Teaching and Higher Education Bill [H.L.]

HL Deb 22 January 1998 vol 584 cc1698-758

8.55 p.m.

House again in Committee on Clause 16.

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 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.

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 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 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 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.

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 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 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.

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 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 "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 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 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. 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 moved Amendment No. 100: Page 12. line 48, leave out ("(8)") and insert ("(7)").

On Question, amendment agreed to.

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 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 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". 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.] 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.

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 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 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. 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 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 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 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.

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 Lockwood

moved 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—

1. (a) personal or spouse's income;
2. (b) parental income;
3. (c) ethnic background;
4. (d) gender;
5. (e) any registered disabilities; and
6. (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. (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.

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 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 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 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 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 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 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 moved Amendment No. 108:

Page 14, line 10, after ("further") insert ("financial).

On Question, amendment agreed to.

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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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 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. 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. 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.

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 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 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 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]:

[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 moved Amendment No.120: Page 18, line 17, after ("further") insert ("financial").

On Question, amendment agreed to.

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,"). 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 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.