Lords Sitting of 22 January 1998

Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by The Lord Bishop of Oxford.):The LORD CHANCELLOR on the Woolsack.

Redundant Farm Buildings
The Earl of Bradford The Earl of Bradford asked Her Majesty's Government:
What is their policy for the productive use of redundant farm buildings.
The Parliamentary Under-Secretary of State, Department of the Environment, Transport and the Regions (Baroness Hayman): My Lords, as part of their commitment to sustainable development, the Government encourage the reuse of existing farm buildings which cease to be needed for agriculture. Such use is subject to the controls of the planning system. Planning policy guidance advises on the circumstances when it would be appropriate to convert such buildings for other business or residential use.
The Earl of Bradford: My Lords, I thank the Minister for that reply. However, is she aware that PPG7, which was published in February 1997 under the previous administration, discriminates positively in favour of business rather than residential reuse? Is she further aware that very often residential reuse is the only economic proposition?
Baroness Hayman: My Lords, the noble Earl, Lord Bradford, is absolutely right. In February last year, PPG7 was revised in order to introduce an emphasis on commercial development because residential use does not have an impact on rural employment whereas commercial use is beneficial to the maintenance or creation of jobs. However, I should say that the guidance stresses that residential use may be acceptable if commercial use is not viable.
Baroness Nicol: My Lords, given that we are now hoping not to use too many green fields in order to house the 4.4 million extra families that we are told we shall have to house, is it not even more important that any buildings which can be made available for residential use, including farm buildings, are used in that way? Will the Government consider encouraging, for example, the Rural Development Commission to give support to residential use in the way that it does in relation to commercial use?
Baroness Hayman: My Lords, it is absolutely right that the planning system needs to be responsive to the needs of people in rural areas for affordable housing. Wherever possible, we want to make sure that we make maximum use of the so-called brownfield sites. Therefore, the residential use of redundant farm
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buildings can help in that area. But it is important also that we look for the most sustainable solutions in the round. Sometimes because of problems of, for example, lack of access to transport, an isolated conversion may not be the most sustainable response. But at the end of the day, it is a matter of local circumstances and therefore for local authorities to decide.
Lord Luke: My Lords, yesterday the noble Lord, Lord Donoughue, in referring to the current difficulties facing farmers, mentioned the need for restructuring in the industry. Does that mean that medium-sized and small farms will be forced to amalgamate sooner or later? If that is the case many more farm buildings will become redundant. What plans do the Government have to deal with that?
Baroness Hayman: My Lords, I know that those matters were well debated yesterday in your Lordships' House. I believe that I made clear that the reasoning behind the changes to the planning guidance was looking at the ability to diversify and reuse buildings. Grants like the redundant building grant are available through the RDC in order to make sure that, where buildings become available, they can be used to regenerate countryside.
Lord Cledwyn of Penrhos: My Lords, does my noble friend believe that those farm buildings with perhaps 50 to 100 acres on the Welsh uplands should be totally disregarded? Those relatively small farm buildings are extremely important to the general life of the area.
Baroness Hayman: My Lords, indeed, it is important that we recognise that there is a whole variety of uses, both commercial and residential, for which we need to encourage the use of such buildings if we are to have thriving communities in the countryside.
Lord Elton: My Lords, does the Minister agree that a viable rural community depends upon the availability of rural employment and that a countryside populated with urban commuters will not provide either an economically viable or socially stable community? Will the Minister therefore assure us that PPG7 will remain unaltered?
Baroness Hayman: My Lords, as I said in response to earlier questions, it was exactly that thinking which accounted for the revision of PPG7 and its emphasis on commercial development because research had found that in remote areas, in particular, applications for residential use predominated. Residential conversions of buildings can have minimal economic impact whereas business conversion may have a much more positive impact on local employment. As I say, I believe that there is enough flexibility in the guidance to allow for residential development when there is no possibility of economic development.
The Earl of Shrewsbury: My Lords, is the Minister aware that the listing of farm buildings often renders

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them completely useless for any other purpose? Will she say what is the Government's policy towards the listing of those buildings?
Baroness Hayman: My Lords, the question of whether or not a building should be listed is a matter for the Secretary of State for Culture, Media and Sport, following recommendations from English Heritage. But PPG15 relating to planning and the historic environment gives guidance to local planning authorities on the handling of listed building consent applications and it explains that the best way of securing the upkeep of historic buildings is to keep them in active use.
Baroness David: My Lords, could I ask the Minister if the Council for National Parks has a policy about buildings which are no longer used as farm buildings? I have seen a number of excellent, strong barns in the national parks, and it is a great shame to see them in a not exactly derelict but rather an unusable state, and they would make very good houses.
Baroness Hayman: My Lords, developments in the national parks, as in areas of outstanding natural beauty and SSSIs, have particular planning constraints upon them. But I shall certainly look into the suggestion which my noble friend made and perhaps write to her on the subject.
The Earl of Courtown: My Lords, will the Minister advise local authorities that consistency of decisions in relation to planning applications would greatly help those who are putting forward planning applications?
Baroness Hayman: My Lords, that is why we have the planning policy guidance in the first place. However, there is a need to have a correct balance between putting forward a national framework and allowing for the sensitivity that comes from local determination of planning applications.

Bosnia: Mine Clearance
3.10 p.m.
The Lord Bishop of Oxford The Lord Bishop of Oxford asked Her Majesty's Government:
What progress has been made in the clearance of mines in Bosnia; and what support they are giving to this process.
Lord Whitty: My Lords, under the Dayton Agreement the responsibility for demining is that of the authorities in Bosnia and Herzegovina. Mine clearance operations are being funded by a number of international organisations and they are co-ordinated by the UN Mine Action Centre. The UK has contributed £400,000 through the EU and £280,000 bilaterally to the international effort. We have also seconded military
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personnel to assist in the establishment of the UN Mine Action Centre, and the regional demining operation in Mostar.
The Lord Bishop of Oxford: My Lords, I thank the Minister for his reply. Unfortunately, a good number of civilians have already been severely mutilated and maimed by these mines, including a fair number of Moslems. Are Her Majesty's Government able to offer any help, either through NGOs or through their own agencies, as regards the support and rehabilitation of some of these mine victims in Bosnia?
Lord Whitty: My Lords, clearly this is a tremendous problem. Indeed, about 50 civilians were killed and many others maimed during the last full year for which we have figures. However, there are about 1 million mines laying in the Bosnia area covering about 300 square kilometres. The process of clearing even the priority areas is very slow; only about 4.7 square kilometres have been cleared. The attention to victims is most important. We are providing assistance for the physically disabled and we supported capacity building projects with WHO and through other NGOs, such as Oxfam and the International Rescue Committee, in order to deal with the precise problems mentioned.
Baroness Strange: My Lords, can the Minister say whether any specific action has been taken about the little round, hand-sized mines which are attractive to children and which can be floated down rivers?
Lord Whitty: My Lords, as I understand it, such mines come under the general definition of anti-personnel mines. Therefore, they are covered by the Ottawa Convention which 120 nations signed in December. Of course, it is much more difficult in the Bosnia area to detect those mines than it is land-based mines. Nevertheless, they are part of the technical operation of determining which is under way.
Lord Hardy of Wath: My Lords, would my noble friend the Minister consider it reasonable to suggest that those who sold such mines, or the governments who assisted them to do so, should be asked to make a rather more significant contribution to their clearance?
Lord Whitty: My Lords, clearly the mines were laid by the protagonists of the catastrophe within the former Yugoslavia. The resources within that country for clearing such mines are relatively limited. The UK and other governments are providing substantial support to the clearance. The purpose of the convention to which I referred is to avoid a similar catastrophe happening elsewhere.
Baroness Williams of Crosby: My Lords, as the presence in Bosnia of the United States is pretty certain for the next year or so, can the Minister say whether, as well as the mine clearing policy, there could also be some sharpening and focusing of the purposes of our presence there? Further, in that particular respect, is the

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Minister aware of the initiative with the United States Congress to try to get agreement about the treatment of war criminals and bringing them to justice?
Lord Whitty: My Lords, as the House will know, my right honourable friend the Foreign Secretary has emphasised the importance of a sharper operation to bring such war criminals to justice. That is backed not only by the United States but also, most emphatically, by the European Union of which we now hold the presidency.
Lord Kennet: My Lords, in an earlier answer, my noble friend the Minister made a distinction between areas of Bosnia where mines are likely to be—or, indeed, are thought to be or probably are—and smaller areas where they are actually known to be. We know of a very interesting technology being developed in the United States to make that distinction more certain. When that comes into use, it will obviously be a great deal easier to get on with the only necessary job; namely, clearing the mines from where they are. Can my noble friend the Minister give the House any news about the bringing into action of such technology?
Lord Whitty: My Lords, my noble friend is correct to say that much of the present mapping of the whereabouts of mines in the area is a little hit and miss. The technology is intended to improve the definition of priority areas. But even were we to be more precise in the priority areas as a result of that technology, we would still be talking about at least 100 square kilometres which would need to be cleared. According to the present rate of progress, that would mean about 5 square kilometres a year.
The Earl of Sandwich: My Lords, in view of the enormous public interest in this important matter can the Minister say when the Government will ratify the Ottawa Treaty?
Lord Whitty: My Lords, the question of ratification of that treaty will come before Parliament in due course when I hope and, indeed, expect that it will receive overwhelming support in both Houses.

Depleted Uranium Ammunition
3.16 p.m.
The Countess of Mar The Countess of Mar asked Her Majesty's Government:
Where, and under what conditions, depleted uranium ammunition is being manufactured in the United Kingdom.
The Minister of State, Ministry of Defence (Lord Gilbert): My Lords, the 120 millimetre ammunition for the Challenger 2 main battle tank has a depleted uranium component, which is being manufactured at Royal Ordnance plc's specialist materials facility at Featherstone, near Wolverhampton; the ammunition is then assembled into complete rounds at the Royal
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Ordnance factory Birtley. Responsibility for conditions of manufacture and compliance with legislation on radiological site licensing rests with Royal Ordnance plc, which is owned by British Aerospace plc.
The Countess of Mar: My Lords, I thank the Minister for his Answer. Does the noble Lord accept that depleted uranium has a half-life of 4.5 billion years; that because of its highly pyrophoric nature on impact it produces uranium dioxide dust which can be carried several miles in the wind; and that that dust is both chemically toxic and radioactive and is implicated in a number of cancers, including lung cancer and leukaemia, kidney problems and birth defects? Therefore, is the Minister satisfied with the safety of the community in Scotland where, I understand, test firing is carried out into the ground and into the Solway Firth from the Dundrennan army base near Kirkcudbright?
Lord Gilbert: My Lords, far be it from me to challenge the remarks or the mastery of statistics of the noble Countess, Lady Mar. All I can say is that we have no knowledge whatever of any danger to the civilian population living in the neighbourhood of that particular test range, just as we have absolutely no knowledge of any dangers sustained by Her Majesty's Forces in the Gulf when DU was used in the conflict.
Lord Jenkins of Putney: My Lords, is my noble friend the Minister aware of the fact that the use of depleted uranium has killed and maimed thousands of Iraqis, hundreds of American troops and an unknown number of British troops as a result of its use in the Gulf War? Therefore, will the Government do two things? First, will they investigate the possibility that this weapon is already bannable under the chemical weapons convention? Secondly, if it is not banned, will the Government consider doing so because it is ultimately a chemical weapon and should be banned under existing legislation? If that is not so, then there ought to be legislation to ban it.
Lord Gilbert: My Lords, not for the first time I am not sure that I can share all the premises in my noble friend's questions. In 1993 the defence radiological protection service concluded that there was no indication of harmful over-exposure of British troops to DU in the Gulf. Tests were made on some Gulf veterans who were concerned that they might have inhaled depleted uranium dust and that that might have had an adverse effect upon them, but none was found to have experienced detectable contamination. Similarly, as far as we know, no British troops sustained injuries from DU ammunition.
Lord Mackie of Benshie: My Lords, can the Minister tell the House what is good about depleted uranium ammunition?
Lord Gilbert: Yes, my Lords; it is extremely hard and is the only ammunition that is capable of penetrating the armour of the latest main battle tanks.
Lord Burnham: My Lords, I have a simplistic question for the Minister; namely, what is the definition of depleted uranium with particular reference to the degree of toxicity?
Lord Gilbert: My Lords, the noble Lord asks a highly technical question. Indeed, I should be in great

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difficulty if I try to answer it and give technical definitions of what constitutes depleted uranium. However, I shall be happy to get the noble Lord a technical answer and will ensure that it is put into the record.
Lord Parry: My Lords, on a simpler level, can the Minister reassure the House as to whether civilian carriers of the shells were warned of possible dangers, whereas the military users of them, often in contained tank space, were not?
Lord Gilbert: My Lords, I have no recollection as to whether or not specific warnings were given to Her Majesty's personnel at the time of the Gulf War, but we continue to have an inventory of depleted uranium ammunition. I am sure that those responsible for handling it are well aware of the risks, if any, to which they might be exposed. Our view is—it was the view of previous administrations—that those are very small indeed.
Lord Kennet: My Lords, I am sure that the House is aware that neither the noble Lord nor I can go too far into radio chemistry. Can the Minister confirm that depleted uranium is about 60 per cent. as radioactive as undepleted uranium? Since there is nothing to do with depleted uranium except to make it into bullets, about a billion pounds' weight of depleted uranium is in store in the United States. If that is so, what is the corresponding figure in this country?
Lord Gilbert: My Lords, I think that I should bring an encyclopedia with me to answer some of my noble friend's questions. Not for the first time my noble friend defeats me with his statistics.
This material is not made into bullets in the normal sense of the word. It is put into the front end of tank shells. The only exception is the Royal Navy which has some depleted uranium ammunition for the Phalanx close-in weapons system.
Earl Howe: My Lords, have the Government any assessment of the potential environmental effects of depleted uranium contamination on the battlefield? If so, what conclusions have they reached?
Lord Gilbert: My Lords, I am not aware of whether our predecessors made any assessment. Certainly this Government have not been invited to do so. It is rather out of date for us now to make such an assessment.
However, the only specific source of concern is that in some circumstances we believe that the radiation can be slightly increased when one of the shells hits the armour of an opposing tank.
Lord Ironside: My Lords, are there any proposals for using depleted uranium—of which there is quite a lot in the world—to replace lead shot in shotguns? Would that alter the ballistics of the gun and create safety problems?
Lord Gilbert: My Lords, I am not normally familiar with the habits of the hunting-shooting fraternity.
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I should have thought that noble Lords opposite would know far more about its intentions than I would. But I have heard nothing of the kind.
The Countess of Mar: My Lords, is the Minister aware that there is evidence that the United Kingdom Atomic Energy Authority was asked to go to the battlefields in Iraq and Kuwait to estimate the problems that might result from the depleted uranium left there after the war? Is the noble Lord aware that it was estimated that there might be some 500,000 deaths of civilians and soldiers; and that some 300 to 800 pounds of depleted uranium had been left in the Gulf?
I have put down a number of Questions for Written Answer on the subject, to which I have had no Answer. Will the noble Lord answer them and publish the answers in Hansard?
Lord Gilbert: My Lords, I cannot reply off the top of my head to the quite extraordinary statistics that the noble Countess produced; but I should be very surprised if 500,000 people were killed from any causes during the Gulf War.

Green Belt Development
3.24 p.m.
Baroness Gardner of Parkes Baroness Gardner of Parkes asked Her Majesty's Government:
Whether in view of the need for more housing, the shortage of available building land and the Government's present review of land use, they will endeavour to release smaller parcels of green belt land between existing buildings rather than untouched greenfield sites.
Baroness Hayman: My Lords, Planning Police Guidance Note 2—Green Belts already provides for circumstances where infilling in existing settlements and major developed sites within the green belt may be appropriate.
Changes to green belt boundaries and allocation of building land is a matter for local planning authorities when reviewing their development plans. Any such proposals would need to be subject to full public consultation and, if opposed, would be considered at a plan inquiry. In addition, my department would need to be satisfied that all opportunities for development within the urban areas contained by or beyond the green belt had been fully considered.
Baroness Gardner of Parkes: My Lords, I thank the Minister for her reply. I have studied carefully Planning Policy Guidance Note 2, but it is not clear on infill sites. It seems to refer only to infill sites in villages. The noble Baroness referred to infill sites in settlements. That is the grey area. I ask the Government at least to reconsider the matter and to clarify it. Does the Minister agree that it is preferable for new homes to be built within areas where infrastructure—drains, roads, transport, schools, and

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social services—are already available in the community, and that people moving into such homes find it easier to be assimilated and to integrate into an existing community?
Baroness Hayman: My Lords, I endorse the latter part of what the noble Baroness says. Sustainability of development, which brings in all those issues about connections with existing infrastructure such as transport, is important. PPG2 states that infilling is acceptable if not inappropriate. That means limited infilling in existing villages within the green belt provided that the village is listed in the local development plan; and infilling at major developed sites within the green belt may be permitted where the site is indicated in development plans. If the noble Baroness feels that there is still a lack of clarity. I shall look at the matter again and write to her.
Lord Dean of Beswick: My Lords, is it correct that the Government are reviewing availability of land as regards use and need for a highly improved housebuilding programme for houses to rent? I understand that there will shortly be a White Paper on the subject. Would it not be better for us to wait for the White Paper? If it presents us with options, we can debate them at length and make the right decision at the right time.
Baroness Hayman: My Lords, how we tackle the challenge of providing new homes that will be needed in the future is an issue for all of us, not just for central government. Regional solutions will need to be integrated with other plans.
The previous government issued their Green Paper on household growth. We are currently considering the responses to that Green Paper and hope to make a Statement in the not too distant future.
Lord Alton of Liverpool: My Lords, is the Minister aware of the article by Simon Jenkins in The Times yesterday which argued passionately against the further encroachment on green belt land? Perhaps I may draw to the noble Baroness's attention figures from her own department published last year indicating that in England alone there are currently 800,000 empty houses in the private and public sector. Would it not be better and more imaginative to put those empty properties back into housing use rather than destroying more of our countryside?
Baroness Hayman: My Lords, I think the whole House would agree that it is important that we make the maximum use of already developed land—that has been clearly stated as this Government's policy—and the bringing of empty buildings back into habitation.
I saw the article to which the noble Lord referred. I believe that one can overstate the extent of the problem. Since 1979 the amount of designated green belt in this country has effectively doubled to over 1.5 million hectares. Some 12 per cent. of England is covered by green belt designation; less than 11 per cent. is urban. Despite all the recent publicity, all the proposed changes in the pipeline would add up to a loss of less than 0.12 per cent. of the green belt.
Baroness Hamwee: My Lords, as new settlements may have to be created to deal with the housing
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shortfall, does the Minister agree that it is crucial that regard is given to the transport infrastructure in order not to create a double whammy for the countryside? If the noble Baroness agrees, is it a matter which will be addressed in the Government's forthcoming White Paper on transport?
Baroness Hayman: My Lords, in terms of the integration referred to in the forthcoming White Paper on transport, there is a recognition that we are talking not only of integration between different modes of transport, but with other policies, other government departments, and particularly with land use planning. I absolutely agree with the noble Baroness's point; we have to make sure that we do not cause two sets of demands on land use with inappropriate new housing developments.
Lord Bowness: My Lords, the Minister will recall that prior to the Christmas Recess she told me that the Government were still using targets set by the previous Administration for building on green belt and greenfield sites. Will she agree that her right honourable friend the Secretary of State, by a number of decisions, notably in the West Midlands, Hertfordshire and now Newcastle upon Tyne, is allowing development on green belt and greenfield sites and has already changed the policy? When will there be a Statement about the new policy that is being followed towards green belt and greenfield sites?
Baroness Hayman: My Lords, there is no new policy being followed towards the green belt. The Government remain committed to its protection. As I said earlier, we shall be making a Statement in response to the household growth figures and how we meet them. It is important not to use "green belt" and "greenfield" as interchangeable terms. It is also important to examine some of the examples given by the noble Lord, particularly in Hertfordshire and Newcastle. It should be recognised that, while some green belt land was being taken away, more green belt land was being designated in both those areas. In Hertfordshire, given comments about the need to locate new settlements near to existing transport infrastructure, that was exactly the basis of the decision.

Audit Commission Bill [H.L.]
The Lord Chancellor (Lord Irvine of Lairg): My Lords, I beg leave to introduce a Bill to consolidate Part III of the Local Government Finance Act 1982 and other enactments relating to the Audit Commission for Local Authorities and the National Health Service in England and Wales. I beg to move that this Bill be now read a first time.
Moved, That the Bill be now read a first time.—(The Lord Chancellor.)
On Question. Bill read a first time, and to be printed.

Teaching and Higher Education Bill [H.L.]
3.32 p.m.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Baroness Blackstone.)
On Question, Motion agreed to.
House in Committee accordingly.
[The CHAIRMAN OF COMMITTEES in the Chair.]
Clause 16 [New arrangements for giving financial support to students]:
Baroness Maddock Baroness Maddock moved Amendment No. 81:
Page 11, line 9, at beginning insert ("full time or part time").
The noble Baroness said: This amendment also stands in the name of my noble friend Lord Tope. Its purpose is to ensure that, in regard to financing, part-time students are treated equally with full-time students. I tabled the amendment partly because the Liberal Democrats believe strongly in the principle behind it, and partly because of a strong personal belief. As a mother who returned to part-time higher education, I was fortunate in being able to afford the fees and to continue my course. I make a plea to the Committee at this early stage. If we believe that the family and the nurture of children is important, this must represent important progress in helping mothers to carry out both tasks: to stay at home with their children as well as having the opportunity to further their careers and return to work in our present flexible labour markets.
I remind the Committee that the Government have expressed a belief in "lifetime learning", as have many of us. If they genuinely believe in lifetime learning, they have here a wonderful opportunity to put that principle into practice.
A third of all students at United Kingdom universities study part-time. It is expected that the growth in demand will continue as more flexible means of studying come about. The Government have committed funding for what they believe will be an additional ½ million students in what they describe as lifetime learning by 2002. They admit that the numbers of part-time students will increase significantly.
At Second Reading, during discussion on the Dearing Report, the message came through strongly that many noble Lords were concerned about evidence of inequality of treatment in funding as between full-time and part-time students. The proposals that we are now discussing relate to a new funding scheme. It is obvious that this new scheme will be geared to the needs of full-time students, and mostly those in the 18 to 21 age group.
Part-time study attracts students who would not otherwise enter higher education. It attracts many who are not in that age group I mentioned. However, the new funding system will continue to discriminate unfairly against part-time students, not only in the categories I
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have mentioned, but particularly against the low paid. I ask the Committee to examine carefully the consequences of some clauses in the Bill for those who have been in work or who are in low paid jobs, and particularly for those with children. How will the legislation marry up with social security legislation? There is strong evidence that it will be very difficult for many people, particularly those with children, to have an adequate living.
I am aware that the Government have already made some concessions in making sure that part-time students have extra income. Extra government money will be available to help the poorest students on part-time courses with tuition fees. The Government have also examined methods of making sure that help will be available for people who lose their jobs while attending a part-time course. In addition, they have examined the possibility—indeed I believe it is likely to happen—of helping part-time students who are presently not eligible for access funds. The Government have said that they will look into the matter.
The final report of the Dearing Committee pointed out that the funding of students in part-time education was possibly not a priority, since many of those students' course fees were paid by employers. That conclusion was based on certain research. However, since the report's publication other research has come to light which reflects particularly on Open University students. Subsequent work in that area suggests that the true figure is only 50 per cent. of students with course fees paid, whereas the Dearing Report indicated a much higher figure.
In relation to Open University students—it is important to note that the Open University is the largest provider of part-time undergraduate study in the United Kingdom—the report indicates only 22 per cent. in work and receiving help with their fees. I ask the Government to reconsider this issue. I and my colleagues believe that the Government's proposals will have a greater impact on part-time numbers than was originally expected. We believe that many students contemplating the choice between part-time and full-time study will look less favourably on the part-time option. This will particularly affect women who wish to be at home looking after their children; they may be tempted to try to do a full-time course. I know from experience that trying to study when one has young children at home is extremely difficult. We should examine closely whether the Government have got their proposals right on this issue.
A fall in the number of part-time students has a knock-on effect on higher education institutions. There is already some indication that that is happening. In addition, it will be difficult to encourage people into lifetime learning if the only choice open to them is full-time courses.
The Dearing Committee was attracted to the principle of levering up support for part-time students but thought that at this time, taking account of the figures, it was not necessary. I hope that I have demonstrated that there are very good reasons why we should look at the figures again and reconsider the matter. A report shows that the cost to the Government of extending loans to part-time

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degree and sub-degree level students would be only an extra 0.5 per cent. of expenditure in this area each year in the short term and an extra 1.5 per cent. in the long term.
I hope that the Government will look closely at this matter. We all have a commitment to lifetime learning. Studies show that particular groups will be affected. We believe in equality of opportunity for all and there is no area in which this is more important than access to education and higher education. Dearing concluded that there was not a good argument for spending the money at this time; I believe that subsequent studies have proved that that is not the case. I believe above all that equality of opportunity, particularly for women in this country, is paramount. I beg to move.
Lord Renfrew of Kaimsthorn: I rise at the earliest opportunity to raise what I believe to be an important procedural point. So far as I am aware, no draft regulations for these parts of the Bill have been placed in the Library. My noble friend Lady Blatch raised this point at Second Reading and said that it was the convention of this House—though it may not be an infallible one—that draft regulations are placed in the Library. I have in my hand the Ninth Report of the Select Committee on Delegated Powers and Deregulation. As I understand it, this debate is concerned with that report as well as with the Committee stage of the Bill. There may be issues to address later; I am aware that my noble friend Lady Blatch will propose an amendment on affirmative procedures.
In relation to Clause 16, the ninth report states, under the appropriate rubric "Henry VIII clauses":
"everything of importance will be in the regulations".
Where are the regulations? In the following paragraph the report goes on to say:
"We invite the House to consider whether the subject matter of the regulations under section 16 is so important that the bill should be amended to require affirmative procedure for the first regulations".
There I begin to touch on the amendment that my noble friend Lady Blatch will move at a later stage. I should like the Minister to give some explanation as to why we have a Bill so unsatisfactory in form that its whole content is in regulations, as is stated in the ninth report, but we do not have even draft regulations available in the Library, in accordance with what I understand to be the usual convention of the House.
3.45 p.m.
Lord Peston: The noble Lord, Lord Renfrew, will remember that we devoted some hours on Tuesday to rowing about regulations. Looking at other amendments, I have the suspicion that we could well spend the rest of today doing the same thing. The noble Lord's protest has already been made—I will not go so far as to say it has been made ad nauseam, but certainly at length. Secondly, I understand that my noble friend the Minister will intervene; I hope she will do so at an early stage. I believe that there is now a fair amount of documentation in the Library covering this matter.
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I have some sympathy with the amendment that I was under the impression we were debating. I hope that we shall not be constantly sidetracked, as we were on Tuesday, from discussing substantial matters because people wish to go through this continual ritual of complaining about regulations. I do not want to stop people making their protests. Quite the contrary; I have made them many times myself. However, the fact is that there is a substantial body of serious matter before us, including the specific amendment, and I for one should like to be able to take part in debating that and other amendments.
Baroness Blatch: I am sorry that the noble Lord finds this tiresome. Let me make him a firm promise that there will be many, many hours of debate on the Bill while we try to elicit some real information from what is a very skeletal Bill. I repeat, and will continue to repeat throughout the course of the passage of the Bill, that the Bill is skeletal. We are not having an indulgent debate about an educational issue but are here part of the process of making legislation. When making legislation, dots, commas and the meaning of particular words are very important indeed.
The noble Lord, Lord Peston, referred to the amount of information in circulation. I have never known such a plethora of information as that which is coming out of the DfEE and have never known such a degree of confusion about such documentation.
There has always been a tradition of this House, certainly once Second Reading has passed, that when any documentation is produced from a department every Member who speaks in a debate receives copies of that documentation. I certainly followed that tradition to the letter when I was on the other side of the House. I suspect that there are Members here this afternoon who are not even aware of some of the documentation that is available. The Library has no procedure for informing Members that information is available. Some Members will therefore be speaking today in a vacuum. Because of that vacuum there will be a great deal of concern.
Another point with regard to regulations is that there is a great deal of concern about a number of Bills. One Bill which will receive Royal Assent next week will be repealed when this Bill has passed through Parliament. I have never known such a crazy way of legislating. There is also concern about the saving provisions. It is provided in the Bill that the whole of the 1962 Act will be repealed in its entirety. However, we are then told that there are some savings provisions, and there are some allusions to those. Many Members of this House do not know about that. It is an incredibly complex subject. Each time we have asked the questions we have received different answers.
My noble friend Lord Renfrew wishes to know precisely what this will mean for students who have already made their choice this year to go to university and for those who are holding back because they are fearful of what these provisions may mean and are waiting to know what they will have to borrow, what they will have to pay on the first day of term and whether they will have to pay it all in one go and find money up front. These questions are material and

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important for students and their families and also for others. I have been talking to colleagues in local government who do not have information about their role. They have lots of circulars that are being published, but they do not know precisely what will be in the regulations. My understanding is that the regulations are to be put before this Chamber in February. If so, then the information contained in those regulations must now be available in some form and would in fact be helpful to Members of this Committee as we discuss this Bill.
Baroness Blackstone: Perhaps it will be helpful if I put the noble Baroness right on one point. The regulations will not be put before the House in the month of February. She is a little confused. I wrote to try to explain the position. What will be available is the standard document that students always receive in the month of February. That sets out clearly what the position is for loans and grants. That will be available in the month of February.
That document will provide, as it always does, all the information that students need to make decisions. When we talk of regulations, we talk of a highly technical document. In my long experience of working in higher education I have never met a student who reads the regulations. They are extremely complex, technical and hard to understand. I have difficulty in understanding them, as I am sure do other Members of the Committee. That is not documentation that students need in order to be clear about what their position will be.
That document will be placed in the Library and in the Printed Paper Office as soon as it is ready. Perhaps I can make clear that we also place other information in the Library in time for the Committee stage of this Bill. The noble Baroness, Lady Blatch, says that many people do not know that. All I can say is that when I was the principal Opposition Front Bench spokesman on education I always told my colleagues who were likely to speak in the Committee stage of the Bill what was available. That is reasonable. As the Minister, I cannot know who will be speaking on the opposite side. When, in Opposition, I received a letter from Ministers I passed it on and informed others. That is the only sensible way to proceed.
Perhaps I can say also to the noble Lord, Lord Renfrew—confirming what my noble friend Lord Peston said—that we had a long debate on this topic. I recognise that it is frustrating in some senses for people who are taking part in the debates on legislation that we cannot always have the regulations ready. But I must correct one thing that the noble Lord said. He said that it is normal for regulations to be ready when a Bill is being debated. That just is not true. I can quote many examples over the past 18 years, including education Bills in which I was involved, when the regulations were not only not here when we were debating a Bill in Committee, but they were not even complete when we reached Royal Assent.
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That was normal, particularly in relation to complex, specific and detailed regulations of the kind we are dealing with today.
Baroness Blatch: Perhaps I can come back to the noble Baroness. The progress report on new students' support arrangements in higher education says that publication of the 1998 mandatory award regulations will be in February. That appears in the timetable at the back of the document. It goes on to say that by July there will be further publication of the student loan regulations. There is therefore a set of regulations imminently due. We are almost in February and do not know what they contain.
I take the point made by the noble Baroness that it is not common for everybody to read the technical details of regulations. Students are interested in the regulations that will set the arrangements to which they will be obliged to conform in this coming September-October. It is the regulations that set the detail in law, after which the department produces a lay explanation of what that means to parents, students, LEAs and so forth.
There is, therefore, a real interest in the regulations, given that they come first. The legislation comes first and what it means to the people whom it affects follows. We are simply saying that we are discussing the legislation that will set the framework for the regulations and need to discuss what is to go into those regulations in order to make sense of these debates.
Baroness Blackstone: I want to be helpful to the noble Baroness and clarify the position. The regulations that will come out in February are based on exactly the same provisions that existed last year. There may be some minor amendments to them, but they have nothing to do with the changes that are being brought about in the Bill. Those will involve the second set of regulations to be published in July.
The regulations that the noble Baroness says are now in draft, are in draft; the noble Baroness is correct. But they will not provide the additional information for which she is asking because they relate to the provision of maintenance grants for students and are built on exactly the same provisions that we had last year, the year before and the year before that.
Earl Russell: I was about to make a speech in support of the amendment tabled by my noble friend Lady Maddock in relation to part-time students. Perhaps I can say to the noble Lord, Lord Renfrew of Kaimsthorn, and others who are concerned with the regulations, that there will be opportunity to discuss that issue on the next group of amendments. I hope not to take up too much of the time of the Committee but it takes two to make progress. I hope I may say that we have an amnesty in that direction.
The point in regard to part-time students is that this is part of a general change in the way the world is organised. The Prime Minister, speaking at the TUC conference, memorably referred to the flexible labour market as the "real world". There is a good deal of evidence to suggest that the labour market is changing in that direction. There is also considerable evidence to

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suggest that the social security system needs to change substantially in that direction to accommodate part- time work.
That is all part of a general change in the way the economy and society are run. It is part of a general change, as my noble friend pointed out, in the way parents care for children. The sharing of care between parents is a much more common situation than it was. My point is that education cannot be left out of that pattern of change. Because the part-time system is becoming more common everywhere else, it inevitably must become more common in education also. That is something on which the Government must be prepared to reach an accommodation. I strongly support my noble friend's amendment and am glad that she tabled it.
Lord Peston: Perhaps I too can join in the debate on this amendment. I should like to say from these Benches that at least one of us is extremely sympathetic to the ideas in the amendment, though I wait to hear what my noble friends have to say. Those of us who have been interested in the economics and financing of education, as I have for a long time, feel that the full-time and part-time distinction in financing has always been anomalous. It has been difficult to find any logical basis for it.
The position has got worse over the years, partly for the reasons explained by the noble Baroness, Lady Maddock, and the noble Earl, Lord Russell, but also because what is called a "full-time" student has completely changed. Though I am officially retired, because I am not quite sane I agreed to teach a lecture course this year. When I was making arrangements for the tutorial classes I was told "You cannot have classes on a Thursday because that is the day the students go and do their jobs".
When I was a student, full-time students worked every day of the week. That position has long since changed. It is a matter of fact—echoing what has already been said—that the full-time/part-time distinction is difficult to make. Even if one could define "part-time" it has never been obvious to me that those people who are often the most enthusiastic and devoted students should receive no state support. This is a point my noble friend always made against me. I do not like tuition fees. As my noble friend pointed out, part-time students are always being stuck with tuition fees.
As we enlarge our methods of finance it cannot be right that part-time students should not have access to loan finance. Those are my remarks of sympathy. But I believe it is all a complete waste of time. What drives everything in this area as in all other areas of government behaviour is public expenditure constraint. Therefore, though it is useful for us to place on record that we favour all this, I cannot see, within the current restraints on public expenditure, that there is any possibility of change.
If one were to be completely honest, when one is given a public expenditure restraint one must say what one's priorities will be. Much as I support the noble Baroness, whatever the cost—the noble Baroness quoted the figure as a percentage of the budget—I am not clear
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that if that money were available I would devote it to this purpose. However, I felt it right to add support to the ideas put forward in the hope that over the years, as we produce a more rational system of student finance, we will include in it part-time students. That is probably the reason for tabling the amendment in the first place.
4 p.m.
Baroness Carnegy of Lour: I suppose that if the main points were settled and on the face of the Bill, we would know whether part-time students were covered. At the moment we do not because, as I understand it, this is contained in regulations. So the noble Baroness, Lady Maddock, is trying to sort that out. But the debate would not be necessary if this was on the face of the Bill.
What the noble Lord, Lord Peston, has just said is, of course, true. I understand very well that budgetary constraints are a problem but, having been on the governing body of the Open University for 12 years until quite recently, I know that the number of people who can study depends upon the level of the fees; and the level of the fees, of course, depends upon the government grant. That is self-evident. The Government should not take it for granted that the number of students is necessarily constant. Indeed the Minister well understands the position of part-time students because she ran extremely ably a college which had only part-time students. Student numbers will not necessarily continue at the same level as costs go up. There is a market level beyond which students are not willing to pay, and the Committee will understand that. I have not checked the figures but of the order of 100,000 students are taking undergraduate Open University courses, to name one institution. Many of those people struggle to pay their fees. They pay a lot of money over a period of five or six years, but they struggle. Some drop out and have to return later; some drop out altogether because of the level of fees.
So if the Government do not help part-time students with their fees at all, and if the fees have to be paid by the students, as they are now, the Government will have to watch very carefully that the part-time population of students in this country does not begin to drop. That would have a very bad effect on the labour market, as the noble Lord, Earl Russell, would agree. That is something which must be watched closely. I do not think I have to tell the noble Baroness that but it may be necessary to tell the Treasury, and I hope that she will.
The Earl of Limerick: I would like to remind the Committee of an interest I declared on Second Reading as chairman of the governing body of one of the new universities—one which, as it happens, apart from the institution in which the noble Baroness served for so long, has just about the highest proportion of part-time students in the country.
There are two points to make. First, the importance of professional courses, education and continuing education, is being more widely recognised and is something which we must strive to support. Secondly, reference was made to the falling proportion of students receiving financial support for part-time courses. That

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is true. However, the other factor is that employers are increasingly unwilling to give students time off for part-time education and keep their noses much tighter to the grindstone, expecting them to work long hours. They are cutting down their own staff the whole time. Therefore, anything which mitigates against the encouragement of part-time education is doubly to be deplored.
Part-time education has been relatively disadvantaged over the years by the funding methodology that we have adopted. Therefore, I have great sympathy for the amendment before us. I hope that it might be possible to move at least some way towards redressing this balance and give more support to those undergoing part-time education on a continuing basis.
Lord Dormand of Easington: I hope that the Committee will forgive me if I intervene to repeat most of what my noble friend Lord Peston has said, and also what the noble Lord, Earl Russell, said in his contribution.
Things have changed very much indeed. There is no question about the number of part-time students. Perhaps I can give another example. The number of mature students now exceeds the number of those under the age of 21 who attend a college or university. Although that does not directly relate to this amendment, it does support the fact that things do change and are changing in education in the same way as they are changing in other areas.
This is where I simply underline what my noble friend said. It really is a matter of public expenditure. The Government have said that they will remain within the restraints of the former government for two years. That seems to be a reasonable length of time in which to say whether this system will work. I have no doubt—I think I have no doubt—that after two years the present Labour Government will look at the whole matter again, when we might be able to meet the kind of suggestions that are being made in this amendment.
Baroness Lockwood: I too have a great deal of sympathy with this amendment and I am sure that my noble friend on the Front Bench has a great deal of sympathy for it too. During the 20 years that I have been in this House I have consistently argued for part-time education to be treated on the same basis as full-time education. I think it is still the principle which I shall support. But we have to look at the situation that we are in. We came to power and inherited a situation where higher education is in the middle of a funding crisis of dimensions that we have not known in the past. I must say I think it is rather strange for Members opposite who have been in power for the best part of those 20 years to be now arguing for part-time education to be covered.
I agree entirely with my noble friend that it is a matter of priorities. I hope that in the foreseeable future the Government—it may not be two years because we shall have to cope with many problems—will be able to bring before the House another Bill which will put part-time and full-time students on the same basis. I do not know
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what my noble friend will say in reply to this debate, but I hope that she will give us some hope for the future. I think that we have to take our priorities as they come.
Lord Beloff: It would seem to me that there is great force in the argument for public expenditure, and clearly if more money was to go to part-time students—and I think it should—it would have to come from elsewhere in the higher education budget.
I remind the Committee that we hear many reports of students who begin full-time education and give it up after a period because they find they are unsuited either to higher education itself or to the particular course they have chosen. Should some way not be found of minimising this factor of waste and would that not save money which could go to part-time students? I would go a little further and say that some, at least, of the courses are in themselves wholly unsuitable for higher education. The noble Lords who heard me speak before will know what I have in mind, but I do think there is fat in the higher education budget which could be squeezed in order to meet what, I agree with the noble Earl, Lord Russell, is essentially a part of changing the form of society and of education.
Baroness Blatch: I agree with the noble Baroness, Lady Lockwood. There has been widespread sympathy across all Benches for extending into this area because of some of the difficulties. But it has always been a matter of priorities. At this stage the issue being addressed is the crisis in higher education, which was precisely why Dearing was commissioned in the first place with all-party support. It is rather a pity that the Government have deviated from Dearing's recommendations.
However, I have to say this to the noble Baroness, Lady Lockwood. I would have liked to have sat where the noble Baroness, Lady Blackstone, is sitting and received that degree of understanding about this issue. I can remember being pilloried by the noble Baroness, Lady Blackstone, the noble Lord, Lord Peston, and others, who called us an uncaring and unthinking government simply because we argued at the time that it was a matter of public expenditure and a matter of priorities. Indeed, the noble Baroness supported keeping benefits for students and extending them to part-time students. I remember an impassioned plea from the noble Baroness using her position as Principal of Birkbeck College to give an incredibly forceful speech about the plight of many students there. All I would add is that we will support the Government when they say it is a matter of priorities, but there is a real will, when funds are available, to extend into the area of part-time students.
Baroness Blackstone: Perhaps I may take that last point first. I cannot believe that I ever wanted to pillory the noble Baroness, Lady Blatch. What I readily admit to is making passionate speeches about the value of part-time higher education.
Perhaps I may explain to the Committee the difference between this legislation and the legislation brought in by the previous government of which the

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noble Baroness, Lady Blatch, was a distinguished member. Under the legislation of the previous Conservative Government, it was completely impossible to make available support for part-time students. It was categorically ruled out. However, under this legislation, we are making it possible, at some future date, to provide support for either full-time or part-time students.
Clause 16(2)(d) provides for regulations for prescribing categories of attendance on courses which are to qualify for any purposes of the regulations. That is one of the advantages of having some flexibility in relation to regulations. To come back to what was said earlier, if we were to try to put all of this on the face of the Bill, we would have had to exclude, for reasons I shall explain in a moment, part-time students. But we do not have to. I hope very much that at some future date it will be possible to do something for them because I genuinely sympathise with all the arguments put forward.
In considering this amendment it is important to bear in mind that the Bill is intended to create a framework which will enable us to provide adequate support for all students in both further and higher education. As drafted, the Bill enables the Secretary of State, if he so wishes, to make grants or loans available to part-time as well as full-time students. Clause 16(2)(d) enables him to prescribe in regulations the categories of attendance which will qualify. In that sense, if I may say so to the noble Baroness, Lady Maddock, the amendment is unnecessary. But it is, in a sense, a probing amendment designed to elicit general views.
Baroness Carnegy of Lour: Can the Minister tell us whether it is the Government's intention in regulations to confine the Bill to full-time students?
Baroness Blackstone: No, it is not the intention to confine anything to any particular category of students. It is our intention, as I shall explain in a moment, for the time being to accept the Dearing recommendation in relation to part-time students.
I should like to develop further what I said at Second Reading in response to the request of the noble Baroness, Lady Maddock, that loans should be made available to part-time students. The Government do not at this stage intend to extend the loan scheme to the generality of part-time students. While we recognise the immensely valuable nature of part-time higher education, we agree with the Dearing Committee's conclusion—this was said by my noble friend Lord Peston—that extending loans to part-time students should not be a priority at present.
As the committee pointed out, a high proportion of part-time students are in employment and are therefore able to support themselves, although I accept, as the noble Baroness, Lady Maddock, and others have said, that many of them do not have their fees paid by their employers. I know that from my own experience. Means testing access to loans for all part-time students would involve a great deal of effort of a nugatory kind, given
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that so many of them are in employment, many of them in jobs that pay more than would justify the provision of a grant or loan.
We have carefully studied the report to which the noble Baroness, Lady Maddock, referred. It was commissioned by the Open University. However, while the 1.5 per cent. per annum additional costs that she cited may appear modest at first glance, they would amount to some £147 million in 1995-96 prices by the year 2015-16. That is a quite substantial sum of money by any standards. As my noble friends Lord Dormand of Easington and Lord Peston said, given the public expenditure constraints under which we are working, it would at this stage be very difficult to justify extending the loan scheme to all part-time students.
In answer to the noble Baroness, Lady Carnegy, I see no reason why part-time student numbers should drop. Part-time students have always had to make a contribution towards tuition costs and have had to cover their maintenance costs. Their position will not be any worse under the new legislation; in fact, in some respects it will be better. I remind the Committee that we have taken alternative steps to ensure that those part-time students who might experience financial hardship are not disadvantaged. Unlike the previous government we will be extending eligibility for access funds to part-timers from 1998-99 so that part-time students in serious financial difficulty will be able to go to their university and ask for support from the access funds. They were never able to do that previously. It means that the Open University, with which I know the noble Baroness, Lady Carnegy, has had a long association, will get access to those funds in a way that did not happen before.
Moreover, our funding package for the sector for 1998-99 included £2 million for fee remission for part-time students in higher education who are unfortunate enough to lose their jobs. I know from my own experience that a part-time student may start a course with a quite well paid job but then loses that job for a reason which is completely out of his or her own control and finds it difficult to continue with the course. We want to avoid that and we are providing some funding to help them. We are currently consulting interested bodies on the criteria for fee remission in those circumstances.
I reassure the noble Baroness, Lady Maddock, that we are also considering with colleagues from the Department of Social Security the Dearing Committee's recommendation that the Government should review the interaction between entitlement to benefits and part-time study. Currently, unemployed people may study part-time while receiving the jobseeker's allowance, subject to their meeting certain eligibility conditions. We will be reviewing these rules on study for the unemployed in the light of the work skill pilots that we have introduced and of early experience of the new deal. We are also looking at ways to ensure that there are no financial disincentives to part-time study by those on low incomes. In summary, the amendment is unnecessary since Clause 16, as drafted, already

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achieves the desired effect. So I hope that the noble Baroness, Lady Maddock, is therefore able to withdraw her amendment.
Baroness Carnegy of Lour: Before the noble Baroness sits down, there is one point which I do not believe she quite picked up as regards what I said about the Open University. The level of fees there is directly related to the grant from the Higher Education Funding Council. I believe that is pretty obvious. So I was suggesting that the Government should make sure that the funding council keeps an eye on the level of grant. I have not discussed this with the Open University, but it is an obvious point that they keep an eye on the funding so that the market response of people to the level of fees, which they have to pay in their entirety, as the noble Baroness said, does not damage the number of people taking courses. It is very important in the context of this discussion.
Baroness Blackstone: Of course the Government will always keep their eye on the level of grant provided by the Higher Education Funding Council for all universities, including the Open University.
Baroness Maddock: I thank the Minister for her long and helpful reply. As she said, under this legislation it is possible to provide funds for students who are in higher education studying part-time. However, the fact is that, as the legislation stands, it is not going to happen yet. That is something the Minister has clarified today. I thank Members of the Committee for their support for the proposition that part-time students have equality of funding with full-time students. I hope that the Minister can, at some stage in the proceedings, give some idea as to when the Government might activate Clause 16(2)(d) to mean that money will be forthcoming to part-time students. But for the moment I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
4.15 p.m.
Earl Russell Earl Russell moved Amendment No. 82:
Page 11, leave out lines 13 and 14.
The noble Earl said: In moving this amendment I shall speak also to Amendments Nos. 83, 85, 87, 88, 92 and 94. Amendment No. 86. in the names of my noble friends on the Front Bench, has a substantive policy point to make and I shall leave that to them.
I believe that the noble Lord, Lord Peston, was slightly cutting a corner in trying to draw a distinction between substantive policy issues and technical issues of regulation. The point about a regulation-making power is that one needs to discover two things about it. First, what the Government at present intend to do with it and, secondly, what they are taking the power to do, and could do in future without further legislation, were they to change the policy intention.
In putting down these amendments it was my object to find out what substantive points I might need to raise at Report stage and without probing them I do not
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believe I can know that. So the antithesis between the drafting matters and matters of policy is a lot less complete than it might appear.
As always, I want to ask three questions about regulation-making powers. What is the extent of these powers? Perhaps I may clarify a little. I am not asking the Minister to imagine six impossible things before or after breakfast. I am asking her a technical, drafting question. When these powers were drawn up, what barriers were put regarding the form of the drafting? Very often there are barriers to the scope of a clause, as drafted, in another clause on which it depends or in terms within it, which a layman—and I count myself among them—does not spot. It is important to know that. Very often one may be reassured by it. Secondly. I want to know the present policy intention. Thirdly, I want to know why the Government are setting out to do it in this particular way.
These are questions of some substance. I raised on Tuesday the question—I admit that I had not given notice of the matter because I only decided to do it that way at that particular moment—what are the powers under which tuition fees are being introduced? I was asked that question by noble Lords all round the Library this morning. I could not answer them.
To get through Clause 16 we need to know an answer to that. It illustrates the point that one needs to know what could, hypothetically, be done under the powers. We need to know the intention. As a legislative Chamber of Parliament, and as a revising Chamber, we need to address the question as to how we might change the Government's intention because, after all, when we are acting as a revising Chamber, that is what we are here for.
I am reminded of the phrase that the noble Lord, Lord Kilmarnock, used about the Education (Student Loans) Bill in 1990 as regards the difficulty of making amendments purchase on the slippery surfaces of this Bill. Frameworks are all very well when they are seen internally from within the great sanctuary; but in the world outside the great sanctuary what is flexibility to the Minister may be restrictions to others.
With those preparatory remarks, in these particular amendments I hope that I may address what powers the Government are taking and why. Amendment No. 82 deals with the power to make regulations,
"for determining whether a person is an eligible student in relation to any grant or loan available under this section".
I believe that I can understand why the Minister wants to do that by regulation. But I want to check the extent of the power. Are there any other powers in any other Act which limit how those powers are exercised or could it be used for absolutely anybody without restriction?
Amendment No. 83 refers to prescribing the maximum amount of any such grant or loan available to any person. Here again, it is a fairly far-reaching power. I can understand why a regulation-making power is needed. Where one needs an annual uprating I concede, and I have always conceded, that one needs a regulation-making power. But am I right in construing this clause as meaning that the Government could raise

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or lower the prescribed amount as much as they like? Obviously, the Treasury would create a limit on raising it, but I do not see any limit to lowering it.
I need to probe the powers, as regards Amendment No. 85, with some care. That deals with terms and conditions which may be prescribed by the Secretary of State for any grant to be made available under the section. Do the terms and conditions relate exclusively to repayment or would it be possible, under terms and conditions, to impose other conditions relating to other things; to categories of student or to place any specific requirement in academic terms on the student? Are these powers simply related to repayment? I hope to hear that they are simply related to repayment. The same point about terms and conditions applies to Amendment No. 88.
Amendment No. 87 creates a power to require the,
"grant to be suspended or terminated in any such circumstances".
If I have correctly understood the word "such"—and this is one of the things I ask—it appears to refer to terms and conditions not yet made. So it is, as they would say in the Latin grammar, in the future perfect. That means that there is a double uncertainty about what is meant here. Again, I would like some explanation of the real meaning.
Amendment No. 92 deals with the ability to prescribe a rate of interest. There is another amendment dealing with that so we do not need to spend long on it. But as I understand the wording, it allows the prescribing of a rate absolutely without ceiling and without a floor. I should like to know whether that understanding is correct.
Amendment No. 94 deals with a power in regulation to make certain provision as the Secretary of State considers necessary or expedient in connection with the recovery of amounts due from borrowers. I should like to know the extent of that. It is my understanding that regulations cannot create a power to imprison and that that can be done only by primary legislation. But there are other methods of debt collection such as the calling in of bailiffs. To what extent can that be done?
For the moment those are sufficient specific questions. I believe they illustrate the point that the framework method of legislation makes parliamentary control rather difficult. There is a real risk that if it went too far it might make Parliament redundant and I for one would regret that. I beg to move.
4.30 p.m.
Lord Renfrew of Kaimsthorn: This is an opportunity to take further a point discussed earlier which the noble Earl, Lord Russell, dealt with so systematically. It would be a matter for regret if my words moved the noble Lord, Lord Peston, further towards the condition of ad nauseam to which he referred earlier. However, having taken the opportunity to re-read the remarks on this subject two days ago, I note that the noble Lord himself contributed no less than four times to one amendment and may have made a contribution to his own indisposition in that respect.
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I seek the reaction of the Minister and the Committee to a statement relating to Clause 16—not in relation to some earlier clause that other noble Lords may have discussed two days ago—in the 9th Report of the Select Committee on Delegated Powers and Deregulation:
"We invite the House to consider whether the subject matter of the regulations under Section 16 is so important that the Bill should be amended to require affirmative procedure for the first regulations, but to allow Ministers the option of using either the affirmative or the negative resolution procedure for subsequent regulations, thereby enabling the negative procedure to be used for amending regulations unless they included new matter of significance".
That seems to me exceedingly good sense. It relates to this clause. I ask the Minister to comment on the proposal. I shall listen carefully to what she says but unless by her eloquence she persuades me that the proposal in the report is superfluous I shall table such an amendment at Report stage, assuming the noble Earl, Lord Russell, has not already done so.
Lord Tope: I shall not contribute further to the indisposition of the noble Lord, Lord Peston, whether or not it is self-imposed. I shall be brief. Amendment No. 86 in my name and that of my noble friend Lady Maddock is identical to Amendments Nos. 85, 87 and 88 in the name of my noble friend Lord Russell. As so often happens, my noble friend has said all that I wish to say in pursuing his identical amendments. I wait to hear the Minister's answers to the points that he put so well.
Lord Peston: I thank the noble Lord, Lord Tope, for saying that this set of amendments is the same as the single amendment. I worked out that to go from Amendments Nos. 24 to 28 and then to Amendments Nos. 29 and 30 to 33 was the same as going directly from Amendments Nos. 24 to 33. I would have thought that even my honourable friend the other Minister in the Department for Education would be able to do that much arithmetic. I am glad to have that reassurance.
If it is believed that there should be regulations as a method of dealing with these matters, then surely the Committee agrees that regulations of precisely this kind must be in the Bill. There must be regulations in the Bill which enable one to decide who should get grants and loans and all the other bits and pieces. I take it that the noble Earl, Lord Russell, and the noble Lord, Lord Renfrew, seek to repeat that they do not want it done by regulation. I agree with the noble Earl that the decision as to what is substantial and what is technical is not an easy one. Since he did not say anything about the actual content I took it that he did not want this to be done by regulation.
Earl Russell: It is not quite that simple. If one concedes the need to have regulations—I concede it in principle but have an open mind in relation to this clause—one must still consider whether it should be done by these regulations. Until I have an answer to that I have no opinion on the question.
Lord Peston: If it is conceded—I do not suggest that those who do not want regulations should concede it—that it is to be done by regulation, I am not persuaded

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that these should not be the regulations. If I were writing regulations I believe that I would need regulations that covered precisely this ground; otherwise, I would not end up with a scheme for grants and loans.
I look forward to hearing what my noble friend says. The noble Baroness, Lady Blatch, rightly said that there is an enormous amount of documentation. I have read the documentation. I find it very hard to say that a suitable background has not been given to us for debating the matter without seeing the precise regulations. In trying to be both sensitive to the views of others and supportive of the Government, the simple logic is that if it is to be done by regulations, given that we have been informed about the content of some of these regulations, and if these amendments are carried—although I am sure the noble Earl is merely seeking clarification—we will have to have regulations of this kind conditional on having regulations.
Earl Bathurst: On the way home last night my cab driver told me that in London a cab driver had to undertake three years' training, which is not far off a period of higher education, with no vacations. There is no financial assistance given to those who train for such professions. Would the amendment of the noble Earl—perhaps the noble Baroness can deal with the existing arrangements within the Bill—provide financial help to cab drivers for such training?
Lord Glenamara: The simple fact remains that this Bill, when it becomes law, will be the means by which tuition fees are imposed on very large numbers of young people. A considerable financial burden will be imposed on graduates at work. There is no mention of that in the Bill. I have been in Parliament for 47 years. This is the most skeletal Bill I have seen in that time. It tells one nothing at all. This morning I obtained from the Library every word that is available from the Department for Education and I am still no wiser. We are legislating for something which we know nothing about. It is a lunatic situation. It is really a contempt of Parliament to legislate on something so important which will affect many young people and place on them enormous financial burdens at the beginning of their working lives and for there to be no mention of it in the Bill. I protest about the way the Government are proceeding.
The Earl of Limerick: The problem raised by the noble Lord, Lord Glenamara, is known to most noble Lords. I am quite familiar with the dilemma of detailed regulations and the difficulty of producing them at a certain stage. Whether or not students read detailed regulations, there is one group of people who will certainly do so with great care and attention. I refer to the governing bodies responsible for the maintenance, solvency and good management of universities.
I am always prepared to accept that I am dimmer than others, but I have shared this problem with others. I have so far received no enlightenment as to how cash will flow as a result of the fees—a point I was intending to raise later, but it is as well to do it on the Floor now.
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We need enlightenment on that point. There is a Motion later on the Marshalled List, that Clause 18 do not stand part. I am sure that we shall receive all sorts of information on the way to reaching that Motion, but how we can be informed is a serious point. If the Minister were able to comment positively on the suggestion made by my noble friend Lord Renfrew, that the first time regulations, which will govern the way all universities will behave for many years, are brought forward, they should be subject to the affirmative procedure, that would be helpful. If that were conceded, we should all find it easier to make progress.
Baroness Blatch: During the debate on the 1992 Act, which introduced student loans, there was this kind of spirited debate. I remember the Minister, the noble Baroness, Lady Blackstone, making an important point, and it took me until Third Reading before I was able to convince my department that it was something that we should concede to her. It was the Government's intention at that time, when introducing the loan scheme, that it should never go beyond the point of 50 per cent. grant and 50 per cent. loan.
The noble Baroness gained the support of most of this place, and indeed myself. The department accepted that that should be the case, and that if there were to be any deviation from that principle and intention Parliament itself should take a view about it. There are two major introductions for students which will impact on every student in the land, neither of which will be on the face of the Bill. We are therefore, as I said earlier, having to debate in a vacuum.
The first proposal is complete abolition of the grants for maintenance system, and the second is that students should contribute to tuition fees. It is unfortunate that, given the tradition of this place, we do not vote against secondary legislation: we cannot properly debate those two major changes which will materially affect students.
I apologise for what might be irksome to many Members of the Committee who are listening to this pedantic debate. We are frustrated by being unable to discuss in detail those matters, because the Bill just takes powers to the Secretary of State to do what he will following the Bill. We shall be discussing later whether tuition fees should be pegged. There is nothing in the Bill about that. Tuition fees could go the way of Australia, where they just go on rising as a percentage of the average cost. The matter is important. Many of us feel a genuine frustration, because we should be having a fundamental debate about the introduction of those two policies.
Lord Quirk: Could I add to the pedantry briefly, and echo, in particular, what the noble Baroness, Lady Blatch, and the noble Lord, Lord Glenamara, said. I am one of those who has been frustrated by being unable to find what I want in the Bill, but at least there is reference in departmental papers to some relative scale of tuition fees to be charged; that they should bear a relationship—as yet unspecified and as yet to be agreed—to the average cost of courses.
A couple of the amendments that the Committee will be discussing later use that phrase which derives from a DfEE document. I hope the Minister can at some point

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explicate what is meant by, "average cost of courses"; whether it is an average on the individual fees in the whole range of fees, or whether it is an average of the total cost of courses to institutions. The difference is obviously vast, depending on the number of students taking the course. That kind of average is extremely sensitive to variation.
4.45 p.m.
Baroness Blackstone: We are at the moment discussing a group of amendments tabled by the noble Earl, Lord Russell, and the noble Lord, Lord Tope. It is difficult to make sensible progress if Members of the Committee keep coming up with issues that will be debated on later amendments. We have to be orderly and have a sensible discussion, otherwise we cannot make progress. I want to be helpful. We shall be all over the place. There is no point in having a system in which Members of the Committee are asked to put down amendments in advance if, when we come to the Committee stage, they take no notice of the programme we have before us for discussing those amendments.
We are coining to a discussion on the whole issue of the affirmative procedure, and my noble friend Lord Whitty or I will answer the question asked by the noble Lord, Lord Renfrew, when we get there. The same applies to issues raised by the noble Earl, Lord Limerick. We shall try to deal with the point when we reach the appropriate amendments.
I return to the amendments tabled by the noble Earl. I shall begin by answering a question he put about the power under which we can charge tuition fees. It is in the Education Act 1962. Fees were means tested from 1962 until the 1970s. Many of us may have forgotten that, but that is the case.
The noble Earl has tabled a number of amendments which would have the effect of removing key regulation-making powers from the Bill. Amendment No. 86, tabled by the noble Baroness, Lady Maddock, and the noble Lord, Lord Tope, would have the same effect. The noble Earl explained that his purpose in tabling the amendments is to challenge whether it is appropriate to use secondary legislation for the purposes envisaged in the Bill, and to seek to establish what are the limits of the powers; that is, what use a future Secretary of State might, in theory, be able to make of them. Those are important points. I hope that I can reassure the noble Earl.
In order to do so, I hope that the Committee will forgive me if I am somewhat longer than usual. It is probably worth being a little longer than usual so that we can all be clear. I acknowledge that the powers in Clause 16 are drafted in fairly general terms. There is no getting away from that. We have taken that approach to allow flexibility to respond to changing circumstances, including, in particular, the changing nature of post-compulsory education; for example, as the Dearing Committee made clear, we face a challenge to become a genuine learning society.
As the system adapts to meet that challenge, the distinctions, for example, between different modes and levels of study, will become increasingly blurred, as
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Members of the Committee have already said. It would not make sense to refer to those concepts on the face of primary legislation which we intend to be on the statute book for a number of years. That is why Clause 16(2) provides, for example, for the rules determining eligibility for support to be set out in regulations.
Similarly, we must remember that we are dealing with maintenance as a long-term loan. It would be shortsighted—would it not?—to imagine that technical changes will not be needed to the administrative mechanisms over the next 30 to 40 years. It is inevitable that changes will be needed from time to time, not least to keep pace with any changes in the administration of the tax system. For example, any move towards greater self-assessment would have a knock-on effect on the arrangements for repaying student loans. It would clearly not make sense to amend primary legislation every time there was a technical change to procedures of this kind. I believe that that is well understood in this Chamber.
In addition, it would be wholly impractical to include on the face of the Bill all the detail of the new arrangements. By definition, any system of financial support embracing large numbers of people needs to take account of a wide variety of individual circumstances. The new repayment arrangements will need to be linked into the tax system and make separate provision, for example, for the employed, the self-employed and those not liable for UK tax. The result will be detailed and complex provisions which are precisely the kind of thing which it is appropriate to set out in regulations. The current mandatory awards regulations, for example, are 36 pages long. It would be quite inappropriate to incorporate all this detail into primary legislation, even if one could be confident that no changes would be required for a number of years. In practice, of course, changes are needed annually—not least to uprate the levels of support available—as I am sure the noble Baroness, Lady Blatch, will confirm from experience.
The noble Earl is concerned about the possible misuse of these powers. I should like to make two points here. I am not sure whether I can reassure him. It is difficult because he feels strongly about the matter. First, flexibility is not necessarily a bad thing. The current drafting of the Bill would enable either this Government or a future one to make more generous provision for students than is currently envisaged; for example, to extend the loans scheme to part-timers, postgraduates or further education students; to increase the level of support available; or to reduce the repayment burden on graduates. That is surely not the kind of flexibility which the noble Earl would wish to curtail.
I accept that a future Secretary of State could, on the other hand, make less generous provision. He could not stop providing support to students altogether, since Clause 16(1) requires him to make regulations governing the payment of grants or loans to students. But he could, for example, reduce the level of that support or restrict the categories of students to whom it is available.

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This is where my second point comes in. The fact is that these powers are no more open-ended than the powers under which the current student support system has been operating for over 35 years. The 1962 Act requires local authorities to make grants to certain students, but it says nothing for example about the level of those grants. And the Student Loans Act 1990 does not even require the Secretary of State to arrange for the making of loans: it merely enables him to do so, as I am sure the noble Baroness, Lady Blatch, will confirm.
Baroness Blatch: I am grateful to the Minister for giving way. She might be relieved to know that I agree with almost everything she said; certainly the case she is putting for secondary legislation. However, the previous legislation provided for the extent to which loans should go. The 50-50 arrangement was codified and agreed by both Houses of Parliament on the insistence of the noble Baroness. Would it not have been possible to provide in this Bill for the introduction of tuition fees and the abolition of the maintenance grant and introduce all secondary legislation thereafter? If that is the case, I agree with the Minister. She is saying that regulation-making powers are not open ended. I am afraid that they are. If they allow the Government to dispense with the 50-50 arrangement and for the introduction of tuition fees they are very open ended indeed.
Baroness Blackstone: I accept that the 1990 Act provided for a 50-50 arrangement. I am aware of that and remember our debates. However, the suggestion was then made that progress in moving towards 50 per cent. loans would be longer than was the case because the Government, of which she was a Member, wished to have the flexibility to make the changes in terms of the proportion of student support by either loan or grant as they wished. I remind her that they left that open and moved faster towards 50 per cent. loans than they stated at the time. As regards this Bill, it is important that we understand the proposal clearly. We have set it out and we announced it in Parliament when the Dearing Committee reported. It is a manifesto commitment to abolish maintenance grants. We could not have made the position clearer.
Baroness Blatch: This is a serious point. Manifestos do not substitute for the sovereign power of Parliament. It is for Parliament to determine whether tuition fees are introduced. It is for Parliament to decide whether the 50-50 loans agreements should be broken to make way for the abolition of grants. All we are saying is that we should be given an opportunity at this stage to discuss the primary legislation and to use a vote, rather than dealing with issues in secondary legislation when this House debates them but does not vote against them.
Baroness Blackstone: I am sorry, but I have difficulty in understanding the noble Baroness's point. She has tabled a later amendment on the matter. It would be helpful if we could confine our discussions to the amendments in the groupings. When we reach the
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relevant amendments, I shall listen carefully to what she says about whether it is right to abolish maintenance grants.
What is being proposed in Clause 16 is nothing new. The current system of enabling legislation and annual regulations has worked well for 35 years without any of my right honourable friends' predecessors abusing the powers in the way the noble Earl fears. Any such abuse would in any case be open to legal challenge on the grounds of unreasonableness.
I should add that we have already included one key safeguard in Clause 16; a provision which would in practice require any increase in the level of contributions to fees above the rate of inflation to be subject to affirmative resolution. That answers a point made earlier by the noble Baroness, Lady Blatch. As I indicated at Second Reading, we also hope to amend the Bill to limit the rates of interest which can be charged on loans. I am not convinced that any further safeguards are necessary.
Concerns have been expressed that we do not yet know exactly what will be included in the regulations. It is not possible to produce draft regulations at the present time because some of the fine detail—for example, on how the new collections mechanism will work—is still under consideration. Nor would one normally expect to see draft regulations at this early stage in the Bill's passage through Parliament. However, the Government have made their intentions very clear, not least in the progress report which was placed in the Library at the end of last week.
The noble Earl addressed his comments to a number of specific points. Perhaps I may take a little time to deal with them. He asked what provision we intended to make in regulations made under Clause 16(2)(a), which will determine who is an eligible student. We have made clear that we intend to retain the present criteria for deciding which students will receive support. This will mean that full-time undergraduate students on designated higher education courses, plus students on part-time and postgraduate courses of initial teacher training, will normally be entitled to receive grants towards the cost of their tuition and loans for maintenance. I am afraid, therefore, that cab drivers doing "the knowledge" will not be eligible. Clause 16 would enable us to extend this support to students in further education or to the generality of part-time or postgraduate students, but we have no current plans to do so. Such students will, however, continue to be eligible for support towards the costs of their study on a discretionary basis.
The eligibility criteria for student loans and for support for fees under the existing arrangements are currently set out in annual regulations and summarised in the progress report, to which I referred earlier. While we have no plans to change the criteria for the 1998-99 academic year it is likely, as I have already indicated, that changes will be needed over time to take account of changes in the system of post-compulsory education. In a dynamic environment, it is important that the Government are able to respond flexibly to changing demands. The power to deal with issues relating to eligibility in regulations will enable us and future administrations to do so.

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The noble Earl asked about the power to set maximum levels of support available to students under Clause 16(2)(b). The maximum amounts of grant and level to which students are entitled are currently set out in annual regulations. We are proposing no change in this respect. I am sure the Committee will agree that it is entirely sensible to make such provision in secondary legislation, given that the amounts will be adjusted routinely each year to take account, for example, of inflation. We have made clear, however, that the value of maintenance loans will be broadly equivalent in real terms to that of the current student support package. As I have mentioned, provisions elsewhere in the Bill will place limits on increases in the amount of grant which is payable towards fees; and by extension to the level of contribution which individuals and their families are expected to make.
The noble Earl asked about the provisions in Clauses 16(2)(e) and (f). These provisions give the Secretary of State the specific power to set out in regulations the terms and conditions attaching to grants. There is nothing sinister about these powers, which broadly mirror powers in the existing legislation. Indeed, our intention is to impose terms and conditions which are broadly the same as those applied to mandatory awards currently. We need in particular to be able to ensure that grant continues to be paid only for as long as a student is attending an eligible course. So we need to be able to prevent the payment of further instalments where a student has dropped out of, or been required to leave, his or her course. We may also wish to provide for grants paid to help with living costs—for example, to students with dependants—to be repaid, in full or in part, in circumstances such as these. It is clearly right to protect taxpayers' money in this way.
5 p.m.
Earl Russell: I seek a small amount of clarification. I accept what the Minister is saying but I am interested in what sort of terms and conditions could be imposed. Does that relate only to eligibility as a student and to repayment, or could that clause be used to impose other terms and conditions upon grants? Is there any restriction as to type?
Baroness Blackstone: I believe that the terms and conditions element is largely related to the issues which the noble Earl has just raised. However, I cannot predict what may happen under regulations in five or 10 years' time. That is the whole point of having some flexibility. I hope that the noble Earl will accept that.
The noble Earl asked about the power to specify in regulations under Clause 16(2)(g) the terms and conditions attaching to loans. That power is clearly essential: one cannot make a loan without specifying the terms on which it is made. Clause 16(3) describes in more detail the kinds of terms and conditions we have in mind; for example, interest rates, repayment terms and deferment and cancellation arrangements. In addition there will be various more technical points. For example, we will want to be able to require borrowers to inform the Student Loans Company if they leave their course early, or if they change their address.
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We have made clear our intentions in relation to the terms on which the new loans will be made. Students are aware of those. The key terms—for example, in relation to interest rates and repayment terms—have been widely publicised. Further details are included in the progress report on the new arrangements to which I referred earlier. That report also explains that a working group involving officials from my department, the Inland Revenue and the Student Loans Company has been set up to consider the fine detail of the new arrangements and that further details will be published in due course.
We believe that it is entirely appropriate for provisions of this kind to be set out in regulations, rather than on the face of the Bill. As I explained earlier, there will be a great deal of technical detail and we will need the flexibility to respond to changes in circumstances—for example, future changes in the way the tax system operates. On one key point—interest rates—it remains our intention to clarify the position on the face of the Bill. But with this one exception I am clear that the only sensible way of setting out the detailed terms and conditions attaching to grants and loans is to do so in regulations. That is, of course, the case under the current arrangements. I hope that the noble Earl will withdraw his amendment.
Earl Russell: I thank the Minister for that long and careful reply. I hope it will not seem ungenerous if I ask for just one more piece of information which I do not believe will cause her any trouble; that is, the section and subsection of the 1962 Act under which tuition fees are imposed.
The noble Baroness talked throughout about flexibility. I am reminded of the story of the American who received a gas bill for 0 dollars and 0 cents. He explained to the gas board that he could not possibly pay that; there was no way he could do it. After the umpteenth exchange he was told, "Yes, we see your point but we hope you will send us a cheque for this amount because our computer won't take 'no' for an answer". Therefore, he sent a cheque for 0 dollars and 0 cents. He then received a letter from his bank saying, "This cheque may well have satisfied their computer but it has caused real chaos in ours". Therefore, the flexibility may satisfy the noble Baroness while causing real chaos for us.
There is a balance to be struck here. I take the point about changes in the tax system but I hope that the noble Baroness also takes the point about parliamentary control.
The point made by the noble Baroness, Lady Blatch, about the introduction of tuition fees and the abolition of the maintenance grant was well taken. If it took us outside the technical wording of the amendment, that is because, on both sides of the argument, we have had to address general questions about the regulation-making power.
The view of the Renton Report and the Hansard Society Report Making the Law from Lord Rippon of Hexham is that the broad general principles must be in primary legislation so that the House can address them.

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Having listened to the noble Lord, Lord Glenamara, I am not certain that that principle has been observed in this Bill.
There is a long history of tension between this House and this department on this subject. We shall get on a great deal faster in future if some attempt can be made to improve communication between us on this point. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 83 not moved.]
Baroness David Baroness David moved Amendment No. 84:
Page 11, line 23, at end insert—
("( ) prescribing the administrative arrangements for the payment of grants or loans to eligible students;").
The noble Baroness said: In speaking to this amendment, I should like to speak also to Amendment No. 89. Amendment No. 84 is a probing amendment, the purpose of which is to enable the Minister to make an announcement on the new administrative arrangements for the new system of student support.
The Bill does not describe the detailed arrangements for the administration of the new student support arrangements. LEAs currently administer the system of mandatory and discretionary awards in England and Wales and in the short term will be responsible for implementing the new student support system in HE in 1998-99 and 1999-2000. On Second Reading, the Minister indicated that an announcement would be made shortly about those administrative arrangements in the light of discussions with representatives of LEAs, the Student Loans Company and other interested parties.
The Government are now understood to have made a decision in relation to the arrangements for 1999-2000. The Minister is expected to confirm that for that year the LEAs will have a continuing role in administering student support arrangements alongside the Student Loans Company and a new central unit established within the DfEE which will take over from the LEAs the means-testing of EU students wishing to study in England and Wales.
The Government's position regarding subsequent years—that is, from 2000 to 2001—is rather less certain. This issue needs to be clarified as a matter of urgency. It would be helpful if my noble friend the Minister could confirm how and when any decision could be anticipated in the area.
Is it correct that the DfEE will be establishing in February a steering committee to manage the introduction of the new arrangements which will draw on the expertise of a committee which will advise on the precise allocation of responsibilities between LEAs, SLC and DfEE's central unit? Will the committee be making a thorough review of the current means-testing arrangements with a view to simplifying the system wherever possible? The review is expected to be completed by the end of September.
To a limited degree the announcement which is anticipated from Ministers on administrative arrangements for 1999-2000 can and will be welcomed
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by LEAs and others. An announcement about 1999-2000 only will not, however, enable the 172 LEAs in England and Wales to plan effectively for the future. It would appear that the present uncertainty for current and prospective students, their parents and families will continue in the short term at least pending any clarification by Ministers of the process they anticipate for reaching decisions on the administrative arrangements beyond 2000-2001.
I hope that my noble friend the Minister realises the importance of resolving uncertainty as soon as possible, and indeed the real advantages and value of opting decisively for continuity of service through locally accountable LEAs. LEAs are pleased to work in partnership with the Government in implementing the significant changes to the current system of student support and also in helping to determine what other improvements might be progressively introduced from 1999-2000 onwards. It is far from satisfactory that uncertainty is expected to continue in this critical area in relation to 2000-2001.
I turn now to Amendment No. 89. Its purpose is to seek clarification of the progress made in establishing the ministerial advisory group on the new arrangements to replace discretionary awards. The enabling approach in the Bill, which gives very wide-ranging powers to the Secretary of State, is also noteworthy in relation to the powers which LEAs currently have to make discretionary awards. The Government are taking the opportunity in this Bill to discontinue discretionary awards made under the 1962 Act, as they feel that the current arrangements are inadequate and need reforming. In December 1997, the Minister invited Councillor Graham Lane, Chairman of the Education Committee of the LGA (the Local Government Association) to chair an advisory group to provide advice on what new arrangements might be introduced to replace discretionary awards.
The Further Education Student Support Advisory Group has so far met on two occasions and a detailed programme of meetings has been agreed on a fortnightly basis up to the end of March when the group is required to report back to the Minister with detailed recommendations. Although the Minister may not feel it appropriate to comment on the detailed discussions in the advisory group, particularly since they are evidently still at an early stage, it might be helpful if she could confirm for the official record details of the group's membership and terms of reference, and set out what work the group has already initiated in terms of collecting information and comments from interested parties to inform its deliberations. If that is too much for my noble friend to do today, perhaps she could place a note in the Library about it.
The Minister has already indicated that she would not intend,
"to leave LEAs without a power to make awards to students in exceptional circumstances and at their own discretion",
in the future. Could the Minister confirm that that is still part of the department's policy pending further consideration of the recommendations of the advisory group and subsequent consultation by Ministers on

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detailed proposals before any new changes to student support arrangements in this area are implemented for the future?
The point of both amendments is to find out rather more about what is going on for the sake of the LEAs. They have a certain amount to do at the moment and they very much want to know how much they will be expected to do in the future. After all, they have to make arrangements about the number of staff they employ and so on. The process of means testing for grants is really quite a considerable job. I beg to move.
5.15 p.m.
Baroness Blatch: I rise to express my support for the plight of LEAs in particular. I believe that they are at a very real disadvantage. There is one aspect of means testing which I know is taxing their minds very much. I know that there is a sentence in the latest progress report which says that the Department for Education and Employment will give substantial help in means testing European students from other EU countries.
Means testing a young Italian applying to come to a university in this country with the added complication of applying to study in Scotland rather than in England, will be most difficult. Unless one is automatically and entirely to rely on what the family puts in the application form, any verification system will be extremely bureaucratic or even costly. For example, will we have DfEE officials going on interesting trips around France, Italy, Spain or Germany? It will make it the most incredibly difficult task.
However, for the moment, the responsibility will rest with local authorities. If that goes wrong and we discover that there is a great deal of malpractice going on, it will be exceedingly difficult for local authorities to deal with it. I have singled out only one element, but there will also be a twin-track system. I make the assumption here that any second-year, third-year or fourth-year student in the system at present from 1998 will in fact receive the larger maintenance grant. Although I know that they will not have to meet any tuition fees, my understanding is that they will receive the 50-50 split of loan and grant. In other words, local authorities will be means testing for the existing system and means testing for the £810 maximum amount of grant for new students, in addition to means testing families for the degree to which they pay all, part or none of the tuition fees. There is a real job and a real challenge here for local authorities. For that reason, I wish to support the noble Baroness, Lady David, in her amendment.
Baroness Park of Monmouth: I should like to add my strong support for the amendment, principally because I am most concerned about the anxiety which is to be found among all students and prospective students regarding the lack of clarity on what is going to happen. I refer especially to the respective responsibilities of the LEA, the Student Loans Company, and others. If loans are to be paid termly, for example, there is very great scope for problem and delay. Is the Student Loans Company now fully organised and able to respond to students? Moreover, will it be accessible and effective?
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The LEAs are local and accessible but, as I understand it, they are no longer to have the responsibility in the long run for paying grant cheques.
I am particularly concerned about the mayhem that could occur and the blow to student morale if students are unable to get through, not once a year but every teen to the Student Loans Company to secure their loans. At present, in Scotland, the Student Awards Agency, which deals with payment of grants, is the subject of an inquiry because some grants which were due in October last year have still not been paid. As with the Student Loans Company, students telephone the agency and receive no answers. Telephoning costs money. The student union in Aberdeen, for example, has helped to pay for telephone calls and even helps students to fax their increasingly urgent inquiries.
Another aspect which concerns me very much is that, hitherto, students coming up could count on the maintenance grant as some money while they sorted out everything else. If they are to lose that, and unless they arrive with everything completely sorted out on the loan side, they will be in desperate straits. I therefore feel that it is extremely important that those aspects of the situation should be cleared up as soon as possible.
Lord Tope: I should like, first, to express my support for the amendment. I want very much to support what the noble Baroness, Lady David, said in moving it. Perhaps on this occasion I may do so as a leader of an LEA, although I forget what the description was of an LEA—perhaps "a beleaguered LEA". If this is to happen, the sooner that LEAs are clear about their role and responsibilities, the better. It is not surprising that students and prospective students are ringing up their LEAs to find out what is happening. The fact that LEAs are not in a position to tell them in detail simply adds to the pressure and stress of students, of parents and indeed of the staff of LEAs.
As I believe is well-known to Members of the Committee, LEAs are undergoing a considerable amount of change and innovation in one way or another at this time. A lack of early clarity adds to the stress that students feel. As soon as the Government are in a position to give clear instructions to LEAs it will be appreciated by all concerned, not least, I suspect, the Government.
Lord Walton of Detchant: In reply to the amendments raised by the noble Earl, Lord Russell, the Minister said that special arrangements would be made for students reading for a postgraduate certificate in education. It has been reported that similar concessionary arrangements will be made available to medical students in the final year of a five-year course.
Will extended concessionary arrangements be made for medical and dental students, and perhaps some architectural students, who may be studying on a six-year course?
Baroness Blackstone: To deal with the specific question by the noble Lord, Lord Walton of Detchant, yes, special arrangements will be made for fifth and subsequent years.

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My noble friend Lady David made clear that these amendments are designed to elicit a statement of our plans for the future administration of the system. I am very pleased that I am able to oblige.
The Dearing Committee argued for the establishment of a single student support agency to replace the functions currently performed by local education authorities. There are attractions in setting up such a body rather than continuing to rely on more than 160 LEAs. In most cases their performance has been perfectly adequate, although there have been exceptions and some LEAs appear to operate much more efficiently than others in this area. But there must be doubts about whether an essentially executive function needs quite so many local delivery agents.
But there are arguments the other way. LEAs have been doing the job for many years, as Members of the Committee have said, and have built up a lot of highly specialist knowledge; and the Dearing Committee was not able, in the very short time it had to examine a huge range of topics, to look at the issue in detail. Furthermore, as the committee recognised, the priority must be to implement the new arrangements, in particular those for new fairer loans. The next couple of years will be transitional ones.
We have therefore decided that during that period we shall continue to use LEAs and the Student Loans Company to deliver the new arrangements. LEAs will conduct the means test and the student eligibility checks. They will therefore have a key role to play for at least the remainder of this Parliament.
The Student Loans Company will be expected to pay loans on time—that is very important—so that students have the money they need in order to live.
We shall be setting rigorous performance standards for LEAs and a new specific grant regime will be based on those standards. We shall involve LEAs and other interested parties in devising the detail of the new arrangements. Our priority will be to ensure that students and others receive a high level of service.
Once the system has bedded down we shall review the arrangements and look, in more detail than the Dearing Committee was able to do, at the best way of administering the student support system. We shall aim to complete that review in 2000. We shall make an announcement about the terms of reference and nature of the review shortly.
Perhaps I may say this to my noble friend Lady David. As regards the other review taking place on discretionary grants, I shall put a note in the Library which sets out the membership, terms of reference, and so on. They are already publicly known, and I can certainly do that. I also confirm that it is the Government's intention to leave with LEAs the power to make awards on a discretionary basis.
I should add that no amendment will be needed to the Bill to facilitate the new arrangements. Although the power to make grants and loans will rest with the Secretary of State, he will be able to delegate certain functions to LEAs and the SLC under Clause 16(7). The
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first of these amendments is not therefore necessary: regulations will in any event prescribe administrative arrangements insofar as it is necessary to regulate in this area.
The noble Baroness, Lady Blatch, raised the issue of means testing for EU students. It has been decided that it would make more sense if, from the beginning, there was a small central unit in the Department for Education and Employment taking on that work rather than that 160 LEAs should undertake it separately. I confirm that the intention is to do that in 1998-99 rather than in the subsequent year. I do not think that civil servants in the department will need to travel around Europe in order to do that work. I believe that through other means they will be able to acquire information about the tax regimes of European Union countries.
The clause as it currently stands would also enable the Secretary of State to make regulations under which he could pay grants to students in exceptional circumstances, such as exceptional financial hardship. It would be difficult, however, if not impossible, to make regulations that specifically addressed the potential needs of every student facing financial difficulties. I have listened carefully to representations by local education authorities that they should continue to have a discretion to offer financial support to students in exceptional circumstances. As I have already said, I agree that such discretion is needed. The primary legislation already exists to permit my right honourable friend the Secretary of State to make regulations allowing authorities this discretion. The Education Act 1996, Section 518, provides for the Secretary of State to make regulations which empower local education authorities to grant allowances in cases of hardship. In view of this existing power, the second of these amendments is also unnecessary.
I hope that the information I have provided is what is sought by my noble friends and that they will therefore be able to withdraw the amendments. I am very confident that the local education authorities will be able to rise to the challenge—a number of Members of the Committee have referred to it—and I know that the LEAs are anxious to do so.
Lord Peston: Leaving aside the European Union question, the Minister said that LEAs will be dealing with the issue until the year 2000. Did I understand the noble Baroness to say that what will happen after the year 2000 is still open? I believe that that is what she said. Is there not a slight problem? If LEAs are to handle the matter—as the Minister said, it is not an easy matter—they will have to invest in systems. If they are no longer to deal with it after two years, there will be less of an incentive to invest in those systems.
Can we be assured that the LEAs will be given good notice? I appreciate that the department has problems. I do not change my views on tuition fees, which is another matter. But, given the other pressures on them, can we be assured that the LEAs will be given as much notice as they will require? Will they be asked suddenly,

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"Can you keep going?"; or will they be told, "We don't need you any more"? The answer has been left out of the reply.
Lord Wallace of Saltaire: I am concerned about the European dimension. The students I taught this morning included students from Finland, Sweden, Germany, France, Italy, Spain and Portugal. A small central unit in the Department for Education and Employment seems to raise a large question. One talks about knowledge of tax regimes in other European Union states. That also raises questions.
Last week, for other reasons, I read cases heard in the European Court of Justice on payment of fees to students from different countries operating across boundaries within the European Union. It seems to present a potentially classic case and we shall find ourselves before the European Court of Justice if we are not careful. Alternatively, we may find ourselves up against questions about the way in which tax regimes are interpreted in different states.
Universities have discussed this issue. How does one demonstrate that a student from northern Greece is who he says he is without investigating in great detail? I wish the Minister to be aware that a small central unit may get us into potentially extremely deep waters as we try to impose a British system on students who come from 14 other countries.
5.30 p.m.
Baroness Blatch: Perhaps I may add to that point. A rather technical exercise is undertaken in this country to calculate residual income, on the basis of the commitments that an English, Scottish, Irish or Welsh person has in terms of taxation, national insurance, mortgage payments and so forth. It is the most incredibly complicated system. If one is to rely entirely on what the student or his or her family says by way of submitting an application and everything is taken as read because there is no sophisticated verification system, I see great problems building up.
Sadly, I also foresee a kind of resentment building up on the part of students at home, who may see that all sorts of tortuous processes are gone through to verify whether a parent is working, whether everything is being declared that should be declared and so on, and yet see almost none of that taking place for an EU student, simply because it is difficult, because the system is bureaucratic and information is hard to get hold of.
I wish to refer to the question put by my noble friend Lady Park of Monmouth. Like the rest of us, my noble friend is very concerned that in this new world in which students will be living, the only money they will have in their hands come the beginning of term will be money they may have received through the loans system. The latest document from the DfEE states:
In September new students will begin applying for loans following the start of their courses".
That is inconsistent with the reply given to my noble friend by the Minister. As my noble friend knows, and certainly I know, having seen my own children through
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the system, as students arrive at university landladies and landlords expect money in advance for rent and other things. Moreover, students will have some expenses to meet simply in order to eat and to live during the first weeks of their course.
A very large number of young people in this country will be unable to turn to their parents for help. They will be unable to turn to them for the sort of sums they will need to put down as advance rent. Therefore it is important that they have this money in their hands, as a loan—especially those who are borrowing 100 per cent. of the moneys they will need for maintenance. That point is not covered in the documentation.
Baroness Carnegy of Lour: Will the noble Baroness tell the Committee whether any changes will have to be made in Scotland in implementing this provision? In Scotland local authorities are not involved: there is an agency. Will that agency have to be enormously enlarged, and will there have to be an extra unit for overseas students? I could put this point when we discuss the Scottish provision under clause stand part. However, it might save time if the noble Baroness could answer now. I see that the Scottish Office Minister, the noble Lord, Lord Sewel, is sitting at her side.
Lord Walton of Detchant: I agree with noble Lords who said that the problem of means-testing overseas students will bristle with difficulties. I wonder how a central unit in the department will deal with the kind of case that I recall from my former university, of an overseas student who applied to the hardship fund but made the mistake of parking his BMW outside the window.
Baroness Blackstone: A number of questions have been raised. To return first to the point made by my noble friend Lord Peston, yes, of course we will give local education authorities ample notice of any change in the system. We ought to be clear that the means-testing regime which presently applies to grants and will apply to tuition fees will be exactly the same. There will not be two different sets of means-testing. The same eligibility criteria will apply. I wish to be clear on that point.
On the issue of means-testing students from the European Union, we are required under EU law, as I am sure the noble Lord. Lord Wallace of Saltaire, is aware, to treat EU students in exactly the same way as we treat UK students. So it is necessary to have a means-testing regime for tuition fees for European Union students if we are to have it for UK students.
Lord Mackay of Ardbrecknish: I have listened to the argument with some interest. Is it not possible that we could argue before the European Court that a student from a European Union country would not, in his or her own country, receive help from the government? In many countries students do not; they are very much on their own and dependent upon their parents. Yet if they

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come to this country, they will receive help. That would seem illogical enough even for lawyers at the European Court to understand!
Baroness Blackstone: Far be it from me to comment on the logic or otherwise of lawyers in European Union courts. The legal advice that we have received is that we cannot change this provision, at least not for the foreseeable future. We have to accept European Union law and abide by it in this particular respect.
Yes, of course I accept the point made by various Members of the Committee. This is a technical and difficult area, and I do not under-estimate the difficulty. Nor do I under-estimate the strengths of DfEE civil servants in being able to sort out the matter. I am sure that they will be able to do so.
It is also the case that the vast majority of European Union students studying in the UK come from families whose incomes are much higher than would qualify them for the sort of support referred to by the noble Lord, Lord Mackay of Ardbrecknish; namely, exemption from fees. We know that that is the case. After all, such students do not receive any support for maintenance in this country. In most European Union countries they would live at home. If they can afford to pay to live in the UK, away from home, it is very unlikely that they will be eligible for exemption from tuition charges.
Baroness Blatch: I wish to make two points. First, I imagine it would be unlawful to make the assumption that if someone comes from an EU country he or she can afford tuition fees, and therefore the exercise of means-testing has to be undertaken. Secondly, I wonder whether the noble Baroness will tell us for the next stage of the Bill what the verification system will be for EU students.
Baroness Blackstone: It would be unlawful to make an assumption if someone applied for exemption in relation to a fee. But I suspect, and hope, that those EU students whose parents' incomes are well above that which will qualify them for exemption from a fee will not apply. They would be wasting their own time as well as that of everybody else. We shall be making available all the information that we possibly can to applicants from the European Union, setting out what the eligibility will be. There may be people who think that some way or other they can get round the provision. I do not deny that. That is why it is important that the central unit to be established is extremely well-informed and operates effectively in carrying out the means-testing. I made the point in order to provide some reassurance. We should not imagine that every EU student coming here to study will apply for exemption.
Lord Wallace of Saltaire: I strongly agree with the Minister that most of the students who come here are not among the poorest classes. I wish, however, to make two points. Will the Minister assure the Committee that the small central unit so designated will at least consult with other EU member governments as early as possible
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as to how such a scheme might be managed? The British Government have an unfortunate record of pushing matters through without consulting other governments first, and then discovering that there are large problems and obstacles to be faced. The DfEE has not always been the most internationally-minded department.
Secondly, the precise reason that I was reading through the ECJ cases last week was that it seems to me the law is not entirely clear on this whole matter. There are some interesting questions that the British Government ought to be considering as we and other governments move forward on university financing. There is a mess that has to be sorted out. Whether or not the legal advice is entirely clear, some of us are seeking additional legal advice on the matter.
Baroness Blackstone: Officials in my department will, of course, consult with the governments of other EU countries in order to obtain the best and most up-to-date information. I also take the second point made by the noble Lord, Lord Wallace of Saltaire.
Perhaps I may return to one or two other points. The noble Baroness, Lady Blatch, raised the question of what happens to students on day one. Perhaps I can remind her that this autumn students will still be in receipt of grants, and their grants will be available from day one. From 1999, when the grant is to be abolished, it will be vital that the Student Loans Company has paid the loan from day one. That is what I said before, and that is what we intend to do. The noble Baroness's point related to the position in 1998, which is slightly different.
The Student Awards Agency for Scotland currently carries out the functions of the LEAs in relation to student awards. The intention is that it will continue to do so for home and EU students. There should thus be no significant difference in the scale that is required.
Earl Russell: The Minister sets me thinking when she talks about imposing means tests on an equal basis across the EU. As things stand at present, that will he affected by exchange rates. My noble friend Lord Avebury has asked me whether the means test will rest on the exchange rate at the time of application or the rate when the money is to be spent. There can be a considerable difference. Is the Minister here setting up a system which will not be viable—unless, as my noble friend suggests to me. we do it all in euros?
Baroness Blackstone: My understanding is that the Liberal Democrats are in favour of moving towards a more federal Europe and the introduction of the euro. If their wishes on this matter are granted, we shall not he faced with this problem for very long. Yes, of course, there are problems of detail about the exact date on which the exchange rate is set for this purpose. I cannot answer the question; the matter is still being looked into. In answer to the noble Baroness, Lady Blatch, I shall try to provide more information about how the scheme

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will work in this respect. I very much hope that my noble friends will be able to withdraw their amendments.
Baroness David: I should like to thank the noble Baroness, Lady Blatch, for her support as far as LEAs are concerned and other noble Lords and Baronesses who have spoken about these two amendments—even though the EU did rather take over. If we moved to a single currency fairly quickly, that would clearly be a great help in this respect.
I thank my noble friend for her reply. Once she had reassured my noble friend Lord Peston that LEAs would have plenty of notice of what would be expected of them, her answer to me was satisfactory. I thank her and withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 85 to 88 not moved.]
Lord Tope Lord Tope moved Amendment No. 90:
Page 11, line 35, at end insert—
("( ) For the purposes of subsection (2)(c), "circumstances" shall not include the income or other financial resources of the person's parents or spouse.").
The noble Lord said: I shall speak briefly in moving this amendment, partly so that we can make some progress this evening and partly because my noble friend Lady Maddock has some important things to say. In speaking briefly, I do not wish in any way to indicate that we regard the amendment as unimportant. On the contrary, it is fundamental to the Liberal Democrat approach to student funding.
We regard people who reach the age of 18 as independent adults, not as dependent children. That is a fundamental point and is the purpose of the amendment, which provides that in assessing these matters the income of a student's parents or spouse should not be taken into account.
In almost all other aspects of life people are regarded as adults once they reach the age of 18. They can vote, fight for their country and enter into contracts. But when it comes to going into higher education, they are still treated as dependent children. We know that many parents are generous in their support of their children while they are at university. Many are willing and able to be so; but that is not always the case. Many parents do not meet their contributions. However, that is not the point. The point is that a person who is 18 should be treated as an adult in his or her own right, and the system of student funding should recognise that. We wish to see the amendment put into the Bill as a fundamentally different way of approaching student funding, recognising people aged 18 as adults, as they are in other situations. I do not imagine that, in the perhaps unlikely event of an 18 year-old applying to a bank or a building society for a mortgage, he or she will be able to obtain a higher mortgage because of his or her parents' income. The same should apply in the education system. My noble friend Lady Maddock will add to the points I have made. With some passion, I beg to move the amendment.
5.45 p.m.
Baroness Maddock: I rise to give my wholehearted support to my noble friend in the proposition that students should be treated as economically independent at the age of 18. There are three reasons why I believe this is a sensible proposition.
First, it would deal with the problem of assumed income, which is often not received by students from their parents. Figures show that almost one in three students do not receive the money that government and others assume they will receive from their parents.
Secondly, it would make it much simpler for students to deal with social security benefits. We heard earlier from the Minister that she is looking carefully into the interaction between this legislation and social security legislation.
Thirdly, it would deal with the muddled situation that exists today with regard to the age at which students become independent. Here I speak from personal experience. My elder daughter was in higher education for two years and decided to give up her course and go out to earn her living. She has now decided that she wishes to go back to university. She is 21 but is not considered independent, although she has been leading an independent life for two years. If she had gone on to work for another couple of years, she would be considered independent of her parents. It is difficult for students going in and out of courses. Students are not always sure what they want to do when they leave school and may choose a course which is not suitable for them, as my own daughter did. I believe the amendment would deal with some of the problems and anomalies that arise.
This proposal to ensure that students are considered independent at 18, together with our earlier proposal that part-time students should be treated the same as full-time students with regard to fees and our later proposal that all students should have their fees paid, would make the job of dealing with this legislation and the administration that will ensue much simpler, not only for the Government but also for local education authorities and higher education institutions.
For those reasons, I hope that the Minister will look favourably upon this amendment and give us some indication as to where the Government stand on whether, perhaps sometime in the future, they will look seriously at this proposal.
Lord Desai: I am in some difficulty here. I grant that people who are over the age of 18 are responsible for themselves and should be treated as such. However, in charging the education fee of £1,000 we have taken to means testing in relation to the resources of the parents. That is my understanding; but I may be wrong.
In an ideal world, peopled by economists and a few of their friends, one would only judge people in terms of their future income and not by their parents' income or anything else. Eligibility for the grants should be on the grounds of future income; therefore, all grants should be loans against future income and they should be collected by the Inland Revenue. That is in an ideal world, but we do not live in an ideal world.

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We cannot have an inconsistent treatment of students as between tuition fees and maintenance grants. That is the dilemma. Maintenance grants are actually consumption loans which are terrible things. One cannot say that for the consumption loans the students are going to be treated as adults, responsible for themselves, and all will qualify, more or less, and then say that when it comes to tuition fees they do not qualify because the parents are supposed to pay. In that case they would lose out both ways.
The world is not consistent and therefore we will have to live with this anomaly, that students cannot be treated as responsible adults as far as this Bill is concerned at the present time.
Lord Quirk: Is it not the case that after the passage of this Bill maintenance grants will not be paid; it will all be on the basis of loans? Therefore, it is possible to treat tuition fees and loans on precisely the same basis.
The amendment proposed by the noble Lord, Lord Tope, and the noble Baroness, Lady Maddock, stands and seems to me to be perfectly logical. The problem is that the justification for having (c) in here is to protect the poor, to ensure that the poorer student will get to university and, a fortiori, if one is going to protect the poor there has to be some way of unprotecting the unpoor, or, as one would have said until last week, some kind of affluence test.
The fact remains that the worst off under the present system is the student of the parent who is affluent but who either does not feel able, or simply refuses, to pay for the reasons that the child, who may be 20 or 21 years old, is an adult and they therefore say, "Why should I?"
We have a real dilemma here. I hope that the Minister will be able to clarify this. We are in the position, surely, where affluence will affect both the ability to pay tuition fees and the ability to get a loan.
Baroness Perry: I strongly support this amendment, most particularly the part of the amendment which refers not just to the student's parents but to their partner. Unfortunately—and I hesitate to say it in this male-dominated House—there are still many men who refuse to support their partners, despite the fact that their income has been taken into account in determining the amount of the £1,000 fee which the woman student has to pay. It does give enormous power to the man in question if he is able to say, "If you are nice to me, I might pay your £1,000 for you; if you are not, I will not." I feel it is quite distasteful to perpetuate a system in which the partner's income should be taken into account, particularly in the case of a woman, in determining the amount of the fees she has to pay.
Unfortunately, there are many women who themselves have limited or no resources and who therefore could be blackmailed in quite an unpleasant way, and who are, apparently, often blackmailed over the issue of the maintenance grant. That will be gone. Everyone will lose that and will get a loan. However, as
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far as the £1,000 fee is concerned, I very much hope that this amendment will be taken on board by the Government.
Earl Russell: The noble Lord, Lord Desai, always interests the House and he always tends to deal with arguments with which he does not agree by the use of the technique of reductio ad absurdum. That technique is, of course, a revolving door. I agree with the noble Lord that we can never hope to abolish anomalies; I am not that Utopian. What I believe and what I think the noble Lord also believes is that one can occasionally attempt to make the anomalies slightly more logical. The real anomaly in what the Government are proposing is not the charge on the parent but the contrast between the obligation to the student to rely on the parent and the lack of any obligation on the parent to support the student.
I should declare an interest in this amendment. As a serving university teacher I am dealing here with something that takes up a good deal of my working life. It is a constant, recurrent problem.
As I believe the noble Lord knows, I have been asking for quite some time for the age of majority to be referred to the Law Commission because, as with the case of part-time students, we are dealing here with a problem that stretches much wider than the educational world or this amendment. We are regularly developing a gap between the age at which parents cease to be bound to maintain their children and the age at which children are treated as having the rights of adults. That is the gap into which students are now falling.
It is obviously a disadvantage to those from low income households, but it is not only a disadvantage to them. It is a disadvantage to any people whose parents do not think they should be having higher education or, indeed, do not think they should be having that particular sort of higher education. Of course, power is capable of abuse among parents as among any other people who hold it.
Just last night I was talking on the telephone to somebody still in her 30s, who almost missed the chance to get a higher education because her father believed that women should not be educated. It still happens. It was not my first case of this by a very long way. I had hoped by now I would be past meeting it, but not yet.
There are, of course, also people who are estranged from their parents. In the increasingly common situation of fractured families, very often people are not on speaking terms with the parent on whom they are compelled to rely for financial support. That is a situation which creates a great many strains within families. The harm it does is not just the harm of being sometimes without money; it is the harm of a great deal of resentment and tension within the family.
There are people who do not get the money from their parents because they are the less favoured child, sometimes because another child is getting his fees paid at an independent school. That is also within my experience. In these cases there is obviously no justice, no connection between the person's claim to higher education and their actual chance of getting parental support.

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During the last recession one of the commonest reasons I found why my pupils were not getting what their parents were assessed to pay for them was bankruptcy which, of course, the parent cannot do anything about. The grant can be reassessed, but it takes a very long time and, as with so many things in this new, flexible universe, there is a very big gap.
Before the noble Baroness, Lady Blatch, leaves the Chamber, I should like to say that I am extremely grateful to her for the trouble she took, when Minister, in regard to grants being assessed more quickly. But not even the noble Baroness's industry and dedication was enough to get the job done properly. There will always be a problem.
It is also true that means tests are inefficient. There will always be people who fall through the net and people whose circumstances are not assessed properly. In particular, with the students' means test, when residual income is assessed it does not properly take account of housing costs. That is based on the mortgage interest tax relief system. It takes account only of the first £30,000 which, as those of us who live in London or the south east know, amounts to practically nothing in terms of a mortgage.
Again, there may be higher as well as lower income people who fall through the net. And an injustice is an injustice, no matter to what sort of person it is done. I hope therefore that we do not assume it is only low income people who are involved. The ultimate objective must be to get higher education to the best people. We will not do it unless this amendment is carried. I am glad to support it.
6 p.m.
Lord Glenamara: This difficulty, so far as it relates to tuition fees, arises because the Government are trying to achieve their objectives in the wrong way. Parental income need not enter the situation at all. Let me remind the Committee that the Dearing Report said:
"On balance of considerations, we recommend to the Government that it introduces arrangements for graduates in work to make a flat rate contribution of around 25 per cent. of the average cost of higher education tuition, through an income contingent mechanism".
When it says, "income contingent mechanism", to whose income does it refer? The way the Government are doing it, it is contingent on the income of the parents and the family home which the student probably left 10 years earlier. Let me give an example. There are two students, John and Jane. John comes from a low income family. Under the Government's proposals, he does not have to pay any tuition fees. Jane comes from a middle-income family. Her parents do not pay the fees and so she must borrow £3,000 towards her tuition fees. Ten years later John, who is a bright boy, has become a barrister, maybe a QC—who knows, he may have married a QC—and will be on a high income, perhaps £100,000 a year. Jane, on the other hand, is a schoolteacher and will earn £15,000 a year if she is lucky. What happens? John, with an income of £100,000 a year, has to pay nothing towards his tuition fees. Jane, with an income of £15,000, must pay off the whole £3,000. That is grossly unjust.
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Have the Government thought out this situation? It is ludicrous. Parental income need not enter the equation at all. If the Government wanted to do this, they should have introduced a graduate tax for all new graduates. I would still have opposed it, but it would be logical and fair. It would be collected through the Inland Revenue. But the Government are basing the system on the original parental income and that is a grossly unfair way of doing it. This difficulty therefore arises because of the way the Government are operating the system.
Lord Desai: The Dearing Report must have meant the income of the student. The words "income contingent" must have meant the future income of the student. My colleagues at the LSE have for a long time worked out and argued that a loan system based on income contingent repayments will finance higher education and time and again that has been shown to be so. When I read the Dearing Report I understood "income contingent" to mean the income contingent of the students who enjoyed the higher education.
I agree with my noble friend that the problem is not what is happening to maintenance grants. Indeed, the anomalies of maintenance grants could be eliminated if they were made into loans. An anomaly arises with the tuition fees. If the Government did not press means testing on the tuition fees and everybody paid them, regardless of what they are, all students would pay £1,000 and pay it back from their future income. If that amendment was proposed, I would embrace it. But Amendment No. 90 does neither one thing nor another.
Baroness Blatch: The noble Lord, Lord Desai, says almost exactly what was said by the noble Lord, Lord Glenamara. The noble Lord, Lord Glenamara, made it absolutely clear that if the Dearing package was put before the Committee, he still would not support it. But it makes more sense.
We shall attempt, in the course of the passage of the Bill, to turn this back into a Dearing recommendation. What is incredible is that the income of the parents will be taken into account for £1,000 and yet the students from the poorest families in the land start off life by borrowing almost £4,000 each year they are at university.
We have a scheme that leaves the poorest families and the poorest students with the highest and greatest burden of debt when they leave university. I cannot better the example given by the noble Lord, Lord Glenamara; it is absolutely right. The future income of students may reflect different situations to the backgrounds of the families from which they come. It makes no sense to have a means test for a family for £1,000 and to consider the student economically independent for the purposes of borrowing almost £4,000. This hybrid system has not been thought through.
Perhaps I may read a letter from the University of Aberdeen written by the president of the student council in which he says:
"The Government's plans appear to be very poorly thought through. Poorer students who will not have to pay the tuition fee will be losing out on £1,685 which they currently receive in the

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form of grants and will have to borrow that instead while richer students will lose out on £1,000, £685 less per year than their contemporaries. This is hardly fair".
That is one aspect. Members of the Committee have given other examples of where there is unfairness. For the student from the affluent family, the family is deemed to be paying part of the loan, whereas the student from the poorest family has to meet the whole of the loan. There are lots of anomalies. It is a scheme which is extremely badly thought through and which will be costly in administration.
Baroness Park of Monmouth: I strongly support the amendment too. When one looks at the plan, it says that family income will be considered without regard to the number of children. It is likely that there will be two or even three clever children in a family which is earning around £20,000 a year. That sounds like a lot of money, but it will be impossible for them to pay for three children. They may be poor hill farmers or small businessmen struggling to keep going. Not only does it mean that they cannot do it; it is probable that the children will not ask them to do it because they will feel it is a gross infliction upon the parents, knowing their other circumstances. It is vital that students should be considered adult for the purposes of this argument and assessed on what they have, not on what their parents have.
Lord Davies of Oldham: I first declare an interest as chair of the Further Education Funding Council, but I have an even deeper interest in seeking to extend opportunity to all our young people who can benefit from courses in higher education.
The nature of the anomaly which has been identified is being discussed without any real appreciation of the problems which higher education faces and which the Government are under a signal obligation to meet. When this Government came into office, higher education was in deep crisis in terms of the shortfall of resources it needed. For three years, there had been a freeze on the numbers going into higher education. That restriction on opportunity has bitten deeply upon people as they increase their qualifications in our society. It is a block which the Government are under a moral obligation to raise. In doing so, they must produce resources, as Dearing identified. And they must produce them quickly.
No one thinks that tuition fees are of themselves a good thing. Of course not. But when resources are needed in higher education, the Government had to attend to the issue against the background of an additional £165 million having been put into the sector this year. But if tuition fees are to be introduced, what is being argued here today? Of course, my noble friend Lord Glenamara argues quite clearly that tuition fees ought not to have been introduced and therefore the resources should have come from elsewhere. Perhaps he thinks they ought to have come from the same direction that the Liberal Bench suggests, increases in taxation. All I can say is that in terms of the demands upon taxation represented by the Liberal Party's arguments,
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and particularly one earlier on which suggested that we could assimilate the whole strategy for part-time students on the same basis as higher education, we would be talking of increases in income tax of many pence in the pound.
The other argument appears to be that tuition fees, if introduced, should have no means-test attached; in other words, that young people from well-off backgrounds, who can afford to pay tuition fees, should be on the same basis as young people from poorer backgrounds who cannot afford to pay. That cannot be right. I am sure that we will have arguments later on during our debates today, but if the argument is to be that the danger is that there are deterrents involved—
Baroness Blatch: I am grateful to the noble Lord for giving way. Does the noble Lord think it fair, if he is concerned about rich students versus poor students, or rich families versus poor families, for the poorest of the students to lose the maintenance grant completely and have to borrow the whole of it when richer students have half the grant paid for them and only borrow half of it?
Lord Davies of Oldham: I recognise that as far as poorer students are concerned they are to be faced with a proposition by the Government that their repayments will be over the course of a lifetime's career activity and not, as at the present time, where they are faced with circumstances in which they have to repay on a mortgage style repayment within five years. So I have no doubt that there is no deterrence to students from poorer families on the Government's improved scheme with regard to maintenance. But there may be—and it will be suggested on many sides that there is—a deterrent involved in the tuition fee obligation. That is exactly why the Government have introduced a means-tested arrangement which ensures that students from poorer backgrounds will not be expected to pay. I will give way to the honourable gentleman.
Lord Mackay of Ardbrecknish: Is the noble Lord trying to argue that students from poor backgrounds will be put off by having to borrow a thousand pounds but they will not be put off by borrowing £4,000? Furthermore, will the funding council be attempting, by other means, to encourage universities to increase the number of poorer students they take against the background of the disincentive being imposed upon them by his Government?
Lord Davies of Oldham: The trouble with that proposition is that it seems to be presumed on the position that the present system is both equitable and fair and not any restriction on people entering higher education. The present system puts very severe obligations upon people in terms of repayments. What is more, the present system has resulted in a situation in this country where, over the course of 35 years of the operation, first of all of the maintenance grant introduced in the early 1960s, and then subsequently with the last government's reform to the combination of maintenance grants and loans, the participation rates of people from poorer backgrounds in our society have

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scarcely increased at all as a proportion of the student bodies. So we still have circumstances remarkably similar to those of the 1960s, that the vast majority in percentage terms of people who enjoy higher education in this country come from better-off backgrounds.
Why, therefore, should it not be obligatory upon the Government to secure funds for higher education to impose a tuition fee which brings in the necessary resources but at the same time to have a means-test to ensure that it protects the least well-off in our population.
6.15 p.m.
Earl Russell: The noble Lord, Lord Davies of Oldham, is of course quite right that higher education has been in a deep financial crisis. But anyone who knew only his speech might have been forgiven for believing that that crisis disappeared on 1st May and they all lived happily ever after. It is not that simple. There is still a deep financial crisis. All the evidence reaching people inside higher education is that it is likely to get worse rather than better.
The noble Lord then drew attention to the decision of this Government to lift the cap on student numbers. Would he agree that he is introducing tuition fees, or his government are, to pay for lifting that cap before they have solved the financial crisis?
Baroness Perry of Southwark: I really feel that the noble Lord, Lord Davies, is turning the world upside-down when he thinks that somehow we are increasing access opportunities for poor students by taking away from them the full maintenance grant that they used to receive.
I have just come from having three weeks of interviewing prospective mature women students, many of whom come from very deprived backgrounds. They are, of course, unhappy about the £1,000 fee. Many of them will be able to obtain loans for that on a means-testing arrangement but they are extremely unhappy to have lost almost £2,000 a year maintenance grant which before, coming from deprived backgrounds, they would have had. That has made access for the deprived student infinitely less attractive and less easy.
I fear very much for the opportunities that there are for poorer students from places like my old university in South Bank where people from Lambeth and Southwark, from very deprived backgrounds, were able to come in on full grant, and for my present college in Cambridge where we take very many students from deprived backgrounds as mature women. I promise you that when they discuss with us the financial arrangements for their time as undergraduates they are dismayed entirely by the fact that they will end up with a loan of over £5,000. And that is on top of the loans they are already taking for their maintenance, which to many of these women is a total deterrent.
Baroness Blotch: May I say to the noble Lord, Lord Davies of Oldham, that he has just made a comparison between a poor student under the new system and a poor student under the present system.
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Under the present system they receive 50 per cent. grant, take out a 50 per cent. loan and have no tuition fees. They do not even start to repay the loan until they are earning 85 per cent. of the national average wage which is £16,750, give or take a penny or two.
A student under the new system will start by borrowing the whole of the maintenance fees and, depending upon the income of their parents, may or may not be responsible for some of the tuition fees, and will start to pay back at £10,000. A person under the new system, the repayment scheme, earning £12,000 a year, will pay the equivalent of 1.5 pence in income tax for the whole of their working life. In fact, if there was not a cut-off point at 65 they would pay it for 83 years.
Lord Whitty: We have had a wide-ranging debate on this amendment, much of which will no doubt come up again later if we are not careful.
I recognise that this is a fundamental principle of the Liberal Party policy to education. I recognise also that on occasions the Liberals sound as if they are arguing that a single measure can possibly rectify all the anomalies of previous systems of student support and the other social problems that have arisen.
But I have to say to the Liberal Benches and to others who have supported them that there are fundamental objections to this, both in terms of principle and in terms of cost. The provisions in this clause will enable us, contrary to what has been said, to target support for fees and for maintenance to those who most need it. There is a clear case for relating the level of support to family income. If we did not do so, any new arrangements would disproportionately deter the poorest and benefit the better off.
Our aim throughout has been to encourage access to higher education from those sections of society that are currently under-represented. I do not believe that these proposals will have the consequences that the noble Baroness, Lady Perry, was referring to.
Parental means-testing for fees will ensure that students from the least well-off backgrounds will not have to contribute at all. Means-testing loans will mean that these students will have access to the maximum funds available for living costs. Since the loans themselves will be highly subsidised, this also means that the largest subsidies will go to those from the poorest backgrounds. This is a progressive system of income support—substantially more progressive than the one it replaces.
On the issue of costs, making available support for fees and loans for living costs without regard to the income of the households from which the students come would be both regressive and extraordinarily expensive. All sides of the Committee have referred to the need for more resources for the higher education sector. But this amendment would cost about £700 million per annum in the short term. That is money we can ill afford to divert from the higher education system. It would not be right to reduce the support available to the poorest students in order to give additional support to those from a background of middle class incomes.

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While I agree that there is a certain ambiguity in the reference in Dearing, to which my noble friends Lord Glenamara and Lord Desai referred, it is also the case that the Dearing Committee recommended maintaining the parental and spouse's contribution. I know that there is a point of civic rights and I acknowledge that 18-year olds are, for most purposes, regarded as adults, although, as the noble Earl, Lord Russell, indicated, the precise age varies according to the area we are talking about. They are legally adults but in most cases they are not individually financially independent. Their parents generally can continue to support them not just by contributing to their grant but in a whole variety of other ways. That is recognised, and has been recognised for decades in our system of student support and is recognised in the systems of student support in almost every country in Europe.
Despite the high-flown ambition of some of the contributions to the debate, we are in essence not changing the existing system. We are not making worse the situation which previously existed. The new arrangements have been carefully designed so that parents and spouses will have to pay no more, whatever their income, whatever the number of children and whatever the nature of the student. I acknowledge the existence of the problems to which the noble Earl, Lord Russell, and others referred, in terms of parents and spouses refusing to pay towards the cost of their child. Those cases occur now. However, what we propose will not increase the incidence of such cases. To spend £700 million on trying to address such cases will not avoid those tensions. Under these proposals, no one will be asked to spend more. Indeed, the improvement on the present situation is that all students will have access to larger loans and they will be repaid in most cases over a longer period related to their future income and in fairer terms than under the present loan provisions. That will be irrespective of their pre-existing family circumstances.
Our proposals build on the existing and generally accepted principle in our society that students' families should, where they can, meet a proportion of their costs. Where they cannot, we make provision for those poorer students. However, our proposals do not impose any additional burden on either parents or spouses. I therefore recognise the point the Liberal Democrat Party is urging on us, but it is wrong in principle and would divert much needed funds from the higher education system. I therefore urge the Committee to reject the amendment.
Baroness Maddock: I rise to reply on behalf of my noble friend Lord Tope. I take to heart the Minister's words that we must try to proceed in a logical order. Therefore, my comments will be brief. I wish to reply briefly to the sideswipe from the noble Lord, Lord Davies of Oldham, about funding. Later on, when we come to tuition fees, we shall make quite clear how we would fund what we have in mind. The funding arrangements we propose are based on the work of
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Nicholas Barr and lain Crawford, who gave evidence to the Select Committee and are considered to be experts in this field.
The whole point of our amendment is that it needs to be looked at in conjunction with the other proposals we have made today, first, about equality between part-time and full-time students; and, secondly, the proposal we shall be putting forward later that all students' fees are paid. This amendment together with our amendments on those proposals would be supported by many people, including students. Finance could be found to make sure that it happened. However, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Baroness Blatch Baroness Blatch moved Amendment No. 91:
Page 11, line 35, at end insert—
("( ) Regulations under subsection (2)(b) which prescribe the maximum amount of fees payable for attending a course of higher education shall ensure that the prescribed amount does not exceed 25 per cent of the average cost of courses of higher education.").
The noble Baroness said: I make the assumption, as I rise to move this amendment, that the Government, with their majority, will introduce tuition fees. I have therefore had to anticipate what that might mean for students. There have already been debates concerning the pros and cons of tuition fees but there is a real concern on the part of students about where it will all end. When Australia introduced tuition fees they started off as a relatively small percentage of all the course fees that had to be met. Year by year, the figure has crept up, until now it is a much higher percentage of the average cost of course fees.
The Bill has been brought forward to us in a skeletal state and we have been denied the opportunity to discuss, other than through amendments, the policy of the introduction of tuition fees and the abolition of grants. I therefore believe it is right that Parliament—not the Labour Party, not the Conservative Party and not the Liberal Democrat Party—should determine whether the figure, which I understand to be 25 per cent., should increase or decrease. My amendment seeks to put on the face of the Bill an absolute constraint on the Government not to go beyond £1,000 or 25 per cent. of the average cost of courses. I beg to move.
Lord Wallace of Saltaire: Amendment No. 97 has been grouped with Amendment No.96 and has much the same effect. I merely wish to underline that we are putting down a marker. We are embarking on a major change in the nature of the funding of higher education—the introduction of tuition fees and a contribution to tuition fees. We all know from the Australian experience that once this starts Ministers of Finance are greedy for more and that one slips down that road. I therefore wish to ensure that the level at which the costs of university education are imposed on students should be specified more clearly on the face of the Bill. I understand that there were discussions about whether there should be a flat £1,000 fee or whether the figure should be fixed at 25 per cent.

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We are trying to make the best of a bad job. I agree with the noble Lord, Lord Glenamara, that it would have been more satisfactory to have gone down the road of a graduate tax. That would have been less offensive in a whole host of ways. It would have raised questions about who can pay and it would not have been seen to overload the student immediately. However, we have to make the best of the Government's proposals.
We would not be rushing the Bill through at this speed if the two Front Benches had not agreed before the election that the Dearing Report was a way of putting off the debate, knowing that the financial crunch which all the universities, including my own, would be facing in 1998-99 would require immediate action. The purpose of the two amendments is to ask the Government to specify more clearly what proportion of overall university costs they wish to take from students and to require that before they raise that contribution, as we anticipate some future government will, we have a thorough debate.
6.30 p.m.
Baroness Carnegy of Lour: I have met several groups of students and discussed this business with them at some length. One of their fears is that, above all, they do not know whether the proportion will stay the same. It is alarming to face this situation as a student and to wonder whether one can cope with it. An assurance on the matter, preferably on the face of the Bill, would go some way towards alleviating that particular fear.
Lord Desai: Perhaps I may make it clear that, more than at any other time, I am now speaking entirely for myself and do not represent the policy of my party on this matter. This amendment can be passed, but it will not make the slightest difference to the fact that the financial crisis in higher education will not be solved at this stage. Very soon, and within the lifetime of this Parliament, the Government will have to ask for more money because the great British public has decided that it does not want to fund the full cost of higher education. Therefore, we shall have to find ways of passing on the burden to those who benefit from it.
The present government have faced the problem to some extent and proposed the figure of £1,000. People do not like that. If all that income from students, without means testing, were to go to universities, it would not make even a small dent in the financial crisis in higher education. As I said at Second Reading, the true cost of higher education is not £4,000, but £8,000. That is the sum we charge foreign students and that is the real cost. Foreign students subsidise British students. Those students are not from the OECD countries, but from poor countries. We tolerate a situation in which Singaporeans, Malaysians, Chinese and Indian students subsidise British students.
Very soon, after this Bill has been passed, British universities will face further financial problems. No one should kid themselves that this matter will be solved straight away, because very soon ways will have to be found for students to pay a much higher proportion of
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their education costs than they do at the moment. I hasten to add that that is my view and not that of my party.
Lord Wallace of Saltaire: As an economist, is the noble Lord concerned about the inter-generational dimension of this issue? Some of us talk about inter-generational transfers. But what we are all saying now is that the great British public—namely, all those who went through higher education and were given it free because their parents were paying tax--now do not want to pay tax so that their children can have higher education. Therefore, we are imposing on future generations costs for further education which our parents did not pay. Let us recognise what we are doing.
Lord Desai: Let us get this straight: this is a middle-class subsidy. This scandal has gone on for about 30 years. A very small proportion of the population were subsidised by way of free higher education. The sum of £4,000, after tax, is about £7,000 before tax is deducted. A £21,000 loan was being given to middle-class students. We have concluded that working-class students do not get access to higher education, not because of what it costs, but because secondary school education is lousy. However, I shall not go into that.
The British public is saying, "The majority of us did not have higher education and the majority of us pay tax. How long are we going to continue giving £21,000 to every 18 year-old whose parents put them through A-levels?" It will have to stop. We are just holding back the tide. If we were really sensible and cared about access to higher education, we would say that we cannot continue paying a middle-class subsidy. The full £4,000 will have to be paid by students in higher education. They should take loans of £4.000 for fees with the £4,000 maintenance grant.
I get tired when people say that the British public do not like debt. But many of them have mortgages. People are willing to borrow in order to buy a house, so why should they not borrow for human capital? We have to pretend that everyone is poor and that we should go on subsidising the great British middle class in the comfort to which they are accustomed. It is real welfare dependence. The middle class have a real dependence on the welfare state. That will not stop because the world is not rational. Sooner or later we will have to transfer to a system in which all higher education is fully paid for by the students, financed by loans. If one wants to educate 30 per cent. of the population and not 10 per cent., no society is going to pay for it.
Baroness Blatch: I wish to speak to my amendment. I do not know whether I speak for the noble Lord, Lord Wallace of Saltaire. This is a fascinating debate on where we shall finish up in future. The two amendments in the Marshalled List have been tabled for two reasons. The first is because the Government, through primary legislation, have introduced tuition fees without reference to this House. That has caused great disquiet in the Chamber. Secondly, if at some future date the Labour Government wish to go further and take

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the £1,000 beyond the 25 per cent. of the cost of the average course, then it is our view—certainly my view—that that should be a parliamentary decision and not simply a sleight-of-hand decision by the Government. I hope that they will at least agree that Parliament should be involved in the debate and be allowed to vote, not simply through secondary legislation, but through primary legislation. Parliament should be allowed to vote, and through my amendment I wish to put that constraint on the face of the Bill.
Lord Glenamara: I support this amendment. I would have preferred the noble Baroness, Lady Blatch, to have included the figure of £1,000 in her amendment instead of 25 per cent. Either that should be done and this amendment passed, or the Government should undertake that any subsequent regulations made under this part of the Bill will be subject to the affirmative procedure. It must be one or the other. The Government must agree to one. We spent the whole of Tuesday meeting implacable rigidity from the noble Baroness. She did not accept anything at all. We ended up with a travesty of a thing called a general teaching council, which was no such thing. Please, can we have just a little flexibility? Will the Government agree to one proposal or the other? They should either give an undertaking that this matter will be subject to an affirmative vote, if it ever comes up, or that they will accept the amendment of the noble Baroness, Lady Blatch.
Earl Howe: I intervene briefly on this amendment to support what my noble friend Lady B latch has said and to direct the attention of the Committee in particular to the difficulties faced by medical and dental students. The needs and unavoidable commitments of that group of students differ in a number of important respects from those of other students. I am very concerned that the introduction of tuition fees on the basis proposed will disadvantage those who undertake a course of study in those subjects and indeed discourage others from taking up such courses.
Medical students have to face five or six years of lost earnings rather than three years. Their academic year—at least from year three onwards—can be up to 50 weeks rather than the standard 30 weeks. That in turn deprives them of the opportunity of supplementing their income through part-time work. The expenses of a medical student on things like reference books, clothing and equipment are at the best of times higher than those typically faced by other students and they cannot be avoided.
Similar considerations apply to dental students. A survey by the British Dental Association has already found that 90 per cent. of newly qualified dentists have debts averaging £9,200 per head. The BDA believes that dental graduates with that sort of level of debt will increasingly have to rely on income from private patients. So the level of debt is further increased by tuition fees. The availability of NHS dental treatment is likely to become increasingly limited.
The Secretary of State has said that the Department of Health will pay all tuition fees from year five onwards for all medical and dental students, and that is
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welcome so far as it goes. But why should a student of medicine or dentistry be treated differently from a student who studies another discipline and pays three years' fees? It is not only a matter of equity but a question that is likely to impact directly on the numbers of young people who put themselves forward for courses in medicine and dentistry. We are already woefully short of GPs and specialists in other medical disciplines. It is essential not to exacerbate an already severe recruitment crisis. I hope that the Government will look again at this issue. If fees rise it will hit a key group of students disproportionately, and that can only be a cause of great concern.
Earl Russell: The noble Earl raises a serious point. I observe the Minister shaking his head. I hope that it is about something else. We need a supply of doctors and dentists who have much longer courses than anyone else.
Lord Sewel: Will the noble Earl accept that on the basis of my experience in a university which has a medical school medicine is about the most over subscribed discipline? The A-level and other requirements for entry into medicine are the highest of any discipline. There is no problem about lack of applicants.
Earl Russell: First, the Minister is unwise to suppose that that is written in tablets of stone. Secondly, the Minister should listen to what the noble Earl has said about private practice. As to the effects of very heavy student debt on professional conduct, I suggest that if he has regard to what has happened to American lawyers he will perhaps be a little less confident than he appears to be at the moment.
Lord Desai: The £9,200 debt for a dentist cannot be a serious matter in relation to the income that can be earned. Doctors and dentists are not at the bottom of the earnings table. The reason why they take five or six years to qualify is that at the end of it they can make more money than the people who pursue three-year courses. It is simple economics: people invest money because they know that it will repay them. A sum of £9,200 is not likely to present a serious problem.
Baroness Blatch: Perhaps I may put a question to the Minister so that he can deal with it when he comes to reply. Would a dental or medical student have to borrow the maintenance for each of the six years? At the moment we are talking mainly about tuition fees. However, would students have to borrow the maintenance money, in which case the sum would not be £9,200 but £4,000 a year for six years and so a great deal more than £9,200?
Lord Whitty: The question just asked goes rather wide of the amendment. To deal with the principle, medical and dental students will borrow for each year although very substantial bursaries are available in medical and dental schools for the later years of the course. The statements of the Secretary of State and two

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of my noble friends earlier this afternoon have to a large extent addressed the particular problems faced by medical and dental students. We have ranged rather wider than this amendment. Some of the points raised are not wholly irrelevant to the general strategy, but they are fairly irrelevant to this amendment.
It is the intention of the Government that there shall be a maximum annual contribution. In Clause 18 we seek powers to limit the top-up fees. In Clause 16(5) we provide safeguards to ensure that the Government cannot increase grants for fees, and therefore also the contributions towards fees, by more than the level of inflation without seeking the approval of both Houses. That is how we shall control the absolute level, which at the moment is set at £1,000, beyond the increase in inflation. I hope that that will provide the reassurance that a number of noble Lords suggest students and potential students require. To a large extent I believe that it meets the point raised by my noble friend Lord Glenamara. It would require parliamentary approval before the Government increased the maximum level of student contribution above the £1,000 level set at the beginning. It is set at that level because effectively it is 25 per cent. of the £4,000 that is currently estimated to be the average cost of fees.
If we adopted these amendments that arrangement would be complicated. If one seeks to control the maximum level in relation to inflation one cannot also control it in relation to a proportion. I agree that if the RPI and the average cost of fees go up by exactly the same amount the answer is the same. However, if the average cost of fees goes up faster than the RPI and it is controlled by reference to the 25 per cent. it is a disadvantage rather than an advantage to the student. Therefore, we believe that the safeguard relating to inflation which we propose to build into these arrangements, and which would require parliamentary approval if it were to be breached, offers sufficient protection. This would complicate matters and in terms of the precise form of words would be totally unnecessary. I ask the noble Baroness to withdraw her amendment in the light of the fact that the intention behind it is already met by the Government's proposals.
Baroness Blatch: I have no intention of pressing the amendment at this stage but I have every intention to return to the House with this amendment in future.
Amendment, by leave, withdrawn.
[Amendment No. 92 not moved.]
6.45 p.m.
Earl Russell Earl Russell moved Amendment No. 93:
Page 11, leave out lines 38 and 39 and insert—
("(a) for any such loan to bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State but so that—

(i) the interest (which shall accrue from day to day) shall be added to the outstanding amount of a loan; and

(ii) the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms.

and for the purposes of this paragraph the Secretary of State shall have regard to the retail price index published
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by the Central Statistical Office, any substituted index or index figures published by that Office or such other index as appears to him to be appropriate;")
The noble Earl said: Amendment No. 93 has been devolved to me. The purpose of the amendment is to introduce what is known popularly as a zero real rate of interest. The noble Lord, Lord Peston, if he were still in his place, would doubtless raise questions as to precisely what a zero rate of interest meant. As I remember from the events of 1990, this is a subject on which he is extremely expert. The general intention is perfectly clear. This provision already exists in the Education (Student Loans) Act 1990 which this Bill repeals while continuing a lot of the main outline. The object is to continue that particular provision. It makes a good deal of difference. A zero real rate of interest is the cheapest credit on the market. Every year I have a great deal of trouble persuading students to take up loans. They all prefer to work in Waitrose or Marks & Spencer rather than take up loans. The fact that it is a zero real rate of interest is rather important in trying to persuade them.
I move this amendment with a certain amount of optimism. Last night I read—a good deal later than I would have liked—the document that the noble Baroness kindly circulated, for which I thank her. I refer to Progress Report on New Student Support Arrangements in Higher Education from 1998/99. In paragraph 5.3 of that document the Government state:
"Interest rates on loans will, as under the current loans scheme, be linked to the RPI so that borrowers repay in real terms broadly what they borrowed. The Government is considering how best to rule out in primary legislation the imposition of real interest rates, which have no part in its plans, whilst recognising the technical complexities arising from the income-contingent nature of the loans".
Put another way, we are asking the Government to put into the Bill what they already intend to do. I welcome that intention. But why not put it into the Bill? On the previous amendment I drew attention to the fact that the Bill as presently drafted allowed the Government to fix a rate of interest which in cash terms could be anything from nought to 100, even 1,000 per cent. That is a rather extreme form of flexibility. When they intend to do what we ask them to do, why not say so?
I accept that there are technical difficulties because of repayment through the income tax scheme, but I do not believe that they are insoluble, nor do the Government; otherwise, they would not have stated in this paragraph that they intend to do this in primary legislation. What it shows is that the decision to introduce this measure was taken in very great haste after the appearance of Dearing. It was within a matter of hours rather than days, if my memory serves me right.
It looks like a case of legislating rather in haste. I wonder whether, if the Government had delayed the Bill even as little as a couple of weeks, they might have found time to solve that difficulty, and whether they may yet do so before the Bill completes its passage through both Chambers. If the Minister remembers the torrid time that she had last August, she might appreciate that in this area people can be easily alarmed. Were they to put into the primary legislation the

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provision for which we are asking, some of that alarm would be stilled. I should have thought that that would have been in their interest, as it is in ours, the students, and, as I believe, in the country's. I beg to move.
Lord Whitty: I think that I can be of assistance. I have a number of technical comments which I will skip because the noble Earl already understands the technical problems involved. Let me reassure the Committee that we have no intention of introducing interest rates above the RPI level, and that we wish to bring forward, as early as possible, an amendment which will write in almost precisely what the noble Earl wishes. It will not be in the terms of this amendment, but it will have the overall effect of restricting the ability to charge interest to the RPI. We still have to discuss how to do that. I cannot give a guarantee that those discussions will be completed by Report stage. However, during the Bill's passage we shall bring forward such proposals. In the light of that reply, I hope that the noble Earl will feel able to withdraw the amendment.
Baroness Carnegy of Lour: Will the Government undertake to publish a statement quickly about that matter so that the students will know about it? With all the problems and considerations involved in trying to frame the Bill, the Government are forgetting the students and how they are reacting. They are alarmed about this. Talk about the future and how in the end they will be earning so much more that it does not matter what the interest rates will be, does not comfort them. It would be a great help if it were possible to publish something in simple terms quickly so that the students can understand the matter.
Earl Russell: I agree with what the noble Baroness has just said. I am extremely grateful to the Minister who has said everything that I hoped he might say. I am therefore delighted to be able to beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 94 not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 95:
Page 12, line 30, at end insert—
("( ) The Secretary of State shall ensure that, in any regulations made under this section in relation to any eligible student for any prescribed purpose for any academic year—

(a) the maximum amount of any loan made available to that student is no greater than half the prescribed cost of maintenance for such a student for that purpose for that year, and

(b) provision continues to be made for maintenance grants to be payable to such a student, subject to—

(i) a maximum amount of half the prescribed cost of maintenance, and

(ii) assessment of any contributions applicable in his case.").

The noble Baroness said: This is an amendment about which I feel extremely strongly. I support the recommendation made in Sir Ron Dearing's report. On that I shall quote from paragraph 108 of the summary of his report which states
"We would be particularly reluctant to see any reduction in public subsidies being concentrated on students from the poorest families and even more reluctant to see the funding released by this, and more, being used to increase the subsidies for others".
I suspect that if the students for whom the noble Lord, Lord Davies of Oldham, now has a responsibility which he will be exercising materially over the next few years—I know that it is further rather than higher education—are watching, listening, or read about the debate, they will be deeply depressed by his approach to their plight. At the moment a student from a poor family receives 50 per cent. grant, takes up a 50 per cent. loan, and has no tuition fees. That same student is under no obligation to start paying back that loan until he or she is earning 85 per cent. of the national average wage which at the moment is £16,750. At the age of 50, or 25 years, whichever comes first, the loan is written off.
When referring to parents and students earlier, the noble Lord, Lord Whitty, was right when he said that no parent under the new proposal would be asked to pay any more. But the student at the lower end of the group is seriously disadvantaged by the scheme. How can the Labour Party introduce a scheme which leaves the poorest students with a greater burden of debt as they leave university than students who themselves are more affluent and come from more affluent families? I just do not know. I do not know how Government Members here will justify that to their own colleagues in another place, where I know there is serious disquiet, let alone to the students.
The students will have to borrow the whole of their maintenance, which will be just under £4,000 per year, or will be when the scheme is fully up and running. They will start to pay back their loan when they are earning £10,000 gross per annum. That is almost £7,000 less than the present threshold. I shall give three examples. I could give more, because we have had some actuarial work done on the repayment scheme. Let us take teachers who rise to the middle rank of teaching. If they are earning £12,000 throughout the period—I am not adding anything for interest, because if one adds interest and some or all of the tuition fees the burden is even greater—they would pay the equivalent of 1.5 pence income tax for 83 years. Of course, it will not be 83 years, because there is a cut-off point at the age of 65. That is if they have borrowed £15,000. If a student borrows £12,000, the period comes down to about 65 or 70 years. If a student earns £14,000 he will pay the equivalent of 2.57 pence income tax, and on a £10,000 loan he will pay for almost 28 years; if he borrows £15,000 he will pay for 41 years. On a £17,000 income, which is still modest and still below the national average wage. they will pay the equivalent of 3.71 pence income tax for 23.8 years.
Students under the present system are a great deal better off. If one is going to lose a grant, paid for by the state, which is replaced by a loan, which the students

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pay throughout their working lives, that is a burden on poorer students which I find almost impossible to justify. I believe that Sir Ron was right. He started by believing that that was the right way to go. Sir Ron and his team looked at the possibility of removing maintenance grants. After a long period of consideration, they came to the conclusion that it would disadvantage students from lower income families. I speak today for those students. He therefore reinstated his recommendation.
Before the ink was hardly dry on that report, the Government came out with a response and set that recommendation aside. They did not merely remove the grant system from students, they added tuition fees. It is that package which we reject entirely. I hope there will be some sympathy for the idea that maintenance grants be retained for the lowest income students. I beg to move.
Baroness Carnegy of Lour: This is a serious matter. It looks as if the Government did not take time to study all the modelling that the Dearing Committee did, which revealed to it that this approach would not work. I do not know whether that is true. The Government made a rapid announcement. They probably had their own reasons for doing that. When it was made, none of us knew what the implications were. Those members of the Dearing Committee whom I know were astonished at the proposal and believed that the report could not have been studied. If that is so, and if the wrong solution has been reached, perhaps the Government should change tack. The situation is sufficiently serious.
The National Union of Students has not concentrated on the problem. I do not know whether that is because of its loyalty to the present Government and of its wish not to make things difficult. All the figures I have were produced by the St. Andrews Student Association. The students at St. Andrews, who are not affiliated to the National Union of Students, believe that the students are being let down by that body. Perhaps the NUS is behaving with a good conscience because it believes that it has a duty to support the Government. That makes an even greater case for the Government to look seriously at the issue.
I am sorry to keep quoting the students at St. Andrews, but the issue is important. They further stated that the previous government did away with housing benefit. The Labour Party were very much against that. I did not like it myself, although with a heavy heart I agreed to it on a number of grounds which existed at the time. Of course, it was in the light of the student funding regime which was then in place.
That regime is being changed to a great extent. The package of fees and maintenance means that even in the first year a badly off student will lose £685 more than a well off student. That being the case, perhaps we should table an amendment on Report to make it possible for students again to receive housing benefit. The short term problems present the difficulty. When a young person first goes to university he or she does not look ahead at how to become a QC. I have no children and therefore I have not experienced these problems. However, I have
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met young students a number of times and they feel that people will be extremely put off. They also believe that the proposal is immoral.
It is disappointing that new Labour should take such a step. I should be horrified if my own party did so, but I am even more horrified at new Labour doing it. I hope that the Government will look seriously at the problem to see whether they should swallow their pride, look again at the Dearing Report and do something slightly different.
7 p.m.
Baroness Warnock: Having heard the figures produced by the noble Baroness, Lady Blatch, it is impossible for me to remain silent about the two issues which I feared would arise. First, the number of students will decline; it is happening already. The thought of poorer students incurring the kind of debt that has been outlined is a serious deterrent, particularly when firms such as Marks & Spencer provide good training programmes. Pupils can join straight from school and be paid while they are training. With higher education leading students into the kind of debt about which we know, and with the existence of such alternatives, the number of students will further decline.
I worry more about the second issue. The trend of declining numbers entering the teaching profession will continue. The salaries earned even by teachers in secondary schools are extremely low by the average national standard. Recently, I read a job description of a head of department at a not very rich independent school. The maximum salary offered was £21,000, which one would be unlikely to receive until one's 30s or 40s. From what we have heard from the noble Baroness, Lady B latch, the proposal would deter people going into teaching. Large-scale debt would be inevitable for someone from a poor family having to take out the full loan for the entire university career.
We have heard about the distinction between, say, medical students and all others. Almost all science degree courses are now for four years, as are modern language degree courses at most universities. Realistically, the number of three-year degree courses is small. It is not only medical students and dentists who have long undergraduate lives but also architects, vets and others. We must concentrate our minds on whether the aims of encouraging more people into higher education and of recruiting more teachers are compatible with the proposals relating to loans.
Lord Glenamara: I wish to make a point about maintenance grants because people who are not associated with universities do not appreciate the kind of costs that students have to bear. The minority of students who have rooms in universities pay £43.50 a week. If they move out to private accommodation they often pay £50 a week, plus their daily fares to the university. An increasing number are moving out, particularly in my town where some 40,000 students are moving further away from the university. They have to pay their fares home during the vacations and they have to pay for books and stationery. They also have to feed themselves and I am sure that many do not have

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sufficient to eat. Today, a student in a modern university has high maintenance costs. Therefore, I hope that the Government will look at the amendment favourably.
Baroness Maddock: I believe that the amendment reinstates the previous government's policy of 50 per cent. grants, the rest being taken in loans. The Liberal Democrats have not changed their view of the proposal. We have examined it carefully and have concluded that students' tuition fees should be paid in full and that maintenance should be paid for by student loans.
Like the noble Baroness, Lady Carnegy, I have spoken to many students about the matter. As student numbers increase we must find ways of paying for that. Many of them reluctantly agree with our solution. We on these Benches cannot support the amendment.
Lord Desai: I wish to make an observation regarding the horrific statistics presented by the noble Baroness, Lady Blatch. It is important to remember that the loans are not like mortgages. There is a cut-off point after 65 years. The noble Baroness is telling me that the poorest people, rather than repaying for the required 83 years, will repay for only 40 years. The poorer the student the larger the subsidy of non-payment as regards the remainder of the loan. It is a progressive scheme. The noble Baroness proved that the rich will pay the full amount and the poor will pay half. That is exactly what we want, is it not?
Baroness Blatch: The rich will not pay the full amount. That is the point. The rich will borrow only half of the maintenance grant and the poor will have to borrow the full amount. If you are a medical student from a poor family, you will borrow £24,000, which is the maintenance for each of the six years at university. The noble Baroness is shaking her head but I am not talking about tuition fees; I am talking about maintenance. If you are on a four-year course, you will borrow £4,000 for four years and if you are on a three-year course, you will borrow £4,000 for three years. Therefore, somebody from a low income family may come out of university with a debt of £12,000, £16,000 or £24,000. But if you are a student who comes from a wealthy family, your parents will meet half of the cost and you leave university with only half of that debt but pay the £1,000 tuition fees. Therefore, the burden on the poorer students is greater.
I know what the noble Lord, Lord Desai, is saying, and the way in which the scheme would work if he were the architect of it would be fairer. But this scheme leaves students from low income families with a greater burden of debt. At present, they receive a grant and they will move to a situation in which they have no grant and will have to borrow all the money. They are the only students who will have to borrow all the money; the wealthy students will borrow only half.
Perhaps I may answer the noble Baroness, Lady Maddock. We have spoken to a large number of students. When they were consulted about how they felt as regards paying more of their maintenance grants, they acquiesced in the early stages. They were minded to go
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along with the Government because they knew that more money must go to the universities. They did so for two reasons. First, they believed that more money would accrue to students in universities. That is not the case. It pays for more students but it is not putting in more money per student.
Secondly, at that time it was not proposed that there would be the introduction of tuition fees and the abolition of grants. Students were surprised by that. They are now having second thoughts about this package which is very dramatic and is having a very real impact on students who come from low income families.
The last point is a matter to which the noble Lord, Lord Glenamara, referred. The Government are sounding extremely generous about helping people in particular from low income families. I know the noble Baroness is very irritated by what I am saying but these are important points and I am speaking on behalf of students who will have that burden to meet. They are told that the Government will meet their tuition fees. However, they are not aware—in particular, those coming from families which do not have a tradition of going to university—that they will have to meet their maintenance costs by borrowing heavily each year at university. That means that they must start to pay off the debt almost immediately on leaving university.
7.15 p.m.
Baroness Lockwood: A few amendments back, the noble Baroness and her noble friends were arguing that parents do not meet their parental contributions. That was being said in relation to earlier debates on student fees. Student fees and maintenance were being brought together on many of the amendments that we have so far considered.
Baroness Blatch: I do not know whether the noble Baroness has heard somebody else say that, but she certainly would not have heard me say it. I am a parent who met my contribution to my children's fees when they were means-tested. Indeed, at this moment, parents are meeting 50 per cent. of students' fees. There are some parents who do not, but I have not prayed in aid for my case that parents are not meeting their obligations to their children. I am talking about parents who are means-tested or—I use the jargon—affluence-tested to the point at which they are not in a position to meet any or all of the fees for their children.
Baroness Lockwood: If the noble Baroness, Lady Blatch, was not making that point, I apologise. But others on those Benches and on the Liberal Democrat Benches too have been arguing that the reason that we should treat 18 year-olds as adults is that one could not always expect their parents to meet the obligations. That has been said around the Committee.
We are now being told in relation to this particular amendment that students who come from less well-off families will bear a heavier burden than students coming from better-off families because the students coming from the better-off families will have to pay only half the cost of maintenance in terms of loans. All I am

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saying is that we cannot have it both ways. Either parents are meeting their parental obligations or they are not.
But the main point that I want to make on this amendment is that one of the reasons that the British system of higher education has been regarded as more expensive than many of the continental systems of higher education has been because we have been very generous indeed in relation to maintenance grants for students at university and in higher education. We have been more generous to students in higher education than we have been in further education. Parents of students in further education have had to help maintain their children in a way that parents of students in higher education have not been doing.
This particular change in the funding of higher education reflects the principle which is now being accepted widely: that those who benefit from higher education should pay for that higher education. Therefore, maintenance grants are being ended and student loans are being made available for all students, including students in lower income groups. The difference is in the repayment system of the loan which in future will be income-contingent. That means that those who can afford to pay will do so.
The only question that I raise—and it is quite different from that raised by the amendment—is whether £10,000 is the right amount at which repayment should start. But the principle behind this scheme is correct because it means that maintenance of those people who are enjoying higher education, with the opportunity to earn higher incomes in the future, should pay for that privilege.
Lord Pilkington of Oxenford: Perhaps I may add one point which was made on Second Reading by the noble Lord, Lord Glenamara, and myself, and the same point has been made by the noble Baroness, Lady Warnock; namely, the problem of people in teaching carrying that load. I fear that the noble Baroness has glossed over that.
I consulted three banks. They spoke off the record. I put to them the same situation to which the noble Lord, Lord Glenamara, referred on Second Reading; namely, a teacher earning about £20,000 who has a loan of possibly £12,000 plus because, as the noble Lord, Lord Glenamara, said, students often have to pay rent for 52 weeks of the year. The banks said that there was no chance of such a teacher obtaining a mortgage because he might take ill or he might lose his job. Therefore, the only people to benefit from this long-term scheme will be those who become barristers or go into highly paid jobs. It is a positive disincentive for people to go into teaching. Of that there can be no doubt. There will be never the chance of them obtaining a mortgage.
Lord Desai: I do not believe that the noble Lord listened carefully to his noble friend: the teacher will not pay the full loan. No one has to pay the loan; they will only have to pay the flow charges and a certain amount of interest per year. Therefore, by the time they stop paying at the age of 65 they will not have repaid the full loan. There is. perhaps, one criticism. If I were
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an orthodox finance champion, I might say that the scheme would encourage over-borrowing. Why should I not borrow £32,000 as I am not going to pay it back? I am only going to pay income tax relative to my income, and if I earn very little, I shall repay very little. It is a perfectly sensible proposal. The bank may not like the teacher but the teacher is not going to pay back the loan.
Lord Pilkington of Oxenford: Would that the noble Lord, Lord Desai, was running the bank. I gave a figure of £17,000 a year with a repayment of £630 a year, which is equivalent to 3.7 per cent. on income tax, to three banks. But they were not as generous as the noble Lord; indeed, they said that they would not give a mortgage. So I should work to become a director of one of the big banks and we would all benefit!
Lord Desai: I was only citing the figures put forward by his noble friend. Perhaps they should talk to each other.
Earl Russell: I believe that the noble Lord, Lord Desai, may inadvertently have strengthened the point made by the noble Lord, Lord Pilkington. The noble Lord, Lord Desai, was talking about the amount of repayment, but he raised the spectre of over-borrowing. The noble Lord, Lord Pilkington, talked very strictly about mortgages. Over-borrowing is something which might possibly concern a person who was being asked to lend money for a mortgage. It is quite a serious point. Can the Minister say whether the Treasury has had any consultation with the public service review bodies on the likely effect of the Bill?
Baroness Park of Monmouth: I should like to make a further point. Everyone is saying that, once they are graduates, students will be relatively well paid and that, therefore, they can well afford to repay the loan for their education. All that sounds perfectly sensible in principle. However, at present, students are feeling threatened and anxious. They will try to borrow as little money as possible and to earn as much as possible in ways that no academic wishes them to do; for example, they will go and stack shelves in supermarkets and work in bars. They will try to make enough money so as not to have to borrow too much for the future, especially if they know that they will not be going into the very highly paid professions. The result is that they very probably get a much worse degree than ought to have been the case. Indeed, we shall be turning out, with great pride, people with thirds and lower seconds who will never, therefore, make it in the high-flying professions and we shall have wasted all this effort. It seems to me to be quite mad that that issue is not being considered and that we are going towards a false economy which is against the interests of the country and, above all, against those of undergraduates.
Baroness Blackstone: The amendment strikes at the heart of the Government's policy on student support and raises fundamental issues relating to access to higher education by students from lower income backgrounds.

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I should point out to the noble Baroness, Lady Blatch, that I was not at all irritated by her raising a number of questions on the issue. However, I see from the noble Baroness's expression that she may not have been referring to me in that respect. Nevertheless, this is a most important matter. I hope that Members of the Committee will forgive me if I give a slightly longer answer than is usual in Committee as I believe it is essential to set the record straight on such a critical point.
There has been some confusion in the debate among those who have contributed regarding the issue of the position of students while they are at university and the issue regarding the position of graduates after they have completed their courses and when they are paying back what they owe. We need to keep those two aspects slightly separate.
I should tell Members of the Committee who have talked about the problems of students while they are at university that, under the scheme that the Government are introducing, students will have access to no less money than they have under the present scheme. Therefore, the suggestion that we, for example, should reintroduce housing benefit for students (which was abolished by the previous government) seems a little odd coming from the Tory Benches. As I said, students will not be any worse off under the new scheme than they are under the present one.
I should also tell my noble friend Lord Glenamara that of course I accept that rents charged by universities are often quite high. But, again, students will not have any less money up front to pay for their rents while they are at university than is the case at present. Therefore, we must be careful in distinguishing two quite different matters.
I should like to correct the noble Baroness, Lady Blatch, on one matter. I recognise that we are discussing very complex issues but, so far as concerns medical students, they will in fact be eligible for 50 per cent. of the cost of their maintenance in years five and six through a bursary scheme. Therefore, they will not be any worse off than they are currently. I believe that the noble Baroness misunderstood the position in that respect. It has been suggested that students are not, and will not be, aware of how much they will have to repay. I should like to reiterate the fact that we have worked very hard to provide students with as much information as we can about the new scheme.
The Government's proposals for an entirely loans-based system are grounded in what I believe to be a very sound principle; namely, that students' living costs should be met out of their future earnings after graduation. I am grateful to the Liberal Front Bench for their support on the matter. As we have consistently made clear, the arrangements for repaying loans will be fairer than under the current scheme. The level of the repayments that graduates are expected to make will depend on their income, as a number of my noble friends said in their interventions, and so will reflect the career success to which their higher education contributed. No student should be deterred from entering higher education by these arrangements.
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Indeed, I should like to take this opportunity to refute suggestions that our proposals have put students off applying to enter higher education in 1998-99. I believe that that suggestion was made by the noble Baroness, Lady Warnock. It is true that, when the normal deadline for applications expired in December, the figures indicated a year-on-year reduction of 6 per cent. However, that was more than offset by the numbers of students choosing to start this academic year rather than defer until 1998-99. In any case, more recent figures produced in the light of the unprecedented late rush of applications suggests that this figure might be even lower. That is a welcome sign that students and parents have understood the fairness of our proposals.
The noble Baroness, Lady Blatch, asked why the Government have not adopted the Dearing Committee's preferred option of retaining maintenance grants at roughly their present level. The Government share the committee's commitment to access and equity. There have been a number of comments suggesting that perhaps the new Labour Government do not do so, but of course they do. We also share its view that there should be a fairer balance between what graduates pay and what taxpayers pay; indeed that is what these arrangements are about in part. Our proposals build on the committee's recommendations. It is true that Dearing recommended keeping grants and that we are phasing them out, but Dearing also recommended that all students should make a contribution of £1,000 towards fees. Our starting point is that it is right to provide help with fees for those who need it. We will ask only those families who can afford to do so to contribute to fees. Perhaps I may tell the noble Baroness, Lady Carnegy of Lour, that of course we looked at the Dearing modelling before we made any final decision, but we do not believe that grants for maintenance have a place in a modern student support system. Graduates are the main winners in higher education: we believe that they should contribute towards the costs of maintaining themselves through a progressive, common-sense, purely income-contingent system of student loans. As the noble Baroness, Lady Maddock, said, students have largely accepted that fact. The National Union of Students accepted that before the election. It has nothing to do with wanting to support a new Labour Government. It had already believed that that was a fair and reasonable change to make.
It has been argued here that grants promote access, and that loans hinder it. I do not remember the noble Baroness or her colleagues arguing this when they introduced the loan scheme originally. Nor has it turned out to be the case. In the five years before loans were introduced, when students still received support from grant alone, participation among younger students from lower socio-economic groups rose by 2 percentage points, from 8.3 per cent. to 10.3 per cent. So any of us who had fears at that time have been proved to be wrong. I know that the noble Baroness will suggest that I was among them. But before she does so, I have to tell her that my fears were based on the former

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government's system of mortgage type repayment loans rather than the income-contingent loans that we are introducing.
Lord Mackay of Ardbrecknish: Will the noble Baroness give way?
Baroness Blackstone: I shall not give way. I wish to get on.
Lord Mackay of Ardbrecknish: It is the convention of this Chamber.
7.30 p.m.
Baroness Blackstone: I do not wish to give way; I wish to go on. I shall answer any question the noble Lord wishes to raise at the end, because I may be answering it now.
Between 1990 and 1995, during which time loans were introduced and the proportion of support available through the loan increased, the rise was much greater-7.1 percentage points, from 10.3 per cent. to 17.4 per cent.
Students from less advantaged backgrounds were not put off by the flawed mortgage style scheme introduced in 1990. All the more reason to believe that they will not be deterred by the fairer loans which we are introducing. Loans do not put off students from lower social groups entering higher education.
Nor is it right to suggest that students from lower social groups, having entered higher education, are unwilling to take out loans or will find other ways of supporting themselves rather than commit themselves to a loan—if I may say that to the noble Baroness, Lady Park. The most recent student income and expenditure survey indicates that, in 1995-96, nearly 70 per cent. of students from social groups D and E had loans. That is well above the overall figure.
Participation by lower social groups in higher education remains poor. Of course that is of great concern. But the evidence shows, crucially, that this cannot be put down to finance. The reasons students enter higher education are more diverse and complex than that, as are their backgrounds and circumstances. The rapid rise in participation all over the developed world is testament to that.
Yet I believe, and the facts suggest, that there is one fundamental factor which governs a young person's choice to enter higher education. That is having the school qualifications which universities demand. Students must have the opportunities to study for them and be helped to attain them. But survey after survey shows that students from lower social groups are either not getting those opportunities or are not succeeding in exploiting them. This is where students from lower social groups are disadvantaged and why I believe that they are not entering higher education in the numbers they should be. For example, analyses of the youth cohort studies suggest that students from higher social groups on average achieve higher A-level points scores that those from lower social groups. They also show that young people from lower socio-economic backgrounds are less likely to go on to A-levels after compulsory
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schooling and have higher sixth form drop-out rates. In other words, numbers of students from lower social groups going on to do A-level and similar programmes, completing them and coming out with good grades are comparatively low. Of course we must do everything we can to put that right. Indeed, the measures that we are introducing to create excellence in schools are about trying to do just that.
The key challenge is to get young people from poorer backgrounds onto the launch pad. Once they get to that point—once they achieve good A-level results—the proportions going on to higher education are very similar for different socio-economic groups. Student funding issues are secondary, but it is obviously vital to ensure that the financial package is adequate in particular for those with extra needs. That is why we have also taken specific action to encourage less well-represented groups to enter higher education.
First, as I have already explained, we are targeting basic support towards those students who need it. Less well-off students will receive free tuition and the full basic support available towards living costs.
Secondly, we are increasing the support available to students who find themselves in difficulty, either because of their circumstances or unforeseen problems. The access funds are there to provide extra help if students find they need it. They will be doubled for 1998-99, and extended to part-time students, as I have already said. A new £250 supplementary loan will be available. The sum of £5 million has been set aside for this for next year.
Thirdly, we are making special provision for students in particular circumstances. The disabled students' allowance will continue to be paid as grant and will no longer be means-tested. The other supplementary allowances which relate to students' personal circumstances—for example for students with dependants—will also continue as grants. We plan to convert some of the course-related allowances—for example, for extra weeks' attendance—to supplementary loans from 1999-2000. But I can assure Members of the Committee that broadly the same levels of support will be available to students while they are attending their course as in previous years. I believe that this is the key issue.
Of course, our proposals are aimed at generating additional resources for investment in further and higher education. I am sure that Members of the Committee do not need to be persuaded of the case of making this investment. By moving to an entirely loans-based system we shall be able to achieve greater savings, and so make more funding available for universities and colleges. At the same time, students will be assured of the support they need while they are studying, and will only be asked to contribute to the costs of their higher education once they have graduated and are earning enough to do so—and I must emphasise that again in response to noble Lords who spoke of graduates on low incomes.
In summary, this amendment would have the effect of perpetuating a student support system which is inconsistent with our aim of securing greater

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opportunities for participation in quality higher education. Most importantly, it would mean that fewer resources were available for much-needed investment in universities and colleges. I therefore urge the Committee to reject the amendment.
Earl Russell: Before the noble Baroness sits down, perhaps I may ask her to be a little less certain that present figures indicate that loans do not deter students. I advise all my first year pupils to take the loan. But I find the idea that higher education is supported by grants is so deep in the culture that at least half of them believe that they will be able to get through without taking the loan. Until that assumption goes, we shall not know how much loans deter students. Can we all keep a decent uncertainty for a little longer?
Baroness Blackstone: Of course there are uncertainties when a completely new system of this kind is introduced. But it is slightly dangerous to base assertions on anecdotal evidence. I, too, have much anecdotal evidence that I could give, one way or the other. Like the noble Earl, I have taught students for many years in various colleges of the University of London, just as he has. But we have to consider the proper statistical evidence before us. On 15th December, this year's applications were 6 per cent. down. However, we had an increase of 6 per cent. more than was anticipated in the numbers entering in October 1997.
On that basis, and on the basis of more recent statistics which suggest an even smaller decrease, I think that we can be reasonably confident. But of course I take his point.
Baroness Blatch: After what the noble Baroness said, I think all students ought to thank the Government for what they are doing and go away happy with no concerns at all!
Not only are students coming to me and my colleagues, and no doubt to Members on the other Benches, but so, too, are the noble Baroness's own colleagues both in this and in the other place, exceedingly disquieted by the proposition that there should be such unfairness in the scheme.
The noble Baroness addressed many other issues in the course of responding to the amendment. My amendment refers to the proposal's unfairness to young people from low income families. An enormous amount of money is to be saved. Grants are simply to be taken away, and all those grants accrue to the Treasury. It is a Gordon Brown proposal. There has been much talk about what will happen to the income from tuition fees, but no guarantee has been given that the money, ring-fenced, will come back into the higher education system. We are talking about billions, not millions, of pounds.
The noble Baroness said that broadly the same level of support will be sustained for students. I am afraid not. A student who at present qualifies for a 50 per cent. grant, which he or she has no responsibility to repay
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moves to a 100 per cent. loan, which they have full responsibility to repay. That is not "broadly sustaining the present system".
The noble Baroness talked about how much help is being afforded to students. Help is being afforded to students for £1,000 of their financial obligations. Four thousand pounds is being ignored completely. They have to borrow and repay £4,000; they may receive help with £1,000.
I wish to ask a straight question as to there being some guarantee. If money is saved from the abolition of grants, will that money accrue to higher education pound for pound? If it does not, I return to a point I made at another stage of the debate—namely, it turns out to be a tax, not a charge.
Finally, may I employ the example used by the noble Lord, Lord Glenamara, and return to "John and Jane". The reason the system is unfair is that John, from a high income family, ends up, after a three-year course, with a debt of £9,000. Jane, from a low income family, ends up after a three-year course with a debt of £12,000. However they pay the money back, whether or not it is income contingent, the person from the low income family leaves university with a greater burden of debt. I cannot believe that anyone can support that proposal.
Everyone is looking expectant in relation to the amendment. The debate has been wide ranging, and there is much support for it around the Chamber. There is a lot of support for the amendment in another place, too; Members believe that there should be some fairness in the system. I wish in particular to read the noble Baroness's remarks. I would like answers to the straight questions that I have set out. Therefore, just as I will reflect on this amendment between now and the next stage of the Bill, I hope that the noble Baroness will, too. I hope that we shall use all our energies in this place to make sure that students from low income families are not left with an unfair burden of debt at the end of their time at university. Meanwhile, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Haskel: I beg to move that the House do now resume. In moving the Motion, I suggest that the Committee stage begin again not before 8.45 p.m.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Deregulation (Licence Transfers) Order 1997
7.44 p.m.
Lord Hoyle Lord Hoyle rose to move, That the draft order laid before the House on 17th November 1997 be approved [8th Report from the Delegated Powers and Deregulation Committee].
The noble Lord said: My Lords, this order is designed to streamline arrangements for transferring liquor licences from one licensee to another. Its provisions

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relate specifically to circumstances where it becomes necessary to replace an existing licensee at short notice. The order is unusual in that its parliamentary consideration has crossed a general election. That in itself indicates the broad extent of the support it has attracted.
The order introduces two new sets of arrangements into licensing law. First, it provides for approval of people as prospective licensees. These are individuals who, in effect, go through the normal process of approval for holding a liquor licence. But instead of being granted a licence for particular premises they are approved as potential licensees should the existing licensee need to be replaced.
The second set of arrangements introduced by the order allows for a form of emergency procedure in order to replace licensees who leave at short notice. The order does that by providing for an interim licence which can come into effect at once. This interim licence is subject to early confirmation by the licensing justices and is dependent on police approval.
These new arrangements have been proposed because of inflexibility within existing licensing arrangements. Under the present law, if someone holding a licence leaves the licensed premises which he or she operates, the owner—whether an individual or a company—has to go through the rather cumbersome procedure of having the licence transferred formally to a new licensee. That process can take a number of weeks, or sometimes a matter of months. So, where a departing licensee does not give sufficient prior notice, a problem arises with the continued operation of the premises.
There is a current form of emergency arrangement—called a protection order—but the procedures for obtaining one of these orders are rather cumbersome. The applicant has to go to the magistrates' court, as opposed to the licensing justices, and, crucially, the applicant for a protection order must be the person who intends to take on the licence on a permanent basis. In other words, the law does not allow for a temporary substitute to step in while arrangements for a new licensee are made. The order before the House allows for temporary arrangements of this kind and allows, in certain circumstances, for clerks to licensing justices to approve interim licences, so cutting out another element of bureaucracy.
A public consultation exercise on the proposed legislation took place between July and September 1996. A proposal for a draft order was laid before Parliament on 3rd February 1997 and was duly considered by the respective committees of this House and in another place. Both committees reported in favour of the proposals, but the intervention of the general election prevented the measure's further progress.
Following the election, the Government decided to support the principle behind the measure, and a draft order was laid before Parliament on 17th November 1997. The draft order has been amended in accordance with recommendations by the committees of both Houses during the initial scrutiny period.
The Delegated Powers Scrutiny Committee considered the amended draft order and recommended approval by the House in its 8th Report dated 26th November 1997. The draft order was approved in another place on 11th December 1997. I commend the order to the House. I beg to move.
Moved, That the draft order laid before the House on 17th November 1997 be approved [8th Report from the Delegated Powers and Deregulation Committed].—(Lord Hoyle.)
On Question, Motion agreed to.

Museums and Galleries (Northern Ireland) Order 1997
7.49 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs)The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Dubs) rose to move, That the draft order laid before the House on 25th November be approved.
The noble Lord said: My Lords, the draft order is the culmination of a process begun in 1995 with the report, entitled A time for change…, by Alistair Wilson OBE, who was commissioned by the previous government to carry out a policy review of Northern Ireland's three major museums—the Ulster Museum, the Ulster Folk and Transport Museum and the Ulster American Folk Park.
The key recommendation of Mr. Wilson's report was that the three museums should be brought together under a single management framework. Public consultation on the report confirmed a broad consensus in favour of the concept of merger. In particular, the three museums themselves confirmed their support for the proposal, any reservations mainly relating to the details of implementation rather than the concept. The Government wholly accept the case for merger and are convinced that Northern Ireland will be best served by a single substantial museum institution working within a coherent framework rather than separate entities in competition with each other. The Government have decided, therefore, to proceed with the necessary legislation and have introduced amendments to reflect comments received during the consultation process.
The purpose of the order is essentially threefold: it will establish a single museum institution for Northern Ireland; it will repeal the Museums (Northern Ireland) Order 1981, which currently governs the two statutory bodies—the Ulster Museum and the Ulster Folk and Transport Museum; and it will make provision to enable the Ulster American Folk Park, an independent charitable museum, to transfer to the new institution by separate arrangements.
I will now turn to the detail of the order, focusing on what are the most significant provisions. One of the main issues which emerged from consultation on the legislation was the model for governance of the new institution. At present each of the two statutory museums is governed by a board of 15 trustees, consisting of six members appointed by district councils,

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two university appointments and seven departmental appointees. The new merged institution will have a single tier of governance which will be known as the Board of Trustees of the National Museums and Galleries of Northern Ireland, this title reflecting the status of the institution in terms of both the importance and breadth of its collections.
As to membership, the Government believe they are best placed to achieve a balance of membership which includes individuals with relevant interests and expertise and is in broad accord with the plurality of Northern Ireland. It has therefore been decided to adhere to the original proposal that there will be no rights of representation on the new board but that all members, including the chairman, will be appointed by the government following consultation with a range of persons and bodies, including the district councils and those which represent educational and heritage interests. While specific provision for consultation is included in the order, the appointments process will, of course, follow the guidelines laid down by the Commissioner for Public Appointments.
In response to comments received during consultation, the order specifies a minimum of 12 and a maximum of 15 members of the board and a term of appointment not exceeding five years. The provision enabling the chairman to be paid an annual honorarium has been retained but such provision for a vice-chairman has been removed. The honorarium has been set at £8,000, which is a modest figure taking account of the level of commitment required and the particularly challenging task of overseeing the reorganisation in the initial years. The detailed provisions are set out in Schedule 1.
This model of governance has worked well to date in other public bodies in Northern Ireland, having produced well balanced membership structures with a strong commitment to the development of the work of the bodies concerned. In reaching its decision on the governance issue, the Government have taken into account the concerns expressed by several district councils and some political parties that the influence of local government should not be diluted. This is a particular issue of broad significance in Northern Ireland. In response to these concerns, the Government have ensured that district councils will be consulted as part of the public appointments process.
The Government have also taken a further step in response to district councils' concerns by requiring, in Article 4(7), the board of the new institution to consult with district councils, education and library boards and other bodies on the exercise of its functions. This should allay any fears by the district councils that they will no longer be able to play an influencing role in the management and development of the new institution. The Government believe that this new body must form a relationship with district councils in order to be aware of the views of the community it serves and to encourage and support the district councils themselves with their local museum provision, which is much less developed than in the rest of the UK. The Government see this as complementary to, rather than duplicating,
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the role of the Northern Ireland Museums Council which provides services to local museums and advises on local museums and heritage development. The specific model for this consultation has not been worked out, but it is expected that the council would play a part.
I turn now to Article 5, which is probably the article that has caused most comment recently. Article 5 places more explicit controls than at present on the disposal of objects in the collections. These controls were introduced to meet the strongly expressed views of the three museums themselves. However, I am aware that reservations have been expressed about the powers accorded to the department to consent to the disposal of any object and to permit the overriding of any trusts or conditions prohibiting or restricting the disposal of any object, in that they bring into question the autonomy of the board. That is not the case.
I emphasise that these are enabling powers only and assure your Lordships that these provisions are intended to give the board greater flexibility and not to give the department an interventionist role. The powers would only ever be exercised at the behest of a proposal emanating from the board itself. I can assure noble Lords that it is envisaged that they would only be applied in exceptional and appropriate circumstances and for that reason we included a safeguarding provision requiring the department's approval.
None the less, I understand the concern of the museum professionals that this power of the board may make benefactors reluctant to donate artefacts to the new institution because they have no absolute assurance in the legislation that any condition attached to the donation will not be overturned in the future. I emphasise, however, that it would be the independent trustees who would have the authority to initiate the disposal of artefacts and the department in the public interest could override that decision in order to retain them.
While it is inherently difficult to anticipate the exceptional conditions in which the use of this power might be appropriate, it may none the less be helpful if I try to illustrate the circumstances in which the board of the museum might think it appropriate to consider the use of the power. In recent years there has been a welcome development of local authority museum provision across Northern Ireland, so that there are new opportunities to display artefacts in locations particularly relevant to their context. The new museum might wish to assign an artefact to one of the local museums to enhance its display and interpretation and its availability to the local community. This could be beneficial to the preservation and presentation of the heritage and would merit consideration by the department if the board were to propose it.
It may also be helpful if I illustrate the circumstances which could not be considered appropriate. The government would not expect the board to propose a disposal simply as a means of raising money. The overriding presumption would be in favour of the retention of artefacts and the museum would have to present a convincing case which satisfied the department that the action was in fact beneficial to the preservation and presentation of the heritage.
The concerns about these powers have been fully aired with representatives of the three museums, who have accepted the good intentions of the Government. It is their unanimous view and that of the Museums and Galleries Commission that this draft order must proceed and that the most appropriate way forward on the disposals issue is for the new board to draw up, in consultation with the commission, a disposals policy and code of practice that will conform with accepted guidelines. This code of practice would include provision about the use of moneys generated by the disposal of an object. I wish to stress that the Commission has confirmed that it is content with this approach. I can assure noble Lords that the Government's intentions are entirely positive and that exceptional disposals would have to be fully justified in accordance with a code of practice which was consistent with national standards. I can give a further categorical assurance that the Government will not permit the use of this power under Article 5(2)(e) until the code of practice has been drawn up and agreed. I hope that this will assure benefactors that their gifts are safe and that their wishes will be respected.
Lord Rees: My Lords, would the noble Lord allow me to intervene in order to ask a question? Having looked as carefully as I can at Article 5, it seems to me that the board can make a proposal without explaining the reason and, provided the department consents, that proposal will become effective. The Minister has tried to reassure us by saying, "Yes, but there will be a code of practice". But that will not have any statutory force. A disposal that appeared to conflict with the broad principle that he is adumbrating could not be challenged in the courts. Is my reading of the order correct?
Lord Dubs: My Lords, perhaps I could return to that point. I think I could give an answer off the cuff, but I would rather consider the matter and return to it towards the end of the debate, if the noble Lord agrees. Article 5 is quite complicated and I spent a lot of time discussing with officials the specific meaning of it. Perhaps I may answer briefly and then come back to it later.
If the museum authorities under the new arrangements wish to dispose of an artefact in accordance with the trust under which it was established, then that would be an order. That is a constraint which would be similar to that which applies to museums generally. However, if they wish to dispose of an artefact against the original trust, then they would not be allowed to do so unless the department itself gave them permission. That is a double lock. It is an additional safeguard to ensure that a museum, if it wished to breach the trust under which it operates, could only do so with the department's consent. That is essentially the way the matter would operate, unless we are talking about damaged items and others which would have no intrinsic value, where such disposal would be permitted; but, in addition, there would be a
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code of practice guiding the overall approach to that. I do not know whether the noble Lord wishes to pursue the matter.
Lord Rees: My Lords, I apologise for taking up more of the Minister's time, but, as I read it, the department does not have to relate its consent to any particular set of criteria in this order, or indeed in any other statute. I am sure it would not be, but it might be entirely capricious. I do not know whether the action of the board could be impugned on that ground, but it does not seem that the department has to give any explanation of the reasons for giving the consent to the disposal. It may be that I have not understood the position correctly and perhaps the Minister can reassure me and the House.
Lord Dubs: My Lords, perhaps the noble Lord is unduly apprehensive. There would have to be a combination of the most unusual circumstances for the board of the museum to behave capriciously and for the department also to give its consent capriciously. What we have in the role of the department is an additional safeguard to ensure that all is handled properly but, essentially, the disposal of artefacts would be governed by the trusts covering the work of the museum and it would be only in cases, as I said earlier, where the museum wished to breach such a trust, that they would also have to get the department's approval, and the department's approval would normally not be forthcoming.
We therefore have two safeguards, whereas it is my understanding that in the case of most museums there is only one safeguard, so we are simply using the department as an additional safeguard. That is the basis of the assurance I am seeking to give. I will proceed, if I may. When I have reflected on what the noble Lord said, I may wish to add further comment when I wind up.
I now wish to turn to Article 6, which provides for the transfer of any body, by agreement, to the new institution and explain that the primary purpose of this article is to enable the board to enter into an agreement for the transfer and management of the Ulster American Folk Park on agreed terms and conditions approved by the department. I stress that the folk park will not be forced to transfer into the new institution. It will take place only on terms which are mutually agreed. I am confident that this is possible and will be in the best interests of the folk park and the new institution itself.
Another main issue which emerged from consultation was the degree of influence and control by the department over the new institution's procedures and activities. Many of the comments received stressed the importance of ensuring an arm's length relationship. The Government have carefully considered these comments and have also taken into account the need for it to be assured that the new institution is properly accountable for its actions. They have therefore relaxed some of the original provisions. For example, in Schedule 1, in relation to the membership of the board, the requirement that the vice-chairman should be appointed by the head of the department has been removed and substituted by provisions enabling the

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trustees to elect one of their number as vice-chairman. All provisions for the appointment to the board of a departmental nominee have been deleted.
Only two changes have been made to strengthen the provisions. Firstly, a trustee may be removed when he or she fails to comply with the terms of appointment; secondly, the department will approve the standing orders of the board and its committees and sub-committees.
Overall, the Government's intention is that the department's controls will focus on proper systems and accountability and not on interference in decision making and it is believed that the changes made will achieve the right balance between autonomy and accountability.
Inevitably, there will be a degree of reorganisation to facilitate the merger and smooth transfer will be essential to maintain stability as the museums move to a single management framework. The detailed transfer provisions are contained in Schedule 2 to the order. In particular, these provisions ensure that staff transferring to the new institution will do so on the basis of existing terms and conditions. This is in accordance with requirements relating to the transfer of undertakings. Any changes to those terms and conditions will be negotiable through the ordinary course of industrial relations.
I am aware that the Northern Ireland Public Service Alliance, the union which represents employees of the museums, has sought certain assurances relating to the position of staff transferring to the new institution, including their pension arrangements.
I can confirm that the new institution will continue the existing arrangements whereby the staff of the Ulster Museum and Ulster Folk and Transport Museum participate in the Northern Ireland Principal Civil Service Pension Scheme. Employees of the Ulster American Folk Park participate in the Local Government Officers' Scheme and a proposal that on transfer they would switch to the Civil Service Scheme is currently under consideration. My understanding is that the switch would not be to the detriment of these staff. Beyond that, the Government cannot be definitive, as the handling of the various issues will be for the board and management of the new institution to resolve. However, the Government will require the new institution to promote good industrial relations and to treat its staff fairly and with consideration.
Finally, I wish to turn to Articles 12 to 14 which are largely a continuation of the existing legislation empowering district councils to provide museums and galleries. However, the new order removes the need for the department to have an approval role in relation to district council expenditure. Instead, a modified control has been introduced, requiring district councils to consult the department, and any body that the department may determine, on museum provision. Government have in mind, for instance, that the district councils should consult the Northern Ireland Museums Council, a non-statutory body, part of whose remit, as I
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said, is to advise on local museum provision. I consider that this alternative arrangement will assist in promoting a more strategic approach to local museum provision.
In conclusion, I have dealt with the main provisions of the order. The remaining provisions are largely of an administrative nature in relation to such matters as by-laws and provision for annual reports, and accounts by the new merged institution. My Lords, I commend the order to the House.
8.6 p.m.
The Earl of Clancarty: My Lords, I am adding my voice to those who will express concern this evening about certain aspects of this draft order. I thank the Minister for his reassurances. No one to whom I have spoken is of the opinion that there is anything Machiavellian behind the wording of Articles 5(2)(d) and (e) and 5(4) of the order, which deal with the disposal of art objects. However, Picasso once said that the most interesting thing about paintings was their mistakes—and sometimes mistakes lead you down new roads, whether they are right or wrong ones.
The Museums and Galleries Commission, the National Art Collections Fund, the Ulster museums, Members of Parliament and others have all expressed concern over the powers seemingly given to DENI to dispose of artworks. I have these concerns, too, even after the reassurances carefully spelt out by the Minister. One of the major concerns is that, even if without intending to do so, this order sets a precedent within the UK, going against the accepted understanding of art works as "inalienable cultural assets" as defined in the Government review, Treasures in Trust. There are those who would be happier if the "or" at the end of Article 5(2)(d) of the order was changed to "and", so that the department has always to act in consultation with the hoard, and not capriciously or unilaterally. My view is that it would be safer if Article 5(2)(e) were to be entirely removed. Also, it is serious that Article 5(4) allows the breaking of trusts.
It has to be noted that the idea of departmental intervention as far as the UK is concerned is new, anyway. The Museums and Galleries Act 1992, on which the order is modelled in relation to the disposal of art objects, makes no provision at all for this kind of intervention. If that is so, how can the Minister describe the problematic articles as providing "enabling powers", if the 1992 legislation has operated without disablement, as one might say?
Another important point in relation to the order is a concern as to how moneys raised by disposal might be used. There is no clause, as appears in the 1992 legislation—Schedule 1 and Clause 4 (7)—which ensures that such moneys would be used for reacquisition.
I also want to mention the fact that the Museums and Galleries Commission, the Ulster museums and the Museums Association among others have expressed concern at the lack of consultation on the order. The Ulster Museum tells me that it received the second draft of the order, containing the problematic articles on disposal, only two days before the Sixth Standing

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Committee on 10th December last. A government which profess a desire for open government should take note of that.
I understand that there would be considerable logistical difficulties if the order were to be withdrawn, and that the process of creating the new board is already well under way. Nevertheless the presence of the clauses may affect benefaction, purely through what is perceived in existing legislation. Also, another government, at a future date, may have quite different ideas as to how to interpret the articles, even with assurances and a code of practice in place. Ideally, the order should be reworded and I ask the Minister whether he intends to revisit the legislation at a future date.
8.11 p.m.
The Earl of Carlisle: My Lords, it is a pleasure to take part in this debate. First, I congratulate publicly the noble Lord. Lord Dubs, on his appointment. I have no direct interest to declare in Northern Ireland, but 20 years ago I had the privilege to spend 18 months there, wearing uniform. Unfortunately, time and pressure of work did not often enable me to visit museums. However, I am fully aware, having visited many private collections there, of the wealth of property, artifacts, art and culture. As we know, culture belongs to everyone—the rich, the poor. the mighty and the lowly. I congratulate the noble Earl, Lord Clancarty, on again revisiting this subject, which is dear to the hearts of so many of our fellow citizens.
Alarm bells are now sounding in the museum world. On 18th December we had a debate on free entrance to museums. I know that that is not the subject of today's debate, but I can assure the Minister that many of us, both inside the Chamber and outside and especially those of us who receive information from curators of museums, feel a great uncertainty. I hope that the Minister will today assure us that the Government's aim is to enable the widest access to museums.
I rise to express anxiety, as others will, in relation to Article 5 on the disposal of objects from museums and galleries. The order sets a dangerous precedent in that regard. Why does the Department of State require such wide powers to intervene in disposal decisions?
So far only the figure of £8,000 has been put forward. But what will be the cost of the new board? It will not be that of just one chairman's salary; there must be many administrative costs involved. Will it be more expensive? Will it mean that there is less money for museums and cultures in Northern Ireland? Perhaps the Minister will enlighten us on that subject.
I do not like to use the word "quango"; I prefer the phrase, "quasi-autonomous non-governmental organisation". For a government that is prepared to decentralise, it does not look good when they accept something from a previous administration; that is, another board, another quango. I am also concerned about its composition. We know that two representatives from the universities were members of the old board. Why are they not to be appointed again, or will they be appointed?
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Finally, I am concerned about benefactors; the families of those who have given objects from their possessions and those who will give them in the future. Once the subsection is accepted, future benefactors will not be encouraged to give of their possessions.
I look forward to hearing from other speakers hut, like the people of Northern Ireland, I have great misgivings about this article and will listen with care to what my noble friend Lord Alderdice has to say about the opinion of Northern Ireland on the order.
8.16 p.m.
Lord Strabolgi: My Lords, I am glad to follow the noble Earl, Lord Carlisle, and, like him, I should like to say a few words about Article 5.
First, I greatly regret that the order has been tabled at such short notice. There may he good reasons for that; I do not know. But I have been asking for some while when it would appear, and it did not in fact appear on the Order Paper until yesterday.
Secondly, I welcome the statement by my noble friend about the reservations that noble Lords—the noble Earls, Lord Clancarty and Lord Carlisle, in particular—express in relation to Article 5. It is right that it should be raised in this House; after all, we are a revising Chamber. When the order came before another place, the Minister in reply did not refer to the same reservations expressed by honourable Members.
The defective wording caused considerable concern to the National Art Collections Fund which, as your Lordships know, has 83,000 subscribers and has done so much to preserve our heritage. The right to dispose of art treasures and artifacts from our museums by governments and to overrule the rights of trustees beyond the provisions of the 1992 Act, is a dangerous one. I accept of course the assurances given by my noble friend. I am glad that he made those and they will go into the record. But what will a future Minister or a future government do? At present the wording is defective.
I should have thought that if this kind of power had existed in the past, there would be hardly any Victorian paintings left in our museums. They were not fashionable between the two world wars and now they fetch large prices because tastes change. Certain museums in the United States have sold paintings, including some good impressionist paintings, in order to buy currently fashionable contemporary works which may not stay the course for long. I understand that that is called, "de-accessioning" and in my view it should not be countenanced over here.
I welcome my noble friend's assurances, but it would be much better if the article could be amended by the substitution of the word "and" for "or" in Article 5 (2)(d). I realise that the order cannot be amended, nor can it be rejected; but I hope that my noble friend will introduce an amending order to tidy up what is really very bad drafting and, if it is taken for what it is, a dangerous right to give. I hope that we shall see something done about it in the near future.
Lord Freyberg: My Lords, like other noble Lords who have spoken this evening I agree that the real

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danger from which all other national museums and galleries in the UK must be protected is that of precedent. If in Ulster this amalgamation of institutions results in the de-accessioning by DENI of what are deemed duplicates, by whatever means, and without following the procedures normal in England, this will imply that all other galleries in England, and perhaps in Scotland—though other rules apply there—have a precedent that enables them to de-accession exhibits that are surplus or irrelevant to the collections.
There was some de-accessioning a generation ago of a kind unlikely ever to happen again, lending strength to the argument that de-accessioning should always be avoided. The most notorious example is the Lady Lever Gallery at Port Sunlight in 1958, when many very considerable works of art were sold at auction at Christie's to the regret, 25 years later, of the new staff and trustees of the gallery. The V&A in 1960 could not even be bothered to sell its surplus drawings by Burne-Jones, and its youngest curator was instructed to burn them in a bonfire. Tastes change with the generations, as the noble Lord, Lord Strabolgi, has already mentioned, and we must guard against precedent for wanton dispersal.
Is there any way in which the Minister can ensure that what has happened in Ulster cannot be treated as a precedent in England?
Just as worrying, as the noble Earl, Lord Clancarty, has already mentioned, is the lack of a clause defining the use to which moneys raised by the disposal may be put. For all other museums in Britain, Clause 4(7) of the Museums and Galleries Act 1992 decrees that moneys resulting from disposals
"shall he applied by the Board in the acquisition of relevant objects to be added to their collection".
Although the Minister has given us an assurance that moneys raised by disposal will be used in this way, without such a clause it is impossible to ensure that moneys so raised will not be syphoned off into the general funding requirement of the museum. That would be both contrary to the Museums Association's Ethical Guidelines and the Museums and Galleries Commission's Guidelines for Registered Museums, and might eventually force the museum to consider disposing of items for financial gain rather than curatorial reasons. Worse still, funds may not be protected for the use of the museum but may find their way into the general purse of DENT. Again, I hope the Minister is correct in what he says.
There have been suggestions that to counter these omissions—if they are omissions—a code of practice will later be introduced. A code of practice, easily abused and more easily forgotten, offers no long-term protection to the national museums.
8.24 p.m.
Lord McConnell: My Lords, I would like to say a few short words in the gap. From time to time Northern Ireland business is put on last thing on a Thursday when most Northern Ireland noble Lords have gone home. But on this occasion it is even worse. This order was only
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put on the Order Paper yesterday and we were given the absolute minimum of notice. I do not think that is a proper way in which to treat this House.
I wish to add to what some other noble Lords have said about Article 5. Reservations have been expressed about that in a letter from the Museums and Galleries Commission, which is the government advisory body for museums and galleries, and it should be given due weight.
I do not intend to go into other parts of the order simply because I have not been given time in which to consider them. But Article 5, as other noble Lords have said, provides that the board shall not dispose of any object the property in which is vested in it and which is comprised in its collections except in accordance with the provisions of the article. Paragraph (2)(e) says that this can be done when the department consents to the disposal. But an object may only be disposed of, as mentioned in paragraph (2)(a), (b) or (c) but not (d) or (e), where the disposal is not inconsistent with any trust or condition, express or implied, prohibiting or restricting the disposal of the object.
Paragraph (4) says:
"An object may be disposed of as mentioned in paragraph (2)(d) or (e) notwithstanding a trust or condition (express or implied) prohibiting or restricting the disposal of the object".
That is a very wide power to give. Normally the variation of trust can only be done by the High Court but in this case it is proposed that it should be done at the say-so of the department.
The noble Lord said that many of the provisions in the order are unlikely to be used. In that case why put them in the order at all? He may give undertakings but he cannot bind his successors. He cannot say at no time in the future will these things ever be done.
It has been suggested, and I agree, that amendments should be made to the order. That, of course, is the difficulty. We, even though we are called a revising Chamber, are not allowed to alter the order. There should have been a proper Bill with both Houses able to propose amendments. The subject could even have been included in a Bill covering the whole of the United Kingdom.
8.26 p.m.
Lord Puttnam: My Lords, may I contribute also briefly in the gap to add some news from the front, as it were. By an extraordinary coincidence I was lecturing last night at the Ulster Museum. The noble Earl, Lord Clancarty, is not overstating the situation when he says there is colossal concern about the potential impact of Article 5.
I accept entirely what the Minister says. His assurances are generous and go as far as they possibly can. I ask him to remember, however, that future or potential benefactors of the museum will be entirely reliant on the text of those assurances. Unfortunately, the rather clumsy wording of the order fails to give them the reassurance that any benefactor has every entitlement to seek in making a gift.
8.27 p.m.
Lord Alderdice: My Lords, I find myself unusually rising in the gap because of the very late notice in regard to the order which led to a degree of confusion in the usual channels. Messages do not appear to have been transmitted.
I speak as one who was a member of the board of the Ulster Museum from 1993 to 1997. I have no doubt that the Minister is transmitting entirely faithfully the briefs he has been given. I have to tell him of the considerable concern felt by myself, other board members and senior members of staff in the whole matter of the merger of the three museums. But the view was that the department was so determined to proceed down this route that any obstruction would simply be brushed to the side. Now, as mentioned by noble Lords, the matter has proceeded to the point where it is rather like planning blight into an old house. To not proceed now would be more disastrous than anything else. It is not because there is happiness about the proposition.
The relative suddenness with which the order has appeared before your Lordships' House appears to be consistent with what has happened before in respect of the order. When the redrafted order came to the Ulster Museum it was again with only a day or two's notice and there was no possibility of proper consideration. We need to ask why. There is one common feature covering a whole series of issues. The very doubtful article on the disposal of materials has already been mentioned. I shall not revisit it because of the problems of time. Another issue is the appointment of chairman and of board members, not as representatives coming from the community but top down from the department.
The Minister says there is a guarantee of consultation. That means consultation with the district councillors and the education and library boards. There are 26 district councils and five education and library boards. Proper consultation of one meeting a week would take almost a whole year. Is that the kind of consultation one would have with proper representatives who had right of being on the board? I say that that is not so. All the way through the order one finds that the Department of Education is insisting on controlling what is going on.
In another place the Minister with responsibility indicated that in the contentious and sectarian atmosphere of Northern Ireland there had been difficulties in the Ulster Folk and Transport Museum and that therefore the Department of Education needed to have its fatherly hand in to make sure that there was not misbehaviour. I would be rather more convinced of that if it were not the case that this was the department that presided over the apartheid in education and proved so obstructive to the development of integrated education.
I have profound concerns about the order. I am clear that certain of the provisions give good reason for concern. I am clear that many of those involved as staff and board members in the various organisations have deep concerns about the matter. I hope that we shall have an assurance from the Minister that there will be words in the record or even regulations and that the Government will seriously consider revisiting the whole
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matter with some amendments in legislation which will give due protection and not establish a precedent not only for Northern Ireland but elsewhere.
8.31 p.m.
Lord Cope of Berkeley: My Lords, as has emerged in the debate, this order has been sprung on the House. We have known it was coming since November, but, as the noble Lord, Lord Strabolgi, indicated, it was put down on the Order Paper only yesterday. That might not have mattered much if the order was uncontentious or if the timing of the debate had been a little more convenient. But neither of those things is true. The contentious nature of the order has come out clearly in the course of this short debate, and this time of the week is not a convenient one for Northern Ireland Lords in particular and for those who have to travel long distances.
There was no great urgency for this debate which might have excused the timing. It was debated in another place on 10th December and it was a sharp debate then which left many unanswered questions. As the debate in your Lordships' House was so delayed, I thought it possible that the order might be withdrawn and amended on the lines that had already become clear both from the debate itself and from representations sent in by museum interests on both sides of the water. Indeed, that is what should have happened. It could perfectly well have happened.
Instead of that the Government have taken some weeks considering the points made in the representations and in the debate in the other place and have then decided to press ahead with the order unchanged, despite the criticism, and give out instead a series of ministerial assurances saying that they do not really mean what is in the order and that they are not going to use the powers which they are asking Parliament to give them. The Minister read out assurances this evening in precisely the same terms. I was following them in the correspondence and they have also been sent out in the past few days to the Museums Association and to my honourable friend in another place who spoke in the debate. Those ministerial assurances are not anything like as good as rewording the order, which is what should have happened here.
We do not disagree with the main purpose of the order and we support the proposed merging of the museums. It is the more detailed provisions that are contentious, as has emerged in the debate. Article 5 concerns the sale of objects from national collections. The 1992 Act, as far as concerns England and Wales, took the view that disposals from national collections should never be of objects accepted on condition that they are not sold, that they should in other cases be subject to strict conditions, that they should be the decision of the relevant trustees themselves, and that the proceeds of any sales should be used solely to acquire new objects for the collection in question.
That seems to me, and, much more importantly, to many in the museums and galleries world and to noble Lords who have spoken, to be a satisfactory policy. But it is not the policy embodied in the order. Logically, it

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seems to me either that the new Government have a different national policy about disposals—one which anticipates greater disposals by museums—or else that there are some special features of Northern Ireland museums which lead to the possibility—or, I suppose, the desirability—of extra disposals. It does not seem to me that there are special features of Northern Ireland museums which should lead to a greater or different disposal policy from the national disposal policy. Nor do I think it desirable to change the national disposal policy in the way the order does for Northern Ireland.
Concern has already been expressed about the position of donors. Article 5(4) is the most difficult and dangerous part of the whole order. It provides that any stipulation of a donor or the terms of a trust—perhaps a deed of gift or a will—which is intended to limit the ability of the museum to sell something can be completely over-ruled and made legally void by the stroke of a departmental pen. However, when an owner gives a valuable object of whatever kind to a museum, he does so because he wants people to be able to see it in the museum and not to have it sold. If he wanted to make the museum rich he need not bother to give it the artifact. He would give the museum money instead which the museum could spend.
The fact that the provision is in the order in respect of Northern Ireland museums means that a similar provision could be put in place for England, for Wales or for Scotland. thus destroying the donor's ability to attach any conditions to a gift in those jurisdictions as well as in Northern Ireland. That is why there is great concern in England and Wales and in Northern Ireland about this provision. It is believed—I think correctly—that it will deter donors even in England, because it has been inserted retrospectively, as it were, so far as the donor is concerned, in Northern Ireland legislation.
There is no provision for limiting what the money raised by the sale of artefacts can be spent on. There is a natural suspicion that at some point the department might press the Ulster museums to sell objects in order to finance their day to day expenditure. Whatever reassurances we are given by Ministers at this time, that, as I understand it, could happen in law as the order stands. It is therefore important that the Minister is very specific in the undertakings he gives in this respect in regard to Northern Ireland. I hope that he will also give us assurances that it is not the intention to apply provisions of this character in the other parts of the United Kingdom.
There are other concerns arising from the order, some of which have been put by the Museums and Galleries Commission, the Government's own advisory body, which are covered by the general phrase that the Government, in the person of the Department of Education in Northern Ireland, are taking greater powers unto themselves and limiting the independence of the trustees.
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The Museums and Galleries Commission said in its submission on the order.
"The degree to which the order gives the Department of Education of Northern Ireland control over the new institution goes beyond that in force for any of the other national museums and galleries in the United Kingdom".
That was discussed in the debates in the other place. As the noble Lord, Lord Alderdice, said, the Minister explained that it was because of problems that there had been at the Ulster Folk and Transport Museum. I accept that there is a reason for particular care over the choice of trustees arising from the nature of the Northern Ireland community, but stringent powers over the actions of the trustees, once appointed, goes much further still and is provided for in this order. Again, I hope that this will not be a precedent for the other parts of the United Kingdom.
Concern has also been expressed at the diminution in the powers of the local authorities. They are being stopped from direct intervention. They are also to be consulted by the board, for what that is worth. They are also to be consulted on the appointment of trustees, but not until the board has been in existence for 12 months. The initial appointment of trustees can be done under the order without consulting local government or anybody else. That provision only comes into force after the order has been in place for 12 months. In any case, it runs counter to the general wish of giving more powers to local authorities in Northern Ireland.
There was clearly, as it emerged in the debate, a lack of effective consultation before the order was laid. There are errors in it which have not been corrected since they have been pointed out and since publication. That has led Ministers to say that they will not use the powers given by the order. But the correct course, as has been said by several noble Lords this evening, is to withdraw the order and table a corrected version. I believe that this has been a reflection of the arrogance of the department in particular and of the Government in general. It has been a mismanaged episode and a bad piece of legislation. We should pass it tonight in order to avoid the confusion that would otherwise result, but I hope that the Minister will be able to say that the order will be replaced by one with more satisfactory wording at the earliest convenient opportunity, following adequate consultation.
8.43 p.m.
Lord Dubs: My Lords, I fear that I have three and a half minutes to deal with many important issues—
Lord Cope of Berkeley: My Lords, I apologise for interrupting the noble Lord so soon. I took advice on the matter. If the debate continues after the time stated, that is not material. The Minister has as long as he likes to reply.
Lord Dubs: My Lords, I am grateful for that help from the noble Lord, Lord Cope. In that case, to do justice to the many important points that have been made, noble Lords will forgive me if I take more than just two or three minutes to answer the debate. Many of

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the points made were covered by several noble Lords. In the interests of time, if I do not mention them all by name, I hope 1 shall be forgiven.
I shall deal first with the point made by the noble Earl, Lord Clancarty, and the noble Lords, Lord Freyberg, Lord Cope and Lord Alderdice, about the use of money that will be obtained from the disposal of objects. These, and many other matters, will be addressed in the code of practice. Although it will not have statutory force, nevertheless there are many examples where codes of practice play an important part in governing the proceedings of public bodies. I have no reason to believe that a code of practice applied in this case, and in consultation with the appropriate museum bodies, will not be faithfully adhered to by the new museum body when it is established. We have to have some confidence that a code of practice which is the result of proper consultation would be adhered to and would deal with many of the concerns to which noble Lords have referred today.
Much concern was expressed about the department's position. I say emphatically that it cannot, will not and has no powers to act unilaterally. Apart from the appointment of members of the committee, the department's powers only come into play when the board has itself made certain proposals. The department has, in certain limited cases under Article 5, the power not to consent to a particular disposal. But there is no question of the department being given such wide powers, they only come into action when the board itself has initiated a course of action.
A number of noble Lords asked whether there could be future revisions of the legislation. Of course, nothing is fixed forever. But it would be misleading of the Government to suggest that an early revision of legislation—which will not yet, as it were, receive full parliamentary approval until later on this evening, I trust—is likely or that the legislative timetable would permit it. It is not an assurance that I could give with any honesty and therefore I do not intend to give it.
The noble Earl, Lord Clancarty, the noble Lord, Lord McConnell, and others, talked about precedence. The legislation covers only Northern Ireland. Any changes to legislation governing museums in England, Wales or Scotland would have to be brought forward and considered in the usual way. So unless one is saying that anything that happens anywhere is a precedent for anything elsewhere—I hope that noble Lords are not saying that—then we are not establishing a precedent. This is legislation intended to cover the particular circumstances in Northern Ireland.
A number of noble Lords said that there had been a lack of consultation. Perhaps I may explain the procedure. The draft order received full consultation over a lengthy period. As a result of that consultation, certain changes were made. It is not the usual practice to consult again on those changes, but in this particular instance further consultation was entered into. It is that second phase of consultation that did not have the full time period attached to it that some noble Lords would have wished. I understand the point, but we have gone in for more consultation in this particular instance than is normally the case with Northern Ireland legislation. I give noble
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Lords an assurance that the Ulster museum played a full part in this consultative process prior to the publication of the draft order.
A question was asked about more information on the code of practice. That will be for determination by the museum and by the Museums and Galleries Commission. It will be in accordance with national guidelines. I do not believe that it will be possible to give more information on the code of practice until such consultations and discussions have been embarked on.
I believe that the noble Earl, Lord Carlisle, asked about the cost of the new institution. I cannot give a full answer to that. The new body is not expected to cost more than the three existing bodies which will be included in it, although there will be some transitional costs associated with the changes that will have to take place. I believe that ultimately the new body will be more economic than the three bodies, but that is speculation on my part. If I am able to get more detailed information on that, I shall write to the noble Earl.
He also asked why there were not two university appointments on the new body. The underlying principle is that there were to be no rights of representation on the new board, but that the department will consult a wide range of bodies, including the universities, about appointments. They will be made on individual merit as regards the new procedures for public appointments. We believe that that will result in the best board that can be achieved for the new body.
My noble friend Lord Strabolgi asked about taking the order at short notice. It was laid on 25th November, which is nearly two months ago. It was considered in the other place on 10th December. But I regret that noble Lords did not have as much notice as they would have wished. I do not know why that is the case. I am sorry if noble Lords had notice only yesterday that the order was to be taken today.
The noble Lord, Lord Strabolgi, referred to the desirability of introducing a further amending order. I have already replied to that. That is not an undertaking that the Government can possibly give as we only now have the new legislation. The noble Lord, Lord Freyberg, spoke about the use of moneys for the general requirement of museums. That will definitely be covered in the code of practice to which the new board will have to adhere.
The noble Lord, Lord Alderdice, spoke about the control to be exercised by the department. The control by the department relates to proper procedures and safeguards. I believe that the right balance has been achieved between the responsibilities and powers of the department and those of the board. I believe that the department's control has been reduced compared with the original proposal which went out for consultation. I appreciate that in relation to an issue as difficult as this the accusation can always be made that insufficient time for consultation has been allowed. However, I believe that in this case reasonable time has been allowed and that has been accepted by the bodies consulted.
I turn to the nub of the issue: Article 5. At the risk of repeating myself, any initiative on disposals—I understand that noble Lords are concerned mainly with Article 5(4)—must come from the board itself. There is

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no question of the department saying to the board that it must dispose of something in order to obtain money or for any other reason. The department's part in this is to be able to exercise safeguards lest the board goes too far in seeking to achieve a disposal.
Lord Alderdice: My Lords, perhaps I may put the question back to the noble Lord. He has made much of the protection that exists. He has said that the board must initiate matters and that the department does not intervene. The whole point is that the department has taken over control of the business of the appointment of the chair and the board. It is no longer in the hands of those who make representations. The board can be hired and fired by the department and yet we are supposed to believe that it is an arm's length arrangement. That is the problem, and the attempts by the noble Lord to reassure the House must fall and break on that particular rock.
Lord Dubs: My Lords, I believe that the noble Lord goes a little further than the facts justify. Many public appointments are made by departments in Northern Ireland. I am not aware that that gives the particular appointing department those powers or that those powers are exercised in the way suggested by the noble Lord. In my experience, boards and committees are appointed by departments. I make some of those appointments myself. From that point onwards the persons appointed under the public appointments procedures are appointed on merit and exercise their powers without the department breathing down their necks. I believe that it is beyond reasonable expectation that the department would exercise a tyrannical hold on this new board in the way that the noble Lord suggests. I do not believe that is how it will be or that the people appointed will allow the department to behave in that way.
I believe the real safeguard is that only the board can initiate some of these matters and that the department can then say "No" to the board. I have indicated the very limited circumstances in which the department would allow an original trust or condition to be breached. I remind noble Lords of the example that I gave. If the board of a museum felt that a particular artefact or exhibit could more properly be displayed perhaps in a local museum run by a district council where it would be more relevant to the local community, in such a case the department might allow the original trust or condition to be breached.
I understand the concerns but I believe that there is very little scope for the realisation of them. I believe that the safeguards in the order are pretty good ones. I do not believe that we can talk about new legislation. I believe that when tested the safeguards will prove adequate and that when noble Lords see how the safeguards operate, they will be satisfied that there is no need for further legislation in the foreseeable future. I beg to move.
On Question, Motion agreed to.

Teaching and Higher Education Bill [H.L.]
8.55 p.m.
House again in Committee on Clause 16.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 96:
Page 12, line 30, at end insert—
("( ) Regulations under this section shall ensure that any arrangements for the payment of grant in respect of tuition fees for the fourth or any subsequent year of study at a higher education institution in England or Wales apply equally to a student whose parental home or normal place of residence for purposes other than attendance at that institution is in Scotland or Northern Ireland as they do to a student whose parental home or normal place of residence for purposes other than attendance at that institution is in England or Wales.").
The noble Lord said: I beg to move Amendment No. 96 and speak also to Amendment No. 128. I understand that the noble Lord, Lord Sewel, intends to reply to this debate. I am sorry about that for two reasons. I would have preferred the noble Baroness, Lady Blackstone, to reply but I am happy to see that she is at least in her place. First, before dinner I attempted to intervene in the speech of the noble Baroness and she declined to allow me to intervene. I attempted to intervene to draw her attention to the handbook on the procedures of this House. She had just refused to allow the noble Earl, Lord Russell, to intervene. An hour or two prior to that she had refused to allow my noble friend, Lord Renfrew of Kaimsthorn, to intervene. I should like to say in the gentlest way to the noble Baroness that the Companion states:
"Giving way accords with the tradition and customary courtesy of the House".
I admit that it goes on to say:
"It is, however, recognised that a Lord may justifiably refuse to give way: for instance when he is in the middle of an argument, or to repeated interruption, or in time-limited proceedings when time is short".
Clearly, these are not time-limited proceedings. In the period when I was a Minister on the other side of the Chamber I cannot recall once having refused to allow a noble Lord to intervene during a speech, certainly in Committee; nor can my noble friends Lady Blatch and Lord Howe.
Baroness Blackstone: I am sorry that the noble Lord believes that I did not give him an opportunity to ask his question. I did so. I was in the middle of an argument. Although we needed to move on, I offered the noble Lord the opportunity to put his question when I got to the end of my argument, but by then he had left the Chamber.
Lord Mackay of Ardbrecknish: I understand that. I simply make the point that that is what the Companion says. In addition, the three ex-Ministers sitting here cannot in their memory ever recall refusing to give way. I am sorry that the noble Earl is not here. On many occasions I felt quite tempted to refuse to allow in the noble Earl, but I always did so. I cannot recall ever

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having seen a Minister do that—I may be wrong—but to see it three times in one afternoon is, I believe, going beyond what is provided for in the Companion.
The second reason I am sorry that the noble Baroness is not to reply to the debate is that this is her business, not the business of the noble Lord at the Scottish Office. I move this amendment because it affects Scottish universities. It does not affect Scottish students at Scottish universities but students who come from the bailiwick of the noble Baroness, Lady Blackstone: England, Wales and Northern Ireland. Those are the students who are affected by the proposal which these two amendments try to make fair. I am sorry that the noble Baroness is not to reply to the debate because it is her department that refuses to take any steps to act in a fair and just way towards students in England, Wales and Northern Ireland.
9 p.m.
Baroness Lockwood: I do not want to become involved in the Scottish argument, but does the noble Lord appreciate the difference between Committee and Report? In Committee, it is often convenient for the Government and Front Bench to put its arguments so that they can then be taken up by different Members in different parts of the Chamber. I suggest that that is what my noble friend was doing.
Lord Mackay of Ardbrecknish: First, this is Committee; and, secondly, I still cannot recall ever doing at any stage what the noble Baroness suggests could be done on Report or Third Reading. Perhaps that was my idiosyncrasy and folly.
Baroness Blackstone: I am afraid that it is not an idiosyncrasy, because I can recall many occasions in Committee when Ministers in the noble Lord's party put their argument in the hope that it would answer the question. At the end of putting their argument, they were willing to answer any question that had not been answered. That is all that I was doing. We are much further behind than we wanted to be. It seemed to be helpful to get on. I am prepared to go back to Hansard where I can give examples of where many Ministers in his party have done the same.
Lord Mackay of Ardbrecknish: We will have to agree to differ about that. I cannot recall not giving way to anyone. I had some fairly mammoth Committee stages which at this moment make this look a pretty short Committee stage.
I return to my principal argument. It is a pity that the noble Lord, Lord Sewel, is to answer a question which should be answered by the DfEE which is responsible for students from outside Scotland but within the UK. The Committee will be aware of the position: in Scotland, honours degrees are, by tradition—a tradition which is greatly valued—of four years' duration. The government policy of charging fees of £1,000 per annum means that students going to a Scottish university for a four-year degree would be paying £4,000.
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Interestingly enough, from my previous experience I know that the Government rely heavily on their manifesto to justify their policies. So I had a look at their manifesto. There I discovered that the costs of student maintenance should be repaid by graduates on an income-related basis from the careers success to which higher education would have contributed. Clearly, the noble Lord, Lord Desai, had some hand in writing at least that sentence of the manifesto if none of the other sentences. There is not one word about fees. Then along comes this proposal for fees.
Lord Desai: I assure the noble Lord that I am not lucky enough to be party to that bit of power.
Lord Mackay of Ardbrecknish: The economic policy might be a good deal more sensible if the noble Lord were involved. Therefore we are entitled to ask for a full and proper justification about the decision on fees. I can fully understand that were I to be arguing about maintenance grants the noble Lord would merely point me, as he did over many weeks in the summer, to the manifesto as the only argument that was necessary and leave it at that. This evening he will have to try to do a good deal better.
A student going to a Scottish university would have to pay £4,000, whereas a student going to an English university, where the degree length is three years, would be asked to pay £3,000 only. That was manifestly unfair to Scottish students. So after a great deal of coming and going in Scotland, a bit of rotation and so on, the Government announced that they would, sort of, ignore the fourth year, and students in Scotland would he asked to pay only £3,000 for the four years. That of course leaves students from outside Scotland paying £4,000. Well, yes, it does and it does not! Because due to the influence of the EU, students from EU countries will have to be dealt with in the same way as Scottish students not English ones. So children of EU countries coming to Scottish universities will be charged £3,000 only.
I find that particularly galling, because I happen to have two grandchildren.
The Parliamentary Under-Secretary of State, Scottish Office (Lord Sewel): Hear, hear!
Lord Mackay of Ardbrecknish: I do not wish to disappoint the noble Lord, Lord Sewel, about that. I have actually got more than that, but we will just take two at the moment. One of them lives in Italy.
Noble Lords: Ah!
Lord Mackay of Ardbrecknish: Yes, Members of the Committee have heard about that before. One lives in Kent. I see the noble Baroness, Lady Ramsay, and the noble Lord, Lord Gordon, in their places. They will appreciate this. One hopes that those grandchildren may follow their grandfather and their parents and find their way eventually to the University of Glasgow. I was going to say the Irish thing—there is an Irish dimension to this also—but the daft thing is that the young lady

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from Italy, if she does that in the fullness of time, will be charged £3,000. The young lady from Kent will be charged £4,000. That is bluntly illogical.
Mr. Brian Wilson, who is responsible for these matters at the Scottish Office, was being interviewed about this issue on one of the UK programmes. The interviewer was not using Italy as an example; he was using France. He said, "Why is the student from France going to be asked to pay only £3,000 and the student from England £4,000?" Brian Wilson—a man with a razor sharp mind it has to be said—said, "It is because France is in the EU". The interviewer then came back very quickly and said, "Isn't England?" That is my point: are not England, Wales or Northern Ireland in the EU?
Northern Ireland is even dafter, because a student from the Republic of Ireland—we get many of them in Scotland—and a student from Northern Ireland will have the same differential applied. One will pay £3,000 and the other £4,000. I could not defend that, even if I were paid the princely salary that the noble Lord, Lord Sewel, is being paid to make that defence this evening.
I have a serious point to make about this. If the Government believe that they could not sustain a case in the European Court of my Italian granddaughter paying £4,000 while a Scottish student is paying £3,000, how on earth do they think that they will sustain a case brought by an English student who can surely go to the same European Court if necessary saying, "I am a member of the EU, can I not be treated on the same basis as the students in Scotland?" Have the Government taken legal advice on these matters? Do they believe that they have a watertight case in law? If so, the law must be as big an ass as the policy is unfair.
In order to reduce the fees to £3,000, it requires only the Department for Education to be prepared to pay the £1,000 for every student who goes to a Scottish university. The same applies to students from Wales and to Northern Ireland. What will the cost be to the department's budget? What would it be for England, and how many students from England go to Scottish universities? How many students go from Wales and what would the cost be? How many students go from Northern Ireland and what would the cost be? I cannot believe that it would break the bank, and it will be less than it will cost the Government in legal fees when they are taken before the courts and found to be in the wrong, as I am certain they will be.
Scottish universities, especially those which take many students from south of the Border and from Northern Ireland, fear that the numbers from those areas will decline. It is interesting to note that there has been a decline in the number of students applying to Scottish universities this year, but we do not know why. I was pleased that the noble Baroness, Lady Blackstone, acknowledged that during the past 18 years there has been a significant increase in the number of students going to university. I feel justifiably proud of that, as a member of the previous government. I also heard the noble Baroness give statistics showing that there has
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been an increase in the number of students from disadvantaged families, although perhaps not as large as we would like.
I wish to read from col. 805 of yesterday's Hansard of the House of Commons, giving the statistics for the past three years at the same time of year. At the turn of the year in 1995 there had been 340,711 applications; in 1996, 347,037 applications; in 1997, 326,220. There may be many reasons for the decrease, but I am allowed to say that perhaps it is as a result of the change we are discussing tonight. I wonder whether the Minister has a breakdown of the statistics, giving a table of Scottish students and a table of those from outside Scotland. I do not expect that he has, because it would be a complicated collection.
I have made my point, but perhaps I may add to it. For the first time in a long time I have been written to by students' unions throughout Scotland in a polite manner. In fact, I could probably visit universities in Scotland without being booed. After tonight, I hope that I might even be cheered. I am not sure that the Minister could visit universities there with safety. However, I wish to quote from a letter I have received from Shamin Akhtar, president of the National Union of Students in Scotland. She writes:
"We are most concerned that this benefit",
that is, the benefit of study in higher education in Scotland by people who do not live in Scotland,
"which was recommended in the Garrick report, is not to be extended to students domiciled in other parts of the UK".
The Scottish Students' Association wrote to Mr. Blunkett, Secretary of State for Education, stating,
"Natural justice demands that students, wherever they reside in the UK, receive the same assistance as Scottish and other European Nationals. We do not accept arguments that avoid the central issue, namely, that domicile should not determine difference in treatment or restriction of choice. The chance of benefiting from Scottish higher education should apply equally to all applicants in the UK".
I do not greatly approve of the Government's policy of charging fees, but I appreciate that they responded to the demand that Scottish students should not be disadvantaged by having to take four-year degree courses. The Scottish Office recognised that and have been prepared to accept that they must pick up the tab for the £1,000 for that extra year. I believe that in all honour the Minister's colleagues in government should accept the same moral responsibility. It may not be the biggest issue in the Bill, but it is a very serious one. If the Government do not follow the lines that I suggest we shall certainly return to the matter. Furthermore, whatever their legal advice, they will be unable to sustain the position in court. I beg to move.
Lord Alderdice: I am eager to speak on this amendment not because the noble Lord, Lord Mackay of Ardbrecknish, failed to make a robust case. Quite the contrary. The feeling of students and their families in Northern Ireland is very strong indeed on this matter.
My own university, Queen's University, has suffered a good deal over recent years. We have suffered from the lack of input and enrichment from young people from other parts of the United Kingdom and other places coming to our university because they have been

1703
frightened away, at least in relatively recent years, by events which have taken place. In truth, part of the business of being a student anywhere, and not least part of the business of being a student in the United Kingdom, is the enormous richness that becomes possible when you can meet, study, live and work with other young people from whom you can learn a great deal.
One of the things that has been rather disturbing recently has been a number of developments which has meant that many students have been discouraged from moving around, even within our United Kingdom. But in this situation it is quite remarkable that we find ourselves treating our own students and their families within the UK less favourably than students from other places. As the noble Lord has said, the situation in Ireland is especially anomalous because we now find that young people from the Republic of Ireland can move around with greater freedom within the United Kingdom and are less discouraged than young people from Northern Ireland who have a tradition, going back not 10 or 20 years but some hundreds of years, of going to Scottish universities. That is sad and really rather absurd.
As regards finance, one of the matters that we must understand is that if young people wish to travel, live, work and study with other young people, that is something to be encouraged. But if we discourage them from doing so within the United Kingdom, students from Northern Ireland will find themselves going not to Scotland, England or Wales but going to the Republic of Ireland. Their funds and grants will follow them outside the United Kingdom altogether, actually worsening the situation.
It is unnecessary to speak at any great length. The argument has been made with great clarity and persuasion by the noble Lord, Lord Mackay. It does not seem to me that there is some great matter of principle; that in some fashion to accept this amendment would change radically the whole nature of the Bill or transgress some important policy. It seems to me rather that if the Government were to be able to consider the amendment and were simply to ensure that the Secretaries of State in Scotland and Northern Ireland could address those matters appropriately, the matter could be resolved and everyone, particularly students and their families, not least in Northern Ireland, would feel grateful to the Government rather than aggrieved by their actions.
9.15 p.m.
Baroness Carnegy of Lour: I have raised this matter twice already in this Chamber and on the last occasion, on a Starred Question, the Minister told me that I had asked the question in the wrong way so he was not allowed to answer. That was rather unconvincing. I wonder now whether he can tell us clearly whether this policy is legal under the Maastricht Treaty, equal opportunities legislation and the Race Relations Act. If he cannot answer the question on this occasion, I believe that noble Lords really will be feeling rather strongly about the situation.
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Members of the National Union of Students in Scotland who were here yesterday want to know, in addition to the answer on legality, whether a French student living in England who comes for a four-year course to a Scottish university will pay the same as a French student living in France or an English student living in France will pay coming to a Scottish university. Those questions may sound theoretical, but the issues may arise and they are very important as regards the legality of the matter.
There is an additional question that I wish to ask the Minister which has been raised with me by the principal of Heriot-Watt University, Professor Archer. He asks, who will fund the £1,000 which Scots will not pay for that fourth year of tuition? That is the £1,000 missing from the fees of the Scottish students. The Scottish Office appears to think that universities will be compensated through the Scottish Higher Education Funding Council, but the funding council is not expecting to receive any extra money earmarked for that cost. If the fees paid by students are really to be new money into the universities, which is claimed by the Government, and a concession has been made to Scots' students on the four-year courses that they need not pay one-quarter of the fees due, surely the universities in Scotland are entitled to that new money from somewhere else.
I understand that that is rankling a good deal with the universities and they want to know the answer because neither the Scottish Office nor the funding council has been able to answer the question. It is quite an interesting question. If the noble Lord cannot answer it now, I should be very glad if he would write to me. I hope that I have expressed the matter clearly but if not, I shall explain it to him again. It is quite complicated. Who will pay for the fourth year for which the Scottish students have been allowed not to pay?
Mr. Brian Wilson has suggested in a letter to Tam Dalyell that he will ask the universities to rejig their four-year courses so that they are entirely suitable for people coming with A-levels from England to enter the second year because he wants more people to be able to enter the second year.
The Minister probably saw in the Scotsman newspaper, on Wednesday 7th January, an article in which Professor Archer was talking about the situation. He said:
"There seems to be some kind of misconception in the mind of the minister that all university degree courses are simple extensions of a continuous process from school. That is far from the truth. Heriot-Watt welcomes suitably qualified students into the second year of four-year degree programmes, but it is not necessarily true that three A-levels will prepare a student for such entry. This is particularly the case when the degree course has been designed as a coherent programme over the four years, with second-year success dependent on mastery of first-year topics".
In the same article, Professor Swinfen, a vice-principal at Dundee University, said that less than 3 per cent. of non-Scots UK students were allowed directly into the second year, and that there were "practical academic limits" on how many could be admitted. So he was making the same point. Therefore, it is not possible simply to say that students with A-levels from England can easily get into the second-year. They can do so in

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some subjects in some universities. However, it would he most difficult to make those courses suitable to enable that to happen on a large scale, so that is not a solution.
I hope that the Minister will be able to give answers to some of those questions because they relate to very serious points. The noble Lord may also have noticed in today's press reports that the population of Scotland is dropping in relation to that of England; indeed, it is going up in England and down in Scotland. The reason for that drop is that young people are not coming into Scotland; it is the older people who are coming back. Young people are leaving and are not coming in. We all know that one of the reasons for young people coming into Scotland is that they come to take up university courses. They then get attracted to it and want to stay or, indeed, to return to work. This is quite an urgent issue and I hope that I shall receive a good answer.
Lord Mackay of Ardbrecknish: I wonder whether my noble friend saw the table in a Written Answer from Mr. Wilson in the Official Report of the other place on 2nd December, in which he gave certain statistics for all undergraduate entrants from England, Wales and Northern Ireland who entered directly into the second year of their course in Scottish universities. Mr. Wilson could only give figures for the past three years but it is interesting to note the decline in England over those three years. For example, in 1994-95, 11 per cent. entered directly into the second year; during 1995-96, the figure was 8 per cent. and in 1996-97 the figure was 6 per cent. Does my noble friend agree that that underlines her argument?
Lord Lewis of Newnham: I do not wish to add complications to the problem, but I find it somewhat difficult to understand that, while the English system seems to be acquiring knowledge by going north of the Border, a number of degrees in England, as my noble friend Lady Warnock said earlier, are now developing into four-year degrees, especially in the sciences. From that, do I understand that, if students attend such courses, the English will pay for three years and that the Scots will pay for four? Alternatively, exactly how are we going to deal with this particular problem?
Lord Sewel: I shall try to reply to all the points made during this debate. I should like, first, to deal with one of the points made by the noble Lord, Lord Mackay of Ardbrecknish. It is perfectly right and proper that I stand here tonight and speak to these clauses. I do so because they seek to translate into English practice, to a limited extent, those procedures which will be adopted in Scotland. Therefore, it is perfectly sensible for me to be the Minister who speaks on behalf of the Government in this context.
Let me take the various points made by noble Lords. It was an utter delight to learn more about the details of the family of the noble Lord, Lord Mackay of Ardbrecknish. I spent many a happy hour sitting in this Chamber during the debate on the referendum Bill learning about the iniquity of the daughter of the noble
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Lord who lived in Italy not being able to vote in the referendum Bill on Scotland. Lo! and behold, we now have the iniquity regarding his grandchildren. The issue ties in with the point that noble Lords made about the legal basis upon which these proposals have been put forward. I have made the point before that it is not the custom of the Government to indicate the content and detail of the legal advice that they have received. Let me make clear that the Government are confident that they would be able to rebut robustly any legal challenge they faced in the courts. On that basis, we have every confidence that what we propose is perfectly lawful in terms of European law.
The noble Lord, Lord Mackay of Ardbrecknish, made a further point on, effectively, cross-Border flows, with English students going to Scottish universities. The figures this year are somewhat difficult to interpret. I have spent most of my professional life trying to interpret figures. These figures are particularly difficult to interpret. At a specific date, before what we know has been a last minute rush, the figure for Scots-domiciled students applying to Scottish universities has fallen. But for the English-domiciled students applying to Scottish universities the figure has fallen by a smaller rate. It is an interesting observation. It does not make the point that the extra £1,000 tuition fee for the extra year is differentially discouraging English-domiciled students from applying to Scottish universities.
The noble Baroness, Lady Carnegy of Lour, made two points. I was a little confused about the French student living in France and the French student living in England. The point she sought to draw out, I think, was not so much nationality but domicile. Where a person establishes a domicile qualification is the basis upon which he will be judged.
Baroness Carnegy of Lour: Perhaps I may make the point clear to the noble Lord. The question is whether the position of a French student with French nationality, and therefore protected by the Maastricht Treaty, who resides in England will remain the same as that of the French student residing in France who goes to the same university in Scotland.
Lord Sewel: If the French student residing in England establishes an English domicile he will be treated as an English-domiciled student. The French student residing in France will not be treated as an English-domiciled student. That is the difference.
Finally, the noble Baroness asked who would pay. We can give a convoluted answer to that, but essentially the answer routes its way back to the good old Scottish Office. The Scottish Office eventually will pay for that extra year. The institutions will be compensated for it.
In making the general point in support of the Government's position, let me recognise for a start that there will always be practical administrative difficulties in bringing about an articulation between two school systems and two university systems that are inherently different. The Scottish schools system, with its tradition of "highers", prepares students particularly for a Scottish higher education career. English A-levels do a very good job within the English system.

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The difficulty is that students in Scotland tend to go to university earlier, around the age of 17. They tend to have done four or five highers, so there is breadth but a lack of depth. The higher has been criticised in the past as being a "two-term dash". It does not provide the same depth of knowledge in a subject as does the A-level— which I hope has not changed too much since my day. In England, three A-levels are taken over a two-year period: breadth is sacrificed, but, it is argued, there is considerably more depth.
For that essential reason, in the Scottish higher education system, universities have traditionally offered four-year degrees. I do not wish to be disparaging, but it could be argued in a popular, colloquial sense that the first year is designed almost to "make up" for the lack of depth that is achieved with the one-year or two-term higher.
We were faced with the anomaly of Scottish domiciled students and English domiciled students coming through different school systems, passing through two different university systems and reaching an end point—the end point judgment being the first degree. We took the view that it would be a gross anomaly if a Scottish student and an English student were to pay more in tuition fees for ending up at the same point; namely, the achievement of their first degree. Our view was that that should not happen, and that there should be a common amount of £3,000 for Scottish domiciled students taking a degree in a Scottish university.
That, I admit, did not resolve the smaller anomaly of the English student going to a Scottish university. It is indeed a smaller anomaly and not of great moment. It has to be recognised that 40 per cent. of students are unlikely to pay anything at all towards the £1,000 because of the means-tested element.
It is also the case that English students currently going to Scottish universities are effectively bearing a greater cost than the £1,000 a year. By choosing to go to a Scottish university rather than an English university, they are forgoing one year's income; in many cases they are taking out an additional year's loan. So the sum total, as it were, the cost to the English domiciled student going to a Scottish university, is already somewhere in the region of £15,000 to £20,000. The £1,000 is a marginal addition to that sum. The figures that we have seen this year indicate that the system we are introducing has certainly not—differentially— deterred English domiciled students from applying to Scottish universities.
I take issue with my former colleagues, as reported by the noble Baroness, Lady Carnegy, regarding the principal of Heriot-Watt University and, I understand, the principal of Dundee University. I have to say bluntly to those distinguished members of the academic community that my view, based on experience, is that a little application and a little imagination would clearly enable well-qualified English students with A-levels to join school-based Scottish university courses in their second year with virtually no disruption at all. It simply requires the application and imagination of which I am sure the Scottish universities are capable. My message
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to them is: stop whingeing, indicate that you have a good product and go out and sell it. I oppose the amendments.
Earl Russell: The Minister said that he asserted with confidence that the Government were capable of meeting any challenge in European law. He may learn over the next five years, or however long it may be, that when a Minister says, "The Government are confident", he is saying, "We are quite sure we are right but we cannot really tell why". I have heard a great many Ministers say that. At least half of them have lost the case in court. If this should be one of those cases, will the Minister review the quality of advice on European law available to his department?
Lord Sewel: Of course; but I have to reflect upon the fact that the Ministers to whom, I am sure, the noble Earl refers are, of course, members of the party opposite.
Lord Mackay of Ardbrecknish: I suspect that the legal advice came from exactly the same sources, so perhaps I should warn the noble Lord to be careful.
I am pleased to hear from the Minister that applications to Scottish universities from other parts of the United Kingdom have not fallen in the way that the totality appears to have fallen. I hope that that will be borne out. To a small extent that removes one of my anxieties. However, it in no way gets round the problem of fairness. The longer I listened to the Minister, the more turns to the argument I came across. The noble Lord, Lord Lewis, made an interesting point that an increasing number of English universities were providing four-year degree courses. What will happen when English students find that they have to pay £4,000 to go to their local university whereas a Scottish student undertaking a course of the same length at a Scottish university has to pay only £3,000? I believe they will say that it is unfair on the English student attending an English university.
On the question of entry into the second year, I think the Minister assumes that there will be a continuum between school and university. In many cases people do not do honours degrees in subjects which they studied, or indeed could have studied to any extent, at school. My recollection is that to be allowed into the single ordinary mathematics class at a Scottish university one needs to have a mathematics qualification from school, but that is not necessarily the case with many other subjects, where a school qualification is not required for entry. Some of the science courses do not require a qualification in the particular subject but may require it in mathematics. It is not true to say that with a bit of application students could get into the second year. In many cases students will choose courses and subjects for which they have to start at the beginning.
I was not in the least convinced—nor, I suspect, was the noble Earl, Lord Russell—by the legal argument. I cannot reconcile it with what was said earlier this afternoon by the noble Baroness's colleague with regard to affluence testing. Here I must say to my noble friend Lady Blatch that she must become more politically correct; we now have to say "affluence testing", not

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"means testing". With regard to means testing, we are told that youngsters from the European Union who come to Britain would have to be means tested, otherwise we should be found to be infringing European law. I cannot believe that it is the same lawyer who gave the Government that advice and the advice on the Scottish position. Perhaps the Minister will tell the Committee whether these two questions were taken to the same lawyer. I do not believe they were. The advice seems to me, as a layman, to be contradictory. If one case fell foul of European law, I believe that the other would.
As to the argument that the school system in England is different from the school system in Scotland, that is indeed the case. I am not entirely sure that the same could be said for Northern Ireland. The school system in all the other European countries is different from the school system in Scotland, so why is the argument only applicable to the rest of the United Kingdom and not to the rest of the European Union? I am sorry to tell the Minister that he has not convinced me at all. I know that my fire ought not to be directed at him because his colleagues in the other departments have the responsibility on this issue.
I note that he did not answer my questions about how much it would cost the Department for Education and Employment in England and Wales and how much it would cost the Northern Ireland department to right this wrong. I appreciate that perhaps he was not able to answer that, and I would be grateful if he could write to me about these issues. However, I have to say that whether it be about my scattered family or about the amazing position of a couple of families, one living on the north side of the Border and the other on the other side of the Border, and one being asked to pay £1,000 more than the other, it really is a ludicrous position. I can tell the Minister that he is only hearing about my scattered family because of some of the daft things the Government do. If he does not want to hear about this matter again, I hope he will sort this out inside government and come forward with a fair and equitable arrangement for all the youngsters in what remains, may I remind him as one of the ministers of the Scottish Office, the United Kingdom of Great Britain and Northern Ireland. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 97, not moved.]
Baroness Maddock Baroness Maddock moved Amendment No. 98:
Page 12, line 37, leave out ("or") and insert ("and").
The noble Baroness said: I do not intend to keep anybody very long on this amendment. It is a short amendment. It is to do with regulations on grants for fees. All we are saying is that we want to have better control over the regulations and, rather than it being a case of the Secretary of State or each House approving, we want it to be all of those things.
I am very grateful to the noble Baroness, Lady Blatch, for supporting this amendment. I do not intend to say any more. We had this debate before during the last Session of this Committee and tonight. I beg to move the amendment.
Lord Whitty: I will try to be equally brief. The noble Baroness ought to recognise that this is really a step too far. We all recognise the anxiety and understand that there is a wish to restrict the freedom of the Government to increase the parental contribution. We accept that and we have written into Clause 16(5) that we will not increase it above the rate of inflation except by affirmative resolution of Parliament.
This amendment would not allow the Government to increase it even by a tiny amount, well below the rate of inflation. We ought to recognise the consequence that it would also not allow us to increase it above the rate of inflation, even were Parliament to approve it. I understand the need for restrictions but there are times when the belt and braces turn into a straitjacket. Allow us just a little flexibility. I ask the noble Baroness to withdraw this amendment.
Baroness Maddock: I am not particularly surprised by the reply from the Minister on that amendment. It is something that students are extremely concerned about. as to what will happen to fees in the future. I know that we are not directly talking about that situation, but it is affected. It is something that people care about. If it is to be changed, I suggest that there ought to be a wide debate.
I do not necessarily believe that it is a step too far. My personal view is that we are here to offer constructive opposition, dare I say, and to make sure that the Government do not go that step too far. I am sure we will return to this again. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.45 p.m.
Lord Tope Lord Tope moved Amendment No. 99:
Page 12, line 40. leave out ("(6)(a)") insert ("(5)(a)").
The noble Lord said: I rise with an unusual measure of confidence on this amendment. I have a feeling that I may be about to score my first victory in this Bill and thus extend the spirit of constructive opposition a little further.
In looking at Clause 16(6) for its meaning I noted that it begins,
"For the purposes of subsection (6)(a)",
and I searched hard for that subsection. I cannot find it. I believe it would be more appropriate for it to refer to subsection (5)(a). If we go on a couple of subsections further, subsection (8) refers in the second line to "subsection (8)". That confused me a little since I cannot believe that governments bring forward Bills that have mistakes in them. They may be mistaken in their intent. but not in their content. These are errors in the Bill.

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I tabled the amendments confident of victory tonight and in the spirit of constructive opposition. I beg to move.
Baroness Blackstone: It is rare that a Government Minister is able to accept a proposed amendment not just in principle, but also in its drafting. It is therefore all the more pleasurable to be able to accept two at once. I am grateful to the ever vigilant noble Lord, Lord Tope, for spotting the mistakes and providing us with an early opportunity to correct them. I recommend that the Committee accepts the amendments.
Lord Tope: I am grateful to the Minister. Perhaps we could quit now!
On Question, amendment agreed to.
Lord Tope Lord Tope moved Amendment No. 100:
Page 12. line 48, leave out ("(8)") and insert ("(7)").
On Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 101:
Page 12, line 49, at end insert—
("(9) A statutory instrument containing the first regulations under any provision of this section shall be laid in draft before, and shall be subject to approval by resolution of, each House of Parliament.
(10) A statutory instrument containing the second or subsequent regulations under any provision of this section which is made without a draft having been laid before, and approved by resolution of, each House of Parliament shall he subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Baroness said: In speaking to Amendment No. 101, I shall speak also to Amendments Nos. 118, 119 and 134. These amendments respond directly to the 9th Report of the Delegated Powers and Deregulation Select Committee. This Chamber has a 100 per cent. record in always responding to the recommendations of that committee and that record should not be broken tonight. Therefore, I hope that the noble Baroness, having turned the corner in accepting an amendment rather than rejecting it, will also consider that that is appropriate in this case.
I believe that the Government will see the sense in the amendment. The case is well argued in the report and my noble friend Lord Renfrew of Kaimsthorn earlier read the words verbatim. They are on the record and I shall not repeat them. But it is not only the possibility of an increase in fees that concerns me. Clause 16 is an extremely important clause in the Bill and the scope for change—if we simply leave it to the Secretary of State and regulations and do not go down the road of allowing Parliament to have a say—will be a step too far. For that reason I hope that the Government will see that it is only fair that, should any modifications or changes be made, Parliament should have an opportunity to debate them. The Committee will also see that two amendments refer to making the same changes to those clauses that refer to Scotland.
A great deal of correspondence has passed between myself and the noble Baroness, Lady Blackstone, in relation to the use of regulations and it may be helpful for me to use this opportunity to refer to a Written Answer that appeared on 21st January in response to a
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Question tabled by the noble Earl, Lord Russell, relating to tuition fees and the way in which the powers can he used. The noble Baroness, Lady Blackstone, answered,
"The Education (Mandatory Awards) Regulations to be made for the 1998–99 academic year will provide for a student's resources to be set first against any tuition fees payable by him. The regulations are made under Section 1(5) of the Education Act 1962".
I have Section 1(5) of the Education Act in front of me. I will read it for the purpose of the point I wish to make:
"The provisions of subsection (3) of this section and of the regulations made in accordance with that subsection (except so much of those provisions as relates to the conditions and exceptions subject to which the duty imposed by subsection (I) of this section is to have effect) shall apply in relation to awards under the last preceding subsection as they apply in relation to awards under subsection (1) of this section".
Fees were not charged in those days. The fees that are referred to are fees that the Government paid on behalf of each student. The fees now being charged out to students are a very different matter. Using these regulations does call into question the legitimacy of this. Noble Lords will see from the final page of the Bill that the Education Act 1962 is to be repealed in its entirety. It says that the whole Act will be repealed. In letters from the noble Baroness, she says that it will only be partially repealed and that it may not be repealed immediately. Clause 17 says:
"Regulations under Section 16 shall make such transitional provision and savings in connection with the repeal by this Act of any relevant enactment as the Secretary of State considers necessary or expedient".
Why repeal the whole Act if you put into this Act a clause that says you can save any provision of the Act you are about to repeal? Why repeal the 1962 Act at all if we are then allowing a clause in this Act to save any provision? It goes on to say:
"In this section "relevant enactment" means any enactment contained in (a) the Education Act 1962, (h) Section 3 of the Education Act 1973, or (c) the Education (Student Loans) Act 1990".
This is incredibly confusing. My reason for this point is not just to say that if there are to be changes to Clause 16 they must come before both Houses of Parliament under the affirmative resolution procedure. I think that all of us in this House would like to see a cast-iron guarantee for the interests and the protection of students receiving loans and grants and fees under the existing system well into the future, both for the existing students and those students who will come in under the gap year scheme in 1998-99; and that everything about the provision for protection of those students is properly guaranteed and has a legitimate basis in law so that that protection carries on alongside and in tandem with protection for students who will be the subject of the new system. I beg to move.
Lord Renfrew of Kaimsthorn: I had some very serious problems with this Bill, some of which I sought to indicate earlier. It may be that the noble Baroness, Lady Blackstone, was correct in suggesting that I should defer my observations until this point. My difficulty has been to find out what the Bill is asserting or what the Government are planning to do. We have a whole series

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of enabling sections and clauses. We are talking about Section 16 now but the same observation, to some extent, applies to Section 18 with very minimal content.
I have found it very difficult to find what the substance might be. I find myself in the awkward position of being very much less well informed on the factual content of the Government's intentions than was the noble Lord, Lord Desai, in his observations earlier. I am happy to defer to the noble Lord, Lord Desai, on many occasions but I was puzzled to understand the source of his information and that of other information being referred to this afternoon and this evening.
I went to the Library some days ago and again at 2.30 this afternoon to ask for draft regulations. We have already had it explained by the noble Baroness that draft regulations are not available now and are not likely to be available until July. The supplementary papers available in the Library, so far as I could understand through a brief inspection, relate to Part I of the Bill. I went to the Printed Paper Office. I had some days ago obtained the Notes on Clauses to the Bill which are perfectly explanatory of what the clauses say, which is evident enough on a close reading, but give no inkling of the actual factual content of the Government's plans. It was not until this evening, when the noble Earl, Lord Russell, brandished a document which had a cover in orange and purple, that I began to realise—I see that the noble Lord, Lord Whitty, opposite has a copy in his hand at the moment—that there was a source of information available to some but not available to me. After dinner, I went back to the Printed Paper Office and said, "There is something more on this Bill. Do you have it, please?" Initially, the Printed Paper Office said, "No, we have nothing supplementary on the Bill".
Lord Carter: Is the noble Lord aware that the Companion says that noble Lords should not speak from the gangways in the House?
10 p.m.
Lord Renfrew of Kaimsthorn: I am grateful to the noble Lord for drawing my attention to that. I shall centre myself in the middle of the Bench and hope that the noble Lord will not feel threatened by my demeanour or indeed by my remarks.
To resume, I went to the Library, which was able to unearth a copy of the document. I then had a phone call from the Printed Paper Office, which, as ever, is diligent in these matters, pointing out to me that there is nothing on the cover of the document to indicate that it relates to this Bill. I wish to make it clear that I am making no criticism of the Printed Paper Office or of the Library. My criticism relates to the Bill rather than to this information.
I have had the opportunity during the rather lengthy discussion on the previous two amendments to study this document. It states:
"This progress report is designed to provide more detailed information about the development of the new student support arrangements … It will also be of interest to Members of both Houses of Parliament considering the Teaching and Higher Education Bill".
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I should like to ask noble Lords opposite how one is supposed to know of this. This may seem a trivial procedural point but I shall relate it to the Bill in a moment. The noble Baroness was good enough to say earlier that sometimes she will be in the habit of writing to her colleague on the opposite Bench to indicate the existence of useful information and that that news might then be circulated. I do not know whether she has written to my noble friend Lady Blatch to draw her attention to the document. No doubt my noble friend has it available.
The document goes on to state:
"We do not envisage this report being made widely available to students and prospective students".
However, turning the pages, I find a lot of information which is useful and relevant. I have one or two questions to ask. The first is one to which I would not expect an immediate oral answer but perhaps a written answer. It relates to page 8 and refugees. There the document deals with eligible students—British nationals, nationals from another European economic area country, and those recognised by the British Government as refugees. I might have written to the noble Baroness about this had I been aware of the document.
I should like to ask this question. Would an applicant for asylum who is not yet accepted and not yet given exceptional permission to remain—an applicant of long standing in this country—be recognised by the British Government as a refugee? Perhaps the noble Baroness or her colleague could write to me about that. There is a series of interesting remarks pertaining to the Bill. The main focus of the report deals with plans for 1998–99, but there is a whole section in it dealing with plans from 1999 to the year 2000.
The main point of my remarks is not really to complain about the lack of availability of this information. The noble Baroness and certainly the noble Lord, Lord Whitty, will recall that at an earlier stage there was difficulty in obtaining information which was supposed to be publicly available. That brings one back to the circumstance that, on the face of the Bill, there is very little information about the Government's intentions. If one asks what Government intentions are publicly available, unless it is press releases which are not available in the Printed Paper Office or in the Library, most of that comes from the noble Baroness's speech at Second Reading. From that one is informed that on the same day in July that the Dearing Report was published, the noble Baroness "announced our intentions"—that is fine because I recall them also. One has to search a long way in the Printed Paper Office and the Library of your Lordships' House to find those intentions.
The noble Baroness went on to say,
"We announced that loan repayments would be linked to graduate income".
I am not sure that that itself is available in the Bill. There are enabling powers to make that clear, but is that in the Bill? There are no draft regulations. Further on in the speech the noble Baroness said.
"A further third will only pay part of the fees. Only the remainder will pay the full £1,000 a year".—[Official Report, 11/12/97; col. 256.]

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That is all that one finds about information which is publicly and officially available in your Lordships' House and Offices about the £1,000 a year. Of course, it is common knowledge.
The noble Baroness went on to say,
"If a graduate's gross income drops below £10,000 a year, repayments will be suspended".—[col. 257.]
I recall that that was in Government announcements. But if one does not have access to the progress report—I have already indicated how difficult it is to find information about it because one could not find it by asking in the Printed Paper Office or the Library—one has no knowledge of these circumstances at all.
Those are perhaps rather trivial circumstances. The important circumstance is that none of this is in the Bill. It is entirely an enabling Bill and a Henry VIII clause. None of this information is officially available as far as I can ascertain.
Reference has been made to the 9th Report of the Select Committee on Delegated Powers and Deregulation. No one has yet been unkind enough to make the observation here in Committee, although I have heard it made quite often outside it, that that report is a rather feeble document in view of the nature of the Bill. The noble Baroness reminded us of one paragraph, which began,
"We invite the House to consider whether"
etc. That is pretty feeble. In my view the committee should have strongly recommended to the House the precise wording which my noble friend has produced for this amendment and which I am supporting.
I do not propose to discuss Clause 18 in detail. As the Committee is aware, this clause is controversial and considers the possibility that the imposition of conditions might be regarded as the exercise of secondary power. Too true it might! I believe that the committee has been feeble. I wish its members no disrespect, but I hope they will accept that there are Members of it and of your Lordships' House, who believe that it has not been over-emphatic in its expression of opinion.
The noble Baroness, Lady Blatch, has said all that needs to be said in moving this amendment. I emphasise that it is an absolutely essential amendment, otherwise if we do not see the regulations so that we can discuss their content in a debate on an affirmative resolution, we have no clear knowledge of the Government's intentions and, moreover, no way of finding out what they are through official channels. I am happy to support the amendment.
Earl Russell: The noble Lord, Lord Renfrew of Kaimsthorn, has made a very powerful and important speech. But I hope that he will forgive me if I qualify it with one point, which is about the recommendation of the Delegated Powers and Deregulation Committee which we invite the House to consider. That committee was set up on the initiative of Lord Rippon. The decision must always be finally that of the House and not the committee. Therefore, it is established convention that, however critical the committee feels, those are the words in which its recommendation is cast.
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Having said that, I add that the terms of reference of that committee are twofold; namely, to consider whether any delegated powers are subject to a sufficient degree of parliamentary control and whether any Bill improperly delegates legislative power.
Increasingly, the committee has tended to concentrate on the first of those terms of reference rather than the second. I believe that the question as to when and in what circumstances it is proper to delegate a legislative power is a live one which I hope the committee will in future help us to consider. We would value its advice a great deal.
The noble Baroness, Lady B latch, opened a substantial can of worms. I also thank her for telling me the contents of my Written Answer. It had not reached me at lunchtime, which was the last time that I had my post. In fact, I am glad to be relieved of the labour of opening post. It takes an awful lot of time every day. I thank the Minister for the Written Answer. Having said that, I believe that it raises many more problems than it answers.
The reference is to Section 1(5) of the Education Act 1962. We are dealing with the skin of an onion. Section 5 deals with conditions and exceptions to the provisions of subsection (3). Subsection (3) is the next inner skin of the onion:
"Regulations made for the purposes of subsection (I)) … shall prescribe the conditions and exceptions subject to which the duty imposed by that subsection is to have effect".
Subsection (1) simply places a duty on the local authority to pay grant. What one has here is a condition and exception to the payment of grant. I am not a lawyer—above all, I am not trained as parliamentary counsel—but I am not sure how far it is an accurate use of language to describe a tuition fee as a condition and exception to the payment of grant. Moreover, since grants are no longer to be paid I am not sure whether a condition or exception to the payment of a grant which is not being paid can govern the levying of money which is no longer in any way related to a grant and therefore cannot be a term or condition of it. The Joint Committee on Statutory Instruments regularly describes this kind of issue as an unexpected use of powers. It is the kind of provision that invites the attention of the noble and learned Lord, Lord Simon of Glaisdale. I hope that he will turn his mind to this question. I shall listen to the answers with very great interest.
I do not want to speculate, but were I in the Government's shoes I would not be 100 per cent. confident that this clause and its meaning would survive the scrutiny of the courts. A tuition fee levied under the powers set out here may turn out to be ultra vires. Undoubtedly the question will come before the courts. I would not bet either way on what might happen.
There is the further question of the timing problem between the repeal of the Act and the laying of the regulations, to which the noble Baroness, Lady Blatch, drew attention. Even assuming that the Government lays the first regulations before the repeal of the Act, one supposes that there will be further regulations and uprating; otherwise, the whole matter will wither on the vine, just as we thought back in the 1980s that child

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benefit would wither on the vine. If the tuition fee is simply to wither on the vine it will not be an answer to the financial problems of a university. Indeed, in 50 years it may be totally unimportant. Under what powers do the Government propose to uprate the tuition fee? Clearly, from the wording of the Bill they believe that they are doing so under regulations, but on what possible statute can those regulations be grounded? We cannot ground regulations on thin air. Regulations cannot walk on water. I hope that the Government will go back and take some really competent legal advice. I do not pretend that I can offer any such thing, but it is something for which I should hate to be ministerially responsible in its present form.
The Earl of Limerick: I have a simpler and far less erudite view of the amendment. I listened to the case made by my noble friend Lady Blatch. Earlier my noble friend Lord Renfew and I were probably rightly rebuked for coming in prematurely on this point. When looking at what is intended under the Bill, and how it will affect us all in the future, the Committee does not have the advantage of knowledge of the regulations which will put the framework provisions into effect. The concept contained in the amendment is modest, proper and irresistible. As Members will not have had the advantage of that knowledge when considering the Bill, they should be given the opportunity to comment under the affirmative procedure when the regulations are produced. That is the simple and unanswerable argument.
Lord Whitty: Despite the temptation offered by the noble Earl, I shall not re-rehearse the arguments about the regulations. I shall try to address his latter remarks. First I shall try to dispose of three other issues that have been raised. I am as happy as anyone to take a side-swipe at lawyers from time to time, but the noble Earl must recognise that departments take competent legal advice.
With regard to the power to introduce tuition fees, the 1962 Act clearly allows local authorities and others to pay awards for students' fees. Section 1(5) enables students' resources to be taken into account and so enables the award and the means testing of that award to be introduced. There is no dubiety about that. We are confident about our legal advice on that. I fail to see the hilarity.
Earl Russell: The Minister will recall what I said a few moments ago about Ministers who say that they are confident of their legal advice.
Lord Whitty: If in addition to having a side-swipe at lawyers the noble Earl wishes to have a side-swipe at the colleagues of the noble Baroness, Lady Blatch, I am happy.
Baroness Blatch: Will the Minister point us to the precise place in the 1962 Act which provides not just that LEAs can pay fees on behalf of a student, but that the student is expected to pay tuition fees?
Lord Whitty: I referred to it just now. It is Section 1 (5).
Lord Pilkington of Oxenford: May I offer the Minister a copy of the Act?
Lord Whitty: No. I referred to Section 1(5) of the Act which provides for students' own resources to be
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taken into account, and therefore allows a contribution from the student to be made. As interesting exchanges are apparently going on between the two Front Benches, I shall move rapidly on to the next point.
The noble Baroness, Lady Blatch, asked about the repeal of the 1962 Act. As she will be aware, that Act has been amended several times. We had the same argument about the repeal of the student loans Act. When the Act is repealed in total, as the schedule provides, that will make it no longer possible for the Secretary of State to make loans to new students, but there will be reserve powers to deal with students in the existing system until those students pass through the system. The principle that applies to the student loans Act 1990 will apply to the 1962 Act, as several times amended. I hope that that partially clarifies the legal position.
10.15 p.m.
Baroness Blatch: Where are the reserve powers, or where will they be? Point me to the statute showing the reserve powers when the Education Act 1962 is repealed in its entirety.
Lord Whitty: I thought that we had explained the matter. We dealt with it in the student loans debate. When the Act is repealed, the powers which apply to students remaining within the system will continue to apply until those students who started the process have finished. Thereafter, the Act will be repealed in total. I am advised that that is the normal practice. I am surprised that the noble Baroness, and the noble Earl even more so, are not familiar with the practice. It has been the practice and will be so, in the area of education as elsewhere.
Earl Russell: Tell us where in the Bill that is stated.
Lord Whitty: The point is that the Bill does not have to state it, any more than it did in the case raised by the noble Lord, Lord Tope, relating to student loans.
Baroness Blatch: Is the noble Lord saying in lay language that the 1962 Act will not be repealed in its entirety? Is he saying that it will be repealed, first, partially and eventually in its entirety? If that is the case, I understand him. However, I understand that it will be repealed in its entirety and that there will be some reserve powers somewhere to continue the old system and to underpin the new system. Where will those reserve powers lie?
Lord Whitty: Those are saving powers—
Baroness Blatch: Where are they?
Lord Whitty: The Act will be totally repealed in that the Secretary of State and the department will no longer be able to start new processes with new students. There will be reserve powers—
Noble Lords: Where are they?
Lord Whitty: People who are more experienced of parliamentary procedure than I must have come across such a case several times—
Lord Pilkington of Oxenford: The situation is most perplexing for Members on this side of the Committee.

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I remind the Minister that we are dealing with legislation. Letters are going backwards and forwards to the Box where there are four civil servants. As an Opposition debating a Bill going through Parliament, we are asking where the powers lie. If the Minister cannot answer that we are most concerned.
This is not a debating society and, quite honestly, this situation is ridiculous! The Minister has civil servants and a whole department behind him. We are puzzled because we are asking a question about an Act. The Bill before us does not appear to have the necessary powers. All the Minister can offer is a vague explanation saying, "I know this happens". I am not a lawyer, but I am responsible for this matter and I believe that we deserve a better answer.
Lord Whitty: We have explained the principle in three or four letters between my noble friend Lady Blackstone and the noble Baroness, Lady Blatch. The requirement will be met when we reach Clause 17(1) on page 13. It deals with transitional arrangements, which are the reserve powers. It does not explicitly relate to the section of the Act to which reference has been made, but it is there in the Bill which is what the noble Lord was pressing me to say—
Baroness Blatch: Where?
Lord Whitty: If it is in order, I shall pass the piece of paper to the noble Baroness. No, I cannot do so. In that case, I ask the noble Baroness to forgive me for a moment—
Lord Pilkington of Oxenford: May we take an adjournment for a while?
Lord Whitty: Clause 17(1) refers to transitional arrangements which cover the situation. Similar provisions exist in similar circumstances.
Baroness Blatch: I read out the whole of Clause 17 when I made my first presentation and I referred to the clause in my letter. I say simply that when the Bill is passed we shall repeal the whole of the 1962 Act. Regulations under Clause 17 provide that the Secretary of State can re-enact any part of the 1962 Act. Why repeal that Act if in Clause 17 we are giving the Secretary of State the power to re-enact it? Clause 17(2) states:
"In this section 'relevant enactment' means any enactment contained in … the Education Act 1962".
Why should we repeal it only to re-enact it?
Earl Russell: Perhaps I may take this matter a little further. I wish to follow up a point made by the noble Baroness Blatch, a few moments ago. She asked where, in the 1962 Act, there are any powers to impose a fee or a payment from a student. I have been looking at the Long Title of that Act which is a fair guide to what the Act is intended to cover. It states:
"An Act to make further provision with respect to awards and grants by local education authorities and the Minister of Education in England and Wales, and by education authorities and the
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Secretary of State in Scotland, and to enable the General Grant Order, 1960, and the General Grant (Scotland) Order, 1960, to be varied so as to take account of additional or reduced expenditure resulting from action (including anticipatory action) taken in accordance with that provision; to make further provision as to school leaving dates: and for purposes connected with the matters aforesaid".
I presume that the Government are relying on the words,
"purposes connected with the matters aforesaid".
I do not believe that there was any such connection in the mind of the legislator in 1962, although I admit that there may be such a connection in the mind of the present Minister.
But the courts clearly construe legislation according to the intention of Parliament at the time the Act was made. It passes my imagination to understand how any raising of a fee of any sort from a student can be brought within the intention of Parliament in this 1962 Act as governed by the Long Title. Therefore, I shall be very interested to hear expert opinion on the vires which the Government are claiming.
I do not believe that we shall solve this question tonight, however hard we try, but I hope that we can all agree that we need to take expert advice and return to this subject on another occasion and at rather greater leisure. Meanwhile, we should all agree not to be more certain than the nature of the matter and our own knowledge permits. I have merely asked questions to which I do not know the answers. I should like answers to those questions. I believe that we should adjourn this matter and discuss it on another occasion.
Lord Whitty: The noble Earl is making something of a meal of this matter. The noble Earl may regard this as hilarious but I regard it as an example of prudent government to take serious legal advice before coming before this House. We are confident in that. I undertake to obtain detailed advice as regards the 1962 Act and to write to the noble Earl in accordance with that advice.
As regards the transitional arrangements—and I am now comforted by the presence of one of the Law Officers sitting with me—those are normal arrangements. We are effectively repealing the prospective effect of the Act; that is, the Secretary of State cannot take any new measures under the Act. However, we are saving its effect on existing students. Leaving aside all the legal jargon, that is the obvious intention. I am strongly advised that those transitional arrangements, as in Clause 17(1), are normal and will be sufficient for these purposes. I hope that we can perhaps now move on to the amendment which the noble Baroness is proposing.
I now refer briefly to the noble Lord, Lord Renfrew, because I am concerned that he is rather uncertain about the information that has been provided. We do not yet have the regulations. It would be unusual for us to have regulations at this stage in the passage of the Bill. However, even prior to the submissions in the Library during the past few days, back in July the department provided information regarding our policy not only to this Chamber but also to the student population and the prospective student population. I do not really think that

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people can say that they had no information on the Government's intentions. I regret that the noble Lord did not receive a copy of the report earlier. But, as my noble friend Lady Blackstone has said, our practice is to provide such information to the Printed Paper Office or the Library and, indeed, to Opposition spokesmen. I regret that there are a large number of Conservative Peers—some of us may think there are almost too many of them—and we have no way of telling who will speak in the debates. Therefore, we have to rely on the parliamentary channels and the parliamentary parties to provide such information to those who are lucky enough to take part in the debate.
Lord Renfrew of Kaimsthorn: I apologise to the Minister, but I should like to intervene briefly. If material relevant to a Bill is provided, I believe that there should be an indication on the front of the legislation stating that it is relevant to the specific Bill. As I have already made clear, I asked both in the PPO and in the Library earlier today for such information and they were not able to provide it simply because they did not know that they had been provided with material which was specifically relevant to this Bill. I make no criticism of that fact, and I do not wish to take the matter any further. However, I respectfully suggest that it is perhaps a lesson for the future.
Lord Whitty: There are those who did understand what the information was for, but I take the noble Lord's point. We will discuss with the relevant authorities how we might provide such information in the future.
I turn now to the question of the affirmative resolution in the recommendations of the Delegated Powers Scrutiny Committee. We have a serious respect for the committee's recommendations in this area. However, the recommendations that it has made on this occasion give us some difficulty. First, the scrutiny committee suggested that it might be appropriate for the first set of regulations under Clauses 16 and 21 to be subject to the affirmative resolution procedure. Secondly, it suggested that the Bill might leave open for the future the possibility of either affirmative or negative resolutions beyond that first stage. That is quite an unusual recommendation.
On the first substantive set of regulations, I understand the committee's concern and that of many noble Lords that Parliament should have an opportunity to scrutinise the recommendations made under those clauses. Indeed, those regulations will include a very substantial amount of material, much of which we judge not to be appropriate to place on the face of the Bill.
In principle, we are happy to accept that first recommendation in relation to Clauses 16 and 21. However, in this case, it would appear to be appropriate not to target the first set of regulations—that is, those dealing with the academic year 1998–99—because, in essence, they are transitional arrangements. Indeed, some of the factors that we have just been discussing relate to the 1998–99 regulations which will deal with fees and residual grants under the 1962 Act. Moreover, we are not making any substantive changes on the
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eligibility requirements and the means-testing arrangements for 1998. The real issue will be covered in the 1999 regulations. Therefore, the Government propose, in line with what I believe to be the basic intention of the amendment, to bring forward an amendment on Report which will make regulations under Clauses 16 and 21 (dealing with the 1999–2000 academic year) subject to the affirmative resolution procedure. In other words, we accept the spirit of the committee's recommendation and, indeed, what the noble Baroness proposes in that regard.
The second suggestion which relates to regulation changes beyond that—namely, the suggestion that we should have a choice between an affirmative or a negative resolution—seems to us somewhat difficult. It is perhaps also difficult for Members of the Committee. Of course, it was an approach which we accepted in relation to the particular circumstances of the Northern Ireland processions Bill. However, as I am sure Members of the Committee will accept, that Bill falls within a particular, volatile political context and applies to a situation which can change from year to year. I do not really believe that educational regulations fall into the same category. They are no different from any other regulations governing the normal course of government business which are re-made every year, at least in detail. The complexity of the regulations means that we shall probably wish to change them at least in minor detail each year.
If we were left with the committee's recommendation that this House and another place would have an obligation to consider exercising their discretion whether to use the affirmative procedure every year, that would leave the Government and perhaps this House subject to challenge in the courts involving my noble friend. I am not convinced that putting the House and the Government in that position would be sensible.
However, we shall consider the matter further, albeit that regulations on student support have been made annually using the negative resolution procedure for the past 35 years. The amendment that we shall bring forward at Report stage will relate therefore to the affirmative resolution on the first substantive change; that is, the year 1999–2000.
I hope that in the light of that commitment, and in anticipation of that amendment at Report stage, the noble Baroness will feel able to withdraw the amendment.
10.30 p.m.
Baroness Blatch: I am grateful for the constructive way in which the Minister has approached the matter. However, I am not fully satisfied, first, because of the enormous concern and confusion there has been over the use of the 1962 Act—the repeal of it, partial repeal, savings provisions—and our concern about the intake of students in 1998–99. That is the last year of the old scheme and the introduction of the new scheme. There are also the hybrid arrangements for students who should be in the new scheme but have been given special exemption to be part of the old scheme. For all those reasons I wish to include 1998–99 as well as 1999 and beyond.

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That is important because it will allay a lot of fears that many of us have expressed. It will also lay the ghost about where the parliamentary legitimacy comes from.
There is no policy in this Bill. The policy is in the Labour Party's manifesto and other documents. The Bill is a framework Henry VIII Bill. It will be followed by secondary legislation. That is why we take such a rigorous view about the nature of secondary legislation.
I am conscious of a question asked by the noble Earl, Lord Russell, on, I think, the first day in Committee. He asked a straight question about the extent of the Secretary of State's powers under the regulations. The noble Baroness said that it was impossible to say: these were powers to be used in the future. We do not know the extent or the scope of those powers. We have asked for examples to give some idea of the outer limits of the powers. We have had no indication whatsoever of the extent to which they can be used. For that reason, I believe it is important that the amendment is accepted.
The Minister referred to the dilemma of the department as to whether some provision should come through on the negative or affirmative resolution procedure. Frankly, looking across the Chamber to some of the officials I recognise from former days (and some new ones), it is not beyond the wit of any person I see to make a decision about a normal uprating, a minor technical amendment to which none of us would take exception, and a provision which makes a substantial change. If tuition fees can he introduced by secondary legislation, in the future one could do something equally dramatic by secondary legislation that would have an impact on students.
When a Bill is produced in such a skeletal form, secondary legislation takes on a very different complexion. On the basis that half a loaf is better none, I should like to pocket what the Minister has offered so far, but I am not satisfied. In the context of this Bill, secondary legislation is essential. Therefore I believe that it should come through this House through the affirmative parliamentary procedure. I shall press for that at later stages of the Bill. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 16, as amended, agreed to.
Baroness Lockwoodmoved Amendment No. 102:
After Clause 16, insert the following new clause—
REPORT ON MONITORING OF ACCEPTANCE OF COURSES
(" .—(1) The Secretary of State shall monitor and report on the acceptance to courses of higher education of persons, having regard to—

(a) personal or spouse's income;

(b) parental income;

(c) ethnic background;

(d) gender;

(e) any registered disabilities; and

(f) mode of attendance at an institution.

(2) Any report made under this section shall he laid before both Houses of Parliament within twelve months of the beginning of each academic year.
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(3) For the purposes of this section. any government department, or other organisation determined by the Secretary of State, shall provide such information as may be requested by the Secretary of State.
(4) In subsection (2) "the beginning of each academic year" shall be taken as the first day in September.").
The noble Baroness said: The purpose of this amendment is to monitor the impact of the proposed new funding arrangements on access to courses in higher education.
The amendment would require the Secretary of State to monitor on an annual basis the effects that the changes in funding arrangements would have on different levels of individuals and on social groups and sub-groups within the potential university population. It would also require the Secretary of State to report to Parliament on an annual basis. It is a probing amendment, and I do not want to take up too much time, nor to rehearse many of the arguments that have taken place during the course of our debates today.
My noble friend Lady Blackstone, both at Second Reading and in her remarks today, was anxious to underline her belief that these new funding arrangements will not have a deterrent effect on students, that safeguards are being built into the system to ensure that under the new arrangements loans will be repayable on the basis of ability to pay, and that lower-income groups will be excused from having to pay the new fee and therefore access will not he affected. I think all of us in this place are concerned about access and are anxious to increase access from lower-income groups.
The reality of the situation may well be, as my noble friend put it, that students will be no worse off under the proposed new arrangements than under the existing ones. But perceptions could be quite different. Indeed the perceptions expressed in the debates today have been, let us say, very variable—and perceptions can be a very strong emotive force.
Therefore it is important that we put in motion steps to monitor in quite a detailed way the effects that these changes will have. That will be particularly important in the earlier years of the new arrangements. It will be especially important for us to see whether or not there are differing effects on different sections of the community, and whether it is necessary to take any remedial action either to try to stop or to improve a process.
I hope therefore that my noble friend the Minister is able to inform the Committee and reassure us that there will be a proper monitoring system following the introduction of these changes. I beg to move.
Lord Tope: I wish to give our very warm support to the intention of this amendment, so eloquently moved by the noble Baroness, Lady Lockwood. As she rightly says, we may all have our perceptions of what is going to happen; we probably all have our perceptions and beliefs in relation to what is happening, and has happened. But none of us will actually know unless the monitoring takes place.

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I am sorry for delaying the Minister slightly in rising: however, I hope she is about to give us the assurances that were sought. The intention of this amendment is extremely important. I hope the Minister will tell us that all of this is going to happen in a proper and satisfactory way, and that we shall receive the reports that are sought.
Baroness Blackstone: My noble friend Baroness Lockwood is right to stress that we need full, reliable and public information about the entry into higher education of different groups in society. We recognise that there are still important differences in rates of participation by different groups. We are committed to taking steps to reduce those differences as part of our overall aim of expanding access to higher education.
Clearly we need to keep track of progress. We intend to monitor the impact of the new student support system. I therefore welcome the spirit of my noble friend's amendment and accept what the noble Lord, Lord Tope, said. I hope, however, that my noble friend will not undervalue the information that is already available on a non-statutory basis. The Higher Education Statistics Agency and the Universities and Colleges Admissions Service, in particular, collect and publish a wealth of information. Statistics on student numbers by gender and ethnic group, by disability and by mode of study are published annually in some detail by HESA. Information on socio-economic groups is published by UCAS for the majority of full-time higher education entrants. Information on students' finances is provided by the Student Income and Expenditure Survey.
As the Dearing Committee pointed out, there are some gaps and weaknesses in the data. For example, information on mature and part-time students is less comprehensive than for young full-time entrants. Information covering students in higher education institutions needs to be brought together with information on those studying on higher education courses in further education colleges.
Work is in hand to improve the data. We fully intend to take this forward and to improve the information available to both Parliament and the public. However, a lot of work remains to be done to achieve the comprehensive data framework envisaged by Dearing. Those involved are working constructively on a voluntary basis. I believe it would be premature to impose a statutory requirement and might even introduce an element of suspicion and protectiveness that could be harmful to the prospects for improvement. When so much progress has been made on a voluntary basis, I would be reluctant to hang the threat of compulsion over those concerned.
In addition to seeking better information in the longer term, we are committed to assessing the impact of the new system of student support. My department already has in place a programme of evaluation work to assess the impact of the new policies on participation in higher education of different types of student. The programme will include analysis of participation data of the types listed in the amendment. We also plan to commission
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research, which may include examining the influences on decisions to enter higher education. I can assure the House that the key results of our monitoring and research will be published and available to Parliament.
I hope that my noble friend will accept my assurance that we are committed to improving the quality of information on entry to higher education by building on existing non-statutory arrangements and to monitoring the new system and that she will feel able to withdraw her amendment.
Baroness Lockwood: I am grateful to my noble friend the Minister for the sympathetic way in which she dealt with the amendment and for her detailed reply, which I shall study with interest and care. On the basis of her assurances, in the meantime I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 17 agreed to.
10.45 p.m.
Clause 18 [Imposition of conditions as to fees at further or higher education institutions]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 103:
Page 13, line 46, leave out first ("specified") and insert ("prescribed").
The noble Baroness said: In speaking to Amendment No. 103 I will also speak to Amendments Nos. 104, 105, 106, 107, 109, 110, 121, 122, 123, 124, 125 and 126.
During our debate at Second Reading a number of Members of your Lordships' House expressed concern about Clause 18 and about the breadth of powers that they believed the Government were seeking. I sought then to provide reassurance that what we were seeking was simply a reserve power to require, through conditions of grant, that universities and colleges limit the fees that they charge to certain students, essentially home and EU full-time undergraduates and PGCE students. We see a need for such a reserve power in order to be able to reassure students and their parents that tuition will continue to be free for home and EU full-time undergraduates and PGCE students from lower income families and that parents will be expected to contribute no more than under present arrangements.
We also believe that students should choose higher education institutions and courses on the basis of what would be most appropriate for their needs, rather than on the cost of tuition; but it is not our purpose to control the fee levels generally for part-time students, postgraduate students or overseas students for whom we make no direct financial support available, nor are we seeking power for the Secretary of State to set university fees generally.
I undertook to bring forward clarifying amendments to Clause 18 at Committee stage with a view to ensuring that our intentions were quite clear, and I have now tabled a number of amendments to fulfil that undertaking.
Amendments Nos. 103 and 105 make provisions for the classes of student and types of course that are to be covered by any condition controlling top-up fees on

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higher education courses to be prescribed in regulations rather than specified by the Secretary of State in conditions. I know that noble Lords have expressed reservations about approving powers for the Government to make regulations without knowing the content of such regulations. We have therefore placed in the Library a first draft of the regulations that we would seek to make under Clause 18 if Members of your Lordships' House agree that we should do so. The draft will no doubt need further refinement in the light of consultations with the CVCP, but it should serve to indicate that the classes of student we wish to protect from top-up fees are, broadly speaking, home and EU students who have not previously received public financial support to undertake higher education. Universities will continue to be able to charge higher fees to those home students who have exhausted their entitlement to public financial support on a previous full-time course.
I hope that this will reassure the noble Lord, Lord Soulsby. I am afraid that he is not in his place. He expressed concern at Second Reading about veterinary schools' continuing power to charge higher fees to self-financing students. Universities will also be able to continue charging higher fees to overseas students. Amendment No. 109 puts this beyond doubt by providing on the face of the Bill that conditions may only control fees paid by students connected with the United Kingdom as determined by regulations under the Education (Fees and Awards) Act 1983.
Conditions may not therefore be used to prevent institutions from charging higher fees for overseas students, as permitted by the Education (Fees and Awards) Regulations 1997 currently in force.
Amendments Nos. 106 to 107 make it clear that conditions can only be imposed in relation to a class of students if the maximum amount of grant to fees has been prescribed to such students under regulations made under Clause 16(2)(b). In other words, if no grant is to be made available under such regulations for, say, postgraduate or part-time fees, then a condition cannot be imposed to control postgraduates' or part-timers' fees.
The draft regulations make clear that the courses we intend to be subject to conditions of grant are the same as those courses in publicly funded universities and colleges for which mandatory awards are currently available and for which in future grants for fees are likely to be provided. We therefore intend to refer to full-time or sandwich undergraduate courses leading to a first degree or diploma and courses of initial teacher training including PGCE courses whether part-time or full-time.
So as to leave no room for doubt, Amendment No. 110 provides specifically that conditions may not impose controls on fees for part-time or postgraduate courses, other than courses of initial teacher training—that is, PGCE courses.
Finally, Amendment No. 104 removes the scope for the Secretary of State to specify the types of fees covered by condition. Fees are now just defined in Clause 20. We recognise that that definition may not
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be perfect. We do not, for instance, intend to restrict universities and colleges in the charges that they make for board and lodging or field trips and are therefore willing to consider amending as appropriate that definition of fees in the light of further consultations with the CVCPs. In the meantime, I hope that Members of the Committee will be reassured about our intentions and accept the amendments. Amendments Nos. 121 to 126 make identical amendments to the parallel provisions in the Scottish Clause 22. We commend them to the Committee also. I beg to move.
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendments Nos. 104 to 107:
Page 13, line 46, leave out ("any specified matters in connection with").
Page 14, line 1, leave out ("specified") and insert ("prescribed").
Page 14, line 3, after first ("amount—) insert (", in relation to any such class of persons attending courses of any such description:").
Page 14, line 6, leave out from ("fees") to end of line 7 and insert ("payable by such persons in respect of their attending such courses.").
The noble Baroness said: With the leave of the Committee I shall move Amendments Nos. 104 to 107 en bloc.
There have been allegations in this Chamber of the threat to academic freedom that Clause 18 poses. Some have alleged that it is a back-door route for a hostile government to interfere in the courses provided by individual universities with a view to closing them down. Those allegations are quite misplaced. This Government are firmly committed to the principle of academic freedom. It has never been our intention to tell universities which courses they should or should not provide. We therefore wish to make clear on the face of the Bill that the only penalties that might be imposed on an institution that decided to impose top-up fees would be financial ones.
We hope of course that we never have to use the power to impose conditions controlling top-up fees. But ultimately there would need to be some sanction against an institution that broke ranks and decided to charge fees in excess of the £1,000 grant for fees that we are proposing. In that unfortunate and, we trust, unlikely event, our intention is that we would ask the Higher Education Funding Council to hold or to see the repayment of grant equivalent to the additional income raised by the top-up fees. If significant time had elapsed, then the payment of interest on that sum might be appropriate. That would ensure that such an institution did not gain an unfair advantage over other universities which had shown restraint in not charging top-up fees.
But, in all cases, we would seek the appropriate financial penalty. Amendment No. 108, along with the parallel Scottish Amendments Nos. 120 and 127, make it absolutely clear that imposing some other penalty is out of the question. These amendments put beyond doubt that it will not be within the power of any

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Secretary of State, whether current or future ones, to control top-up fees in order to interfere in a university's academic affairs. I beg to move.
The Earl of Limerick: I seek clarification. I accept that I should perhaps have mentioned the matter on Amendment No. 103. Can the noble Baroness confirm my understanding that the difference between "specified" and "prescribed" for this purpose is that "specified" means specified by the Secretary of State, which can be done by a procedure which comes nowhere near Parliament, whereas "prescribed" means that it has to be prescribed in regulations that come before Parliament? Would that be a correct interpretation?
Baroness Blackstone: I believe that to be the right answer. Perhaps I can write to the noble Earl confirming it.
On Question, amendments agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 108:
Page 14, line 10, after ("further") insert ("financial).
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 109:
Page 14, line 13, at end insert—
("( ) No condition under subsection (4) shall apply in relation to any fees which are payable, in accordance with regulations under section I of the Education (Fees and Awards) Act 1983 (fees at universities and further education establishments), by students other than those falling within any class of persons prescribed by such regulations for the purposes of subsection (1) or (2) of that section (persons connected with the United Kingdom, etc.).").
Baroness Blatch: I rise only to make this point. I took the trouble to adapt my own Bill to these amendments and to write out the whole list of amendments. I shall need to take legal advice to understand them. They are extremely technical amendments, so I need more time to think about them.
I know that a great deal of discussion has gone on between the CVCP and the department. I heard a rumour before I came in today that the CVCP are not happy with the amendments, but that is not direct information, so I shall certainly follow that up.
This way of operating with the universities creates tensions between the department and the universities—to say, "If you do one thing, we will threaten you with something else". I understand why it is this way round. It is because they are free-standing, chartered institutions and it would not have been possible under the law to put a direct clause in the Bill to stop a university from doing what it wanted to do.
There is still a great deal of anxiety about the lever that the DfEE will have over the academic freedom of the universities. I retain a residual concern about that. But until I can be talked through these amendments to
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understand precisely what they mean and I am hoping that the safeguards for the universities are there, I want to reserve my judgment as to what to do about them.
The Earl of Limerick: Again, as a point of clarification, in speaking to these amendments the noble Baroness made some very helpful statements which I and others shall wish to study in detail.
It may be that I am raising this point on the wrong amendment, in which case I apologise. But one of the points she put to us was that there would be a further amendment defining what was meant or what was not meant in terms of top-up fees in relation to such matters as field trips. That is something I would have raised at a later stage.
May I take it that in the course of consultation or discussion on what is required in that amendment she will take into account other matters which I think have already been raised? I have in mind such matters as course materials. At universities such as mine, where we have courses concerned with goldsmithing and silversmithing, clearly these are not trivial matters when it comes to the materials concerned. May I take it that that consultation will go fairly wide?
Finally, if I have understood the situation correctly, in relation to Amendment No.109, to whom it does or does not apply, it could be summarised in a way by saying that he who does not pay the piper does not call the tune. Therefore, where there are no fees payable in respect of those students, there would be no powers taken to regulate the contents of those matters.
Baroness Blackstone: Perhaps I may begin with the questions raised by the noble Baroness, Lady Blatch. We have had very extensive discussions with the CVCP about these amendments. They are acceptable to them and they have been agreed with them. I put that forward just to reassure her on that matter.
The amendments define those categories of students to which Clause 18 will not apply. In that sense I think it is providing reassurance that there is no intention of withholding grants for top-up fees for postgraduate students, for example, and overseas students, to which the noble Earl, Lord Limerick, has just referred.
As far as the noble Earl's question on types of charges is concerned, as I said earlier, we are still in discussion with the CVCP about that. We will come back at a later stage if and when we can reach agreement. I hope that is helpful.
11 p.m.
Lord Wallace of Saltaire: I have with me a copy of a letter from the Vice-Chancellor of Birmingham University. It states:
"We remain unhappy. The Secretary of State might instruct us … but henceforth it will be a condition of grant that institutions are able to demonstrate that their admissions policies are based solely on merit and not on the ability to pay. That would not require Clause 18".
The suggestion that the universities subject to these amendments would be happy to accept Clause 18 is a considerable exaggeration. All of us who have any

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connection with universities are deeply unhappy about Clause 18 as a whole. That is something we shall want to come back to at Report stage.
Baroness Blackstone: At no point did I say that the universities were collectively happy with Clause 18. I said they were happy with the amendments that the Government have just brought forward in relation to identifying those categories of students to whom this clause would not apply.
I am aware that the Vice-Chancellor of Birmingham University has written to suggest that Clause 18 is unnecessary. He has suggested that the Secretary of State should instruct the Higher Education Funding Council for England that from now on it will be a condition of grant in the financial memoranda that institutions are able to demonstrate that their admissions policies are based solely on merit and not on ability to pay. That suggestion simply will not work. Section 68(3) specifically bars the Secretary of State from framing conditions of grant with reference to the criteria for the admission of students. That is why we need to seek a further reserve power to control top-up fees through Clause 18.
Moreover, this is not simply where the universities base their admissions policies on the ability to pay. There is also the question of how students will react if different universities charge different amounts for full-time undergraduate and PGCE courses. There remains the danger that students will base their choice on the price of the course rather than suitability for them. Much as I would like to have been able to accept what Maxwell Irvine, the Vice-Chancellor of Birmingham University, has said, I am afraid that it just is not acceptable or appropriate. It will not work.
Lord Wallace of Saltaire: I do not want to detain the Committee at this late hour but I do think that Clause 18 is a classic example of hurried drafting without proper consideration. It will not stand for more than two or three years. The problems to which it leads in terms of challenge, definition, and so on, are extremely large. The further incursion into the autonomy of universities, which this implies, following the major incursions suffered under the previous government, is extremely unfortunate. It stems from over-hasty government reaction to the publication of the Dearing Report. It is sadly mistaken. Clearly, we shall have to come back to the matter at Report stage and Third Reading.
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 110:
Page 14, line 14, at end insert—
(""course", where it appears in subsection (4) or (5), does not include any part-time course or any postgraduate course other than a course of initial teacher training;").
On Question, amendment agreed to.
Baroness Perry of Southwark Baroness Perry of Southwark moved Amendment No. 111:
Page 14, line 14, at end insert—
(""connected", in relation to two higher education institutions, means that one institution controls the other; for which purpose a person controls an institution if that person has
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the power to secure, by virtue of any powers conferred by the instrument of government or other document regulating that or any other institution, that the affairs of the first-mentioned institution are conducted in accordance with the wishes of that person.").
The noble Baroness said: Before I speak to the amendment, I should point out that I did not agree to the groupings and I am not quite sure why this amendment is grouped with Amendment No. 117, although both in different ways test the extent of control. The noble Lord, Lord Wallace of Saltaire, may wish to present his as a separate amendment.
The purpose of Amendment No. 111 is to add to Clause 18(7) some definition of the word "connected". At present the financial penalties which could be imposed on a university charging top-up fees would extend also to top-up fees being charged by,
"any college, school, hall or other institution connected with the institution".
For a definition of "connected" we must go to Clause 19, which imports a definition of the term "connected institution" into the Further and Higher Education Act 1992, and states that "connected institution" means any,
"college, school, hall or other institution which the Council in question are satisfied has a sufficient connection with that institution for the purposes of that subsection",
which I suggest leaves with the funding council or the Secretary of State a rather vague decision as to what that connection is meant to be and how much control is exercised by one institution over another.
My assumption is that the clause as it stands is intended inter alia to apply to the colleges of Oxford and Cambridge on the basis that each of those universities is connected with all the colleges in the university. The amendment would negate that intention, making the point that the colleges and universities are constitutionally independent bodies without control over one another.
Rather than seeming totally parochial in the sense of speaking only about the two universities of Oxford and Cambridge, I raise the concern also that the connection could apply to many other universities; for example, to those many universities which validate other colleges' courses and work. Courses can be "franchised" into other institutions. Undoubtedly, the validating or franchising university then controls, in academic terms, the work of the other institution, but it has absolutely no control over the financial activities of that other institution. I respectfully suggest that it is both unreasonable and unjust for conditions to be imposed on a university with which it has not the power to ensure compliance, especially when the penalty for non-compliance could potentially put the whole of its grant from the funding council at risk.
I hope very much that the Minister will accept that my college does not find it unreasonable—nor, I am confident, do any of the other Cambridge colleges—that the Government as a matter of policy should seek to prevent universities charging top-up fees. I strongly support the principle that access to higher education should be on the ground of merit only and not on the ability to pay. However, the Government cannot ignore

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the interaction of that policy with the existence of the college fees at Oxford and Cambridge; nor can they properly ignore the constitutional independence of the colleges which, for a long time, have charged for the tuition which they provide and which, in a fair number of cases, are constrained by their own statutes to charge fees for tuition at levels estimated sufficiently to fund their tuition accounts.
I know that discussions with the Government between Oxford and Cambridge universities in relation to college fees are continuing and I assure the Minister that, as far as the colleges are concerned, top-up fees are simply not on the agenda—that is, top-up fees in the sense of fees paid by students out of their own resources in addition to the £1,000 now being introduced. I hope that the Government will be willing to rely on the good faith of the colleges in this matter, but if they are unwilling so to do, I respectfully suggest that they must introduce legislation which addresses the matter of the colleges, and not of the totally separate and independent universities which, as I said, have no control over their financial matters.
Sadly, I think that this legislation has not been properly thought through and, in this specific case, more consultation with universities and colleges is necessary. It is not the business of this Committee to put through legislation which has been hastily prepared and which would be extremely oppressive and contrary to natural justice. I beg to move.
Lord Wallace of Saltaire: To save the time of the Committee I shall speak also to Amendment No. 117 as these amendments concern related subjects. They relate to the problem of defining how far the concepts of connection and fees extend. We are in considerable difficulty on this Bill. Clause 20 states,
"'fees' means tuition, enrolment or other fees payable".
As the Minister well knows, there is a great deal of nervousness about how one is going to be able to define that in practice. My children have attended a comprehensive school for the past few years and I am aware that all state schools have encountered increasing difficulty over what is a compulsory charge and what is a voluntary charge, as the Government have attempted to tighten that up. We are about to go down the same road with higher education institutions. There is a tremendous quagmire here which needs to be addressed. I understand that the Government have been in discussion on this with the CVCP and that the Government may bring forward an amendment at a later stage to clarify the situation. I merely wish to underline that that is extremely important if we are not to have a whole host of knock-on cases once this Bill becomes law.
Lord Whitty: These two amendments seek to redefine a connection in two almost diametrically opposed directions. The amendment of the noble Baroness seeks narrowly to define a connection. As far as I can see, the amendment of the noble Lord, Lord Wallace, would extend and tie down a connection. We may need to look at the precise wording here. In so
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far as the amendment of the noble Baroness is designed primarily to deal with Oxford and Cambridge, it would define a connection far too narrowly, were it not to allow for the reality that the relationship between the universities and the colleges in Oxford and Cambridge is indeed a connection in the terms of this Bill. It is virtually inconceivable that those two universities and their colleges could live without each other. As I say, the effect of this amendment would be to exclude the colleges from the constraints on top-up fees which would destroy much of the intention of this Bill.
People outside this Chamber would find it difficult to comprehend why such colleges should be exempt from conditions on controlling top-up fees. In the current academic year public funding for teaching per student is £5,800 in Oxford and Cambridge compared with an average of £4,000 elsewhere. I think it is well known that Oxford and Cambridge take disproportionately more students from private than from state schools. If the amendment were accepted and colleges started to charge top-up fees—I accept that very often it does not appear the intention of those colleges to do that—clearly Oxbridge would become increasingly the preserve of the rich rather than of the excellent.
Baroness Perry of Southwark: I hope the Minister will forgive me for intervening even though I know it is late and we want to get on. However, the Minister has misunderstood what I said. We are not in any sense attempting by this amendment to exclude the colleges from the provisions of the Bill. What I said quite clearly was that we would hope that the Government would address the question of how to penalise the colleges should they charge top-up fees and not try to penalise the university which has no control over what the colleges do. Of course they are connected in many, many ways, in the same way that universities which validate the courses of other colleges and which franchise courses to other colleges are connected. The point is that the university has no control over the financial matters of colleges by statute; they are Royal chartered institutions and many of them have a duty to charge fees. The amendment seeks to detach the university from penalties as a result of the colleges' actions. Let the colleges be penalised for their actions, not the university.
Lord Whitty: We hope that we do not have to enforce this provision but I think it would be impossible to enforce this regulation if you could not take the aggregate fees of the colleges and the universities together. The noble Lord, Lord Wallace, referred to the fact that we are looking at mechanisms for dealing with the colleges in Oxford and Cambridge. We may well need to look further at the wording. However, as I understand it, it is the intention of the noble Baroness to separate entirely consideration of the fees charged by the colleges and by the universities of Oxford and Cambridge. I cannot accept that intention in any sense.
Therefore, I regret that I have to oppose the amendment and ask the noble Baroness to withdraw it. As regards the noble Lord, Lord Wallace, subject to the

1735
fact that we may need to clarify it, his amendment, as it stands, would not be helpful in clarifying the arrangements.
11.15 p.m.
Baroness Perry of Southwark: I give up on trying to repeat the argument. It is not a question of trying to separate the college fees from university fees. They are separate. We shall have to return to this matter at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Earl Russell Earl Russell moved Amendment No. 112:
Page 14, line 29, at end insert—
("( ) The terms and conditions subject to which grants are made by the Secretary of State to either of the Councils, or under which the Councils make grants to the governing bodies of relevant institutions, may not be framed by reference to particular courses of study or programmes of research (including the contents of such courses or programmes and the manner in which they are taught, supervised or assessed) or to the criteria for the selection and appointment of academic staff or for the academic conditions under which students are admitted.").
The noble Earl said: Perhaps I may say a very brief word, first, on the previous amendment. I did not speak to it. I hoped that there might be more clarification achieved. As I understand it what the noble Baroness, Lady Perry, is invoking is the principle of subsidiarity. In that context I wonder whether that might help the Government to understand what she is saying. One hopes that negotiation may be achieved. But that cannot be done until people know what is being negotiated.
As regards Amendment No. 112, I must declare an interest. This Bill attempts to reverse what is known as the Beloff amendment in relation to Section 68(1) of the 1992 Act. My name was second on that amendment. I must admit that one gets a certain attachment to those very few bits that one has put into the legislative process.
The noble Lord, Lord Beloff, is not here tonight to defend his offspring, partly because he said that he was not really prepared to stay up past 11 o'clock at night to do it and partly, as anyone who looks at the Second Reading speech of the noble Lord will appreciate, he is beginning to lose faith finally in the possibility of a continuing, workable relationship between the universities and the state. He believes that the battle is already lost. I am very near reaching that conclusion, but I have not quite done so yet.
I should explain the context in which that amendment was brought in in 1992. There was a clause in that Bill—thank God, not in the 1992 Act!—authorising the government in some circumstances to reduce the length of university degrees from three years to two. It appeared to a number of people that that was a real encroachment on the sphere of academic judgment; that it was making a judgment of a type that the then government were not competent to make.
I can remember at the time comparing it to the then Prime Minister making a grant, say, for the restoration of Lord's and claiming to alter the lbw law as part of the terms and conditions of the grant. I will not speculate
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on what the equivalent would be for the present Prime Minister. It appeared to underline the point that in any activity there has to be a sphere of independent judgment, which the government do not control or else that activity is not worth having. That must include any terms and conditions framed with reference to the content of particular clauses or the selection of individual staff and students. Selection by merit is a principle which is very dear to universities and, we believe, not contested by the Government.
This is not the first attempt to reverse the Beloff amendment. One was made by a very remote back door in the Disability Discrimination Bill 1995. That was beaten off largely by the kindness and understanding of my noble kinsman Lord Henley, who took a great deal of care and trouble over it. One hopes that one might be as lucky this time because if we are not, frankly, I do not see the point of carrying on.
When Ministers fly they do not instruct the pilot on the speed and angle at which he should fly his plane. They recognise that if they are to get to their destinations safely they must let the pilot exercise his own judgment in the area of his own expertise.
Every academic is supposed to be an expert within a particular area. What is the point of having people to do a job in which they are expert if the Government then make decisions over their heads? If government does not recognise that there is an area of academic freedom within which it is not competent to make judgments then the noble Lord, Lord Beloff, is right and the relationship between universities and the state is at an end. I believe that that would be a very tragic loss.
Lord Renfrew of Kaimsthorn: My Amendment No.113 is grouped with Amendment No.112. With the leave of the Committee, I should like to take them separately. I shall speak very briefly to my amendment later. As to Amendment No.112, I very much agree with the noble Earl, Lord Russell. Many of us will clearly recall that during the debates on the 1992 Act this matter was very strongly contested. The noble Lord, Lord Peston, is not in his place at the moment, but earlier he spoke about the ritual whereby when in government one made one kind of speech and another kind of speech when in opposition. The noble Lord, Lord Howie of Troon, made a remark, with which I agree. He said that he tried to make the same kind of speech. I was among those who were quick to criticise my own government in the debate on the 1992 legislation. I would be falling down in my responsibilities as an academic and a citizen of this country, despite the lateness of the hour, if I did not express my full support for this amendment.
Baroness Park of Monmouth: I too strongly support the noble Earl. I believe that this is the fundamental anxiety about the clause. While I support the point about the constitutional problems facing colleges and universities, the serious and long term point of the present discussion is academic freedom and the importance of preserving it.
Baroness Blatch: If this kind of amendment were accepted by the Government it would allay a good many

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fears. All of the earlier amendments to Clause 18 went so far but this one goes one step further and establishes the confidence that the university sector desires in the changes that will come about.
I was present when my noble friend Lord Renfrew vigorously fought his corner. I appreciate that both Ministers have worked very hard on the Bill. He will recall that while I and my colleagues gave the usual DfE answers throughout the Bill, nevertheless we took away the arguments deployed in the Chamber and used our best offices, if we were convinced of those arguments, to line up with the noble Lord, Lord Howie of Troon, the noble Baroness and my noble friend Lord Renfrew. That was how changes were made to the Bill. It was entirely consistent that my noble friend Lord Renfrew worked vigorously in private, and publicly in the Chamber, to make all noble Lords aware of his case. I am not sure who is to answer the debate, but if the noble Baroness, Lady Blackstone, is not able to accept the amendment I hope that she will go away, discuss the matters with officials in the department and convince colleagues that this is a powerful argument. The amendment will go a long way to establishing confidence in the university sector which I believe is somewhat shaken at the moment.
Baroness Blackstone: Of course I fully understand the motives behind Amendment No. 112, and I sympathise with its aims. I think that I can claim better than most—certainly better than many people who have occupied my position in government previously—that university autonomy is a sensitive issue for vice chancellors. I understand and share their concerns about academic freedom. However, I assure the Committee that the Government are committed to upholding the principle of academic freedom.
Clause 18 is not an attack on academic freedom. Universities will retain all their essential freedoms to decide which courses of study to provide and which programmes of research to undertake. They will have complete control when deciding which students to admit, which staff to appoint, and what to teach students—and so they should. Methods of teaching, supervision, and assessment will also remain the preserves of universities and colleges themselves. We are far from seeking to reverse the provisions of the Further and Higher Education Act 1992, which protect universities from government interference in those matters. Those provisions will stand.
I am aware that subsection (8) has given cause for concern among those who see it as undoing all the safeguards that the universities won in the 1992 Act, but I should not want that to happen. All it does is to ensure that there could be no legal conflict between those provisions and the power sought to place conditions on grant to control top-up fees. For instance, if the criteria at a particular university for admitting students included a requirement that they should pay fees charged by the university, subsection (8) adds no powers that are not already in the previous subsections. It does not give the
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Secretary of State the power to intervene, for example, in research programmes, or the selection of academic staff.
How, for instance, could a condition controlling top-up fees for students be framed by reference to the appointment of academic staff or to the nature of research undertaken? It is for that reason that reluctantly I cannot support Amendment No. 112. Most of the amendment is unnecessary, however much I sympathise with the underlying principles. However, I understand the fear that a future Secretary of State might seek to apply conditions controlling top-up fees to some particular courses but not others. We are currently looking again, with the CVCP, at the clause to see whether an appropriate amendment could be drafted to ensure that, so far as possible. conditions on grant to control top-up fees could not be framed by reference to courses in particular subjects. We shall of course come back if we can do that. With that assurance, I hope that the noble Earl, Lord Russell, will withdraw his amendment.
The Earl of Limerick: Before the noble Earl decides what to do about his amendment, perhaps I may make just one simple point. Does the Minister accept that it is not merely vice-chancellors but the many people concerned in a lay capacity with universities who are worried about this point? I am not clear whether she is saying that the amendment is wrong or merely unnecessary. If she is arguing that it is unnecessary, I urge her to think carefully about the effect of resisting an amendment the acceptance of which, or something similar, would give enormous reassurance to the whole sector.
Earl Russell: I listened carefully and with great interest to the Minister. I shall have to read what she said. Perhaps I could ask for a few points of clarification. First, she said that most of the amendment was unnecessary. Before we go further, could she tell me which parts of it are not?
11.30 p.m.
Baroness Blackstone: I made it clear that with respect to matters such as programmes of research or the selection of academic staff, the Secretary of State would not intervene. The amendment is unnecessary in that respect. However, I have said that I understand the fear that a future Secretary of State might seek to apply conditions controlling top-up fees to some courses but not others. It may well be that a university decides to charge a top-up fee in relation to students on a particular course. A university can hardly introduce a top-up fee in relation to research, or in relation to the selection of academic staff. Therefore, that aspect of the amendment is not necessary.
We are having further discussions with the CVCP and it would be helpful if, in the light of that, the noble Earl withdrew his amendment. As regards the comments of the noble Earl, Lord Limerick, I am aware that there are others in universities besides vice-chancellors who have concerns, including the lay members of governing

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bodies. We would he happy to hear more from the CUC or its members about what might allay their fears. I hope that that is helpful, too.
Earl Russell: I am sorry to ask for further clarification. The Minister said that the Secretary of State would not intervene in these matters. If she could change one letter and say that the Secretary of State "could" not intervene in these matters that would make a great deal of difference. I am not clear whether she is denying that Section 68(1), including its condition, is hereby repealed. If she is denying that, and will do so with the case of Pepper v. Hart in mind, that would influence me considerably. Or is she saying that it is repealed but the repeal is not significant? The difference matters a great deal.
Baroness Blatch: Perhaps I may make a brief point which is a variation on the same theme. The issue is not so much the intentions of the present Secretary of State, nor what he might do in future. It is whether the clause allows the scope for some of these things. That is important. No one is doubting the intention, but we are interested in the scope of the clause.
Baroness Blackstone: Clause 18 does not repeal any section of the 1992 Act. I hope that that clarification is helpful. Subsection (8) adds no powers which are not already in the previous subsections. It certainly does not give the Secretary of State the power to intervene. I give the same examples of programmes of research and the selection of academic staff. I hope that that is helpful.
Earl Russell: That is very helpful. I must still go away and think very hard indeed. I appreciate that the provision does not give the Secretary of State power, but before 1992 the Secretary of State claimed an inherent power by his power to make grants and impose terms and conditions. The question is whether the bar that was put on that power by the 1992 Act still stands.
At this time of night, we cannot usefully pursue the matter further. I shall read the Minister's comments with a great deal of interest and so, I am sure, will a number of others. I look forward to hearing their opinions. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Renfrew of Kaimsthorn Lord Renfrew of Kaimsthorn moved Amendment No. 113:
Page 14, line 29, at end insert—
("( ) Before exercising his powers under subsections (3) and (4) the Secretary of State shall consult the governing body of any institution which proposes to charge a fee greater than the prescribed amount, and shall have regard to any representations made by such governing body.").
The noble Lord said: Due to the lateness of the hour, I shall be brief. This is a mild amendment relating to some of the issues discussed by my noble friend Lady Perry in relation to Amendment No. 111. They were also addressed by the noble Earl, Lord Limerick. A whole range of fees, including college fees, are involved. In addition, there are potential fees for course work and charges for enrolment and graduation. There
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are a plethora of factors which we have been told are under discussion or review. I suspect that that will still be the case when the Bill is enacted and when the regulations are discussed and approved.
The amendment is very mild. It simply requires, before exercising powers, that the Secretary of State shall consult in order to have the opportunity of being fully aware of the circumstances and the facts. In view of the mildness of the amendment, I hope that it will prove acceptable to the Government. I beg to move.
Baroness Blackstone: I understand the wish for an institution's views to be taken into account before any condition is placed on its grant. In practice, I believe that that would happen in any event. No Minister would embark on the process of setting conditions lightly. I cannot envisage that any Government would seek to the take the ultimate step of imposing a condition on the grant to the HEFC requiring it in turn to impose a condition on funding for an institution without having in practice discussions with that institution. Indeed, I should expect Ministers to have regard to representations from all parties affected and the institution must count as a principal party.
I really do not believe that this amendment is necessary and I do not feel able to accept it. I hope that the noble Lord will withdraw the amendment.
Earl Russell: It is rather difficult to ask universities to trust the Secretary of State and assume that there are certain things he cannot do. The vast majority of what he has done since I entered this House are things which, 30 years ago, we should all have assumed he could not do.
In general, it is not the purpose of Parliament to trust Ministers with powers. It is the purpose of Parliament to hold Ministers to account and to ask questions about them.
The relationship between the universities and the state is far too battered and bruised for it to be useful to subject us to this sort of request. It may be that he will not do these things but asking people to trust him not to is asking for rather a lot.
Lord Renfrew of Kaimsthorn: I find the remarks of the noble Earl, Lord Russell, helpful. As I said earlier in relation to the 1992 Bill, ultimately I did not feel able to trust my own right honourable friend the Secretary of State at that time. Although I have no reason at all to doubt the word of the noble Baroness, or, indeed, that of her right honourable friend the Secretary of State, I do not see why I should trust him further than I would trust my right honourable friend Mr. Clarke.
Therefore, although at this late hour I shall not press the amendment, it is a matter to which we may need to return later. I beg leave to withdraw the amendment at this stage.
Amendment, by leave, withdrawn.
On Question, Whether Clause 18, as amended, shall stand part of the Bill?
Earl Russell: I very nearly decided not to raise this issue at this time of night and I shall not take very long

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with it. I probably should not have raised the matter had the noble Baroness not said what she did in reply to my previous amendment. She said that Clause 18 constituted no threat to academic freedom because the universities retain complete academic control. I do not have an exact recollection of her words, but I believe she said that universities could continue to put on whichever courses they liked and to teach whichever subjects they liked.
However, that cannot be done unless you have ultimate control over your own costs. The decision whether to put on a particular course is a decision which inevitably, and always, must have cost implications. It has cost implications in terms of staffing. If you decide to put on a particular course, you may either need a new member of staff or you may need to be able to make a commitment to replace an existing member of staff when he is due to retire. It has library implications, which may often be considerable. It has space implications within the college. You cannot put on a course if you cannot find any room in which it can be taught. That is becoming an increasingly common problem.
Therefore, if you do not have residual control over the cost, you cannot have academic freedom to decide what you teach. I am afraid that that is inescapable and in any context internal to government, I believe that the Treasury would recognise it quite quickly. I wish it would show the same sensitivity outside government.
I believe it is understood that no one wants to charge top-up fees. The arguments put against them by the noble Baroness, Lady Kennedy of the Shaws, on Second Reading were powerful and I listened to them with sympathy. Indeed, no one wants to do it. However, in the end, there comes a point where, simply in terms of academic safety, either one has to have a particular amount of money or one has to decide not to do it. There comes a point ultimately where one has to decide that either the college can raise a certain level of support, or it would be better not to operate; it is like going out on the road in a car with no brakes.
In the struggle between the Treasury and anything dependent on public funds, there has to be an element of negotiation. Obviously it is for any government to determine the total level of public expenditure and, therefore, the amount that they can spend on any particular entity. What government cannot do is go on from there and say how much that money will buy. The Government cannot tell an aircraft factory what it costs to build a jet fighter; it cannot tell a surgeon what equipment he needs to conduct an operation. Indeed, government cannot make clinical judgments. That parallel is one which I believe academics should regard as being applicable to themselves.
Therefore, if government do not recognise that whoever they are bargaining with can have the ultimate say in how much the money that government are prepared to spend will buy, there is no negotiation. It means the absolute power of the Treasury. If we get to that situation, I believe that the relationship between
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universities and the state, however slow and painful its death, will have received a blow from which it will not recover. I beg to move.
Baroness Blackstone: Perhaps I may remind members of the Committee again that the new funding arrangements that we are seeking to put in place will, in 1998–99, yield an estimated £130 million in students' own contributions to fees in England alone, after allowance has been made for costs of some 5 per cent. for collection and default. Our £165 million package of measures for higher education in 1998–99 will mean that universities and colleges will receive directly around £130 million in extra funding in 1998–99. They will benefit fully from the money derived from students' contributions to tuition fees.
We have thus honoured our pledge that our proposals would mean more money for universities. Levels of funding for future years will necessarily have to be considered in the context of the Government's comprehensive spending review, but we fully intend that higher education should benefit from the new arrangements. Perhaps I may reiterate that savings from the introduction of tuition fees will be used to improve quality, standards and opportunity for all in further and higher education.
The Dearing Inquiry identified as its first priority the need for additional funds to enable the reduction in the unit of funding to be limited to 1 per cent. Our funding package provides for that and, in addition, will allow for more investment in infrastructure and a start on growth in student places. There should be no need for universities and colleges now to consider introducing top-up fees. Our provisions do not, as some have suggested, threaten the university system. Instead, they provide the means of improvement and expansion.
However, in seeking to address the financial crisis that has been facing universities and colleges over recent years, we should not forget the interests of the students. Indeed, many members of the Committee mentioned students during our debates today. Clause 18 is not about altering the fundamental nature of the relationship between the Government and universities, as the noble Earl, Lord Russell, has claimed. It is simply about protecting the interests of students, and particularly those who come from families that are financially less well off, at a time when some of them are being asked to contribute to the costs of their education.
We need to have a reserve power to control top-up fees, if necessary, in order to be able to reassure home and EU full-time undergraduate and PGCE students that tuition will continue to be free for those from lower income families and affordable for those from slightly better off backgrounds. And we need to assure their parents that they will be expected to contribute no more than under present arrangements. We also believe that students should choose higher education institutions and courses on the basis of what will be most appropriate for their needs rather than on the costs of tuition. Top-up fees would undermine that principle.
I know that some universities or colleges might be willing to introduce bursary or scholarship schemes alongside top-up fees. But I do not believe that anyone

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can guarantee that all would do so. We cannot be certain that such schemes would ensure that all students from lower income families received bursaries equivalent to the top-up fees while fees for students from slightly better off families would be kept to affordable levels. That is why we are seeking a reserve power to control top-up fees, if necessary.
But all we are seeking is a reserve power to limit the amount that universities may charge home and EU full-time undergraduates and PGCE students in return for the £3.5 billion of public funding they already receive through grant and the further £1 billion they will receive through tuition fees. The Bill does not give the Secretary of State power to set university fees. Nor is it, as I said, our purpose to control fee levels generally for part-time students, postgraduate students or overseas students for whom we make no direct financial support available. I trust that the amendments that we have brought forward today have made this amply clear.
We have also said that we hope we never have to use this power. But I do understand universities' concerns about the possible use, or misuse, of powers that are on the statute book. Clause 18 is not, however, an attack on academic freedom, nor is it an attempt to prevent universities improving their financial position. Universities retain all their essential freedoms to decide which students to admit, which staff to appoint, what courses to provide and what to teach on those courses. They will also remain responsible for their overall income and expenditure, and will be free to maintain and develop funding from other sources.
In drafting Clause 18 it has been necessary to make sure that there could be no legal conflict between certain provisions in the Further and Higher Education Act 1992. But I should like to emphasise again that the safeguards for academic freedom in that Act will still stand.
I also wish to stress that we are prepared to look again at particular elements of the drafting of Clause 18 and to continue working with the CVCP to clarify as far as possible any remaining uncertainties. If Members of the Committee agree that Clause 18 should now stand part, we would, for instance, be willing, as I said, to see whether an appropriate amendment could be drafted to ensure as far as possible that conditions on grant to control top-up fees could not be framed by reference to courses in particular subjects.
With those assurances, I hope that noble Lords will accept the importance of Clause 18 in the new funding arrangements that we are proposing for students, and particularly in giving reassurance to full-time undergraduates and PGCE students as we ask them to contribute to the costs of their tuition. I commend Clause 18 to the Committee.
11.45 p.m.
Baroness Blatch: I wish to ask a technical question. It is pertinent not only to the clause but also to one or two future amendments. One hundred per cent. of tuition costs for each student are met by the state. From the beginning of the next academic year students will be required to meet approximately 25 per cent. of that
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through the first £1,000 of fees. Am I right in assuming that the state will continue to provide the equivalent of the 100 per cent., and that the income generated by the 25 per cent. will he additional money; or will the Government adjust their grant to the higher education sector and include the 25 per cent. that is being met by students to make up the 100 per cent?
Baroness Blackstone: As I have already explained several times, both at Second Reading and earlier today, universities are able to keep the fees that they are charging to students under the new arrangements. We have already said that during 1998–99 universities will have an extra £130 million to deal with making sure that the efficiency gain is no more than I per cent. and to deal with some of the problems of their infrastructure. The amount raised from fees will be £125 million, so the universities will receive more next year than is raised by the fee. As I have said on countless occasions, it is our intention to ensure that the new arrangements will lead to more money for the universities. Because of our comprehensive spending review, I cannot anticipate the precise arrangements after 1998–99. I can only repeat what I said: for 1998–99 the universities will retain the additional funds that derive from charging students fees.
Baroness Blatch: I am sorry to come back on the point, but does that then mean that the university sector as a whole will receive the equivalent of 125 per cent. of the cost of tuition? In other words, universities already receive 100 per cent. from the state and they will receive a further 25 per cent. from students, which tops up to 125 per cent.; or will the government adjust the amount and pay 75 per cent. in future with 25 per cent. coming from the students? In that case there is no extra money. As I understand the noble Baroness's remarks, the Government will continue to pay the equivalent of 100 per cent. tuition fees and the student will add to that a further 25 per cent., which will be kept within the universities.
Baroness Blackstone: It is very late, and I have tried to explain the position. Next year, the amount of money that is raised from tuition fees, which will be charged and collected by the universities, will be kept by the universities. I cannot—
Lord Pilkington of Oxenford: What my noble friend is asking is this. At present the state pays all tuition fees. The state is now to charge for 25 per cent. of tuition fees. I realise that we are all tired, but it is a very simple matter. Universities receive the 100 per cent. paid by the state, but they are to receive the 25 per cent. extra that the student pays—in other words, as my noble friend says, 125 per cent. The amount will not be the same as it is now. The student's contribution will be extra to the 100 per cent. presently paid by the state.
Baroness Blackstone: The existing arrangements in relation to fees will not continue. So the answer to that has to be no. There will not be a fee in the same respect so far as the state is concerned. All the arrangements will change. What is important is whether the

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universities will benefit, and the answer is that they will. They will be collecting the fee. For next year they will have the total amount of the fee that is collected. What I cannot do, because of the comprehensive spending review, to which we were committed prior to the election, is say what will happen in subsequent years.
Lord Pilkington of Oxenford: I am sorry to be an awful bore at this time of night. It may be that my mathematics are wrong. At the moment, universities receive from the state 100 per cent. The Government have now decided that 25 per cent. of that 100 per cent. will be paid by students. It seems to me that the noble Baroness is saying that universities will receive almost the same, except that 25 per cent. comes from the student and 75 per cent. comes from the state. I therefore find it hard to understand where the extra money comes from. If the state pays 100 per cent. and the student pays 25 per cent., there is 125 per cent. That is marvellous; the university has 25 per cent. extra. If the state only pays 75 per cent. and the student pays 25 per cent., the university only receives the same amount as before.
Baroness Blackstone: I think the noble Lord, Lord Pilkington, is perhaps a little unfamiliar with the system of providing financial support for universities. At present it is done by a complex system of grant paid by the Department for Education and Employment to the Higher Education Funding Council for England and by the Scottish Education Department, and so on, for the other parts of the UK, and by fees that are provided through the local education authorities. The system of supporting universities is much more complex than the noble Lord implies. The fee arrangements will be changed, so the percentages that he and his noble friend keep giving have absolutely no meaning. The scheme does not work in that way.
Lord Pilkington of Oxenford: Will the noble Baroness, who understands the scheme, tell us in words of one syllable where the extra money will come from? That is all I want to hear.
Baroness Blackstone: The extra money will come from the decision to charge students tuition fees. Extra money will also come from providing students with their loans on a termly basis rather than paying the whole amount up-front at the beginning of the year. During 1998–99 that will provide additional resources which will go direct to the universities.
Lord Wallace of Saltaire: I too listened carefully to what the Minister said and shall want to read it. A number of things worried me. The reserve power question leaves a lot to be desired and I still do not understand the rationale for it. If it is a reserve power which is not to be used except in the gravest cases, we are in a rather different situation.
Secondly, if I understood correctly, the Minister said that the universities will continue to have full control over their income and expenditure. It seems to me that
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the purpose of this provision is to ensure that the universities will not have full control over their income. I have taught in German and French universities and am very conscious of the fact that allowing universities to expand their number of students while holding down their income leads to a rapid deterioration in quality and a rapid expansion in the number of students.
The Minister spoke about efficiency gains. I met my efficiency gains this morning in two or three extra students in the graduate seminars I am teaching. That is what efficiency gains mean. We all recognise that quality in British universities is now beginning to go down and is likely to go down further if universities do not increase their income. The Government are now saying that they want reserve powers to prevent universities in extremis from increasing their income.
Lord Renfrew of Kaimsthorn: At an earlier stage the noble Lord, Lord Wallace of Saltaire, referred to a letter from the Vice-Chancellor of the University of Birmingham. The noble Lords, Lord Quirk and Lord Walton of Detchant, who were unable to stay until this stage of this evening's Committee, asked me to express their support for the sentiments contained in that letter, although I perfectly understand that they did not have the benefit of hearing the Minister's reply on that point. I do not want to prolong the debate on that issue.
I wish to emphasise that I believe that the debate on this point has made clear that there is evidently great unease throughout the university world and beyond. As we have already heard, not only the Committee of Vice-Chancellors and Principals but all university teachers, or almost so, and most students are deeply concerned about some of the issues which have been debated. There is particular concern about the two matters which have surfaced in the past 15 minutes of our discussions: the issues of academic freedom and of funding and whether such benefits as will accrue from the imposition of tuition fees will really be felt by the universities and bring about the improvements that are hoped for.
The noble Baroness, in her earlier speech on this point, made some helpful remarks which we shall want to reflect upon. I think it appropriate that I should repeat in Committee this sentiment, widely felt, of the very deep unease which surrounds this clause and, indeed, the Bill as a whole.
Midnight
The Earl of Limerick: I listened carefully to the reply of the Minister to the speech of the noble Earl, Lord Russell. It can be summarised as, "You have nothing to worry about. Trust us." It was the same answer, in essence, as that given by the noble Baroness to the noble Earl on Amendment No. 112. In her response to that amendment the noble Baroness said that the Government would be looking to introduce its own amendment at a later stage. It is only right to signal that many of us will be looking very carefully at the text of that amendment when it comes forward.
Baroness Blackstone: Perhaps I can make one point to the noble Earl, before he intervenes. He was

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suggesting that universities will have no control over their income as a result of this clause. Nothing could be further from the truth. Universities will still set their own fee levels for all kinds of groups of students: part-time students, postgraduate students, except PGCE students, overseas students. They will also be able to raise income from research grants and contracts and consultancy fees.
The noble Lord, Lord Wallace of Saltaire, referred to efficiency gains. He might have the good grace to recognise that, as a result of the new arrangements that the new Government are making, the efficiency gain required from universities next year will be I per cent, which is much lower than it would have been under the arrangements and projections of the previous government. It is, in fact, exactly what the Dearing Committee recommended should be required of universities.
I shall try to reassure the noble Lord. He made the suggestion that the reserve power might be widely and frequently used. That was implicit in what he said. I said earlier that the Government hope that they will never have to use this reserve power. We keep hearing that universities do not intend to charge top-up fees. The noble Baroness, Lady Perry, made that point earlier. If it is the case that they do not intend to charge top-up fees for home and EU undergraduates, the power will never be used. It is a reserve power.
I remind the noble Lord that the universities are in receipt of £3.5 billion worth of public money. That is a great deal of the taxpayers' money. In return for that enormous receipt of public money they have to accept that when a government have made it clear to both parents and students that they will not be expected to pay more than is set out in these new arrangements, we have some obligation to both parents and students.
I move on to what the noble Lord, Lord Renfrew of Kaimsthorn, was saying. I believe that he is not living in the real world if he is suggesting that students are concerned about this clause. On the contrary, the Government have been criticised by the NUS for not going far enough. They did not want a reserve power; they wanted us to take an actual power in relation to top-up fees.
I also do not believe that the noble Lord is living in the real world if he thinks that university teachers as a whole are concerned about this clause. Again, on the contrary, many university teachers believe it is vital that entry to universities should continue to be open to all students, regardless of their families' income and that none of them should start choosing courses according to what is charged.
Finally, I refer to my old colleagues in the CVCP. Again, there are divisions in the CVCP. I readily accept that some vice-chancellors do not like this clause. There are many other vice-chancellors who believe that it is absolutely essential. When we are discussing something like this, we ought to be accurate when we are reporting the views of people. I accept that there are divisions, and I know that the noble Lord is absolutely right in saying that some people are concerned. But he was
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suggesting that there was universal condemnation of the use of the provision on the face of the Bill, and that simply is not true.
Baroness Perry of Southwark: Before the noble Baroness sits down, perhaps I may ask whether she will accept this. While there is widespread acceptance of the undesirability of top-up fees and a great deal of sympathy with the Government's wish to find ways to prevent universities charging such fees, I sense that she, like many of us on this side and like many members of the CVCP, would wish to find a sanction that did not run the risk of infringing a university's freedom. Is it not, even now, worth testing the ingenuity of her officials to find another form of sanction against universities topping up their fees other than the one suggested in Clause 18?
Earl Russell: The Minister has tried very hard indeed. I thank her warmly for that. But the gulf between us is still extremely wide. She tells us that in the additional money she has offered the condemned man a hearty breakfast. I tell her that 1 am afraid it is only a continental breakfast. She really does not have any idea—indeed, the Government as a whole do not have any idea—how severe the shortage of funding actually is in relation to the job we are asked to do. If she understood that, she would not be talking about "efficiency gains".
I grant that it is smaller than it might otherwise have been, and I am thankful for being allowed that small mercy. It is a bit like the mercy of Polyphemus to Odysseus of being allowed to be the last to be devoured. But we really cannot carry on like this. The Minister says that if we do not want to charge top-up fees, what is the fuss about? I do not want to run my car on alcohol, though I believe technically it may be done. But that is contingent on my being able to obtain a supply of petrol. Were I to run out of petrol in the middle of the desert and find that the local garage could not sell me any, I might well attempt to run my car on alcohol. It would not prove that I wished to do so. If I reserve a power to do so, it proves only that I do not trust the garages in the desert.
That is very much the way I feel about government funding. I do not trust, and I believe most of my colleagues do not trust, the Government to fund universities to a level which makes it possible for us to do our job at all. Though the Minister is right that I and many of my colleagues want admission to remain free and by merit only, we cannot do that unless the Government do their part also. That is not under the university's control. We do not know whether the Government will do it.
The Minister says that we should also consider the interests of the student. Of course we do. We on these Benches are deeply aware of the force of that point, myself not least. But the interest of the student is two-fold. It is in having only a manageable amount to pay, and in receiving value for money for what he or she will be paying. When students are being asked to pay for higher education, they are entitled to be sure

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that what they are getting deserves the name of higher education. That is now very much in doubt. If things get any worse, it becomes impossible.
We are not yet within shouting distance of each other. I do not want to begin shouting at this time of the night. I shall withdraw my Motion to oppose the Question that Clause 18 stand part of the Bill. But I hope that when we return at Report stage, it may be possible to begin a dialogue. It is just about our last chance.
Clause 18, as amended, agreed to.
Lord Tope Lord Tope moved Amendment no. 114:
After Clause 18, insert the following new clause—
TUITION FEES: PAYMENT BY STUDENTS
(" . In exercising any powers under this Part of this Act, the Secretary of State shall ensure that fees in respect of tuition for any course of higher or further education at a publicly-funded institution shall only be payable by the student concerned where a grant in the same amount has been made available for that purpose to that student.").
The noble Lord said: It is unfortunate in the extreme that we come to the first amendment which is clearly and specifically about tuition fees at some time after midnight on the last night of the parliamentary week; an issue which is perhaps of the greatest concern to the greatest number of people, many of whom were listening to this earlier in the day.
My noble friend, Baroness Maddock, promised your Lordships that I would explain in full the Liberal Democrat proposals for student funding rather than deal with it piecemeal as we moved successive amendments. I could explain that it is a coherent package, but your Lordships may be relieved to know that I do not intend to do that at ten minutes past midnight on the last night of the parliamentary week.
All I want to do at this stage is to say that the Liberal Democrats remain unequivocally opposed to tuition fees. Our first objective is to remove the provision for tuition fees from the Bill. However, if tuition fees are to be charged, and we feel that they should not be—and that is the purpose of this amendment—we will expect the Government to pay the student the equivalent sum, thus removing any additional cost to the student or their parents.
One of the effects of this will be that through that method the universities will receive a little more money than they currently receive through the LEA system. If all else fails—and this is a last resort—we will be seeking to ensure that all revenue from fees is hypothecated back to higher education and not to the tertiary sector as a whole.
I do not intend to pursue this further at this time of night. I know that the Minister needs no reassurance from me that we will pursue it most vigorously at Report stage whatever time of day or night we reach that point. I beg to move.
Lord Whitty: My Lords, despite the lateness of the hour one has to admire the ambition of the Liberal Benches. This clause, as drafted, would not only prevent the introduction of tuition fees but also, in effect, extend
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free education to a whole range of people who have never previously had it. There are objections to that both on grounds of principle and cost. It would extend it to everybody not only in higher education but also in further education, irrespective of the course they are on, irrespective of income and, as it stands, irrespective of whether they live here or abroad. The objections in principle are clear. It would benefit far more greatly those of higher income than the lower income groups we are attempting to attract into universities.
The objections on cost are colossal. Even if we extended the same funding arrangements that used to exist it would cost an additional £4 billion per year. If we add on the increased participation since then and the additional categories of students that would be covered by this clause, we are talking of a minimum of £6 billion, probably more—the equivalent of at least a 3p increase in taxation. The next line in my notes says, "The only other option would be fewer resources for higher education". But unfortunately there is not £6 billion of state resources to take out of higher education.
This is not a feasible amendment. A nice world though it may portray, it is not feasible in terms of cost; but nor is it sensible in terms of equity. The noble Lord says he will return to this matter. I trust a slightly less ambitious amendment may come before us, but even so I regret that we would have to object, and oppose the principle that this amendment seeks to introduce.
Lord Tope: My Lords, I am grateful to the noble Lord for his reply and his clearly more limited ambitions than the Liberal Democrats have for education. I prefaced all my remarks by making it clear that we prefer that neither this amendment, nor any similar amendment, was necessary because we oppose tuition fees, and that will remain our first objective. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
12.15 a.m.
Baroness Blatch Baroness Blatch moved Amendment No. 115:
After Clause 18, insert the following new clause—
RECEIPT AND DISPOSAL OF FEES
(" .—( 1 ) The governing body of a relevant higher education institution shall be entitled to receive, and to dispose of as it sees fit, the full amount of any fees or grants in respect of fees payable to it in respect of tuition by or on behalf of any student.
This subsection is without prejudice to any arrangements under which the governing body proposes, with the consent of the Higher Education Funding Council, to pay the whole or part of any fees or grants in respect of fees to any connected institution, as defined in section 65(3B) of the 1992 Act.
(2) In this section, "relevant higher education institution" means an institution providing courses of higher education, where "higher education" has the same meaning as in the Education Reform Act 1988.").
The noble Baroness said: I shall be brief, but I feel as strongly about this amendment as the noble Lord, Lord Tope, felt about the previous amendment. There are two forms of saving to the Government. First, there is to be a 75-25 split between those partners who pay tuition fees—75 per cent. state and 25 per cent. student.

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I also understand that, with the abolition of the maintenance grant, there is to he a considerable saving to the Government. I should be grateful if the noble Baroness could put a figure on that.
If the average cost of tuition for students in this country, which is wholly met at the moment by the state. albeit that it goes round in a convoluted way through the LEA, is to remain at the same level, the money charged to students, which is equal to 25 per cent. of the average cost, is additional money. If it is to be a 75-25 split, it is not additional money. It would be very helpful at some stage to get a proper clarification of that.
The purpose of the amendment is to ensure that income raised from fees from students, and the families of students, moving into higher education should reside exclusively in higher education. It should be received by higher education and used for higher education. In a number of the answers we have had in previous debates and at earlier stages of the Bill the noble Baroness has coupled further education with higher education in terms of the spending of income raised. I would not want to argue with the noble Baroness's aspiration that if more money can be found it should be spent in further education. Indeed, I have been a great supporter of further education. It is the rung in the ladder that is very important in terms of young people making their way into the world of work and, indeed, making their way into the world of higher education. But if the money for higher education is to be raised from students and their families, unless it is spent in higher education it is a tax on those students, raising money to be spent elsewhere. That would be quite wrong.
At some point I should like clarification as to whether the money raised by tuition fees is additional; and if it is additional, it means that 100 per cent. of the cost of tuition will continue to he met by the state and the 25 per cent. contribution will be additional to that. How much money will be raised from maintenance? Where will it accrue? Will it accrue to the Treasury or will it accrue to the DfEE? The figure will be some billions of pounds and it will accrue somewhere in Whitehall. It would be helpful to know where and for what purpose it will be spent. I beg to move.
Lord Tope: I rise to support what the noble Baroness, Lady Blatch, said and to speak specifically, in view of the hour, to Amendment No. 116, which seeks very much the same objective. The amendment has two purposes. First, it is designed to ensure that revenues collected as a result of student tuition fees are retained by the institutions for the sole purpose of the provision of higher education courses; and, secondly, it requires that those revenues should be disregarded in the calculation of grant made available to the funding councils and thus constitute additional resources for higher education institutions. We are at one on this point. I agree with the noble Baroness, Lady Blatch, that, however it is achieved, it is a very important point.
There is no assurance anywhere in the Bill that money raised by the tuition fee contributions of students will remain within the higher education sector. This point has been pressed time and again. As the noble Baroness has just said, we are still not clear about that.
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There is a fear that it will provide the basis for commensurate reductions in money allocated to the funding councils for higher education. Consequently, there are fears that the imposition of tuition fees will not result in a real increase in resources for higher education institutions. That has been mentioned previously in debates on this Bill and I am certain that we shall return to it. I support Amendment No. 115 and propose Amendment No. 116. I am not too anxious how we achieve the result, as long as we do so.
Baroness Perry of Southwark: My name is also down to Amendment No. 115 and I support what my noble friend Lady Blatch said. As I understand it from a reply given in the other place by the Minister's colleague, Dr. Howells, for 1998–99, the introduction of private contributions to tuition fees for higher education will mean an extra £125 million for higher education, plus £4 million for sub-degree courses mainly in FE. In addition, some £15 million of the higher education savings have to be allocated to the FE sector. Much as I support further education —I have taught in FE and have the greatest respect for it—I do not see why students in higher education should be asked to contribute to the education of their younger brothers and sisters, or whatever, in further education.
This is not a tuition fee. It is a tax. It is a poll tax on any student entering a university, requiring that student to pay £1,000 which then goes back into the Treasury maw. At least for 1998–99 we have some promise that it will go back into further and higher education but, beyond that, we are not promised anything—nor are the students, yet for a student £1,000 is a lot to pay in additional tax.
Earl Russell: Perhaps I may add one point without detaining the Committee. I am beginning to understand the Minister's difficulties about the additional money. Her problem essentially arises from parliamentary sovereignty. She seems to be saying that she cannot commit future parliaments and future Chancellors of the Exchequer. I understand that, which is why the element of hypothecation, which is included in both amendments, may turn out to be vital. If I know anything about Whitehall theology, I suspect that somewhere in the margin of the Minister's briefing are written the words "Treasury Minute 1919". I am aware that the Treasury Minute of 1919 on hypothecation is regarded in Whitehall as holy writ, but I do not think that it applies to these amendments. As envisaged, I can see very few virtues in the tuition fee, but this is one: it is not actually government revenue, it is a fee paid to the university; and if it is not government revenue it is entirely outside the scope of the Treasury Minute. I hope that that thought might open a few Whitehall minds.
The Earl of Limerick: It is very late, but one has to take one's opportunities. The purpose of the first subsection of Amendment No. 115 is clear: it is to ensure that governing bodies shall be entitled to receive the full amount of any fees or grants in respect of fees payable to the university in respect of tuition by or on behalf of any student.

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Since Second Reading, I have taken quite some time over this and I hope that I now understand the way the system works. The amendment would mean that the two parts of the £1,000 (whether paid by the student—lucky the universities that receive it in full and upfront from the students!—or, on means-testing, by the local authority) will remain with the university, but that is not what is going to happen. It will happen in the first instance but then, as I understand it, the local authorities will put in their bill to the DfEE for the amount they have had to pay by way of subvention to the students. So the £1,000 in its entirety, however it is divided between the two elements, remains with the university. But then comes the kick in the tail; namely, the LEAs will claim back the amount they have contributed from the Department for Education, which presumably will take that into account in the amount that it decides to devolve to the funding council.
The estimated sum is £130 million of extra money. I use the term "extra" advisedly and not the term "new" money, because the new money will be a greater sum. The impact of that will be twofold. First, it will impact differently on different universities. Some of them—lucky old things—will have 100 per cent. of students who can pay their £1,000 and not miss it, if such there be. However, other institutions, like mine, will have few people who will do other than apply for means-testing. Therefore, the £1,000 sum will impact differently on different universities. I hope to hear that that will be taken into account through the funding council so that one is not penalised in financial terms for teaching many means-tested students, when a good part of the thrust of this Bill is to get more such students into higher education. I hope I can take that assurance for granted, but I should obviously like to hear it.
My other point is really a budgetary point; namely, that governing bodies are responsible for the solvency of their institutions, and that includes budgeting which they require on their own account. Even if they did not require it on their own account, it would be required by the funding council. At the moment we are conducting that budgeting on a series of assumptions of which we are quite uncertain. Our budgets rest on shaky and possibly quite unsound ground. What is lacking—perhaps this could be addressed in the near future—is any form of funding model, whether that be in the form of examples or parameters. It would be an enormous help to the sector if there were some basis on which institutions could test their assumptions against a model and begin to see how it might affect them, because they are having to make some fairly fundamental plans about what they do in the near future. Behind that lies a point of public accountability as regards the institutions adopting prudent plans. If that could be arranged it would take us forward. I should be happy to be involved in that.
Baroness Blackstone: I am afraid I shall have to disappoint the noble Lord and the noble Baroness with regard to their amendments. They are unnecessary. The money which students pay directly to universities and colleges in tuition fees will in any case remain with the
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institutions. So, too, will the contributions that local authorities pay on students' behalf, if the assessed income of students and their families means that they do not have to pay all or any of the fee.
I can reassure the noble Earl, Lord Limerick. Of course the institution, like the one whose governing body he chairs, which has many such students, will not in any way be worse off than the institution that has many students who are paying the full fee. There will be no problem in that respect. It will be for universities and colleges themselves to decide on how to use these resources. Amendment No. 115 in the name of the noble Baroness, Lady Blatch, is therefore unnecessary, as is the first part of Amendment No. 116 in the name of the noble Lord, Lord Tope.
The proposal in the second part of Amendment No. 116 to disregard fee income for the purposes of calculating grant for the higher education funding councils, on the other hand, goes a little too far. A large proportion of fee income will continue to be paid from public funds. Thus, while universities and colleges will receive £1,000 for every home or EU full-time undergraduate new entrant in autumn 1998—either from students, their families or local authorities—not all of this will be new money, as I think the noble Earl, Lord Limerick, was aware. Local authorities have long paid tuition fees on students' behalf to universities and colleges and will continue to do so. I should explain to the noble Baroness, Lady Blatch, that those fees do not necessarily or normally cover the whole cost of tuition. That is covered by grant, which is paid through the Higher Education Funding Council.
We estimate that the contribution from public funds for fees in 1998–99 will be just over £1 billion in England alone. We clearly cannot leave such a very large sum of taxpayers' money out of account when calculating the other channel of public funds for higher education, which is the grant to HEFC.
Nevertheless, I would like to give some assurance about funding for higher education. I did so as regards an earlier amendment. In future the new element will be the student's own contribution to fees. As I said before, we estimate that these will amount to £130 million in England in 1998–99 after allowance has been made for costs of some 5 per cent. for collection and default. As I have also said, we have already announced a package of measures allowing an extra £165 million to be spent in higher education in 1998–99.
I now turn to the point about further education raised by the noble Baroness. I do not believe it right to suggest that we have robbed higher education to pay for further education. The funding package we have announced for higher education for next year means that institutions of higher education will fully benefit from the money derived from student contributions to fees. The sector as a whole will receive an increase in funding, including the student support access package, greater than the amount that we expect will be raised by the introduction of tuition fees.
The bulk of the additional funds for further education next year have come from savings brought about by a drop in unemployment and not from this particular

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source. Incidentally, the fact that we have been able to make savings derived from the drop in unemployment reflects the success of our policies.
I make no apologies for putting extra money into further education next year. Our initial response to the Dearing Report made clear that the savings from the new funding arrangements will be used to improve quality, standards and opportunities for all in further and higher education.
I return to the specific amendments before us. As I explained earlier, it would be wrong to leave out of the reckoning fee income for the purposes of calculating grant for the higher education funding councils. All public funds must be taken into account when assessing the needs of higher education. Given the assurances that I have just made and that all fees paid by or on behalf of students will remain with higher education institutions, I hope that the noble Lord and the noble Baroness will withdraw their amendments.
12.30 a.m.
The Earl of Limerick: I hope that the noble Baroness will forgive me. I believe that she partly misunderstood my point. I recognised and explicitly said that I understood that £1,000 per student will come to the university in whatever mix between students and local education authorities. That is the direct result. I was talking about the indirect result. My local authorities will have a much bigger recoupment claim on the DfEE than the local authorities from universities with a predominance of rich students. In consequence, would there be a knock-on effect in terms of what the Higher Education Funding Council might allocate to universities in such different positions?
Baroness Blackstone: Of course not. The grant that the noble Earl's institution receives would not be lower simply because there needed to be more provided from public funds to make up for the lower level of tuition fee income that the noble Earl's institution could obtain.
Baroness Blatch: I take it from that that the local authority would be the body to be compensated? Let us take a very simple example. If 50 per cent. of the students who come through my noble friend's university, which is university A, are students for whom the whole £1,000 is met by the local authority and 50 per cent. pay £1,000 and in university B all the students pay £1,000 themselves, with no call on local authority funds, will the local authority that has to meet 50 per cent. of the student's £1,000 be compensated for the extra amount of money it has to pay out to the university?
Baroness Blackstone: Yes, of course. Just as at present the local authority fee contribution to universities comes direct from the Department for Education and Employment, this will continue. No local education authority will be worse off as a result of having to make up the difference because the money
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comes direct from central government and is paid simply through the local education authorities. I hope that is helpful.
Baroness Blatch: I knew it was only a mechanism and that the money went round in that way. It is helpful to have it confirmed that that will continue to be the case.
Perhaps I may raise another question. I have read so much background to the Bill from different sources—newspapers, media interviews and so forth—and also noted Kim Howells' point. He specifically spoke about the sum of money that would come in from tuition fees and broke it up into chunks, some of which would go into further education and some into higher education. That is not consistent with the answer given by the noble Baroness. There is confusion about whether this money will remain exclusively with higher education. I also read somewhere that it is merely a mechanism and that the £1,000 per student, in whatever mix, will go to the university but there will be a clawback. It will be taken back and reallocated centrally in the way that Kim Howells has set out in his reply. I do not know whether the noble Baroness will be able to enlighten the Committee. Can she confirm that there will not be a clawback and that the £1,000 will reside with the university or college where the student is taking up a place?
My next question is critical. Will there be any adjustment? We have been told that students who do not make the contribution this year will make a contribution to the university equal to 25 per cent. of the average cost of tuition across the country. Is that to be a 75–25 split between that which is met by the state, whether LEA or government, and that which is met by the student—which represents no extra money because it still makes up the whole cost of tuition fees—or will the Government continue to meet the equivalent of the 100 per cent. cost of tuition fees for all students? Will they contribute a further 25 per cent., which will constitute extra money that remains with the universities? It would be helpful to have an answer to that.
I shall seek to press this amendment at some stage. I know that it has a great deal of support. I shall check the technicalities and read what the noble Baroness said. This is probably the last word for tonight.
I should like to take this opportunity to apologise most profusely for espying strangers in the Chamber earlier. I understand that that was wholly against the rules of the House. I also apologise most profusely to the strangers whom I espied for any embarrassment that I may have caused them.
I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 19 agreed to.
[Amendment No.116 not moved.]
Clause 20 [Interpretation of Chapter I.]:
[Amendment No.117 not moved.]
Clause 20 agreed to.
Clause 21 [Grants and loans: Scotland]:

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[Amendments Nos.118 and 119 not moved.]
Clause 21 agreed to.
Clause 22 [Imposition of conditions as to fees at further and higher education institutions in Scotland]:
Baroness Blackstone Baroness Blackstone moved Amendment No.120:
Page 18, line 17, after ("further") insert ("financial").
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendments Nos.121 to 126:
Page 18, line 33, leave out ("specified").
Page 18, line 34, after ("persons") insert ("prescribed by regulations").
Page 18, line 34, leave out ("any specified matters in connection with").
Page 18, line 35, leave out ("specified description") and insert ("description so prescribed").
Page 18, line 36, after ("may") insert (", in relation to any such class of persons attending courses of any such description,").
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Page 18, line 37, at end insert—
("( ) No condition under subsection (3B) above shall apply in relation to any fees which are payable, in accordance with regulations under section 1 of the Education (Fees and Awards) Act 1983 (fees at universities and further education establishments), by students other than those falling within any class of persons prescribed by such regulations for the purposes of subsection (I) or (2) of that section (persons connected with the United Kingdom etc.).").
On Question, amendments agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 127:
Page 18, line 41, after ("further") insert ("financial").
On Question, amendment agreed to.
[Amendment No. 128 not moved.]
Clause 22, as amended, agreed to.
House resumed.
House adjourned at twenty minutes before one o'clock.