Henley, L. Strathcarron, L.
Hesketh, L. Strathclyde, L.
Hives, L. Strathcona and Mount
Holdemess, L. Royal, L.
Home of the Hirsel, L. Strathmore and Kinghorne, E.
Hood, V.
Strathspey, L. Vaux of Harrowden, L.
Swansea, L. Westbury, L.
Swinton, E. Whitelaw, V.
Teviot, L. Wigram, L.
Thomas of Gwydir, L. Wise, L.
Thomeycroft, L. Wynford, L.
Trefgame, L. Young, B.
Ullswater, V.

Resolved in the negative, and amendment disagreed to accordingly.

4.5 p.m.

Lord Peston moved Amendment No. 34B: Page 3, line 35, at beginning insert ("subject to sub-paragraph (A1A) below").

The noble Lord said: In speaking to this amendment, with permission I shall also speak to Amendment No. 42C. Once again we are in the broad area that concerns us about the nature of the Bill. Regretfully, one has to make exactly the same kind of argument, the central plank of which is that such an important Bill, at least for students and for higher education in general, should not proceed in this bizarre way based solely on regulations. One must keep pressing, as it were, for the substance to be placed on the face of the Bill.

We have just failed, though not by a very large margin, to move in that direction on the previous amendment. One makes no apology, therefore, for again making the same point. The essence of what we are referring to in these amendments is contained in Amendment No. 42C. Amendment No. 34B simply leads us into that amendment. Essentially, as the noble Earl, Lord Caithness, pointed out, the Government do give information. Sometimes the Government volunteer that information and sometimes it is given in response to questions and to deal with anxieties.

The information set out in my amendment has been given by the Government and refers to what they propose by way of loans, as I understand the position, in the first full year under the London rate, the elsewhere rate and for students living at home. The Government have also made clear their view that final year students should have their loans docked somewhat because it is assumed that the final year is not a full academic year.

The numbers are the Government's numbers; unless I have written them down incorrectly, and I am sure noble Lords know that I am perfectly capable of doing that. They are in the amendment simply to persuade the Government that the time has come for them to specify at least the start position for the regulations.

Perhaps I may make one other comment which I do not say in a mean spirit. The noble Earl and others have often referred to the repayments as £ 8 per week. I know that the noble Earl would not willingly or consciously mislead the Committee but £ 8 per week is simply the repayment for the first loan of the first year of the scheme. The scheme announced by the Government builds up through time until eventually half of the student maintenance is in the form of a loan. As that is the scheme when it is fully operational and as in broad terms— at the moment I use broad terms— we are talking about £ 3,000 a year, the relevant sum that we should be bearing in mind when discussing repayments, student indebtedness and so on, is £ 1,500 a year, or £ 30 a week. The repayment of £ 8 per week is purely a transitional amount for this coming year. Here again I repeat the point I made a few moments ago. I do not complain to the noble Earl for making clear what the Government propose to do; but they are proposing to offer a loan equal to half of the standard award. Unless I do not understand the position correctly, that is £ 1,500 a year.

The amendment I have tabled is simply the opening shot. It relates to the very first year. However, I have taken the opportunity to clarify the true nature of the indebtedness as it builds up. My main complaint is not the numbers but the principle of asking the Committee to proceed all the time with this parallel approach; the approach of the Bill which relates to regulations and contains no substance and the approach of all the other documents and speeches in which the substance is to be found. As I understand it— the Committee will be aware that I am a complete tyro on these matters— nothing said outside this Chamber and none of those documents carries the weight of law. The only matter which carries the weight of law is that which appears on the face of the Bill. I have tabled this amendment and other Members of the Committee have put down similar ones. All seek to make much the same point; namely, that if Her Majesty's Government believe in what they are saying, they should themselves put these amendments on the face of the Bill.

Lord Harmar-Nicholls

I wonder what kind of answers we expect from the Government Front Bench on some of these amendments. This matter has been drawn to my attention by the attitude which the Committee has adopted. Perhaps I should modify that by referring to the attitude adopted by the noble Earl, Lord Russell, on the last amendment. Very pertinent points were made concerning it and my noble friend answered them very clearly. He said that he had given answers clearly as he saw the issue, but that there were still matters of doubt and issues that needed to be looked at. He said that he would look at them and come back at a later stage.

One could not have a more categorical promise that he would look at the matters to see whether there was any weight at all in the arguments put forward by Members of the Committee on that amendment. We are at Committee stage. As I understand the workings of this Chamber, when one receives such a clear offer— namely, that the Government intend to clarify what they have said and knowing that there are other stages of the procedure when we can return to these matters if we are unhappy with the current situation— then the matter can be dealt with at a later stage.

What happened with the last amendment could very well happen in respect of the amendment under discussion. Though the categorical offer was made to look at the issues, and though it was known by the noble Earl, Lord Russell, that there would be other opportunities at a later stage to either accept or reject whatever conclusion the Government came to, he pushed the amendment to a vote. That meant that we spent 10 minutes walking through the Lobbies. That 10 minutes should have been spent examining what really matters in this Bill. In another place if the Front Bench say that they will look into a matter and they accept the validity of the points made, there are rules to prevent that particular issue being pushed to a vote. In this Committee I gather that we have no such rules.

My noble friend said that he would look at the matter sympathetically and bring back an answer. Does the fact that the amendment was pushed to a vote, and that the Committee did not agree with the noble. Earl, Lord Russell, mean that my noble friend is absolved of his offer to look at the issue, and that he is no longer under the obligation that he would have been without the vote?

Lord Boyd-Carpenter


Lord Harmar-Nicholls

Is my noble friend under an obligation to give the Committee the information that it needs? When considering intricate matters such as those concerned with this Bill, if we are not careful we shall be destroying our procedures. That would not be in the best interests of good government.

The Earl of Longford

I do not know whether many noble Lords have been here longer than I, but it seems a long time. The doctrine that is being expounded by the noble Lord is new. He speaks with authority of another place though I never managed to make my way there. It would be unbelievable if noble Lords in this Chamber were silenced, and were told that they could not go into the Lobby because a Minister has said that he will look at an issue again. That would be so unlike this Chamber that I am sure no one would swallow that measure for one moment.

4.15 p.m.

Earl Russell

I am grateful to the noble Earl, Lord Longford, for what he has just said. He has been here a great deal longer than I. As I understand it, this is a free Parliament. A noble Lord who decides whether to call a Division has to use his judgment as to whether or not the Committee will like it. We have heard assurances before, and some of them were more categorical. Last week we heard assurances concerning affirmative resolutions, and those assurances were far more categorical. I believe that it is parliamentary practice that a noble Lord retains the right to be unsatisfied by assurances quite as much as the noble Lord, Lord Harmar-Nicholls, retains the right to be dissatisfied with my dissatisfaction.

Lord Peyton of Yeovil

I wish to make clear one point arising from what my noble friend Lord Harmar-Nicholls has just said. I am making no judgmemt on whether it was right or not to call the Division. I voted for the Government on the basis of the undertakings given by my noble friend. I very much hope that he will not run out on it because his undertaking will be very useful. I always find his undertakings very helpful. Without them, I might have stayed in my place or even strayed into another Lobby altogether. When my noble friend comes to wind up, I hope that he will honour those undertakings.

There are two matters I wish to raise concerning this amendment. When I was in another place and we had Labour administrations, in my view they often erred in thinking that they could not be wrong. They knew the answers to every difficult question, and they believed that they should be given carte blanche to do what they thought fit without giving Parliament the details. I recall that I felt very strongly on those matters. I remember dealing with them at some length, but I have no intention of doing so this afternoon.

I hope that my noble friend will at least consider very carefully putting more detail before the Committee than is presently available, and before the next stage of this Bill is reached. I find it very difficult to follow the assumptions, which are sometimes lightly made by Ministers, that they know best and that they had better be left to take powers and exercise them as they think fit.

Lord Boyd-Carpenter

I agree very much with my noble friend Lord Peyton about forcing a Division on the previous amendment regardless of the very full assurances which my noble friend on the Front Bench had given. The noble Earl, Lord Russell, is right in saying that technically in this Chamber one is free to force a Division whenever it is thought right and sensible. I hope that he will consider whether it is sensible. We are at Committee stage and at the close of the debate the Minister concerned promised further consideration of the points raised. In those circumstances, one is at least doing something contrary to the spirit of that approach if a vote is then insisted on and the Committee rejects the amendment. That may well condition my noble friend the Minister to be less agreeable to the propositions that were put than he otherwise would be.

I shall be very distressed if that were to be so. My position is exactly the same as that of my noble friend Lord Peyton. If it had not been for the assurances given, I should have voted for the amendment tabled by the noble Earl, Lord Russell. The full assurances given cover the whole area, and because of those assurances we shall have an opportunity at a later stage to consider the matter. In those circumstances, it seemed utterly wrong to call a Division and was an error of judgment. Perhaps the noble Earl will allow me to say that it was almost an error of taste for him to do so.

I have sufficient confidence in my noble friend Lord Caithness to know that he will not allow the fact that a Division was called to cause him to go back at all on the undertakings that he gave. It is unnecessary for him to say that because those of us who know him are perfectly sure that he will honour those undertakings. The noble Earl, Lord Russell, was within his rights to call a Division, but I believe it was a great misjudgment.

If I am not out of order, I now come to the amendment which is before the Committee. As an opponent of the scheme for student loans, I certainly would not support it. It proposes to fix, by statute, the opening figures of a scheme which I do not like. I have made that clear to the Committee before, and I shall not weary it by repetition. Surely it is inconsistent with that view solemnly to ask Parliament to vote into the Bill certain firm figures. That would be arguing support for a loan scheme which I am not prepared to give. Nevertheless, I agree with the general proposition put again by my noble friend Lord Peyton that the Bill is rather a skinny framework and that a good deal more of what the Government intend to do under it could well and profitably be inserted into it. If there is a Division, the only reason that I shall vote against the amendment is that I do not want to put these or any other figures into the Bill.

The Earl of Caithness

Perhaps I may say something at this stage in view of what has been said. I agree that the noble Earl, Lord Russell, had every right to call a Division if he so wished. I was more than just a little surprised that he did so in view of the categorical assurances that I had given; but that was the noble Earl's wish. The Committee decided, and that is the end of the matter. However, I shall stick by the assurances that I gave despite the fact that we had a vote.

Lord Addington

I shall return to the amendment. As many noble Lords have said, there is very little information in the Bill. Many amendments which try to put in some information have been tabled. Students and their parents should know what the starting figure is to be. They should know roughly on what terms the student loan scheme will operate. They should know what they are getting involved in. On those grounds alone we should have something in the Bill that will tell us what will happen. That information should be in the Bill, because it is the Bill that counts, as has been pointed out before. On those grounds alone I support the amendment. Unless we have firm information, we are merely saying, "Yes, get on with it", in the hope that something certain comes back at the end.

Baroness Blatch

I cannot agree with the noble Lord, Lord Addington, that there has been little or no information about the Bill's details. My noble friend the Paymaster General has given considerable information during the Committee stage, on Second Reading, and in the papers that preceded the Bill coming to this place.

The amendments are similar to Amendment No. 36 which has been tabled by the noble Earl, Lord Russell. As has been explained to the Committee, we do not believe that the loan terms should be set out in the Bill. This place will have the opportunity to debate the regulations under the affirmative resolution procedure when the scheme is established.

The size of the loan facilities in the first year will be set in those regulations and debated at that time. We made clear in the White Paper what the size of the loan facilities will be, and so there is no need to fix them in the Bill.

I also assure the Committee— we have made this point clear previously— that we intend that the full-year rate of loan will be available for students on postgraduate certificate of education courses. We intend the loan to be proportional if the course runs part way into the acadamic year. That point was raised by the noble Lord, Lord Peston. He mentioned repayment of £ 8 a week. It is important to point out that as the loan increases in size the repayment term over which it is to be repaid is extended. Therefore, I can promise the noble Lord that the repayment at current prices is not envisaged to be more than £ 400 per year.

The amendment is consequentially redundant. It does no more than insert into the Bill what the Government intend, and our intentions will be subject to the affirmative resolution procedure. On the basis of those assurances, I hope that the noble Lord will agree to withdraw the amendment.

Lord Peston

We have had two debates. One was a debate upon a debate about what happened before. The ill-feeling felt by noble Lords opposite should not be addressed solely to the noble Earl, Lord Russell. It was a grouped series of amendments, and it is customary to divide on the first. I can assure the Committee that I would have insisted on dividing if the noble Earl had not done so. That is not out of any lack of respect to the noble Earl, Lord Caithness, I look forward to reading his assurances.

We raised many issues on the amendment, upon only some of which we received assurances. On others— my anxieties concerning default, for instance— the noble Earl's forthright statement, for which I was indebted as I said, was one at which I was appalled to say the least.

I should like to associate myself with the noble Earl's decision to divide the Committee. It is a decision that I would have made unless it would have been constitutionally improper. I would not do anything that was constitutionally improper. However I gather that it was not so. I was taken aback by the suggestion that it was in bad taste. I made it a rule never to do anything in bad taste. I shall reflect on that point, and if it was in bad taste I shall never divide in similar circumstances in the future.

Perhaps I may now get down to the amendment. I am indebted to the noble Baroness for the clarity of her reply because it brought out the difference between us. She says, "We have made it clear", meaning that the Government have made it clear elsewhere than in the Bill. It therefore follows, according to her, that the Government do not have to put the details in the Bill. I take the view, which many members of the Committee share, that when the matter has been made clear, the whole point is to put it into the Bill. I am indebted to the noble Baroness for explaining the distinction. That explains why we have to spend time on these matters.

Barroness Blatch

The assurance I gave the noble Lord was that the figure would appear in the affirmative resolution and will therefore be debated in both places.

Lord Peston

With respect, it is not the same point. Let me just invent a possible fantasy. Let us assume that during the course of today sterling plunges— I hope fervently that it will not. Let us assume that the noble Baroness's right honourable friend the Chancellor of the Exchequer during the course of tonight has to modify slightly the Statement that he will make to the other place tomorrow. Let us assume that the modification he has to make means that the not too ungenerous provision within public expenditure in this field has to be reined back for the sake of sterling. He would then announce that there would be no money for the scheme, and that it would not go forward. In other words, there is a world of difference between what is put into the statute and what Ministers say. It has nothing to do with the bona fides of Ministers; it is to do with the way that one proceeds.

Lord Harmar-Nicholls

I wish to make a point on the fantasy described by the noble Lord. If those circumstances arose and it was in the interest of the country that such action should be taken, is not the flexibility that he says is being left to the advantage of the nation?

Baroness Young

I wonder whether I might see that I have understood the Bill correctly. I might be able to help the Committee. My noble friend Lady Blatch put clearly that it is not necessary to have the amount of the loan on the face of the Bill, because that will appear in the regulations, which will be dealt with under the affirmative resolution procedure. Therefore there will be an opportunity to discuss them.

As I understand it— this is where I should like to know whether I am correct, although I do not anticipate the scenario that the noble Lord, Lord Peston, has sketched out— as the scheme progresses, the figures would clearly be increased. If we project ourselves to the year 2000, I can see a variation in the figures. I may be wrong and everything will remain as it is. Were there to be a change in the figures, and were they on the face of the Bill, legislation would be needed to amend them. That would be a much more cumbersome procedure. Where, for reasons we cannot foresee, there needs to be an alteration in the figures, that can be done if the figures are in regulations. That, as I understand it, was the basis of the 1962 Act upon which the Bill is based.

Baroness Seear

Surely the point, as has been pointed out over and over again, is that the 1962 Act was one that was accepted throughout the House and therefore there was much less controversy about it. So it is not a very good argument to say that because it was done in the 1962 Act it is perfectly all right to do it in the 1990 Act.

A second point that I want to make in response to the noble Baroness is that to tell us that it will come forward for affirmative resolution is not a very great help because we shall not be able to amend it. We have to take the figure such as it is. I see no problem whatsoever in writing into the Bill that the figure will be x and can be adjusted by affirmative resolution subsequently, as is required. In that way one has the flexibility that one wants for the future, but also the certainty that one requires for the present.

4.30 p.m.

Lord Peston

If I may just proceed to a conclusion, I was extremely intrigued by the intervention of the noble Lord, Lord Harmar-NichoUs. I was surprised by it. He ought to know that flexibility in economic policy-making is something advocated by old fashioned Keynesians like myself I am somewhat surprised to see him, a loyal supporter of the present Government, also espousing a Keynesian position on these matters. I know that the noble Earl, Lord Caithness, sitting opposite was deeply shocked that such 1960s ideas, to which I still subscribe, have any echo on those Benches.

On a more serious matter, I believe that the point which the noble Baroness, Lady Seear, made so very clearly is what matters. Of course I do not intend to press the amendment to a vote because it was used for probing, but it seems to have led to one further statement that I found extremely interesting. It has been hovering around the Bill and I have tried to get it clear in my mind ever since the start of the Committee stage. It is about the extension of the period for repayment.

The noble Baroness said just now that as the size of the debt went up the period of repayment lengthened. I have to admit that it had not occurred to me that that was an intrinsic feature of the Bill, so that, although you were paying the £ 400 at £ 8 a week, when the debt was £ 1,500 you were still paying at £ 8 a week but over a much longer period of years. If I had realised that I should have put down an amendment on that point as well.

Before I withdraw the amendment, can the noble Baroness assure me that I have misunderstood; that what she said is exactly right about the Government's intentions, that what we will normalise about is the £ 8 a week and that the repayment period will extend far enough into the future so that it is always £ 8 a week? Is that what she said, because it was a very important clarification?

Baroness Blatch

I hope that I can help the noble Lord. The point I was making was that when the loan scheme is at its maximum, the loan at current prices is expected to be about £ 1,500 a year. Therefore the total of the debt will be greater than was envisaged at the beginning of the scheme. When that happens, in order to keep the repayments at around about £ 400 at current prices, one will have to extend the number of years over which it is to be repaid.

Lord Peston

I ask the noble Baroness to bear with me, but it is important that we know what we are debating. The loan starts at £ 400 or £ 450 and eventually it is grossed up and becomes £ 4,500, which is 10 times as much. Therefore, if the student who owes £ 4,500 is to pay £ 8 a week, ignoring the inflation rate interest to be added, he will be repaying over at least 10 years, and if we add the interest to that it will be more than 10 years. As I say, I think that the statement of the noble Baroness is an extremely important one. She may not want to commit herself precisely to it, but it is very important to me in trying to participate in the Committee to know precisely that part of the Government's scheme.

Baroness Blatch

I am not sure that a definitive maximum time period over which a loan can be repaid has been established, other than the basic principle that the level of repayment should not exceed around £ 400 in any one year. Therefore as the size of the loan increases the period over which it is to be repaid will be extended.

Lord Peston

I thank the noble Baroness for that. I shall look very carefully at what she said. It seems to me that that means that the repayment period will be a minimum of 10 years and will probably be more than 10 years, bearing inflation in mind. That might lead to further consideration on Report.

The noble Lord, Lord Harmar-Nicholls, is not here and I was not clear whether he was objecting to my amendment per se, but it is an amendment from which we have learned something. Therefore, I am pleased to have put it down. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Lord Addington moved Amendment No. 35: Page 3, line 36, after ("year") insert ("with reference to regional variations in housing costs for students").

The noble Lord said: The thinking behind this amendment is quite simple and I think it will be accepted by everybody. Throughout the country there is a great variation in costs of living due to the area in which you are living and probably that is most manifest in housing costs. This amendment was put forward as an attempt to try to build into the Bill something which will take into account the very great regional variation in costs, particularly in housing costs.

Under this Bill, it becomes extremely important that we get some recognition of this problem, for the simple reason that we have lost housing benefit as a supplement to the students' income. It is worth pointing out that anybody paying just in excess of £ 30 a week and receiving over £ 400 a year in housing benefit will lose this. Thus we have the situation that anybody in a high rent area will lose the whole benefit of the student loan.

Although there has been an increase in the grant for next year of approximately 5 per cent. with 8 per cent. inflation, it is easy to see that in real terms, and in some cases in cash terms, students living in certain parts of the country will be worse off. As the housing benefit safety net has been removed, I suggest that the Government have a duty to make sure that certain students will not find themselves becoming worse off.

I was led to believe that the whole idea of the Bill was to make more funds available to students. If this hole is not to be plugged we are going to make less funds available for students. Indeed, we shall have thousands of students piling off to Manchester University because the rents there are low. I doubt whether they will remain low if there are three times more students at that institution in the foreseeable future, even assuming that the Government provide enough places in institutes of higher education in that part of the world to accommodate them.

Also, if we have a squeeze going on there could be a knock-on effect, which means that those on low incomes will only be able to accept places in the cheaper parts of the country, due to financial pressures. Thus we have another squeeze on the availability of places. As the noble Lord pointed out, I am rather a convert to the Scottish education system. Indeed, as he said, he came south for his education and I went north for my higher education. I give him a greeting on the Tweed and carry on with this.

But those in high housing cost areas of Scotland will be incredibly hard hit. Four years at some educational establishment in Edinburgh or Aberdeen, where you are paying fairly high rents, over the rather ominous figure of £ 30 a week on average, will mean having a greater debt over a longer period of time, there will be less funds coming in and students will be on an increasing downward spiral.

The Government have spoken about trying to remove students from the great bugbear of bank debts at higher rates of interest than are proposed in this grant scheme. For that reason alone, I suggest that the Government must build some form of variation into the scheme that takes into account those students who find themselves in these more expensive areas, because without it the scheme is effectively a dead duck. It is defeating its own aims and is thus creating a situation where students will have to rule out certain educational establishments purely on grounds of geography, with no consideration about the course involved. I refer to considerations about their academic ability and future employment. I beg to move.

Lord Flowers

I should like to support the noble Lord, Lord Addington, and thank him for drawing our attention to the problem of the extra regional costs which are most pronounced in London. As a vice-Chancellor in London, I speak with some feeling on the matter. I know how difficult it is for many of our students to cope with the situation. The noble Lord put the essential case and the facts and figures extremely well and clearly.

Two years ago in the University of London we undertook a study intended to help the Department of Education and Science— and it thanked us for our work— on the estimated extra required expenditure of a student in London. We came to the conclusion that it was about £ 800 per annum over and above that of the average student in the average university, wherever it may be in the United Kingdom. It would, of course, be somewhat more now because of the variations in prices. Whatever the sum may be, it would be partly offset by the regional levels of maintenance grant because they are set at a somewhat higher rate for students in London than for students elsewhere. That partly offsets the difference, but only partly.

We estimate that for a three-year course, taking account of every allowance we found it possible to include in this respect, the total extra cost to graduate in London is now in excess of £ 1,500. It would, of course, be more for students undertaking more than three years of study, such as medical students and so on. Therefore there is a good case for increasing the London differential for grants and also for loans.

I would be the first to accept that the idea of regional varialion could, and probably should, be applied more generally than just to London versus the rest.

Finally, I should like to point out that for those students living at home who have a third rate of grant and a third maximum loan proposed, there is no regional variation in grant, in existing grants or in the proposal for loans. Yet it costs more to live at home in London than it does elsewhere. There is a case for putting in a regional variation for those students who live at home; that is, both for grants and for loans.

I should welcome an assurance from the Minister that he will think about whether this situation can be rectified. Increased access, which is an improvement we all hope for, will have to come in large measure from those students who live at home and who go to their local university. Moreover, London University, the biggest of our universities by a factor of four— neglecting the fact that there are two other universities and other higher education institutions which abound in London— will have to bear a major share in the expansion that we all desire.

4.45 p.m.

Lord Nugent of Guildford

I should like to enter into this modest auction. I am especially interested in the University of Surrey in Guildford. Housing costs in the area are even more horrific than they are in London. I would not be in favour of changing the whole structure of the Bill with this amendment to cater for such differentials. Of course, London receives a differential under the rules of procedure and therefore its special need is recognised by my noble friend. However, my friends in the University of Surrey do not receive such a recognition, although, as I said, the housing costs in the area are even higher.

I ask my noble friend to meet the needs of that and other special cases by use of the access funds which he is providing, although I cannot be sure that he has provided quite enough for the purpose. I shoulci imagine that in other parts of the country there will be special cases which require special attention. The access funds give maximum flexibility. Therefore I should be perfectly happy to see these problems dealt with in that way. I hope that my noble friend will feel able to say a word in that direction. I do not expect him to commit himself but I ask him at least to undertake to look sympathetically at the particular needs of my friends in the University of Surrey and possibly solve their problems by use of the access funds.

Lord Sherfield

I support the amendment. I, too, am interested in a university which is in a high-cost area. It is quite clear that unless some flexibility is written into the Bill, the whole scheme will suffer a distortion in view of the strong variations in the cost of living in different parts of the country.

Baroness Young

Like most speakers who have taken part in the proceedings on the Bill, I have received correspondence and a great deal of inforrr ation from vice-chancellors. Almost everyone has picked upon this point about the loss of social security benefits and the housing difficulties. The way that the noble Lords, Lord Addington and Lord Flowers, put the case, especially that for London, is quite clear. It is true— and this is an important point— that the grant will be increased in 1990. Moreover, it will be considerably higher in London than in other parts of the country. In my view that is quite right and it answers the first part of the question.

However, the second part of the question concerns the loss of social security benefits, especially housing benefit. The difficulties which arise in relation to the issue of the financing of students have been made much more complicated because the social security system has become involved in something for which I do not believe it was ever designed. It is being used for a purpose for which it was not intended and has, therefore, brought to light many anomalies in connection with the Bill.

As I understand it, the Bill only applies to maintenance, and not to the rest of the costs involved in going to university. It will be covered partly by the loan and partly by the access funds. It seems to me that this could be an opportunity for my noble friend the Paymaster General to say a little more about these funds. There are three of them and they are valued at £ 5 million each. One does not have to be a mathematical genius to realise that by the time these are divided among all the institutions of higher education, there will not be much for each institution.

My noble friend Lord Nugent and the noble Lord, Lord Sherfield, asked that more money should go to those in the greatest need, probably in the South-East. I am not familiar with the situation in Scotland; indeed, for all I know, it may be equally expensive in that part of the country. At any rate, there is a need for some change in this connection. I entirely agree that there must be some system whereby more money will go to the areas where it is more expensive to live. However, I am not at all clear as to whether the amount of money in the funds will be anything like sufficient to meet the demand.

I sincerely hope that my noble friend will feel able to look hard and long at this issue. I should add here, just in case we get involved in a terrible constitutional debate today, that I should be quite satisfied if he would say that he will look at the matter in the light of the figures which have been given and which we can all work out. It is quite clear that there will not be enough money for the very people who we would like to see benefit from the provisions of the Bill. I hope that my noble friend will look sympathetically at the amendments, bearing in mind especially the access funds.

Baroness Seear

Before the noble Earl replies perhaps I may anticipate what may be in many people's minds. I know that a number of people believe that during vacations it is appropriate for students to earn money to pay for the costs and to replace the grants and allowances which have been removed. I wish to put the the strongest possible opposition to the idea. I accept that the odd job from time to time does students no harm. However, in this country our three-year courses run from October in one year to the middle of May two-and-a-half years later when students stop being taught in order to take their examinations. That only gives about two years nine months for the vast amount of work. In order to obtain good quality results and good quality students at the end of the day it is highly desirable that much work should be done during the vacation. The belief has grown up in recent years that students should not do this work. It is a deplorable development.

Nothing that the Government do should encourage students to earn in the vacation rather than study, read and pursue special courses. The short period of undergraduate work— because that is what it is— should be used to the fullest possible effect.

Baroness David

I wish to support what has been said by the noble Baroness, Lady Seear, and also the remarks of the noble Baroness, Lady Young, about access funds which will clearly be totally inadequate to make up for the loss of housing benefit. Whether or not we like social security to be mixed up with education and the funding of students, it has happened. The allowances are being taken away and that will make a great deal of difference to many students.

In a letter to my noble friend Lady Blackstone the Minister said that the Government had asked the funding council to take account of relevant accommodation costs in distributing the funds to individual universities and polytechnics. However, it is no use asking for that to be done if the funds are totally inadequate in the first place. There are three access funds: one is for post graduates, another for further education students. That leaves only £ 5 million for the whole student body, the main undergraduate body. Apparently that works out at £ 10 per student, divided between the whole lot. So it will be inadequate.

If the access fund is to deal with housing, greater funds must be provided. I am told that applications for London University are well down. Whether or not that is because of the extra costs for housing I do not know, but it could well be. In the light of all that has been said, particularly about London, by the noble Lord, Lord Flowers, I hope very much that the Minister will be willing to take away this amendment which has received support from all sides of the Committee. Perhaps he will come back with further suggestions rather than directing the access funds in any particular way.

Earl Russell

I am in full agreement with what the noble Baroness, Lady Young, said about the access funds; I am glad that she said it. Were we to be given the kind of assurance that she suggests, I should accept and welcome it with open arms. I am also in full agreement with everything my noble friend Lady Seear said about vacations.

This is a regional amendment; it is not meant simply to apply to London. I listened with sympathy to the noble Lords, Lord Nugent of Guildford, and Lord Sherfield. The tentacles of the London housing market have spead over a distance of about 100 miles and prices have moved up accordingly. Nevertheless, there is also a specific London dimension to the amendment. I agree with what the noble Lord, Lord Flowers, said.

I have one specific illustration of how inadequate I think the loan facility for London is. It concerns not housing costs but transport. Suppose the undergraduate concerned lives in fare zone 2, which is typically where students tend to live during the year when they are out of college. The London loan facility would bring them into college on 20 days in the whole academic year. We expect to see them a little more often that than.

Lord Boyd-Carpenter

It is clear from the debate that the problem to which noble Lords on all sides of the Committee have referred has been created by the decision to withdraw housing benefit from students. Frankly, I do not share the view of one of my noble friends who said that it was wrong for social security measures to be, as he put it, "mixed up with education". We are dealing with people, on the whole, over the age of 18 who, for all purposes in law, are citizens, voters, and the rest. I cannot see any reason why an unsuperable barrier should be erected between being a student and drawing either this or other social security benefits if, on the merits of the case, the facts warrant it.

With respect, I do not believe that the problem will be dealt with by the access funds. They will not be large enough. I do not believe that they will necessarily be administered as well. The housing benefit is administered by experts in the social security department who understand the problem. They understand housing costs; they are trained administrators in the subject. However, there is no reason to believe that those responsible for the access funds will have the advantage of such expertise.

Therefore I say to my noble friend: would it not be better to think again on this and on many other matters in the Bill and reverse the decision? In appropriate cases social security benefits such as housing benefit, which would otherwise be available if the person concerned were not a student, should continue to be available to students. That would get over the whole problem.

Lord Cocks of Hartcliffe

I apologise to the noble Lord who moved the amendment for not hearing his initial argument. I must tell your Lordships that however persuasive he may have been I should not have changed my mind if I had heard his remarks. The amendment enshrines in a piece of legislation that students should go away from home in order to study. I have recently referred in your Lordships' House to a conspiracy about higher education to conceal the facts from the public. The plain truth is that there is no piece of research that shows an educational advantage in studying away from home.

A large number of students at Scottish higher education establishments live at home. No one ever suggests that Scottish higher education is inferior to that in other parts of the country: in fact, quite the reverse. On the Continent a large number of students are home-based. In this country, for some reason, the idea has grown up that if a student does not go away from home to study in higher education, the education is not complete.

I have had students lobbying me about my allegedly reactionary views. They put the point to me that it is great to get away from home, to experience life and so forth. However I receive no further come backs when I ask them "Are you in favour of the reintroduction of National Service, which had much the same effect?"

I do not wish to weary the Committee. But it is time that we punctured the myth that it is essential to go a way from home to study in higher education. It is not necessary. The burden which it puts on the housing facilities of the country is very great. I have previously referred in your Lordships' House to the way in which vast inroads could be made into the problem of homelessness if some of the rented accommodation now used by students in our big urban areas were released. People who are booted from pillar to post in bed and breakfast facilities could at least in the summer vacations have a decent environment in the university halls of residence.

When I have raised the matter previously in your Lordships' House I have received a lot of guff about courses and seminars being run and so forth. We ought to look at the greater good which is to relieve one of the biggest problems that we are now facing. If people lived at home and took the nearest available course there would be an immense saving in resources which could be translated to other ends.

At Second Reading the university vice-chancellors' committee circulated information saying: Cost of living: University accommodation fees account for 68 per cent. of the full grant. Private rents now cost an average of 8.7 per cent. more than the full grant in London and account for 71 per cent. of the grant elsewhere". The situation ought to be examined. The whole thrust of guidance for school pupils contemplating higher education ought to be changed to encourage them to go to the nearest course for the greatest good. I know that there are some courses where it is essential for students to go away from home because of availability or distance. However, I must tell the Committee again that if only 50 per cent. of students in higher education lived at home and took the nearest available course, we could clear up the problem of homelessness in three years.

5 p.m.

Baroness Lockwood

I find myself in the unusual position of being in complete agreement with the noble Lord, Lord Boyd-Carpenter. It seems to me that there are a number of considerations to be looked at here. I do not think the amendment quite meets them all. I am not opposed to the amendment but I regard it has a second best measure. If it were to be carried, it would mean that those students who suffer from having to pay for accommodation in high cost areas would to a certain extent have that payment alleviated. Nevertheless it would mean that they would find themselves with a larger loan at the end of their student days. They would then have to repay that. Therefore, the burden would be moved from the time they were students to the time they graduated.

Further, it has been suggested that the access funds should be made available for this kind of purpose. That could help to some extent, but the access funds are not sufficiently large to meet the whole of this problem. I should not like to see the access funds being used solely for the purpose of helping students in the high cost areas because I believe that they should be more broadly available to help those students from lower income groups and some of the deprived social groups in our society to enjoy the benefits of higher education.

The other point I wish to make is a serious one. I hope that the Government will look at it carefully. It was referred to by the noble Lord, Lord Addington, in his speech moving the amendment. It is that some of the universities in this country, London in particular, will in due course find themselves short of students. Those institutions within London University and institutions within some of the higher cost areas might find themselves in an uneconomical position. Then the whole question of the location and the extent of our university provision might be called into question. It seems to me that there is a real problem here which needs to be addressed. However, I do not think that this amendment is sufficiently comprehensive to address it. I suggest that the shortest and most efficient way to address the matter would be to look again at the question of housing benefit being made available to students who need it.

Viscount Ridley

I must say, coming from the North of England, how nice it is, to hear special pleading from the South-East for a change. That turns things on their head. The reason for the pleading is the higher cost of living in the South-East. However, it is also true to say that students are coming to North of England universities in increasing numbers not only because housing is cheaper but also because, I venture to hope, education is just as good there, if not better. I wish to say how strongly I support everything said by the noble Baroness, Lady Young, and by the noble Lord, Lord Boyd-Carpenter, on the two matters of the access funds and social security. That seems to me to be the nub of the whole problem.

Baroness Carnegy of Lour

I do not go along with the amendment because I do not think it is the answer. I do not agree with my noble friend Lord Boyd-Carpenter that the ideal situation is for students to remain on housing benefit. I do not believe that is the right answer, but I do not know what the answer is. That is my problem. I think it is important that my noble friend looks carefully at the figures. We are really talking about what will happen to individual students as a result of the interaction of the withdrawal of housing benefit and the introduction of the loan.

The students' association of Edinburgh University has provided me with some figures. I have no reason to believe that the figures are incorrect. According to the association, around 2,760 students rent houses in the private sector and are claiming and receiving housing benefit. That is a large number. That applies during term time. Some 920 students are claiming housing benefit over the summer vacation. The students who claim throughout the year will lose on average £ 505. That was the figure for 1988–89. Presumably that sum will be larger when the scheme begins. That figure must be looked at. If the problem is to be dealt with by the access funds, a large number of students will apply in Edinburgh alone for help from the access funds. Therefore, a fairly large sum of money will be required. That may be the way to solve the problem. I do not know whether there is any other way of varying the amount that students receive according to where they live.

The attention of the noble Lord, Lord Addington, is being diverted at the moment, but I hope he will reply to my next point. He mentioned students in Aberdeen and their problems in the private rented sector. Will he say how many years they remain in the university residences and how the rents in those residences compare with those outside? I think that in Edinburgh students always have to stay in the university residences in their first year at a lower rent and they have the option of staying longer. It would be interesting to have that information because we are talking about precise figures and how students will be affected by this provision.

In Edinburgh an average of £ 505 will be lost by students who claim benefit throughout the year. As that is an average it means that some students will lose much more and some less. We need to know what figures we are talking about if we are discussing the matter being resolved by the access funds. I hope that my noble friend will pay careful attention to that.

Lord Addington

In response to the noble Baroness, I should say that in Aberdeen accommodation was provided, certainly for the first year students, and generally for the second year for those students who needed it. Two years' accommodation were provided in the private rented sector. It is worth pointing out that anyone who is in housing provided by an education institution is invariably a lot better off. It should be pointed out that those institutions and polytechnics which are less well endowed in their initial funding tend to be far harder hit in terms of accommodation. Someone who attends an institution of higher education in the south of England that does not have blocks of accommodation will find himself particularly hard hit because there will be no back-up and no subsidised housing.

The Earl of Caithness

The purpose of the amendment is to look at the regional variations of housing costs to students. The Government have made it clear that there will be a differential between the loan facilities available for study in London and elsewhere. There will also be a smaller loan facility for those students who continue to live in the family home. That point was stressed by the noble Lord, Lord Cocks of Hartcliffe.

These differentials reflect those which operate for the mandatory grant. The main reason for them is the higher level of housing costs in the London area. Provision for these differentials will appear in regulations, but this is another case where provision in the Bill would inhibit our scope for flexibility. The differential in the grant is similarly included in the mandatory awards regulations, not in the 1962 Education Act.

While we accept that housing costs are a significant factor affecting students' cost of living, I hope that the Committee will consider that these amendments have the effect of obscuring consideration of other factors such as travel and food. The Government intend that any uprating of the loan will reflect all relevant cost increases, just as with the annual uprating of the grant hitherto. The Committee need have no fear that housing costs will be ignored: nor will other costs. However, the Government's decisions must always reflect what the taxpayer can afford.

We have heard the argument that the distinction in the grant, and in future the loan, between London and elsewhere does not adequately reflect high housing costs outside London. It is not possible to provide in the student support system a multiplicity of different rates to reflect the various housing costs of all the centres of higher education. Nor would the result necessarily be fair. If there was one rate for Birmingham and another for Newcastle, for example, that would still not take account of the significant differences in housing costs within a region and the differences in the types of accommodation that students choose.

Our policy is to provide students with a budget. Within that, they are free to choose how to spend. Some may choose to devote a large proportion of their budget to sporting activities or to travel, others to accommodation. It is not right that the taxpayer should be required to take account of those variations. Within the budget provided it is up to the student to manage.

I can perhaps best illustrate the effects of higher housing costs by considering the position of students in London. It is true that, even after accounting for the extra loan and grant, some students may consider the cost of London simply too high; others, with different priorities, may decide that the extra cost is worth it. Some students will not want to come to London at all. Very few students will wish to take courses which are offered only in London.

In view of what the noble Lord, Lord Flowers, said about living costs in London, it is worth asking whether in practice higher housing costs have influenced recruitment to institutions in London. The recent surveys into students' income and expenditure show no evidence that those coming to study in London are necessarily from better-off families. Housing costs have not made study in London the province of the well-heeled.

As for numbers, a point raised by the noble Baroness, Lady David, my information is that of students with a maintenance grant the proportion studying in London has remained at a steady 17 per cent. over the past five years; so the proportion of students in London is holding constant despite the cost of housing.

Baroness David

I referred to applications and not to students studying in London now.

The Earl of Caithness

I shall look into that point. I am sorry if I have misinterpreted what the noble Baroness said.

In moving the amendment the noble Lord, Lord Addington, spoke very eloquently about the need to make funds available for students and the fact that less funds would be available to students because of the loss of housing benefit for those who had claimed it. I was surprised that the noble Lord did not mention a point which was raised by a number of noble Lords; namely, the access funds.

As the Committee will know, the access funds will equip the educational institutions to direct help where they judge it is most needed. I hope that that will answer the point of the noble Lord, Lord Sherfield, about the need for flexibility. It will be the educational institutions which will deal with the matter. No doubt they will take account of housing difficulties although they will not be limited to that. As the Committee knows, housing costs is one of the factors used in the distribution of access fund cash by the department. There is a total of £ 15 million in three funds.

Some Members of the Committee, including my noble friends Lord Nugent of Guildford and Lady Young, were concerned whether the access funds were adequate. That is a point that I have already discussed with my right honourable friend the Secretary of State. He has listened sympathetically. He has made it clear that he is considering the size of the access funds in the light particularly of concern expressed both in another place and this Chamber about housing costs. I can give the Committee an assurance that my right honourable friend is doing so sympathetically and actively. I can say no more at this stage, but I hope that he will make a further announcement on the matter in the very near future.

Lord Flowers

Perhaps I may be excused for interrupting for just one moment. Will the Minister accept that many of the difficulties that some of us have with the Bill arise from the almost simultaneous withdrawal of social security benefits? If students could once again become eligible for such benefits the problems that we are debating at the moment would go away.

5.15 p.m.

The Earl of Caithness

I fully understand the point that the noble Lord, Lord Flowers, has made. One of the reasons for our introducing the access fund was to cater for those students who will face the additional difficulties that the noble Lord mentioned. I understand his concern and that he would like students to continue to receive housing benefit.

I have to be honest. I do not believe that I can offer him any assurance that we shall change our minds on that point. However, we shall seek to provide access funds to allow the educational establishments the flexiblity to take care of those students who at present receive housing benefit and who, in view of the loan that they will receive in the future, will still face problems. That is what the access funds are designed to do. The total amount is the access funds is a question that my right honourable friend the Secretary of State is considering at the moment.

Baroness Seear

Before the noble Earl sits down, perhaps I may ask him what reaction he has received from the universities and polytechnics to the suggestion that they should administer the access funds. It is not only a major administrative task; it is one that many academics would be extremely unwilling to undertake. It means making judgments about the amount of money to be given to student A as distinct from student B. I should not have liked to do that job. It could be an extremely invidious task. Can the noble Earl tell the Committee whether the academic institutions have expressed any opinion about being asked to make such a discrimination between individual students?

The Earl of Caithness

I understand what the noble Baroness said, but she rather surprised me. I was coming to that point, but I had not intended to comment on the point made by my noble friend Lord Boyd-Carpenter that the higher education establishments would not be as good at administering the funds as the DSS. I do not want to get involved in that argument, particularly as I know that many universities already have hardship funds which they use for precisely the purpose for which the access funds will be used. They have the money and they make precisely the judgments about which the noble Baroness is so worried.

Lord Adrian

Before the noble Earl sits down and we leave the question of the access funds, can he tell us the amount of the housing benefits that will be withdrawn in relation to the size of the proposed access funds? We know that it is proposed that the access funds should total £ 15 million, but I do not have a figure for the withdrawn housing benefit.

The Earl of Caithness

I do not have the figures to hand. I shall certainly look them up. I was about to come to the question of funding for students because that was a point that was raised by the noble Lord, Lord Flowers, when he spoke. That is what the Bill is about. What has happened over time is that the amount that a student can receive from various sources has declined since 1962. To date that has been a question of a means-tested grant, parental contribution and some earned income. That has not proved satisfactory, and the value of the grant has gone down. It is for that reason that we are bringing forward a loan scheme. It will boost the income available to students by 25 per cent. this year. It will cover many of the points about which the noble Lords, Lord Flowers and Lord Adrian, are concerned.

The total of the uprated grant for this year, the parental contribution, which I know that some people in higher education do not want to see continued but will still be there, plus the loan, will take the value of income to the student almost back to the 1962 level when my noble friend Lord Boyd-Carpenter was Chief Secretary. We have been able to uprate significantly the amount available to students. In addition, we have provided the access funds. I should re-emphasise the fact that it is the total amount in the access funds at which my right honourable friend the Secretary of State will look and on which I hope we shall be able to make a decision in time for our discussions at the next stage.

Baroness David

The Minister said that he did not have certain figures. I have some figures from Hansard, so perhaps I may give them as they show the scale of the problem. Hansard states that government statements differ on the savings to be achieved by removing students from welfare benefits. That is not only housing benefit, but housing benefits form a large proportion. Hansard goes on to say that the savings are large with estimates ranging from £ 65 million— the figures are to be found in cols. 497 to 499 of the Commons Hansard of 21st March 1989— to £ 110 million per annum. Those figures are vastly greater than the access funds of £ 15 million when we consider that only £ 5 million of that will be for undergraduates.

Baroness White

It is unsatisfactory to equate the running of hardship funds in universities with the running of access funds in view of the problems that will be faced with the access funds. They are quite different matters. The hardship funds are for exceptional difficulties; for example, in the case of someone whose grant has not arrived from overseas or someone with a death in the family, where one must step in and ensure that the student can continue his education without having a break on financial grounds. The hardship funds are not for the widespread administrative difficulties which would undoubtedly be faced. That is why the Committee of Vice-Chancellors and Principals is so unwilling to undertake that kind of administration without having any extra resources for the administrative costs involved.

The Earl of Caithness

I am grateful to the noble Baroness, Lady David, for bringing those figures to the Committee's attention. I now have the figures too and I must agree with her. As I understand it, the value of the benefit to be withdrawn is £ 68 million. The value of the loan is £ 178 million, so that is another £ 110 million available for students. In addition, there are the access funds of £ 15 million, which is the sum that we are considering. That entirely substantiates the argument that I have put to noble Lords; namely that the amount of money that will be available to students is a considerable increase.

Earl Russell

I wish to ask for one more piece of clarification. Do the figures which the noble Earl has just given us include housing benefit coming through local authorities?

The Earl of Caithness

Yes, because, as I understand it, that is how housing benefit works at the moment. That will be withdrawn, other than for disabled students. We shall come to that matter on a later amendment. They will continue to receive it. Perhaps I should repeat the figures for clarification. The benefit withdrawn is £ 68 million. The increase, because of the loan, is £ 178 million. That gives a net figure of £ 110 million. On top of that, there are the access funds.

Lord Boyd-Carpenter

Is my noble friend aware that those figures are not comparable because the social security benefits go only to a limited number of students whereas the figures that he has quoted generally go very wide? It is obvious that there is great disquiet in the Committee, particularly on the student housing point.

I wonder whether, even at this stage, the Government would be prepared to defer the withdrawal of housing benefit and perhaps the other social security benefits, at least for the first year of the loans scheme, so as to see whether the various expedients that he has suggested, such as access funds, are capable of taking charge of the situation. After all, students have enjoyed those benefits for many years. Is it asking too much to suggest that they be not straightaway abolished when the new scheme starts, but that it be seen for a year whether it is possible to dispense with them without causing dislocation and hardship?

Lord Flowers

I intended to raise exactly the same point.

The Earl of Caithness

I hear what my noble friend says and I shall draw it to the attention of my right honourable friend. There are two points to bear in mind here. One must look at the package as a whole. Part of the package was the withdrawal of benefits and the loan, which is considerably more. My noble friend is right to say that some students will receive a loan and will still be worse off. That is precisely why we added the second point, which is the access funds. I have already given an assurance on the value of the access funds to the Committtee and I know that my noble friend will take it in good faith. If we seek to take out one part of that equation, it upsets the balance of the rest of the equation.

I must clarify a point which arose last Monday during our first day's discussion. The point about which my noble friend is concerned arises under the social security legislation. It does not arise under the Bill. It is part of the package of the Bill but it comes under the social security legislation.

Baroness White

I am sorry to interrupt the Minister again, but the arguments on the Government's side are so unsatisfactory. One must include the 20 per cent. poll tax in the equation. People are bored to death with the poll tax, but it is part of the equation and in some areas it will be a significant amount.

The Earl of Caithness

If the noble Baroness seeks to extend the equation to include the community charge, one must also extend it to include rates. As a student, I had to pay my fair share of the rates for the cottage in which I lived. One must also take that into account.

Perhaps I may move on from those important points, all of which I shall consider. I give that assurance to the Committee and I repeat the assurance about looking at the value of the access funds. Perhaps I may pick up a point made by the noble Lord, Lord Cocks of Hartcliffe, that the universities should do more to help their students by providing halls of residence and that students would be educated nearer home. I am not a specialist in those matters, but I am sure that what he has said has been noted by those with much closer contacts with h igher education than I have.

I was a little suprised that the noble Baroness, Lady Lockwood, said that some colleges would be short of students. I take issue with her on that point in the nicest possible way because the aim of the Bill is to increase the number of students in higher education. I hope that there will be a much greater demand as a result of our proposals.

Perhaps I may return to the basic point of the amendment which in our view is unnecessary and imposes inflexibility on the Bill. Let me assure the Committee that housing costs will be considered alongside other costs in uprating the loan and that there is no need to extend provision to graduates. We beieve that the access funds, along with the general uprating process, offer the best solution.

Lord Addington

I have listened to the noble Earl's reply and I was amazed to see how well he manoeuvred under such heavy fire. I proposed the idea with a view to those students who receive full grant and have the least financial support from the home background. The idea of a regional policy has some p -ecedent because this Government and other governments have accepted that it is more expensive to live in London. There are housing and travel costs. All large cities involve considerable travel costs and there are incredible variations in housing costs in many large cities. Thus, once the housing benefit which ironed out those difficulties was removed we had to do something about bringing the situation back to a state of equilibrium in order to give support especially to those who have the fewest resources available to them and are most dependent on housing benefit.

The access funds of £ 5 million for undergraduates will effectively be broken down among those who are in the most trouble. Suppose the money is used to supplement housing benefit. There are 200,000 students who pay over £ 35 a week. I do not for one minute pretend that they are all claiming housing benefit, but if they were it would cost £ 25 a week each. I suggest that that would not cover all the problems. One could double the figure, assuming that on y half are claiming housing benefit. That would be £ 50 a week. We are speaking of losses of several hundred pounds.

The noble Earl said that his right honourable friend in another place would be looking at this point. I should like to know whether we shall be making more funds available, especially to those who are dependent on full grant. If more funds are to be made available soon I shall not think again about dividing the Committee. If not, I do not think that I have any alternative but to test the opinion of the Chamber.

The Earl of Caithness

I find it difficult to offer a more firm assurance than I have given already to the Committee. I said that my right honourable friend was looking very carefully at the value of the access funds. That is precisely to meet the point raised by the noble Lord, Lord Addington. It is, as we all know, a valid point. It is precisely to meet that point that over and above the loan are the access funds. The value of the access funds has been a matter of some dispute both here and in another place.

I know that my right honourable friend would wish to read very carefully what the Committee has said today. I have said that he is looking at the matter sympathetically and actively. I know that at this stage the noble Lord will understand that I cannot say more than that because a decision has not been made. My right honourable friend will want to read noble Lords' remarks. The assurance I can give is that I shall let this Chamber know as soon as possible when a decision has been made, which will be before a further stage is reached.

Lord Addington

Evidently the noble Earl cannot say any more than that at this point. This is a very important issue. In the circumstances I am prepared to withdraw the amendment at this point on the understanding that the noble Earl will come back and inform this Chamber as soon as possible. I categorically reserve the right to come back on this issue. If there is nothing positive forthcoming, let me assure the Committee that I shall certainly raise this issue again and will not be put off a second time. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

5.30 p.m.

Lord Peston moved Amendment No. 35A: Page 3, line 36, at end insert ("such maximum, and the maximum level of mandatory awards under regulations made under the Education Act 1962, being uprated annually by not less than the same amount, namely that calculable at the end of July in relation to the previous twelve months according to the Retail Prices Index published by the Central Statistical Office of the Chancellor of the Exchequer").

The noble Lord said: I shall try hard to make more rapid progress in view of the fact that it is already 5.30 p.m. This is a probing amendment intended to look further into the Government's mind. The Government have argued that we must look at the scheme as a whole package. I for one am still trying to do that. However, I cannot put the numbers together to see what the whole package amounts to. I hope that before the Report stage I shall be able to do so.

This amendment looks at one special matter. Let us ignore for the moment all the matters that we were discussing with regard to housing benefit and so on, and leave on one side the question of access funds. Essentially, with respect to the maintenance grant itself and the loan, the Government seem to be putting back the real value of the grant approximately to where it was somewhere in the early 1960s. That does not mean that the student on full grant is as well off now as he was in the early 1960s because he will now have to bear the cost of the loan element. But, as I said, the cash in hand will be very close, excluding the matters that we have just discussed under the previous amendment.

The important point to bear in mind is that the intention is to probe the Government's plans for the future. The cynical view is to look at the famous Chart 4 in the White Paper and say that if we get the amount up, the next blue and red dot would be close to where the dots were in 1962 and 1963. We then ask— and this is the concern of the amendment— whether over the next 20 years we can expect to see the real value start to erode again. I agree that one cannot prejudge public expenditure, but are the Government trying to tell us by intention that Government policy is to try to maintain the real value of student support for the next decade or two? I do not ask for a guarantee because no government can give such a guarantee but is the Government's position at the moment such that they are unable to say even by way of intention that they would like to maintain the real value of the grant from now on?

I could argue a good case that the real value of the grant ought to grow through time, especially in the context of a loan scheme which is predicated on a growing economy and higher education being productive. The economics of it would certainly argue that the ratio of the real value of the grant to real average graduate earnings should be constant and most of all should grow through time. I do not press that point of doctrine at the moment.

I am merely exploring the Government's intention. I ask how they want us to interpret what they are currently doing this year. I do not look for any kind of government statement of commitment to public expenditure which they could not make. Certainly I am interested in what the Government would like to do if they felt that it could be afforded. I beg to move.

The Earl of Caithness

To anybody who has been connected with the Treasury and had to look after expenditure, the last words of the noble Lord, Lord Peston, would ring like— well, I am not educated enough to get the words out! What would the Government do if they had the resources available to them? That is what he said, or words to that effect. That is something which every government, including that of the noble Lord, Lord Callaghan of Cardiff, whom I am glad to see in his place, would like to have. Every government would love to have more resources available to them. All of us who spend money would love to have more resources available. However, we have to live within budgets. That is very much the key to this amendment.

The point that needs to be emphasised is that this amendment would link both the maximum loan facility and— this is the interesting part— the mandatory award (that is, the grant) to the retail price index. That is presumably what the noble Lord would like to do in the future. If that is the commitment of the Labour Party, I note it. I asked the noble Lord at an earlier stage what he would like to do. I am perhaps getting it in dribs and drabs. If he were in my position, obviously he would give that assurance to the Committee.

As the noble Lord indicated, the effect of what he has said would be very dramatically to increase the total resources available to some students, in this case by twice the rate of inflation. Presumably, it would be for the local education authorities to decide whether those students who receive discretionary awards should enjoy the same advantage.

However, the down side to the noble Lord's amendment is that there would be a very substantial increase in the cost of the scheme. Moreover, it would never develop to the point where the loan and the grant became approximately equal in size— and as the Committee will know that is our intention. Instead, the ratio between the loan and the grant in 1990 would be frozen. Since loan repayments would be substantially reduced and grants significantly increased, the scheme would be most unlikely to produce savings in the longer term, as would be the case with the Government's proposals. This would make it more difficult to lift the financial restriction on the supply of higher education, and the taxpayer would not be able to afford the expansion of higher education that we all desire. I think that that is the important difference between the plans of the noble Lord and those of the Government. We shall be uprating the loan and the grant but converting the uprating of the grant into a loan until they are about equal. That is our plan for the future.

Lord Peston

For once I do not seem to have been my normal extremely clear self I thought that the amendment was so clear that it did not require a long lecture from me. Perhaps It would help now if I stated what the amendment meant. I might then receive an answer that corresponded to the amendment.

The Government are raising the total amount of student support this year and claiming that in real terms it is now approximately where it was 25 to 30 years ago. That is the Government's claim. Is it the Government's intention to maintain that real value of total support? That is my simple question. That is perfectly compatible, as a matter of elementary algebra, with still increasing the ratio of loan to total support if that is what the Government so decide. What is incompatible is raising the grant this year, as the Government are proposing to do, and if there is 6 per cent. inflation next year not raising the grant and loan element by 6 per cent; and if there is 10 per cent. inflation the following year not doing so then.

Having raised the real value of support, is it the Government's intention to maintain the real value of support? It has nothing to do with the schemes that I shall put forward a year or so from now, one hopes— and the country hopes— from these Benches. Those will involve much more sophisticated approaches to the question of student support than this rather crude and ill thought out scheme.

However, I am not in the mood— nor, I hope, are Members of the Committee— for such political to-ing and fro-ing. I am asking a simple question that any student will ask: "You are giving me more money this year. But will you maintain it in real terms from now on? Or would you like to try to do so?". I added a few other remarks in addition to that. However, the main point is this. Do the Government regard the real value of the grant plus loan that they are fixing this year as the correct real value? That is as sim ple as I can put it. It is an answerable question.

The Earl of Caithness

I am grateful for the greater clarification that the noble Lord has been able to bring to the amendment that he has proposed. The student will be in no different position from now. As with the grant, so it will be with the grant and the loan. Any uprating in future years will need to be considered in the usual way in the public expenditure survey.

Lord Peston

I thank the noble Earl very much. That was the answer I thought that he would originally give. We did not need any of the other answers. On uprating, nothing has changed as a result of the Bill. The Treasury will decide year after year what it feels it can do by way of uprating, considering the general economic circumstances of the country. In that sense, nothing has changed from the existing student maintenance scheme.

Having learnt something about the Bill, as I am always anxious to do, I thank the noble Earl for giving the answer and I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Earl Russell moved Amendment No. 36: Page 3, line 36, at end insert ("In the first year the amounts of the loan shall be as follows—

London Elsewhere Home
Full year £ 460 £ 420 £ 330
Final year £ 340 £ 310 £ 240

In determining the amount of the loan for subsequent years, the Secretary of State shall have regard to the retail prices index published by the Central Statistical Office of the Chancellor of the Exchequer.").

The noble Earl said: I speak also to Amendment No. 44 with which Amendment No. 36 is grouped.

Amendment No. 36 simply follows the lines of government policy so far as I can understand them. It states the amount of the loan and seeks only to write it into the Bill. I repeat that we find it very difficult to be satisfied with the answer that the noble Baroness, Lady Blatch, gave on the subject earlier today. We know that the Government are quite prepared to say what they are doing on the subject but they are not prepared to write it into the Bill.

This is supposed to be a revising Chamber. It is not supposed to be a substitute for a press conference. We are supposed to have something in front of us that we can revise. We can only revise what is in the Bill. I am very much concerned that we should let such a precedent pass and let our successors in Parliament think that we regarded it as a fit way to legislate.

The amendment concerns only the drafting of the Bill. It does not concern the size of the loan the principle of loans, or any other matter of government policy. It simply concerns how legislation should be provided.

Amendment No. 44 concerns the same point. We have heard the Bill described as a blank cheque. Amendment No. 44 appears to be picking up a blank cheque book as well as a blank cheque. It relates to an uprating phrase which states that the Secretary of State may use the retail prices index, or such other index as appears to him to be appropriate".

That could be absolutely any index. We should have some idea what type of index the Secretary of State will use. If he wishes to change it, he should at least tell us so. I beg to move.

5.45 p.m.

The Earl of Caithness

I can understand the concern of the noble Earl about the Bill and the regulations. He has made it perfectly clear on numerous occasions: his first amendment at Second Reading which was not the one we discussed; his amendment at Second Reading which we discussed; his amendments on the first day of Committee, and his amendments today. I understand the concern of the noble Earl. I happen to differ from him, and the Bill is as it is now before us.

My noble friend Lady Blatch and I have on numerous occasions explained why the Bill is framed in the terms it is. On the first day of Committee we were able to change the way that the regulations which are to be laid will be discussed within Parliament, from the negative to the affirmative resolution procedure. The size of the loan facilities in the first year will be set in those regulations and debated at the time. We made clear in the White Paper what the size of the loan facilities will be. It is for that reason that there is no need to fix it in the Bill.

Turning to the other part of Amendment No. 36, we have said that the level of the grant and the loan together will be reviewed annually. If there is a need to increase the resources available to students then the extra will be provided as loan, until the loan and grant each provide half the public support offered to students— a point we do not expect to reach this century.

One of the factors that the Secretary of State will have in mind is of course the costs that students face. But that cannot be the only consideration. Any Secretary of State must consider what the taxpayer can afford. I hope that the noble Earl will agree with me on that at least. It would be quite improper to commit oneself, however slightly, to automatic increases in the rate of student support.

I must stress that we are giving a substantial boost to student support. The grant and the loan will be worth 25 per cent. more than grant alone this year. We will be making £ 178 million available in loans, in addition to the uprated grant. Once benefit changes are taken into account the net increase is still well above £ 100 million. We discussed that at length earlier this afternoon.

But what increase in students' public support is to be provided in 1991–92 cannot be predetermined now. It must be considered in the light of all the circumstances at the time. Those will certainly include consideration of movements in the retail prices index, though there is no similar requirement in the 1962 Act to take account of the RPI.

Amendment No. 36 is consequently redundant. It does no more than insert in the Bill exactly what the Government intend. And our intentions will be subject to the affirmative resolution procedure.

Turning now to Amendment No. 44, I should begin by pointing out that there is nothing suspicious about the reference in paragraph 1 (3) of Schedule 2 to possible alternatives to the retail prices index. The Government intend to use the RPI to index the debt, so that it retains its value in real terms.

The provision for alternatives is merely a safeguard in case the RPI should become unsuitable or if a new index supersedes it. Without this provision, such an event would require fresh primary legislation. With the provision intact, it will simply be a case of amending the appropriate regulations.

It is right in our view to index the loans so that the value of the repayment will be the same in real terms as the value of the sum borrowed. The outstanding debt will be adjusted annually in line with inflation. But no real interest will be charged.

We consider this to be a matter of equity. It is fair to the graduate who pays back in real terms the same sum as he borrowed, and fair to the taxpayer who receives back in real terms the same sum as was originally lent.

Baroness Seear

Once again, the noble Earl has not answered the point. He says that this matter will be dealt with by regulations. However, even under the affirmative regulation procedure there is no way in which we can argue about the amount of money. That is why my noble friend wants this written into the Bill. I have already said that once this afternoon but the noble Earl repeated the totally unsatisfactory answer which he gave before. That does not meet our problem, which is that the affirmative resolution procedure gives us no opportunity to vary the amount of money.

In relation to Amendment No. 44 and the possible change, at the discretion of the Secretary of State, in the type of index to be used, if there is to be such a change, I ask the noble Earl that it should be brought before the House by way of an affirmative resolution and should not take place merely by the Secretary of State deciding that he will use another index.

Earl of Caithness

On the first point, that is ground which we have covered at length. I fear that we shall continue to disagree throughout the remainder of the proceedings on that point. On the second point, I shall look at the noble Baroness's proposal.

Earl Russell

I am thankful to be able to agree with the noble Earl about something. Of course I agree that we are limited by the constraints of public expenditure. In turn, I ask the noble Earl whether he will agree with something else; namely, that we cannot have any more students than we can afford. However, that is by the way.

I am also grateful for what the noble Earl said to my noble friend Lady Seear. On the subject of the drafting of the Bill, it seems that there is very little common ground between us. I beg the noble Earl not to continue to repeat his answer that we shall be told what is being done. Increasingly, that has the effect of a red rag and we do not wish to turn these Benches into bulls.

I do not intend to press this amendment. However, if other Bills are put before us of the same sort, even if we agree wholeheartedly with the principle of the Bill, we should still feel the need for objection. I hope that when future legislation is drafted that point will be taken into account. In view of the hour, I beg leave to withdraw this amendment and hope that the noble Earl will continue to think about the retail prices index.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendment No. 36A: Page 3, line 36, at end insert; (" (aa) prescribe as 50 per cent. the maximum proportion of maintenance support payable to a student which shall comprise a loan").

The noble Baroness said: This is a very simple amendment to make clear on the face of the Bill that loans will not go on rising and rising as a proportion of student maintenance from 50 per cent. to 60 per cent. and eventually up to 100 per cent. On Second Reading I made the point that that sort of matter should be in the Bill and should not be left to regulations and I repeat that point now.

To go above 50 per cent. could well deter many more students as the debt will be much greater. It is likely greatly to increase default rates because of the difficulties which some former students will have repaying larger debts. I believe that it is noteworthy that even in the United States of America, where an extensive loan system is in place, loans rarely account for more than 50 per cent. of maintenance costs and usually account for not more than about one third.

If the Government are sincere about their intention not to allow the loan to exceed that proportion, I cannot see how the amendment can be refused. However, should it be refused, then the Government must stop referring to the loans as top-up loans because that would be misleading Parliament, the general public and existing and future students.

That is so fundamental to the nature of the Bill that it must be written on to the face of it. If the Government refuse to do that, many of us will doubt their sincerity. I beg to move.

Lord Addington

I support the noble Baroness's amendment. I believe that she has encapsulated perfectly the argument for this amendment. If we are to have top-up loans which will never be more than 50 per cent. of the total amount of funding, why not say that? Throughout the Bill we have argued that more and more should be written into it so that we know what we are dealing with. This is one situation where we should make the position absolutely clear to those involved and also place a limit on particular elements within the Bill.

We can reach a maximum situation where loans will account for 50 per cent. of maintenance costs, the other 50 per cent. being provided by grant. That was the concept which we were given to discuss and surely it is fair and just that that concept is written into the Bill.

Baroness Blatch

I understand the concerns that lie behind this amendment. We have heard expressed fears that the Government wish to abolish the mandatory grant. I assure the Committee that this is not our intention. As Members of the Committee know, we have uprated the grant by 5 per cent. next year. The loan facility that we will provide in 1990–91 will be on top of that uprated grant.

In 1990–91 we shall be providing over £ 730 million in maintenance grant and £ 178 million in loans— more if take-up exceeds 80 per cent.

In years thereafter we shall look at the total amount of support that is available from both grant and loan and, if any increase is necessary, provide this as loan. The grant will be maintained in cash terms at its 1990–91 level.

In the White Paper we made clear that with this uprating of the total support through additions to the loan facility, the scheme will develop to the point where the loan and grant each provide half the public support for students' living costs. We said that uprating after that date will have to be considered nearer the time.

On White Paper assumptions, that issue will not arise until 2007–08. It would be foolish to set policy hard and fast in a Bill as this amendment seeks to do, for an event some 15 to 20 years ahead. I assure the Committee that our present intention on reaching that point is to run the two systems of grant and loan in parallel.

However, we cannot predict what the higher educat ion system will be like by 2007, nor what the needs of students will be. Who could have foretold, in the mid-to-late 1970s, that by 1990 higher education would be thriving under the present Administration with over 1 million students in higher education and an age participation rate heading towards 20 per cent.?

I assure Members of the Committee once more that the present Government are committed to retaining the mandatory awards system and adding to this the loans scheme. But we cannot accept that this Bill should prescribe decisions about the needs and financing of higher education which will be made in the next century. I invite the Committee to reject this amendment.

Baroness Blackstone

Is the noble Baroness telling us that it is the Government's intention to reconsider what they said in the White Paper and the reassurances which have been given that the proportion of student maintenance which will be covered by loans is to be 50 per cent. and no more? I interpret what she says to mean that when we reach that later date, the Government will wish to consider whether they wish to take the level above 50 per cent. Otherwise, I cannot see why she cannot accept my amendment.

Baroness Blatch

This Government's intention is that there should be a 50: 50 balance. This Government have no plans, once that level is reached, to go beyond that. It will be for the government of the day, in the light of all considerations, to make that decision.

Lord Boyd-Carpenter

In the light of that answer, surely it is sensible to write the 50: 50 balance into the Bill. That does not commit a future government in 2007, whichever government that may be, to maintain that if they are prepared to legislate. However, when you are discussing a provision which, on my noble friend's own view, is to last 17 years, there does not seem to be any objection to writing that into the Bill.

I know that my noble friend will understand that there is great unhappiness and anxiety in the universities about the background to this Bill. I should have thought that there is every need to reassure the universities and the students that the Government will stick to the undertakings which they have given. If the present Government give an undertaking, then I accept that wholeheartedly. However, we are talking of a period when it is at least possible that there may be another government. I profoundly hope not. I should like to see the Government continue in office until 2007 and indeed beyond that. I think they are a most excellent government. But I might be accused of optimism if I said I believed that the noble Baroness would be at the Dispatch Box replying to a debate 17 years from tonight.

I should have thought it sensible, in view of the uneasiness and anxiety which she must know exists, to accept the amendment, put the 50 per cent. maximum into the Bill and leave it to a subsequent government, if they want to alter it in 2007, to come to Parliament and legislate. I cannot see the difficulty in that.

6 p.m.

The Earl of Onslow

My noble friend has suggested that the Government are trustworthy on the 50 per cent. figure, a point with which I totally agree. The noble Baroness, Lady Blackstone, does not agree with loans so she will not want to increase the figure beyond 50 per cent. Therefore I see no reason for putting anything extra into the Bill. In both ways, 50 per cent. will stay.

Baroness Blatch

I can repeat that the Government's intention in this Bill is to take the loan to the 50: 50 level. However, because of the points pressed at this time, I shall, if the Committee will accept that I do it without commitment, speak to my right honourable friend in the meantime and report at a later stage.

Lord Boyd-Carpenter

Will my noble friend amplify that assurance? What is it that she will discuss with her right honourable friend? Is it the question of putting the 50 per cent. into the Bill?

Baroness Blatch

With respect, I think I intend to discuss with my right honourable friend the pressing points made by my noble friend Lord Boyd-Carpenter and the noble Baroness, Lady Blackstone. It is important to consider whether it is necessary at this stage to commit and bind a government possibly in the year 2007. I shall discuss whether it is right that the Government should set a finite date and commit a finite level so that there would be recourse to primary legislation if it should go beyond the 50: 50 level. But I do so without commitment. I hope that the Committee will accept that assurance.

Lord Callaghan of Cardiff

We all thank the noble Baroness. I am sure, although she is anxious to safeguard her own position, that she does not intend to talk to her right honourable friend unless it is to try to persuade him to accept the 50 per cent. I guess, although she would not say so now, that she has been convinced by the arguments from both sides. I believe that we should reinforce her on this point. It would be helpful if she were able to go to her Minister and say that not only was she expressing the views of those who spoke but also of those who did not speak and that those who did not speak expressed their view in the Division Lobby in order to support her in her splendid choice.

I have two other points to make. First, I could understand the Government refusing amendments which would cost them a good deal of money. I do not understand their refusing an amendment that will not cost them anything except in one regard in respect of which the noble Lord, Lord Boyd-Carpenter, will certainly agree. I am deeply suspicious of any estimates that are made as far ahead as the year 2007. Therefore, if I were not a nice, innocent chap who always believed the Minister, I might fear that perhaps it would not be 2007 after all but a date very much closer and that that is why the noble Baroness did not want to accept it. She would not want me to think that; she would not want the Committee to think it. I believe that we should reinforce what she will say to the Minister by going into the Lobby and supporting her, man and boy.

Baroness Blackstone

In the light of what my noble friend has said, I believe that we should divide the Committee and provide the noble Baroness with the support she needs in discussing this matter with her right honourable friend.

Lord Boyd-Carpenter

In saying that and in giving that advice to the Committee, does the noble Baroness appreciate that, if she does so and if as is quite possible she loses the Division, when my noble friend talks to her right honourable friend the Secretary of State she will be bound to say that the Committee rejected the proposal? The noble Baroness seems to be putting in jeopardy the offer of a possible improvement to the Bill. That is most unwise. I advise her not to press it now but to wait until Report stage. If my noble friend did not then come forward with an acceptance the noble Baroness would obtain wider support than she is likely to get tonight when she seems very likely to prejudice what is already a half win.

Lord Callaghan of Cardiff

Is the noble Lord saying that his vote would not follow his voice on this matter? I am sure that he would not wish to convey that impression to the Committee. I am sure that his vote would follow his voice. I believe that Members of the Committee sitting in the Chamber are as convinced as the noble Lord, Lord Boyd-Carpenter, by the arguments adduced. I have no hesitation in assuming that the matter would be carried. Even if it were not carried, the noble Baroness, having said that she intends to go back to the Minister on this matter, will naturally do so. The noble Earl, Lord Caithness, shakes his head. If we decide to vote and the matter is not carried, is that the end of it? Is that what the noble Earl is saying? Is he saying that the noble Baroness will not go back to the Minister although she has been convinced by the argument?

I must say that that is a novel doctrine and one that I would not accept. If that is to be the case I would certainly advise my noble friend not to vote on the issue at this stage but to let it go. We shall then come back doubly reinforced, knowing that the noble Baroness will have put the case not only with all the fervour of the arguments but knowing that those who were hoping to support her stood back on the advice of the noble Lord, Lord Boyd-Carpenter, to whom we always listen with great respect. We know that not only will she have our support but that she will have the noble Lord's support also behind the scenes. We look forward with hope to the next stage of the Bill.

Lord Shackleton

I have just come into the Chamber. The noble Earl has enunciated a principle that is completely unfamiliar to me as a former Leader of the House. He is saying that, because the Opposition and others sought to divide, the noble Baroness will not try to do her best for the Bill.

Baroness Faithfull

As a Back-Bench Conservative who very often votes against her party, as is well known in the Chamber, I would be sorry if the noble Baroness, Lady Blackstone, were to press the amendment. I agree with the amendment but we have been given an assurance by my noble friend on the Front Bench. The Secretary of State would be in a very strong position to say "No" as the Committee had voted the other way. I hope that the noble Baroness will not press the amendment. We shall then have a chance at the next stage to hear what the Secretary of State has to say.

Baroness Seear

Despite all his great experience, the noble Lord, Lord Callaghan, overlooked the fact that it is not the people who heard the argument who will decide the vote but the people who have not heard it.

The Earl of Onslow

As one who quite frequently speaks against his own Front Bench perhaps I may say that on this occasion I happen to agree with it. If I had an undertaking from my noble friend I would be totally happy. If I were the noble Baroness, Lady Blackstone, I would remember, Quidquid id est timeo Danaos et dona ferentes", which. I hasten to add, is the only Latin tag I know. It means, "I fear the Greeks especially when they are bearing gifts". I suspect that the noble Lord, Lord Callaghan, is heavily disguised as Ulysses in this life.

Lord Swinfen

If the amendment is pressed to a Division and is lost, am I not right in thinking that it canrot then be brought back?

Bareness Blackstone

I have never received so much conflicting and changing advice in such a short space of time. I am especially grateful to the noble Earl for translating his Latin phrase for me as I did not understand what he was saying. Before I make a final decision, I want to be absolutely sure what the noble Baroness, speaking for the Government, will say to her right honourable friend about the amendment.

Baroness Blatch

I can assure the Committee that I will faithfully report everything said in the debate and the feeling behind what has been said. I will consult with my right honourable friend and report back at the next stage.

Baroness Blackstone

In the light of that assurance I shall not divide the Committee on this occasion. However, if we do not receive a satisfactory result from that consultation, we intend to come back on Report, In the meantime, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendment No. 36B: Page 3 line 38, after ("made") insert ("and in the case of students receiving loans in the academic year 1990–91 the repaymert period shall be five years, subject to any provisions of sub-paragraph (c) below").

The noble Baroness said: I can be brief. In reply to an amendment in my name on the first day of our Committee proceedings the Minister repudiated my suggestion that those students facing repayment of loans after a long period of deferment would have a large amount to repay because of indexation throughout the life of the loan. He said that repayments would be around £ 400 per annum; that is, £ 8 per week.

I assumed that the Minister was referring to present values but I was not entirely sure whether that was so or whether the loans would be held at that level in cash terms with a longer period of repayment than five years where deferral was taking place. The Minister has since written to me and made clear that he was referring to figures in real terms rather than cash terms. In the light of that I assume that we are referring to a fixed repayment period of five years in all instances. However, this is a probing amendment to clarify that that is the case. I beg to move.

Baroness Blatch

I can be brief in my remarks. It is our intention that the repayment period should initially be five years. That would mean that a student on a three-year course starting in 1990 who has a debt of about £ 1,500 on leaving the course would make repayments at about £ 31 a month if inflation were to run at 6 per cent.

As the loan scheme develops, the total support that is available from grant and loan together will be reviewed annually. Any addition will be made available as loan. As the loan facility increases in this way in real terms the total liability built up by a student over his course will also increase in real terms. The repayment period will be extended so that repayments remain at a reasonable level.

We intend that this extended repayment period should apply to the whole of the loan of a student who is receiving loan when the extension comes into effect. One perverse effect of this amendment is that if this extension were required in the next few years we could not offer it to students then still studying who had started their course in 1990.

As I have already said in debate on earlier amendments, if a student were on a longer course his liability would obviously be higher than that of a student on a three-year course. We intend in recognition of this that his repayments should remain manageable. The Secretary of State is considering how best this might be done.

Again, this amendment would have a perverse effect. It would constrain the Secretary of State so that if he were to provide a longer repayment period for students on the longest courses, he could not provide this to students starting a course in 1990.

The terms of the repayments will be set out in the regulations which, under the affirmative resolution procedure, the Chamber will have the opportunity to debate. It is better handled in that way than in the Bill.

I trust that in the light of my assurance— that the repayment term will be five years initially— the noble Baroness will withdraw the amendment.

Earl Russell

The noble Baroness said that this amendment would constrain the Secretary of State. I thought that was the purpose of having a parliament.

Baroness Blatch

I believe I said that it would constrain the Secretary of State from helping students who started their courses in 1990.

Baroness Blackstone

As I said, this is a probing amendment and I have no intention of pressing it any further. I certainly would not want to push an amendment that had the perverse effect described. In the light of the helpful clarification given by the noble Baroness, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

6.15 p.m.

Earl Russell moved Amendment No. 36C: Page 3, line 38 after ("made") insert: (" (bb) prescribed the maximum total liability which may be incurred by any person as a result of a loan, which shall be not more than twice the amount in financial terms of the total of the loan paid to that person during their period of study; ").

The noble Earl said: This amendment originates from my noble friend Lord Grimond, who offers his apologies to the Committee. He has been in hospital and is unable to be present today.

The purpose of the amendment is to protect students against the effects of rampant inflation. I know that it is government policy to reduce the rate of inflation to zero, but it is a policy in which they have not yet achieved success. One of the unrealistic features of this scheme is the extent to which it is based on an inflation rate calculated at a greatly lower figure than is currently applicable.

I know that the noble Earl will reply that the debt remains constant in real terms but as the noble Lord, Lord Peston, said earlier, real terms never paid any bills. If a student enters the teaching profession, as many do, where salaries consistently rise at a lower rate than inflation, a debt which was light when it was incurred becomes extremely burdensome. I hope the noble Earl will take that into consideration. I beg to move.

The Earl of Caithness

I was sorry to hear the sad news about the noble Lord, Lord Grimond, and I hope that the noble Baroness, Lady Seear, will pass on the very good wishes of the whole Committee to her noble friend and, on our behalf, wish him a speedy recovery.

Noble Lords

Hear, hear.

Baroness Seear

I am grateful to the noble Earl for those remarks and of course I will do as he requests.

The Earl of Caithness

I hope the noble Lord, Lord Grimond, was well enough to see the great triumph on Saturday afternoon at Murrayfield, which so many of us enjoyed.

The amendment seeks to ensure that under the effect of indexation the debt can never grow in cash terms to more than double its original value. It is likely to have practical effect only if a graduate defers repayments for some years during a period of high inflation. The debt would then cease being indexed for inflation and would be frozen in cash terms: in other words, it would progressively diminish in real terms, even if no repayments were made.

Our intention is to be even-handed as between the borrower and the taxpayer. Indexing the sum outstanding in line with inflation ensures that the sum repaid is the same, in real terms, as the sum borrowed. The result is that neither the taxpayer nor the borrower profits from the effects of inflation.

However, the amendment would operate to the detriment of the taxpayer. Some graduates would see their debts shrinking in real terms. This would not, however, be a general benefit because the effect would result only from a particular combination of circumstances. I can see no equity in that, either for taxpayers or graduates and I am sure that, on consideration, the Committee will not see the equity either. Therefore, I hope that the noble Earl will withdraw his amendment.

Earl Russell

In the past I have expressed the view that the noble Earl has surprised me. This time he has not. That reply was completely predictable. I cannot regard it as entirely satisfactory. It does not seem to have absorbed the problem behind the amendment. However, at this time of night and with so much business in front of us I ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Darcy (de Knayth) moved Amendment No. 37: Page 3, line 38, leave out ("and").

The noble Baroness said: In moving this amendment I speak also to Amendment No. 38 which contains the substance of my proposals. I also speak to Amendment No. 47, in the name of my noble friend Lord Henderson of Brompton, because they are grouped together. I fully support his amendment. The repayment of loans by students with disabilities must take account of, first, their reduced earning power and, secondly, their reduced disposable income because of the extra costs of disabled life. I will not enlarge on that amendment because my Amendments Nos. 37 and 38 deal specifically with education costs as opposed to daily living, and it is important that the issues are kept entirely separate.

All three amendments have all-party support. They are also supported by the All-Party Disablement Group, the Association of Disabled Professionals, Skill, the RNID, the RNIB and RADAR. The amendments establish the principle that disabled students should have their educational needs adequately met from sources other than their maintenance grants or loans and thus be free to use the latter on their maintenance— for example, board, lodging and leisure— in exactly the same way as any other student. The Government have acknowledged that in some cases the education costs of disabled students are in excess of the allowance for disabled students.

There have been encouraging moves. As the noble Baroness, Lady David, said at Second Reading on 27th February at col. 644 of the Official Report, the Minister in the other place said at Report stage that the intention was to make a statement before the Bill completed its passage through Parliament. Therefore, I very much hope that the Minister will be able to say something cheering about the upper limit of the DSA and other arrangements connected with it, and also about the repayment of loans.

While the DSA is a very useful way of covering the extra education costs of disabled students, there are a number of problems associated with it which I should like to outline briefly. First, the maximum amount payable is £ 765 a year. While that is sufficient for some students, it is not enough for many others and far too little for a very small number of students. The RNIB, the RNID and the Snowdon Award Scheme, all of which give grants or bursaries to students who cannot manage on the DSA alone, estimate that there are about 300 students a year who need more than the current maximum level of the DSA.

The RNID reckons that only a small handful would need more than £ 5,000. The DSA should be more flexible and capable of responding to the actual education needs of the individual student. Many students do not know about the DSA. My noble friend Lord Snowdon, who began his award scheme in 1981 , confirms that. He has asked me to say that he very strongly supports these amendments. He is very sorry that he had to leave before they were called because he hoped to speak to them. I hope that the DSA can be better publicised.

The allowance is distributed inequitably because LEAs follow different practices. We need clear guidelines. I hope that the Minister will be able to say something positive on that matter. For instance, it would be helpful to spell out that the DSA can be paid as a lump sum at the beginning of a course and that it can be used to fund human support as well as technical support because some LEAs appear not to know this.

The DSA is means tested. The All-Party Disablement Group and disabled organisations feel that it is essential that the allowance should be freed from means testing and based on assessment of need. At present those who are not in receipt of a mandatory grant cannot get the DSA however high their education costs. Others do not receive the full amount even though in some cases they may need a very much larger sum because it is assessed in conjunction with the mandatory grant. My impression is that we do not need primary legislation to free the DSA from means testing. I hope that the Minister can confirm that and perhaps even say something encouraging about freeing it from means testing. If not, perhaps he can point out what would need to be amended. I feel that is important and I hope that he will answer the point in his reply.

I wish to make two other points. The All-Party Disablement Group and disabled organisations feel that it is very important to have a fourth access fund to fill the gaps that the DSA cannot plug. The Govern ment have been less keen on a fourth access fund. I shall leave it to others to go into its advantages. I hope that the Minister will be able to say something more positive about it or perhaps we can discuss the matter before the next stage of the Bill.

I am very glad that, as the noble Earl explained at Second Reading, at col. 605, disabled students will remain eligible for unemployment benefit, income support and housing benefit. However, there is one problem I wish to ask him about. In the new draft social security regulations of the DSS, a disabled student is defined as one who qualifies for income support disability premium or severe disability premium. In practice that means that some students, particularly deaf students and those with arthritis or dyslexia, may not be eligible for benefit. I imagine— I certainly hope— that that is a mistake which can be rectified while the regulations are still in draft form. I look for reassurance from the Minister on that point.

To sum up, if the education costs of disabled students are to be properly met, the DSA needs to be more flexible with a higher maximum level, better publicised, more evenly distributed and freed from means testing. I very much hope for a positive and encouraging reply from the Minister. I shall also be interested to hear what he has to say about a fourth access fund to fill the gaps. I beg to move.

Lord Henderson of Brompton

I wish to support what my noble friend said concerning Amendments Nos. 37 and 38. I shall confine my remarks to Amendment No. 47 which is grouped with her amendments. The common aim of our amendments is to enable disabled people to have access to higher education like other eligible people who are their peers. I emphasise that it is not to confer privileges on them. I say that because a superficial reading of my amendment might give the impression that we are seeking privileges for disabled people. We are seeking to remove disabilities in order that they may act like other people.

Disabled students start with the handicap of extra costs; in some few cases they are very high costs indeed. These amendments seek to remove those handicaps of extra costs in a variety of ways. We are speaking of quite small numbers. I believe that the disabled student population is something of the order of 3,000 and only about 10 per cent.— those of whom we are speaking— are very severely disabled. Even of those only a handful— quite literally perhaps 10 to 15— at any one time require very expensivea electronic treatment and so forth. So we are not speaking about unmanageable sums of money or very large numbers of people.

Following the White Paper but before the Bill was published ample warning was given to the Government that special provision should be made for disabled people. Unfortunately, the Bill was published without the Government having had regard to that advice. However, sympathetic noises have been made in another place. I go further and call those sympathetic noises "promissory notes" given by the Under-Secretary of State responsible for higher education. I am sure that the Committee is looking for those promissory notes to be honoured in amendments. If they are not honoured in amendments, which I very much hope for, then at least cast-iron undertakings should be given.

As my noble friend Lady Darcy (de Knayth), has covered the need for greater flexibility in the management of the disabled student's allowance and the proposal for a fourth access fund, which I strongly support, dedicated to disabled students, I turn instead to my amendment which, as my noble friend said, has all party support. My noble friend Lord Snowdon was here this afternoon and on the previous day in Committee, but unfortunately he had to leave before the amendment was called. He would have liked very much to have spoken in support of it.

Amendment No. 47 seeks to ensure that the special needs of disabled students or graduates are taken into account by regulations in three main respects. First, their earning prospects are undoubtedly lower than for most other people. Secondly, their living costs are most certainly higher. Thirdly, it is important that there should be flexibility in regard to the terms and conditions of loans which take into account their special circumstances.

I illustrate this point by referring to repayments. It is entirely unrealistic to expect severely disabled students to be able to repay loans as graduates at the same rate as other students if only because of their extra disability-related costs of living. A disabled graduate may indeed have an income of 86 per cent. of the national average like other graduates, but after deduction of his disability-related costs his dispoable income may be perhaps 75 per cent. of the national average. On that ground alone there should be a different threshold for severely disabled graduates.

The Minister made an agreeable noise in another place on 15th February, at col. 548 of the Commons Official Report. He said that he would look into what I would call the unanswerable case for alternative provision to be made for the repayment of loans in the case of disabled graduates.

People with disabilities face a much higher possibility of unemployment, as is implied in Amendment No. 47, or unfortunately lower paid employment than other graduates. That is sadly borne out in unmistakable terms by OPCS surveys. Higher living costs and lower earnings than other graduates are two compelling reasons for making regulations as provided for in Amendment No. 47. I hope that such regulations, if not accepted by the Government in my amendment, will be brought forward by them at the next stage of the Bill.

I must revert to the disabled student's allowance which was extensively dealt with by my noble friend Lady Darcy (de Knayth). I add my plea to hers that the Government should discontinue means testing for disabled students. I ask the Government to provide that a local authority payment to a student to defray the costs attributable to his disability, which are incurred in the course of higher education, should be disregarded when applying this or any other enactment when regard has to be had to the disabled person's means. Nothing less than that will do. Like my noble friend, I hope for a positive answer on that score.

I have been brief. I do not believe that I have spoken for the 13 minutes shown on the clock. There must be some mistake there. In these amendments we have been debating whether to enable disabled people, by payments or adjustments, to participate in what should be theirs by right; that is to say, higher education with their peers. As a society we surely cannot say that time is too short or that the Bill is too tightly drawn for anything to be done. The means must be found in the Bill in this place. I commend the amendments to the Committee.

6.30 p.m.

Lord Addington

I add the support of all on these Benches for this group of amendments. The amendments aim to give support to disabled people when they attempt to enter higher education. If we are to make higher education available to all, as the Government have said— I hope that they are sincere in that wish— everyone should have access to it. The disabled can contribute to our society provided that they have the correct training. They often have to have the highest form of training to enable them to earn a living because the most ordinary forms of economic employment are unavailable to them. When we give them support to enable them to take part in higher education we should do so in a way that does not discourage them. We should also ensure that they have all the support that they need to achieve those aims.

We are facing a demographic downturn. We should look to all sections of our society to make up that economic gap. We should also allow people to fulfil their maximum potential in any field.

There is one group of disabled of which I am capable of speaking with some authority. I am talking about dyslexics. I am a dyslexic. I recently went through higher education. That was made possible only because I was given access to a typist and was allowed to dictate my essays straight on to the typewriter so that I could read them back. The same applied to examinations. That concession was allowed me and I was given funding for it. That was a comparatively small concession, but it enabled me to complete the course. Without it I should have been unable to do so.

Dyslexia is regarded as a hidden disability. I am probably the last person who would be thought of as disabled if I were seen walking down the street. That is one example of one group of disabled people. If we give disabled people a little help, they can achieve a considerable amount. Problems can be overcome. One should allow people to undertake their academic studies on equal terms. Anything that gives the disabled the same opportunity as others must be welcomed because it is beneficial to society and the individuals involved.

Baroness Faithfull

I wish to ask my noble friend the Minister about the access funds. The Committee will be aware that a cash-limited fund was set up under another Act of Parliament. That was the Social Fund. It was cash-limited. Two people had their right to cash turned down. The case was brought here, and this place ruled against the Department of Social Security.

Let us suppose that the access fund runs out. If disabled students apply to the access fund what will happen with a cash-limited fund when there is no money? Secondly, the Committee should know that the speeches made and the amendments relating to disabled students are supported by the National Union of Students.

Lady Kinloss

I support the amendments. I shall speak in particular to Amendment No. 47. Disabled graduates are likely to have a lower disposable income because of having to meet the extra costs of the disability. They will also have more difficulty in finding full or part-time work in the vacations in order to minimise their borrowing. The costs of disability can make large inroads on an individual's income.

If graduates are to repay student loans at rates set according to their earnings rather than their disposable resources, disabled people will amost certainly face considerable hardship.

I should like to give the example of a severely disabled microbiology graduate working in a pathology laboratory in a London hospital. It illustrates the point clearly. From a take-home pay of £ 125 a week, that graduate has to pay £ 30 a week for a helper to attend to his basic personal care needs to enable him to go out to work. That leaves £ 95. If that graduate has also to repay the loan, he will not be left with much to live on in London. Will the Government consider freezing the loan when a disabled student has finished his or her degree or course against any rise in the cost of living?

I support the idea of a fourth access fund, which has already been mentioned by my noble friend Lady Darcy (de Knayth) and the noble Baroness, Lady Faithfall. If a separately administered fund were set up it could be used for adaptations and equipment at the institution concerned as well as to provide support for the student. If it were used for adaptations and equipment in institutions, they could also be used for future generations of students.

The Minister in another place said that the Government would consider the suggestion that there should be a special access fund. Have any further discussions on that subject taken place? Although the Government have said that disabled students will be able to continue to receive benefits, some disabled students will find that they are unable to claim those benefits. As my noble friend Lady Darcy (de Knayth) has already said, that is particularly so in the case of deaf students unless they have additional disabilities. That is contrary to assurances given in another place in Committee and on Report, and so I look forward to hearing what the Minister has to say on that point.

I am glad that registered blind students are automatically included for benefit, but it is rather strange that one disabled group should receive those benefits and not another.

Lord Beloff

Having put my name to Amendment No 38, I should like to make it clear that I support the entire group of amendments. On the face of it Amendment No. 38 seems to be so unexceptional that I cannot even imagine the arguments that the Government might have for not accepting it.

This Bil has been described as unique in a variety of ways I have just thought of another way in which it is unique. It is the only Bill that I can remember coming before your Lordships at Committee stage without a single government amendment. To the best of my recollection, this has never happened before and it is very surprising because, as various noble Lords have pointed out, the issues that we are discussing now with regard to the disabled were raised in another place. Various pledges of greater or lesser significance were given that these would be dealt with in this Chamber. But we are now on what we are told is the last Committee day that we can have and we still have no indication that appropriate amendments are to be forthcoming.

I very much hope that the noble Earl the Minister, when he comes to reply, will tell us that possibly the Report stage might be postponed for a week or two in order to enable the Government to meet the various points that have been made. Clearly it would not have been necessary to raise these points if greater thought had been given from the very beginning to the complications of a Bill of this kind.

First, as illustrated by our current concern with disabled students, and indeed as was illustrated when we were dealing with students in areas of high housing cost, students are not numbers on a computer. They are individual persons with greatly varying needs, and a Bill which is to deal with their financing— and we are told that it is to be of permanent duration— ought to take into account, or should have taken into account, all the problems that arise with respect to particular classes of students, of whom the disabled students are the ones before us.

There is also the complication, which will obviously figure again in the Minister's reply, that hitherto a great deal of the financial burden of giving disabled students what they require in order to put them on a par with their peers has been borne by another department of government. It has not normally fallen on the education budget. If it is to be now a fourth access fund— and we are waiting to hear whether or not this fourth access fund is to come into existence— then it becomes part of the education budget and this ought to be clearly spelt out in the Bill.

The point of Amendment No. 38 is, as I said, so simple that it is difficult to see how the Government can possibly disagree with it. They have said all the time that the loan is to be maintenance. Maintenance means having a roof over one's head, eating meals, and so forth. There is nothing to suggest that disabled students eat less or require less shelter or fewer clothes than other students. Even if we assume that they have no extra needs in relation to their maintenance— and that is arguable— it will still be the case that they ought not to have to take out of their maintenance anything that goes towards their special needs as disabled students. That is all this amendment says and I shall be flabbergasted, if I may coin a phrase, if the noble Earl the Minister cannot accept it.

Baroness David

I should like to support these amendments. My name is to the first two and it would have been to the amendment of the noble Lord, Lord Henderson, if there had been room to put it on. Unfortunately, it was a competition to put names to that amendment.

I spoke at Second Reading at certain length about the disabled and I should like to thank the Minister for responding to some of the points I made. But he did not say what would be done. I agree with the noble Lord, Lord Beloff, that it is very surprising that, after the Bill has been through all its stages in another place and we are now on the second Committee day, the Government have said that they are going to do something but are being totally secretive about it. It would have been a great help, and would have shortened these proceedings a great deal, if we had had some government amendments or had been told what they will do.

It is a good thing that the DSA exists, but I do not think it works altogether well in every circumstance. The different LEAs treat it in a different way, and the same sort of disability may be given more or less money in a different authority. Furthermore, sometimes it is paid a year in arrears, not at the beginning of a year, which is not very satisfactory.

I should particularly like to press for the fourth access fund, which has been mentioned already by several noble Lords, The position is that disabled students will be able to apply for the access fund, but it will be on the same basis as all the other students and not necessarily an incentive to help the disabled. But if the fourth separately administered fund was set up it could be used to fund adaptations and equipment at the institution, as well as providing support directly to the students, allowing staff and students to work in partnership to set up the most appropriate support.

Mr. Jackson said on 15th February this year that the Government would consider the suggestion that there should be a special access fund. We have talked about the access fund already today in relation to housing. The access funds that exist will have a tremendous demand upon them. I hope that the Minister will tell us that there will be this fourth special fund. What we have to remember is that there are not very many disabled students and the numbers who applied for the disability allowance were not great. It is not very large sums of money that we are talking about. I hope very much that if I sit down now we shall hear some good news from the Minister.

6.45 p.m.

Earl Russell

Very briefly, I should like to add my name to those supporting these amendments. One of the values of going to university is that you meet all sorts of people, so one of the great arguments for keeping up the number of disabled students is that it is a better education for everybody else. It is the same argument as for mature students.

I should also like to point out the effect of the growth of information technology. To take one example among many, the microfilm reader printer now makes it possible for a disabled person to do a ph.D. based on the study of manuscripts in areas where this would have been quite impossible 20 years ago. So this opens up opportunities for the disabled. But those opportunities cost money, so the amount of money that could be needed is going up quite rapidly.

On the subject of Amendment No. 47, there is an argument of public expenditure. It is in the interests of the Exchequer that people should go to work whenever possible. I imagine, though I hesitate to speak on it, that it costs a certain effort of will to go to work in these circumstances. Incentive is something which is not to be sneezed at and which might be worth providing. I have one final point to make and then I shall sit down. Has any thought been given to what happens to those who become disabled after their graduation and are left with a debt?

Lord Milverton

I too should like to add my support to these two amendments and also to Amendment No. 47, in the name of the noble Lord, Lord Henderson. I hope that Her Majesty's Government will be able to accept them because, as has been said, they are very reasonable and it is not as though there are thousands and thousands of disabled students who would benefit.

The Earl of Caithness

Before I reply to the points that have been made I should like to welcome the noble Lord, Lord Henderson of Brompton, back among us. I am delighted to see him. I hoped very much that with his experience he would be here this evening and we are very pleased that he is.

The circumstances of disabled students and disabled graduates have been the subject of much debate. Several amendments, as your Lordships know, were put forward in another place and I should like to pay tribute to those Members who brought them forward for discussion, as indeed I should like to pay tribute to those of your Lordships who have contributed to our discussions today. Having carefully considered all the representations and having reviewed our proposals in their light, we believe that we have identified a way forward. That will be good news for the noble Baroness, Lady David, who has been waiting on tenterhooks since my letter for a final decision. I shall explain in detail our responses to the various suggestions that have been advanced.

First, let me turn to the amendments. Amendments Nos. 37 and 38 would require regulations making unspecified provision to ensure that disabled students do not use the loan to meet, educational costs arising from a confluence of the disability of a student and the demands of a course". The loan is intended to meet students' living costs. That applies as much to disabled students as to any others. But it makes little sense in practice to differentiate between educational and living costs, particularly in the case of persons with disabilities.

Depending on their circumstances, disabled students will have a portfolio of resources, and from several different providers. Those which are not tied to meeting specified kinds of costs are likely to be used to help meet the totality of a student's needs. Moreover, the implementation of regulations in line with this amendment would be time-consuming, costly and likely to lead to many disputed cases. It would be impracticable to ensure that students did not use their loan money to cover any educational costs. Would there be a penalty if the loan was used for educational costs? If that was the case, I put it to Members of the Committee that it would be a nightmare.

We believe that we should not specify for any student what the loan may or may not be used to buy. That is a matter of individual choice. In the light of that principle, and given the problems which I have just enunciated, we consider that the amendment would create more problems than it would solve.

From autumn 1990, we intend disabled students to receive three sources of support: basic grant, additional allowances, and benefits. Benefit entitlement will not be withdrawn from disabled students. They will still be able to claim housing benefit in term-time and the long vacations, income support in the long vactions and disability benefits, should they be elegible. We are confident, too, that the charitable and voluntary organisations will continue to play an active role, for which we are all most irateful.

From the autumn, in addition to the existing sources of support, disabled students will be able to make use of the loan facility, initially worth £ 420 for a student studying outside London; and they will also be candidates for assistance from the access funds, to be administered on a discretionary basis by the institutions.

My noble friend Lady Faithfull was especially conceined about the question of a fourth access fund and she, among other Members of the Committee, will know that we are looking carefully at the size of the access funds in the light of the many representations received. Although I understand her concern, I put it to her that it is perhaps a more fruitful approach to look at the value of the access funds than to establish a separate, earmarked access fund. I believe that the educational institutions will be in far the best position to judge the needs of their students.

My noble friend also raised the question of the cash limit. If one had a fourth fund one would be more likely to have the cash limit about which my noble Friend is so concerned.

Nevertheless there remain two major concerns about this enhanced package: that the level of support, particularly the additional allowances for disabled students, may still be inadequate; and that the loan will be more difficult for disabled graduates to repay. The first is a concern about the position of disabled students while they are studying; and the second about the position of graduates who are disabled while loan repayments are due. I shall consider each separately.

There have been several representations about the level and operation of the disabled students' allowarce. We have reviewed its purpose and operation, and have concluded that the existing provision is appropriate for the majority of those eligible to claim for such items as special diet, clothing heating or basic equipment costs. However, there are some who need rather more sophisticated facilities, such as radio aids, for which the present ceiling is rather too low. A small minority need special equipment such as word-processors with braille printers, or personal helpers such as sign language interpreters, and the ceiling is much too low to accommodate the cost of such facilities.

My right honourable friend the Secretary of State announced today that the basic ceiling for the disabled students' allowance in 1990–1991 will be raised from £ 765 now to £ 1,000 a year. That is a 30 per cent. increase. I should say that the allowance will continue to be means tested. The reason for this is that it is right that the Government should target the resources they have at their disposal at those most in need. That is the purpose of means testing. However, there is good news. In addition, two new allowances will be introduced: one is for specialist equipment up to a value of £ 3,000 in total for the duration of the course. That news will be especially pleasing to the noble Lord, Lord Addington, in view of the problems he suffered. It meets the very concern he mentioned. The other is for non-medical personal helpers and is worth up to £ 4,000 a year. The DES will take steps to ensure that local education authorities and disabled students are fully aware of the new arrangements.

I was concerned to hear that some people are saying that the local education authorities are not getting the message across. I shall take that message back to my right honourable friend and ensure that we get this new and very generous proposal for disabled students properly into the public domain. Parallel improvements will be made for Scotland and Northern Ireland.

I am sure that Members of the Committee will welcome this substantial uprating of the resources available to disabled students. The increase in the basic allowance will give disabled students additional resources where needed to help meet costs incurred as a result both of their disability and attendance at the course. It specifically responds to the concerns which lay behind the tabling of Amendment No. 38.

The additional allowances for equipment and personal help will be a boon to those students who need complex personal communication aids, notetakers and interpreters. It should be of particular help to deaf students, to whom the noble Baroness, Lady Darcy (de Knayth), paid special attention. We hope that this reform will encourage disabled people to take full advantage of higher education opportunities, and on equal terms with their non-disabled peers. That is something of which I am sure we all approve.

I turn now to disabled graduates, the basis of the amendment put foward by the noble Lord, Lord Henderson of Brompton. Representations have also been made about the disposable income of disabled graduates. The argument has been put foward that they face additional costs because of their disability, and have less disposable income out of which to repay a loan than a non-disabled graduate with the same gross income.

I should tell the Committee that my right honourable friend has also announced today a measure to extend protection to disabled people receiving disability benefits. We intend that income from disability benefits will be disregarded for the purposes of assessing an individual's eligibility for deferment. In other words, only income net of benefit will count towards the assessment. That means that, if a disabled person's income is lifted above the deferment threshold as a result of benefit income, but would remain below the threshold if the benefit income is discounted, then that person will remain eligible for deferment.

That is equivalent to increasing each individual's deferment threshold by the value of his benefit income. It has the major advantage that it targets assistance specifically at those who are judged by the social security system to need it most. I hope that this will be welcomed as the most appropriate solution to the problem.

In conclusion, perhaps I may summarise the proposed changes: we shall increase the general level of the disabled students' allowance by 30 per cent; on top of that, we shall introduce additional allowances— namely, £ 3,000 for specialist equipment during a course, and £ 4,000 for non-medical helpers; and, to help the disabled with loan repayments, we shall disregard disability-related benefits in assessing the 85 per cent. threshold for deferment. I hope that Members of the Committee will welcome those measures.

Baroness David

Before the noble Baroness replies, I should like to ask the Minister a question. Of course we are very pleased to hear about the increased grants. However, will they be administered by the local authorities? I ask this because, apparently, in some cases, authorities have not been very generous in this respect up until now. Further will the grants be paid in advance of the academic year rather than in arrears as is sometimes the case at present?

The Earl of Caithness

On the second question I should say that that is very much dependent upon when the student feels he needs the particular benefit. Although one would wish to get the money to the student as soon as possible— and I fully appreciate that fact— it is not possible to do so until he knows what he wants. Indeed, it may be at the beginning of the course or at some stage thereafter. I can assure the noble Baroness that it wilt be done as soon as possible. As regards her first point, perhaps I may write to her specifically on the matter.

Lord Henderson of Brompton

Before the Minister sits down, I should like to ask him a question about the second part of the package, which, incidentally, I warmly welcome. I refer to the disregard and the loans. Is it something which can be done without amendment to the Bill, or will an amendment be required at a later stage?

The Earl of Caithness

As I understand it, this will be done by regulations and therefore there will be no need to amend the Bill. Perhaps I may come back to the point of the noble Baroness, Lady David. Local authorities will look after the grants.

7 p.m.

Baroness Darcy (de Knayth)

First perhaps I may thank all noble Lords who have given splendid support. Not a single voice was raised against the amendment, but then as the noble Lord, Lord Beloff, said, it was a totally reasonable amendment. I thank the Minister. At first I was slightly disappointed in his package but he certainly knows how to build up to a crescendo. He times himself very well. I was disappointed at his only raising the level of the DSA to £ 1,000 because, as organisations have pointed out, 300 students probably need in excess of the amount, or between the £ 500 and the £ 1,000 level. However, it is very good news about the £ 3,000. Am I right in saying that this is not per annum but £ 3,000 for specialist equipment for the whole course? The noble Earl nods. It is up to £ 4,000 in human support per annum. I believe that that is right and it is pretty good. I thank the noble Earl for that. I am delighted that this will be publicised because it is very important.

I may have missed the point, but did the noble Earl say anything about guidelines? Did he mention what the equipment could be used for so that LEAs will distribute it more equitably? That is important. The noble Earl suggests that there will be guidelines. Good, that is excellent. I thank him. Did I miss means testing or did the noble Earl mention it in connection with the DSA, and freeing the allowance from means testing?

The Earl of Caithness

I mentioned that the DSA would continue to be means tested. The reason is that within the limited resources it is right that the Government should target the allowance at those most in need. That is its purpose and that is where we shall be able to get the money to those most in need.

Baroness Darcy (de Knayth)

In a way I thank the noble Earl for that reply. It makes the matter clearer. However, I agree with my noble friend Lord Henderson of Brompton who put the case strongly. He summed up by saying that nothing less than abolishing the means test would do. We need to respond to the individual education needs of the disabled student. I wonder whether the noble Earl will consider discussing this further with us. I see that he is nodding which means that he will speak to us about possibly freeing the DSA from means testing. That is great.

Would the noble Earl be willing to discuss further the fourth access fund? There are merits in the argument but he still does not seem much warmer about it than Mr. Jackson in another place. As the noble Baroness, Lady David, said, the individual piece of equipment could be used for the college and would be available for future students. I can understand that with the disabled student competing against able-bodied students with help from the other access funds, the inclination would be for the institution to give help to individual able-bodied students rather than the one disabled student who might have a greater need. Will the noble Earl nod and say that he might even discuss that further as well?

The Earl of Caithness

Perhaps I should rise to my feet to give an answer. I certainly say to the noble Baroness that of course my door is open. We could perhaps look at the package in the cold light of day. If the noble Baroness or the noble Lord, Lord Henderson of Brompton, have any concerns I should be happy to discuss any of the issues. However, when we examine it overall and take into account what we are doing as opposed to having a fourth access fund, I believe that the noble Baroness will understand why I am colder on that but warmer on other suggestions.

Baroness Darcy (de Knayth)

I thank the noble Earl very much. That is helpful. I agree that we need time to examine the whole package and that we shall have to pursue certain matters. Before I finally say that I am gxateful and beg leave to withdraw the amendment, the noble Earl did not mention deaf students and the definition of a disabled student. I mean the deaf students, the dyslexics, the arthritics and so on who are not eligible for income support disability premium and income support severe disability premium. Consequently they would not be eligible for housing benefit and other allowances.

The Earl of Caithness

I apologise to the Committee, I did not cover that point. It is at the moment in draft regulations relating to student social security entitlement which are currently being considered by the Social Security Advisory Committee. Of course I shall draw what has been said today to the attention of my right honourable friend the Secretary of State.

Baroness Darcy (de Knayth)

I am grateful to the noble Earl. I believe that it is peculiar and unjust to treat students who, for example, are blind and those who are deaf in different ways when both have high extra costs. I thank the noble Earl quite a lot for the package. I welcome some parts very much. I am more lukewarm towards other parts. I thank him enormously for his response to the suggestion of further talks with us. I beg leave to withdraw my amendment.

Amendment, by leave, withdrawn

[Amendment No. 38 not moved.]

Baroness Blatch

I believe this would be an appropriate time at which to break for dinner. I suggest that the Committee stage be resumed not before five minutes past eight. I beg to move that the Ho use do now resume.

Moved accordingly, and, on Question, Motion agreed to.

House resumed.