HL Deb 04 November 1992 vol 539 cc1428-30

3.14 p.m.

Lord Gainford

My Lords, I beg leave to ask the Question standing in my name on the Order Paper. In doing so I declare an interest in that I am a student of the Open University.

The Question was as follows:

Whether Her Majesty's Government have any proposals to make university and college fees paid by students, particularly those who are pensioners, tax deductible.

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

My Lords, tax relief is already available for certain course fees paid by students. In particular, relief is available for further and higher education courses leading to national vocational qualifications and Scottish vocational qualifications up to level 4. Her Majesty's Government have no proposals to extend those reliefs.

Lord Gainford

My Lords, I thank my noble friend for that Answer. Is he aware that certain education relief grants are rather dependent on local authorities whereas nationwide tax relief could help a great deal when many people considering changing jobs are seeking new qualifications?

Lord Henley

My Lords, I join the rest of the House in congratulating my noble friend on his Open University course and wishing him success in the future. There are certain reliefs but we believe that before we extend any reliefs further in this field we must be sure that there is a need for extending them to provide further incentives to individuals to participate in particular courses. We see no such need.

Baroness David

My Lords, does not the Minister realise that there is a tremendous need for more qualified people and that a great many of these people are over the age of 25? Tax concessions and help through grants for younger people are of course available but it is older people who very much need such tax concessions. Am I not right in thinking that pensioners are not eligible for loans?

Lord Henley

My Lords, the noble Baroness is quite right regarding pensioners not being eligible for loans. In fact no one over the age of 50 is eligible for a loan. But that is another question. We are talking purely about fees. Anyone taking a full-time first degree course will be eligible for having fees being paid by the LEA. So we are only talking about those taking postgraduate courses, other forms of higher or further education or part-time courses. There has been a great expansion over the past 10 or 12 years in the number of people following those courses; therefore it does not appear that there is need for such an incentive.

Lord Peston

My Lords, we are also partly talking about the Open University where fees are charged and where students are not eligible for help, as the noble Lord, Lord Gainford, will undoubtedly tell us if he rises a second time. Surely the fundamental point is that people who invest in their own education are raising their productivity just as much as firms which invest in capital equipment. Is it not the case that they should be treated in exactly the same way from a tax standpoint? I understand that with the present state of the Government's finances the Treasury cannot make any concessions, but in terms of fundamental principles, surely it must be right that in the end one ought to be able to allow the costs of one's education against tax.

Lord Henley

My Lords, I note what the noble Lord says. It depends really on how far he is prepared to see any extension go. If the extension were to include all self-funded fees, the cost—the figures must have a large health warning as they are very broad range—would be something of the order of £50 million. If the extension were to embrace all private school fees—I do not necessarily see the distinction—the cost could be something of the order of £500 million.

Lord Peston

My Lords, I agree with the noble Lord that there is a practical problem in terms of money. I am simply asking whether he will at least concede the principle that investment should be treated on all fours regardless of the part of the economy one is dealing with.

Lord Henley

My Lords, we have accepted the principle on certain occasions where there is need for that incentive. Hence the concessions that I announced in my original Answer and the various other concessions—the non-statutory concessions—operated by the Inland Revenue. However, if we take purely the Open University, there is no evidence that lack of any tax relief has acted as a discouragement to people taking up an Open University course.

Lord Annan

My Lords, can the noble Lord say what the reaction of the Government would be to the proposals being mooted in some universities to charge top-up fees? What line would the Government take with the Universities Funding Council regarding those proposals?

Lord Henley

My Lords, without notice I cannot answer that question. The Question on the Order Paper is specifically related to tax relief for fees. I have given my answer. If the noble Lord wishes to put down another Question on top-up fees, no doubt the Government would be prepared to answer it.

Baroness David

My Lords, does the Minister really have evidence that no one has fallen out of an Open University course because of inability to pay the fees'? My understanding is quite different.

Lord Henley

My Lords, the noble Baroness should consider the vastly increased number of postgraduates—the figure rose by something like 50 per cent. during the 1980s—or the number of part-time students who increased by about 34 per cent. during the same period. It occurs to me that there is not a disincentive. I do not see tax reliefs as being the way forward.