Lords Sitting of 30 January 1995

Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chester.

Haemophiliacs: Contaminated Blood Transfusions
Lord Ashley of Stokeasked Her Majesty's Government:
What information they have about the percentage of haemophiliacs who have Hepatitis C following infection from contaminated blood products, and whether they are planning a compensation scheme similar to that for haemophiliacs infected by the HIV virus.
The Parliamentary Under-Secretary of State, Department of Health (Baroness Cumberlege): My Lords, figures are not collected centrally for haemophilia patients who have contracted Hepatitis C through contaminated blood products. We have great sympathy for those affected, but have no plans to make special payments.
Lord Ashley of Stoke: My Lords, the noble Baroness will know that haemophiliacs depend entirely on blood transfusions. Does she also know that virtually all of those who received blood transfusions before 1986 had been infected with the deadly Hepatitis C, and although no fault is involved, does the Minister agree that they need payment just the same as those haemophiliacs who were infected by the HIV virus through contaminated blood? The Minister is aware that they were treated humanely by the Government in 1990. Does the Minister agree that there is no difference in principle and there should be none in practice? Therefore, will the Government avoid discriminating against those with Hepatitis C by extending the role and funding of the Macfarlane Trust which helps the other group?
Baroness Cumberlege: My Lords, we draw a distinction between HIV and Hepatitis C. When compensation was given HIV was a very new disease and, unlike Hepatitis C, it was thought to be invariably fatal. It carries with it a range of health, social and financial effects which are devastating to those affected. Again, that is unlike Hepatitis C patients many of whom can lead very ordinary lives for decades. As regards hereditary haemophiliacs, they had all those disadvantages superimposed on their hereditary haemophilia.
Lord Hailsham of Saint Marylebone: My Lords, is it not possibly a mistake to concentrate entirely on Hepatitis C? When I had jaundice in 1942 that was before the three kinds of hepatitis were differentiated. I was warned never to give my blood to anybody because
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it would be poisonous for the rest of my life. Therefore, should not one just speak generally on the subject of Hepatitis and not simply on Hepatitis C.
Baroness Cumberlege: My Lords, I am very grateful to my noble and learned friend. He is absolutely right. People are given the best treatment available at the time in good faith. As regards haemophiliacs, without the blood they would certainly have died. That risk had to be assessed.
Baroness Masham of Ilton: My Lords, is the Minister aware that following a recent Panorama programme on Hepatitis C there were very many concerned people who could not get through to the helpline because there were too many callers? What advice can the Minister give to all those people who have had blood transfusions? Further, is there any benefit in having interferon should the persons affected be positive to Hepatitis C?
Baroness Cumberlege: My Lords, we were very concerned by the Panorama programme especially as the programme editor did not co-operate with us on the helpline. We had to approach the makers and endeavour to ensure that the helplines we run were similar in terms of the advice given. In general, our advice is that if people are concerned they should immediately see their general practitioner. They should talk about the matter and take the advice given.
Baroness Jay of Paddington: My Lords, I know that the Minister was not in her present post at the Department of Health at the time, but is she aware that there was considerable and justifiable anger at the length of time it took the Department of Health to come to an opinion and a decision about the Macfarlane Trust on HIV and AIDS compensation? Will she seek to avoid a similar atmosphere developing and a similar sense of unjust treatment of people with haemophilia who have been infected by Hepatitis C? There is really no difference in the position which the Minister has explained between those infected who have Hepatitis C and those who have HIV and AIDS.
Baroness Cumberlege: My Lords, I believe that there really is a very great difference and I outlined that in my initial response to the noble Lord, Lord Ashley of Stoke. HIV is very different in that people are likely to die of it. We believe that there is no cure or treatment for it, but there is with Hepatitis C. We know that interferon can have a very beneficial effect. Therefore, we have to draw a distinction. We also have to be careful not to open the floodgates to every case that is made for compensation. If that were to happen I believe that we would reach the situation which exists in the United States where doctors are very frightened to give quite ordinary treatment to people for fear of being sued. That would finish the National Health Service and we would all be the poorer.
Lord Cledwyn of Penrhos: My Lords, notwithstanding what the Minister has quite sincerely said, is she aware that I find it difficult not to agree with my noble friend Lady Jay? Can the Minister give the House some statistics about the number who are now

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suffering from Hepatitis C and about those who suffer from the HIV virus? I understand from what the Minister said in her Answer that the number in the first case is not very great at present.
Baroness Cumberlege: My Lords, I am afraid that I do not have all those figures with me. In fact, they are difficult to obtain. That is why we have introduced a system of looking back at all those who have received blood transfusions from donors who have suffered from Hepatitis C. I have figures relating to the HIV cases—although not with me this afternoon—and I shall write to the noble Lord with that information.
Baroness Jay of Paddington: My Lords, I apologise for coming back on this point, but surely the Minister is aware that it is not a question of what happens once somebody is infected? We all understand that there are differences between the impact of Hepatitis C and of HIV. The issue is how those conditions are caused. In this case, both were caused by contaminated blood. Surely that is the position which the Government should seek to redress.
Baroness Cumberlege: My Lords, it is only very recently that we have been able to detect Hepatitis C in blood products and to remedy that situation. As soon as we knew what was happening, and once we had a foolproof test, we took early action. That is the situation. There is no question at this time of compensating those who have contracted Hepatitis C through blood transfusions.
Lord Annan: My Lords, does the Minister accept that we run a risk every time that we go to the doctor and receive treatment but that, mercifully, owing to the skill of the medical profession and the admirable work of pharmaceutical companies the risk is very small? Does the Minister further accept that many Members of your Lordships' House agree with her in regard to the situation in the United States where doctors have to carry extremely heavy insurance cover against the risk of being sued by patients for improper treatment? If we go down the road of having a compensation scheme, we shall find that exactly the same thing happens in this country, at enormous cost.
Baroness Cumberlege: My Lords, the noble Lord is absolutely right. That was the point I was trying to put, although not as effectively.
Lord Ashley of Stoke: My Lords, is the Minister aware that seven people died last year, and many more are going to die, so there is no point in the noble and learned Lord, Lord Hailsham, and herself writing down Hepatitis C? It is a fact that this situation has been created by contaminated blood that was given through the National Health Service, so I hope that the Minister will think again about this very special case.
Baroness Cumberlege: My Lords, I should like to stress just three points. At the time, the people concerned were given the best possible treatment. That treatment was given in good faith and, without it, they would certainly have died.

QEII: Safety Inspections
2.46 p.m.
Lord Monkswellasked Her Majesty's Government:
Whether they will set up an independent inquiry into the efficacy of the Marine Safety Agency in the light of the permission granted to the QEII to sail from Southampton to New York on 17th December 1994.
The Parliamentary Under-Secretary of State, Department of Transport (Viscount Goschen): My Lords, no. While the Marine Safety Agency has confirmed that standard procedures were followed, the Secretary of State for Transport has asked the chief executive to consider the case as part of his review of the agency's survey and inspection instructions.
Lord Monkswell: My Lords, I thank the Minister for that Answer. But is he aware that not only were passengers inconvenienced during the voyage and the image of Britain overseas heavily tarnished, but furthermore, given the decline of the merchant navy over the past 10 to 15 years by more than 50 per cent., surely we have a right to question the fitness for purpose of the merchant marine as demonstrated by this incident? What action are the Government taking to make sure that shipowners ensure that their ships are fit for the purpose when they sail from UK ports?
Viscount Goschen: My Lords, clearly it is in the shipowners' and operators' own commercial interest to ensure that their vessels are in the best possible condition. The Government's role in this matter is to ensure that safety standards are adhered to.
Lord Clinton-Davis: My Lords, can the Minister say when he expects to receive the report? Is the noble Viscount aware—he does not seem to have shown the awareness that the situation demands—that the incident concerning Britain's most prestigious liner certainly raised questionmarks about the efficacy of our surveying procedures, as well as causing grave concern to the international maritime world? Does the Minister believe that that ship should have been allowed to sail? If he does, is it not time that the international standards to which he referred were revised? Therefore, would he be prepared for the International Maritime Organisation to take the appropriate procedures to remedy a situation of this kind?
Viscount Goschen: My Lords, I agree with the noble Lord about the prestige of the vessel concerned and the influence of such events on our country's international reputation. Again, however, the Marine Safety Agency, which was the agency responsible for surveying the vessel, has a worldwide reputation of the highest order for both integrity and expertise. Special considerations were taken into account at the time. The ship had undergone a thorough survey by the MSA during its refit period and was inspected before it left

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Southampton. Additional work was required, and the MSA issued only a limited passenger certificate to cover that number of passengers.
Lord Greenway: My Lords, while it may have been a case of poor commercial judgment rather than any breach of safety regulations, are Her Majesty's Government aware that, as a result of publicity surrounding such occurrences, there now exists a breed of person who, armed with a camcorder, makes a point of recording any breach of regulations (safety or otherwise) with a view to selling that information to newspapers for gain or to suing the company concerned? Is not that a process that is to be wholly deprecated?
Viscount Goschen: My Lords, the noble Lord is essentially right, but the Government are of course interested in any evidence or information of wrongdoing in the operation of ships, so in that sense the practice is not wholly to be condemned.
Lord Dean of Beswick: My Lords, bearing in mind that no one would condone some of the conditions on that ship and the inconvenience they caused to the passengers in view of the price charged these days for such a passage or holiday, have the Government any reason to believe that the passengers on the QEII were in any more peril than they are on the car ferries that sail to the Continent which are given full approval for every trip they make?
Viscount Goschen: My Lords, one cannot draw an exact parallel. We make ro-ro ferries as safe as we can. The noble Lord will be aware of the inspection the MSA undertook of all bow doors and sealing arrangements of all ferries operating to and from the UK. So far as concerns the QEII and its voyage to New York, the vessel was given a limited passenger certificate for approximately half of her complement. We are satisfied that safety was at no point compromised.
Lord Clinton-Davis: My Lords, how does the Minister reconcile that response with the fact that the US coast guard detained the vessel because it was not satisfied as to the safety conditions under which it was sailing?
Viscount Goschen: My Lords, the MSA and the US coast guard were working extremely closely on this matter. They were applying the same international standards. I agree that there was a small difference of interpretation between the two agencies. At the end of the episode, the US coast guard chose to endorse its certificate, but the MSA was satisfied that the ship met the required safety standards and issued a full certificate. That was on leaving New York.
Lord Harris of Greenwich: My Lords, the Minister has said that there was a small difference between the British and American authorities. Does he agree that the small difference meant that the ship was allowed to leave Southampton, and it was not allowed to leave New York?
Viscount Goschen: My Lords, no, that is not true. The ship was allowed to leave Southampton with a restricted certificate; that is, for approximately half the
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number of passengers that it would normally carry. In addition, other specific security and safety measures were put in place. Various parts of the ship were closed. There were increased fire patrols and so forth. The difference in interpretation occurred in New York. It concerned one of the vessel's vertical fire sections.
Lord Monkswell: My Lords, is the Minister aware that at the height of the Falklands conflict my noble friend Lord Callaghan, who was then a Member of the other place, advised the nation that an early landing on the Falkland Islands was to be expected because it was impossible to keep troops sailing around in circles for long periods while still maintaining their fighting effectiveness? Does he recognise that troops using the QEII in this condition would have been rendered less fit for active service at the end of their voyage? Therefore it is something that the Government should take seriously into account.
Viscount Goschen: My Lords, the noble Lord asked a question that I did not expect him to ask. I am not sure that the condition of the aft swimming pool was of major consequence to fully armed troops about to embark upon an expedition to the South Atlantic. The condition of the vessel is a serious point. I have made it clear that extra safety requirements were put in place and insisted upon by the MSA before the vessel was allowed to sail to New York.

Friday Sittings: Starred Questions
2.53 p.m.
Lord Boyd-Carpenterasked the Chairman of Committees:
What are the grounds for banning Starred Questions at Friday sittings of the House.
The Chairman of Committees (Lord Boston of Faversham): My Lords, the House decided on 10th January to discontinue Starred Questions on Fridays after a suggestion by the Group on Sittings of the House. It was part of a package of proposals to reduce the burden of business on the Floor of the House; in particular, to enable the House to have more Friday sittings, allowing the House to rise earlier on other days of the week, so lightening the burden on all Members of the House. To have continued to take Starred Questions on Fridays would have added to the burden on Ministers, and would have taken up time that otherwise would have been saved.
Lord Boyd-Carpenter: My Lords, I thank my noble friend for that Answer, but is he aware that to take Starred Questions on a Friday would in no way inhibit having a Friday sitting and that, on the contrary, Starred Questions are an effective part of the House's control of the Government? Can he seriously say that if they were restored on a Friday it would in any degree inhibit the House from sitting on a Friday?
The Chairman of Committees: My Lords, first, I would agree with the noble Lord that Starred Questions are one of the means of, as he has put it—

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I would not quite have used the word—"controlling" the Government. In our debate on the Procedure Committee's report which recommended the proposal, I ventured to suggest that part of the duty of the House was to protect Ministers. I took the view, as was clear during the course of the debate, that there is a clear distinction to be drawn between protecting Ministers in order that they can carry out their public duties for the benefit of the public as a whole and protecting them from proper scrutiny. Not only would that be wrong, but we should probably be failing in our duty if we did it. I come back to the point that the proposals stemmed from a recommendation of the Leader's Group on the Sittings of the House. The proposal was taken up by the Procedure Committee and recommended to your Lordships. Your Lordships felt inclined to accept that recommendation on 10th January.
Lord Stoddart of Swindon: My Lords, the noble Lord the Chairman of Committees will recall that I raised this matter during the debate on the Procedure Committee's report. To my recollection the House took no notice of what I said, and agreed the committee's recommendation. Will the noble Lord advise me whether it would now be in order for any Member of the House to put down a Motion providing for Questions to be asked on Fridays? Could that be discussed and voted upon?
The Chairman of Committees: My Lords, I shall answer the noble Lord's final point first. It is of course open to any of your Lordships to put down whatever Motion your Lordships felt appropriate provided that it was proper, in order and within the procedure of the House. Perhaps I may comfort the noble Lord to some extent on his first question. To my certain recollection, it is not the case that your Lordships did not pay attention to what the noble Lord said. I paid close attention to it and responded to him during the debate.
Lord Renton: My Lords, bearing in mind that our performance should compare reasonably favourably with that of another place, is the noble Lord aware that in another place several score of Questions are tabled for answer by Ministers every day that the House sits and that about 12 or 15 are normally answered every day, whereas in your Lordships' House, even if we were to have four Questions tabled on a Friday, we should have had only 20 Questions in the whole week? Cannot that important factor of great distinction be borne in mind during further consideration of this matter?
The Chairman of Committees: My Lords, I agree with the noble Lord that these are considerations which might well need to be borne in mind when this package of proposals falls to be reviewed, if that is your Lordships' wish, by the Procedure Committee in due course. So far as concerns the point about the number of Questions, there are benefits and disadvantages in them. The fact that we have four Questions each day from Mondays to Thursdays, when
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we sit on Mondays, exposes Ministers to greater scrutiny on those points than happens to be the case in another place. I venture to take a different view from the noble Lord about the amount of time which would be taken up on Fridays. The intention of the Group on the Sittings of the House, followed by the Procedure Committee and by your Lordships, was to save time and to expect that, if Friday sittings took place more often, we would aim to rise at about 2.30 p.m. That means that there would be a sitting of only three-and-a-half hours. If we were to have half an hour of Questions that would limit that time. That is a consideration which was very much in your Lordships' minds on 10th January.
Lord Ezra: My Lords, as the intervention of the noble Lord, Lord Stoddart, had no European connection whatever, I have no hesitation in supporting what he said. The noble Lord, Lord Boyd-Carpenter, raised an important point. Does the Chairman of Committees agree that it is one of the most important areas of our debate and that we should not be deprived of the opportunity of asking Questions on a Friday?
The Chairman of Committees: My Lords, there is substance in what the noble Lord, Lord Ezra, has said. The proposals are seen as a package and therefore the intention, which arose out of our debate three weeks ago, is that they will be reviewed as a package. Undoubtedly, the comments expressed by the noble Lord, Lord Ezra, will be taken into account if and when the occasion arises. I believe that it will arise.
I would not attempt to answer the noble Lord's first point. I well remember that when a couple of weeks ago a noble Lord suggested that the noble Lord, Lord Bruce of Donington, had not linked his Question with Europe he immediately came back and did so.
Lord Bruce of Donington: My Lords, looking at the matter from an entirely domestic aspect, and excluding any European aura, will the Chairman of Committees be kind enough to explain to the House how the answering of four additional Questions per week will effect the efficiency of Her Majesty's Government and their Ministers? I am sure that the noble Lord will answer the point indirectly if he wishes. However, if the capability of the Government and their reputation in the country depend on such a fragile consideration the Government must be in dire straits.
The Chairman of Committees: My Lords, I do not believe that we can lay this matter at the door of the Government. I am not here to defend the Government or aspiring Members of any future government. It is not for me to judge; it is a matter for the House to decide.
There are still spaces for Starred Questions over the next 15 days; that is, until 14th February. As a matter of fact there is not so much pressure for spaces for Starred Questions during the first four days of the week as one might think.

Air Passenger Duty
3.3 p.m.
Lord Brabazon of Taraasked Her Majesty's Government:
Whether they are satisfied with the operation of air passenger duty.
The Parliamentary Under-Secretary of State, Ministry of Defence (Lord Henley): My Lords, yes. The duty will yield some £315 million in a full year. The consultation process, which began after the November 1993 Budget, is continuing and some significant changes to the duty have arisen from that consultation and have been welcomed by the air transport industry.
Lord Brabazon of Tara: My Lords, I am grateful to my noble friend for that Answer. Is he aware that it is a most complicated duty to collect? The duty is supposed to be £5 in respect of journeys to the European Community and £10 in respect of journeys elsewhere. However, is my noble friend aware that as regards flights to Norway, a country which decisively rejected membership to the European Community, the duty is only £5? Furthermore, when travelling to Switzerland, one pays only £5 on a journey to Geneva or Basle but £10 on a journey to Zurich.
Is it no wonder, therefore, that the cost of collection is estimated by British Airways to be more than £11 million per year for that company alone? Would it not be reasonable if the airlines were allowed to offset the cost of collection against the duty payable or if there were a more simple means of collection?
Lord Henley: My Lords, my noble friend implies that the tax is complicated. In fact, it is simple—£5 in respect of flights to EU or EEA countries and £10 in respect of flights elsewhere. That is why in respect of Norway, which is an EEA country, the duty is £5.
As regards airports in Switzerland, I am advised that Basle and Geneva straddle the border between Switzerland and France. It was decided, therefore, that for pragmatic and simpler reasons—one did not know into which country the passengers would offload—to treat passengers as though they were exiting into France and to charge £5. Zurich is totally in Switzerland and therefore outside EEA.
I am not prepared to accept the figure which my noble friend gave relating to the cost of collection to airlines. I appreciate the airlines' anxieties relating to the cost and that is why, following discussions between the airlines and Customs and Excise, it was agreed that we could use a special accounting system for air passenger duty that allows airlines to use samples and surveys of passengers. That will simplify procedures and keep costs down. I am confident that modern information technology should enable them to do the job relatively cheaply.
Lord Eatwell: My Lords, is the Minister aware that this tax is being levied in an inequitable and arbitrary manner? Is he aware that, for example, as regards the same round-trip journey between London and Glasgow,
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if the journey is made on a three-day return ticket the tax is £5 but if it is made on a return ticket valid for more than three days it is £10? Will the Minister explain that extreme difference in taxation on the same journey?
Lord Henley: My Lords, it is simply a question of keeping such a tax as simple as possible. The noble Lord and others may laugh but there comes a point when a return journey ceases to be a return journey and becomes two separate legs of two different journeys.
Lady Saltoun of Abernethy: My Lords, will the Minister explain why, as regards my return journey from Aberdeen to London, leaving on Monday and returning on Friday, which is five days later, the tax is only £5?
Lord Henley: My Lords, I must take further advice on the matter because I am getting different figures from the noble Lady and the noble Lord. If the House will bear with me, it must accept that there are occasions when a return journey is one journey, and can be seen as that, and when it is not that but two journeys.

Business
Lord Strathclyde: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Goschen will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on security in the Channel Tunnel.

Agricultural Tenancies Bill [H.L.]
3.7 p.m.
Baroness Trumpington: My Lords, I have it in command from Her Majesty the Queen and His Royal Highness the Prince of Wales to acquaint the House that they, having been informed of the purport of the Agricultural Tenancies Bill, have consented to place their prerogative and interest, so far as they are affected by the Bill, at the disposal of Parliament, for the purposes of the Bill.
Read a third time.
Clause 4 [Agricultural Holdings Act 1986 not to apply in relation to new tenancies except in special cases]:
Lord Carter Lord Carter moved Amendment No. 1:
Page 3, line 27, leave out from ("applied") to end of line 31.
The noble Lord said: My Lords, we return to a matter that has already been discussed. However, I thought it important to table the amendment again in order that the Minister will accept that it is worth consideration when the Bill reaches the other place. It relates to the important issue of surrender and regrant under the Agricultural Holdings Act 1986. I shall paraphrase what I said on Report. Preserving security for the existing tenant where there is an expressed surrender and regrant is as important as the surrender and regrant which occurred by the inadvertent operation of the law.
We accept that the Government's intention is that all tenants with existing protected tenancies shall have that protection continued and shall not inadvertently lose their security when the Bill becomes law.

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I have discussed the matter with a number of practitioners since it was dealt with on Report. They are anxious about an inadvertent surrender and regrant or an expressed surrender and regrant. It is entirely a matter of good law and practice and not a point of principle on the operation of the Bill. It seems that there is a strong feeling among those who must deal with these matters that if landlords and tenants wish to exchange land or rearrange an estate or if tenants are moved around within an estate, the tenant may find, without realising it, that he has lost the security which he has under the 1986 Act and he will end up with a farm business tenancy.
On Report the Minister put the point well when he said:
"As drafted, the clause provides protection for people who have an existing tenancy under the Agricultural Holdings Act 1986 against losing their rights under that Act—for example, their security of tenure—simply because a variation in their tenancy agreement has effect by operation of law as an implied surrender followed by the grant of a new tenancy".
The Minister seemed to accept an important point because he said:
"We accept that in those circumstances it would be inequitable for the new tenancy to be excluded from the scope of the 1986 Act when the parties had not intended that to happen".—[Official Report, 23/1/95; cols. 894–5.]
On Report, the Minister made a fair point when he said that the amendment as drafted would affect all tenancies under the Agricultural Holdings Act 1986 and he was concerned about the effect of that. I understand that. However, I have tabled an amendment with the same wording but I accept that there is a weakness in it. I hope that the Minister will be able to say that the point will be dealt with when the Bill reaches the other place. That would satisfy those practitioners—and there are a number of them—who are saying that there is a weakness in the 1986 Act with the new Act coming in. The Government's intention is that all tenants who are now secure under the 1986 Act should remain so unless they decide expressly to come away from the 1986 Act and have a farm business tenancy. But if they intend the security of the 1986 Act to continue, there should be some words in the Bill which will allow that to happen.
At present, that matter is causing anxiety. If, for reasons of good estate management, holdings are rearranged on an estate, tenants are concerned that they will be caught unless there is a provision in the Bill to take account of the problem. I beg to move.
The Parliamentary Secretary, Ministry of Agriculture, Fisheries and Food (Earl Howe): My Lords, we discussed a very similar amendment last week on Report, as was indicated by the noble Lord, Lord Carter, but I should like to explain again why the Government are resisting it.
The first reason is on policy grounds. We have proposed that new tenancies granted on or after 1st September 1995 should be farm business tenancies. In order to avoid legislative confusion, Clause 4 of the Bill therefore provides, as the side-heading so succinctly puts it, that the Agricultural Holdings Act 1986 is not to apply in relation to new tenancies except in special
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cases. Those special cases do not include cases where people elect to make changes to the holding, or to their contract, and enter into a new tenancy agreement. Those people will know that they cannot have a new tenancy under the 1986 Act; but they will have the opportunity to weigh up the advantages and disadvantages of exchanging their 1986 Act tenancy for a farm business tenancy. In such cases, the parties are taking a decision with their eyes open.
Clause 4(1)(d) deals with a different kind of case: our intention here is to protect people who have an existing tenancy under the Agricultural Holdings Act against losing their rights under that Act simply because of a variation in their tenancy agreement which has effect by operation of law as an implied surrender and regrant. These cases, which could occur inadvertently, will, by way of exception, continue to be subject to the 1986 Act even though they are, legally, new tenancies granted on or after 1st September 1995.
The noble Lord suggests that tenants who wanted to relocate to another farm within an estate would benefit from this amendment. I do not think it would have that effect. My understanding is that, unless the new holding included the whole or a substantial part of the land held under the 1986 Act tenancy, they would still fall outside the scope of Clause 4(1) (d).
When we discussed this amendment on Report, the noble Lord referred to the doctrine of estates and drew a distinction between a protected annual tenancy and a fixed term lease. That was because I had remarked that after the Bill comes into force a landlord can still offer the tenant a new long fixed-term farm business tenancy, including many of the provisions of the 1986 Act, which would confer considerable security of tenure on the tenant.
Lord Monkswell: My Lords, I apologise most sincerely for rising to intervene but it has become increasingly difficult to listen to the Minister's remarks because of discussions on the Benches opposite. Perhaps the noble Earl will continue his remarks and I hope that there will be less disturbance in future.
Earl Howe: My Lords, I am sure that all noble Lords are conscious of the potential for distraction. I am grateful to the noble Lord for his wish to give my words the maximum possible airing. I am sure that those to whom the noble Lord's remarks are directed will take the appropriate action, although I should not like to say who they may be.
Of course, I appreciate that under a protected annual tenancy, it is open to the tenant to terminate the tenancy at any time by giving a year's notice. However, the fixed term tenancy could include suitable break clauses in the event of the tenant becoming ill or incapacitated or in such other circumstances as the parties agree. Therefore, I believe that my original point is still valid.
I remain of the view that the amendment is unnecessary since parties can make adequate arrangements. The amendment is defective in that it

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would not achieve its aim. Therefore, I hope that with that explanation, the noble Lord will withdraw the amendment.
3.15 p.m.
Lord Carter: My Lords, I shall withdraw the amendment; but I am rather disappointed. The Minister started off by saying that it is a matter of policy, and almost immediately he pointed out that there is an exception which is allowed for in the Bill under Clause 4(1) (d).
I admit that the wording of the amendment is not perfect but its intention is to highlight a problem and to see whether the Government are prepared to consider the matter. I believe that tenants may become locked into situations. There may be a lack of flexibility. It seems a pity that on rather spurious policy grounds, the Government are not prepared to deal with the problem.
Obviously, the Minister was slightly stunned on Report when I mentioned a fundamental misunderstanding of the doctrine of estates and the distinction between a protected annual tenancy and a fixed term lease. I am not sure that I am convinced by what he said about that; but he will realise that I was reading from the brief and I should not dream of accusing myself of a fundamental misunderstanding of the doctrine of estates.
We have tried hard to bring the point home. Perhaps the problem will be dealt with in another place but we have not been able to change the Minister's mind. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 13 [Amount of rent]:
Earl Howe Earl Howe moved Amendment No.2:
Page 7, line 30, leave out from ("tenancy") to ("which") in line 31 and insert ("(including those which are relevant for the purposes of section 10(4) to (6) of this Act, but not those relating to the criteria by reference to").
The noble Earl said: My Lords, this is a drafting amendment which we consider necessary to make the meaning of Clause 13(2) clear beyond doubt. Under the clause as drafted, an arbitrator at a rent review is required to take account of all relevant factors, including the terms of the tenancy, except those relating to the manner in which any new rent is to be determined. It has been pointed out to us by the RICS that this might possibly be taken to mean any provisions in the tenancy agreement relating to rent reviews. This was not our intention.
The amendment makes clear that the arbitrator should disregard provisions in the tenancy agreement relating to the criteria by reference to which any new rent is to be determined—in other words, any provision which purports to lay down a method for reviewing the rent—but not those provisions which relate to the intervals between rent reviews or the dates on which reviews are to take place. Those clearly have a bearing on the new open market rent and should be taken into consideration at the arbitration. I beg to move.
On Question, amendment agreed to.
Clause 16 [Tenant's right to compensation for tenant's improvement]:
Lord Carter Lord Carter moved Amendment No. 3:
Page 8, line 34, at end insert ("save that where milk quota was registered in relation to land held under a tenancy to which the Agricultural Holdings Act 1986 applied and which was let immediately on the expiry of that tenancy as a farm business tenancy, and where no claim was made for compensation in respect of that quota under the Agriculture Act 1986, that Act shall still apply to that milk quota which shall not be the subject of any other claim for compensation").
The noble Lord said: My Lords, with the above amendment, we move to the vexed question of milk quota. We have already discussed the matter during the passage of the Bill, but I thought that it was important to have one last try to draw the attention of the House, and of the Government, to the problems which are foreseen in the situation outlined in the amendment. I refer to the transfer of the tenancy and the tenant somehow losing his compensation for milk quota while wishing to take such provision with him. I believe that that point was not answered by the Minister in his response on Report. At the stage where one was creating a new tenancy to deal with changes to the registered quota he said that it would be extremely complicated and very difficult; indeed, the Minister called it a nightmare.
It seems to me that if the landlord and tenant wished to crystallise the value of the quota at that point, and then, so to speak, to pass it on to the new tenancy they should be able—in the jargon—to massage it through into the new tenancy. That was the point that I was trying to make. I see that the Minister is nodding his head in agreement, so obviously the point has been picked up in his brief.
I should like to know why it would not be possible for the tenant to take the compensation for milk quota under the 1986 Act—he may, perhaps, be encouraged to move into one of the new tenancies—and have the value crystallised. In that way, it would be established so that there would be no fear of a double payment or, indeed, of no payment at all. I agree that the whole area is complicated as regards the compensation for milk quota. Obviously it is complicated because of the schedules to the 1986 Act. But clearly there should be the opportunity for the landlord and the tenant to crystallise the value of the milk quota, if they wish to do so, and to pass it on to the new tenancy.
The amendment gives me the chance to raise another point for the last time. I promise that it is the last time; indeed, it has to be. I refer to the point I made about the business of the Euro holding where the tenant has some quota under the 1986 Act and takes up a farm business tenancy with the same landlord. He then buys some quota for the new tenancy in the happy expectation that, as he has paid for all of it, it belongs to him. The tenant consequently leaves the two tenancies and, as I understand it, because of the European rules on Euro holdings, the landlord is entitled to some compensation for the quota which the tenant purchased outright, so to speak, for the new tenancy.
In his response, I believe that the Minister said that my understanding of the situation was correct. However, perhaps the noble Earl or the department would like to reconsider the matter. It has been drawn to my attention that it is not the intention that such a thing should happen, but the situation has to apply under European rules. I wonder whether there is any way to ensure that the problem can be dealt with when the legislation reaches the other place. The two related problems are the crystallisation of the value of the quota as outlined in my first example and the curious situation regarding the effect of the Euro holding as explained in my second example. I beg to move.
Earl Howe: My Lords, I am grateful to the noble Lord, Lord Carter, once again for his explanations on milk quota matters. We have now considered the question of compensation for milk quota at every stage of the Bill since it received Second Reading in your Lordships' House. I must confess that I was unsure before the noble Lord's explanation whether he wished really to press the amendment or was in fact looking to me to shed further light on the complexities of milk quota legislation. I hope I am right in thinking that the noble Lord desires the latter.
I believe it is common ground between the noble Lord and myself that milk quota is already a fearfully complicated and technical subject. It would only add to those existing complications if tenants who take up a farm business tenancy immediately after a tenancy under the Agricultural Holdings Act has ended were to be given the statutory right to use the current milk quota compensation provisions in the Agriculture Act 1986 in respect of the new tenancy. I should, however, make clear once again that the Bill does not prevent them from agreeing to do so. Such an agreement might be attractive in cases where the tenant occupies no other land than the holding in question. Where the tenant occupies some other land for milk production, he may find that matters begin to get extremely complex.
As I indicated on Report, in response to a question posed by the noble Lord, Lord Carter, because of the operation of EC rules any additional quota acquired during the new tenancy would have to be aggregated with all the existing quota registered in the producer's name. Any subsequent disposal of quota from another part of the tenant's aggregated Euro holding would require the consent of the farm business tenancy landlord, as well as anyone else with an interest in that wider "holding". In that situation, the parties would be well advised to agree as early as possible apportionments of quota to the various areas of land used for milk production. Arbitration is available where parties are unable to reach agreement. Of course, the Bill in no way alters the existing position.
The noble Lord also asked me whether a tenant could transport the value of compensation between farms. The Agriculture Act gives a legal entitlement to payment of compensation at the end of a tenancy which is subject to the Agricultural Holdings Act (including one granted on a statutory succession) but does not provide for roll-over to any other holding. I therefore think that any
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such roll-over would only be possible with the agreement of the parties themselves. I cannot see any obvious way of enabling that to happen by means of a provision in the Bill.
The people best placed to make appropriate arrangements for compensation in respect of milk quota where a 1986 Act tenancy is immediately followed by a farm business tenancy are the parties themselves. It will, of course, be a matter for the tenant's judgment as to whether he wishes to end a current tenancy and take up a farm business tenancy. Milk quota compensation will be one factor—albeit a very weighty factor—among many to be balanced when reaching a decision.
To repeat what I said in Committee on 13th December, Clause 16(3) as drafted in no way prevents parties from agreeing the most appropriate arrangements on compensation to meet their own particular needs. The noble Lord asked whether the tenant might be able to crystallise the value of the milk quota under a 1986 Act tenancy before embarking on a new tenancy. A tenant can indeed do so; and should do so. Certainly, the Bill does not prevent him from so doing. However, the central point is still the value. After a decade or so of milk quotas, with the price of quota being as high as it is at present, I really cannot believe that parties will forget to deal with the matter before a tenancy ends. I doubt whether the noble Lord will be entirely happy with the fact that I cannot accept the thrust of his amendment. Nevertheless, on reflection, I hope that he will feel able to withdraw the amendment.
Lord Carter: My Lords, the Minister is correct. However, one never ceases to be amazed at what landlords and tenants do forget to deal with when they are rearranging their affairs. The Minister's response was most helpful. An interesting point has emerged from this last discussion. The fear was that if the value of the quota was crystallised, payment would actually have to be made under the Act when, in a sense, neither side wanted that to happen.
However, it is to be hoped that the noble Earl is correct and that the parties can agree to roll over the value of the quota from one holding to another. That meets the point, and is a most helpful explanation of the problem with which we are trying to deal. I agree that anything one attempts to do with milk quota will add to existing complications. In that respect, I must remind the noble Earl that he said that he did not wish to add to such complications but then went on to suggest the apportionment of quota and the possible referral to arbitration.
The point is, indeed, complicated but has been well aired during our debates. Anyone who reads the Hansard reports of the debates during the various stages of the Bill will soon realise the thrust of the arguments. I entirely agree with the Minister that the landlord and tenant should be extremely careful in such a situation and that applies especially to the tenant: he must not lose the value of the quota that he assumes is his. That fact needs to be spelt out in any agreement between the two parties. I beg leave to withdraw the amendment.

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Amendment, by leave, withdrawn.
3.30 p.m.
Clause 17 [Consent of landlord as condition of compensation for tenant's improvement]:
Lord Gallacher Lord Gallacher moved Amendment No. 4:
Page 9, line 6, at end insert:
("() This section does not apply in any case where the tenant's improvement consists of one or more of the following—

(a) growing annual crops;

(b) pasturing;

(c) beneficial acts of husbandry;

(d) liming of land; or

(e) application to the land of purchased manure or fertiliser, unless there is provision to the contrary in an agreement in writing between the landlord and the tenant.").

The noble Lord said: My Lords, the Bill as drafted provides that for a tenant's improvement to be eligible for compensation it must have the landlord's written consent. In all cases, except planning permissions, the question of consent is referable to arbitration before the improvement is made. The amendment lists five items of tenant right as specific exceptions to this rule. If approved, no written consent would be needed for these essentially operational matters to be eligible for compensation. The parties' freedom is preserved by allowing them to contract otherwise in a written agreement.
Under English common law, anything that is fixed to land becomes the property of the landowner. It is the peculiar position of the farm tenant that many of his day-to-day actions fix value to the landowner's land. Tenant right grew up to address this problem creating a customary claim to compensation which the law steadily consolidated until custom was finally abolished in 1947. The custom of tenant right reflected the fact that the agricultural year has no absolute end, neither has it a beginning. Something will always be left at the end of the tenancy and has the desirability of encouraging the tenant to farm as though he were the incoming tenant.
The Bill removes the legal basis for tenant right by insisting absolutely on the consent of either the landlord or the arbitrator. Nonetheless, it seems possible that over time the courts would intervene to recreate some customary claim to tenant right. Rather than face the cost and uncertainty of that process—and the denial of fair treatment to some outgoing tenants along the way—we feel it is best to tackle the question as part of the Bill. In contrast to this amendment, it is impossible to foresee how far-reaching might be the consequences of court intervention.
The approach taken in the amendment to Clause 17 is to identify five specific exceptions to the general rule requiring consent for compensation. This list has been prepared after discussion with valuers and farmers from all parts of the country and the items have been selected on the basis that they are operational rather than policy items. They should be significant enough to warrant statutory reference. The specific areas are, first, the growing of annual crops. This would not cover trees or orchards but would protect, say, a cereals crop on a tenancy which ends in late March. It would also protect
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crops that should have been harvested before the end of the tenancy but for difficulties of the season—a situation where it could be too late to apply for arbitration.
In the case of pastures, this would allow the tenant to be paid for pastures he has established on arable ground as might be required by a livestock enterprise meeting official stocking limit or extensification requirements. Beneficial acts of husbandry would cover the normal operations and cultivations of the farming year so that they are performed when the time is right and so unlock profit for the incomer or save him effort. The liming of land can be important to the status of some soils and has a significant cost, but the benefit carries forward for several seasons. Provision of tenant right for liming encourages the tenant to take the longer-term view. Finally, under this head, there is the application to land of purchased manures and fertilisers. Again, these are important to the fertility of the land and, particularly in root crop areas, can amount to significant expenditure which we believe should be recognised.
Most written agreements could be expected to cover these items, but there will be some tenancies with only a sketchy written basis and others that are purely oral. In those cases, the Bill's present form would require the tenant to seek the landlord's written consent—perhaps every year in a tenancy from year to year. This is likely to feel unnatural to both parties. The tenant may feel awkward about taking the matter to arbitration and sometimes may not even have the time: the requirement is for the arbitrator's prior consent. Most tenants will simply assume that the matter is covered and be badly surprised should they find the landlord making it clear that he is not required to pay. Without some cover as proposed in the amendment, other tenants will clearly feel more cautious about committing themselves to normal operations on the farm in the last years of the tenancy. That would not be in the interests of the incomer, the owner or the industry and would be bad for the reputation of the legislation. The amendment provides a general rule which would operate as a default, but does not give the parties the opportunity to make other provision in a written agreement, so honouring the approach of the Bill. It will be for valuers to address the claim in these circumstances.
At the Report stage the noble Earl expressed some sympathy with the intention of the amendment then before us but was concerned that there could be later pressures to add non-agricultural tenant right clauses. There is no evidence of such examples being found under business tenancy law and such diversification would almost always be by written tenancy agreement. It is the particular problem of farming that its operations almost inevitably fix value to the land. The tenant farmer is putting his money into the landlord's land to earn his income in a way that the factory, office or shop tenant does not.
The noble Earl said that the listed items needed further definition. Our view is that our terms are all of very long-standing familiarity to valuers—tenant right has a longer history than statute law in these matters. If this is really a key objection it can be addressed by practical discussion between the Ministry, industry and professional organisations rather than lose an important

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issue on a point of phrasing or definition. In practice, the introduction of new definitions may add to the problems rather than help them. We are agreed that we want sensible definitions and not excessive detail. It has been suggested that some items might be long term. The items listed capture the significant normal farming operations. Policy matters are indeed best addressed between the parties. If the landlord wants a lower level of fertility as a matter of policy—as some might for conservation reasons—that can be covered in the tenancy agreement, as this amendment allows. Otherwise, the tenant should be able to claim the value he has made available to an incomer through these items.
The noble Earl suggested that the tenant has time to secure consents. Our response to that is that he does not if the weather turns against him and crops that should have been harvested before the term date cannot be harvested. It will be too late to secure an arbitrator's prior consent. Finally, it could all be put in a standard clause. We believe that most written agreements may be expected to follow this route but this amendment provides a fall-back with legal force for the oral agreement on the issue of compensation which in our opinion is central to the framework of the Bill. I hope on this occasion for a sympathetic response from the noble Earl. I beg to move.
The Earl of Kinnoull: My Lords, I wish to support this amendment and congratulate the noble Lord, Lord Gallacher, on the comprehensiveness of his arguments. I see that he almost repeated the brief that I was sent as well. This is the second time that this amendment has come up. The more one looks at the amendment, the more one realises that it adds continuity to farming. As has been known for generations, and in fact since 1947, the one thing one could never do was to contract out of tenant right. It was a case of an operational improvement to the land accepted by custom and statute. I recall that as a student learning some of these intricacies, one had to understand how to value unexhausted manurial values and indeed farm-yard manure as well. The noble Lord rightly listed five key items which this amendment covers. The part of the amendment which I like best is the end which states that the measure would not apply if it specifically came under a written tenancy agreement. Therefore the amendment does not damage the Bill at all, it simply gives a continuity which I think is of value.
Lord Stanley of Alderley: My Lords, I have much sympathy for the amendment. I wish to ask my noble friend one or two questions and I hope that he can clear my mind on those points. If nothing is mentioned in the lease, I rather understand from the noble Lord, Lord Gallacher, that it would have to be renegotiated each year. I believe he said that might be awkward. I would use a totally different word from "awkward". It would be totally impractical and no tenant would think of doing it each year. He would forget.
I cannot emphasise too strongly that tenant right is embedded in tenancy law. It would never occur to me to ask permission to apply lime. By the time I had asked
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for permission, it would have rained and I would not have time to apply it anyway, and that would be to the detriment of the farm.
If that is covered by the agreement, can my noble friend say whether it would be necessary therefore to obtain the landlord's permission for every single thing one intends to do? That is totally impractical. Although I do not want to press my noble friend on the matter this evening, I hope that when the Bill reaches another place it will be considered very carefully, because I believe that that is a mistake.
Earl Howe: My Lords, since our debate on this subject last week, I have looked carefully at the arguments which the noble Lord, Lord Gallacher, advanced in support of provisions on tenant-right in the Bill. I also listened with interest to the comments which he and my noble friends made in support of the amendment. I remain unconvinced that a provision in the legislation is necessary or indeed desirable.
As I said at Report stage, this is a matter which is best left to the RICS guidance. I would expect that the guidance might propose a standard clause giving the tenant consent to undertake various short-term improvements and tenant-right matters with the consequence that he will receive compensation for them. Such a clause could become a standard part of a tenancy agreement, perhaps balancing a similar clause giving the landlord the right to compensation for dilapidations since, just as for tenant-right matters, no dilapidation provisions are included in the Bill.
When a tenancy agreement does not contain a standard clause or any other provisions on compensation for tenant-right matters, it is true that the tenant would need to apply for his landlord's consent as soon as he received notice terminating the tenancy. In all cases there will of course be at least a year's notice of termination.
I hope that that answers one of the questions posed by my noble friend, who asked whether, when the lease was silent on these matters, they would have to be renegotiated each year. The answer to that question is, strictly, no. That would only be the case if it were a tenancy which ran from year to year. In a term tenancy, the question of compensation arises only at the end of the tenancy so there is no need for repeat consents.
At Report stage, I touched on the fact that the amendment as it stands would be inadequate and some definitions would be needed. I should like to return to that point for a moment and give an example of the problems which may arise, however familiar the concepts may seem. The amendment refers to "beneficial acts of husbandry". I have seen it suggested that that should cover "normal operations", but I doubt very much whether that would be adequate. Schedule 8 to the 1986 Act also refers to "acts of husbandry". There is a Statutory Instrument which sets out the methods for calculating the compensation for such acts of husbandry and it may be instructive if I quote part of that Statutory Instrument. It says that the value of compensation is to be the reasonable cost taking into account:
"(a) normal current costs, having regard to the current agricultural wage, the cost of horse and tractor operations, the size and shape of fields, and other relevant factors;

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"(b) reasonable costs of hired tractor cultivations;
"(c) increased costs over normal tractor rates, where owing to the size of the farm or fields, the shape of the fields or to other special circumstances, it was reasonable to use horse labour." '
Your Lordships will agree with me that that sounds more appropriate to the 1930s or 1940s than to the 1990s. There are other examples in the 1986 Act, for instance complicated provisions on sod fertility. The problem is that once something gets onto the statute book it is not so easily removed. Neither the Government nor Parliament needs to be involved in updating legislation all the time. That is why it is so much better for guidance of this nature to be provided by organisations such as the RICS.
Finally, the amendment does not have the support of the industry group. I hope that in the light of that fact and my comments the noble Lord will feel able to withdraw the amendment.
3.45 p.m.
Lord Gallacher: My Lords, I am grateful to the noble Earl for his not unexpected reply. I am even more grateful to the noble Earl, Lord Kinnoull, and the noble Lord, Lord Stanley of Alderley, for their support. As they spoke, I reflected that I was hearing from a professional man on the one hand and a practical farmer on the other. To some extent that compensates for my own lack of knowledge of the subject, which I freely admit.
The noble Earl said that following our earlier discussion, he had looked carefully at the amendment. Having said that, I know the noble Earl has carried out that exercise very carefully. However, from my point of view it is disappointing that he remains unconvinced that there is merit in the amendment. As he developed his arguments against it I formed the impression that, far from containing merit not only was the amendment devoid of merit but that it contained the seeds for future difficulty and litigation. Since the object of the exercise is to avoid just that, it seemed to me a peculiar paradox that having put our hands to the plough we had produced more potential problems than we hoped to solved.
The Minister's position is firm: we should look to the RICS for guidance on these matters, with the possibility of a clause being devised by the RICS to form part of the standard agreement. No doubt that observation, which I have deliberately repeated in my response to the Minister, will be taken up by the industry. Certainly the industry should reflect upon both the principle involved and the practicalities.
I concede that the one-year notice of termination gives some protection. However, we do not operate in a perfect world and there may be situations in which problems arise simply because the deficiences of a sketchy oral agreement are only discovered when the agreement comes to an end.
The noble Earl also said that the amendment is inadequate. In support of that observation, he cited the fact that, for example, "beneficial acts of husbandry" are already defined by Statutory Instrument under the 1986 Act. He gave the House, in some detail, the benefit of what that SI contains. Undoubtedly that is an extensive piece of legislation. The noble Earl rightly pointed to the
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dangers inherent in trying to define in too much detail in statute matters which are perhaps best left to the parties concerned.
We shall go along with the proposition that this matter can be safely entrusted to the RICS. I am sorry that there has not been wider support for the amendment. Nevertheless, it has raised matters of continuing importance. As the Bill is to go to another place, I do not think that we have heard the last of it. The fact that the industry as a whole does not support the amendment does not rule out the validity of some of what the amendment contains. It would be a very sorry situation if a strongly-held minority view did not find expression in your Lordships' House at some point in the discussion of a Bill of this kind.
Having said that, we shall reflect on what has been said. We may even take the trouble to alert our colleagues in another place to the matter. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Gallacher Lord Gallacher moved Amendment No. 5:
After Clause 30, insert the following new clause:
("Section 22 of the Solicitors Act 1974 not to apply
. For the purpose of drawing or preparing any instrument under this Act, subsection (1) of section 22 of the Solicitors Act 1974 shall not apply to any Fellow or Associate Member of the Royal Institution of Chartered Surveyors.").
The noble Lord said: My Lords, Amendment No. 5 is grouped with Amendment No. 6 in the name of the noble Earl, Lord Howe. To my untutored eye they are virtually the same type of amendment and have the same objective. Amendment No. 5 has been carried over from the Report stage of the Bill. The noble Earl promised a Government amendment on the same lines. In putting down our amendment, we wished to ensure that an amendment would be tabled for the Third Reading.
The noble Earl has kept his promise. Therefore I can be brief in speaking to Amendment No. 5 because I am anxious to hear what the noble Earl has to say on Amendment No. 6. If we are satisfied that the drafting of Amendment No. 6 is as good as or superior to that of Amendment No. 5 we shall not need to be hit over the head with a hammer in order to know what to do with Amendment No. 5. A point has arisen which is supplementary to our deliberations at Report stage. I shall bother the Minister with it although I do not expect him to give an answer today. Any pursuit of the point raised will have to be elsewhere.
Since the Minister gave his promise at Report, we have been told that full members of the Central Association of Agricultural Valuers are fellows or associates of the Royal Institution of Chartered Surveyors or the Incorporated Society of Valuers and Auctioneers. We have been further told that the examinations of the latter body are at a similar level to those of the RICS. For good measure, full members must also pass the CAAV practical and written examinations which require practical experience in agriculture. Therefore, those qualified persons are specialists in agriculture in their own right.

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It has been suggested that the amendment as drafted may exclude some CAAV members; they may wish to pursue the matter in another place. I do not even ask the noble Earl for an answer to the point today; I merely state that the point has been raised with us. I know well that sometimes the chartered bodies and incorporated bodies have difficulty in coming to terms on such matters. I have done what I was asked to do in bringing the issue to the attention of the House and of the Minister. It is to be hoped that the matter can be resolved to the satisfaction of both parties, or at least one party, when the Bill goes to another place.
I move Amendment No. 5 without giving details in support of it because I have already done so. I look forward to listening to what the noble Earl says in support of his Amendment No. 6 which is grouped with the amendment. I beg to move.
The Earl of Kinnoull: My Lords, the noble Earl may wish arguments to be put at this stage although clearly we hope to accept his amendment. If there is one improvement in the Bill which I believe is much welcomed outside, it is the acceptance of the deregulation of the legal fiefdom on drawing up agricultural tenancies. It is a sensible, practical and wise decision of my noble friend and his department to accept that the RICS is capable and professionally competent to do so. I, too, have received communication from the CAAV. It explained that although 90 per cent. of its members are members of one of the other two bodies, in particular the RICS, 10 per cent. are not. That 10 per cent. are more than competent. They are practical practitioners who probably know more than most professionals about the subject. Therefore, I hope that my noble friend will at least say that he will examine with sympathy the proposal that CAAV members will be accepted.
Lord Stanley of Alderley: My Lords, if those other bodies will make up agreements, I hope that they will be properly insured for possible mistakes, as are members of the legal profession.
Earl Howe: My Lords, I am grateful to the noble Lord, Lord Gallacher, for introducing his amendment, the purpose of which is identical to government Amendment No. 6 that is grouped with it and to which I now speak. I am grateful to the noble Lord and to my noble friend Lord Kinnoull for their support.
As I said at Report stage, the Government have concluded that it would be appropriate to amend the Solicitors Act 1974 to empower members of the RICS to draw up farm business tenancy agreements of more than three years' duration and prepare other instruments relating to farm business tenancies. This amendment adds a new exception in Section 22 of that Act which will allow RICS associates or fellows to undertake that work. I am satisfied that those RICS members have sufficient expertise to carry out that function and that they may be able to offer the service at a lower cost to the parties.
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It may be helpful if I explain why it is necessary to refer to the preparation of an instrument which the RICS member,
"believes on reasonable grounds will create a farm business tenancy".
Those are the words used in the amendment. This is needed to cater for the situation in which the instrument does not become a farm business tenancy because it fails to meet the conditions set out in Clause 1 of the Bill. This phrase avoids the RICS member committing an offence in that situation, provided, of course, that he or she had reasonable grounds for believing that a farm business tenancy was being created.
The noble Lord, Lord Gallacher, asked me to consider the proposal that fellows and associates of the ISVA should also be empowered to prepare tenancy agreements. My noble friend Lord Kinnoull referred to the CAAV in the same context. The first proposed amendment to enable RICS members to prepare tenancy agreements was debated at Committee stage on 13th December, as noble Lords will recall. Although my response at that time was not particularly encouraging, it was clear that certain noble Lords wished to pursue the matter. It is therefore a little unfortunate that these further proposals were not raised until after we had already debated the matter twice and the Government had consulted interested parties on what amendment should be tabled.
Before we could consider, in the amendment which I had tabled, extending the exemption to members of any other organisation we would have to be absolutely convinced that their qualifications and expertise were equal to those of associates and fellows of the RICS. The noble Lord, Lord Gallacher, indicated that he believed that that was so, but I have no independent information on that. What I can say is that those members of the Incorporated Society of Valuers and Auctioneers who are also members of the RICS would, of course, be able to undertake that work.
My noble friend Lord Stanley expressed the hope that members of those bodies would be properly insured were they to be allowed to sit alongside RICS associates and fellows in that context of the Bill. We have raised that point with the RICS. It has told us that it will revise its general rules of conduct and will be advising its members to obtain adequate indemnity cover. I cannot speak for the CAAV members because we have not yet had discussions with that body. I have no doubt, nevertheless, that the matter will need to be considered further. The noble Lord has the privilege of moving his amendment, or not, as he decides.
Lord Gallacher: My Lords, I am grateful to the noble Earl for the detail of his reply and for the sympathetic way in which he dealt with the problem which has arisen rather late in the day. I would have left the matter entirely for another place because I am a great believer in the avoidance of the short pass. Invariably, if you go for it you get your leg broken; and if you do not the home supporters boo you. Nevertheless, we have served sufficient notice to allow inquiries to be made and I warmly welcome that fact.

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The provision is a major concession for which we are extremely grateful. If it is to be extended in any fashion, the Government have a right and a duty to be satisfied that that extension is justified even though the number of persons involved may not be numerous. I also agree with the importance of full insurance for all who are likely to benefit from the concession.
I leave the nature of the consultation for the Minister to decide. However, the industry groups are close to the matter and may have a point of view of value to the Government in deciding what, if anything, they will do about the request.
I said at the outset that Amendment No. 5 had been tabled only as an insurance policy. From what the noble Earl said, I am satisfied that Amendment No. 6 fully covers what we are anxious to see provided in the Bill. In view of that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Howe Earl Howe moved Amendment No. 6:
After Clause 33, insert the following new clause:
Preparation of documents etc. by surveyors
. In subsection (2) of section 22 of the Solicitors Act 1974 (unqualified person not to prepare certain instruments), after paragraph (ab) there shall be inserted—
"(ac) any Associate or Fellow of the Royal Institution of Chartered Surveyors drawing or preparing any instrument—

(i) which creates, or which he believes on reasonable grounds will create, a farm business tenancy (within the meaning of the Agricultural Tenancies Act 1995), or

(ii) which relates to an existing tenancy which is, or which he believes on reasonable grounds to be, such a tenancy;".").

On Question, amendment agreed to.

Channel Tunnel Security
4 p.m.
Viscount Goschen: My Lords, with the leave of the House, I should like to repeat the Answer to a Private Notice Question which has been given by my right honourable friend the Secretary of State for Transport in another place. The Answer is as follows:
"Madam Speaker, allegations were published yesterday that on certain specified days security arrangements for the Eurostar and Eurotunnel trains were inadequate. When these allegations were brought to my attention at the beginning of the weekend, I immediately called for urgent reports from the two companies.
"The Channel Tunnel (Security) Order 1994 requires the operators of the tunnel and of the trains which go through it to carry out counter-terrorist security measures. Similar measures are applied in France and Belgium as agreed between our three Governments. The operators are responsible for ensuring that the security measures are properly applied: here my department's inspectors give instructions, offer advice and make both announced and unannounced inspections.
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"The Government's requirements have not changed since the tunnel was opened. The House will not expect me to detail the requirements. Suffice it to say that security measures are closely tailored to the threat, as assessed by the Government's security advisers. Among other measures, all traffic in the tunnel, passenger and freight, is liable to be searched. There is not and never has been a requirement for all passengers or vehicles to be searched. On the other hand, permitting a passenger to get off a train prior to arrival at his destination and leaving behind an unattended bag is a potentially serious matter, which could be a breach of security requirements.
"Madam Speaker, like other right honourable and honourable Members of this House, I take security issues very seriously. I will decide what further action needs to be taken in the light of the reports which I have commissioned and any further security advice which I receive."
My Lords, that concludes the Answer.
4.3 p.m.
Lord Clinton-Davis: My Lords, the House will be indebted to the Minister for repeating the Answer which was given in another place about a matter which will obviously give rise to a considerable degree of public concern about security at the various ends of the Channel Tunnel route—not only here but in France and Belgium. While we recognise that the Minister cannot be as transparent about security issues as he might be about other matters, nonetheless the public will remain very concerned until they have some further response from the Minister following the inquiries that he has indicated will be undertaken.
What was exposed in the Observer newspaper yesterday gives rise to serious allegations of breaches of the Channel Tunnel (Security) Order. That order came into operation in February of last year. That the Government themselves are concerned about these matters is exemplified by the fact that they have ordered an inquiry to be undertaken. What concerns me is that the Minister gave assurances when the order was being debated last year that tunnel security would be as tight as security at international airports. Perhaps that was an unwise statement to make because I do not for the life of me see how that could be complied with. Nonetheless, the statement was made to Parliament and in a sense, therefore, Parliament was misled. The Minister shakes his head. In fact, the Minister of State wrote to members of the committee on 3rd March saying:
"John Taylor"—
that was the Member concerned—
"also sought assurances that the security of Channel Tunnel services will be comparable with arrangements at airports. I was happy to give him that assurance".
That is as plain as a pikestaff. I think it was an unwise statement to make, but it was made.
Is not an abundance of evidence disclosed in the newspaper article that luggage was not checked or X-rayed before passengers boarded trains and that passengers were not challenged, randomly or otherwise, by security officials? Indeed, I have to say that that

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appears to be borne out by the evidence of a number of lorry drivers, truck owners, journalists, and my own wife, who perhaps naturally was not challenged. She said to me last night that she should have told me about that experience. There has to be some proper security check when people are going on to the train.
The Minister has already alluded to the seriousness of one matter where a package was left on board the train when someone had disembarked. In another instance a passenger was asked the question, "Are you British?", and it seemed to be enough to assure everyone when he replied in the affirmative. I am not sure that that constitutes the greatest surveillance with regard to security measures.
I do not want to take the matter very much further except to say that the Government have an obligation to report further to the House as and when their current inquiries, together with the operators' inquiries, are completed. We do not ask them to go into great detail but we want to know that the situation will demonstrably improve from the present.
Baroness Thomas of Walliswood: My Lords, I thank the noble Viscount for repeating the Answer given in another place. Certainly the press cuttings from yesterday are quite alarming and the chief concern of everyone must be that we can provide well-based reassurance to the public.
I wish to ask a couple of questions. Does the Minister recall that the Select Committee of this House on the Channel Tunnel Bill recommended that the Kent police should be responsible for security in the Channel Tunnel and that that recommendation was not accepted by the Government? Is that still the Government's view? In the light of these events, is it sensible to exclude the police in this way? Secondly, given that we are to expect a further statement after reports have been commissioned, will those reports which the Minister's colleague is commissioning include one from the Commissioner of Police on current security arrangements covering services through the Channel Tunnel at Waterloo and elsewhere?
Viscount Goschen: My Lords, we have discussed very briefly the effect of the alleged potential breaches of security which were highlighted in newspaper articles yesterday. There is little beyond what I said in my original Answer that I can usefully add to what has already been said. I wish to make two points. First, there is not and never has been a requirement for all passengers and vehicles to be searched. As was indicated by the noble Lord, Lord Clinton-Davis, I do not intend to go into further detail as to the exact proportions, how and so forth, but it has never been a requirement that all passengers and all freight should be searched.
Secondly, the noble Lord, Lord Clinton-Davis, highlighted an exchange between my right honourable friend in another place, Mr. Freeman, and Mr. John
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Taylor. The quotation that I have—I believe it is within the bounds of order to give it; if not, I hope the House will give me leave—is:
"Security at the tunnel will be comparable to that of airlines and of airports commensurate with the threat".
That is the crucial element. We are not saying—to my knowledge it has not been said—that the security measures for the Channel Tunnel should be the same in all circumstances as those for airlines. There is a different level of vulnerability and a different level of threat. It has always been our intention to tailor our security arrangements to the level of threat—that is provided to us by our security advisers—and the level of vulnerability of the mode. Those are the vital important factors relating to this situation.
To respond very briefly to the point that was made by the noble Baroness, Lady Thomas, I do not believe that it helps anyone to insist on much more stringent measures than are necessitated by the threat. The Government's aim has been to balance the level of threat and the type of vulnerability against the requirement for security measures to counter those threats.
4.11 p.m.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the tunnel is peculiarly vulnerable to terrorism and other outrages by the nature of its construction and operation? Are the Government satisfied that the precautions now being taken are sufficient to prevent a catastrophic incident?
Viscount Goschen: My Lords, the Channel Tunnel does indeed have a high degree of vulnerability. But it must also be contrasted with aeroplanes, which also have a very, very high level of vulnerability. It is extremely easy to destroy an aeroplane, as we were tragically shown with the example of Pan Am flight 103 at Lockerbie. A very small amount of explosive can do very great damage to an aircraft. Of course the Channel Tunnel is vulnerable. That is why we have put in place security measures. We believe that that level of security is appropriate to the current level of threat.
The questions that have been asked have been about how those security measures are operated. As has been said, we have asked for reports from the operators of those measures. When we have received those reports we shall decide whether further action needs to be taken.
To reply to the question asked by the noble Baroness, Lady Thomas, which I am afraid I earlier omitted to do, about the role of the Kent Police in this matter, it is important to note that a great deal of what has been said as regards the allegations concerning security has been about people travelling on the Eurostar service from Waterloo. That must be balanced against the role of the Kent police, who will clearly not have a role in London but they do elsewhere.
Lord Bruce of Donington: My Lords, has the Minister spoken with his counterparts in the French

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Government; and has he any information as to whether anxieties have been raised in France similar to those raised in the United Kingdom?
Viscount Goschen: Yes, my Lords. We are continually in touch with the French authorities on these matters. They have security concerns as indeed we do. That is why we have decided on certain levels of measures. It is important to recognise that a number of authorities believe that there is also a considerable risk of attack from the French side as well as from the British side.
Lord Harris of Greenwich: My Lords, is the noble Viscount aware that the question of the role of the Kent police is highly relevant in relation to the case that was put to him by his noble friend Lord Boyd-Carpenter, who talked about the vulnerability of the tunnel? Is the Minister aware that the Select Committee of this House recommended specifically that the Kent police should he members of the safety authority? For some mysterious reason the Department of Transport would not accept that recommendation. Will he agree that it might be a good idea, in the light of general public concern on this matter, to look at that question again? It seems odd that the Fire Service is represented on that committee but that the police are not.
Secondly, on the matter of preparation for dealing with potential terrorist problems, is it not desirable, quite apart from getting reports from the two companies, to get one from the people who have direct experience; namely, the anti-terrorism branch of Scotland Yard?
Viscount Goschen: My Lords, as I have indicated, the particular division of my department which deals with transport security issues liaises with the security services, the police and other bodies as it thinks fit to determine levels of threat, levels of vulnerability and how to go about preventing any attack.
The noble Lord referred again to the role of the Kent police. The Kent police are very important in that area and they have a particular role to play. I will investigate further the references that the noble Lord brought to my attention. If the noble Lord will permit me, I will write to him on the subject.
Lord Merlyn-Rees: My Lords, the Statement today, based on a PNQ in another place, has arisen because the Observer newspaper did what it did. Does the sub-department in the Department of Transport for which the Minister is responsible ever check to see that what Parliament intended is carried out; or do we have to wait for newspapers to do this from time to time?
Viscount Goschen: No, my Lords. As with aviation security, my department makes announced and unannounced visits; it checks security regimes by means of unannounced exercises.
Lord Strabolgi: My Lords, apart from terrorism, I understand that two outbreaks of fire have been reported. Can the noble Viscount say whether he knows
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anything about the causes of those fires and what is being done to increase precautions against such incidents?
Viscount Goschen: No, my Lords, for the moment I cannot give the noble Lord the information that he asks. I will investigate the reference to the fires that he mentioned and I will make sure that he is made fully aware of the causes once the investigation is complete.
Lord Dixon-Smith: My Lords, I hesitate to introduce a slightly different slant to this question—still less do I wish to get into a debate as to whether I am pro or against Europe—but there is a different angle to this issue which I hope might just be considered. We live in an age when travelling is more and more common; we all do it increasingly. I hope that the time will come when a journey from Waterloo to Paris might be regarded as no more than a journey from Westminster to Green Park or St. James's Park on the London Underground. I am bound to say that I would regard an explosion in that tunnel as being at least as dangerous as an explosion in the Channel Tunnel and just as damaging to everybody's prestige. I hope that we shall not go overboard on the one without having regard to the fact that there is a wider implication.
Viscount Goschen: My Lords, I quite agree that my noble friend has made a very valuable point. He has highlighted the difference between vulnerability and threat levels.
Lord Sefton of Garston: My Lords, during the passage of the Bill a question was raised about the carrying of insurance for the tunnel. The Government refused an amendment that sought to make sure that the Channel Tunnel company would insure the tunnel against any possible risk. Can the Minister tell the House —and if not, perhaps he can put a reply in the Library—what insurance is carried in regard to the tunnel, who carries the risk and whether or not the people who are alleged to carry the risk have sufficient assets to meet any claim?
Viscount Goschen: My Lords, I will investigate the insurance information that the noble Lord seeks and I will place a reply in the Library.
4.19 p.m.
Baroness Miller of Hendon: My Lords, I should like to move that the House do now adjourn during pleasure—I suggest for 10 minutes.
Noble Lords: Why?
Lord Harris of Greenwich: My Lords, I should like to ask the noble Baroness—and perhaps while I am speaking she can take instruction—what is the reason. There does not seem to be a case for adjourning for any purpose whatever. I assume that we are to continue with the Government's agricultural Bill. Why cannot that be

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done forthwith? There seems to me to be no case for an adjournment—unless someone would like to explain what that case is.
Lord McIntosh of Haringey: My Lords, we have here my noble friend who is to move the amendment; we do not need Ministers.
Viscount Goschen: My Lords, perhaps I may very briefly reply to the noble Lord, whose interventions I always welcome, on the subject of the agriculture Bill. We have just taken a Statement and I of course welcome any intervention that the noble Lord would like to make in my particular remarks. We have taken a very important Statement on the Channel Tunnel security measures, and we will shortly be proceeding to the—I give way to the noble Lord.
Lord Monkswell: My Lords, I wonder whether the Government would like to comment on the fact that at the start of business today we were advised that a Statement would be made "at a convenient moment" after 3.30. My understanding of that phrase is that it is at the convenience of the House that the Statement is made. The Front Benches and Members of the House have had to consider some amendments to the Agricultural Tenancies Bill which we probably had not expected to debate so early because we had the Statement at four o'clock rather than shortly after 3.30 p.m.
I wonder whether the Government could respond to the criticisms that I am sure Members of your Lordships' House will have about not only the delay in receiving the Statement but also—dare I say it?—the tardiness in resuming at the end of the Statement the business which the Government placed before the House.
Viscount Goschen: My Lords, the convenience of the House of course is of the utmost priority at all times. I regret to advise Members of the House that proceedings have been totally out of order because no Motion has been put. Therefore, we shall not move the proposed Motion.

Agricultural Tenancies Bill [H.L.]
4.20 p.m.
Proceedings after Third Reading resumed.
Clause 34 [Service of notices]:
Lord Gallacher Lord Gallacher moved Amendment No. 7:
Page 16, line 6, leave out from ("by") to end of line 7 and insert ("prepaid post").
The noble Lord said: My Lords, this amendment has a familiar ring to it. Indeed, I have moved this amendment and variations of it at different stages of the Bill, so that I now feel a certain empathy with Postman Pat.
Nevertheless, this is a matter of some importance which we debated on Report. Largely as a follow up to the Report stage, we thought it appropriate to table an amendment on this matter today. We are concerned
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about the manner in which documents under the Act are to be served and in particular the evidence of proof of serving such documents.
Briefly, Amendment No. 7 has been retabled to ask whether the noble Earl has concluded the consultations with industry that he described on Report (Official Report, 23/1/95; cols. 920–921) and whether he can yet tell the House what Her Majesty's Government are likely to do about the service of documents when the Bill comes before another place. May I take it from him that discussions and consultations are still progressing and that those discussions and consultations have as their objective the tabling of an amendment in the Government's name to this particular part of the Bill, in order that the matters which we have raised consistently during debates on the Bill in this House can be fully dealt with in a satisfactory manner when the Bill reaches another place? In that spirit I beg to move.
Earl Howe: My Lords, it is for me to apologise to the House for the inconvenience caused by my absence from the Front Bench. I do so in the hope that I may be forgiven and in the expectation that it will not happen again. Nevertheless, I regret any inconvenience caused to your Lordships.
When we debated a similar amendment introduced by the noble Lord, Lord Gallacher, last week, I explained that if service by ordinary prepaid post was authorised by the Bill and then a dispute arose on whether a notice had been served, the onus would be on the recipient to prove that he had not received it. That would place someone who genuinely had not received the document in a very difficult position.
The noble Lord wonders whether I can add anything to what I said last week on that point. I can assure your Lordships that we are working on an amendment to Clause 34 to clarify the rules regarding the giving of notices. However, this is a complex area on which we shall want to consult the experts in the field before proceeding with changes to the Bill. At present we await comments from industry representatives. Once we have settled on some satisfactory wording, the intention is to introduce an amendment in another place. In the light of that assurance, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Gallacher: My Lords, I am grateful to the noble Earl for what he said and for his assurance about the introduction of a suitable amendment in another place. On that basis, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Carter Lord Carter moved Amendment No. 8:
After Clause 34, insert the following new clause:
("Agricultural Holdings Act 1986: Review of rent
Paragraph 4(2) of Schedule 2 to the Agricultural Holdings Act 1986 shall be amended to add at the end—
"(d) Without prejudice to the particularity of the foregoing, any increase or reduction of rent other than one consequent upon a comprehensive review of the rent payable by reference to current economic circumstances.".").
The noble Lord said: My Lords, with this amendment we return to a point raised on Report. Noble Lords will notice that the amendments that we tabled are intended to follow up the Report stage, when the Minister indicated that he was prepared either to reconsider the matter or to come forward with his own amendment.
I felt that this point was important to bring forward. It is technical and relates to an apparent anomaly in the 1986 Act. Perhaps I may remind your Lordships that the purpose of the amendment is to ensure that the circumstances in which a reduction of rent is agreed, which was not intended to result in resetting the three-year time limit for rent review and which does not fall within the present exceptions, do not—as they presently would—reset the time limit for rent reviews. As I said, it is a technical point. We have discussed it before with the Minister.
I brought back the amendment because I was surprised when I came to read Hansard and took in its import. The Minister said:
"As I have just made clear, we do not wish to make retrospective changes, however meritorious a case could be made for those changes".—[Official Report, 23/1/95; col. 923.]
That seems to be an extraordinary attitude to a technical amendment to remedy a weakness in the 1986 Act. We do not often have a major Agricultural Tenancies Bill. There is a chance with this Bill—the Long Title is suitably drawn—to take the opportunity to put right such technical matters. It is not a point of great principle or a political point.
The Minister said that the departmental doctrine, whether through inertia or for other reasons, was that however excellent a case is made for a change, it has to be resisted just because it is a change in the 1986 Act. That seems to me unreasonable. The Bill gives us a chance to put right technical points, which are important for practitioners who are trying to use the 1986 Act. It is worth repeating that many tenants will be subject to the 1986 Act for a long time. In fact the majority of tenancies will be 1986 Act tenancies for a long time. We have a chance to use the Bill to put right a technical flaw in the previous Act of Parliament, but the Minister resists it, not on grounds of the merits of the case but simply because he does not wish to look backwards. That is not the best way to use the opportunity afforded by the Bill. I hope that the Minister has had time to reflect and will change his mind. I beg to move.
Earl Howe: My Lords, the noble Lord warned us at Report stage that he would want to return to his proposed amendment to the rent provisions contained in the 1986 Act. I am sure that the noble Lord will have read in full the Hansard record of my remarks last week (cols. 922 and 923). I explained that no doubt the amendment was well intentioned. But I took care to avoid commenting on whether there was a technical deficiency in the rent provisions. Certainly, I did not accept that there was an obvious anomaly (as he then described it).
The noble Lord inferred from my remarks that the Act was bad law but that the Government would not change it. No doubt the noble Lord has received advice from the leading practitioner to whom he referred at
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Report stage. However, apart from the representations made to the noble Lord, I am not aware of any real concern in the industry at large that the paragraph in question is in need of amendment.
During the consultations over the past four years on tenancy reform, I have been asked by many people to address all kinds of matters dealt with in the 1986 Act. This is not one of them. As the noble Lord will know, many parties agree not to trigger statutory rent reviews at present but settle changes in rent without reference to arbitration. They are perfectly entitled to do so. A great deal of time and trouble is thereby spared, although the party who most wants the rent review will usually make sure that statutory notice is given, to ensure that arbitration will be there as a fall back.
I remain unpersuaded that there is a serious problem. The noble Lord said that there was not a point of great principle at stake, and I agree with that. Even if I were to agree with the noble Lord—which I do not—that there was a significant flaw which could in theory be corrected, I am not satisfied that the noble Lord's amendment would necessarily improve matters. I suggest to the noble Lord that the wording of the amendment could give rise to disputes about what should be disregarded for working out the statutory three-yearly rent review cycle in respect of a specific holding. There is no requirement that rent increases or decreases agreed at a rent review should be based on current economic circumstances. I could envisage much scope for litigation on whether or not a specific rent increase had been based on a comprehensive review. Nor does the amendment deal with cases where parties themselves agree (in writing or otherwise), when a rent review falls due, that the rent for the holding should continue unchanged.
The final point that I should like to make will be a familiar one. I am particularly concerned that the noble Lord's amendment would have an impact on existing tenancies. One cannot say with certainty that the consequences would tend to work more often to the advantage of landlords or of tenants, but one effect would be clear: it would undermine the industry's confidence that any holdings legislation would be free from the risk of subsequent retrospective amendment. That is why the Government—with the industry's support—stand by their commitment not to amend substantively the existing holdings legislation.
I am sorry that for those reasons I cannot even offer to come forward with our own wording for a government amendment. I am afraid I can only invite the noble Lord, Lord Carter, to reflect on what I have said, and to withdraw his amendment.
4.30 p.m.
Lord Carter: My Lords, that answer was not wholly unexpected. The Minister refused to comment on the merits of the amendment at Report stage. He began his reply today by saying that he was refusing to comment, and then he proceeded to comment and tell me what was wrong with it.
We have made the point. The fact that nobody referred to it during the past three or four years does not mean that it is not a good point. I am pleased that we

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found a new point that the industry group somehow missed in its comprehensive review. I did not feel that the issue concerned arbitration. I understood it to be related to the setting of the time clock on the rent reviews. The comment in relation to retrospective legislation is a thin one. I have been involved with a number of Bills in this House concerning agriculture, social security and health. It is always the case, if the Long Title allows and there is an anomaly in a previous Act, that the opportunity is taken to put it right. I do not believe therefore that that is a major argument against the amendment.
It is clear that we are not going to change the mind of the Government. But I am glad to have brought to the attention of the House this extraordinary new doctrine that, even when there are merits in a proposed change, the Government will refuse to acknowledge them because of the doctrine they adopt of not looking back at previous Acts of Parliament which, though they were thought to be perfectly drafted at the time, are often found to contain anomalies. This was a chance to put a small anomaly right. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 36 [Interpretation]:
Lord Gallacher Lord Gallacher moved Amendment No. 9:
Page 18, line 12, after second ("a") insert ("written").
The noble Lord said: My Lords, Amendment No. 9 was tabled to give the noble Earl, Lord Howe, the opportunity of returning to a subject which we discussed at Report stage and which he promised to look at again in the light of what was said at that time.
Clause 36 (3) provides that,
"A tenancy granted pursuant to a contact shall be taken for the purposes of this Act to have been granted when the contract was entered into".
Our advice is that, if there was a contract before 1st September 1995 for a tenancy which is granted after that date, the tenancy will be governed by the Agricultural Holdings Act 1986 and will not be a farm business tenancy.
Contracts for leases of three years or under do not need to be in writing—Section 2(1) of the Law of Property (Miscellaneous Provisions) Act 1989. It may therefore be that a landlord or tenant could find that they enter into a contract without being aware that they had done so or of the consequences. If the contract is in writing, then the parties will probably have applied their minds to what they were doing and therefore the accident would not happen. If they did not, there will be clear evidence that there is a contract and therefore the Agricultural Holdings Act 1986 will apply.
When that information was given at Report stage, the noble Earl told the House (at col. 924 of Hansard) that he did not wish to set traps in the new legislation and he thought that Clause 1(4), read with Clause 36(3), was satisfactory. However, in view of the unease expressed by myself at that time, the noble Earl said that he was prepared to look again at the matter and if necessary return with a government amendment at a later stage. My purpose therefore in moving Amendment No. 9 is
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to ask whether, in the week that has elapsed since we last met, the noble Earl has had time to look again and can give the reassurance that we are seeking this afternoon. Failing that, perhaps he will regard it as an ongoing item which will be taken by the Government to another place so that when the matter is raised there at an appropriate stage, either an amendment can be tabled or the necessary reassurance given that the insertion of the word "written", which is the object of Amendment No. 9 to Clause 36(3), is unnecessary. I beg to move.
Earl Howe: My Lords, the noble Lord, Lord Gallacher, will know from our discussion at Report stage that we want to avoid legal traps in the new legislation. Such traps have bedevilled the tenanted sector for far too long. The noble Lord has a serious point which we are studying with care.
We are still considering what amendment might be made to the Bill. Although the noble Lord's concern may be well-founded, I am advised that this particular wording may not do the job required, and that possibly some changes elsewhere may be needed instead. I am sorry that I am therefore not able to add a great deal to what I said last week. However, I hope the noble Lord will accept my further assurance this afternoon that this particular problem is being seriously considered and that this will persuade him to withdraw his amendment.
Lord Gallacher: My Lords, I am grateful to the noble Earl for his comments and for his assurance that Her Majesty's Government are still considering this matter because of its importance. I take his point with regard to the wording as it stands; that it is perhaps not of a nature that will solve a problem if a problem exists. I fully understand also that in the week that has elapsed since we discussed the matter there may not have been time for the legal advice which the noble Earl requires to come to hand and therefore he is not able to say definitively what the Government's position on the amendment would be.
I leave the matter there in the knowledge that the Bill will go to another place. I shall certainly make it my business to ensure that the matter is raised appropriately in another place. Having said that, I beg leave to withdraw Amendment No. 9.
Amendment, by leave, withdrawn.
Earl Howe: My Lords, I beg to move that the Bill do now pass.
The noble Lord, Lord Beaumont of Whitley, remarked at Second Reading, I think with a touch of irony, how pleasant it was to be dealing with a government Bill which was largely popular and agreed by the industry to which it relates. I have to say that from where I stand it makes my task a great deal more congenial, also!
It is also my pleasure very genuinely to thank the noble Lords opposite—particularly the noble Lords, Lord Carter and Lord Gallacher—for the amicable and constructive spirit in which this Bill was considered. If I may go so far as imputing motives to the noble Lords, I hope it is because they recognise that with this Bill we genuinely want to take real steps to revive the agricultural tenanted sector. The reason that I have had

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to resist certain amendments which they proposed is that we felt that they would detract from that overriding objective. Nonetheless, I am pleased to have been able to accept a number of amendments that they proposed, particularly the ones which had the support of the industry group. And throughout our debates I tried hard, though I am not certain that I succeeded, to avoid using the word "otiose" when resisting amendments proposed by the noble Lord, Lord Carter.
I should also like to thank the many noble Lords from all sides of the House who have contributed to our debates during the Bill's successive stages. As the House will understand, there are too many names to mention them individually, but if I were to single out one name it would be that of my noble friend Lord Stanley of Alderley whose knowledge and persuasiveness have, as ever, been of great value. I hope that he and all of your Lordships will agree with me that, in keeping with the best traditions of this House, the Bill will be leaving for consideration in another place in even better form than that in which it arrived.
I should now like to pick up two or three themes that have emerged during your Lordships' consideration of the Bill. First, noble Lords opposite have commented several times on the fact that the Bill will permit much greater diversification away from primary agricultural use on a holding. Indeed, at Report stage the noble Lord, Lord Carter, I believe, referred to this as extraordinary. The fact is that diversification is an increasing feature of the rural economy but, whereas under the present law it is necessary for the parties to set up a separate commercial tenancy covering the non-agricultural enterprises, the benefit of the Bill is that it will allow scope for such enterprises to flourish within a single farm business tenancy. We see nothing extraordinary about that; indeed, it is one of the features of the Bill that the tenant organisations most strongly support.
Secondly, we have heard a lot about the perils of unwritten agreements. I have made clear in response to the noble Lord, Lord Carter, that such oral agreements are only valid for tenancies not exceeding three years' duration and for periodic tenancies. If we were to exclude these tenancies from the scope of the legislation, we would leave the parties in a state of great legal uncertainty. At the same time, we might provide a method for unscrupulous landlords to seek to avoid the provisions of the Bill by letting exclusively on oral agreements. We therefore decided to set a framework which accommodates oral agreements whilst in no way wishing to encourage the use of such agreements.
Thirdly, a recurring topic has been a concern expressed by my noble friends as well as by noble Lords opposite, about the hazards of leaving many matters to be settled between the parties in their tenancy agreement. I plead guilty to this charge. In my defence, I quote George Bernard Shaw, who said:
"Liberty means responsibility. That is why most men dread it."
In this area we believe freedom is essential. Landowners and farmers need to be free to negotiate agreements to suit their own circumstances, within a legal framework that provides safeguards for their basic rights. I am sure that it is true that many people may be apprehensive about this. However, the main industry organisations
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realise that the time has come when agriculture needs the extra freedom that other business sectors enjoy, and believe that their members are ready to accept the extra responsibility that goes with it. That is where the guidance currently being prepared by the RICS in consultation with others, will, I hope, prove helpful to those facing this new responsibility.
I do not believe that this Bill could be described as a "courts' charter", as the noble Lord, Lord Carter, would have it. In essence, the parties will need to adhere to the tenancy agreement that they have signed; and where there is a dispute, the matter can be referred to arbitration. But I believe that because the Bill does not seek to deal with every detailed aspect of the landlord-tenant relationship, there will be correspondingly less scope for disputes to arise.
Most of all, our hope, as I said earlier, is that the Bill will convince landlords that a new climate has dawned which is favourable towards letting of land, and that new entrants will benefit accordingly. The latest CAAV annual survey which was published last week reaffirms once again how desperately this reform is needed. It showed a further decline in letting of full tenancies and a further increase in short-term arrangements. Excluding succession tenancies, these short-term lettings now outnumber lettings on full tenancies by a ratio of more than 5:1.
I hope that when the Bill comes to be considered in another place the party opposite will show awareness of both the substance and the spirit of the debates that we have had in your Lordships' House. And I hope that they will feel able to be equally constructive in order to help us to achieve that underlying objective. It is clear, for example, that a statutory minimum term would nullify the beneficial effect of the Bill. That is why none of the main industry organisations apart from the Farmers Union of Wales support that proposition. But another equally important aspect is that landowners should not have to fear future retrospective legislation. Just as we have resisted amending the 1986 Act with retrospective effect, I would call upon the party opposite to pledge not to introduce any future legislation on this subject with retrospective effect. In my view, such a pledge would be the single biggest contribution that they could make to allow tenants to derive full benefit from this Bill.
I have one very important point to make in conclusion. At Committee stage, the noble Lord, Lord Carter, referred to the fiscal disincentive to the letting of land. If I recall rightly, he expressed the view that the decline in the number of farms available to let had more to do with taxation than with the present legislation. He implied that removing this disincentive would do more for the tenanted sector than would this Bill. I did not agree with that view, but I am delighted by the fact that my right honourable friend the Chancellor of the Exchequer was able to announce last Friday that the 100 per cent. relief from inheritance tax which applies to owner-occupied agricultural land is to be extended to the agricultural value of land comprised in new tenancies that are granted on or after 1st September 1995. An amendment to the Finance Bill is expected to be tabled shortly. Without doubt this will enhance still

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further the major beneficial effect that this Bill will have on the letting of land once it comes into force. By making this change the Government have underlined their commitment to the agricultural tenanted sector. This is excellent news which I hope will be greatly welcomed on all sides of your Lordships' House. I commend the Bill to the House.
Moved, That the Bill do now pass.—(Earl Howe.)
4.45 p.m.
Lord Carter: My Lords, I would like to begin, as always, by thanking the Minister for handling this Bill with his usual courtesy. That is not just a form of words. It is a technical Bill, and he has handled his brief with his usual lucidity. I believe that we have all enjoyed the work that we have done on the Bill. I am also particularly grateful to him and his officials for the meetings which I have had, together with my noble friend Lord Gallacher, outside the House to discuss the Bill at its various stages. It has been extremely helpful to us on this side of the House.
In particular, I would like to thank my noble friend Lord Gallacher who has shared the burden with me on the Front Bench. He has his own very effective approach in the handling of a Bill. It has certainly worked because I believe that all the amendments which have been accepted by the Government, at least in principle, were moved by my noble friend. Noble Lords will be aware that on the opposition Benches we do not have the resources which are available to the Government. Therefore, I have to say a particular thank you to our researcher, Mrs. Clare Cozens, who has been of enormous help to us in preparing for the various stages of the Bill.
I must also say a word about TRIG, the Tenancy Reform Industry Group, the Country Landowners' Association, the National Farmers Union, the Tenant Farmers' Association and the Federation of Young Farmers' Clubs. I believe that they can be fairly described as the corporate midwives of the Bill. This is the first occasion on which I have been involved with a Bill where the Minister needed a nod from below the Bar as well as the usual briefing from the officials in the Box. I hope that this is a new doctrine where the Government listen to the views of industry. I shall not use the word "slavishly"—but certainly they listened on almost every occasion they were called in aid. I hope that that will now extend to all the other policies which the Government intend to introduce. The privatisation of the railways springs to mind. I hope that they will listen to what people in the industry say and will follow the excellent example of the department of agriculture and apply the doctrine to all their other policies.
Obviously, the Tenancy Reform Industry Group has worked extremely hard. There are some in the industry—and I am with them—who feel that some may have striven a mite too hard to go along with the Government's deregulatory and free market enthusiasm. They would be churlish not to note that the Country Landowners' Association, I am sure, is pretty pleased with the outcome of the Bill.
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I think that we can all agree on one thing: it is absolutely imperative that when the Bill becomes law, all parties (and particularly tenants) must take proper advice before entering into farm business tenancies. I entirely accept what the noble Earl said, and that it is up to the landlord and tenant to reach an agreement, but I am convinced—I know that the Government will agree—that the guidance notes which are to be prepared by the RICS and discussed with the industry will be of vital importance. The Government have not taken on the responsibility of giving them any form of statutory power, as we asked them to do, but we know that the RICS and other groups will work very hard on this matter. That is important if the Bill is not to turn into a lawyer's paradise. I do not think that it will. Indeed, there is a good hope that it will not if all of us in the industry can get the message across that the guidance notes are extremely important. This is a whole new area. Both landlords and tenants must take advice, look at the guidance, and make sure that they are forewarned, and can thus avoid, the pitfalls that still exist, some of which we have touched on in our discussions.
The Minister mentioned the news over the weekend about relief from inheritance tax. I refer to what I said at previous stages about the effects of such taxation; but, as I have been anxious to point out, it is the way in which it is done that is so important. I should have been surprised if the Minister had not mentioned the new proposal to give 100 per cent. relief from inheritance tax for agreements reached after 1st September. Obviously, we shall have to see details of the amendments to the Finance Bill. I have seen only the press releases; but my first reaction—I stress that it is only a first reaction—is that the Government are showing a very odd sense of priorities. We have heard a great deal about the pressures on public expenditure. We know that local authorities are having to slash their community care budgets. We know that all the tax increases that the Government have introduced are equivalent to 7p on the basic rate, yet it seems that the Government can still find the wherewithal to give substantial tax relief to a not particularly impecunious section of the community.
As I have said, it is the way in which it is done that is so important. As I understand it, there will be relief of 100 per cent. on all let agricultural land on agreements after 1st September 1995. That means all those agreements and existing reliefs on owner-occupied land. The danger is that agricultural land could become a tax haven. We shall have to look very hard at the proposal. I am sure that when that amendment to the Finance Bill is tabled in another place, my colleagues there will be anxious to return to the point that we may be turning agricultural land into a tax haven. We must consider the effect of that on the price of land as well as all the other factors that will flow from it. When we form the Government, I am sure that my colleagues at the Treasury will wish to look at that very hard.
To repeat what I said on Second Reading: major agricultural tenancy Bills come but rarely. We have made no secret of the fact that we should have preferred a rather different Bill with more security for the tenant; but saying that does not in any way reflect on the Minister and the way in which he has handled the Bill.

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We shall now await with interest the changes to the Bill that may be made in another place. There will be several and although they are largely technical, they are nevertheless important and need to be carried forward to be dealt with there.
We must all hope that once the Bill becomes law, it will achieve the Government's objective, which we all share, which is to increase the supply of agricultural tenancies, particularly to new entrants to the industry.
Lord Geraint: My Lords, perhaps I may congratulate the Minister on the way in which he has conducted the Bill through the House. There is no doubt in my mind that the noble Earl knows his subject inside out. I should like to thank him for being a very good listener and for being very sympathetic to our views.
Over the years, I have had the privilege of considering the 1976 Act (when I was a Member of the other place) as well as the Act that was passed in the 1980s. Many mistakes were made in the 1970s and 1980s, but here we are in the 1990s. Although I voted differently in the 1970s and 1980s, I have always held the view that an agricultural tenancy is a matter between two people, the landlord and the tenant, and that if we have good legislation which looks after the interests of both parties, people in the countryside will survive.
Let us hope that the passage of the Bill through another place will ensure that more land is available on the market in September for tenant farmers. I make a special plea to the landlords of this country to try to let more land to young farmers who want an opportunity to start on the farming ladder.
The Earl of Kinnoull: My Lords, I should like to add my congratulations to those that have been paid to my noble friend Lord Howe on his lucidity and command of the Bill. It is a very complicated Bill and he has shown great clarity and courtesy in handling it as well as giving us all a real sense that he has listened to our comments. One of the most encouraging aspects of the passage of the Bill through the House is that we have improved it.
My noble friend the Minister has been up against some doughty agriculturalists, including my noble friend Lord Stanley and the two noble Lords on the Opposition Front Bench, the noble Lords, Lord Gallacher and Lord Carter. As my noble friend said, both have been courteous but are very much in command of their subjects.
I should like to add my congratulations to the industry. It has taken something like four years to get this agreement among the industry. The committee must have shown great wisdom and patience in meeting the arguments of all the conflicting interests. I hope that that will prove a great benefit to agriculture.
Twenty years ago, the Northfield Committee, on which the noble Lord, Lord Carter, served, stated the urgent need to free farming. This is the first time that we have done that. As I have said, it has taken 20 years to achieve and needs great support. As a result of this legislation, the somewhat dubious partnerships and the one to two-year agricultural leases which were outside the scope of the Agricultural Holdings Act will now be gone.
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The Royal Institution of Chartered Surveyors still has a very important role to play. My noble friend has shown that he has great confidence in its ability. I know that the committee that was set up some months ago is working hard. I am sure that it will rise to the responsibility and give the industry proper advice.
I am delighted about the relief that was announced last Friday. I am somewhat surprised at the noble Lord, Lord Carter, suggesting that agricultural land might become a tax haven. I had thought that that is what he suggested on Second Reading. I am slightly sad that the provision will not apply to all tenanted land. Finally, I wish the Bill success and a fair wind in another place.
Earl Howe: My Lords, perhaps I may reply briefly. I am most grateful for your Lordships' kind words about the Bill and my part in its passage through this House. As I said earlier, dealing with the Bill has been more of a pleasure than a duty for me. The Bill is both wanted and needed by the agricultural industry and I very much hope that it will receive a speedy passage in another place.
I have noted the strong welcome that has been given by several noble Lords to the announcement about inheritance tax. I am delighted that we have been able to make that change now because it will enhance the effect of the Bill and, I hope, render it even more successful. The noble Lord, Lord Carter, suggested that agricultural land might be in danger of becoming a tax haven. However, the intention is that the landowner will need to have owned the land for seven years before the relief that has been proposed by my right honourable friend would apply, so I believe that the noble Lord's fear is unfounded.
This is an important and useful Bill. I am grateful to noble Lords for the spirit in which they have debated it and helped us to improve it in certain ways. I invite the House to pass the Bill.
On Question, Bill passed, and sent to the Commons.

Education: Student Support
5 p.m.
Lord Addingtonrose to move, That this House resolves that, before the commencement of the Education (Mandatory Awards) Regulations 1994 and the Education (Mandatory Awards) (Amendment) (No. 2) Regulations 1994, there shall be restored to students the same right to receive housing benefit and income support during the long vacation as the rest of the adult population.
The noble Lord said: My Lords, the Motion draws attention to a group of people—adult students in full-time education—who are denied the basic right of a safety net to guarantee a minimum standard of living. That is a long-winded way of saying that students have been denied the safety net of the social security system since the 1990 student loan regulations were introduced. That is a piece of legislation about which the House could probably stand up and say, "We told you so". Everything that we predicted when we debated the subject in 1989 has come to pass.

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Students have become increasingly worse off. They carry a heavy debt burden, and not just because of the student loan scheme. Even that, as we have all heard recently, is not working well. Students have been effectively left with a lower guaranteed standard of living than one could expect if one were receiving the basic income support and housing benefit package when unemployed. The majority of students will have a lower income than that regarded as the lowest capable of sustaining life in this country.
The history of the matter is interesting. With the indulgence of the House, I shall relate briefly what happened. Since coming to power, the Government have introduced a series of measures which, inch by inch, have effectively removed students from the social security system. For instance, students were unable to sign on and receive benefits during their first Christmas and Easter vacations. Then they could not claim housing benefit if they happened to be in university-provided accommodation. The present scheme then came into effect in 1990. When the scheme came into effect, there was a hardship allowance. That was withdrawn the following year.
I was in the Chamber when that happened. I remember being told that one of the reasons for the withdrawal of the allowance was that students were being encouraged to apply for it. In other words, they were being encouraged to take out a loan which was supposed to act as a backstop to enable them to have money during the long vacation.
The average student therefore can now expect an income of £61.35 a week throughout the year. The Department of Social Security calculates that a person on social security benefit paying rent at an average cost around the country would receive £71.15 per week throughout the year. There is therefore a shortfall of nearly £10 for people who have to buy textbooks. That person is receiving potentially £10 per week less than the basic income level. We then stick other expenses on top of that.
The Government's answer to the problem is that people can find jobs. Students can earn money in addition to the grant. We have heard from many distinguished academics in the House, including my noble friend Lord Russell, that we are encouraging most students to take on a full-time educational course. That means that they are not doing anything else. So how many hours a week is it acceptable for them to work during term? How many hours does that mean working behind a bar when one is lucky to get home by midnight having been on one's feet for several hours? How many hours will be acceptable when doing a course? Many educational establishments actively discourage their students from working.
The main issue we are debating relates to the long vacation. "Vacation" is probably no longer a good name for it, as it describes a period when there is potentially no income. The student can work. A student has 14 weeks in which to find a job. How many of those weeks will be spent searching for a job? It is conceivable that 14 weeks will be spent searching for a job. Once a job is found, what will the rates of pay be? We are talking
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about low paid casual work; for example, working in the local factory or stacking shelves. Many menial, low-paid jobs no longer exist in the production sector. I am talking perhaps about the packing industry, although I have probably offended members of your Lordships' industrial committee by using that expression. That type of work no longer exists because it is cheaper to do it by automation. We all know that large areas of the country have structural unemployment because unskilled employment no longer exists in many sectors.
We then turn to the service sector. Once again students may obtain part-time work at perhaps less than £3 per hour. If one works for 20 hours a week at less than £3 an hour, that provides £60 a week upon which to live. Students may be worse of then than they are during the term. So what is the case for not bringing them back into the system? I cannot see it. Students who will earn a good income during the greater part of the vacation will not sign on as an alternative. We are not talking about vast amounts of money.
Students now have to sign 12-month tenancies for their accommodation. That has occurred since I was a student. That means that students cannot even live at home during vacation and thus not have to pay for their accommodation. They have to maintain their term-time accommodation even if they are not there. They are legally obliged to ensure that the rent is paid. All those factors combine to result in students suffering financial hardship.
The ancient universities recently carried out a survey. They include Oxford and Cambridge and the four ancient universities in Scotland, in order of age—St. Andrews, Glasgow, Aberdeen and Edinburgh. The survey found that about 15 per cent. of all students had considered leaving university due to financial hardship. The figures are hard to come by because when a student leaves a university he usually just leaves. Students are ashamed that they have not managed to complete the course. Financial considerations may play a part in this. If a student has financial problems he may have been doing a job and his academic work may have been affected. Many students in the surveys that I have seen have said that having to work has affected their academic performance. Students will not say that that is why they have left. That is why the figures are so difficult to collect. However, all the anecdotal and circumstantial evidence suggests that financial hardship is having a real effect.
The Motion asks merely that we restore to students the basic safety net. Students form a large group of adults who are undertaking a period of study which, it is hoped, will benefit the whole of our society because those people will be better qualified. It will undoubtedly benefit students themselves also. We are not suggesting a major change such as housing benefit during term time, although that too would be welcome. In the past, before the regulations were introduced, that acted as a regional balance. In expensive housing areas housing benefit rose and so that provided a form of levelling out. We do not call for that in the Motion. We ask merely that students should not find themselves without an income. It is not the most radical suggestion that the Chamber has ever heard.

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If we are to allow students to carry on falling into debt, we shall cause more of them to fail unnecessarily. We shall thus waste our investment both in time and money. That is the nub of the argument. I beg to move.
Moved, That this House resolves that, before the commencement of the Education (Mandatory Awards) Regulations 1994 and the Education (Mandatory Awards) (Amendment) (No. 2) Regulations 1994, there shall be restored to students the same right to receive housing benefit and income support during the long vacation as the rest of the adult population. —(Lord Addington.)
5.10 p.m.
Lord Skidelsky: My Lords, I have considerable sympathy with the position advanced by the noble Lord, Lord Addington. There is no doubt that for some time the real value of the student grant has been falling and therefore the financial position of students, in so far as they rely on that grant, has deteriorated. However, the background is that during the past 15 or 16 years there has been an enormous expansion in the number of students in full-time higher education. Expansion has occurred for longer than that but it has accelerated during that period. The fall in the real value of the grant is a direct consequence of that mass expansion.
The number of students in full-time higher education has doubled during the past 15 years and is now about 930,000. That is one-third of those in the 18 to 21 age group and includes a large increase in the number of women students. The expansion has been widely welcomed; in fact, it has been demanded. Everyone is extremely happy that an increasing proportion of people in that age group should be going on to higher education. It is good for the economy and for their own personal life chances.
However, it has inevitably strained the education budget, on which there are increasing demands. The demand for expansion is not confined to the higher sector of education. There have been worrying signs that literacy and numeracy levels have declined in primary schools. There is a big demand for extra expenditure in that area. Some would say that that is the main priority in the education budget and governments must decide how to distribute limited resources between the different claims. That is true in all areas but in education it has posed increasingly difficult problems.
It is not obvious that in a climate of scarce resources one should give a high priority to increasing financial support for university students who, in most cases, will be able to live at home and to borrow money via student loans and the banks. They will also have the opportunity to take vacation jobs if they need them. The problem is one of success rather than failure, and of special hardships created by the success.
The noble Lord, Lord Addington, said that he is not asking for a large sum of money. I have worked out that if one-third of full-time higher education students receive these average benefit pay-outs as a result of the new entitlements that he suggests the cost for the long vacation will be about £443 million. That is a large sum of money. I plucked the figure of one-third out of the air. It may be much less than that but it is the possible
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magnitude of the amounts that we are considering. However, one thing is clear and all experience teaches it; that if one creates an entitlement the population claiming the entitlement will grow. Therefore, whatever the initial calculations, the amounts required to meet the entitlement will expand. We must bear that in mind.
Before supporting the proposals we must, first, establish the dimension of the problem and, secondly, decide how it might be met. The noble Lord failed to supply any quantitative data. He made general remarks, which were well taken—
Earl Russell: My Lords, is the noble Lord aware that when asked in a Question for Written Answer for quantitative data the Minister said that he was unable to supply it? Therefore, I do not believe that it is possible to blame my noble friend for being in the same position.
Lord Skidelsky: My Lords, I do not blame the noble Lord for being unable to supply the data. I say merely that policy should be based on information and if we want to find out how best to meet cases of hardship we must establish the quantitative amount of hardship. There are many ways in which we can try to deal with the issue and recreating the proposed entitlement may not be the most obvious. Further, what proportion of students cannot live at home during vacations because they have no homes or because family relations are too bad?
Lord Addington: My Lords, the point was not that they cannot live at home but that they must maintain property because of 12-month leases. Many students are legally obliged to maintain property throughout the long vacation.
Lord Skidelsky: My Lords, how many are legally obliged to do so? Those who have property with such leases are so obliged, but what proportion of the 930,000 students are in that position? My argument is that one does not establish a universal entitlement to crack a small problem, if it is a small problem. There are other ways of doing so.
I wish to know what proportion of students are in the situation in which they cannot live at home because they have 12-month leases which they cannot give up. How many full-time students cannot count on any parental support during the vacations? That is further data that we must have. I should be loath to create, or to recreate, a system of entitlements based on the idea that most students are homeless, are without parental support, or are so tied to leases that they cannot give them up during the long vacation. I believe that that is what the noble Lord is asking us to do.
The noble Lord, Lord Addington, mentioned a safety net for students. Of course I agree that there should be a safety net but the question is how best to supply it. In 1994–95, £26.7 million has been provided for limited access funds. The noble Lord did not mention that. It is administered by universities and colleges to help students in serious financial difficulties. I believe that an expansion of such arrangements, if and when financial difficulties are established, is the way forward. After all, the people who administer the funds will know the personal circumstances of the students concerned and

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will be in the best position to judge the level of support that is needed. It should not be dealt with by way of entitlement to benefits that are generally associated with labour-market conditions and interruptions. One must deal with the problem through an extension of the facilities already available to students.
That brings me to the last general point that I wish to make. I am suspicious of any approach that treats full-time students as part of the labour market. They are not in that position. I am not sure whether the noble Lord, Lord Addington, believes that students should or should not be looking for vacation jobs. That varies in different countries. Many students would benefit from having jobs in the vacation, especially in the earlier part of their degree courses. But income support is related directly to the job market. If you do not believe that students should be in the job market because their studies will be disrupted, logically you cannot also call for income support under conditions related directly to the number of hours worked—less than 16 hours per week. Housing benefit is paid to people who cannot afford to pay their rent. That is not true of most students for most of the time that they are at university.
Everyone must be aware that there has been increasing hardship for students. There is a case for being more generous in order to meet that hardship. However, I do not believe that there is a case at all for recreating a system of entitlements which are bound to be demanded by more and more students as time goes on.
5.21 p.m.
The Lord Bishop of Chester: My Lords, I am grateful to the noble Lord, Lord Addington, for tabling this Motion for debate.
I begin by quoting from a Motion accepted by the General Synod of the Church of England. I should underline that that is a body elected from 43 dioceses of the Church of England and from all different sections of society. If a private Motion is debated there, it has to carry the maximum number of signatures. At the last meeting of the General Synod, the Motion was passed unanimously that it is:
"deeply concerned at the low level of financial support available to full-time students in higher education and requests Her Majesty's Government to consider means of alleviating the position".
Therefore, that is well in tune with the Motion before us.
I am connected most closely with Liverpool University which generously gives out doctorates in different directions. The welfare officer of the Guild of Students at Liverpool University has given me a very careful breakdown which accords with the calculations given earlier by the noble Lord that there is a difference of £9.82 per week between the income of a full-time student and that of someone who is receiving income support and housing benefit, with the reminder that those on benefit receive also free prescriptions and other benefits. That is a considerable difference. Therefore, there is a sense of deep injustice about that for those students living away from home rather than being unemployed.
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That concern is expressed in many ways. I am not concerned, neither can the Church be concerned, necessarily with those students who have parental support. Many of us, when we were students, benefited from parental support and many of us have suffered from having students of our own to support. We know that it is not an easy business and sometimes relationships become very difficult. But in speaking in the debate, my primary concern is with students who do not receive any such support; and there are quite a number of them. I do not believe that the figure is as high as one-third, but there are many such students.
Many students are living on a very tight budget. I wish to quote information given to me by a student who is a member of the chaplaincy at Liverpool University. Therefore, she is not a renegade or a beer-swilling student. She is trying to live sensibly and trying to get through her studies in order to graduate. She lives with three other girls in an apartment. On her careful budget that she has given to me, undramatically, she is left with £5 per week for food and heat. That girl does not want to take out a loan. The Government state that their reason for removing housing benefits and so on during the vacation is to make people more economically self-reliant. Her argument is that she wishes to be economically self-reliant and, therefore, does not wish to take out a loan. The argument goes both ways: she has been forced into taking out a loan against her will.
This subject is larger than the long vacation, but clearly we are concerned with the long vacation. However, before I turn to that, perhaps I may say that I know from my experience of Liverpool University that there has been an increase in the demands on the health and welfare resources of the university. More students are under stress and seeking counselling, and debt counselling is now commonplace in the university. That is a serious matter which we must consider.
However, we are considering the long vacation. How does one meet that challenge at a time when it is extremely difficult to obtain employment? Many of us, when we were students, found it extremely easy to obtain employment, but we are now living in a very different age.
Ideally, I should argue for an extra lock-on grant for the long vacation because the grant is already means-tested and that would be a way of taking it through into the vacation. I am sure that in that regard it will be argued that the grants are already thinly spread; that we wish to increase the numbers of people in higher education; and, therefore, to increase the size of the grant will reduce the numbers receiving higher education. Against that, I ask whether we want more students in increasing poverty or X number of students who can at least survive properly. I put that forward as a serious consideration. To my mind, that would be the best way forward.
The second way in which to tackle matters is for students to take out loans. The girl to whom I referred is very hesitant about the loan which she was forced to take out, as are many students, and, in particular, how it is to be repaid. Repayment is often to be made just at the time when students are taking on family responsibilities and just at the moment when they least

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want to repay it. Therefore, if that is the only answer, we should reconsider seriously how those loans are repaid. Linkage with income tax would take into account the circumstances of life at any particular time and I suggest that that would be a fairer way of repayment.
I imagine that neither of those suggestions will be acceptable. In view of that and in spite of the problems locally, which I recognise, in relation to administering housing benefit and income support, it seems that that is the only way in which to proceed unless the alternatives that I have put forward are accepted. If that is so, and the need is certainly there to be met in one way or another, I warmly support the Motion tabled by the noble Lord, Lord Addington.
5.27 p.m.
Baroness Williams of Crosby: My Lords, I too congratulate my noble friend Lord Addington for moving the Motion this evening. I should like also to congratulate the right reverend Prelate on what he said about it.
We now have a Secretary of State for Education who seems prepared to listen to some of the problems which confront those of us who are interested in educational matters. Therefore, I hope that she will consider very carefully this debate, and that the Minister who is to respond will consider all those suggestions which are intended to be helpful and positive.
Following on from what the noble Lord, Lord Skidelsky, said, we are clearly moving towards a different philosophy of student support, whether for good or for evil. That new philosophy is to base student support on a mixture of loans and the ability to meet the costs of higher education from private sources and away from the concept of grants.
I suspect that that is the philosophy, and I believe that the 10 per cent. cuts which started in 1994 and which should conclude in 1997 will not conclude in that year. I believe that we shall see a steady decline in the grant system to the point at which there is no longer a grant of any kind for maintenance.
I merely wish to register that there are two great drawbacks which should be put on the record. The first is that that is a particularly harsh system for those whose earnings after graduation are low; primarily those who work in the public service. Some noble Lords will know that at present I am a professor at Harvard University. It is one of the great problems of American education that many former students in low-paid employment are unable to pay back the sums involved in their education—and many of them are engaged in some of the most socially necessary jobs which any society has to offer.
The second point that I should like to make is that the system we have adopted in Britain is one that is extremely harsh on students who suddenly experience a change in their life circumstances, perhaps because of the death of a parent or because of disability in the family or because, for one reason or another, they are affected as regards their ability to gain employment after graduation. As I said, the system is peculiarly harsh with no element of fairness to those students who, for a
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variety of reasons, encounter financial responsibilities and commitments which they could not have envisaged when they took out the loan.
With regard to the system, and in response to the noble Lord, Lord Skidelsky, I should like to point out that of course one has to consider the numbers in higher education—indeed, the noble Lord is quite right in that respect—and we must also consider the desirability of an expansion in those numbers. However, one has also to consider how many students actually take degrees. As the noble Lord will know, in France and Germany, for example, and several other countries, a great many students enter university but far fewer actually complete their university and higher education studies. One of the great glories of this country is that a very large proportion of all our students goes from beginning to end of a university course because the work involved is so intensive and spread over a very short period.
I should also like to mention the fact that the British university structure is one with which the system that we are now moving to is peculiarly incompatible. Again, in American universities the provision for student jobs—many of them in the university itself, in libraries or in occupations such as a research assistant, a teaching assistant, and so on—actually complement the studies that the students are undertaking. That is not characteristic of the kind of jobs that our students undertake; for example, they take mostly bar jobs, waitressing jobs and jobs which are in direct conflict with the students' time and energy as regards their academic studies.
Implicit in what the Government want ought to be a major move towards discussing with the CVCP, and others in higher education, the possibility of deliberately planning for a much larger number of student jobs associated with and related to the university. Incidentally, I believe that it should also lead to a great willingness by the Government to pursue with employers within the public and private sectors the possibility of a major expansion of summer internships. In the United States and Canada, students find it relatively easy to get summer jobs which complement their education. As the right reverend Prelate has just said, it is increasingly difficult in Britain for students to find summer jobs. Moreover, summer jobs related to one's studies are virtually impossible to find.
My final subject relates directly back to the remarks made by the noble Lord, Lord Skidelsky. I respect the gritty frankness of his remarks and his willingness to associate himself with what is certainly an unpopular cause; namely, student loans as compared with student grants. However, I appeal to the noble Lord's own sense of intellectual coherence and his willingness to be frank about facts. I ask him whether he can really support the indefensible system of student loans which has been adopted in this country over the objections of the universities, of the other sectors of higher education, of students themselves and of virtually anyone else who knows anything about the subject.
The system is spread out over five years within which rigid, fixed amounts must be paid. There is virtually no flexibility at all under the system to allow for differences in circumstance, and the scheme is not

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related in any way to the income that students will earn. It means, for example, that those who enter the NHS as house doctors will find it incredibly difficult to repay loans because their earnings are so low in the early years of their profession. All of that makes the existing scheme quite straightforwardly indefensible. I am surprised—although, not altogether surprised—that the noble Lord, Lord Skidelsky, did not address himself to the existing scheme.
If we are to support the idea of a move from grants to loans, we must, first, soften that move in the way suggested by my noble friend, Lord Addington: we must allow for some redress for hardship. Everyone from universities who is present in the Chamber knows perfectly well that the access funds do not amount to an adequate safety net; they amount to a ragged net which is full of holes. Secondly, we must accept greater flexibility and a link to the income earned after graduation in the way that has happened with the Australian scheme, which is a great deal fairer than ours. Thirdly, there must be recognition of the fact that students would not be entitled to universal benefit as suggested by the noble Lord but rather to the means-tested benefits such as housing benefit and income support. Until we have a much better framework, I urge the House to accept the annulment of the grant awards as suggested by my noble friend, Lord Addington. I am very honoured to be present and to be able to support my noble friend this evening.
5.35 p.m.
Lord Beloff: My Lords, it is a particular pleasure to follow the noble Baroness. Since the noble Baroness faced me across the table of the Oxford examination school, some years ago, we have confronted one another on many occasions, usually on educational matters. However, this evening is an exception in that we are, for once, in total agreement. I find nothing with which to quarrel in what the noble Baroness said, but I should like to expand on it a little.
As the noble Lord, Lord Addington, said, many speakers in your Lordship's House—all, I believe, with university experience—warned the Government when the loan scheme was established that, even if it was correct in principle (as I believe it is to say that people who derive benefit from society at large might, in later life, be under a moral obligation to repay some of it) it was bound to be a tragic disaster. Indeed, the particular scheme mentioned by the noble Baroness and which the Government adopted was a disaster. It had no merits compared with the Australian scheme to which the noble Baroness referred.
Even I—and I believe my noble friends on that occasion—thought that, at any rate, it would actually work and that the loans would be forthcoming. We also thought that when students applied for loans their letters would be answered and their telephone calls dealt with. However, we now know from the Committee of Vice-Chancellors and Principals which has reported on the matter that nothing could be further from the truth. It is not only a bad scheme, it is also a scheme which has been administered with monstrous incompetence. In
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fact, looking at the record of the Student Loan Company makes me think that Lambeth Borough Council is a model of business efficiency.
Why did not the Government adopt what was urged upon them; namely, a recovery of some of the costs of higher education through the taxation system, either by means of income tax, national insurance or in some other way which could be clearly related to income and repayable when the income was actually available?
The Government never gave any conceptual argument. They stated that the Treasury said it was not possible: it was technically too difficult for the Treasury to work out a scheme for recovering money in that way. If the Australians can do it, one might think that we could also do it. But, apparently, that argument is not convincing. There is a curious aspect in the whole story. Noble Lords may be aware that the Chancellor of the Exchequer is proposing to sell off the Treasury building in order to provide better for its refurbishment. I urge the Minister to inform his right honourable friend that it is not the building that needs refurbishment; indeed, it is the chaps inside it.
We are fighting a very difficult battle to try to introduce sense into the system. We cannot cover the entire range of hardship. I, myself, have seen the surveys that have been carried out by the ancient universities, especially the University of Edinburgh. There is no doubt that a considerable degree of hardship exists which will, inevitably, lead to the lowering of academic standards. You cannot be worried about whether you can afford a meal the next day and at the same time contemplate the finer points of Aristotelian logic, or whatever it may be. That is a really serious question of which I think many students, particularly the more serious students, are very well aware. They are aware that their great opportunity is being affected by this situation.
There are also categories of students whose existence the noble Lord, Lord Skidelsky, omitted altogether—the mature students. We are always told that education should be a continuous process and that we want more people to go back to higher education at a later stage if they have missed it at an earlier one. But the whole scheme at the moment is heavily biased against mature students for whom many benefits are not obtainable. There is, of course—I am encouraged here by the presence of the noble Lord, Lord Dahrendorf, who knows a great deal about this—also the question of postgraduate students. Why cannot the college of the noble Lord, Lord Dahrendorf, attract more British students to its magnificent programmes of postgraduate research? It is because the provision of support for postgraduates is almost totally lacking.
The noble Lord, Lord Skidelsky, says all this is a consequence of expansion, and expansion has been much applauded on all sides. As noble Lords will be aware, I am unconvinced. My own feeling is that there is no point expanding a system unless you have thought out the way to pay for it. It is quite clear that when this expansion was accelerated—by a very high proportion, as the noble Lord, Lord Skidelsky, said—no serious effort was made to see how it would be paid for. It is being paid for either by putting additional burdens—

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administrative as well as teaching—upon university staffs who, if not yet reduced to the student level of poverty are moving in that direction, or at the expense of the students themselves. I see no benefit to the economy or to the national well-being by putting out into the world a number of graduates who, by reason of their circumstances if nothing else, are not going to be able to make the contribution which a generation ago we would have expected of someone with a graduate degree.
Therefore, this is a situation which really demands a great deal more thought than is being given to it. The National Commission on Education funked this. The Labour Party's commission on social justice has funked it also. It is time that, from all sides of the House and from all sides of the political spectrum, we began to ask ourselves what is the point of having a system which is badly run, which creates so much hardship and which is unacceptable to the universities themselves as well as to their students. What is the point of this? Is it not better to say that we now need to think very carefully before we go any further with expansion? The CBI wants to have another huge burst of expansion from 30 per cent. of the age group to 40 per cent. but the CBI's pronouncements on public affairs are nearly always beside the point.
Before we do anything of that kind we really must ask ourselves what to do. I have a tiny glimmer of sympathy with the noble Lord, Lord Skidelsky. My favourite solution would not perhaps be the solution that the noble Lord, Lord Addington, has put forward. But in the absence of anything seriously proposed—and in the absence, for instance, of a great increase in the amount of money available to universities to deal with hardship cases, which would be the simplest short-term solution—I feel the House has no option but to support the Motion of the noble Lord, Lord Addington.
5.44 p.m.
Lord Redesdale: My Lords, I would like to make a short speech based on my own experience as a student. Many noble Lords here will be surprised to learn that I obtained a degree in Newcastle. I left Newcastle University in about 1989. I remember that student loans were on the horizon and I remember a cry going up from all of us who were leaving, "Thank God it will happen to somebody else"! Unfortunately for the students around today, it has happened to them.
I wish to point out a few of the realities on the ground today in Newcastle. One of the points that I wish to underline is the fact that the Government have been successful in their attempt to raise the number of students in higher education. That very success has led to some of the major problems for students in Newcastle. I wish briefly to consider two areas: housing and jobs. I know that both areas have been covered by other noble Lords.
I wish first to consider housing. One of the problems with raising the number of students in Newcastle is that it has placed a massive burden on the available housing stock for students. The vast increase in student numbers has meant that there is now a great deal of competition for housing. The houses have not got any better; they
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are still the same dumps that I stayed in but they now cost double the amount that they cost in my day. I remember renting a house in Fenham in the west end of Newcastle for £14 a week. The price gives an indication of the kind of house it was. I visited that same area and asked students about houses there. The houses there today are still in the same state as when I lived there—in fact they are probably worse—but they are now being rented out at the average rate for Newcastle which is £35 a week.
As regards the point about houses being rented out for 12 months of the year, it obviously does not make any sense to a landlord who is renting out commercially to rent out for anything less than 12 months of the year. The customers of those landlords are students and why should the landlords leave their houses empty over the summer period? Problems can arise if houses are left empty over the summer period. The one good asset in the house I rented was a marble fireplace. However, I remember returning after the holiday to find that it had been stolen. That was rather annoying because we did not get our deposit back. Someone had broken into the house over the summer period and stolen the fireplace. That is an indication of what Fenham was like.
I now turn to jobs. The increase in the number of students has meant a decrease in the number of jobs available to students. The jobs available to students are very limited in nature. At the time we last debated this matter I visited Newcastle and I went into McDonald's and asked whether I could get a job there. The staff said I would be put on the waiting list. If one has to be put on the waiting list for a job at McDonald's, that shows there must be a massive scarcity of jobs because the work there is so badly paid.
The only jobs that are available in some areas are bar jobs. However, due to the unemployment in the area, there is competition for those jobs with people living in Newcastle. Sometimes employers in the area will not employ students for those jobs. As regards summer vacation jobs, if one is a student in Newcastle—I know this from what my friends have told me—and one wishes to obtain a job there, one has to lie and say that one is not a student. If one does not do that, one will not be employed because employers know one will only be employed for a short period of time.
Those are just some of the problems. Although one is bound to keep one's accommodation for the summer period—and I calculated that for 12 weeks in Newcastle one would pay £420 at the lower end of the housing market, which is a significant sum for a student to have to pay—one might have to move away from Newcastle to find a job. That will be a problem in any town with a student population.
The noble Lord, Lord Skidelsky, estimated the cost of the scheme as £443 million. Perhaps I am cynical, but taking into account the rise in student numbers and the fact that a third of those between the ages of 18 and 21 are now students, there must be an enormous saving to the taxpayer because if they had stayed at home and had not become students they would have received benefits. Considering that there is a large amount of unemployment in that age group there must be a saving to the taxpayer.

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There is no safety net for students at present. There should be a safety net for the summer period. It is difficult to spot student poverty because it is an age group which will not be the most visible. If one takes out a loan one will probably be able to pay it off, but that does not mean that student poverty does not exist. It is a growing problem.
I hope that the Minister will give one commitment when he sums up and will agree to review the access fund and the university hardship funds. That is the only safety net which exists at present. Many noble Lords are concerned that that is not an adequate safety net because so many fall through it. I hope that the Minister will give a commitment to take another look at the matter.
5.52 p.m.
Baroness Park of Monmouth: My Lords, I too am grateful to the noble Lord, Lord Addington, for promoting the debate. We have all received statistics on student finances which are deeply disturbing. I propose to quote very few, but that is not for lack of data.
It is claimed by the Department of Education that such evidence as is available is fragmentary, anecdotal and insufficient to justify the immediate and urgent review of policy which I believe to be essential. Is it really not enough that the vice-chancellors at their meeting with the new Secretary of State on 2nd December pressed her to review the level of student support as a matter of urgency and said that many students were now in real poverty and that the question was wider than the balance between grant and loan? Is it not enough that the students themselves have carried out reviews of 1,718 students at St. Andrews, 1,266 at Edinburgh, 3,062 at Aberdeen, 767 at Glasgow and 1,000 at Lancaster), all of which tell the same story of serious financial strain?
I could cite many detailed statistics provided both by those surveys and by the CVCP's student financial support survey of home full-time students in the autumn of 1994 which demonstrate clearly the substantial number of students suffering a degree of financial stress and real hardship over long periods. That is seriously damaging to their academic work and hence to their prospects in a society which urgently needs good graduates, not students who have been driven to become only part-time students while notionally taking a full-time course because they are obliged to take low-paid jobs with long hours in term time, even in their last year, to survive.
Employers are looking for bright graduates with transferable skills. They expect much more from a graduate than proof of academic quality. They are looking for young men and women who, in addition, have acted, made music, communicated, been part of teams, taken initiatives or led expeditions. How are students who are already only part-time students because they are stacking shelves at Sainsbury's when they should be spending Saturday nights deciding how to run the world (which is what we did in my day) to afford the time to learn those skills which make a rounded human being and which are part of a university education? This is the time when the young can explore
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new ideas, make friends for life, learn to respect other points of view—in short, enjoy a truly catholic education. That is the experience good employers are looking for, and many of today's students are not getting it, to the great loss of our country.
There are four issues which I urge the Government to address with immediate practical measures without delay. The first is to create forthwith an additional interim means-tested payment in lieu of housing benefit but directed to the rent and accommodation problem while a proper review of student poverty is carried out. I have never understood or agreed with the Government's extraordinary thesis that students going into higher education have deliberately removed themselves from the labour market and thus disqualified themselves from entitlement to social security benefits, but I am prepared to see some logic in requiring money for students to come from the education budget. But some such money is urgently needed.
In the past, Ministers have said that they wanted, first, to increase the total resources available to students and, secondly, to increase students' economic awareness and self reliance. As I said in an earlier debate, it is difficult to learn to manage money when you have none to manage. Can the Government suggest how to manage a budget based on the following figures? In 1995–96 the maintenance grant outside London will be £2,040 and the loan available will be £1,150 (or £840 for those in their last year). Therefore the total will be between £3,190 and £2,880. The median rent, countrywide, is £42 per week—per room, not per house—for a 52-week year (landlords do not work in academic terms) or £2,184 per annum. That leaves the student without private means (who are the students we are talking about) with between £1,006 and £806 for all other purposes for the whole year. That is between £20 and £15 a week to cover food, heat, books, travel and sometimes council tax.
The Minister will say, "There are those splendid access funds". The difficulty is that those funds serve both undergraduates and postgraduates and the latter receive no loans and need help. Now mature students are to lose their allowances, so they too will need help. Secondly, only between one-half and one-third of applications can at present be met, even partially. It is worth noting that the vast majority of those receiving access funds last year were living in rented accommodation, so that is undoubtedly where the need lies.
However, the whole infrastructure of student life is suffering. One shocking example is the lack of access to libraries, whether to terminals or to books. Edinburgh University library bought no books at all for six months because of lack of funds. If students cannot buy textbooks at £20 each or more and cannot borrow them how are they supposed to do their academic work?
Why should we press for an interim subsidy, whatever we may call it and from whatever pocket of the Exchequer it may come, pending an early review and a fresh approach to student funding? It is because we see a valuable national asset being frittered away. At present, students are living in a state of total uncertainty. They are existing on a variable and unpredictable mix

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of the student loan, the maintenance grant, possible money from the access funds, possible private or bank loans, occasional possible parental help and possible short-term, part-time jobs with low pay and long hours. Many cannot expect parental help. Most cannot get a decent job in the long vacation which might, as in the past, help them to clear bank debts as they go along. Some are precluded from that anyway because of course work. Only a small number will get help from the access funds, and universities are precluded by law from using their funds to subsidise students. How on earth can anyone plan his or her finances in the face of so many imponderables which are beyond control? I find it disgraceful that student unions have to carry out extensive and complicated debt arrangement counselling as one of their chief functions.
I argued earlier for an interim mechanism to introduce one more element of certainty into students' finances: that they should have the grant, the loan and an interim payment of some kind while the whole system of financing is reviewed and rethought. I agree with other noble Lords that that payment might be made through the existing countrywide mechanism of access funds and could be presented simply as a significant increase in those funds. For instance, in Oxford, 60 per cent. of this year's applications for access fund which are awaiting consideration are from undergraduates living out and therefore liable to pay 52 weeks' rent.
Another simple and thoroughly useful recognition of the need to improve the present appalling lines of communication between students seeking loans and the Student Loans Company would be the immediate provision of a Freephone line for students to use. One of the many problems which students have encountered is the virtual impossibility of getting through by telephone, as they seek to do after successive letters and applications have vanished into the black hole either of a computer or a pending tray. It is surely disgraceful that a student can exhaust a £5 telephone card, bought especially to ensure that he or she actually gets to talk to someone, and still gets no further than being put on hold and dealt with by the answerphone. I know that students have urged that there should be a Freephone link with the Student Loans Company only to be told that that is a Department for Education decision. I appeal to the Minister to please make that decision now.
That lack of communication, coupled with gross inefficiency on the part of the Student Loans Company in dealing with its proper business, has extended even to face-to-face contact. The student loans consultative group, itself made up of representatives of large student unions selected by the loan company, was unable to obtain an interview for three months, while the backlog of 35,000 unprocessed applications built up. It was finally seen in January of this year.
Perhaps I may urge the Minister to lose no time in asking the Secretary of State, whose coming—I am happy to agree with the noble Baroness, Lady Williams of Crosby—has brought such a breath of fresh air and common sense to education, to set up without delay a review body. This should include representatives of the CVCP and the appropriate student bodies such as the NUS and some of the larger student unions—for
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instance, the Ancients and others such as Manchester, London and some of the new universities, and rethink the whole method of student financing.
In my view, there should be an independent audit, not a domestic one, of the Student Loans Company. Could not the National Audit Office do that? The Student Loans Company should be required to account for its proceedings and to operate a better management structure in future, with more staff allocated to the processing of applications as opposed to the pursuit of debt. I understand that that was done in December in order to clear the backlog. That principle should be maintained.
Students themselves could make some valuable suggestions. They have a great deal of sense. Just as the Government have had the common sense and honesty to revise their policies and management processes for child support, so must they make the Student Loans Company work or scrap it. It has not worked hitherto, although there are hopeful signs of a better approach to problems with the departure of its unlamented head. This is the moment to do some radical rethinking. The Government regard all surveys—and, of course, statistics can be interpreted variously—as tending to be skewed in some way. It should surely be possible to devise questions which will provide honest answers.
The other area in which there needs to be radical rethinking is the method of repayment. Other noble Lords have spoken about that. I say only that I strongly support the proposal, made and rejected long before the recent Labour commission, that repayment should be income related, with repayment linked directly to pay level and collected probably through the national insurance system. Under the present system, whereas in Hansard of 25th January 1994, at col. 950, the then Minister in this House quoted a repayment figure of a mere £11 a week, the figure for a student going down this year will be something like £70, and that figure will rise to £96 per month within five years. That is a daunting prospect.
I have said nothing about the proportion of students who are dropping out, because as yet there is no mechanism for establishing whether the reasons were solely financial. However, the combination of no money, no way of planning to secure it, and the effects on work and future prospects of continual anxiety and stress must be a powerful factor.
We are asked to believe that there is a feelgood factor in the country arising from a gradual and welcome improvement in the economy. I hope that we do begin to feel that. Too many students, however, are experiencing the "feelbad" factor. It is in the power of the Minister to persuade the Secretary of State to exert her undoubted energy and goodwill to change students' lives. All it needs short-term is free phones, a better use of staff in the Student Loans Company, a major increase in access funds, and the setting in train of an objective and radical review, in consultation with the CVCP and student bodies, both of student finances and of the operations of the Student Loans Company. I cannot but wonder whether that monstrous animal should survive.

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Long-term, I hope that we shall see a different formula for recovering loans, and a real hope that students will once again be full-time students, able to use the resources of their universities to the full and to emerge as valuable graduates.
6.8 p.m.
Baroness David: My Lords, I must apologise for failing to put my name down in time to get it on the list, but I did want to speak about the effects of government policies over the last number of years on student finances, which I consider to be disastrous as I think quite a few people tonight have also said. I felt that it was important that a good number of us said how totally unsatisfactory are the present arrangements that the Government have put in place.
From September 1986 when students lost their entitlement to supplementary benefit and unemployment benefit during the Christmas and Easter vacations, things have gone from bad to worse—housing benefit withdrawn and vacation hardship grants gone, among others. Then the flawed Education (Student Loans) Bill was introduced; and what an appalling mess the Student Loans Company is now in since the new fast-track application system for loans was introduced in May last year. Chaos and widespread student hardship have resulted. Of 320,000 forms for loans sent out, for the current academic year, only 60,000 were ready for processing at the start of the new term. Thousands of students were left without loans. The company was forced to take on extra staff to try to clear up the mess it had created. Eleven thousand telephone calls a day were being received. At the end of December 1994—that is, at the end of the first term of a new academic year—35,000 students had not received loans. In the context of steep grant cuts, this meant significant student deprivation and suffering.
Many borrowers (over 20,000–7.7 per cent. of those in repayment status) were in default at the end of July. Legal action was in progress against 749 borrowers and judgments had been received or enforced against a further 1,483.
Students do not like getting into debt, and the right reverend Prelate made that clear in his remarks. It is a heavy burden and more and more almost inevitably are in bad debt—up to several thousand pounds at the end of their courses. One survey indicated that nearly half of all undergraduates are finding it difficult to pay their way through university and a quarter are turning to term time jobs. That is not good for their work. In particular, one hears about the number of hours per week which a great many are working. A survey last year showed that,
"nearly nine out of 10 academics strongly agree or agree that financial hardship is damaging students' academic achievements".
Some students have given up altogether. Access funds, which are available only if a loan has been applied for, have proved totally inadequate for need. That has been pointed out by a good many speakers.
I would like to speak of postgraduate students, who face particular problems. This is linked to the decrease in discretionary awards. The Gulbenkian survey shows that they had fallen to 1,700 in 1993–94 from 4,000 in
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1990–91. They and part-time students and mature students have had to face many more problems than the ordinary undergraduates who can claim a grant, albeit any grant is now a very reduced one. The average proportion of those in debt rose by nearly 20 per cent. among postgraduate students at St. Andrews. I was there last Saturday, as it happens.
Conditions for students have got worse, too. The increased numbers of students have not been provided with increased facilities. Libraries have not enough space for the larger numbers, nor enough books for their needs, as has already been pointed out. Because of inadequate funds more and more students are relying on books from libraries. The demand for study space in libraries has increased, too, for many reasons, but one is the result of cramped and cold living conditions. Student numbers have gone up by 70 per cent. in the last seven years; library provision by only a few per cent. Many universities have responded to these needs by having longer opening hours. Oxford and Cambridge colleges have long offered overnight study facilities. Bath University library opens until midnight in term-time but the new study centre which it is building will be open all night. More universities should follow these good examples. The rise in accommodation costs—faster than inflation, as the noble Lord, Lord Redesdale, said—is another cause of students getting into debt. Payment for rent takes up such a very large proportion of a student's income.
Could the Government not accept that all is not well in the financing of higher education? Could they institute a proper financial review—as was suggested by the noble Lord, Lord Beloff, the noble Baroness, Lady Park, and others—and not only of higher education but also of further education, as it does not seem fair that an 18 year-old at university should be treated very much more favourably than an 18 year-old in a further education college?
What one fears will happen is that it will be only the well-off who will be able to afford a university education, that it will become for the elite, available to those with well-heeled parents. It is very disturbing that those without considerable support from parents or relations will become reluctant to take on the daunting financial responsibilities and the possibility of large debt at the end of their course that now seems inevitable for a great many young people. This I find deeply disturbing. The possibility of equality of opportunity and education for all up to degree standard will become more and more remote. And that is bad both for individuals and for the country.
6.13 p.m.
Earl Russell: My Lords, not for the first time I should like to thank my noble friend Lord Addington for introducing this subject and for speaking about it with so much expertise. This has been an excellent debate. If someone were to read the Official Report without knowing anything of our names, he would not be able to guess from what has been said to which parties we all belong. The voice of experience seems to be unanimous.

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I must also declare an interest, both as a university teacher and as a parent. In both those capacities I have reached the same conclusion—that the basic package of support is short by approximately £1,000 a year. In this profession we seem to be fated to be Cassandras: our remarks do not get attention until it is too late for them to be of any use. I remember very vividly sitting on these Benches almost seven years ago waiting to make my maiden speech and listening to my noble friend Lord Jenkins of Hillhead saying that if present policies were to continue this country would be without a world class university in the 1990s. I can still remember the shock and horror which came back from the other side of the House when he said that. The word "alarmism" flashed by a telepathic signal across the Chamber. That remark looks a lot more on the spot now than it did then. One of the biggest reasons why it does so is the collapse of the system of student financial support. I agree with everything said by the noble Lord, Lord Beloff, about the funding of expansion and I will say that, though we have more students in higher education, whether more students are getting more education is something as regards which I have very profound doubt.
We might pause a moment to think why the funding of higher education has been a problem all round the world in the past 20 years. It is the clash of two tendencies. One is that higher education is a quality market. In a quality market competition does not lower the price; it increases it. If one thinks, for example, of fighter aircraft, in 1940 to have the second best fighter aircraft in the world was worth nothing. So one does not think in a quality market of saving a few pounds; one thinks of making the product better. The tendency in all the world's great universities, with the growth of more expensive ways of tackling the big sciences, has been to drive the cost down. That is inevitable. At the same time it has been the tendency of the world in the late 20th century to want to move towards a greater degree of equality and to spread privilege more widely. Those are both good tendencies, but until we can accept that they are capable of conflicting we shall not be in a position to come anywhere near planning our higher education.
I wish to touch on one or two small points. We have heard a good deal about the recent misfortunes of the Student Loans Company. I should like to thank the Minister, Mr. Boswell, for being kind enough to have a meeting with me on that subject about three weeks ago. I found I was pushing on an open door. When one is pushing on an open door, one stops pushing, just as when one is in a hole one stops digging. I did not feel that anything I could do could make the Minister more determined to do something about it than he was already. I agree, though, with what has been said by the noble Baroness, the right reverend Prelate and my noble friend Lady Williams of Crosby about repayment.
Two basic problems arise from this debate. One is that the total package of student support is not big enough. The other is that, even if it were big enough, the breach in the universal safety net will cause hardship. However, I think we need to split these matters up. I shall deal first with the total inadequacy of the package.
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The real measure of that is the number of students who are now regularly in employment. That point has been made from every quarter of the Chamber. The right reverend Prelate made it particularly effectively. A lot of universities, including my own, have always had a rule that students may not take full-time paid employment during full term. A lot of universities, including my own, now have institutions to help undergraduates to find such employment during term. One does not get into that kind of position lightly. One does not make the tremendous cultural revolution in one's own thinking involved in encouraging the students to get jobs during term unless one knows very well that what they are getting is not enough or anything like enough. That cultural change is an enormous one and a measure of all our experience of what is really wrong.
I do not think everyone is up to date with it. The noble Lord, Lord Mackay of Ardbrecknish—I gave him notice that I intended to quote this—said on Monday 16th January:
"most full-time students I know are not seeking employment".—[Official Report, 16/1/95; col. 401.]
I am sorry that his acquaintance is so limited. If he would like to come down to King's at lunch time one day, I will enlarge his acquaintance. The noble Lord also said (col. 401):
"I should have thought that those two conditions—being a full-time student and actively seeking work—cannot apply concurrently".
There I agree with what he says. What I am not so sure about is that he agrees with government policy—because for most people it is not now possible to be a full-time student without getting paid work. The effect of that on their academic work is as the noble Lord, Lord Beloff, described it. I cannot put it more strongly than he did. I will let him speak for both of us.
A certain number of comments will always be forthcoming when we try to make these points. Some people will say that it was ever thus. The last time that that point was made in this Chamber I reviewed my memory bank while the speaker was on her feet. It was true that I could think of six cases which were as bad as anything that happens now. But those were my worst six cases in 30 years before the present system came into being. When I compared them with the worst six cases of my past two weeks, they were identical. That is a measure of the change that has come about.
People may ask why the Government got it wrong. It is a fair question. I think the answer is that the survey that was carried out by Research Services Limited when the new system was being brought in, estimating how much money students were getting from social security, got it wrong. I believe the reason was that those who completed their questionnaire filled it in wrongly. That, I suspect, was because, since people read the newspapers, they were afraid of a massive campaign against them for scrounging. If so, I hope that they learn their lesson and are more honest next time they fill in a survey.
I agree with my noble kinsman Lord Henley that one cannot blame the Government for believing independent research. But after four-and-a-half years the

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Government ought to begin to wonder whether research that contradicts the experience of everyone who knows anything about the subject was perhaps wrong.
It may be said that if the situation were this bad, students would not continue to go to university. I speak to every new pupil of my own in his or her first week and explain roughly what the financial position is. I meet utter incredulity. They have no idea that it is like that. Six or nine months later they turn up and say, "You were quite right". But they do not go to university believing that it will be the way that it is. So the Government cannot rely on the number of applications to prove that matters are all right.
Then there is the safety net. Even if the basic package were all right, there would always be unexpected cases: people who fall ill during the long vacation, who of course cannot get jobs; people who do not get any support from their parents, in some cases because their parents have thrown them out; people who transfer courses, which happens for perfectly good reasons, and who may end up doing a three-year course on two years of grant; people who suffer an accident or an injury, something that is not covered by an insurance policy—a misfortune that leads to extra costs; people whose parental contribution cheque bounces—and during the recession we have had a good many of those instances, which are not the fault either of the parent or of the student; and exactly the same category of people as are entitled to social security in every other walk of life, namely, those who try to find work and cannot. Finding work in Bournemouth during the Christmas vacation is, I have learnt, particularly difficult. If one cannot find work, one ought to have, simply because one is a human being, entitlement to support from the social security system. It is a citizen's right.
The Government may invoke costs. If so, they have not thought all round the problem. My noble friend Lord Redesdale made the point that in many cases students are in competition for jobs with ordinary members of the public. I know that some work in the students' union. But if—to take actual examples—I find my pupils behind the till at Waitrose or behind the counter at Liberty's, they have taken jobs which would otherwise have gone to ordinary members of the public. Because they have those jobs, somebody else is on income support. So the Department of Social Security is paying just as much as it did before; it has merely shifted its saving from one person to another. That is not a particularly useful process.
The Government will undoubtedly invoke the Access Funds. The Access Funds might possibly be useful if they were designed simply to deal with unexpected hard cases. What those funds cannot possibly deal with is a system which is short by £1,000 per student. There is simply not that kind of money in the system. I do not believe that the Minister will deny that. But if they were to deal even with the hard cases, I am not sure whether trebling them would be enough.
The Minister may say that social security is not the ideal means of educational support. If he says that, I shall not argue with him. It is true, just as it is true that social security is not the ideal form of support for people
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in full-time employment. But in both those cases, if the support that they receive from their normal occupation drops below benefit levels, then as citizens they should have an entitlement to social security support. It is for one thing the only way to create pressure to keep their income up to a level on which body and soul can be kept together.
People may say, "In that case we cannot have the expansion that we want". I say: there is no point in expanding higher education unless what you are expanding is in fact higher education. If people cannot get about £1,000 a year more than the size of the present package, I will advise them in public, as I have done before and, if need be, will do again, that it is much better not to go to university at all.
6.27 p.m.
Lord Morris of Castle Morris: My Lords, Alexander Pope, at the end of The Dunciad, writes as follows:
"Lo! thy dread empire, Chaos! is restor'd;
Light dies before thy uncreating word".
That well describes the situation revealed to us by this debate, for which the House is deeply indebted to the noble Lord, Lord Addington. And how many times in recent years has the noble Earl, Lord Russell, reminded the House that the academic standards of many university degrees have fallen because students are now forced to waste their time earning money in term and throughout vacations simply to pay their bills?
On 17th March 1993 I myself pointed out that students of English Literature, my own subject, no longer have time to read the plays of Shakespeare. Assume a reading speed of about 30 pages an hour, and it takes 469.9 hours to read Shakespeare. Assume that a student works a 40-hour week, and it takes 11.7475 weeks (doing nothing else) to read Shakespeare. A long vacation, for which the student now receives no extra financial support, is about 12 weeks. He could not read Shakespeare. He does not read Shakespeare. He gets a job because he has to. And the fact that students now have to fight to get paid jobs in the summer vacation is proof positive, if we needed it, that academic standards have indeed fallen in most of our university subjects.
Lord Skidelsky: My Lords, would the noble Lord accept that the proportion of students getting first-class honours degrees and 2.1s has been steadily rising over the period about which he is talking? If he would accept that, why does he think that that has been the case?
Lord Morris of Castle Morris: My Lords, the proportion has gone up. The reason for that is much more complex than saying simply that standards have risen or that standards have remained the same. There are many ways of getting through examinations, as the noble Lord, Lord Skidelsky, will know better than most; and 2.1 s and Firsts are not a very simple register of the full educational achievement of a student on a university course. It may be an indication that the students have learnt how to pass certain examinations, which may now be set in quite different ways from the traditional ways. But there is no simple relationship between rising standards and the number of Firsts and 2.1s.

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The present system of financial support for students is chaotic, inequitable and inefficient. It is chaotic because it is, as we have heard from all sides, an ideological mishmash of maintenance grant, loan and the so-called "access" funding, which is really a pitifully small hardship fund.
The value of that maintenance grant declined steadily through the 1980s—by 24.1 per cent. between 1978–79 and 1990–91. In 1979, the standard maintenance grant was 24 per cent. of average earnings; in 1993–94 the grant plus loan amounted to 18 per cent. of average earnings. Access funds provided for universities to give that "targeted" assistance to the most needy are utterly inadequate at a mere £27 million this year.
What sticks in the Government's throat is that the maintenance grant is a grant—that is, it does not have to be paid back. That is anathema to them. So the loans scheme was established in 1990 and, after the banks refused to take it on, a new scheme was produced and a new company—the Student Loans Company—was set up to administer it. The result, to which I shall return in some detail, is chaos.
The Student Hardship Survey conducted at Aberdeen University in September 1994 shows a picture which is as typical as it is disgraceful: 39 per cent. of students had a job during the past academic year; the jobs averaged 12 hours a week; the average wage was £2.90. Yet 77 per cent. anticipate that they will need a job in the next academic year; 78 per cent. said that they were in debt at the end of the last academic year; the average debt, excluding student loan, was £233; and 54 per cent. said that they received money from parents or relatives, excluding the parental contribution, at an average of £371.
But it is not only chaos; it is inequitable chaos. As we heard, postgraduates, part-time students and mature students over 50 are simply not eligible for loans—loans which are shortly to amount to 50 per cent. of all student support. The present scheme, created since 1990, remains geared to full-time undergraduates, even though the composition of the student body has radically changed in recent years, as the Government fully knew that it would.
By 1991–92, 35 per cent. of higher education students in Great Britain were part-time. There are now approximately 30 per cent. more of those students than there were five years ago. Despite their number and despite their importance, they are not eligible for student loans or for other forms of support. It is as clear as day—and has been for many years—that the distinction between full-time and part-time students is vanishing like the morning mist; and that it is the part-time, the postgraduate, the mature and the further education students who are suffering most.
Mature students, as any university teacher will tell you, are often among the very best students. When I was a Principal in the University of Wales, we recruited them joyfully, and they usually out-performed their junior colleagues every year. The Liverpool John Moores University has the highest proportion of mature students in the country, most of them from the local area. At present, the benefits available to them are greater if they are unemployed and claiming income
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support and housing benefit than if they are mature students. And of course the phasing out of the older students' allowance will exacerbate their position. If they happen to be over 50, it is hardly worth bothering to apply.
Let us take one particular case. There is a mature, divorced student. She had qualified and worked as a nurse, but because of illness she was unable to continue working as a nurse and so had to retrain. She decided to go to university. Poor woman! She is over 50 and so cannot apply for a student loan. She had been unable to work before entry to her course, and so she was not eligible for the mature student's allowance. So her basic and only grant is £2,040. Not surprisingly, she has arrears and an overdraft to contend with. She is in her first year of study. On top of that, come the cuts in grants over the next two years. The only other assistance is from the Access Fund and that is extremely limited. What would Her Majesty's Government advise that woman to do—get on her bike?
The student support system is chaotic and inequitable. But it is also pathetically inefficient. That from a government which exhorts us all to adopt good business practice, seek value for money, set targets and achieve them, make efficiency gains every year and cut the costs to the consumers of education.
The story of the Student Loans Company since its birth in 1990 is a well known disaster. If it were not so ruinous to so many potential students, it might well make a hilarious farce of the kind that the noble Lord, Lord Rix, used to adorn at the Whitehall theatre. At all events, the Student Loans Company has been caught with its trousers down.
Perhaps I may present to your Lordships the information that I have gathered, from usually reliable sources, and ask the Minister to comment on what I say, item by item, when he comes to reply. To assist him to do so, I have given him some notice of what I intend to say.
As I understand it, only 47 per cent. of eligible students took out loans in the academic year 1993–94, and only £19.8 million was repaid. A total of £751.6 million remains outstanding on previous years. At 31st July 1994, 20,628 borrowers (7.7 per cent. of those in repayment status) were in default. I do not think that there is much argument about that.
The "fast-track" application system was introduced last May. Students who had received loans in 1993–94 were sent their application forms during last summer. I repeat what, to my surprise, my noble friend Lady David has already told the Minister. There were 320,000 forms sent out, but only 60,000 were ready for processing at the start of the new term. Is that correct? Loans were significantly delayed, and thousands of students spent weeks trying to secure them. The company was forced to take on extra staff and extend its hours to cope with the problem. Is it true that at one point it was receiving an estimated 11,000 telephone calls per day? Is it true that at the end of last month the company admitted that 35,000 students had still not received their loans?
I am informed that the company itself has been the target of allegations of corruption and incompetence, which suggest serious abuse of corporate expenses and

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contravention of Whitehall rules on the acceptance of hospitality from clients. Is that true? Is it true that the Department for Education has been forced to employ Coopers & Lybrand to investigate those allegations, and that its report will be presented to the Public Accounts Committee next month? Is it further the case that, notwithstanding that report, the concerns of the National Audit Office are such that it has announced separate plans to conduct a further investigation into the company's operation?
Finally, is it true that the Department for Education documents leaked last November show that the Government have considered privatising that loans scheme and that under one of the options considered students would be charged a commercial interest rate on their loans? If so, it would add a pleasing touch of grim graveyard humour to an otherwise sorry situation, since it would be another example, like British Rail, of the Government failing to control a situation and then crying out to the private sector to haul them out of the soup. If those facts are correct, I must ask Her Majesty's Government "What do you allege as your excuse?"
Student support is chaotic, inequitable and woefully inefficient under this Government. Student hardship has never been greater or more widespread. Students have only two options: walk out or take paid work. Evidence is now emerging that student poverty and indebtedness have led to increased drop-out rates. The CVCP report that full-time students leaving their courses for reasons other than failure between 1991–92 and 1992–93 increased by over 30 per cent.
The Chief Executive of the Higher Education Funding Council for England said recently,
"While the number of entrants held up, the system as a whole was under-recruited last year which indicates a fall in numbers in the late years of courses. It looks as though people are taking career decisions to break their courses—my guess is that the reasons are financial, with people building up debts, looking round and saying 'I have to do something about this'".
Hear also the words of the Cadbury Report for the CBI—the CBI, not all of whose members are fully paid-up members of the Labour Party. The report said,
"The Government's approach should be fundamentally revised so that the UK aims for a minimum graduation target of 40% … of young people by the year 2000. Significant increases in higher education participation by mature people should also be expected. This would meet the vital need to upskill the existing workforce".
I agree with every word of that, except the nasty word "upskill", which makes me want to outwalk and upthrow.
We on these Benches have great sympathy with the protest against these orders implicit in the Motion of the noble Lord, Lord Addington. But the orders are subject to the negative procedure and would only be withdrawn by the Government if there were a prayer against them. Whatever we may think about the Motion moved by the noble Lord, Lord Addington, it is certainly not what I would understand—I speak in deference to the right reverend Prelate—as any form of prayer. The Motion, therefore, would be simply an expression of the House's opinion—if it were to be passed—which the
1316
Government can ignore or accept as they see fit. As such, it could be seen as something of an exercise in futility.
Nevertheless, it makes important points and I would emphasise that we on these Benches are wholly opposed to the implications of the two orders. Having said that, I hope that the noble Lord will be content with the expression of opinion in debate and not press his Motion to a Division. The reason for this is simple. Power, as Mao Tse Tung is reported to have said, grows out of the barrel of a gun. If the orders are to be withdrawn, there are procedures for so doing—the prayer, the gun out of which power grows. We would not support them for reasons which my noble friend Lady Hollis gave the House last week in the debate on the Cleveland order, and the whole matter of our attitude to secondary legislation. If there is no serious gun, while welcoming the expression of opinion, we see no point in firing off blank shots.
6.45 p.m.
Lord Lucas: My Lords, we have had a constructive and often passionate debate. I can assure the noble Lord, Lord Morris of Castle Morris, that although, as he says, this Motion would not in any way annul the orders, we shall pay close attention to everything which was said today.
We believe that students are properly provided for in a fair and flexible system of support. I shall enlarge later on why we hold to that view. However, we keep an open mind on the issue. We are ready to listen to criticism and noble Lords who have spoken may think that that is a good thing in the context of today's debate. We fully accept that we should pay careful attention to the needs of specific groups of students within the broad framework of support. Quite clearly we are not thinking in the same terms as the noble Earl, Lord Russell, or the noble Lord, Lord Morris, when they talk implicitly of an extra £1 billion for student support.
As noble Lords will know, we are conducting a wide-ranging review of the higher education system. Once we have crystallised our views on its aims and purposes, on what education it should be providing to whom, we shall turn to the questions of funding and student support. All that has been said today and any further evidence which noble Lords and others may subsequently offer, will be a welcome contribution to that review. My noble friend Lord Beloff will no doubt be comforted by that commitment.
In 1979 one in eight young people were going on to higher education. Now, almost one in three enters higher education, and those from social classes C1 and C2DE are in the majority. The numbers of mature students have also increased dramatically. The Government are proud of those achievements.
There was some opposition to student loans when we introduced them in 1990. The debate now is not about whether students should contribute, but about how they should do so. There seem to be plenty of models to choose from, each with its own protagonists. Some call for a graduate tax or for a national insurance surcharge. Some want a system for student support based entirely

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on loans, yet others call for students to contribute towards the cost of their own tuition as well as their maintenance.
I shall not venture on to those farther shores today. I can give the right reverend Prelate the Bishop of Chester and the noble Baroness, Lady Williams of Crosby, the comfort that we shall seriously be considering all the alternative models proposed. If they have specific points at which they want us to look, they should add them to the many submissions that we are already receiving on the review.
Lord Beloff: My Lords, perhaps my noble friend will give way. My noble friend and his department will be saved a great deal of trouble if they simply re-read Hansard from when the student loan system was introduced. All these questions were then ventilated; all the possibilities were argued. The fact that the Government took no notice of what the House said is the reason why we keep coming back.
Lord Lucas: My Lords, occasionally we disagree with my noble friend Lord Beloff. I hope not too frequently because, hearing him say things like that from behind me can be distinctly unnerving. My noble friend Lord Beloff, the noble Baroness, Lady Williams, and others suggested that the Government should introduce some form of income contingent repayment administered through the tax or national insurance system. As I said, we shall look again at those systems. However, when we have looked at them in the past we concluded that loan schemes involving collection through the tax or national insurance systems are not the panacea that they are often made out to be. The administrative complexity and costs involved seem to be seriously under-estimated for employers as well as for the Government.
Baroness Williams of Crosby: My Lords, I do not want to bowl a yorker from behind at the Minister. However, I ask that he regard with great scepticism the kind of objections that the Treasury raises. It raises objections to almost every efficient scheme.
Lord Lucas: My Lords, I am sure that the noble Baroness has a great deal of experience of that.
There is a great deal of scope to amend the repayment terms within the broad framework of the current scheme and we shall certainly be looking at any submissions. A number of noble Lords suggested that there should be submissions to that effect.
The Government considered the possibility of collection through the tax or national insurance systems when the current scheme was being set up. But we concluded that the current arrangements were better. Despite the problems in paying out loans this year, we continue to believe that the system is fundamentally well
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designed. However, the proper place for a wide consideration of such issues is our review of higher education.
Earl Russell: My Lords, if the system is fundamentally well designed, why have the Government been unable to get anyone else to notice?
Lord Lucas: My Lords, to my best knowledge a great number of people have noticed, including those who set policy in the Labour Party and the National Commission on Education.
To turn to the principal subject of this debate: the current system of student support. As I have said, the Government believe that students are properly provided for in a fair and flexible system. Our belief is based on clear and powerful evidence. Let me set out the facts as we see them: students' total resources in grant and loan were increased by 25 per cent. when loans were introduced in 1990. Since then, resources have increased each year in line with forecast inflation. Students, as a group, are better off than they used to be.
Lord McIntosh of Haringey: My Lords, will the noble Lord permit me? Is he seriously saying on the one hand—?
Baroness Trumpington: My Lords, order! The noble Lord was not in the Chamber for the whole of the debate. My noble friend should be allowed to get on with his speech.
Lord Monkswell: My Lords, I thank the Minister for giving way. I have sat through the whole debate. I was not intending to intervene, but the statements by the Minister call for it. Can he explain to the House since when have students been better off?
Baroness Trumpington: My Lords, I really believe that my noble friend should be allowed to get on with his speech.
Noble Lords: No!
Lord Lucas: My Lords, I am quite happy to write to both noble Lords who have risen to give the statistics which underline the statement that I have just made. I can assure the noble Lord that that is a figure which we hold to.
The noble Earl, Lord Russell, suggested that student support might be inadequate because the SIES (student income and expenditure survey) underestimated benefits. The introduction of the loan scheme more than compensated most students for loss of benefit. The Government's assessment was not based on the figures given by students in the survey, but took account of figures from the Department of Social Security.
We treat our students very well compared with most other countries. Student loans are offered on very good terms. Interest is effectively nil in real terms and repayment can be deferred until income reaches 85 per cent. of national average income.
The Government are very conscious of the need to keep repayments at a manageable level. We shall review the repayment terms as necessary as the volume of debt decreases, let alone looking at them again as part of a higher education review.

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Student numbers and participation rates have increased dramatically and the drop-out rate from higher education courses has remained fairly steady. Public funding for mature students has held up and mature student numbers have increased rapidly.
All these facts go to show that young people are not deterred from entering higher education by our current support arrangements. They also provide, to our mind, convincing evidence that our overall policy is fair and reasonable and that the broad framework that puts the policy into effect is working satisfactorily.
The noble Earl, Lord Russell, suggested that there was some evidence of declining standards in universities in the United Kingdom. Quality assessments undertaken by the higher education funding councils suggest that the quality of teaching and learning in those subjects so far assessed continues to be satisfactory or better in 95 per cent. of cases and there is no evidence that the personal circumstances of students have affected that.
Lord Beloff: My Lords, will the noble Lord give way?
Baroness Trumpington: My Lords, no.
Lord Beloff: My Lords, I cannot agree with the Whip. This is perfectly normal; I took a part in the debate. I am entitled to ask my noble friend a question. Is it not a fact that all he has said so far is contradicted by the Committee of Vice-Chancellors and Principals in their communication to his right honourable friend? Is there much point in going on trying to tell us things when we have a much better source of information in that committee?
Since I may have upset the noble Lord, I am going to give him a present. I suggest to him that as England has won a test match it would be very interesting to be in Australia for the final test. I suggest to the noble Lord that he goes to Australia. I am perfectly willing to see public funds spent on that. In between watching the cricket he can find out why the Australian Treasury manages to collect money which the British Treasury is unable to.
Lord Lucas: My Lords, I hope that later in my speech I shall turn to matters which may answer part of the question which the noble Lord has just asked. We believe that there is no evidence that quality in British universities is declining. Indeed, the quality of exams and degrees is something which the universities themselves maintain. We trust them to do it and we have no doubt that they are fulfilling that function.
Of course, I have only painted the broad picture. Individual students' needs, both personal and for their courses, vary considerably. Our system of support has to respond to areas of potential hardship and it does so in several ways. First, there are a number of additional allowances which are payable on top of the main grant. There are allowances available for extra attendance on courses, to meet the needs of disabled students for personal help and equipment, for students with dependants and, for certain students, travel costs.
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Secondly, social security benefits have continued to be available for certain vulnerable groups, disabled students and students who are single parents. Partners of students are also able to claim, subject to the normal rules. Last but by no means least, the Access Funds are there to help those students who are in particular financial difficulty but whose needs are not met by the broadly defined support arrangements. The funds are worth £26.7 million in 1994–95. This total will rise to £28 million from 1995–96; the third substantial rise in three years.
There will always be some students who get into financial difficulties that the system of student support cannot overcome. No practicable system will ever be perfect. But we are not aware from evidence in our possession of any properly researched evidence of more widespread hardship. We have heard today a number of individual examples. We have also heard information from surveys. What we need to move to now is the sort of quality of research which noble Lords who are active academics will recognise. If I were to try to convince an academic who believed that, say, 16th century monks were largely celibate, that he was wrong, by quoting one or two examples, he would not take me seriously. What we require is some properly researched evidence and universities are in the best possible position to supply that. They run the Access Funds and they see the hardship. The noble Earl, Lord Russell, has given us several examples today of his own experience. If that were to be distilled into something which was made available to the Department for Education, you may be certain that we would take that seriously.
The Motion tabled by the noble Lord, Lord Addington, calls for students to be given, during the long vacation, the same rights to housing benefit and income support as the rest of the adult population. The Government have long believed that a general student dependence on benefits is inappropriate and undesirable.
The benefit system is there to serve social and not educational purposes. Students should look to the student support system while they are studying. We are confident that the additional resources provided through student loans and the Access Funds have more than compensated most students for the unavailability of benefits since 1990. A blanket restoration of eligibility to benefits would once again foster the sort of dependency that we sought to end; it would be inefficient and it would discourage students from looking for vacation work. My noble friend Lord Skidelsky pointed out the sort of amounts that he estimates might be involved. I have no government estimate with which to compare that.
The noble Lord, Lord Addington, said that students would receive more from social security than they receive from student support. It is not legitimate to compare social security with student support. Students are now expected to bear some of the costs of their own support because higher education is an investment in their own future. Social security is designed for those who are involuntarily dependent on resources provided by the Government. Some groups, such as single parents

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and disabled students, have retained their eligibility for benefits throughout the year but that is for specific reasons related to their particular conditions.
We are convinced that our present approach with closely targeted provision is preferable in every way to a return to reliance on social security. In this context, the noble Baroness, Lady Williams of Crosby, suggested that summer jobs and other employment should be provided by universities. That is an interesting idea. It is, of course, primarily for the institutions themselves to consider what jobs they might want to provide either by way of course-related jobs for their students, as the noble Baroness suggested, or otherwise, but we would encourage them to think along those lines.
Even if almost everyone who has spoken in the debate had not raised the subject of the Student Loans Company, I would have wished to do so. I would not wish to reply to the debate without apologising for the way in which the Student Loans Company failed tens of thousands of students so badly last autumn. The picture which the noble Lord, Lord Morris, paints in terms of figures is, I believe, broadly accurate. I will write to him after the debate to confirm the exact figures. The Government were, and are, extremely concerned by that lapse from the extremely high standards that we have come to expect from the company. Both the company and the Government have taken action to remedy the problems as fast as possible. The backlog has now almost entirely been eliminated. The company is devising measures to avoid any recurrence and will take them out to wide consultation as soon as possible. I am very comforted by the confidence which the noble Earl, Lord Russell, places in my honourable friend Mr. Boswell.
The noble Lord, Lord Morris, asked certain other specific questions. Since he was kind enough to give me a hit of time to look up the answers, I shall do my best to give them to him. The noble Lord asked about allegations of impropriety at the Student Loans Company and about the plans of the National Audit Office to conduct a further study into the company's operations. I can confirm that my right honourable friend was made aware last October of the allegations made against certain executives of the company by a former employee. She immediately ordered an investigation, as part of which Coopers & Lybrand were contracted to carry out a forensic audit. The investigation is nearing completion and its full conclusions will be reported to the Public Accounts Committee in the usual way. It would not be appropriate for me to comment any further at this stage.
The National Audit Office's work programme is, as noble Lords will know, a matter for the Comptroller and Auditor General. However, I understand that the National Audit Office plans to undertake a study of the value for money being achieved at the Student Loans Company. The plans for the study are not yet finalised, but I believe that it is unlikely to cover matters relating to the impropriety investigation.
The noble Lord also asked whether the Government have plans to privatise the loans scheme or to introduce commercial interest rates. The Government keep the operation of the loans scheme under review, but I can
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assure the House that we have no current plans to privatise the scheme—nor do we have any intention of requiring students to pay commercial interest rates. That would in any case require primary legislation.
The noble Baroness, Lady David, asked whether the Student Loans Company was too hard on defaulters. It is the company's duty to protect the taxpayers' money and we believe that it is firm, but not excessively so. Borrowers are given every opportunity to apply for deferment or to begin repayment before the company instigates court action.
The noble Lord, Lord Morris, also quoted a number of other figures. I shall write to him to confirm whether they are accurate.
I have listened carefully to what noble Lords have said today. I hope that I have been able to reply to the main points that have been made. I shall review Hansard tomorrow and write in reply to any substantive points that I have missed. As I said, we firmly believe (on the basis of the evidence that we have) that students enjoy a reasonable level of support during their studies. By providing this support and funding a huge expansion of higher education, the Government have shown their wholehearted commitment to students and to higher education. If the noble Lord, Lord Addington, chooses to press this to a vote, I urge your Lordships to vote against the Motion.
Lord Addington: My Lords, I must first thank all noble Lords who have spoken in this enlightening debate, which has shown the almost total lack of confidence in the current scheme. The noble Lord, Lord Slcidelsky, said that he was not sure whether I had the right suggestion; but he did not like the current scheme very much in any case. That was as near as the Government got to a wholehearted endorsement in the debate.
I feel that it is the function of this House to ask another place to think again. With one or two minor exceptions, that is our only real function. In those circumstances, I feel that when we see something that we think is wrong, we should ask another place to think again. If we do not do that, there is very little point in us being here. In those circumstances, I commend the Motion to the House.
7.7 p.m.
On Question, Whether the Motion shall be agreed to?
Their Lordships divided: Contents, 38; Not-Contents, 86.

Division No. 1

CONTENTS

Acton, L.

Harris of Greenwich, L.

Addington, L. [Teller.]

Howell, L.

Beaumont of Whitley, L.

Jenkins of Hillhead, L.

Beloff, L.

Jenkins of Putney, L.

Chester, Bp.

Kilbracken, L.

Dahrendorf, L.

Lawrence, L.

Darcy (de Knayth), B.

Lester of Herne Hill, L.

David, B.

Longford, L.

Donaldson of Kingsbridge, L.

Mar and Kellie, E.

Falkland, V.

McNair, L.

Fisher of Rednal, B.

Meston, L.

Hamwee, B.

Mishcon, L.

1323

Monkswell, L.

Taylor of Blackburn, L.

Park of Monmouth, B.

Thomson of Monifieth, L.

Rea, L.

Tordoff, L.

Redesdale, L.

Warnock, B.

Rodgers of Quarry Bank, L.

White, B.

Russell, E. [Teller.]

Williams of Crosby, B.

Seear, B.

Wyatt of Weeford, L.

NOT-CONTENTS

Addison, V.

Craig of Radley, L.

Astor of Hever, L.

Craigmyle, L.

Astor, V.

Cranborne, V. [Lord Privy Seal.]

Boardman, L.

Cumberlege, B.

Borthwick, L.

Dean of Harptree, L.

Brabazon of Tara, L.

Denham, L.

Bridgeman, V.

Dilhorne, L.

Brougham and Vaux, L.

Dixon-Smith, L.

Burnham, L.

Dundonald, E.

Butterworth, L.

Faithfull, B.

Cadman, L.

Flather, B.

Carlisle of Bucklow, L.

Fraser of Carmyllie, L.

Chelmsford, V.

Goschen, L.

Chesham, L.

Greenway, L.

Clark of Kempston, L.

Hacking, L.

Cochrane of Cults, L.

Haig, E.

Colwyn, L.

Harmar-Nicholls, L.

Henley, L.

Hesketh, L.

HolmPatrick, L.

Pender, L

Howe of Aberavon, L.

Peyton of Yeovil, L.

Howe, E.

Quinton, L.

Hylton-Foster, B.

Rankeillour, L.

Inglewood, L. [Teller.]

Rawlings, B.

Kilmarnock, L.

Renton, L.

Kimball, L.

Renwick, L.

Lauderdale, E.

Rodger of Earlsferry, L.

Leigh, L.

Rodney, L.

Lindsay, E.

Shaw of Northstead, L.

Long, V.

Skelmersdale, L.

Lucas, L.

Skidelsky, L.

Lyell, L.

St. Davids, V.

Mackay of Ardbrecknish, L.

Stanley of Alderley, L.

Mackay of Clashfern, L. [Lord

Stewartby, L.

Chancellor.]

Stockton, E.

Marlesford, L.

Strange, B.

Mersey, V.

Strathclyde, L. [Teller.]

Miller of Hendon, B.

Thomas of Gwydir, L.

Mills, V.

Torrington, V.

Moyne, L.

Trumpington, B.

Murton of Lindisfarne, L.

Ullswater, V.

Norrie, L.

Vivian, L.

Northesk, E.

Whitelaw, V.

Orkney, E.

Wynford, L.

Pearson of Rannoch, L.

Resolved in the negative, and Motion disagreed to accordingly.

House adjourned at a quarter past seven o'clock.