Student Support: Domestic Fuel Tax (Hansard, 28 April 1993)

Viscount Astor
My Lords, the Government's policy is to review annually the overall level of support available to students through mandatory awards and student loans in the light of forecast cost movements. Any increase is applied only to the loans element and to the supplementary allowances within the award, leaving the basic grant fixed at its present cash level.

§ Baroness White
My Lords, does the Minister accept—the noble Viscount is not the Minister for Education of course—that when the first and second tranche of domestic fuel tax become operative in 1994 and 1995 respectively it is essential that appropriate adjustments are made in advance at least to the student loan conditions and that those should become effective at the onset of the tax and not deferred to the end of the relevant academic year?

Viscount Astor
My Lords, the Government's system of student support means more money for students. The rates for the 1993–94 academic year will shortly be announced. Grant rates for courses not attracting mandatory awards are for the appropriate award-making bodies to decide. Students' total resources in grant and loans will continue to be reviewed annually with any uprating to reflect rising costs being added to the loan facility.
With regard to VAT, it has been made clear that extra help will be given to the poorer pensioners and to other people on low incomes as soon as the higher fuel bills arise. The Government will be considering the precise way in which to target that help and will announce their conclusions in the autumn.

§ Lord Ennals
My Lords, is it not true that in addition to pensioners many students will be affected by the increase in their energy costs? Why is not the Minister prepared to be a little more forthcoming? Assurances have been given that pensioners will not suffer, so why is it not as important that students planning their future should not suffer?

Viscount Astor
My Lords, last year the majority of students—that is, 63 per cent. of the total of about 340 700,000—did not take out the loans to which they were entitled. Of course I accept that occasionally students suffer hardships. However, the Government provide resources for access funds worth £26 million in order to assist precisely such students. The funding councils decide the distribution among the colleges.

§ Baroness Park of Monmouth
My Lords, is my noble friend aware that the access funds are widely recognised as being insufficient to cope with the problems which students already have? Does he agree that since they are excluded from the whole range of benefits, it is particularly important that consideration should be given to their special needs when we are talking about poor students—and we are talking about poor students, who need to be targeted?

Viscount Astor
My Lords, as I said earlier, we are considering what the grant rates will be for the next academic year and we shall announce them in the near future.

§ Lord Hailsham of Saint Marylebone
My Lords, will my noble friend remind me, because I am ignorant, what is done about students with different requirements for heat and light? Surely the requirements must differ from student to student according to whether they are living at home, in provided accommodation or in lodgings for which they must pay.

Viscount Astor
My Lords, my noble and learned friend is right. The basic grants for 1992–93 for students living away from their parents' home and studying are, in London, £2,845 and elsewhere in the country, £2,265. Students living at their parents' home receive £1,795. There is also a difference in the maximum loan for students living away from their parents' home. In London that is £830 and elsewhere in the country it is £715. Students living at their parents' home receive £570.

§ Lord Cledwyn of Penrhos
My Lords, will the Minister give a clear undertaking to the House that when grant rates are being considered heating costs will be taken into account?

Viscount Astor
My Lords, all matters which affect the rise in the cost of living are taken into account when deciding what the grant rate will be.

§ Lord Cledwyn of Penrhos
My Lords, will that include heating costs?

Viscount Astor
My Lords, I think that they will be considered.

§ Earl Russell
My Lords, is the Minister aware that students typically do a large proportion of their work at home and often after dark? Therefore, like pensioners, they depend on domestic heating and lighting for a higher proportion of the day than many other people. Therefore, will he agree that it will not improve the quality of university education if students tell us that they cannot complete their essays because their electricity has been disconnected?

Viscount Astor
My Lords, we are not talking about major rises in the price of electricity. We are talking 341 about a gradual imposition of VAT on electricity prices, and those are extremely small increases. Up-to-date figures will be available as regards student income in the expenditure survey. That survey is in progress at present and the findings will be available later in the year.

§ Lord Mackay of Ardbrecknish
My Lords, before we become too overwhelmed by the problem of students, will my noble friend advise me whether there is any evidence of a fall in the applications for university places?

Viscount Astor
My Lords, there is absolutely none. My noble friend is right. Record numbers of students are investing in their own futures by taking a course of higher education.

§ Baroness Seear
My Lords, will the noble Viscount tell us, in addition to that information, what difference there is as regards students coming from different social classes? In the universities we have always been unrepresented by students from social classes C, D and E. Is there any difference in that regard?

Viscount Astor
My Lords, that is separate from the Question on the Order Paper, which specifically relates to student grants and loans and not to the composition of students in universities.

§ Lord Eatwell
My Lords, will the noble Viscount tell the House whether accommodation owned and/or managed by educational institutions will be classified as domestic for the purposes of fuel tax and will therefore attract VAT?

Viscount Astor
My Lords, that is a matter for the Chancellor of the Exchequer.

§ Lord Grimond
My Lords, will the Minister tell us whether special help will be available for students in the far North and Scotland where it is a notorious fact that heating and lighting costs are much higher than those, for example, in the South of England?

Viscount Astor
My Lords, the average expenditure on domestic fuel in Scotland is only marginally higher than that in England and Wales despite the colder climate. That is partly due to the fact that domestic electricity tariffs in Scotland are the lowest in the country, reflecting the success of the Government's privatisation of the Scottish electricity supply industry.

§ Lord Ponsonby of Shulbrede
My Lords, will the noble Viscount tell us why he believes it to be fair that students will have to pay more for their domestic fuel when the vast majority of full-time students are not eligible for income support, which is index-linked unlike student grants and student loans?

Viscount Astor
My Lords, I repeat what I said earlier. The rates for the 1993–94 academic year will be announced shortly.

§ Lord Elton
My Lords, so that the matter shall not go unremarked, will my noble friend agree that questions in this House are addressed to the 342 Government and not to individual departments? Perhaps he will write to the noble Lord, Lord Eatwell, with an answer to his question.

Viscount Astor
My Lords, that question was specifically for the Chancellor of the Exchequer and it is for him to reply to it.

§ Baroness White
My Lords, does the noble Viscount recognise that the complexity of the questions is such that it makes it clear that we should have an Unstarred Question on this matter, which I am sure can be arranged through the usual channels?

Viscount Astor
My Lords, I hope that I have been able to answer as many of your Lordships' questions as possible on this subject. A number of announcements will be made shortly and I cannot pre-empt them.