Education (Student Loans) Bill

HL Deb 29 March 1990 vol 517 cc980-1033

3.51 p.m.

Read a third time.

Clause 1 [Loans for students]:

Lord Peston moved Amendment No. 1: Page 1, line 6, after ("students"), insert ("over the age of 18 years").

The noble Lord said: My Lords, I move Amendment No. 1 which stands alone. However, in order to assure noble Lords that I am anxious to proceed as rapidly as possible, perhaps I may say that much which concerns me under Amendment No. 1 also arises under Amendment No. 11. I shall therefore not delay noble Lords very greatly when we reach Amendment No. 11.

On Amendment No. 1, your Lordships will recall that I remonstrated very strongly with the Government when they introduced an amendment connected with the Consumer Credit Act 1974. I argued that it was a very difficult matter. I thought that it was fundamental and I asked for more time. It was denied to me and to other colleagues who were interested in the matter. Three days have now passed and I have had time to try to understand the subject further. I shall raise certain matters which I believe will make very clear that as a result of three days' work I understand only how little I understand. I therefore remain convinced that I was right to ask the Government for more time to explore these matters further.

This is a probing amendment and it is not my intention to divide the House on it. The aim is to make clear some of the difficulties, in particular difficulties for someone like myself who is interested in education matters and student loans but who is a very long way from having expertise in matters to do with consumer credit.

First, let me say that my reading of what little I have been able to understand absolutely convinces me that we are not dealing with a minor and technical matter. I believe that the moment we open up the question of making loans to young people under 18 we are on a slippery slope. I am not sure which is the worst of the cliché s but that one will do for the moment. Let me therefore ask these questions. I shall put the points forward and hope for some response.

The noble Earl, Lord Caithness, instituted an amendment essentially to do with the provision of information to minors and its connection with consumer credit. That is what I understood the amendment to be about. I assumed— perhaps not immediately; it took me at least 48 hours to consider this point— that schools or some young people have already been sent documentation to do with the forthcoming loans scheme. Have they been sent such documentation to do with the forthcoming loans scheme? If any of those young people are under 18, have those who have been sending such documentation to sixth formers been acting illegally under the Consumer Credit Act 1974? I do not have to remind noble Lords that the Bill that we are discussing at the moment is not an Act. So the question that comes immediately to mind is: what has been going on? If they have not been sent any documentation whatever on the matter, there is a paradox— are they ready to respond to the scheme? Either way, that is the problem that emerges.

However, I have also been told that it is not a matter of documentation but of whether it is possible for the Student Loans Company to make loans to under 18 year-olds. I am told that the point is that it is not legally impossible for them to do something: the real problem is whether the debtor is under an obligation to discharge the indebtedness. I am also told that where that arises in connection with loans to minors from, say, a bank— not that I assume that that happens often— then a guarantee of indemnity is required from a third party. A commercial bank would certainly require that.

I have also been advised of many factors that I do not understand concerning what happens with guarantors of indemnity; what happens if they fail; the recovering of the loan and so on. I do not understand them. In a sense, that is all right because essentially all I need to ask is whether the issue has been thought through in connection with the Student Loans Company.

In England and Wales, a student of 17 years is fairly rare and he will be 18 before long. A student of 17 years and 10 months will become 18 two months later, say, by December in his first term. Does that affect his position vis-à -vis a loan? I do not put these questions forward on the assumption that there are no answers. I assume that there must be answers from experts. I put them forward in order to make it clear that it is not a trivial matter and that we ought not to have hurried our debate on it.

I have been informed— and I must emphasise that I do not normally proceed in this manner in your Lordships' debates; I endeavour to acquire some confidence in what I say but I do not have such confidence on this matter— that the situation in Scotland is also worse, and different. On Monday the noble Earl, Lord Caithness, remonstrated with the noble Lord, Lord Addington, on the question of Scotland. I was very disappointed that he did not remonstrate with me also. I deserve every bit of remonstration. Until I was told about these amendments, I had not thought of the problem of 17 year-olds. When I said that I was unprepared and ignorant, I really meant that. It had not occurred to me. I agree that perhaps I should have thought it through; but I had not. The fact that I had not thought it through reinforces my view that I should have been given more time to think it through rather than be told that everything is all right.

I gather that in Scotland more young people go to university at 17 than in England. The situation is therefore less atypical. I am also told that the legal position in Scotland is different. There are questions of having parental permission to take out a loan which have to be faced up to. Therefore in so far as the student loans scheme applies to Scotland, among the various pieces of paper to be discussed must be a paper referring to parental permission, and such matters. The exact advice that I have been given is that without parental consent in Scotland a loan to a minor is completely void and can be cancelled at any time. That is also rather worrying.

Let me repeat that I do not say that there cannot be answers. I do not say that the Government will not in due course be in a position to answer these matters. But I have to ask noble Lords generally whether we can have confidence that the Government have properly thought through the implications of the Bill for minors, having brought this forward at a late stage. Have they really thought through the problem as it would affect minors in Scotland?

I do not raise these as wrecking matters. I accept that if the Government wish to have a student loans Bill, they must have one. That is up to the Government. However, I believe that on such a matter the Government ought to have given us more time and ought at this moment to be able to offer rather more than definitive statements as answers to my questions. I beg to move.

Lord Boyd-Carpenter

My Lords, I have a great deal of sympathy with the noble Lord, Lord Peston, being puzzled by certain aspects of this matter. As I am sure will become very apparent to your Lordships, I fully share that puzzlement. It is difficult for your Lordships' House to discharge its duties as a revising Chamber when it has to deal with matters of this complexity at such extremely short notice.

If the noble Lord, Lord Peston— whose energy and enthusiasm are so manifest— is unable to sort out these matters between the time of the announcement and today, it is not unreasonable to infer that there must be a good many others of us who are in a similar position. I hope that my noble friend the Minister will realise that from the point of view of the treatment of this House and the treatment by the House of legislation this is not a satisfactory situation. It derives to some extent from the Government's extraordinary haste in dealing with the Bill. I do not blame my noble friend for that— I know that the decision does not lie with him— but had the Government allowed a little more time to review the matter they would have emerged in the end with a better Bill.

I have only one point on the merits and I should be grateful if my noble friend would deal with it. If I understand the Bill aright— and that is a hypothetical question— all the provisions of the Consumer Credit Act 1974 remain in respect of those under 18— minors— unless they happen to be students. If they happen to be students of a certain category and kind as defined in the Bill they are taken out of the protection of the Consumer Credit Act. If that interpretation is right— and I should value my noble friend's answer— I should be grateful for an answer to the consequential question: what is the justification for that? If it is right to protect minors from the risk of becoming indebted when they are at an age where they may not fully understand the effect of the obligations they are taking on— and it has apparently been the position which our law has adopted since 1974— is it sensible or socially right to take out of that protection the limited number of minors who happen to be students? The question requires an answer.

4 p.m.

Lord Addington

My Lords, I feel obliged to speak to the amendment, not only because my name is to it but because in the small hours of Tuesday morning while we were still in Monday the noble Earl asked me why I had not noted the number of 17 year-old students in Scotland since I had left university there only recently.

I point out to the Minister that I had assumed that the Government would manage to correct such a fundamental error as a group of people being affected by the Bill illegally. I too have a limited knowledge of consumer credit. I made the assumption that the Government would at least base their provisions on the Bill working in conformity with the rest of the law of the country.

As regards those under the age of 18 becoming indebted, I am opposed to that. I have seen many quite appalling cases of 18 and 19 year-olds not being able to handle their finances satisfactorily in their first year at university. All those protections provided by law are probably not only necessary but should be strengthened in some way. Thus I put to your Lordships' House that the issue of minors should have been addressed long before this. We definitely need more information on it.

Baroness Young

My Lords, we shall all listen with great interest to the answers that my noble friend gives to the noble Lord, Lord Peston. He has raised at least four questions about the Consumer Credit Act. I rise to speak now because some parts of the answers were clearly given by my noble friend last Monday night. Perhaps I may say to my noble friend Lord Boyd-Carpenter that it is a pity he was not here to listen to the quite lengthy discussion which we had on that occasion.

Lord Boyd-Carpenter

My Lords, will my noble friend allow me to intervene? Does she agree that it is also a pity that important matters of this kind on an important Bill are, under the arrangements made, taken at an hour when it is sometimes difficult for noble Lords to be present?

Baroness Young

My Lords, of course I agree with the noble Lord, Lord Boyd-Carpenter, that it is unpleasant to have to sit on this Bill or indeed on any other Bills in the early hours of the morning. It is not the first time that this has happened under any government. I am quite certain, that, as on many other matters, it will not be the last time. If I may say so the noble Lord is being somewhat disingenuous in using that argument on this occasion.

Your Lordships' House is a revising Chamber. It is perfectly within the rules that the matter should come to your Lordships' House although I said on Monday night that I regretted that it should come up so late. I have not the slightest doubt that many people who were involved were somewhat irritated that it should come up at this late stage. However, come up it has.

My noble friend will no doubt have answers to all the questions raised but perhaps I may make two points which arose on Monday night. The part of the Consumer Credit Act which is affected by this legislation is one section of the Act whereby finance houses or banks are prohibited from seeking custom from minors. That is on the grounds that in seeking to lend money they would be making money themselves. The whole point about the Student Loans Company is that it will not make a profit. Therefore it stands in a different relationship to young people from that which would apply to a bank. That is the answer to the point on why a bank giving a loan needs a guarantor whereas the Student Loans Company is different. I shall of course listen to what my noble friend says.

The reason for this having to be in the Bill, as I understand it, is that it might just be said that although the Student Loans Company does not make a profit, at some stage it might receive more back in cash terms than it lent. Therefore there could be an element of doubt. It is to remove that doubt that this provision comes before your Lordships' House. It is an important legal point and it is quite right that it arose.

However, as was said on Monday night, we do not need to feel that this completely changes matters or introduces anything other than an important technical point. It does not in any way alter the principle of the Bill.

Lord Grimond

My Lords, on the handling of the Bill I do not think we have received an answer to the point originally raised by the noble Lord, Lord Beloff. It was that whatever notice was given to the Front Benches, no notice could have been given to people on the Back-Benches or the Cross-Benches. In a matter of this kind that is important, particularly for the Cross-Benches. I also believe that it is rather unfair to attack the noble Lord, Lord Boyd-Carpenter. We are all unpaid slaves in this place. It seems to me that on a matter of this importance we have some right to suppose that it will arise at a time when trains still run and we should not normally be in bed.

I wish to raise two points which I have no doubt can easily be answered. As I understand it, so long as there are students, minors of whatever age— and we know that one girl went to university aged 14— for this purpose they will be entitled to enter into serious obligations. As I have said before, I do not think the fact that no interest is charged by any means; suggests that it is a minor matter. It is a serious matter which may hang over students until they are 50.

Am I right in saying that without any advice or understanding of what is happening anyone of any age, so long as they are students, can undertake the obligations attaching to the loan? Further, quite apart from consumer protection, I have no doubt that I am quite wrong but I seem to remember that at least in Scotland minors cannot be held to contracts into which they have entered, nor indeed to contracts entered into on their behalf. I am willing to be told that I am wrong about that but I remember as a trustee selling a house which belonged to a minor. I was told that up to the age of 21 he— or in that case she— had a right to repurchase it. No doubt I have misunderstood this, but quite apart from consumer protection, which I do not understand, we should be quite clear what are the covenanted rights of minors in both England and Scotland. We should know what precautions we are taking to see that minors understand the obligations which they take on under this Bill if they accept loans.

Lord Beloff

My Lords, following on from something that the noble Baroness, Lady Young, said, I think there is a further way in which my noble friend the Minister could assist the House. The noble Baroness said that doubt had arisen because the money that is repaid might be a larger sum, in view of inflation, than the original sum borrowed and thus people could consider that the Student Loans Company was making a profit. However, I do not believe that that is a factor that causes anxiety. I think it is universally accepted that the Student Loans. Company, as a wholly government-owned company, is not in the business of making a profit.

However, I remind the Minister that in Committee in another place the Under-Secretary refused to rule out the possibility of the Student Loans Company being privatised. Indeed at one stage he said that the company may have considerable assets which would facilitate privatisation. We know that as regards any future privatisation Bill, the possibility of the organisation concerned making a profit so that it can be sold into the private sector is an essential factor. Therefore I hope the Minister will state categorically that as long as the loans scheme lasts the Student Loans Company will remain wholly in the public sector. If he made such a statement, many of the worries about minors and other matters would be dissipated.

Baroness Elles

My Lords, I wish to put one point to my noble friend before he rises to reply to all the questions that he has been asked. It seems to me that very few people have read Section 50 of the Consumer Credit Act. That section makes it perfectly clear that the Student Loans Company would commit an offence if it sent to a minor, any document inviting him to— (a) borrow money, or (b) obtain goods on credit or hire". Four categories of borrowing or loans are referred to in total in that section. But surely the purpose of the provision is to protect the Student Loans Company from committing an offence when it circulates documents to minors inviting them to take up a loan which is in effect a form of credit. Therefore it is not the minors whom we seek to protect but the Student Loans Company, or whoever acts on behalf of that company in sending minors documents concerning student loans. I should make it clear that we are not just talking about 17 year-old students but also about the schools that will be sent literature informing them of the opportunity for their pupils to obtain student loans. It is that aspect of the matter that needs to be considered.

The matter of financial gain is the other side of the coin. It has been said over and over again that the Student Loans Company does not intend to make a profit. However, if someone brought a case against the company as regards having distributed documents and it was not protected, it could be shown that it had made a profit on its cash flow at a particular moment in time. I understand that no case has been brought before the courts under the terms of Section 50 of the Consumer Credit Act. Presumably the courts would decide whether financial gain had accrued to the Student Loans Company in this instance. My noble friend Lord Butterworth referred to that matter the other night.

The Earl of Caithness

My Lords, I was interested to hear the comments of noble Lords. Perhaps it would be convenient for the House if I separated Amendment No. 11 from this amendment because different arguments are involved. However, I shall try to answer the questions that your Lordships have posed.

This amendment would prevent the Secretary of State from making arrangements to provide students under the age of 19 with loans. It would thus deny loans to such students. It is particularly important that your Lordships are aware that we are talking about denying the opportunity of loans to those under 19. The amendment would therefore quite simply penalise those young people who are bright enough to be ready for higher education while they are still under the age of 19. We have often during our discussions on the Bill referred to the benefits that the loan facility affords to students such as a nil real interest rate on the outstanding loan.

Lord Peston

My Lords, I must interrupt the noble Earl as I wish to follow his argument all the way. I realise that it is my amendment that is being discussed, but I certainly did not think that the words "over the age of 18" had anything to do with the age of 19. I thought those words simply meant someone who was over the age of 18, for example 18 years plus one minute. I am rather lost here. If one says "over the age of 18", does that mean 19 years-old in law?

The Earl of Caithness

My Lords, I have read out the information that I have been given as regards the effect of the amendment of the noble Lord.

4.15 p.m.

Lord Hailsham of Saint Marylebone

My Lords, I do not wish to interrupt my noble friend, but surely the words "over the age of 18" mean that one is over the age of 18 on one's 18th birthday plus one. Indeed, one could say that one is over the age of 18 at one's birth hour plus one. One does not have to wait until one's 19th birthday to be over the age of 18. One is over the age of 18 after one's 18th birthday. I should be astonished to hear a lawyer seriously argue to the contrary.

The Earl of Caithness

My Lords, I shall have to take further advice on that point. When it comes to debating legal matters with my noble and learned friend one has to be very sure of one's legal ground. However, I can say that that is the advice that I have been given.

The benefits of the loan facility have been referred to on a number of occasions. The loan facility is a benefit to students whether they are over or under the age of 18. As I said, the loan facility offers students a nil real interest rate on the outstanding loan and the generous provision we have built in for deferment of repayments where a borrower's income is no more than moderate. Further, there is provision for cancellation of the entire loan in certain circumstances and at a certain age. I therefore wonder whether the students who would have stood to benefit had the loans been available as we had hoped will welcome the fact that such an amendment is before your Lordships.

I now turn specifically to the points that have been raised. The noble Lord, Lord Peston, asked whether schools had been sent information on loans. He said in his most disarming way that if schools had that information they must be breaking the law but that if they did not have it they could not be ready to carry out the loans scheme. However, the situation is not quite like that, as I am sure the noble Lord is aware. That is an important point for my noble friend Lady Elles too.

It is true that copies of the leaflet have been sent to schools for the information of sixth formers and their teachers. However, that does not offend any of the provisions of the Consumer Credit Act. Section 50 of the Consumer Credit Act makes it an offence to send an invitation to borrowers with a view to financial gain. That is an entirely separate matter. As I said in the early hours of Tuesday morning, the key to that part of the Consumer Credit Act is whether a company has a view to financial gain. The leaflet on the student loans scheme was sent by the department with no view to financial gain. It was sent only to convey information. Therefore we are ready to implement the scheme, but we are not breaking the law.

As regards the requirement of parental consent for loans to minors in Scotland, in view of the purpose for which a student loan would be taken out there is every prospect that the Scottish courts would hold the debt to be enforceable as loans are taken out for the benefit of students. That point was raised by the noble Lord, Lord Peston. A parental acknowledgment or consent to the existence of the loan would enhance the prospects of enforcement, but my advice is that neither acknowledgment nor consent would be essential. Such parental acknowledgment need not constitute a guarantee. It simply acknowledges that the minor concerned has entered into a contract.

The noble Lord, Lord Grimond, said that he was not aware of the amendment. I must remind him that my noble friend the Chief Whip brought the amendment to the attention of the noble Lord the Chief Whip of the Liberal Democrat Party before the usual Thursday meeting so that he could bring it to the attention of those noble Lords whom he knew to be interested in the Bill.

The noble Lord, Lord Grimond, and my noble friend Lord Boyd-Carpenter raised the important point of whether the whole of the Consumer Credit Act now did not apply to students. The answer is no. Students will be subject to the provisions of the Consumer Credit Act except in so far as concerns Section 50. I spent a great deal of time at an earlier stage spelling out exactly what the difficulties were with Section 50. It is a difficult, complex and rather grey area of the law which has yet to be tested. The amendment which we tabled and which was agreed by your Lordships was for clarification, as my noble friend Lady Young reminded the House. It could be that the courts might have interpreted the matter differently from the way in which my noble friend Lord Beloff interprets it. It was for that very reason that we thought it necessary to clarify the situation.

I repeat that Section 50 of the Consumer Credit Act relates to the prohibition on sending documents with a view to financial gain. That was the point that we needed to clarify. The technical amendment was necessary to make sure that the Student Loans Company was not in the business of making a financial gain.

Baroness Phillips

My Lords, before the noble Earl leaves that point can he explain how the company can be run and pay salaries if it does not make a financial gain?

The Earl of Caithness

My Lords, the salaries are paid by the taxpayer, as I hope the noble Baroness will have understood from what I have said on numerous occasions both in Committee and at Report stage.

I hope that that reply satisfies my noble friend Lord Beloff. Whether the company is in public or private hands it is in the business of giving loans to students and not of making a financial gain. Therefore I believe that his concern is unfounded.

Baroness Seear

My Lords, I am sorry to interrupt because I know that the noble Earl has a great deal to get through. However, we are genuinely mystified by the question of privatisation. If the company were to be privatised it would be free to do what it liked. Can we be reassured that it will not be privatised? Once it is privatised the Government have no more control over it. Can the noble Earl explain the position and give some guarantee that that will not happen?

The Earl of Caithness

My Lords, no gain will be made out of the making of loans whether the company is owned by the Government or is in private ownership. Under whatever ownership, minors will continue to enjoy the protection of Section 50 of the Consumer Credit Act. The government amendment on that section makes it clear that no gain or profit will be made out of the loan scheme. That is the key point which I hope will resolve the concerns of the noble Baroness, whether the company is in public or private ownership.

I turn back to the question that was raised by my noble and learned friend Lord Hailsham who picked up the point of the noble Lord, Lord Peston. As I understand it now, a person is over the age of 18— which is what the amendment states— when he is 19 and over. A person is aged 18 during the entire 12-month period between his eighteenth birthday and his nineteenth birthday. That is the advice that I have received. Since I am up against my noble and learned friend I shall not quibble about it. I have tried to deal not so much with the wording and the technical nature of the amendment, although that has been an interesting debate in itself, but with the principle of what we are trying to achieve.

Lord Hailsham of Saint Marylebone

My Lords, perhaps I may ask my noble friend one question. If I am wrong— and I am just as fallible as anybody else -does he agree that it is purely a drafting point and that the wording of the amendment can be changed so as to give effect to what most of us believe is the existing situation, namely that you become 18 on your eighteenth birthday and after midnight you are more than 18?

Lord Hughes

My Lords, in view of the fact that the noble Earl is risking disagreeing with the noble and learned Lord, Lord Hailsham, perhaps I may ask whether the advice he has received is from a legal quarter, a civil servant or a draftsman.

The Earl of Caithness

My Lords, the noble Lord with his great experience, knows better than I where such information comes from. I am told that it is of the highest repute, as one would expect in your Lordships' House.

The effect of the amendment, whether the definition is 17 years, 11 months and 28 days or 18 years and one day, is to treat entirely differently two students who are on the same course at the same institution and who will enjoy the same lifetime advantages as a result of their higher education merely because one is over a certain age and the other is not. As I believe all noble Lords will agree, such discrimination is neither sensible nor fair. It would be a positive deterrent to young people taking higher education. That is at least one area of common ground. We all want to encourage young people to enter higher education. I believe that to discriminate against one group would be wrong.

Lord Jay

My Lords, can the noble Earl now answer the question that I asked earlier? Could this curious company be privatised without primary legislation or would it require primary legislation?

The Earl of Caithness

My Lords, I answered that question too fully on Report. I am sure that the noble Lord has read the answer in the Official Report with his usual diligence in view of his concern in this matter. As I understand it, it would not require primary legislation.

Viscount Eccles

My Lords, is it really worth worrying about the privatisation point? Here is a company which is going to make loans without inquiring into the financial status of the borrowers. It is bound to become insolvent.

Lord Peston

My Lords, it is extremely difficult to speak after that particular intervention. I thank the noble Earl for his reply and noble Lords for their contributions. I am not endeavouring to damage the Bill at this point. I am merely endeavouring to establish the point about scrutiny, revision and the need for time to think these matters through. What has emerged from our discussions is precisely that those are difficult areas.

I should like to say to the noble Baroness, Lady Elles, although she is not in her place, that I am not stupid. I am aware of what Section 50 of the Consumer Credit Act says. I am also perfectly well aware of the arguments which the noble Earl, Lord Caithness, has put forward. I find them extremely cogent. However, my problem is that once one opens up the area there is always the suspicion that one has to look at the matter in much greater detail and explore it further. I hope that the noble Earl does not feel that I have insulted him in any way by saying that I have not understood his arguments. My point is that when one enters a new field one's concern is where one will end up when it has been thought through. I have already given some examples of where we might end up.

I have made my point. I should have been happier if we could have dealt with the matter at our leisure at a more satisfactory time. There is nothing that we can do about that and I understand that there was nothing that the Government could have done. Having made those points, and perhaps adding "I told you so" in anticipation of the trouble that will emerge with the Student Loans Company, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blackstone moved Amendment No. 2: Page 1, line 6, after ("loans") insert ("amounting to no more than 50 per cent. of public support).

The noble Baroness said: My Lords, the amendment is grouped with Amendment No. 9 but I wish to speak to Amendment No. 2 first and wait to hear what the Government have to say about their own amendment, Amendment No. 9, before I comment on it.

This is the third time that I have moved the amendment. The first time was at the Committee stage, when the noble Baroness, Lady Blatch, said that she would take it back and draw the matter to the attention of her right honourable friend the Secretary of State. I moved it again on Report, when the noble Baroness said that she would come forward with a new amendment on Third Reading. She assured the House that she had expressed the Committee's views to the Secretary of State, but she felt that the amendment was inappropriate because the Government intend that loans should be more widely available than mandatory grants.

I recognise that there might be a problem in this amendment, but it is the issue of principle of which I want to remind noble Lords. The principle of the Bill is that it should be based on the concept of top-up loans. It therefore seemed to many Members of the Committee and again to many Members of the House at Report stage that it was appropriate to write into the Bill the provision that the maximum amount of student maintenance to which loans should refer was 50 per cent. It has always been the Government's stated intention not to go above 50 per cent. In the light of that, there was agreement on all sides of the House that it would provide some reassurance to the universities, polytechnics, colleges and their students that that was the case and that the Government were sincere in their intentions if the principle were written into the Bill. There is an overwhelming case for doing that. No one in any of the debates that we have had on the Bill has favoured going above the principle of 50 per cent. and abandoning the concept of top-up. I beg to move.

4.30 p.m.

Baroness Blatch

My Lords, I have to say that I admire the persistence of the noble Baroness in this matter. I hope that my reply will help her.

In a previous debate I undertook to bring forward an amendment that would meet the concern expressed both here and in another place about the possible long-term development of the scheme. I accepted that the Bill should contain a provision that would not allow the loan to exceed the value of the grant, in line with the policy set out in the White Paper. I hope that noble Lords will agree that I have kept faith with the commitment which I gave on Report. That provision is one of the amendments that we are due to reach later, as it applies to Schedule 2.

It may be helpful if I say a little at this stage about the Government's amendment, Amendment No. 9. Amendments Nos. 2 and 9 are grouped together, but I wish to speak to Amendment No. 9. As I explained before, the amendment in the names of the noble Baroness, Lady Blackstone, and the noble Lord, Lord Addington, does not meet the problem. It denies the loan to students receiving no grant. As I pointed out on Report, 50 per cent. of nothing is nothing.

The government amendment avoids that difficulty. It allows the loan to be offered to students receiving no grant. That is important. As the House knows, we intend eligibility for the loan to be cast more widely than eligibility for the grant.

The government amendment also deals with a second difficulty that the amendment before us at the moment does not address; namely, that the public support available to a student is not a single fixed total. There are three main rates of grant and a series of additional allowances. The government amendment is specific about the sum that the loan should not exceed. It would not allow the loan to be greater than the grant to that student. Thus, for a student in London the loan could not be more than the London rate of grant; for one elsewhere, it could not be more than the elsewhere rate of grant; and so on. Without that degree of precision it would be possible for the loan to exceed the value of the grant available to some students.

The government amendment has a third feature. I mentioned it in our previous debate. It includes a provision that would allow a successor government to exceed the limit, subject to parliamentary approval.

As the House knows, we do not expect the point where grant and loan are equal to be reached for a good many years. However, when that point is reached the government of the day might wish, in the light of circumstances at the time, to provide more than half a student's resources in the form of loan. We proposed that, if the government at that time decide to take that route, the loan regulations should require affirmative resolution if they involve a loan facility that exceeds the value of the grant.

Your Lordships know that our present intention is that, once the loan and the grant have reached parity, they should be uprated in parallel; but we must allow a government in the next century to act differently without needing to secure fresh primary legislation. The affirmative resolution procedure that we propose will allow the government of the day the necessary flexibility. At the same time it provides, through the affirmative procedure, for the proper opportunity for parliamentary scrutiny. There is therefore an assurance that both Houses will determine what happens beyond that level of parity.

In describing the government amendment that arises a little later on— Amendment No. 9— I have also explained why the amendment before us now does not have the desired effect. I hope that, in the light of that explanation, the noble Baroness and the noble Lord will withdraw their amendment.

Lord Kilmarnock

My Lords, before the noble Baroness, Lady Blackstone, decides what to do with her amendment, perhaps I may ask the noble Baroness, Lady Blatch, to clarify an interesting phrase which fell from her lips. She mentioned the Government's intention that eligibility for the loan should be cast more widely than eligibility for the grant. Will she tell us what categories of student she has in mind? Is she thinking of mature students or part-time students? That would materially affect the feelings of many of us about the amendment.

Baroness Blatch

My Lords, we have had extremely detailed discussions on who shall be qualified. Off the top of my head, I believe that a mature student who might not necessarily qualify for grant would have access to the loan facility. I cannot be precise at this moment, but we have mentioned many people who may have access to the loan facility for higher education but would not necessarily qualify for a grant.

Baroness Blackstone

My Lords, before the noble Baroness sits down, perhaps I may put to her one further question about which I am slightly uncertain. Can we be reassured that paragraph (b) of Amendment No. 9 will not make it difficult for any future government to extend the eligibility for mandatory awards, should they choose to do so?

Baroness Blatch

My Lords, I am receiving from the Box the right kind of nods which I hope will reassure the noble Baroness on that point. The imporant point is that the Bill now makes it possible not to go beyond that level of parity and that, should there be any intention to do so, it would be important for both Houses to have a view about what should happen beyond that level.

In reply to the noble Lord, Lord Kilmarnock, I should say that grants are available for one course only. I am afraid that I cannot read the writing in the note that has been handed to me. I believe that my first answer is correct. Some people will have access to a loan but will not necessarily qualify for a grant. I hope that the noble Lord will read Hansard and single out some illustrations of that point.

Lord Kilmarnock

My Lords, before the noble Baroness sits down, perhaps she will tell me whether she could write to me and summarise the position.

Baroness Blatch

My Lords, I shall indeed do so.

Baroness Blackstone

My Lords, I am grateful to the noble Baroness for bringing forward the amendment. I am extremely glad to be able to say that I find large parts of it highly acceptable. However, I have one reservation which relates to the final paragraph of the amendment where the Government yet again appear to want to provide a let-out whereby either they or a future government could go above the 50 per cent. figure in the Bill.

I was a little surprised to hear the noble Baroness say that some future government might want to abandon the parity principle as, until now, we have always had the reassurance that the parity principle was paramount. However, if a future government were to want to do that and to increase loans as a proportion of the total amount of maintenance, I should have thought that the right solution was to introduce primary legislation rather than to rely yet again on regulations. With that exception about which I am not entirely happy, although I do not wish to press the point further this afternoon, and in view of the government amendment, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 3 not moved.]

Lord Addington moved Amendment No. 4: Page 1, line 15, at end insert ("and such conditions may include a provision in respect of students attending courses of higher education of longer than three academic years' duration that they shall incur no liability in respect of any loan given for the fourth year").

The noble Lord said: My Lords, we now return yet again to the problem of the fourth-year student. All students on courses longer than three years are at some disadvantage compared with those on three-year courses. That is for the simple reason that if any debt is incurred in the form of the new student loan, ultimately it will have to be paid back. With interest even at only the rate of inflation, the student will still end up paying a considerable sum of interest on the loan. The basic problem can be described by saying that if one receives a loan for four years rather than three years, there is not only the extra debt but also the extra period for paying interest on the debt that one has already acquired. Even if that interest is only levied at the rate of inflation, it has been calculated that the difference could be as much as 60 per cent.

I hope that that description puts in context the need for special help to be given to fourth-year students. There has been some small consideration for those whose courses last for more than four years. Why is there not some help for those who are taking a four-year

As I have said, as it seems to me on umpteen occasions the Scots are the group who will be most hard hit. On other occasions I have remarked at considerable length that Scottish students who do Highers, even though they do not undertake sixth-form studies do not have the same choice available to them as in most of the English and Welsh courses, which assume that the student has already acquired a certain amount of technical knowledge from A-levels. Therefore any Scottish student who does a three-year course without having taken A-levels is at a certain disadvantage. He is at a definite disadvantage in the first year especially in the first couple of terms.

If one accepts that some provision is to be given to those undertaking longer courses, why not for those who have four-year courses to follow? They also have a problem. It is possibly not quite of the same magnitude but it is a problem of the same type and they should be given some help.

The Government have constantly said that they would review the situation. I hope that they will review the whole scheme the whole time. One should try to get the thing right so that any review would be a matter of examining the scheme and noting how well it is doing. One should not be glaring at it and hoping that the problem will not erupt in one's face.

Groups other than Scottish students are affected. I accept that the Scots can do a three-year course but the Scottish Honours course takes four years and I suggest that we want to obtain the highest standard of education that is available.

Throughout discussion of this Bill the Government have said that they hope to encourage an increase in student numbers. I suggest that greater numbers with lower quality degrees will be no answer. We have teachers who are studying for the B.Ed. qualification and we have a chronic shortage of teachers. I suggest that anything that might deter even a few of them is something to be avoided like the plague at this time.

We ask the Government Front Bench for a real concession and help to be given to those who undertake four-year courses. I hope that we can make some progress and give assistance to those who are studying for longer than the basic three years. I beg to move.

Lord Peston

My Lords, I should like to say a few brief words on this amendment which is tabled in my name and that of the noble Lord, Lord Addington. I fully appreciate that when a scheme of this kind is introduced one faces the problem of what to do about what one might call, so far as concerns England and Wales, a non-standard three-year degree; namely, a four-year degree course. I do not say that in order to insult the Scots and infer that there is something abnormal about them. It is simply that they have the tradition of a four-year degree.

I should like to hear from the Government whether they feel that the four-year degree is somehow academically bad and they do not mind if this legislation acts as a disincentive to such degrees. I hope that they will not say that. The fact is that the student on a four-year degree course already incurs higher costs. To the economist the most obvious of those costs consists of the year of income forgone in order to spend time at college. If the noble Earl is about to say that this problem is very difficult to solve, I shall agree with him. However I think that those who, to say the least, do not regard a four-year course as illegitimate— to put it as mildly as possible— would like to have some reassurance from the Government in the form of an undertaking that they will at least look for a way of making a concession if they can. I understand that that is what the noble Lord, Lord Addington, is seeking. I add my voice to his I think that the Government to take this matter very seriously.

Baroness Seear

My Lords, in case it should be thought that this is only a Scottish question, I should like to underline the fact that the B.Ed. takes four years and it leads to not very well paid work. If one discourages teachers from taking a B.Ed. qualification, it flies in the face of all the needs of the education system at the present time.

Lord Rea

My Lords, in support of this amendment I should like to remind the House that a number of speakers supported this or similar amendments during all three previous stages of the Bill. Not only will there be a deterrent in the Bill as it now stands to those taking longer courses but also after they have finished the longer courses there will be an incentive for them to go into the more highly paid branches of their profession and perhaps neglect the lower paid ones. In my own field of medicine I think of medical research, public health and epidemiology which are rather poorly paid branches of the profession. They are, however, extremely important.

4.45 p.m.

The Earl of Caithness

My Lords, I understand the motivation behind this amendment. The noble Lord, Lord Addington, has been very persistent in bringing it to your Lordships' notice. It is intended to secure fair treatment for students following longer courses, particularly those in Scotland. However, I have to say that on the test of fairness I believe that it fails. It would mean that a student on a course of four years or longer would pay back less than he had borrowed from the taxpayer.

Those on four-year courses would pay back the same as those on three-year courses, even though they had borrowed more. On top of that they would continue to receive more by way of maintenance and tuition fee support than those on three-year courses. I wonder whether the noble Lord, Lord Addington, agrees with me that students on three-year courses might wonder why the funds available for higher education were to be loaded towards those on four-year courses in the way that he proposes.

We believe that a loan should be available to every student irrespective of the length of the course or its nature and that graduates should pay back in real terms the same sums as they have borrowed. That is fair to the taxpayer and fair to the graduate.

After very careful consideration we were able to vary, while keeping moneys repaid equal to moneys borrowed in real terms, the period over which a loan is repaid. As noble Lords will recall, I announced to the House at Report stage that we would be extending to seven years initially the repayment period for graduates who borrow under the scheme for more than four years. That will significantly reduce the size of the annual repayments that those graduates will face. That was a point which the noble Lord, Lord Rea, pressed on us at an earlier stage. I was perhaps a shade disappointed that he did not thank the Government for the major concession in meeting the concern that he had put before us.

As the loan scheme develops and loans increase in real terms, the standard repayment period and the extended repayment period for those on longer courses will be increased so that the repayments remain reasonable. I repeat what I and my noble friend Lady Blatch have said on many occasions. We shall continue to monitor the whole of the loan scheme. We shall look particularly carefully at those who are on four-year courses because of the concerns that have been expressed. If there is need to take action, one is able to act under the regulations.

Lord Addington

My Lords, the noble Earl has given me more or less the same answer as I have been receiving the whole way through this discussion. No further concession has been forthcoming. He spoke about someone receiving a loan over a four-year period and receiving the extra year's help in tuition fees and maintenance. I should like to point out that Scottish students have invariably spent one year less in school— or have done so very often. I should also mention the fact that the four-year course in Scotland is based on the Highers system. It is a system which is non-specialist. England is moving toward it and away from the specialisation of A-levels. I suggest that we may face that problem in the future.

Ultimately we are not addressing the problem that certain courses are of a four-year nature. Many of them lead to low paid professions and teaching is the classic example. As the Government have not been prepared to make any major concession on this matter, I have no option but to test the opinion of the House.

4.50 p.m.

On Question, whether the said amendment (No. 4) shall be agreed to?

Their Lordships divided: Contents, 85; Not-Contents, 98.

DIVISION No. 1
CONTENTS
Addington, L, [Teller]	Jay, L.
Adrian, L.	Jenkins of Putney, L.
Airedale, L.	Kearton, L.
Ardwick, L.	Kilmarnock, L.
Aylestone, L.	Kirkwood, L.
Banks, L.	Llewelyn-Davies of Hastoe, B.
Beloff, L.
Birk, B.	Lloyd of Hampstead, L.
Blackstone, B.	Lloyd of Kilgerran, L.
Blease, L.	Longford, E.
Blyth, L.	Macaulay of Bragar, L.
Boston of Faversham, L.	McGregor of Durris, L.
Broadbridge, L.	Masham of Ilton, B.
Bruce of Donington, L.	Molloy, L.
Campbell of Eskan, L.	Morton of Shuna, L.
Carmichael of Kelvingrove, L.	Nicol, B.
	Peston, L.
Dacre of Glanton, L.	Pitt of Hampstead, L.
Dainton, L.	Ponsonby of Shulbrede, L.
Darcy (de Knayth), B,	Porritt, L.
David, B .	Rea, L.
Dean of Beswick, L.	Richardson, L.
Diamond, L.	Ritchie of Dundee, L.
Donaldson of Kingsbridge, L.	Robson of Kiddington, B.
Dormand of Easington, L.	Sainsbury, L.
Dunrossil, V.	St. John of Bletso, L.
Ennals, L.	Saltoun of Abernethy, Ly.
Ezra, L.	Seear, B.
Falkland, V.	Serota, B.
Flowers, L.	Shaughnessy, L.
Foot, L.	Stallard, L.
Gallacher, L. [Teller.]	Stedman, B.
Gladwyn, L.	Stoddart of Swindon, L.
Graham of Edmonton, L.	Strabolgi, L.
Grimond, L.	Swann, L.
Hampton, L.	Tordoff, L.
Hatch of Lusby, L.	Underhill, L.
Henderson of Brompton, L.	Wallace of Coslany, L.
Hirshfield, L.	Whaddon, L.
Hooson, L.	White, B.
Houghton of Sowerby, L.	Wilberforce, L.
Hughes, L.	Williams of Elvel, L.
Hunt, L.	Willis, L.
Hylton-Foster, B.

NOT-CONTENTS
Aldington, L.	Cross, V.
Arran, E.	Cullen of Ashbourne, L.
Atholl, D.	Davidson, V. [Teller.]
Balfour, E.	Denham, L. [Teller.]
Bauer, L.	Derwent, L.
Belstead, L.	Eccles, V.
Bessborough, E.	Elton, L.
Blake, I,.	Fisher, L.
Blatch, B.	Fraser of Carmyllie, L.
Borthwick, L.	Eraser of Kilmorack, L.
Brookeborough, V.	Gainford, L.
Brougham and Vaux, L.	Gardner of Parkes, B.
Butterworth, L.	Geddes, L.
Caithness, E.	Glenarthur, L.
Caldecote, V.	Gray of Contin, L.
Campbell of Alloway, L.	Grimthorpe, L.
Carnegy of Lour, B.	Hailsham of Saint Marylebone, L.
Carnock, L.
Carr of Hadley, L.	Hanson, L.
Clanwilliam, E.	Harvington, L.
Colwyn, L.	Havers, L.
Constantine of Stanmore, L.	Henley, L.
Cottesloe, L.	Hertford, M.
Craigmyle, L.	Hesketh, L.

Hives, L.	Renwick, L.
Holdemess, L.	St. Davids, V.
Home of the Hirsel, L.	Saint Oswald, L.
Hooper, B.	Sanderson of Bowden, L.
Iddesleigh, E.	Selkirk, E.
Kitchener, E.	Sempill, Ly.
Lauderdale, E.	Shannon, E.
Long, V.	Skelmersdale, L.
Mancroft, L.	Slim, V.
Merrivale, L.	Stockton, E.
Milverton, L.	Strange, B.
Morris, L.	Strathclyde, L.
Mottistone, L.	Strathmore and Kinghorne, E.
Mountevans, L.
Munster, E.	Swansea, L.
Nelson, E.	Swinton, E.
Newall, L.	Terrington, L.
Nugent of Guildford, L.	Thomas of Gwydir, L.
Orkney, E.	Tombs, L.
Orr-Ewing, L.	Trumpington, B.
Peel, E.	Ullswater, V.
Plummer of St. Marylebone, L.	Vaux of Harrowden, L.
	Whitelaw, V.
Quinton, L.	Wyatt of Weeford, L.
Rankeillour, L.	Yarborough, E.
Reay, L.	Young, B.
Renton, L.

Resolved in the negative, and amendment disagreed to accordingly.

4.58 p.m.

The Earl of Caithness moved Amendment No. 5: Page 2, line 15, at end insert: (" (5A) The power to make orders under subsection (4) above shall be exercisable by statutory instrument and no such order shall be made unless a draft of it has been laid before and approved by a resolution of each House of Parliament.").

The noble Earl said: My Lords, I beg to move Amendment No. 5 and, with the leave of the House, will speak to Amendment No. 6. At Report stage earlier this week I promised to look carefully, with my right honourable friend, at the power given by Clause 1(4) to amend Schedule 1, and the comments made on that power by many of your Lordships. The feeling of the House, as I understood it, was that your Lordships would like some way in which to comment, if orders were made amending Schedule 1.

Amendments Nos. 5 and 6 provide for your Lordships to do just that. They make such orders subject to the affirmative resolution procedure. We anticipate that changes to Schedule 1 will be made in response to developments in the world of higher education; for example, to include new courses, rather than through any wish to restrict the provision of loans. We do not expect that frequent revision of Schedule 1 will be necessary, but, if such changes are to be made, this amendment will ensure that they are debated by your Lordships and by another place, and are subject to the approval of both Houses.

I hope that what I have said, and what is in the amendments, meets the concerns expressed by your Lordships— in particular, those of the noble and learned Lord, Lord Simon of Glaisdale, and my noble friend Lady Young. The Government Amendments Nos. 5 and 6 have exactly the effect intended in Amendment No. 8, which is in the name of the noble and learned Lord, and I hope that what I have said will satisfy him. I beg to move.

Baroness Young

My Lords, I am grateful to my noble friend for bringing forward this amendment, which meets one of the anxieties I raised at Report stage. I have no doubt that it will be greatly welcomed by the universities. I am very grateful to my noble friend for the work which I know he has put into the matter. I hope that he will pass on my thanks to my right honourable friend the Secretary of State for his support of these measures. I am sure that I speak on behalf of the noble and learned Lord, Lord Simon of Glaisdale, who may wish to say something further, and my noble friend Lord Rippon in thanking my noble friend for what he has been able to do.

Lord Simon of Glaisdale

My Lords, I too should like to express my thanks to the noble Earl the Paymaster General. As I had not heard from him as I expected to hear yesterday, I put down my Amendment No. 8, just ahead, I imagine, of the noble Earl's Amendment No. 5. There are only two differences, on both of which I hesitated. They concern where the amendments should appear in the Bill and whether the cautionary words at the beginning of my amendment are necessary. On both those points the draftsman is entitled to have his view maintained and vindicated. The noble Earl has been good as his word in Committee and rather better than his word at Report, as he merely said then that he would consult. I am most grateful to him.

Baroness David

My Lords, we are grateful for this concession. It has taken a long time to get but it has arrived. We are very pleased about it. The noble Baroness, Lady Young, said how pleased the universities would be. I would say that the universities, the polytechnics and indeed the colleges which are affected by Schedule 1 will be glad to have the reassurance that the amendment gives.

On Question, amendment agreed to.

The Earl of Caithness moved Amendment No. 6: Page 2, line 16, leave out from ("make") to ("shall") in line 18 and insert ("regulations under this section or Schedule 2 to this Act shall be exercisable by statutory instrument which, subject to subsection (7) below and paragraph (1A) of that Schedule, ").

On Question, amendment agreed to.

Lord Addington moved Amendment No. 7: Page 2, line 38, leave out ("code") and insert ("regulations").

The noble Lord said: My Lords, this is a purely technical drafting amendment. It is designed to correct one very small error in a previous amendment agreed by the House. I beg to move.

Baroness Blatch

My Lords, this is indeed a technical amendment. The Bill now contains two sets of amendments that were passed on Report against the Government's wishes; those inserted by the noble Earl, Lord Russell, who unfortunately is not with us today, about amending the regulations which are the subject of the present debate; and those inserted by the noble Lord, Lord Peston, and the noble Earl, Lord Russell, about the treatment of some students for housing benefit purposes. Noble Lords will not be surprised to hear that the Government are considering the position in the light of those votes. I have no conclusion to announce today but do not wish to stand in the way of Amendment No. 7. Therefore we will accept the amendment.

On Question, amendment agreed to.

[Amendment No. 8 not moved.]

Schedule 2 [Loans for students]:

Baroness Blatch moved Amendment No. 9:

Page 4, line 40, at end insert:

(1A) The maximum amount prescribed under sub-paragraph (1) (a) above for the loan to be made to a student in any year shall not exceed—

1. (a) the amount specified as the ordinary maintenance requirement for students of the class or description to which he belongs by regulations having effect for that year under section 1 (1) of the Education Act 1962 (mandatory awards); or
2. (b) if no such amount is specified for students of the class or description to which he belongs, such amount as the Secretary of State considers appropriate for students of that class or description having regard to the amount specified as mentioned in paragraph (a) above;

but regulations, other than the first, made under sub-paragraph (1) (a) above may prescribe a higher maximum if a draft of the regulations has been laid before and approved by a resolution of each House of Parliament.").

The noble Baroness said: My Lords, I have already spoken to this amendment. I beg to move. On Question, amendment agreed to.

Baroness Seear moved Amendment No. 10: Page 4, line 40, at end insert: (" (1A) Before issuing regulations in respect of any academic year under sub-paragraph (1) above, the Secretary of State shall consult such organisations as appear to him to be concerned.").

The noble Baroness said: My Lords, at Report stage the noble Baroness agreed that the consultation is a very important part of the process when changes take place from year to year. We believe that it is very important that consultation with all interested groups before these changes are made should be on the face of the Bill. I beg to move.

Baroness Blatch

My Lords, this amendment would require the Secretary of State to consult, such organisations as appear to him to be concerned", before making regulations governing the size of the loan and the terms on which they are to be made and recovered. As noble Lords will know, the Government are committed to monitoring the operation of the loans scheme, a point we have made at every stage of the Bill's progress through the House. The operation of the loan scheme will be monitored continually. We expect to consult widely and will take into account all views put to us before deciding whether the scheme can be improved in any material respect.

There is no similar statutory requirement to consult on the mandatory awards regulations, though in practice the Secretary of State consults the Committee of Vice-Chancellors and Principals, the Committee of Directors of Polytechnics, the local authority associations and indeed the National Union of Students. The annual review of grant rates and conditions takes account of a wide range of evidence from a variety of sources. Such consultations are valuable and effective even in the absence of a statutory requirement for them.

The Education Act 1962 does not commit the Government to taking account of evidence from particular groups before amending the regulations for grants, and there is no reason why such a requirement should be written on to the face of this Bill. Since 1962 the Government have taken account of a range of views in revising the grants regulations year by year. There is no reason why the same procedure should not apply in future for the parallel loans regulations. The Government are always receiving and responding to representations on student support and will continue to do so.

This amendment is both unnecessary and unwieldy. The Government will monitor the impact of the loans scheme and consult where necessary before making any regulations governing the making and repayment of loans. This is what happens with the grants scheme and, quite properly, this procedure will also apply to the loans scheme. I hope that in the light of that explanation the noble Baroness will feel able to withdraw the amendment.

Baroness Seear

My Lords, I am very sorry that the noble Baroness has responded in that way. Reference is constantly made to the 1962 Act but it provides no parallel. We are now moving into a position that is very much challenged by pretty well all the organisations concerned with education. That was not the case at all under the 1962 Act. There is a great deal of anxiety about the Bill and how it will develop over the years. The position is quite different from that of 1962. It is important to have on the face of the Bill the right to be consulted. One should not have to rely on the goodwill of the Government to consult but on the right to be consulted. I am afraid that, in the light of the noble Baroness's response, I shall have to divide the House.

5.8 p.m.

On Question, whether the said amendment (No. 10) shall be agreed to?

Their Lordships divided: Contents, 74; Not-Contents, 104.

DIVISION NO. 2
CONTENTS
Addington, L.	Dacre of Glanton, L.
Adrian, L.	David, B.
Airedale, L.	Dean of Beswick, L.
Ardwick, L.	Diamond, L.
Aylestone, L.	Donaldson of Kingsbridge, L.
Baldwin of Bewdley, E.	Dormand of Easington, L.
Beloff, L.	Ennals, L.
Birk, B.	Ezra, L.
Blackstone, B.	Falkland, V.
Blease, L.	Flowers, L.
Blyth, L.	Foot, L.
Boston of Faversham, L.	Gallacher, L.
Broadbridge, L.	Gladwyn, L.
Bruce of Donington, L.	Graham of Edmonton, L. [Teller.]
Campbell of Eskan, L.
Carmichael of Kelvingrove, L.	Hanworth, V.
	Hatch of Lusby, L.
Cobbold, L.	Henderson of Brompton, L.
Craigavon, V.	Henniker, L.

Hirshfield, L.	Nicol, B.
Hooson, L.	Peston, L.
Houghton of Sowerby, L.	Pitt of Hampstead, L.
Hughes, L.	Ponsonby of Shulbrede, L.
Hunt, L.	Ritchie of Dundee, L.
Hylton-Foster, B.	Robson of Kiddington, B.
Jenkins of Putney, L.	Seear, B. [Teller.]
Kearton, L.	Serota, B.
Kilmarnock, L.	Shaughnessy, L.
Llewelyn-Davies of Hastoe, B.	Stedman, B.
	Stoddart of Swindon, L,
Lloyd of Hampstead, L.	Swann, L.
Lloyd of Kilgerran, L.	Tordoff, L.
Longford, E.	Underhill, L.
Lovell-Davis, L.	Wallace of Coslany, L.
Macaulay of Bragar, L.	Whaddon, L.
McGregor of Durris, L.	White, B.
Molloy, L.	Williams of Elvel, L.
Monson, L.	Willis, L.
Mulley, L.

NOT-CONTENTS
Aldington, L.	Jenkin of Roding, L.
Allenby of Megiddo, V.	Killearn, L.
Arran, E.	Kitchener, E.
Atholl, D.	Lauderdale, E.
Balfour, E.	Long, V. [Teller.]
Bauer, L.	Lyell, L.
Belstead, L.	McColl of Dulwich, L.
Bessborough, E.	Mancroft, L.
Blake, L.	Merrivale, L.
Blatch, B.	Milverton, L.
Borthwick, L.	Morris, L.
Boyd-Carpenter, L.	Mottistone, L.
Brentford, V.	Mountevans, L.
Brookeborough, V.	Munster, E.
Brougham and Vaux, L.	Nelson, E.
Butterworth, L.	Newall, L.
Caithness, E.	Nugent of Guildford, L.
Caldecote, V.	Orkney, E.
Campbell of Alloway, L.	Orr-Ewing, L.
Carnegy of Lour, B.	Peel, E.
Carnock, L.	Plummer of St. Marylebone, L.
Carr of Hadley, L.
Colwyn, L.	Prior, L.
Constantine of Stanmore, L.	Quinton, L.
Cottesloe, L.	Rankeillour, L.
Cross, V.	Reay, L.
Cullen of Ashbourne, L.	Renton, L.
Davidson, V. [Teller.]	Renwick, L.
Denham, L.	Richardson, L.
Derwent, L.	Rippon of Hexham, L.
Eccles, V.	St. Davids, V.
Elton, L.	St. John of Bletso, L.
Erroll, E.	Saint Oswald, L.
Ferrers, E.	Saltoun of Abernethy, Ly.
Fisher, L.	Sanderson of Bowden, L.
Fortescue, L.	Selkirk, E.
Fraser of Carmyllie, L.	Sempill, Ly.
Fraser of Kilmorack, L.	Skelmersdale, L.
Gainford, L.	Slim, V.
Gardner of Parkes, B.	Stockton, E.
Geddes, L.	Strange, B.
Glenarthur, L.	Strathclyde, L.
Gray of Contin, L.	Strathmore and Kinghorne, E.
Grimthorpe, L.
Hailsham of Saint Marylebone, L.	Swansea, L.
	Thomas of Gwydir, L.
Hanson, L.	Tombs, L.
Havers, L.	Trumpington, B.
Henley, L.	Ullswater, V.
Hertford, M.	Vaux of Harrowden, L.
Hesketh, L.	Whitelaw, V.
Hives, L.	Yarborough, E.
Holderness, L.	Young, B.
Hooper, B.

Resolved in the negative, and amendment disagreed to accordingly.

5.16 p.m.

Lord Peston had given notice of his intention to move Amendment No. 11: Page 5, line 10, at end insert ("; and (c) no interest shall accrue to a loan secured by a minor during the period when such a person is a minor.").

The noble Lord said: My Lords, during our debate on Amendment No. 1 I said that I had made all the relevant points. I do not want to cover the ground again but I forgot to point out that we should be looking at other legislation such as the Minors' Contracts Act 1987 which deals with lending to minors. It illustrates my point about how complicated the issue is.

Having made my points earlier I do not believe that noble Lords will welcome a further delay in the proceedings. Therefore, I shall not move the amendment.

[Amendment No. 11 not moved.]

Lord Henderson of Brompton moved Amendment No. 12: Page 5, line 14, at end insert: (" (4) Regulations made under this paragraph shall allow special conditions to be set in respect of repayment of loans for disabled students or graduates.").

The noble Lord said: My Lords, the amendment is the same as that which I moved and withdrew on Report. However, there is one minor exception which I hope will appeal to the noble Earl. It provides that regulations may be made under this paragraph to allow special conditions to be set in respect of repayment of loans for disabled students or graduates. I have left out the words which appeared in my previous amendment; they were "in comparison with loans to other students". The noble Earl was right to take exception to those words and I hope that the amendment is acceptable in its present form.

The arguments were adduced at great length during previous stages and therefore I do not need to go into detail. Briefly they are, first, that a disabled student is likely to incur larger loans than a non-disabled student. Secondly, when the disabled student becomes a graduate he is likely to be poorer than graduates who are able bodied. He will be poorer partly because he will have incurred greater expenses, partly because he will have greater costs and partly because, on average, the disabled graduate receives a smaller income than the non-disabled graduate.

For all those reasons it appears to be unanswerable that special conditions should be set for the repayment of loans for disabled students. I beg to move.

Baroness David

My Lords, I support the amendment as I did on Report. The noble Lord, Lord Henderson, has made the necessary points and there is no need for me to repeat them. I hope that disabled students will receive the extra help. We all agree that what has been given is generous but, because of the difficulties that they will face when repaying the loans, that is not enough.

Lord Addington

My Lords, I support this amendment. The points have already been made. The disabled not only have a more difficult time as students, but they have a far higher probability of being unemployed and a far less chance of earning very high salaries. Thus I suggest that it is only fair that they receive special consideration.

Baroness Darcy (de Knayth)

My Lords, I support this amendment. I hope that the Minister has been able to assist on this aspect. I wonder whether the Government have fully understood the point about the extra costs of disabled life. Even if a disabled person manages to obtain a job as highly paid as an able-bodied counterpart, and manages not to run up a higher loan, there are still the extra costs which are not fully offset by the mobility and attendance allowances. Those costs occur daily for the rest of your life.

Lord Milverton

My Lords, I also support this amendment.

The Earl of Caithness

My Lords, we announced on 19th March that there would be special provision for disabled people repaying their loans, in the form of a disregard of disability-related benefits for the purpose of assessing a disabled graduate's income for deferment.

Disabled people with low incomes will be protected by the deferment threshold at 85 per cent. of national average income. Those who continue to earn less than this generous threshold may expect to make no repayments, and to have their debts cancelled at the age of 50. Those two sentences cover the point of concern of the noble Lord, Lord Addington, as he has just expressed it to the House.

The disregard of disability-related benefits will ensure that disabled graduates are not lifted above the threshold by benefit income. Someone who received the mobility allowance would find that the disregard effectively raised his threshold to around 90 per cent., or over £ 12, 200 in today's terms. Anyone receiving disability-related benefits of over £ 40 per week in today's terms would enjoy a threshold above 100 per cent. of average earnings.

I repeat the assurances I gave at Report stage that this provision will be included in regulations, which the House will debate for their first use.

I now turn to the key point of what I have to say. The noble Baroness, Lady Darcy (de Knayth), said that she hoped that I had given this matter further consideration, as I have. What convinces me on my line of argument is that there is no need to insert in the Bill a measure permitting special provision to be made for repayments by the disabled. The Bill as drafted already provides for that.

I can reassure the House that an enormous amount of work has gone into this area. We were able to come back with a very generous package for the disabled which we have discussed on a couple of occasions. I understand the anxieties of the noble Lord, Lord Henderson of Brompton. We are very keen to monitor the situation and look at it. However, I return to my key point— that is, there is no need to insert this into the Bill because the Bill as drafted already allows for it.

Lord Henderson of Brompton

My Lords, the Bill may already contain the provision. No doubt the noble Earl can tell us where it is. However, this is not so material as whether or not the Government will make use of the provision. That is what we should like to have from the noble Earl. If he says he will make use of the provision, then there would be good reason to withdraw the amendment.

I hope that the noble Earl recognises that there is support from all sides of the House on this amendment. When he talks about the disregard of disability-related benefits, that is beside the point because all disabled people do not receive those benefits. For example, the deaf are very gravely handicapped but do not receive the same disability-related benefits as those confined to wheelchairs. Therefore, disregard is neither here nor there for them.

Unless there is an assurance from the noble Earl that the Government will make use of the regulations in the sense for which we have all pressed, I shall ask the House to divide.

The Earl of Caithness

My Lords, on the question of whether the Bill permits the disabled to be treated differently, I draw the noble Lord's attention to Clause 1 (6), and particularly the last line.

I cannot go further regarding what the noble Lord said today. He knows that we have responded very considerably towards meeting the anxieties of the disabled. I fear that we are not going to agree exactly on the final amount today. However, there has been a considerable shift in the Government's position, as I have been able to tell your Lordships. We shall continue to monitor the situation very carefully.

Lord Boyd-Carpenter

My Lords, before my noble friend sits down, perhaps I may ask this question. Is it not the case that however good and honourable are the present Government's intentions— and I am sure they are— if we put the words of this amendment into the Bill that will serve as a very useful handle should we have the misfortune to have a government who are less fair on this matter? There is a great deal to be said for having something on the face of the Bill which can be referred to if the government of the day, whoever they may be, do not make that sort of provision.

The Earl of Caithness

My Lords, with respect to my noble friend, I have heard him use the opposite argument; namely, if it is provided for in the Bill there is no need to write it on the face of the Bill a second time. On the question of the disabled, whatever may be the colour, complexion or belief of the government in power, the concerns of the disabled will always be very much to the fore as they are to the forefront of the mind of this Government.

Lord Hughes

My Lords, when I sat on that Bench opposite I was always very pleased when I was able to say that an amendment was not acceptable because it contradicted what we intended to do. On more than one occasion I refused to accept a brief which told me that I should not accept the amendment because it was already covered in another form in another part of the Bill. I told my advisers that there is nothing wrong with belt and braces.

Lord Henderson of Brompton

My Lords, I am extremely grateful for the support of the noble Lord, Lord Boyd-Carpenter, and of the noble Lord, Lord Hughes. I hope that the noble Earl will understand that it is the feeling of the House that special provision for the disabled should be written into the Bill. I appeal to him to accept that. I very much regret that if he does not, I shall have to divide the House. It would be most acceptable to the House if the noble Earl could nod his head, but I can see that he is not doing so and regretfully I ask the House to divide on this amendment.

5.27 p.m.

On Question, whether the said amendment (No. 12) shall be agreed to?

Their Lordships divided: Contents, 92; Not-Contents, 85.

DIVISION NO. 3
CONTENTS
Addington, L.	Hughes, L.
Adrian, L.	Hunt, L.
Airedale, L.	Hylton-Foster, B.
Allen of Abbeydale, L.	Jenkins of Putney, L.
Ardwick, L.	Kearton, L.
Aylestone, L.	Kilmarnock, L.
Baldwin of Bewdley, E.	Llewelyn-Davies of Hastoe, B.
Beloff, L.
Birk, B.	Lloyd of Hampstead, L.
Blackstone, B.	Lloyd of Kilgerran, L.
Blease, L.	Longford, E.
Blyth, L.	Lovell-Davis, L.
Boston of Faversham, L.	Macaulay of Bragar, L.
Boyd-Carpenter, L.	McColl of Dulwich, L.
Broadbridge, L.	McGregor of Durris, L.
Bruce of Donington, L.	Milverton, L.
Carmichael of Kelvingrove, L.	Molloy, L.
	Monson, L.
Cobbold, L.	Morton of Shuna, L.
Congleton, L.	Mulley, L.
Craigavon, V.	Nicol, B.
Dacre of Glanton, L.	Perry of Walton, L.
Darcy (de Knayth), B.	Peston, L.
David, B.	Pitt of Hampstead, L.
Dean of Beswick, L.	Ponsonby of Shulbrede, L.
Diamond, L.	Renton, L.
Donaldson of Kingsbridge, L.	Richardson, L.
Dormand of Easington, L.	Rippon of Hexham, L.
Erroll, E.	Ritchie of Dundee, L.
Ezra, L.	Robson of Kiddington, B.
Falkland, V.	Saint Oswald, L.
Flowers, L.	Saltoun of Abernethy, Ly.
Foot, L.	Seear, B.
Gallacher, L.	Serota, B.
Gladwyn, L.	Shaughnessy, L.
Graham of Edmonton, L. [Teller.]	Simon of Glaisdale, L.
	Stedman, B.
Grantchester, L.	Stoddart of Swindon, L.
Grimond, L.	Swann, L.
Hacking, L.	Tombs, L.
Hanworth, V.	Tordoff, L.
Hatch of Lusby, L.	Underhill, L.
Henderson of Brompton, L. [Teller.]	Wallace of Coslany, L.
	Whaddon, L.
Henniker, L.	White, B.
Holderness, L.	Wilberforce, L.
Hooson, L.	Williams of Elvel, L.
Howie of Troon, L.	Willis, L.

NOT-CONTENTS
Aldington, L.	Henley, L.
Allenby of Megiddo, V.	Hertford, M.
Arran, E.	Hesketh, L.
Atholl, D.	Hives, L.
Balfour, E.	Hooper, B.
Bauer, L.	Jenkin of Roding, L.
Belstead, L.	Killearn, L.
Bessborough, E.	Lauderdale, E.
Blake, L.	Long, V. [Teller.]
Blatch, B.	Lyell, L.
Borthwick, L.	Mancroft, L.
Brookeborough, V.	Merrivale, L.
Brougham and Vaux, L.	Morris, L.
Butterworth, L.	Mottistone, L.
Caithness, E.	Mountevans, L.
Caldecote, V.	Munster, E.
Campbell of Alloway, L.	Nelson, E.
Carnegy of Lour, B.	Newall, L.
Carnock, L.	Nugent of Guildford, L.
Colwyn, L.	Orkney, E.
Constantine of Stanmore, L.	Orr-Ewing, L.
Cottesloe, L.	Peel, E.
Cross, V.	Prior, L.
Cullen of Ashbourne, L.	Quinton, L.
Davidson, V. [Teller.]	Rankeillour, L.
Denham, L.	Reay, L.
Derwent, L.	Renwick, L.
Eccles, V.	Saint Albans, D.
Elles, B.	St. Davids, V.
Elton, L.	Sanderson of Bowden, L.
Ferrers, E.	Selkirk, E.
Fisher, L.	Skelmersdale, L.
Fraser of Carmyllie, L.	Stockton, E.
Fraser of Kilmorack, L.	Strange, B.
Gainford, L.	Strathclyde, L.
Gardner of Parkes, B.	Strathmore and Kinghorne, E.
Geddes, L.
Glenarthur, L.	Trumpington, B.
Gray of Contin, L.	Ullswater, V.
Greenhill of Harrow, L.	Vaux of Harrowden, L.
Grimthorpe, L.	Whitelaw, V.
Hailsham of Saint Marylebone, L.	Yarborough, E.
	Young, B.
Hanson, L.

Resolved in the affirmative, and amendment agreed to accordingly.

5.35 p.m.

Lord Beloff moved Amendment No. 13: Page 5, line 28, at end insert: (" (1A) The Secretary of State shall provide to such institutions full compensation in respect of all work required in connection with the certification or otherwise of a students eligibility, and such compensation shall be in addition to that made available for the work required in connection with the distribution of Access Funds.").

The noble Lord said: My Lords, those noble Lords who were here around midnight at Report stage heard the arguments for this amendment rehearsed at some length both by myself and by the noble Lord, Lord Flowers. I therefore need only rehearse them briefly today.

One matter that has worried me throughout the debates on the Bill is a tendency to underestimate the administrative costs. In so far as these proposals reflect extra administrative costs to the Government, that is a matter which they must balance against the advantages they believe the scheme confers on the country. My concern— a universal concern in the institutions of higher education— is that the universities and polytechnics will also bear considerable administrative costs. Those costs have already manifested themselves in relation to the community charge where they are involved in dealing with the students liable to pay it, but certification is probably a more serious and complicated business.

The noble Earl described the process to be followed by the student and the role of the university as regards certification. There will be extra administrators; no doubt extra typewriters, telephones, offices and so forth. Since this was not a measure forced upon the Government by the overwhelming enthusiasm of the universities and polytechnics, but a government measure which they asked those institutions to accept, surely the financial responsibility should be that of the Government.

Universities and other institutions of higher education have no free money. Many of them are in considerable financial difficulty. If money has to be paid to certify students for the student loans, it can only be obtained by cutting the universities' activity in some other respect— by reducing teaching staff or curtailing research. In other words, unless there is a guarantee from the Government that they will pay the extra administrative costs, they are asking universities to divert money from their primary concerns— teaching and research— to a secondary concern, administration.

In replying to the debate the Minister informed us that there was no need to worry. The Government would be consulting with the Committee of Vice-Chancellors and Principals and the Committee of Directors of Polytechnics. He said that in those discussions the question of who should pay the bill "would be on the agenda".

That is a slippery phrase. On a day when Chancellor Kohl is visiting London I seem to remember someone saying a little while ago, that German unification was not on the agenda. It now appears to be on the agenda. Similarly, if the noble Earl says that the matter of payment is simply to be "on the agenda", how do I know that it will turn out not to be on the agenda?

In other words, all we are asking is that the Minister should admit that it will cost the universities, polytechnics and colleges money; that they have no money to meet these costs and that the Government recognise their obligation to furnish resources to enable institutions to carry through the Government's own policy. I commend the amendment to your Lordships. I beg to move.

Lord Flowers

My Lords, I support the noble Lord, Lord Beloff. He has stated the general case very thoroughly and I do not want to repeat it. However, I should like to highlight what is involved. On Report the Minister said something about the process that is required but since then we have had the DES press release of 22nd March which amplifies that process.

It seems that the student applies through the college, which will have to certify him as a proper student on a proper course. The student will take with him as proof of identify his birth certificate, his mandatory award letter, if any, his bank or building society account number, and so on. However, what bothers me are the following words: The academic institution checks the documents the student brings with him. The student completes an eligibility form". Therefore, the college has to check the student's birth certificate, bank account number, and so on. I do not know what one does when checking such things. Perhaps that is perfectly reasonable but I wish I understood better what will actually be involved. Therefore I do not know what the costs will be and for that reason I hope that they will be covered by the Government, who are putting this demand upon the universities. We are already faced with the demand to administer access funds and in recent years at the Government's behest we have had to administer all sorts of schemes at the expense of our teaching and research, as the noble Lord, Lord Beloff, said.

Lord Adrian

My Lords, I spoke on this issue in Committee and on Report and I was grateful to the noble Earl the Paymaster General for saying on Report that the question of payments would be on the agenda of the meeting between the universities and the DES.

I put my name to this amendment because I hope that the Minister will indicate today how his thinking on the matter is developing. I know that it is only a few days since the Report stage was concluded but I am sure the House would be grateful to hear that the Government will not only place this matter on the agenda of the forthcoming meeting but will also come forward with an offer of financial support, preferably with an offer of new resources to support the administrative activities that this new scheme will involve.

Baroness Blackstone

My Lords, I support this amendment from these Benches. All of us who are involved in running higher education institutions know the difficulties of the current financial situation. We are speaking not just about universities but about polytechnics and colleges of higher education. As the noble Lord, Lord Beloff, so rightly said, this scheme could well mean the diversion of funds from the main responsibilities of higher education institutions, which are to teach our students, and to undertake research into supporting the Government in the administration of a scheme involving student maintenance. As I have already said that would be a highly undesirable situation in the context of so little funding being available for new developments in research and teaching.

In supporting Amendment No. 13 I shall not be moving my Amendment No. 15 since both amendments cover exactly the same issues and the wording of Amendment No. 13 is, if anything, better than the wording of my amendment.

5.45 p.m.

Lord Kilmarnock

My Lords, there is a report in today's issue of Nature — an admirable publication which some of your Lordships may read— which states: DES officials say they will discuss any arrangements to reimburse universities for additional costs with the Committee of Vice-Chancellors and Principals at a future date". That must mean after the passing of this Bill. I think the House will agree that that is rather an unsatisfactory situation in which to allow the Bill to leave this House. For example, if the talks break down what will happen? I am sure the noble Earl will be able to assist us this afternoon and give some indication that the talks will take place under reasonable auspices.

Lord Boyd-Carpenter

My Lords, this seems to be a reasonable amendment. No one can allege that the universities have clamoured for the scheme. It is well known that the Government have decided, for better or worse and for their own reasons, to impose the scheme on them. That inevitably raises the basic question of who pays.

No one is clear— though we shall perhaps be clearer when my noble friend the Paymaster General has spoken— as to how much money is involved, but I put to him that he is facing a dilemma. If, as I suspect, the amount is substantial, it is wrong that it should come out of the universities' assets. If, on the other hand, it is trifling, it is putting no obligation on the Government and the taxpayer to ask them to shoulder it. Either way, it seems that there is a case, if the Government want to go ahead with the scheme, for not seeking directly or indirectly to make the universities pay for it.

Baroness White

My Lords, I draw the attention of the noble Earl to the fact that this coming year will be particularly arduous because it covers the entire body of students, as I understand it, and not just one year's entry, which will occur later on. We have to arrange— as we shall in our college— to deal with some 8, 000 students, though not all of them will be eligible for the loan system as some are from overseas. Nevertheless, it will be a very difficult job and if, as the noble Lord, Lord Flowers, indicated, we have to check a number of personal documents, whatever they may be, I cannot help thinking how much easier it would be for the Government to accede to the vice-chancellors' suggestion that it should all be done through the Inland Revenue.

However, the Government have not felt able to do that so they must recognise, particularly in this coming academic year, that they are putting a considerable administrative burden upon staffs, which some of us have been pruning— perhaps over-vigorously— over the past few years.

Viscount Eccles

My Lords, I do not want the universities to divert money to this scheme which they would otherwise spend on other forms of education. However, I do not see why they should be given a blank cheque to hire as many people as they like in order to administer it. Therefore, what should one do? I believe the answer is simple. The money should come from the access fund.

Lord Rippon

My Lords, I do not wholly agree with the argument put forward by my noble friend Lord Eccles. This has nothing to do with whether one is in favour of student loans. It is wholly reasonable that this amendment should be accepted by the Government for the reasons given by my noble friend Lord Boyd-Carpenter.

We all know that at present the universities are under tremendous pressure. Funds are not freely available for extra expenditure of this nature. It is not a question, if I may say so, of giving the universities a blank cheque. After all, the universities are subject to audit. Perhaps I should declare an interest as chairman of the audit committee of London University. But it certainly seems to me that the universities should be reimbursed for all expenditure necessarily incurred in carrying out duties imposed by government legislation.

Lord Nugent of Guildford

My Lords, I wish to put one more point to my noble friend. There is a certain logic in this amendment. The purpose of the Bill is to raise additional funds for the universities and the growing number of students. This is a measure which will be of assistance to the Treasury and the taxpayer in the long run. The universities are being asked to work the machinery when the Bill becomes an Act. It is only reasonable that the cost of working that machinery, which will benefit the Government, should be borne by them.

It is well known that universities are going to great lengths to work the machinery. My particular interest is Surrey University. It has set up a research park to earn itself fresh income in order to keep the university going. It would be very hard if the university had to use such hard earned funds in order to provide the machinery to work this scheme for the benefit of the Government. With his admirable mind, I am sure that my noble friend will see the logic of that argument.

Lord Swann

My Lords, I wish to give your Lordships the results of some calculations which I have done though they may well be wrong. I do not have my calculator with me. I have done a little mental arithmetic. I was considering what I would have thought if I were in charge of this scheme in the days when I was Principal of Edinburgh University. I do not believe for one moment that it could be carried out for less than about 10 minutes per student, and probably a lot more. Edinburgh University had 10, 000 students, so that is 100, 000 minutes per annum. That equals 16, 000 hours, which is 400 weeks; something like eight-man years would be involved each year. It would have involved quite a lot money as well as a lot of wasted time by intelligent people.

The Earl of Caithness

My Lords, at Report stage I described in some detail the role of the academic institutions in the student loans scheme. I said that, while that role will be important, it will also be limited, as indeed has been requested.

Academic institutions will identify their students, certify them as eligible and issue forms. Students will apply for loans directly to the Student Loans Company, through the post. The academic institutions will also be expected to inform the Student Loans Company if a student unexpectedly ceases to be eligible by leaving a course prematurely, and to store documents for auditing purposes.

Apart from that, the academic institutions will not be involved in any steps beyond certifying eligibility. I have listened carefully to what noble Lords have said at Second Reading, Committee and Report stages of the Bill about the matter of payment to the academic institutions.

Given what I had said, I was very surprised to hear what my noble friend Lord Beloff said. He said something to the effect that he did not know whether this matter would be on the agenda when I said that it would be. I can confirm the fact that the department's officials have already written confirming that payment is on the agenda. That subject will be discussed. I do not know whether or not I can convince my noble friend, but that is up to him.

Just as the Government were willing to make a payment contribution towards the cost of the scheme when it was to be run by the banks, so we will be willing to make a contribution to the institutions. Those payments will reflect the limited role in the certification process which we are asking the institutions to take on.

The issue will be discussed at official level at a meeting to be held next Tuesday. I do not think any of us can anticipate the outcome in detail, but I can assure your Lordships that the momentum of discussion will be maintained.

My noble friend Lord Beloff said that we were underestimating the administrative cost. The Government have said all along that the administrative cost of the scheme would be in the range of £ 10 million to £ 20 million. There is no reason to change that view. It is not the Government who have underestimated the cost, but the critics who have consistently overestimated it.

The noble Lord, Lord Flowers, raised the question of college checks. I shall go over that point again. The colleges will check the correct transcription of material on the birth certificate, the chequebook, etc., onto the eligibility certificate. These are details and how they will be worked out will be a matter for discussion between officials on Tuesday.

There is another point which I believe will be of interest to your Lordships. During the summer term, the Student Loans Company and the education departments will be organising a major information programme for the academic institutions. We shall work closely with the institutions at all stages. It is in our joint interests to ensure that students have swift and efficient access to additional resources this autumn.

Perhaps I may confirm the two main points. First, payment is on the agenda for the meeting on Tuesday. Secondly, and most important is the matter which is of concern to so many of your Lordships and that is that the Government are willing to make payments to the institutions, but it is the amount which has now to be decided.

Lord Beloff

My Lords, I am delighted to know that the matter is on the agenda and that there is not time now for it to come off. I am sure that my noble friend was right in assuring us that that was the case. He has also said— perhaps it goes some way to meeting the point made by the noble Lord, Lord Kilmarnock— that the Government contemplate, in the course of those negotiations, making a contribution towards the cost. In consequence, I might have been tempted to withdraw this amendment were it not for the fact that my noble friend prefaced his remarks by insisting that the costs of the universities were very limited because their function was very limited.

The noble Lords, Lord Flowers and Lord Swann, I suspect have more academic experience between them than most Members of your Lordships' House. Their remarks show that, even accepting the view— and we accept the Minister's word for it— that all that is required is the certification that students are who they say they are and that they inform the loan company should they cease to be students, nevertheless, a very considerable sum of money is involved.

The documents have to be examined and the students have to be interviewed. It is difficult to see how that can be done in any other way. So when the Minister suggests that the expenditure is not very large, one begins to wonder whether the offer made to the universities will come anywhere near the total cost to them of the operation. The Minister could accept the view of his noble friend Lord Rippon, or the opinion expressed by his noble friend Lord Boyd-Carpenter, and simply tell the House that the necessary cost to the universities of the certification process will be reimbursed with due audit by Her Majesty's Government. In that case the amendment would have served its purpose and I would feel able to withdraw it.

The Earl of Caithness

My Lords, with the leave of the House, I must point out that I did not say that the cost was not large. I said that the costs have to be quantified. I said that the Government are willing to make a contribution. One of the points of the Tuesday meeting is to assess exactly that issue. We have to discuss the matter with the institutions. We are in touch with them at the moment. If the officials put forward a good idea and say that, within that framework they can carry out what is required in a slightly different way and the costs will be so much; or if the officials say that it would be easier to use an alternative method, that will affect the cost. I cannot say what the cost will be. No way did I ever say that the cost would not be large. I do not know what the cost will be and that is what the Tuesday meeting will be concerned with. Your Lordships have a commitment from me that the Government will pay the money.

Lord Peston

My Lords, the noble Lords, Lord Beloff and Lord Rippon, laid down a very simple principle. It was not that the universities and colleges should be allowed to exploit the Government, but simply that the Government should agree that, whatever be the agreed audited costs, they were the costs that the Government should meet. I cannot understand how the noble Earl can possibly reject that suggestion. It is the noble Earl's scheme. Surely the Government would be willing to meet the agreed audited costs of the scheme. That is all that the noble Lord, Lord Beloff, is asking for, and I cannot see how the noble Earl can reject it.

6 p.m.

The Earl of Caithness

My Lords, with respect, that is not what the amendment states. It might well be one definition of how we assess the cost, but as all noble Lords will know, it is not the only way. However, I have given a very firm commitment to the House this afternoon.

Lord Boyd-Carpenter

My Lords, before my noble friend sits down, can he say whether the commitment that he has given to the House is that the Government will reimburse to the universities all costs of introducing and operating the scheme which can be shown to have arisen as the result of his discussions or otherwise? Will he undertake not— as he used the phrase— to make a contribution, but to pay those costs in full?

The Earl of Caithness

My Lords, what the Government are willing to do is obviously to meet the reasonable costs of this scheme. What I do not know is what those costs will be. I have made a very firm commitment that the Government are willing to make payments to the institutions. That has to be decided at the meeting on Tuesday.

Lord Flowers

My Lords, will the noble Earl accept the phase "audited costs", which means that they are real?

The Earl of Caithness

My Lords, as I said, that could be one of the methods by which we arrive at an assessment of the final cost. At this stage, to pre-empt the discussion that will take place would be wrong. I shall certainly draw to the attention of my right honourable friend the feeling in the House that that is what the preferred method would be.

Lord Renton

My Lords, before my noble friend sits down, is there not a difficulty there? Unless an amendment goes to another place which enables the matter to be put right, whatever view his noble friend may take, it will be too late for the matter to be put right unless we do something now.

The Earl of Caithness

My Lords, it is a question of getting the matter right. I put it to your Lordships that the best way of getting it right is to have a commitment from the Government that they will meet the costs. That I have given. The best way for that to be assessed and agreed is at a meeting between the parties. That will be on Tuesday of next week. It might not be the last meeting, but it will certainly be the first.

Lord Flowers

My Lords, I am sorry to interrupt again. However, the Minister is saying that at the meeting we shall form the estimated costs. I think that the House would be satisfied if the Minister undertook that the audited costs after the event would be met. Of course we must estimate the costs at this meeting which he has promised us— and I am glad that he has done so— but the real costs are the audited costs after the event. We need an assurance about them.

The Earl of Caithness

My Lords, I am not an expert on the definition of audited costs. However, I believe that "audited" proves the probity of the accounts. I know that the noble Lord, Lord Flowers, is keen to get this right, as are the Government. I am sure that he would understand that it would be wrong for me to prescribe at this stage, before the meeting, exactly the best method of assessing the final picture. That is rightly left for the discussions that will be held.

Let me say yet again that noble Lords have a commitment that the Government are concerned about this matter. We understand the points that have been made. That is why I was able to give the firm commitment that I have given this afternoon.

Baroness David

My Lords, before the noble Lord sits down, perhaps I may ask whether the meeting for Tuesday is absolutely fixed or will it take place only if the Bill has received Royal Assent by then?

The Earl of Caithness

My Lords, that is a different question to which I do not know the answer. As your Lordships will be aware, there are many meetings between officials and the higher institutions. As I have said on numerous occasions, we wish to continue to foster that situation. It is absolutely fixed, my Lords.

Baroness White

My Lords, will the noble Lord agree with the noble Lord, Lord Renton, that if we accept the amendment now there is still an opportunity in another place for members to say that they do not accept it? We then have the procedure between the Houses and so on. If we do not have this provision on the face of the Bill, we have nothing that will sustain us if, by unhappy chance, anything should go wrong with the discussions.

Viscount Eccles

My Lords, as I understand it, the Government are willing to pay the costs, but they wish to know what scheme will be brought in. It is no good saying that all schemes cost the same money. The scheme might be computerised; it might not. One must find that out first. If I were Minister, I should not be willing to trust all the universities to produce a good, efficient, economic scheme. We wish to know that factor before the taxpayer is asked to pay the money.

Lord Grimond

My Lords, will the Minister confirm that he said that the Government would meet the costs— that seems to be perfectly adequate— and not that they would make a contribution to the costs? He said at one point that the Government would meet them. We wish to qualify that by finding out what they will be and the method of meeting them which is to be decided. Will he confirm that he categorically stated that the Government would meet the costs. That is quite clear.

The Earl of Caithness

My Lords, I am extremely grateful to the noble Lord, Lord Grimond, and my noble friend Lord Eccles. I think that that covers exactly what I have been saying and meets very much the concerns that your Lordships have stated.

Baroness Seear

My Lords, if the noble Earl says that, why on earth does he not accept the amendment?

Lord Beloff

My Lords, I have listened to this further exchange. I think that the noble Earl misunderstands the amendment. The amendment does not commit the Government either to a particular sum of money, or (and this meets the case put by the noble Viscount, Lord Eccles) prescribes any particular way in which it should be administered. It merely puts on record the fact that the Government are committed to meeting the costs of the universities which, as the noble Lord, Lord Grimond, says, is what the noble Earl has said. I cannot understand why the noble Earl will not agree to an amendment which does not bind him to more than what he has stated, especially in view of the remarks of my noble friend Lord Renton that this would enable the issue to be considered when the Bill returns to another place.

The Earl of Caithness

My Lords, I am grateful to my noble friend for giving way. Perhaps I may say, with the leave of the House— because, with respect, we are on the point of becoming quite out of order— that the amendment provides for compensation in respect of all work required in connection with the certification". In view of what my noble friend Lord Eccles said, it is working out those costs exactly that is important. On the advice that I have received, the amendment is very open ended.

Lord Beloff

My Lords, no. "Required" means required by Her Majesty's Government in order to carry out Her Majesty's Government's intentions. In the light of that answer,. I must seek the opinion of the House.

6.8 p.m.

On Question, whether the said amendment (No. 13) shall be agreed to?

Their Lordships divided: Contents, 80; Not-Contents, 83.

DIVISION NO. 4
CONTENTS
Addington, L.	David, B.
Adrian, L.	Dean of Beswick, L.
Airedale, L,	Derwent, L.
Allen of Abbeydale, L.	Diamond, L.
Ardwick, L.	Dormand of Easington, L.
Atholl, D.	Dunrossil, V.
Aylestone, L.	Ennals, L.
Beloff, L. [Teller.]	Erroll, E.
Birk, B.	Ezra, L.
Blackstone, B.	Falkland, V.
Blyth, L.	Fisher, L.
Boyd-Carpenter, L.	Flowers, L. [Teller.]
Broadbridge, L.	Foot, L.
Carmichael of Kelvingrove, L.	Gallacher, L.
	Geddes, L.
Cobbold, L.	Graham of Edmonton, L.
Congleton, L.	Grimond, L.
Craigavon, V.	Hanworth, V.
Dacre of Glanton, L.	Hatch of Lusby, L.
Dainton, L.	Henderson of Brompton, L.
Darcy (de Knayth), B.	Henniker, L.

Houghton of Sowerby, L.	Peston, L.
Hughes, L.	Pitt of Hampstead, L.
Hunt, L.	Ponsonby of Shulbrede, L.
Hylton-Foster, B.	Renton, L.
Jenkins of Putney, L.	Richardson, L.
Kearton, L.	Rippon of Hexham, L.
Kilmarnock, L.	Robson of Kiddington, B.
Llewelyn-Davies of Hastoe, B.	Russell of Liverpool, L.
	Saint Oswald, L.
Lloyd of Hampstead, L.	Saltoun of Abernethy, Ly.
Lloyd of Kilgerran, L.	Seear, B.
Longford, E.	Simon of Glaisdale, L.
Lovell-Davis, L.	Stedman, B.
Macaulay of Bragar, L.	Stoddart of Swindon, L.
McGregor of Durris, L.	Swann, L.
Molloy, L.	Tordoff, L.
Monson, L.	Underhill, L.
Mulley, L .	White, B.
Nicol, B.	Wilberforce, L.
Perry of Walton, L.	Willis, L.

NOT-CONTENTS
Allenby of Megiddo, V.	Hooper, B.
Arran, E.	Jenkin of Roding, L.
Balfour, E.	Kinnoull, E.
Bauer, L.	Lauderdale, E.
Belstead, L.	Liverpool, E.
Bessborough, E.	Long, V.
Blake, L.	Lyell, L.
Blatch, B.	McColl of Dulwich, L.
Boardman, L.	Mancroft, L.
Borthwick, L.	Merrivale, L.
Brookeborough, V.	Milverton, L.
Brougham and Vaux, L.	Morris, L.
Buckinghamshire, E.	Mottistone, L.
Butterworth, L.	Mountevans, L.
Caithness, E.	Munster, E.
Caldecote, V.	Nelson, E.
Campbell of Alloway, L.	Newall, L.
Carnegy of Lour, B.	Nugent of Guildford, L.
Carnock, L.	Orkney, E.
Cocks of Hartcliffe, L.	Orr-Ewing, L.
Colwyn, L.	Peel, E.
Constantine of Stanmore, L.	Prior, L.
Cottesloe, L.	Rankeillour, L.
Davidson, V. [Teller.]	Reay, L.
Denham L. [Teller.]	Renwick, L.
Eccles, V.	Saint Albans, D.
Elles, B.	Sanderson of Bowden, L.
Elton, L.	Selkirk, L.
Ferrers, E.	Sharples, B.
Fraser of Carmyllie, L.	Skelmersdale, L.
Fraser of Kilmorack, L.	Stockton, E.
Gainford, L.	Strange, B.
Gardner of Parkes, B.	Strathclyde, L.
Glenarthur, L.	Strathmore and Kinghorne, E.
Gray of Contin, L.
Hailsham of Saint Marylebone, L.	Torrington, V.
	Trumpington, B.
Hanson, L.	Ullswater, V.
Henley, L.	Vaux of Harrowden, L.
Hertford M.	Whitelaw, V.
Hesketh, L.	Yarborough, E.
Hives, L.	Young, B.
Holderness, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.15 p.m.

Baroness David moved Amendment No. 14: Page 5, line 40, at end insert: (" (1A) The Secretary of State shall in making any provision in respect of the disbursement to institutions of funds to be made available as Access Funds issue guidelines to the Universities Funding Council and the Polytechnics and Colleges Funding Council on the criteria by which such funds are to be dispersed to these institutions, after consultation with such bodies as appear to him to be concerned. (1B) The institutions referred to in sub-paragraph (1A) above shall publish information on how they distribute these Access Funds to their students.").

The noble Baroness said: My Lords, the purpose of this amendment is to attempt to ensure that the allocation of funds by the individual education institutions has regard to fairness, financial hardship and individual need, and that the criteria used to enable this to take place are established in consultation with the appropriate bodies. The individual education institution will make public the methods it has used to distribute the funds.

On 26th March, the Secretary of State for Education announced a further £ 10 million for the access funds. This I understand will give the undergraduate sector £ 14 million, the postgraduate sector £ 6 million and the further education sector £ 5 million. Despite increases, these amounts are unfortunately still wholly inadequate to compensate for losses incurred as a result of the Government's proposed student financial support scheme.

In the White Paper the section on access funds includes the following: The Government hopes that the institutions will themselves work out imaginative arrangements for enhancing the value and scope of the funds, for example, by linking payments to sponsorship, helping students find paid employment, or making some payments on a repayable basis, as well as making grants.

In a letter to the chairman of the UFC on 23rd November, Mr. MacGregor said: The degree to which the funds assist access for undergraduates will depend on the skill with which institutions not only use the funds available but also develop imaginative ways of enhancing the value of them". Quite how they will do that I do not know. Mr. Jackson, in Committee in January, quoted this statement from the White Paper as being desirable. It seems unlikely that if the payments were linked to sponsorship or were made in the form of loans, as the White Paper suggests, they could also be made on the basis of financial hardship and individual need.

I trust that in reply the Minister will tell us whether the White Paper statement and its corroboration by Mr. Jackson on 25th January still represent government thinking. On 19th March the noble Earl, Lord Caithness, stated (at col. 142 of Hansard), "The noble Baroness"— that is me— referred to access loans. They are not loans, they are payments".

I had made a slip-up because I certainly meant to say "funds". However perhaps I was not so wrong if the White Paper is to be followed.

Anyway, we hope that this line of thinking— the loan idea— will not inform the Secretary of State's guidelines on the criteria for the dispersal of the funds. Instead, attention should be paid to the issues of fairness, hardship and individual need. To establish the criteria that will address these issues properly, the consultation process mentioned in the amendment with such bodies as appear to him to be concerned will be absolutely essential. Consultation has been an issue of concern throughout the passage of the loans Bill. It is particularly important here to establish the specific criteria that will be used to allocate funds. The Minister accepted a previous amendment of mine on consultation, so I hope he will also feel able to accept this amendment.

A case in point which highlights the importance of consultation is that of an education institution which has made particular efforts and has been successful in increasing the proportion of students with disabilities who are taking courses, or perhaps which has a large number of four-year courses. If those institutions— there are a number of them— are allocated the same amount of funds as other institutions of comparable size, it is likely that they will be short of funds for other groups in need.

On 12th March the noble Baroness, Lady Blatch, said: Student parents will also be candidates for assistance from the access funds".— [Official Report. 12/3/90; col. [437.]

On 19th March the noble Earl, Lord Caithness, said: housing costs is one of the factors used in the distribution of access fund cash by the department". — [Official Report, 19/3/90; col. 45.]

There will of course be high regional housing costs in some areas. That has been mentioned several times during the passage of the Bill. Throughout the debates on this Bill there have been a number of claims by the Government that the access funds will be used to compensate for losses incurred by different groups such as mature students, students with dependants, students with disabilities and others. Those have all been mentioned. Hence it appears that the access funds are being used as a catch-all answer whenever the question of students losing out under the new system of student financial support is raised.

It is clear that the amounts of funds allocated are insufficient to compensate for losses suffered by all those different groups. Therefore there is a need for guidelines from the Secretary of State to establish the criteria for dispersal of the funds, and for those criteria to be worked out in consultation with the appropriate bodies. Furthermore, the use which the relevant education institutions make of the guidelines should be made public. That will help in assessing the adequacy of the access funds and give confidence and information to those students who may want help but who are not sure whether they qualify for it. This is an important matter. I beg to move.

Baroness Seear

My Lords, I wish to support the amendment. The noble Baroness, Lady David, has made most of the important points, but I wish to emphasise that it is important that the public, students as a whole and institutions should know from the centre what the broad principles for the administration of the access funds are to be. At the same time it is important that there should be adequate flexibility inside the different institutions because their needs will tend to vary considerably according to the students that they happen to have. Anyone who has been involved in this area knows that circumstances that one has not anticipated always arise. Therefore it is extremely important to have money available which one is free to use in order to meet unanticipated problems which crop up when an institution contains a variety of students with different needs and backgrounds.

I also wish to stress how important it is that the access funds should not be loans. The people who require access funds will have enough problems repaying the loans that they receive. However, graduate students will not receive any loans, so the access funds will be the only funds available to them. However, we are still hoping that the Government will not reverse the wise decision that the House made on housing subsidy. Unless that decision stands, graduate students will be in a bad position. Access funds will be the only way of assisting that particular important group of students. I hope there is no question of the access funds being provided as anything other than grants. I hope that guidance will be given so that the way in which the funds are administered is seen to be fair. That guidance should, however, include sufficient flexibility to meet the varying needs which inevitably crop up in different institutions.

Baroness Darcy (de Knayth)

My Lords, I wish most warmly to support the amendment. I think it would be very useful from the point of view of students with disabilities, as the noble Baroness, Lady David, has already said. I look forward to hearing the Minister's reply.

Baroness Blatch

My Lords, there is no reference to access funds in the Bill. Therefore, for that reason, the amendment is technically defective. However, that is not the main point I wish to make. I believe the amendment is otiose for a number of reasons. My right honourable friend intends to issue guidelines on the distribution of the access funds not only to the two funding councils but also to LEA maintained and other institutions which fall outside the ambit of the funding councils. The amendment of the noble Baroness does not include the further education sector. However, I trust that is an oversight, rather than a desire to prevent the issuing of guidance relating to the further education access fund. The guidance has already been drafted and my right honourable friend intends to discuss it with the funding councils and others in the near future.

Concern has been expressed about the need to ensure that the funding councils should be asked to take account of students' accommodation costs in distributing the access funds to the institutions. I can assure the House that my right honourable friend's guidance will do precisely that.

There has also been some concern that institutions will not regard disabled students as eligible for access fund assistance because they retain entitlement to certain social security benefits. My right honourable friend will be willing to draw attention to this point in giving guidance to the administrators of the three proposed funds, if your Lordships feel this would be helpful.

As to the requirement that institutions should publish information on how they distribute the access funds to their students, the Government made it clear in the White Paper that institutions would have discretion as to the administration of the funds. We shall certainly be reviewing the operation of the access funds, as the White Paper made clear. We shall be asking the funding councils and the institutions to co-operate with us in that, by making available data on the use to which the money is put. From that the Government will expect to be able to publish data on the way the access funds are used.

But it would not be right to place a statutory obligation on the further and higher education institutions to publish individual statistics, although some may wish to do so. The operation of the scheme will be monitored, and the data will be published, centrally rather than piecemeal.

I believe that the noble Baroness, Lady Seear, said that she expected the access funds not to be loans and that they should always be grants. If institutions thought it appropriate to make a loan to a student rather than to give a grant because that student may just need time to become solvent and to overcome a crisis in his life, that would be an appropriate use of the funds and would extend their use. I envisage, however, that most payments of this kind would be in the form of grants. However, I should not like to think that the facility of a loan was necessarily excluded. However, that would be a matter for the institution concerned. The noble Baroness also referred to postgraduates. It is quite wrong to say that access funds will only be available to postgraduates. Their present grant arrangements will continue.

Baroness Seear

My Lords, I did not intend to say that in the least. However, I understand that one access fund is intended for graduates. Is that not correct?

Baroness Blatch

Yes, my Lords, That is correct. The amendment is technically defective but I also believe it is unnecessary and inappropriate. Therefore, I hope that the noble Baronesses, Lady David and Lady Seear, will feel able to withdraw it.

Baroness David

My Lords, I am disappointed with that reply. I am not at all surprised that the amendment is defective. The point about the further education sector was an oversight. However, I am glad that institutions will have discretion in this matter because they will have different needs. I am glad also that the operation will be monitored. Nevertheless, I am disappointed as regards what the noble Baroness said about loans because I thought these access funds were to be outright grants. If they are to be granted as loans, they will represent yet another burden on the students concerned.

However, it appears that there will be some guidance on this matter. One certainly hopes, for the sake of the students, that the institutions will know what kind of grants are to be given from the funds. That is an important point because otherwise students will not know whether to apply for funds and what to apply for. I shall certainly not press the amendment at this stage, but we shall watch very carefully to see what happens. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 15 not moved.]

6.30 p.m.

The Earl of Caithness

My Lords, I beg to move that the Bill do now pass.

Moved, That the Bill do now pass.— {The Earl of Caithness.)

Lord Peston

My Lords, our deliberations are nearly at an end. I cannot pretend that I am at all happy with the Bill although noble Lords can claim to have removed or moderated some of its faults. In that connection I have heard that the Government propose to guillotine the debate on your Lordships' amendments in another place. I never criticise the other place but I do not see how noble Lords can with confidence do their job of scrutiny if it does not examine our amendments fully and seriously, albeit eventually to reject them.

The Government were surely right to call into question the existing system of student maintenance. In considering reform a relevant consideration is how the graduate repays and may further repay to the community some of the benefits which he or she has received from higher education. Unfortunately, the response to those problems represented by the Bill is a botched one.

Perhaps I may repeat some remarks that I made at this stage of the Education Reform Bill in 1988. There ought to have been a greater meeting of minds than there has been. There were arguments that the Government could and should have accepted. A good example is Amendment No. 10 on consultation moved today by the noble Baroness, Lady Seear. The Government defeated that amendment but in my view they should have accepted it. Another example is the amendment, narrowly defeated, moved by the noble Lord, Lord Beloff.

It has been apparent from the moment the Bill was introduced in your Lordships' House that the Government have been living from hand to mouth. They have found new difficulties almost every day and cobbled together new solutions as best they might. I hope that I may be forgiven for yet again harping on the obvious example, the amendment to the Consumer Credit Act. There have been others.

More importantly, the Government have not yet proved to anyone's satisfaction that they have a workable scheme. We are grateful to the noble Earl, Lord Caithness, for telling us, bit by bit, how the scheme might work. However, it is by no means clear that it will work or that there are any back-up procedures to deal with the many things that can go wrong.

Noble Lords must bear in mind that it is only from next week that consultations will begin with the universities and colleges on their part in the administration of the scheme. Without denigrating academic administrators, who anyway have other thankless tasks to perform, it is hard to believe that they can take on the issue of certificates and the allocation of the access funds in time for the new academic year. I hope that I do not have to remind Ministers that the new academic year starts in September. Happily, maintenance grants will continue to be paid by the local authorities in their usual efficient way.

As for recovery of the loans on default and related matters, the position is even more vague and unconvincing. However, happily we may have a change of government before long which will avoid at least those traumas.

Much of the trouble arises from the nature of the Bill, which is in the form of powers to make regulations. Here the Government have moved. We are thankful that there will be significant use of the affirmative resolution procedure. We are also pleased by the Government's acceptance of the amendment of my noble friend Lady David on consultation and some of the amendments concerning the disabled. We are also grateful for our own amendments relating to data protection.

Having said all that, among those Peers who have participated in our debates the majority opinion must surely be that the Government would be best advised to think further, to modify their plans and not to proceed before the academic year 1991–92.

I must now change the subject. I have the pleasant duty of thanking all those colleagues in all parts of your Lordships' House who have taken part in our debates. We have heard well-considered contributions from the Cross-Benchers, who have made clear many of the worries of the universities. They have been extremely helpful in dealing with problems that arise for the disabled.

We have heard from the Social Democrats, at least from the noble Lord, Lord Kilmarnock, who has valiantly soldiered on, largely on his own on his Benches. The Liberal Democrat Front Bench has done its usual good job. I do not usually care to make invidious comparisons but I must in particular congratulate the noble Lord, Lord Addington. He is nearer the student stage than many of us. That is to his advantage. I hope that he can be persuaded to continue to participate in our debates on education and related themes.

On the government side the noble Earl, Lord Caithness, continues to impress. I must especially single out the noble Baroness, Lady Blatch, whose first Bill this is. At the risk of ruining her career, I can only say that in my opinion she has made an excellent start. I should also like to refer to two Tory Back-Benchers. The noble Lord, Lord Beloff, dislikes the Bill. He has shown great courage in opposing it. If I ever find myself in a similar position, which I hope I do not, I should hope to be equally courageous. Equally, although she is not presently in her seat, the noble Baroness, Lady Young, has given the Government critical but constructive support. In analogous circumstances I should hope to emulate her.

On behalf of the official Opposition I should like to thank all those organisations which have sent us briefing material. They are too many to name in their entirety. However, I must mention the National Union of Students, which has, I understand, assisted Peers of all political persuasions and none. It has correctly reflected the attitude of the overwhelming majority of students in opposing the Bill. In addition, the material it has sent us, which covers a wide range of topics, has been of the highest professional quality.

It reflects very well on the National Union of Students as a serious body representing students.

As for my two colleagues, my noble friends Lady David and Lady Blackstone, I risk embarrassing them by saying that noble Lords on all sides of the House have remarked on the excellence of their contributions. It is not so much that they have helped me to do my job better but rather, as they have not hesitated to point out when I have loaded them with amendments, that they have been doing my job for me. For that I thank them.

I conclude by thanking all noble Lords for making these difficult and trying days a good deal more interesting and enjoyable than they otherwise might have been.

Lord Addington

My Lords, I should like to thank all those who have taken part in the debates on the Bill. I believe that we have helped to make it a more workable piece of legislation. Having said that, I must say that I am still totally opposed to the principle behind it. I believe that the idea of students paying in some way for their education in the form of a direct payment rather than through the tax burden which is placed on them is not an unreasonable one. However, this is not the way to go about it. However, it is the system that we are stuck with. I hope that we have made improvements to the scheme.

I should like to thank the noble Earl and the noble Baroness opposite who have handled the Bill with their usual courtesy and at times with a quite uncomfortable degree of skill. I hope that this will not be the last time that we cross foils and that the next time we score a few more points.

I thank those other noble Lords on all sides of the House who have joined in the debates. The noble Lord, Lord Beloff, has already been mentioned. He is a notable example of somebody who follows his convictions without being swayed by his colleagues.

Those groups which have helped us— the Committee of Vice-Chancellors and Principals, the AMA and particularly the National Union of Students— have all been extremely helpful. I should like to say to the NUS that, having seen its work here, I am sorry that I did not take an active role in it when I was at university, but it would have been difficult to fit that in with the academic work and about 15 rugby matches a week

I hope that when the Bill becomes law— if indeed it does— it will have a far better future than I perceive it will, but I doubt that. I should welcome any more workable system if it were to be placed on the statute book.

Lord Beloff

My Lords, with the British genius for understatement, the noble Lord, Lord Peston, remarked that I dislike this Bill. I am afraid that my dislike of it has at times been apparent and may even have caused some irritation among my noble friends. On the other hand, I do not wish to pursue, and it would be wrong to pursue at this stage, the reasons for the objections that have been voiced. I should rather repeat what I said on Second Reading; namely, that my worry was largely that the Bill would contribute to the alienation that has taken place between the Government and the academic community. It is perhaps evident from the notable contributions that have been made from all sides of the House by persons whose roots are in the academic community that that disquiet has not been allayed, but has rather been increased by the passage of the Bill through the House.

On the other hand, since the Second Reading debate, noble Lords have both elicited through their diligent attendance a great deal of information which will be of value to the academic institutions and have improved the Bill in some notable respects. Where those improvements have been made particularly in relation to the question of the affirmative resolution— they have been the acceptance by Ministers of the arguments put forward in earlier stages of the Bill— one can only accept them with gratitude. I can well imagine that the task of the noble Earl in steering a course between the wishes of the House and the instructions he might receive from other quarters has not been an easy one. I do not think that he will look back with great pleasure on his inevitable and compulsory immersion in the murky deep of Academe.

However, some amendments have been carried by the House and my plea to Her Majesty's Government is: do not use the other place to reverse them. The House has criticised the Bill, irrespective of party, on professional lines, from every quarter. There is no point in having a second Chamber composed largely of experts on particular topics and then brushing aside the amendments that they have persuaded their colleagues to make. If the Government were not merely to guillotine discussion but to whip the other place against the amendments which this House has passed, the alienation of the university community would be greater than ever. It could say that it had spent a great deal of time and trouble, as the noble Lord, Lord Peston, said, in briefing the noble Lords on the issues involved and had managed to persuade colleagues less directly involved than themselves in academic affairs. All of us in the universities owe particular gratitude to my noble friend Lord Boyd-Carpenter for his interventions. Members of the university community have done all that and might reasonably expect that the Government would accept amendments which do not in any way invalidate the latter's purpose in putting forward the Bill and which do not impugn the Bill's principles. They would then say that the Government were indifferent to their concerns.

I ask my noble friend the Leader of the House, who sins in Cabinet, to convey to his colleagues that this is an opportunity to bring about at least an element of reconciliation and that it would be a pity to throw it away in order simply to show that in the last resort the Executive, with a majority in the other place, can always get its way, whatever the criticism. This is a serious appeal from a convinced supporter of Her Majesty's Government to Members on the Front Bench in this House and I hope that they will heed it.

6.45 p.m.

Baroness Seear

My Lords, I should like to say briefly that I know my noble friend Lord Russell very much wishes that he could be here for the speeches on the Motion, That the Bill do now pass. He mentioned on Monday— it seems a long time ago— that he would be in the United States by this time, so he is not here to make the contribution that he would have very much liked to make. I know that he would have liked to pay tribute to the many people all around the House who have joined in debates on the Bill. It has been one of the pleasures, if one can describe so unsatisfactory a Bill as providing pleasure, that there has been so much cross-party and cross-Bench collaboration— for instance, between these Benches and the noble Lord, Lord Peston— though that is in no way to be taken as a precedent. However, on a Bill such as this, one is prepared to collaborate with absolutely anyone who will play.

I still regard this as a totally deplorable Bill. It is a great mistake that the advice of the vice-chancellors was not taken as to the way in which the necessary extra money— we all recognise that it is needed for the universities— should be raised, but that is water under the bridge. We are grateful— I know that my noble friend Lord Russell would have said this— to the noble Earl, Lord Caithness, for his patience and the good tempered way in which he has conducted proceedings on the Bill. He stands up to us admirably and without losing his temper. It might help if he also stood up to some of the people behind him who prepare his briefs and give him his instructions, but we understand full well the position of government Front Bench speakers in that regard.

I should like to echo the noble Lord, Lord Beloff, with regard to the great importance of trying to heal the breach with the universities and other institutions of higher education. They are the powerhouses from which the strength of this country must be drawn and the damage that has been done between the Government and the institutions of higher education goes very deep indeed.

Perhaps I may just put in one last plug; namely, that the Government should think seriously about what they are doing to the graduate students. There is a great danger that, because of the increased numbers, the teaching at undergraduate level cannot be as thorough and deep as it has been in the past, and that reliance for the development of the ablest people in this country will have to be placed on fourth-year students. I therefore beg the Government, when they consider the amendments which have gone through the House and those which have been put forward but have not been accepted, to bear seriously in mind the needs of graduate students if the quality of work coming from the universities is to be maintained. However, that is perhaps a Second Reading point rather than a point to be made on the Motion, That the Bill do now pass. Sadly, the Bill will now pass. We have done the best we can for it. It is a little better than it was, but that is not saying much.

Viscount Eccles

My Lords, I should like to begin by echoing what the noble Baroness, Lady Seear, said about my noble friend Lord Caithness. He has managed a difficult situation extremely well. I have taken a good many education Bills— I do not remember the exact number— through another place. If one is the Minister, one is at least supposed to understand something about education. It is a difficult subject because the experts on both sides of the Chamber are all certain that they know what is right. I do not know of any subject with which one has to deal in government on which there is such obstinacy among the experts. When I was in the ministry I had great trouble. I am sure that anyone dealing with an education Bill will know that I am right.

I find this Bill a disappointment. It is obvious that the future of our people depends on the breadth and quality of the education that we offer to all citizens all through their lives. This Bill does a little— a very little— to extend the entry to higher education. In my judgment it has been a lost opportunity.

To my recollection all students overspent their allowances, irrespective of how big those allowances were. I do not think that young people have changed very much. I expect that all students today overspend their maintenance allowances. Therefore the offer of a top-up loan will be very welcome. But in higher education the maintenance money is not a factor of importance in furthering the expansion of higher education. The real deterrent to higher education lies in the schools. Every year thousands of boys and girls have never been brought to the point of preparation where they could make it to a university or college. I have in mind especially children from poor homes where poverty and other disadvantages are handicaps which can only be overcome by good teaching in schools.

We make an error in spending our time on what is, as regards the future, the less important part of higher education. There are several areas of great weakness. One was identified by the noble Baronesses, Lady David and Lady Blackstone. In my view, they rightly showed us that money spent on part-time students is money well spent. The Bill does not cover that area. I think it is a great pity. We have to be content with the assurance from my noble friend on the Front Bench that the Secretary of State will take a further look at the importance of part-time students.

It is high time that we pressed upon the Secretary of State and all his colleagues the fact that they must provide very much more in the way of resources for education at all stages, and in particular for the 16 to 19 year-olds, among whom the recruitment takes place for universities and colleges. Unless they do that, we shall find that our economy will decline and there will not be the resources to maintain progress in the other social services. Therefore, if there were to be a vote, I should vote for this Bill half-heartedly.

Lord Kilmarnock

My Lords, I want to begin with the nice things— to thank the noble Earl and the noble Baroness, Lady Blatch, for their unfailing courtesy and for the extent to which they have tried to help in some of our concerns. But they have been operating under considerable constraints, as has already been pointed out.

What is interesting is that when the Government introduced the Bill in this House they started with a considerable advantage— namely, the general acceptance around the House that there should be a contribution from graduates to the costs of higher education. There was not a consensus on that issue two or three years ago. It is a considerable achievement of the Government that they have managed to gain acceptance for that point and that they have gained it from the Labour Party as well. During the course of the Bill through this House they dissipated the advantage from which they started.

There are only three points which stick in my mind and continue to cause me considerable worry— as much worry at the end of the Bill as they did at the beginning. First, I do not understand from where the easier access and increased participation are to come. As I pointed out at an earlier stage in the Bill the Government have made projections well into the next century in which they seem to have frozen the loan eligible student body at 427, 000. If that is to include some who are not eligible for grants, as the noble Baroness, Lady Blatch, told us, that could lead certainly to no increase and possibly to a flattening out in the student population. Possibly a few mature students may creep in under the Bill, but part-timers, as the noble Viscount, Lord Eccles, pointed out, are completely excluded. We have done abolutely nothing for them and they will be a very important element in the increase in higher education numbers that we all seek. I hope that the Government will come back to that point or at any rate keep a constant eye on it.

There was one new clause which I was amazed— and I remain amazed— that the Government did not accept: the new clause moved by the noble Baroness, Lady David, for an annual report to Parliament on the results of monitoring the scheme. We were told that monitoring would take place anyway and the facts would be available. There would have been no additional cost or additional demand on civil servants' time. It would have been so much better if the Government were simply to put on the table on an annual basis the results of the scheme. It is very regrettable that they did not accept that.

The noble Lord, Lord Peston, said that we should be making significant use of the affirmative procedure. That is a gain that we have made during the course of the Bill through your Lordships' House. But that will be of no use to us at all unless the Government listen. So my final hope is that they will bring an unbiased and objective eye to bear on the operation of this scheme and its effect on the various student groups. If it is not seen to be operating as the Government had hoped, I hope that they will be genuinely prepared to admit that they were wrong and look at the whole scheme again. Pending that, I am most grateful to the Front Bench opposite for the courtesy with which they have treated noble Lords during the course of this Bill.

7 p.m.

Lord Boyd-Carpenter

My Lords, the one point on which all noble Lords who have taken part have wholly agreed during the discussions of the Bill has been their admiration for the noble Earl the Paymaster General. He has handled the Bill with enormous skill, patience and stamina. I say that as one who from time to time may have given him a little minor trouble.

It is difficult work to conduct a good Bill through this House; but it much harder work to conduct a bad one. I hope that my noble friend Lord Renton will not disagree with my statement that the really great advocate is the man who can make a good argument out of a thoroughly bad case. In that sense too the noble Earl is a remarkably able advocate.

For me the Bill has been a sad experience because it is the first Bill in 11 years from what I regard as the best Government that this country has had for many years that I found myself from time to time quite unable to support. It seems to go against the philosophy of the party to which I belong by its emphasis on borrowing. It is virtually compelling a whole generation of our future leaders to resort to borrowing not, shall we say, for the purpose of a mortgage in order to acquire a house but simply for day-to-day maintenance. It will do much harm long after students have graduated and long after they have repaid or tried to repay the loan. The habit of thinking it right to borrow for their day-to-day maintenance will do an infinity of harm. Moreover, it is very contrary indeed to the whole spirit and approach of the Conservative Party. It is also, incidentally, quite contrary to what my right honourable friend the Chancellor of the Exchequer said in the Budget speech, when he made it clear that there was much too much borrowing in this country today and he would like to see it reduced. But here we have a Bill which is extending borrowing on a very considerable scale and I find it enormously regrettable.

The other point that has struck me forcibly— and I do not want to detain your Lordships long— has been the almost inexplicable hurry in which the Government have involved themselves in taking the Bill through. They have sat late night after night. Incidentally, I was rebuked by the noble Baroness, Lady Young, who I see is not in her place, for not having been in my place during one of those late night debates. But perhaps I can say that she is one of those people who operate best at night. For my part, I did not feel any obligation to inconvenience myself unduly for the sake of a Bill which I found myself quite unable to support and which I am extremely sorry that this excellent Government should bring forward.

What makes the hurry even more inexplicable— and this argument should appeal to a Treasury Minister on the Front Bench— is that this measure will result in no saving to public funds until well into the next century. Therefore to hurry in this way, to, in many ways, abort the legislative process on an important Bill, in order to get the Bill in operation by the autumn is the more inexplicable. There will be no saving until 2004 or 2005, and therefore there would have been no great difficulty in taking the Bill at the sort of pace at which it would have been easier and more appropriate to debate its immensely important clauses.

I so agreed with what my noble friend Lord Eccles said; and he speaks, as your Lordships know, with very great authority as a most successful former Minister for Education. There were opportunities for amendment which could have widened the Bill so as to do some of the very important things which need doing in our education system. All this has been prejudiced and lost by the haste with which it has been pushed through. I leave aside the inconvenience to your Lordships. But I suggest that this is just the kind of Bill in which the revising responsibilities of this House could have been most usefully deployed.

Apart from my noble friend, we number among our Members a number of vice-chancellors and former vice-chancellors and other people with immense experience in education. If we had had a more leisurely pace of discussion, we could undoubtedly have taken advantage of their knowledge and wisdom to improve the Bill very considerably. As it is, it goes from this House with one or two amendments which are undoubtedly improvements and it goes after very rushed discussion.

I can only conclude by saying that I profoundly hope that I am wrong in anticipating the harm that it will do socially; that I hope that I am wrong in referring to the missed opportunities; and that in any event I hope the Government will take the advice which my noble friend gave them to make every effort now to restore their relations with the universities.

There really is no doubt from the declarations of vice-chancellors and senior academics and from the views of students, undergraduates, student unions and the rest that this measure is intensely unpopular, and has made the Government intensely unpopular in the universities. To make this Government in their 11th year unpopular with the future leaders of this country is a very serious thing to have done. It could if not remedied be extremely damaging for the country in the future.

I hope that when my noble friend comes to reply he will indicate that not only he, but still more his right honourable friend the Secretary of State for Education, will make every effort in their power to mend their fences with the universities, to try to show some understanding of their feelings and of their apprehensions about this measure, to smooth its path as far as is possible and to get back to the good relations that there used to be.

I speak on that with some experience. When I was Chief Secretary to the Treasury in 1962 I was also Minister for the universities and we had a good and friendly relationship. The university heads would ring me up and I would ring them up and, though they never got as much money out of me as they would have liked, our relations were good and easy and we understood each other. That was a long time ago and there have been many periods since, I am sure, when relations have been good. They are not good today and it is up to Her Majesty's Government now to try to restore the position in the interests of the universities, of the future of this country and of the future of the Government.

Lord Adrian

My Lords, I am not sure that anyone on these Benches can speak on behalf of the Cross-Bench Peers but I should like, if I may, to take that risk and say that I am sure that they too are very grateful indeed to all those who have taken part in this debate and to add my thanks especially to the noble Earl the Paymaster General and the noble Baroness, Lady Blatch

Like most of us here I have grave reservations about the Bill even as it now stands. I have even more reservations about the Bill as I fear it may return to us from another place, and I very much want to echo what the noble Lord, Lord Beloff, has said about the amendments on housing benefits. It is an enormously important change that we have made in the Bill. It may not be very acceptable to the Government, but I have to say that it makes the Bill a great deal more acceptable to universities.

As the noble Lords, Lord Beloff and Lord Boyd-Carpenter, have said, to reverse those amendments by whatever procedure, but particularly by the guillotine procedure, will do incalculable damage to the relationships between universities and this Government. Speaking as one who is involved in universities and who, indeed, is not wholly unsympathetic to much of what the Government have done over the last 10 years, I would be enormously sorry to see that relationship made worse than it already has been made. I hope that the Bill can be left in that respect as it stands now as it is about to leave your Lordships' House.

The Earl of Caithness

My Lords, it is worth recalling that before we brought forward this Bill to your Lordships there was an enormous amount of discussion and consultation carried out, so much so that experience was sought from other countries around the world that were either doing a loans scheme, a grants scheme, a mixture of the two or some other form of finance to education. In that latter category there is only Australia, with a very new, novel and untested scheme. That led in due course to the White Paper which was followed by yet further consultation.

At the end of that we have produced a scheme which has been more carefully thought out and considered than any other alternative. Indeed it has been proven to be a better alternative than other suggestions. The Bill provides the legislative framework for the loans scheme to be put into operation and for the scheme to be improved and developed in the light of monitoring— a point which is of so much concern to your Lordships. The scheme is intended to increase participation in higher education, a fundamental point on which we are all agreed. I say to my noble friend Lord Eccles that we will encourage greater demand by increasing the resources available to students. We want to see that encouragement. That is why the grant plus the loan will be 25 per cent. higher than the grant alone this year. We will also remove the constraint on expansion by tapping a new source of funds— the anticipation of a student's future earnings as a graduate— thereby reducing the burden on parents from 1991–92 and on the taxpayer in particular in future years.

It is also worth reminding ourselves of the number of concessions the Government have made during the long hours of discussion on the Bill to meet concerns both in this House and in another place. What has been done is an enormous tribute to my honourable friend the Parliamentary Under-Secretary and, in particular, to my right honourable friend the Secretary of State. As those who have been involved will know, my right honourable friend has made considerable efforts to make the right communications with the higher education establishment. The noble Lords, Lord Flowers and Lord Adrian, will know this particularly well. My noble friend Lady Blatch and I said on more than one occasion that my right houourable friend's door was open, but of course consultation is a two-way process.

So what were the concessions made? There was the affirmative resolution procedure for first regulations under Clause 1 (2) (b) and paragraphs 1 and 2 of Schedule 2 and the orders under Clause 1 (4) amending Schedule 1. Those were of particular concern to my noble friend Lady Young, who played a valiant role in taking the Bill through the House, and to the noble and learned Lord, Lord Simon of Glaisdale. We met the concerns of the noble Baroness, Lady David, on consultation before amending Schedule 1. The concerns of the noble Baroness, Lady Blackstone, were met today when we limited the maximum of the loan to the value of the maximum grant with no departure from parity without use of the affirmative resolution procedure.

We put together a substantial package for the disabled in increasing the disabled students' allowance and disregard of disability related benefits when assessing income for deferment. The House has come to expect the expertise with which the disabled students' case was put forward by the noble Lord, Lord Henderson of Brompton, and the noble Baroness, Lady Darcy (de Knayth). The whole House benefited from the great wisdom and experience brought to our debates by the noble Lords, Lord Flowers and Lord Adrian. We were able to meet their concerns too by defining and limiting the role of the academic institutions.

Many noble Lords were concerned about the access funds. There was an increase in public expenditure with a doubling of the access funds. The noble Lord, Lord Addington, has been right to the fore in wishing to put forward the case of those on four-year courses and longer. We have not been able to agree on four-year courses although the position will be monitored. We have been able to meet the concern of the noble Lord and of my noble friends Lord Colwyn and Lord Haig with the extension of repayment terms for those who have been on longer courses. I agree with the noble Lord, Lord Peston, that the noble Lord, Lord Addington, has played an immense role. He has had the benefit not only of being at university more recently than other noble Lords but also of going to a Scottish university.

The noble Earl, Lord Russell, whom we much missed today— we hope he is having a nice time in America— was able to convince the Government that constraints on disclosure of information by the Student Loans Company was a necessary matter to incorporate into the Bill, and that we have done.

We have made a mass of concessions to meet the concerns expressed by the House. To me it has been a most interesting discussion. I refer particularly to the discussion with the higher education establishment. It is something which I could not claim to have been in at Cirencester but I gather that it has now more of a university status since I left. Perhaps that is an omen. What has most impressed me has been the magnificent role played by the noble Lord, Lord Peston. He has been the thorn between the two blushing roses on the Opposition Bench. He has never ceased trying to put forward his points of view, with many of which I have been able to agree and make the necessary amendments.

The noble Baroness, Lady Seear, has been tireless in putting forward her points with very good effect. The noble Lord, Lord Kilmarnock, has fought a long and lonely battle from his Bench but with success on occasions too. I should like to thank all noble Lords for their contributions. Whether the Bill will go down in the battle honours of All Souls College is a matter on which I do not think I am the right person to comment. I thank my noble friend Lady Elles for her support. I pay a special tribute to my noble friend Lady Blatch. On her first Bill she has done better than anyone could have done in her position. She has done an enormous amount of work and has been a great help to me.

I should like to say, because I feel strongly, that I was disappointed that a number of commitments, concessions and undertakings— in fact more on this Bill than any other— which I gave in very good faith on behalf of the Government were rejected by your Lordships. We pressed the noble Lord, Lord Peston, very hard to reveal the plans of the Labour Party and to give us an insight into its policies, but, alas, the agency seems to have got the better of him. However, we saw just a glimpse of the noble Lord's general policies in his party's attitude to public expenditure and taxpayers' money. We were a little concerned on this side of the House— and I was especially concerned wearing my Treasury hat— that the taxpayers' money was there to be liberally doled out at whim.

I am extremely grateful to all noble Lords. I have had the enormous advantage of having an excellent team, supporting me from behind. I would say to some of my noble friends who have said that I have had a bad brief that, on the contary, I have had an excellent brief. It is an excellent Bill. I commend it to the House.

On Question, Bill passed, and returned to the Commons with amendments.