Lords Sitting of 2 March 1998

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

Gulf War: DU Weapons and Toxic Dust
Lord Jenkins of Putneyasked Her Majesty's Government:
Whether chemically toxic dust created and scattered by the explosion of depleted uranium weapons by allied forces in the Gulf was responsible for casualties on either side.
The Minister of State, Ministry of Defence (Lord Gilbert): My Lords, the Government are not aware of any coalition personnel who have become ill or have died as a result of any such exposure. We have no information regarding any Iraqi casualties resulting from exposure to such dust.
Lord Jenkins of Putney: My Lords, is it the view of the Government that toxic chemicals produced by their nuclear weapons are legal but that if such substances were produced by an enemy they would become illegal?
Lord Gilbert: My Lords, my noble friend may be suffering from a misunderstanding. DU shells are in no sense nuclear weapons and no nuclear explosion is caused when they hit any object.
The Countess of Mar: My Lords, is the noble Lord aware of a study carried out in 1993 by three US scientists which found that in the first eight months after the Gulf War about 50,000 children died from DU-related illnesses? In the light of that, what does the Minister think of the remark made by General Gallois in 1995 that if tanks are equipped with these kinds of munitions, chemical/nuclear war is morally allowable?
Lord Gilbert: My Lords, I am not familiar with the study to which the noble Countess has referred. But I find those figures quite remarkable because, if anyone did suffer from the inhalation of depleted uranium dust, he would have had to be very close to the point of impact of the shell on the tank. It would have to be a hard and not a soft target. On the basis that I dispute the premise of the noble Countess's question, I cannot follow the rest of it.
Lord Burnham: My Lords, in a reply to an earlier question that I asked about depleted uranium, the noble Lord said that it was a heavy metal with toxic properties similar to lead. Can he confirm that that is the case and that DU has no more dangerous properties than lead?
Lord Gilbert: My Lords, I am grateful to the noble Lord for his question. I can confirm what he has said.
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Depleted uranium is a material used for many civilian purposes. It is used in hospitals for radiological protection, for balancing the keels of small boats and in aircraft. There are several tens of thousands of tonnes of this material in civil hands in this country.
Lord Hayhoe: My Lords, can the Minister confirm that depleted uranium is used because of its high density and that as a result it can penetrate armour? Does he agree that there is no question of depleted uranium surrounding explosives and dust being created, and that the only dust that may arise from the use of depleted uranium ammunition results from the shattering of ammunition as it hits a very hard object, as the noble Lord implied?
Lord Gilbert: My Lords, I am most grateful to the noble Lord. I agree entirely with what he has said.
Lord Jenkins of Putney: My Lords, does my noble friend suggest that no toxic chemical is produced by the explosion of depleted uranium, or does he suggest that a nuclear weapon exploded by us is in a different category from a nuclear weapon exploded by anyone else?
Lord Gilbert: My Lords, my noble friend cannot have heard my original reply. These substances are not parts of nuclear weapons. No nuclear explosion takes place whatsoever when a DU shell hits the main battle tank of an opposing force. He is quite right that toxic dust arises from such incidents. It also arises when other materials hit main battle tanks.

Immigration Advisers
2.42 p.m.
Lord Dholakiaasked Her Majesty's Government:
Whether they will publicise the names and addresses of those companies and individuals offering immigration advice whose activities cause concern to the Home Office.
The Parliamentary Under-Secretary of State, Home Office (Lord Williams of Mostyn): My Lords, no. It would not be right to publish details of companies and individuals whose activities are currently under investigation or who may be further investigated in the future or who may be behaving in a way which is currently within the law where we believe the law to be inadequate and in need of amendment.
Lord Dholakia: My Lords, I thank the Minister for his reply. I am aware of his impeccable record in the field of race and community relations. Does he agree that those who are desperately seeking help and advice on immigration matters are being exploited and that it is right and proper that they should be aware of where to go when seeking such help and advice? On that basis, does the Minister accept that a 3 per cent. increase in the budget of the Immigration Advisory Service has resulted over a period of three years in a deficit of about

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£500,000 and yet the service, whose record is impeccable—it has a 25 per cent. success rate—is expected to cut its staff by 21 as a result of cuts?
Lord Williams of Mostyn: My Lords, I agree with the noble Lord's first proposition. People are in a vulnerable situation and are being leeched upon by organisations of dubious morality and possible illegality. Those organisations are concerned with bogus applications for asylum, the presentation of bogus marriage certificates and fraud of the legal aid fund and are preying financially upon those in such difficulties.
The Government funds the Immigration Advisory Service. Funding for 1997–98 will be core funding of £2.592 million, together with £500,000 on the spend-to-save initiative. In respect of the refugee legal centre, there is further funding from the Home Office of some £3.644 million. Therefore, the sums available from public funds are not insignificant.
Lord Pilkington of Oxenford: My Lords, is the Minister satisfied that the law can deal with these illegalities? My experience shows that when these fraudulent immigration agencies deal with gullible people the civil courts are dilatory in attending to the cases. Can the Minister give his attention to accelerating the court process of these cases, which cause enormous distress?
Lord Williams of Mostyn: My Lords, I agree with the thrust of the noble Lord's question. We believe that the criminal courts and not the civil courts should be dealing with these cases. Undoubtedly, criminal offences are being committed, which is one of the points of the consultation document we have put forward. The Government's preference is to look to a statutory scheme which would be able to regulate the activities. Our further belief is that if there are convictions in the courts a few sharp sentences would send a useful signal and have a salutary effect on what is a cruel practice.
Lord Randall of St. Budeaux: My Lords, does the Minister agree that applicants for immigration are incredibly vulnerable because the immigration law is complex and many of them are not in the UK at the time of application? In order to prevent the kind of cases about which we read, is there not a reasonable case for setting up a register of reputable organisations and individuals which provide such services to potential immigrants?
Lord Williams of Mostyn: My Lords, there is such a case. That is why we have put out our consultation document which is headed "Control of Unscrupulous Immigration Advisers". The three options we are examining are, first, a self-financing statutory scheme, to which I referred earlier; secondly, a voluntary self-regulatory scheme; and, thirdly, a compulsory self-regulation scheme.
Lord Avebury: My Lords, bearing in mind that many of the examples quoted in the consultation document are
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of a criminal nature, and that on 2nd February in another place the Home Secretary stated that 250 firms were guilty of unscrupulous behaviour and 40 of them were solicitors, why have not those firms been reported to the Home Office, the Law Society or to the police respectively?
Furthermore, considering that the proposed regulatory scheme will cost £600 per agency, where does the Minister believe that the UKIS and the Refugee Legal Centre will find the money to meet the additional costs? Where will it come from if it is not passed on to the clients?
Lord Williams of Mostyn: My Lords, there may be confusion in the noble Lord's mind. The proposed fee for the first option, the preferred option, is an annual fee of £600. That is not a vast amount in terms of the budgets which I have put forward. It may weed out the unscrupulous because they will know that under a statutory scheme they are likely to be exposed.
Assertion of unscrupulous behaviour is one thing, but proof of criminal activity is quite another. However, I assure your Lordships that the Home Secretary is deeply concerned about the abuses. The matter was raised in 1992 by a Select Committee in another place and it was put forward in your Lordships' House in 1996 when my noble friend Lord Dubs introduced a proposal for a statutory scheme. The then government believed that the problem was not sufficient to require such a remedy.
Lord Weatherill: My Lords, I support what was said by the noble Lord, Lord Randall. Many immigration cases were brought to me in my former constituency of Croydon. In one case, I discovered that people were being brought to me by unscrupulous advisers who charged a fee for the introduction. Does the Minister agree that there should be a register?
Lord Williams of Mostyn: My Lords, as far as the Government are concerned, the noble Lord is pushing at an open door. I confirm that people in this vulnerable situation are being charged, I have heard it alleged, as much as £1,000. A further claim is then made on the legal aid fund, making two possible frauds. At the end, there is no decent redress for the applicant and the system is severely clogged for more meritorious applications.
Earl Russell: My Lords, is the Minister aware that in the past he has admitted that certain aspects of the law relating to asylum seekers are far from clear and satisfactory and that while that is so the need for advice is exceptional? When he considers how far that is the case, will he bear in mind what was said by Lord Taylor of Gosforth about the delays to justice caused by ill-informed litigants in person?
Lord Williams of Mostyn: My Lords, certainly it is a very difficult area of law even for those who claim to be expert in it. But I know that the noble Earl will remember the indication which I gave to your Lordships

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in the past few weeks that there is a review of the asylum procedures. I entirely agree that we want a system which will be fairer, firmer and faster.
The Countess of Mar: My Lords, I declare an interest as a lay member of the Immigration Appeal Tribunal. Is it not correct that when an asylum seeker has his initial claim rejected by the Home Office, he is informed of the two free legal services which are provided? But is it not the case also that a great many people who seek asylum do not speak English and those forms are only in English? In view of the fact that the Home Office will know, at that stage, which language the person speaks, would it not be possible to put in a separate sheet with that information in that person's own language, because if he goes to a solicitor he is unlikely to be given that information?
Lord Williams of Mostyn: My Lords, that is a useful suggestion. One of the problems is that people from abroad who come to this country will not be familiar with the system, as the noble Lord, Lord Dholakia, rightly pointed out, nor with the language. It is people of their own ethnic and national origins who are familiar with the language who are very often preying on their own countrymen and countrywomen. It is that which we wish to stop.
Lord Dholakia: My Lords, will the Minister indicate how many cases have been reported to the Law Society, bearing in mind that such exploitation has been going on for some years now?
Lord Williams of Mostyn: My Lords, I cannot give a precise figure in terms of those reported to the Law Society. I agree entirely with the sub-text that the Law Society and the Bar Council have their own duties in relation to their members. Very often, we are dealing with people who are not solicitors or barristers but who may pretend to be. At present there are about 250 organisations, individuals and companies which are known to the Home Office. Of those, 38 are firms of solicitors and five claim to be solicitors. I hope that that provides a context for the noble Lord's question.

Western European Union: Purpose and Functions
2.52 p.m.
Lord Wallace of Saltaireasked Her Majesty's Government:
What they consider to be the purpose and functions of the Western European Union, in the context of NATO's acceptance of the objective of developing a European security and defence identity and of the Protocol on Article J7 of the Treaty of Amsterdam.
Lord Whitty: My Lords, the Western European Union acts as the interface between NATO and the European Union, allowing Europe to take on an increased share of responsibility in security matters, consistent with the primary role of NATO. It provides
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Europe with a valuable crisis management tool and a military capability which the European Union can call on to support its common foreign and security policy.
The WEU is also an essential part of the development of the European security and defence identity in NATO, able to draw on the assets and experience of NATO to run crisis management operations in which our North American allies choose not to take part.
Lord Wallace of Saltaire: My Lords, I thank the Minister for that Answer. Will the Minister assure us all that, in the foreign policy led strategic defence review, the question of how our forces fit in with the developing European and defence initiative is being taken fully into account? Will the Minister accept that over the past few months we have heard more enthusiastic language about closer European defence co-operation from our American allies than we have from the British Government?
Lord Whitty: My Lords, on the first point, I assure the noble Lord that those aims will be taken into account in the defence review. On the second point, it is clear that the British Government wish to see a strong European dimension to NATO. What the noble Lord may be querying is the position which the Government have explained often to this House; namely, that we do not believe that the European Union should take on direct military responsibilities. We made that position absolutely clear in the Amsterdam negotiations.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the protocol cited in the Question refers specifically to paragraphs 1 and 3 of Article J7? In view of the profound silence of the European Commission during the recent Iraq crisis, will the Minister reassure us that the members of the European Council meeting together can decide on courses of action regarding both the organisation and functions of the WEU without any proposals coming from the Commission or without being required to enter into any co-decision matters in conjunction with the European Parliament?
Lord Whitty: My Lords, clearly relations between the EU and the WEU are covered in the inter-governmental second pillar to which Article J7 and its paragraphs apply. That means that it is the Council of Ministers and not the Commission which is the prime authority in those matters and there is no co-decision with either the Commission or the Parliament in that respect.
Lord Hardy of Wath: My Lords, will my noble Lord comment on the proposition that the WEU is much more suitable as the base of the security pillar in western Europe but, if it is to fulfil that role properly, the Council of Ministers will have to take the same sort of approach as Her Majesty's Government have adopted over the past year.
Lord Whitty: My Lords, to some extent, I agree with that. Increasingly, the WEU can take on responsibility for

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aspects of crisis management within Europe. We should not expect it to take on aspects of the territorial defence of Europe which is the responsibility of NATO.
Lord Bruce of Donington: My Lords, is the noble Lord aware that the European Council of Ministers has no status whatever in the matter? The protocol concerned and the article to which it relates refer specifically to the European Council, which is set up under entirely different auspices from the Council of Ministers. Therefore, would the Minister care to revise his answer to my question?
Lord Whitty: My Lords, not very much. The article referred to relates to co-operation between the WEU and the EU. Clearly, the Council of Ministers does not have any authority in relation to the WEU's operations. Therefore, the co-operation is expressed in terms of co-operation between the European Council and the WEU.
Lord Carver: My Lords, will the noble Lord clarify his answer? Is he saying that the WEU as it exists at present and its relationship with NATO satisfactorily provides the European security and defence identity which has been envisaged? If so, I do not agree with him. Is he saying that nothing more needs to be done to produce a better organisation and relationship than the sort of muddle which exists now between the WEU and NATO?
Lord Whitty: My Lords, I am certainly not saying that the present position is satisfactory. But the role of the WEU would primarily be in the area of crisis management, whereas the European pillar of NATO would deal with territorial defence aspects. But certainly all those areas need further development and, in particular, the WEU needs to be turned more effectively into an operational unit to deal with crisis management matters. I hope that that clarifies the situation.
Lord Wallace of Saltaire: My Lords, Article J7, which is now before the House as part of the European Communities (Amendment) Bill, states specifically that the WEU is an integral part of the development of the European Union. Are the Government saying that they agree with that sentiment or that they have deep reservations about it?
Lord Whitty: My Lords, for the European Union to develop a direct defence capability requires a unanimous decision and at present the British Government are not prepared to be party to that unanimous decision. Those longer term objectives will always be subject to a unanimous decision under the Treaty of Amsterdam as well as under the current treaties.

Motorcycles: Parking Places
2.59 p.m.
Viscount Addisonasked Her Majesty's Government:
Whether, as part of their integrated transport policy, they will strengthen current guidelines to ensure that sufficient motorcycle parking spaces are made available.
Baroness Farrington of Ribbleton: My Lords, discussions with motorcycle groups have identified the provision of adequate and secure parking as one of their principal concerns. The Government certainly agree that local authorities and employers should have regard to their needs in this respect. What further advice might be offered on the subject is something that we shall consider in the preparation of the forthcoming White Paper on integrated transport policy.
Viscount Addison: My Lords, I thank the Minister for that reply. Is she aware that there is no strategy for public transport which has resulted in a reduction of congestion on the roads? Is the noble Baroness also aware that, because of that, the number of commuter scooters and motorcycles is an attractive sight to those who use public transport because the costs involved compare favourably with the cost of public transport? Bearing that in mind, and given the fact that 93,000 motorcycles and motor scooters were sold last year, is it not imperative that more leverage should be placed on local authorities—I was pleased to hear what the Minister said—and that something should be put in place to ensure that they do provide more adequate and secure parking for motorcycles and motor scooters?
Baroness Farrington of Ribbleton: My Lords, the Government are committed to developing a sustainable and integrated public transport policy. With regard to the modal shift from one means of transport to another, research is a good idea and has been commissioned. It is useful to note that the Driving Standards Agency has surveyed candidates taking the test for motorcycle licences in order to gain some evidence. It was found that 75 per cent. of the sample had access to a car, which they also used daily or several times a week; that 33 per cent. travelled to work by motorcycle more than once a week; that some would otherwise have driven; but that most would have walked or used public transport. Regarding secure parking, local authorities have powers to provide designated parking spaces on highways for motorcycles. The Government encourage them to use those powers.
Lord St. John of Bletso: My Lords, is the Minister aware that there was a 36 per cent. rise last year in motorcycle sales and a 39 per cent. rise in moped sales? I say this in my capacity as one of your Lordships who is a motorcycle commuter. Does the Minister agree that the number of parking spaces in London for motorcycle riders is totally insufficient?
Baroness Farrington of Ribbleton: My Lords, with regard to London, I can tell the noble Lord that the document Traffic Management and Parking Guidance for

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London, published on 27th February, states that it expects boroughs which have not yet done so to undertake a fundamental review of their existing parking regimes. Among other things, the review process is expected to assess the need for any coach, cycle or motorcycle parking. The document goes on to point out that the Secretary of State recommends that local authorities should bear in mind the needs of cyclists and motorcyclists when planning and designing.
Lord Naseby: My Lords, the noble Baroness mentioned the Driving Standards Agency. Can she tell the House whether that agency will be looking at the driving standards of dispatch riders in London and other central city areas?
Baroness Farrington of Ribbleton: My Lords, they would be included in any review of standards.
Lord Merlyn-Rees: My Lords, regarding guidelines, can my noble friend say whether, where a great big motorbike driven by a chap dressed in leathers attempts to sneak past two cars, thereby frightening the living daylights out of an old man, breaking the car wing mirrors and then making off without saying a word, an addendum could be added to the guidance stating that, in such circumstances, the biker should: "Stop, be kind and apologise"?
Baroness Farrington of Ribbleton: My Lords, my noble friend's question had a ring of experience about it. I am quite sure that all those who are involved with motorcycle riding, including Members of your Lordships' House, would also want to continue to pursue safety as the main theme, both for riders and other road users. I am quite sure that the picture of large, aggressive motorcyclists driving dangerously is one which is most serious but must not be taken to include all motorcyclists.
Lord Rotherwick: My Lords, my noble friend Lord Addison told the House that 93,000 motorcycles and scooters are sold each year. However, does the Minister agree that there are no secure parking spaces when 52,000 motorcycles are stolen each year, according to the figures of the Metropolitan Police stolen vehicles unit? Therefore, what are the Government proposing to do to ensure that we have secure parking spaces in London, especially as regards street furniture so that motorcycles can be chained and secured? Further, can the Minister say when the White Paper on integrated transport policy will be published?
Baroness Farrington of Ribbleton: My Lords, secure parking is a key concern. We acknowledge the problem of theft, although the rate has fallen in recent years. The Government have declared that they will change the law when an opportunity arises to put beyond doubt the ability of local authorities to provide devices on the highways to which motorcycles can be attached.
The Government also endorse the initiative of ACPO on the secured car parks initiative for off-street car parks and encourage all operators to aspire to the standards that that has established. Local authorities have the power to
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require that off-street parking in car parks that they do not own provide motorcycle parking spaces. However, should that result in a loss of revenue for those who own the car park, compensation must be paid by the local authority.
The Viscount of Falkland: My Lords, although my point does not directly relate to the Question on the Order Paper—
Noble Lords: Oh!
The Viscount of Falkland:—it has, nevertheless, been raised. I should first declare an interest as chairman of the Despatch Association, which is one of the two main bodies that represent dispatch riders. I can tell the House that there is now a national vocational qualification for dispatch riders which is more and more widely being taken. Is the Minister aware that, on every occasion I address groups of dispatch riders, I tell them that every time they frighten one of my noble friends—or, indeed, other noble Lords—by knocking wing mirrors, it makes my life exceedingly difficult and that, therefore, I am expecting a vast improvement in that area?
Baroness Farrington of Ribbleton: My Lords, I endorse the view that, complementary to compulsory basic training, it is important to encourage the pursuit of safety. I am quite sure that the noble Viscount did not wish to imply that it was acceptable to knock car wing mirrors of people who are not Members of this House. However, as I said, I endorse what he said about the importance of safety. That is especially so for dispatch riders, many of whom are very young.

Succession to the Crown Bill [H.L.]
3.6 p.m.
The Lord Privy Seal (Lord Richard): My Lords, last Friday my noble friend Lord Williams of Mostyn, when replying to the Second Reading debate on the Succession to the Crown Bill, said:
"Her Majesty had no objection to the Government's view that in determining the line of succession to the throne daughters and sons should be treated in the same way".
The noble Lord, Lord Marlesford, immediately raised a point of order and said that,
"it was not normal to make known the views of the monarch on legislation before the House".—[Official Report, 27/2/98; col. 916]
No doubt the noble Lord had in mind the passage in Erskine May, which says:
"Her Majesty cannot be supposed to have a private opinion, apart from that of her responsible advisers; and any attempt to use her name in debate to influence the judgment of Parliament is immediately checked and censured".
I was not present during that part of the debate when my noble friend advised the House of the view of Her Majesty. However, I recognised that the matter was of some importance and, therefore, took advice on it. The advice that I have received is that, on a Bill which is so fundamentally personal to the sovereign and to her family, it would have been unhelpful to the House for

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the Government not to have made her view known to your Lordships. The procedure must always be applied with common sense and with due consideration of the circumstances. I am bound to say that the advice I received was both sensible and correct.
Her Majesty's views would very soon have became apparent through other channels. Indeed, there was an alleged mention of them in the Daily Telegraph of the day immediately before the debate. It might have been thought discourteous to your Lordships, when debating such a measure, not to have learnt of them first. Even though the advice that I was tendered was that no impropriety had occurred, I thought it might help the House, in view of the interventions made on Friday, to have the position clarified publicly at the earliest opportunity. That is what I have sought to do.
Baroness Blatch: My Lords, I thank the noble Lord for the Statement that he has just made to the House. Was my noble friend Lord Marlesford given notice that the statement was to be made today? Without prejudice to the advice received by the noble Lord the Lord Privy Seal, it is astonishing that on such a constitutional matter a statement was made to the House on the Second Reading of a Private Member's Bill on a poorly attended Friday afternoon in a way which broke a convention which has survived over centuries; that is, that it is not normal to make known the personal views of the monarch on legislation before the House. I understand that no Member of the Opposition, nor the usual channels, nor my noble friend Lord Archer, were informed that such an historic break with convention was to be made. I note the advice that has been accepted by the noble Lord the Lord Privy Seal. I have read and re-read page 382 of Erskine May, which has already been referred to by the noble Lord, Lord Richard, but which I refer to again:
"Where the Crown has a distinct interest in a measure, there is an authorized mode of communicating Her Majesty's recommendation or consent, through one of her Ministers";
that is, setting aside, or putting at the disposal of the House, the Crown's prerogative. That was done for this Bill on 30th July 1997. Erskine May further states,
"but Her Majesty cannot he supposed to have a private opinion, apart from that of her responsible advisers; and any attempt to use her name in debate to influence the judgment of Parliament is immediately checked and censured".
It is my personal view that it was inadvisable for the noble Lord, Lord Williams, to have broken with the convention in this way. Whenever the personal views of the sovereign are placed before the House, ahead of the determination of a Bill, private or public, that runs the risk of influencing matters under discussion and impeding full and free debate. Therefore I hope the noble Lord the Lord Privy Seal will assure the House that the precedent established should not be prayed in aid by the Government to justify alluding to the sovereign's personal view on other matters coming before the House.
3.12 p.m.
Lord Rodgers of Quarry Bank: My Lords, I hope that the majority of Members of your Lordships' House will feel that the Statement on the position made by the noble Lord the Lord Privy Seal was fair and reasonable and widely acceptable. I think that the most relevant sentence in that Statement of the noble Lord was when he said that procedure must be applied with common sense and with due consideration of the circumstances. The circumstances were such that the failure to make a Statement to the House in the terms that the Minister did would have been widely misunderstood, and, I think, resented in this place. My only question is one that I perhaps take for granted. I assume that the circumstances of the Statement, the time and the place were understood by Her Majesty so that she was in full knowledge of what was being done.
Earl Russell: My Lords—
Lord Richard: My Lords, I had better reply to the two Front Bench spokesmen first.
The noble Baroness, Lady Blatch, asked me whether I had communicated with the noble Lord, Lord Marlesford. The answer to that is no. What I did was to communicate with the Opposition. The Opposition are here in force this afternoon. I made what I thought was a procedural statement to clear up a point which had arisen last Friday, instead of which I find myself under considerable attack from the noble Baroness, particularly on the basis that this is an historic break with convention. My advice is that it is not an historic break with convention. There is no breach of convention. There is no breach of the rules of procedure of the House. That is the advice that I have received. In those circumstances I say with great respect to the noble Baroness, Lady Blatch, that I think she is going somewhat over the top as regards this issue.
I am grateful for the views of the noble Lord, Lord Rodgers. It would be difficult to see how the Bill could sensibly have been debated without that information being passed to the House; otherwise it would have been debated on the basis of leaks in the newspaper. I cannot believe that that is what the noble Baroness, Lady Blatch, would have wanted. If there had been many leaks to the newspaper, I am perfectly certain that we would have been under intense pressure to have clarified the position.
The Earl of Lauderdale: My Lords, can the noble Lord tell us what precedents there are for citing the private views of the monarch in a matter which is controversial in party political terms?
Lord Richard: My Lords, first, with respect, I do not agree that they are necessarily the private views of the monarch. Secondly, it would have been impossible to discuss the Bill without the views of the present monarch being considered. The noble Lord, Lord Rodgers, asked me whether this took place after consultation. Of course it occurred after consultation with the appropriate authorities, and with their full

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agreement. In my respectful submission to the House, in those circumstances it would have been remiss of the Government not to have dealt with the position.
Earl Russell: My Lords, in my professional capacity, perhaps I may be associated with the advice that the noble Lord the Lord Privy Seal has received. I believe it to be entirely correct. I believe the noble Baroness, Lady Blatch, also to be correct that this procedure is not normal, but that is because the subject matter of the Bill is not normal. Such a procedure relates to Bills on the succession and on Royal marriages, which in their very nature are not likely to be every day occurrences.
Lord Richard: My Lords, I am certainly grateful—I nearly said surprised—to have received the support of the noble Earl, Lord Russell. His historical knowledge is far greater than mine. I am fortified in the position I have taken by not only having the support of the Clerks of both Houses but also of eminent historians and constitutionalists in this House.
Baroness Carnegy of Lour: My Lords, does the noble Lord the Leader of the House accept that at the present time, when so much constitutional change is being discussed, the Government need to be particularly careful about the propriety of the way in which the views of the Crown, or the personal view of the monarch, are conveyed to the House? Does he also agree that the Government have a duty when they are dealing with a comment that has been made by a Member of the House—in this case by my noble kinsman Lord Marlesford—to tell the individual that this matter is to arise, and not to use the Opposition Front Bench as message boys?
Lord Richard: My Lords, with great respect, I do not accept the final point that the noble Baroness has made. It seems to me that in circumstances of this kind, when the incident occurs on a Friday, I have to decide on a Monday morning whether to make a Statement. I thought I was helping the House in making the Statement. When I am dealing with an issue which has arisen in the House I really cannot make myself responsible for notifying everyone who had an interest in that issue last Friday that they should be here this afternoon. If I have been discourteous to the noble Lord, Lord Marlesford, of course I apologise, but I do not think that I have.
The noble Baroness said that the Government have been responsible, or are being responsible, for much constitutional change. The author of the Bill we are discussing is sitting on the Benches behind the noble Baroness, not behind me. The constitutional change that was debated last Friday has emerged from the Opposition Benches and not from the Government Benches. The noble Baroness asks me to be especially careful as regards the Queen's views. Of course we shall be careful. I totally accept that point. Were it not for the peculiar, special nature of this Bill, no difficulty would have arisen. However, the nature of the Bill is such that
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it was almost impossible to discuss it without this matter being an issue. If it was going to be an issue, it was obviously better that it was dealt with on a formal, agreed basis by the Government Front Bench than by leaks in newspapers.
Baroness Blatch: My Lords, I ask the noble Lord the Lord Privy Seal just one question. Is it proper or is it normal practice to refer to the Clerks of both Houses as having given advice?
Lord Richard: My Lords, if another hare is about to start running, let me strangle it now. If I should not have said that I have had the advice of the Clerks of both Houses. I apologise to the Clerk of the House, to whom I should not have referred. If that helps the noble Baroness, I am delighted to say so.
Lord Naseby: My Lords, before the noble Lord the Lord Privy Seal sits down, perhaps I may ask this. Before Erskine May is cast aside quite so easily as appears to have been done on Friday, would it aid the House in future if, when there is to be some substantive change, prior notice were given to noble Lords at one of the normal meeting days of the House which is known to be well attended, so that noble Lords can take the matter on board? Had that been done, this difficulty would not have arisen.
Lord Richard: My Lords, I do not accept that Erskine May has been tossed aside. Nor, indeed, is the advice that I have received that Erskine May has been tossed aside. If Erskine May had been tossed aside, and that is what the Government were advised, I should be making a very different statement today from the one I have made.
Lord Annan: My Lords, could we vote in favour of common sense and not pedantry?

Teaching and Higher Education Bill [H.L.]
3.21 p.m.
The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Baroness Blackstone.)
On Question, Motion agreed to.
Clause 16 [New arrangements for giving financial support to students]:
Lord Tope Lord Tope moved Amendment No. 37:
Page 11, line 6, at beginning insert—
("(A1) Fees in respect of tuition for any course of higher 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.

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(A2) For the purposes of subsection (A1) above, "the student concerned" means a person whose normal place of residence for purposes other than attendance at that institution is in the United Kingdom.").
The noble Lord said: My Lords, in moving the amendment standing in my name and that of my noble friends, I speak also to Amendments Nos. 40 and 45.
There has been considerable concern in your Lordships' House and in the country generally as to exactly where in the Bill one finds the provision to institute student payment of tuition fees. Indeed, there is no specific reference to such a provision in the Bill. That has made it extremely difficult to draft any amendments opposing it, and therefore to have any debate in your Lordships' House on the principle of student payment of tuition fees. We reach this comparatively late stage of the Bill without having had any substantive debate on what many would see as one of the most important aspects of the Bill. I bring forward Amendment No. 37 as the vehicle by which your Lordships can debate the important issue and principle of student payment of tuition fees.
I am sure that it will be noted that this debate is also taking place in prime time, as was the Government's intention. The amendment that I move as a device to make our views clear on this issue provides that students will have to pay fees only where an equivalent grant has been made available for that purpose. I make no pretence that it is anything other than a device to register our fundamental opposition to the payment of tuition fees. The effect of the amendment, if passed, would be to nullify that payment. On these Benches, we oppose the student payment of tuition fees as wrong in principle, unnecessary in practice and the thin end of a very large wedge.
The most important of those arguments is that the Government's move is wrong in principle. They know it. The Harris poll among Members in another place suggests that 45 per cent. of Labour Members of Parliament also know it. Indeed, I think that only last week the noble Lord, Lord Glenamara, assured us that the provision will be defeated should it reach another place. I hope today that we can save it the trouble. If the measure reaches another place, I hope that the noble Lord is right in his belief.
There is widespread concern and opposition throughout the country to the imposition of tuition fees. There have been demonstrations in 14 cities across the United Kingdom. An estimated 40,000 students, lecturers and parents have taken part in the campaign against the student payment of tuition fees. There is a great wave of feeling against what I described at Second Reading—I got into some trouble with others in your Lordships' House—as a student poll tax. Many of us have received shoals of letters from student unions, individual students and concerned parents. That suggests that that concern is well founded.
We believe in the principle that education should be free at the point of entry and at the point of need. That is the principle we are defending today. We see education as a public service and a national investment. I had thought that noble Lords on the opposite side of the House shared that view of social provision and
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national investment. I know that many noble Lords and Members in another place are deeply unhappy at the move which the Government are making.
Much has been said about the deterrent effect of the imposition of tuition fees on applications for higher education. As we have said previously, those of us who oppose it may tend to exaggerate that effect. I think that it is equally true that the Government will seek to minimise that effect. The truth is that we shall probably not know the actual effect for a year or two until the system has settled down. But it must be self-evident that the fear of having to meet the tuition fees, the fear of having to leave university with a large debt, must be a disincentive in particular for people from poorer families. It is most certainly not an incentive to enter higher education.
Our second argument is that the Government's plan to introduce student payment of tuition fees is unnecessary in practice. We acknowledge fully and strongly that significant further money needs to be found for universities. We are all well aware of the funding crisis there. But it does not need to come from the £1,000 contributions of young or not-so-young students. Our approach to covering the cost is threefold. We recognise that there are three main beneficiaries of higher education: the state; the student, the individual learner; and the employers. Employers are too often left out of the equation. Yet if they are to benefit from a highly educated workforce, as our international competitors do, they need a strong and well-financed higher education sector. According to the CBI, good employers contributed an estimated £28 million in 1994; and I am sure the figure is higher now.
The problem is that there are too many free-loading employers who do not make any investment. They ride on the backs of their more responsible competitors. Liberal Democrats therefore want to introduce a remissible education and training levy, equivalent to 2 per cent. of the organisation's payroll. That proposal is endorsed by the OECD. Companies employing small numbers of people would be exempt. We estimate that that measure alone would raise some £500 million.
Clearly a further contribution needs to come from the Treasury. We make no bones about that. There have been many weary jokes in your Lordships' House and elsewhere about the longest "p" in history. But the fact remains that the somewhat modest £2 billion extra on education for which we asked was carefully costed and that more money for higher education was a small component within it. Additionally, we believe that the current funding system for tertiary education is wasteful with funds being distributed in various ways through a number of different funding agencies. The duplication of bureaucracy uses resources that could be better spent.
Lastly, I turn to the third beneficiary—the students. I think that it is now accepted, perhaps reluctantly by most students, that they, too, need to make a contribution towards university funding, not through the payment of tuition fees but through contributions to their maintenance. For that reason, after some difficult discussions within our party, we are prepared to abandon the concept of the maintenance grant and to

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fund that through income contingent loans. That, too, would release significant sums of money. I suspect that later in the day I shall say more about income contingent loans. But they are different in practice and principle from the student debt. They depend upon the outcome not the income. They take account of where the student will be in the future, not where he is when he starts on the process. Repayment is linked to so much in the pound, not to having to pay off a large debt or to having to meet the equivalent of a mortgage payment each month.
Those are our alternatives for finding the funding for higher education. But we are not here today to debate, still less to vote upon, Liberal Democrat proposals. I thought it important to make clear that we recognise the crisis and have means of meeting it.
I have spoken about the principle and about covering the cost. I wish to conclude with a warning about this provision being the thin end of a very large wedge, and possibly in two ways. Once the principle of free tuition has been conceded, demands will increase for student payment to grow and grow. I am aware of the provision in the Bill, but it will not be sufficient safeguard once the legislation has been introduced. In Australia, tuition fees have risen from an average of 23 per cent. of actual tuition costs to an average of approximately 50 per cent. That has led to a year on year drop in applications since 1996, with just the same pattern of decline in mature age applicants that we are beginning to see in this country.
The other danger is that, once student payment of tuition fees is accepted, it will spread further. The Government are trying to revise the traditional view of social provision so that those who can pay for public service should have to do so. It may well be that the next target will be sixth form education, and so on.
The time has come in this debate to take a stand and say that student payment of tuition fees is a step too far in principle, in practice, and in terms of the real dangers that it opens out. There are many more sensible and fairer ways of dealing with the funding crisis in universities. We are not today debating the Liberal Democrat alternative proposals—much as I would be happy to do so. We are deciding on the Government's proposals. We have the first opportunity in Parliament to express our view on those proposals, which were not a manifesto commitment. I therefore urge noble Lords to take this, the first opportunity in Parliament, to say "no" to tuition fees. This amendment is the opportunity to do so. I beg to move.
3.30 p.m.
Earl Russell: My Lords, some of your Lordships will be familiar with the work of Mr. Russell Baker, who is for the New York Times a combination of Miles Kington and the young David Frost. When I arrived in the States in 1984 I was reading his volume in the New York Times. He described a scene where a father burst into floods of tears at his son's graduation ceremony. It was because he had just been told that his son wanted to go to graduate school. When I read that, I vowed to myself that that was a situation I would never consent to have in this country. This is the time for me to make good that vow.
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My noble friend touched on the "thin end of the wedge" argument. It is a very powerful one. Present the Treasury with an alternative source of funding, give it an inch of that and it will take an ell; give it once, and it will do it again and again. There is nothing new about that. In 1589, immediately after the Spanish Armada, the Chancellor of the Exchequer asked another place for two subsidies, and very rashly promised that it would never be done again. Twenty-one years later, one of those who heard the promise said, "How it hath been honoured, you all know as well as I." There is nothing new in the story.
If we look around this Chamber we must be aware of the force of education as an engine of social change since 1945. The noble Baroness the Minister will remember the debates on the Education (Student Loans) Bill 1990. One after another, noble Lords rose to their feet and said, "This is the system without which I should not have been here." If we get the thin end of the wedge—if tuition fees rise from £1,000, to £2,000, to £4,000, and I do not know how far after that—that avenue will be closed. If it is closed, the effect on the social structure of our country will be one about which I do not want to think.
We talk about getting all the money to go to university. We talk about avoiding a claw-back by the Treasury. But in this respect we are up against the sovereignty of Parliament. No Parliament can bind its successors. We cannot now bind a future Chancellor of the Exchequer to put a certain sum of money into the budget for higher education, and therefore we cannot protect ourselves against a slide down the slippery slope where the proportion of funding for higher education coming from tuition fees gets greater and greater.
I declare an interest as a parent of two recent graduates. The debt of people who finish courses as students is already extremely heavy. I had colleagues in the United States who were still paying off their own student debt when they first took on the load of their children's student debt.
We have heard from time to time—for example, in the pensions debate in this House on 15th October—about the need to encourage people to make more provision for their pension. I wonder whether we can really have both these things at once; or whether we are starting two hares that cannot finish the course.
We have to consider also the effect on public sector recruitment. We know—and the Minister drew our attention to the fact during debates on this very Bill—that there is a considerable problem in the area of teacher recruitment. Where students leave university with a greatly increased load of debt, and where we have the big institutions in the City offering golden hellos, attracting recruits by offering to pay off student debt, the Government are on a fork. Either the public services accept that their number of recruits will go down and down; or they compete and they, too, offer to pay off the debt. By doing one, they do not get the recruits; by doing the other, they do not get the saving. We know of Morton's Fork; but this is a reverse Morton's Fork. Government is sticking the fork into itself. That is even worse than shooting oneself in the foot. A pitchfork can be quite a dangerous instrument.

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My final reason for supporting the amendment is that the charge is not on the student's subsequent income, but on the parents' immediate income; and there is no compulsion to make the parents pay it. There are cases—I have had one recently among my own pupils—where the father will not disclose his income. There is no way of getting round that. We have had cases, and again I have been dealing with one recently, where the parent will not pay—in that case because of his belief that women should not receive higher education. There still are such people, I regret to say.
There are also cases of bankruptcy, resulting from the last recession and predictable, no doubt, from the next, where the parent cannot pay. There again, the readjustment of the grant cannot be done in time and the student has to leave. So the student's chances of an education depend on parental goodwill and parental circumstances. That is not right. I am happy to support the amendment.
Lord Renfrew of Kaimsthorn: My Lords, the Government were given a very difficult problem by the previous government, with the increase in the number of students in higher education and the associated costs. The Dearing Committee's recommendations are the obvious way of resolving that problem. So, despite one's repugnance at the notion of paying tuition fees, there are arguments for it, as set out in the Dearing Report, with its suggestion of 25 per cent. of tuition costs to be paid in fees. To some extent one sees the Government's case. There is a financial problem to be solved. I am not sure that the remarks that we have just heard altogether meet the problem.
However, I am surprised that it has been found necessary by the Government both to abolish maintenance grants entirely and at the same time, and in addition, to levy a tuition fee of £1,000. It seems to me that the first step would be drastic enough.
I realise that the amendment concerns tuition fees, not maintenance grants, but I hope it is not inappropriate to address oneself to the overall package since it is not otherwise clear how one would discuss the matter in the Bill. Will the Minister confirm that the total abolition of maintenance grants was not a recommendation of the Dearing Committee? Paragraph 111 of the report says that,
"an increased contribution from graduates towards living costs … takes away subsidies from the poorest families and redirects them to others".
I do not like the notion of tuition fees but I do not feel able to take quite the same moral high ground as previous speakers have done. I can contemplate the possibility of tuition fees. My objection is that there is a double whammy, as it were. Students are to be asked to pay tuition fees, but in addition maintenance grants are to be entirely abolished, which was not a recommendation of the Dearing Committee. To do both seems inappropriate. The package is not a fair one.
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I received a briefing note from the students' union at the University of Warwick which puts the matter clearly. It states:
"The abolition of maintenance grants alone will raise twice the value of the current estimated funding shortfall for Higher Education".
There may be a correction to be offered there. I should be interested to know from the Minister, first, the total annual saving to be achieved by the abolition of maintenance grants and, secondly, the total sum that will accrue from the imposition of the £1,000 tuition fee, taking into account that it will not be paid by those who pass—or perhaps I should say fail—the means test. My concern is the package, and I shall be interested to hear what the Minister says. It is my overall impression, however, that the package is an unfair one. For that reason, I am currently inclined to support the amendment.
3.45 p.m.
Lord Glenamara: My Lords, I support these amendments. They do not entirely express my view on the matter but they are the best, and indeed the only, opportunity of voting against the imposition of tuition fees, which I intend to do this evening. The Government have no mandate for what is proposed either from the public—the electorate—or from the party. I hope that they will not tell me it was approved at the Labour Party conference, because it was not. It was swept under the carpet at the conference, with the connivance of one or two trade union leaders.
I believe that I am probably the only Member of your Lordships' House who went to college, many years ago, on a loan. When I came out of college, I had to repay that loan. I lived in poverty for a number of years. I was only rescued from poverty by going into the Army where I was fed and clothed at public expense. In the six years that I spent in the Army I made a tremendous vow to myself that, when I came out, one of my objects in life would be to ensure that every young person born in this country should have the opportunity to go through the whole education system to the top, if they had the ability to do so and wished to do so.
That is the bedrock of my political philosophy. It explains why, 30 years ago, the Labour Government—the government which we are now told did not do anything—abolished the 11-plus, the biggest cause of wastage of ability in this country at that time, and why my late colleague Anthony Crosland set up the polytechnics to extend the opportunities for higher education.
After the war we had the Robbins Report, following which we talked about the open highway from the primary school to the university. In recent years, as a university chancellor, I have seen about 4,000 students each year come up for their degrees. I began to believe that my dream was becoming a reality: that all our young people who wished to do so, and who had the ability to do so, were going right through to university. Then, in the closing years of this century, a Labour Government take leave of their senses, go off their rockers, and decide to impose a great road block, a great Berlin Wall, across this open road. Not only that but,

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with great enthusiasm, they are completing the other wall begun by the party opposite when they were in power, so we shall have two road blocks across the open road.
I object on three grounds. First, I object on principle. I believe that all the stages in our education system should remain free, as they have always been.
Secondly, I object because it will be a deterrent. There is some evidence—not much so far, but it will increase—of a deterrent, especially among poorer families who know that they will not receive a maintenance grant and that even the poorest students will have to borrow the money, £43 a week for a room, or £50 a week in private lodgings, and to pay for their food, clothing, train fares, and so on.
Thirdly, I object because the Government have chosen a grotesquely unfair way of implementing their proposals. Had they had the courage to impose a graduate tax, I would still have opposed it, and I would still think it wrong, but at least it would have been fair as between one ex-student and another. I tried to explain previously what will happen. Take, for example, two ex-students, graduates aged 30; one a lawyer earning £70,000 or £80,000 a year, the other a teacher earning £15,000 a year. The graduate lawyer makes no contribution at all to his tuition fees but the teacher has to pay £3,000 towards his fees, in addition to the other costs. That arises because of their parental income. The amount graduates will pay towards their tuition fees will depend not on their own income but on that of their parents, of the family home which they probably left years before.
How do the Government justify that? It is grotesquely unfair. How can Labour Peers and Members of Parliament support it? It is ridiculous. I cannot think of anything more unfair. It is all based on a completely mistaken, untenable premise that those who have a degree will benefit more from that degree than will anybody else. What about the teacher? Who benefits from the teacher's degree? What about the doctor? Is the doctor himself the only person who receives any benefit from his degree? Large numbers of graduates are now health workers—nurses, physiotherapists, midwives. Are they the only people to benefit from their degrees? Of course they are not; the whole community benefits. The whole matter is based on a wrong premise.
I have said all this before, and I apologise for repeating it. I shall vote against the measure, and I hope that my noble friends on this side of the House will do so as well. I have told my noble friend the Government Chief Whip that I shall vote against and he said that he understood. Let us defeat this measure, throw it out, finish with it and let the Government think again.
Lord Desai: My Lords, I oppose the amendment. I wish to examine a number of statements that have been made which are factually or logically erroneous. The noble Earl, Lord Russell, began with an example from the United States. Russell Baker is very amusing; I have read him. But the truth is that access to education in the United States is much wider and deeper and extends more to lower incomes than in this country. Access to
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education therefore is not hindered by the charging of fees. We have to look at other institutions such as the capital markets, the opportunity to work and at a number of colleges and the diversity of fees that they charge. We must not equate the charging of fees with lack of access. The United States is a living example against that scenario.
Baroness Williams of Crosby: My Lords, perhaps the noble Lord will give way. Is he aware that in the United States there is a system of national merit awards which means that in most universities scholarships extend to as much as 40 per cent. of the student population? In the university in which I teach—Harvard—it extends to 60 per cent. of the student population. There is no such mechanism known to me in the British higher education system.
Lord Desai: My Lords, I am not only aware of that system, but I was a beneficiary of it. I could not have come to this country because, although the fees were low, they were too high for me. I went to the United States for my graduate education and had a Ford Foundation Scholarship. I am aware of the system. Indeed, I would have been pleased had the noble Earl or his noble friend Lord Tope said, "Let us have full fees and scholarship awards". I would have supported such an amendment. If the amendment had said, "The Government are completely wrong. A charge of £1,000 is not enough; charge £4,000 and have 40 per cent. merit scholarships", I would have supported it. It would have not only a moral ground, but an economic ground.
I understand what is being said about the United States, but it is not fees alone—I mentioned capital markets and so forth—that deny access; it is a lack of other institutions. On another occasion we might debate that. But for the time being let us not point to the charging of fees as being a major factor.
Many people, including my noble friend Lord Glenamara, said that students are not the only people to benefit from education; that other people benefit also. That is right. But the students are not being asked to pay the full cost of tuition; they are being asked only to pay one-quarter of the cost of their education. Indeed, some part-time and mature students already pay. We do not have a system of universally free higher education and therefore the provisions in the Bill are not such a great move.
We are bringing 18 to 21 year-olds in line with some others. And I must declare an interest. I have put three young adults through 11 years of higher education. At £1,000 per year tuition fees—the fee now said to be payable—I received a subsidy of £11,000 which, when one thinks of it in terms of pre-taxed income, amounts to a subsidy of £16,000 or £17,000. What have I done to deserve that? People make the mistake of not counting a tax not paid because it is hidden. But that is a subsidy just as much as somebody claiming benefit. I am a bigger welfare scrounger, as are all parents of higher education children, than the poor people whose money we are disputing.
Currently there is a zero fee system for 18 to 21 year-olds. By and large that constitutes a massive subsidy to the well-off middle classes. People quote

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difficulty of access. But the current bias towards the middle class in our higher education system is as great as the bias was at the time of Robbins when only 10 per cent. went into higher education. It is perhaps now a little less but, by and large, middle class children go into higher education and therefore any system which subsidises higher education does not, as my noble friend Lord Glenamara said, allow everybody to go from primary to higher education.
I agree with that. But it has become a pyramid. Those who receive subsidies are precisely those who are best able to pay. The reason the present system does not improve access for poorer people has nothing whatever to do with the charging of fees. Up until now when there have been no fees, access has been unequal. When we ask why that is so, we find that it is more to do with what happens when a child is 16 and the fact that the children of poorer families do not stay on at school beyond 16; it is the fact that they do not continue with their education beyond that age rather than the charging of tuition fees.
We must not perpetuate fallacies just to feel good at heart that we are supporting a good cause because there are people who believe that they should be subsidised. Of course they want subsidies; who would not? I would march for my subsidies. Everybody receives mortgage relief and that is a subsidy. We all love subsidies but that does not make it right.
Some people asked whether we should judge students by the income of their parents or by their future income. But I believe that the Government have struck a right balance in that regard. Obviously all payments of loans will be from future income. It is an income-contingent loan system and therefore, whether the student becomes a doctor or a lawyer, the amount of money he or she pays back will not be the full loan. It is not a mortgage scheme. It is an income-contingent loan scheme and therefore students pay back only as much as they are able to pay back until the time that they stop working. We went through this both at Second Reading and at Committee stages. Somebody who earns £17,000 will not pay back the full value of the loan because that is what an "income-contingent" loan means.
The Government have said that those whose parental income is not very high will not be asked to pay tuition fees. That leads to the dilemma that those students whose parents have a high income but who are reluctant to pay will have to find the money from somewhere else. But once again I say that our task is to remove fallacies and not perpetuate them. To those who say, "I shall end up with a great debt", we must say "No, you will not. The debts will be collected only as long as they are payable". That is the whole principle of an income-contingent loan.
The Government strive not to be purist—I am very tempted to be a purist, but let us not go into that—and to strike a balance. I ask Members of this House to see that the present system is not helpful to the poor; it is a subsidy to the well-off. The new system partially corrects it. But it admits the principle that those who benefit from education pay for at least part of that education.
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Finally, inasmuch as one can combine acuity in this difficult matter, the Government have tried their best. I am not often known for supporting my Government. People are aware of that and nobody has persuaded me to do so. For the past 10 years I have studied this problem; my colleagues at the London School of Economics have analysed the problem and I am convinced that the only long-term solution for a widely accessible higher education system in this country is an income-contingent loan scheme. The Government have taken the first step. It is a bold step. They have been able to persuade the Inland Revenue to make collections on the debt. They need massive support because this is the first step in the change of the higher education system and I welcome it.
4 p.m.
Lord Quirk: My Lords, I welcome the opportunity provided by the amendment to have this unexpectedly wide-ranging discussion of these basic issues. However, I do not rise to speak in favour of the amendment, much as I have been impressed and moved, as who could not be, by what the noble Lord, Lord Glenamara, has said.
Two things have surprised me about the amendment. One is that, as the noble Lord, Lord Desai, said, this is aimed at protecting, as it were, the 18 to 21 year-olds, irrespective of the fact that those in part-time education and those going through the Open University, from, one would expect, less well benefited family backgrounds, have for years been paying tuition fees. There is, therefore, no matter of principle here, except possibly the very fair principle of extending to all that which has been unfortunately restricted hitherto to those who were not able to manage full-time higher education but had to cope with part-time study.
The other thing that rather surprised me about the presentation of the amendment is that, although we have all had marvellously full and detailed letters from the student unions up and down the country, to which reference has been made, we have also had a lot of briefing papers from the committee of vice-chancellors, to which no allusion has been made, though in fact the vice-chancellors are backing the imposition of the £1,000 tuition fee—that is, are backing Dearing in this respect.
I have one question only to put to the Minister, and it is one I raised at Second Reading. Presumably, we are going to get to know the details of the application of the £1,000 fee, or rather the derogation from the £1,000 fee, only in regulations at some future stage. I wonder whether it would be possible to see draft regulations before the Bill comes back for Third Reading. I should like to reiterate the point that I then made about the importance of being able to use the remission of fee payment as a means of attracting students.
It has been said that there is no serious deterrent to entry into higher education by the imposition of tuition fees—and that may well be true—but the Government appear not to believe it, because they are in certain instances saying that there is no need to pay tuition fees. The one that has been mentioned is the PGCE, and

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I entirely welcome that. I should like to have some indication from the Minister that this principle will be extended.
If it is true that more people will enter the PGCE if they do not have to pay the £1,000 fee, I should like to see that principle used in order to attract people into school teaching, which is the profession on which all the rest of our education and our educational future depends. I know the Minister will say that we do not have such a recruitment problem for initial teacher training, but we have. We are getting a very poor level of academically-qualified students coming into primary education. Let us attract people into initial teacher training by a flexible derogation from these fees.
Furthermore, the Minister may say that the PGCE is accepted because of the importance of recruitment into secondary education—and that is perfectly true and I welcome it. But attracting people into secondary education is particularly difficult for mathematics and modern languages, just to mention two. Since so many of the undergraduates reading for a BA in modern languages or a BSc. in mathematics go into teaching, why do we not use the fee issue as a lever in order to attract people into the teaching profession?
Baroness Perry of Southwark: My Lords, I fear that we are conducting the debate on this amendment under a false premise, or so it seems from several of the points noble Lords have made. Those who have opposed the amendment and supported the Government's current framework have repeatedly talked about students making a contribution to their own education. But there is no guarantee whatever that the £1,000 which they pay as a fee will be used for their own education. From an answer that was given by education Ministers in another place we already know that £19 million of the fees paid by students out of their private money or out of their parents' private money next year will go into further education. It will not help their own education. That is a totally different principle. This is asking higher education students to make a contribution to the Exchequer. I think we should conduct our debate under honest terms with regard to where this money will actually go.
The noble Lord, Lord Desai, from the sunny air of the London School of Economics, with its huge intake of students from private education, talked about middle-class students. Not all universities are like that. As he was speaking, I thought back to my previous job when I was vice-chancellor and before that the director of the South Bank, which took its students from Lambeth, Southwark and Lewisham. Many of the students came from desperately poor backgrounds and desperately poor homes. To them, taking the loans which they had to take for their maintenance was extremely painful.
I am not talking about the minor deprivation of not being able to drink all night in the bar. I am thinking of the day when one of the university nurses came to see me. She was very upset. She said that she was concerned about a young woman in her 'twenties who was very tired and had collapsed in class. On careful questioning over some time, the woman finally burst into tears and
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said, "I have a choice between feeding myself and feeding my four year-old child. I fed my child. I have not eaten today". That is real poverty.
We cannot separate the question of the loan of £1,000 which students might have to take from what my noble friend Lord Renfrew has called the double whammy. Students are also losing the £2,000 or the £1,800 of their maintenance grant, which means that they will be extremely heavily in debt when they finish. There are many students, particularly mature women, who will not take on that kind of loan. They will be denied access to higher education.
Lord Baker of Dorking: My Lords, I hope your Lordships will reject this amendment for very much the arguments put forward by the noble Lord, Lord Desai. When the noble Lord decides that he will support the Government, it is almost a case of any port in a storm. But I very much agree with the line he was taking.
This debate is something of a Second Reading on tuition fees. I see that the noble Baroness the Minister is nodding. Well, she has made it so because tuition fees are not mentioned in the Bill and so it is difficult to address the issues which have been raised by several noble Lords on both sides of the House.
I support the Government in one respect. I believe it is appropriate to bring in tuition fees, though I think they are doing it in the wrong way. All governments have some difficulty in funding higher education properly. The previous government are to be criticised for the way they did not fund higher education properly for the last two or three years of their term. When I was responsible for this matter, I tried to provide funds on a growing level, and I succeeded in so doing. But every government, including the one of the noble Baroness, will find it difficult to provide the amount of money that higher education needs. Therefore, I look upon tuition fees as one way—and only one way—of doing it.
The cost of higher education should be borne in our society by three elements: the state, yes; the family, yes if it can afford it; and also the student. Unlike the noble Lord, Lord Glenamara, I believe the student is the primary beneficiary of higher education. Someone who has benefited from higher education certainly starts much higher up the ladder in society, whatever they may be doing, than someone who has not. Therefore, I accept the principle.
As regards whether it is a deterrent, the noble Baroness, Lady Williams, quite rightly drew the attention of the House to the fact that in the Ivy League universities there is the principle of high fees with high scholarships. That is a system which, as the noble Baroness knows, has taken about 100 years to develop. The slow build-up of scholarships and endowments in America has allowed that system to develop. I would not pretend that that system exists and can be replicated in Britain today. When I first put forward the idea of student loans I insisted on having access funds, which would allow the institutions to help students who had financial difficulties. I am glad to note that the present Government have increased the access funds. I was hoping to start on the road to the university system

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which the Americans now have. They are well down that road. The endowments that go with access funds and scholarships are the way forward.
I do not believe that a relatively modest tuition fee deters young people from going on to higher education. When I first put forward the proposals for student loans, the Liberal Party—as it did today—made dire forecasts of a drop in applications, but that has not happened. The rate of increase in the number of applications to institutions of higher education over the past 10 years is unlikely to be matched in future. As a result of that increase, more students have participated, and I believe that that is the way forward.
Earl Russell: My Lords, I am most grateful to the noble Lord for giving way. Is he aware that a large majority of the people whom I am at present teaching, when they arrive at university, believe, because the idea of students grants is deep in the culture, that they can manage without the loan? They learn better. But until they learn better before they come up we will not know the effect on access in the long term.
Lord Baker of Dorking: My Lords, the noble Earl helps me to my next point. He mentioned grants, which is where I believe the Government have got it wrong. I believe that maintenance grants should be retained. However, there is the double whammy to which my noble friends Lord Renfrew and Lady Perry referred. She was the vice-chancellor of a polytechnic, as it was then, when I introduced the loan scheme. It is a double whammy to impose a very high loan and to take away the maintenance grant. That is wrong.
The Government have a very botched-up proposal in means-tested top-up fees. It is going to be an administrative nightmare. For a start, one has to bring in 70,000 European students. So many people will be involved that I can only assume that it is part of the Government's welfare-to-work programme in order to reduce the number of unemployed people who can speak Greek, Portuguese and the rest. I believe that to be totally wrong. I would like to see retention of the maintenance grant—possibly increased slightly. Maintenance grants can be beautifully fudged, as I well know. They could be increased slightly to allow for the top-up fee. Amendment No. 50 on the Marshalled List allows that alternative, which is better than this amendment.
4.15 p.m.
Baroness Maddock: My Lords, we have now debated this part of the Bill three times and, far from my worries being lessened as the Government have responded to our questions and probing, I feel more concerned. The noble Lord, Lord Desai, has made me feel even more concerned. It is very difficult to compare exactly where we are now in Britain in relation to America. I am also not quite sure whether the noble Lord realises that one of the problems with paying tuition fees is that the Government are not setting up a grants system for students to borrow money for the fees. However, I agree with him entirely about the difficulties
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that 16 year-olds have in staying on in education. I believe that the arguments that the noble Lord used in respect of 16 year-olds could equally apply to those going into higher education.
There are several things that I am concerned about. I am still concerned at the lack of clarity surrounding the Bill, particularly the unknown regulations which are yet to come. Only last week the Department for Education and Employment produced a document in response to Dearing, which stated
"In today's publication we respond as promised to other aspects of the Dearing Report not dealt with in the statement to the House in July or in subsequent clarifications relating to the new structure of funding and student maintenance".
The Government are still trying to rush things through. In responding to what has happened in the House the Government have been tabling amendments very close to the wire. I still feel very concerned.
We have all had letters from people outside the House. Perhaps I may quote from a letter received from Southampton University. I do that partly because I was pushed incredibly hard to do so, having once represented that area as a local councillor. The letter says that they are,
"extremely concerned that the Government's proposals for fees are poorly thought through. Indeed, peers, MPs and students will not know the details and the true cost of the system until after the Bill has been passed and the regulations are published".
It is not only these Benches that are concerned on this matter. We all have a fund of similar letters.
I am also concerned about the timetable. Perhaps I may declare an interest here. On Monday my daughter received an offer of a place to return to university for the second time. In her letter there was no indication, on taking up the offer, what might be in store for her as regards fees. That information has not filtered through. Someone who is at school now is kept fairly well informed. My daughter has been working. She applied to university again, but the situation is not very clear. I am not even convinced that people outside this House would be in a better position to understand exactly what is going to happen even if they read the full proceedings of the House or the very long documents that we have seen clarifying further how the grants and fees will be dealt with by local authorities and universities.
I am still concerned that many will be discouraged when they try to find the tuition fees. They may not take up higher education because it will be too difficult. I believe that many families will find it difficult. Next October 40 per cent. of students will be asked to pay the full £1,000 up front. That will put many families into great difficulty. The Government have made concessions to families in real poverty, but some of the families which will have to find this money are not very well off. The Government maintain that there will be no difference. Families that made a parental contribution to maintenance will now pay for tuition fees. But paying a little month by month for your children is a very different matter from having to find, when budgets are tight, £1,000 up front. That is a large amount to be paid at once. Someone described it to me as throwing a six before one can even start the game. I think that puts it very nicely. If, like myself, one has been foolish enough

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to have less than a three-year gap between children, one may well have to find £2,000 up front, with years of continuing great difficulty.
Bad as the situation is for those who are thoroughly committed to supporting their children through university, it is much worse for parents who cannot or will not pay £1,000. We may be dealing with parents who take the view that their child is an adult and should not be taking any more money from the family but bringing it in. It was also mentioned this afternoon that some families still believe that girls should stay at home. It is women, particularly mature women, who will be hit by many of the proposals that are going through the House. We may be dealing with parents or a spouse who wants to put pressure on the student in some other way. We may be dealing with parents who have been comfortably off and in good jobs. But we know that the job market is very uncertain at the moment. What happens then'? We also know that many small businesses go into receivership, and the children affected may find great difficulty.
The fact remains that under the current arrangements a very significant proportion of students do not get help with their maintenance from their parents. When Ministers have been pressed to say what would happen to those students whose parents refuse to pay the £1,000, they have admitted that those students will have to take out commercial loans for their fees or give up the idea of going to university. It has been said that the new arrangement will not put off students from going to university, but it is well documented that, since we began our proceedings on this Bill, the number of applications has dropped by between 18 and 20 per cent. What worries me most is that that large drop comes mainly from the mature age group—that is, those over the age of 25.
The Government have tried to calm us as the Bill has been going through, but today they have heard many of our fears. Indeed, they have heard not only from many Members of your Lordships' House, but also from universities, students and their families. People's fears are still as great as ever despite everything that has been said over many weeks. We are particularly concerned about the problems of implementing the new system, and especially about its effect on access to higher education for all.
I have received many letters and communications from people outside the House. Perhaps a letter I received today from a mother in Stockport best sums up what the noble Lord, Lord Glenamara, said earlier. That mother writes about how she is against the proposals. At the end of her letter she states:
"Both my husband and I are from working class backgrounds and took full advantage of our educations to be able to support ourselves and family. We have both come a long way from our roots in council homes, subsidies and social security. But I truly don't see any way this could happen for children nowadays from this background. Taking away the right to a decent education from children with very few privileges anyway is an act of an uncaring, short-sighted, money-orientated government. I beg you to try to change its mind".
If the Government do not respond positively, what I shall find most difficult to come to terms with is the fact that we shall be taking a step that I never thought to see in this country. I refer to the fact that people will no
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longer have access to free higher education. I would never have imagined that such a step would be taken by a Labour Government in this country and I hope that they will turn their back on it before it is too late.
Lord Annan: My Lords, I shall not take up the time of the House, but I should like to make two small points. First, can we have an answer to the point raised by the noble Lord, Lord Glenamara, about teachers? Are we to assume that all those entering the teaching profession will be so poor that they will not have to pay the tuition fee?
Secondly, I refer to the "double whammy" mentioned by the noble Lord, Lord Renfrew. If I had to choose, I would not, like the noble Lord, Lord Baker, exonerate students from paying a maintenance fee—although I notice that, with the aplomb of a former Minister, the noble Lord realises that that is a way in which one can somehow swindle one's way past the Treasury. The noble Lord, Lord Renfrew, is entirely right. It is a great pity that we have to do these two things together. I would choose the maintenance fee as the fee that students should pay as it might induce some students to choose their home university rather than giving God's gift to the British rail system three times a year.
Baroness Lockwood: My Lords, I am opposed to the amendment because it strikes at the fundamentals of Part II of the Bill. I understand why my noble friend Lord Glenamara supports it. I respect him and the enormous contribution he has made to higher education and to education across the board, but I must say to him that perhaps the situation in which we find ourselves today is a result of some of the reforms that he made as Secretary of State for Education and Science. I say that because we are dealing now with an entirely different situation from any that we have had before. We have moved from a period in the 1960s when something like 5 per cent. of the age group participated in higher education to the situation today when some 32 per cent. now participate and when it is estimated, and hoped, that that participation rate will continue to grow. So we are dealing with an issue which is fundamentally different in dimension from what it was some years ago.
Both my noble friend and the noble Baroness, Lady Maddock, referred to free higher education. There has never been such a thing as universal free access to higher education. As my noble friend Lord Desai indicated, part-time students in higher education have always had to pay their way. The noble Baroness, Lady Maddock, and the noble Baroness, Lady Perry, referred to the mature women who will have great difficulty paying the £1,000 tuition fee. I, too, am concerned about the position of mature women. I am sure, however, that the noble Baronesses will agree that under the current system many mature women—the majority of mature part-time students in higher education are women—have that difficulty. So it is not a fact that there has been universal free access to higher education.
Indeed, education generally has not been completely free. Many further education students over the age of 18 have not had free access to that education. Those

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who are concerned about the participation rate of those in the lower income groups should look at further education to see where the problems are. Although we have been supporting higher income families in higher education, those other students have had to pay for their own further education.
We are not talking about a level playing field; we are talking about some very complicated problems. Indeed, the problems were so complicated that when the now Opposition were in power they set up the Dearing Committee to look at the problems and to come forward with a report and recommendations. This Bill is a response to the Dearing Committee—or to some aspects of its report. The Government have not accepted everything that Dearing said—no government would—but they have accepted a number of important points.
Noble Lords have today offered the Government a different mixture of solutions. The noble Lord, Lord Renfrew, referred to the "double whammy". Those on the Liberal Benches have said that they now recognise that the maintenance grants should go. Others have said that we should continue to support maintenance grants. There is no simple answer to the question.
What did the Government decide to do? They decided to give help where it was thought that help was most needed. So, they did not, as my noble friend Lord Glenamara suggested, offer a loans system or a graduate tax system right across the board. The Government decided that to try to encourage the lower income groups they would exclude them from payment of the £1,000 tuition fee. We are told by the Government that about 30 per cent. to 33 per cent. of the age group will be excused payment. The next 30 per cent. or so will pay part of the £1,000. One wonders whether that covers some of those whom the noble Baroness, Lady Maddock, had in mind when she said that not everyone had a three-year interval between their children and therefore might have more than one child at university at any one time. If a family has more than one child at university and is reasonably well off, but not in the top echelons of wealth, it will probably fall into the second group and will be judged according to ability to pay.
The third group is made up of higher income families who are expected to pay the full £1,000. This afternoon some noble Lords have said that that is unfair because the parents are being means-tested, not the students. However, those parents will be expected to pay exactly the same proportion as they pay at the moment. I know that there are problems in a very few families. If there are problems—for example, parents may refuse to pay for their daughters because they do not believe that it is important for girls to be educated—those same parents would object under the present system.
4.30 p.m.
Earl Russell: My Lords, the noble Baroness said that at present only a very few parents fail to pay their contributions. Is she aware that the latest published figure is 43 per cent.?
Baroness Lockwood: My Lords, I am not aware of the figure to which the noble Earl has referred. I shall
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look into it. I am very surprised to learn that 43 per cent. of parents refuse to pay. I point out that part of the proposals that my noble friend has put to the House results in an increase in access funds. Access funds will be available to those students who suffer particular hardship. There has been an increase in access funding.
I ask my noble friend to look at the particular problems of mature students, because it is among those students that the deterrent is likely to be most effective. As to the deterrent effect, I ask my noble friend for the latest figures for comparative applications for entry to university. Applications to the university of which I am chancellor, certainly as of Friday last week when I made an inquiry, are not down but, if anything, have slightly increased. Although there was a drop at the beginning of January, I believe that the figures have increased considerably. I doubt very much whether the deterrent effect would be anything like as great as that suggested by noble Lords opposite. However, I should like my noble friend to clear up that point.
Baroness Park of Monmouth: My Lords, time presses and I shall deal with only one of the matters that I wanted to raise this afternoon. The Government have themselves faced the fact that the £1,000 will be a deterrent. In the progress report on student support arrangements published on 19th January, they announced:
"To avoid discouraging students who would have difficulty finding up to £1,000 before starting their course, the Government have advised [higher education institutions] that they should collect fees sensitively in the early months of the course, for example, by offering instalment arrangements to students".
Therefore, the universities which are already required to access funds and the hardship loan must also be prepared to enter into hire purchase-type individual agreements with each student who so needs it. It is higher education on the never-never. Think of the administrative burden and bureaucratic chaos that this could cause. Not least, it will leave the universities with no firm financial base for 25 per cent. of the tuition fees and hence no ability to plan expenditure. I believe that that is an indication that there is a real deterrent in this £1,000.
Lord Dormand of Easington: My Lords, I hope that the House will take careful note of the matter raised by the noble Lord, Lord Renfrew. I believe that it is rather artificial to talk about fees without at the same time talking about maintenance. Two or three noble Lords have referred to that matter. I hope that my noble friend will take that into consideration when she comes to reply.
I have considerable sympathy with my noble friend Lord Glenamara, which is not entirely surprising in view of the fact that we share the same background and come from the same part of the country. I shall not today refer to some of the problems that the north east has faced over the past 50 or 60 years. I make the following simple point. I have the feeling—I do not believe that any noble Lord yet has the figures—that this measure may have a deterrent effect. I should like to know what

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the figures will be. I presume that they will appear in regulations. It appears that there is to be a means test of some kind whereby some people may be deterred from taking advantage (if that is the right expression) of the situation. If my noble friend can give some indication—I do not expect to have the kind of figures normally seen in regulations—of the deterrent effect, I believe that noble Lords can be assisted in deciding how to vote this afternoon.
Lord Smith of Clifton: My Lords, I declare an interest as vice-chancellor of the University of Ulster. I believe that there are many distinguished former vice-chancellors, but I believe I am right in saying that, since the noble Baroness took the Queen's shilling, I am the only vice-chancellor within the meaning of the Act in your Lordships' House.
I should like to raise two matters, one a moral point and the other a more prosaic consideration. First, the present Government are not averse to levying windfall taxes. I should have thought that we might have been invited to consider a graduate windfall tax of, say, £3,000 for those of us who graduated between 1948 and the present. That would perhaps have given us the high moral ground.
Secondly, I turn to more prosaic considerations. I am gratified that other Members of your Lordships' House have raised practical difficulties. One can have an objection to fees as a matter of principle. Like the noble Lord, Lord Renfrew, I do not have that particular hang-up. I object, however, to the system that is to be introduced. The universities are to be asked to take on additional tasks. They have to collect the fees and invoice for them. If they stagger the payments the costs will rise with each invoice. They must have liaison with local education authorities. They also have to devise means tests for non-UK/EU students. Therefore, there will be more administrators and fewer teachers.
Mr. Frank Dobson accused the previous Government of creating too many managers and administrators and not enough doctors and nurses in the National Health Service. The present Government are in danger of doing precisely the same with regard to higher education. Universities will have to chase up debtors which give rise to additional cost. I should like to know precisely what the cost of this new administration and bureaucracy will be. I hope that the noble Baroness will be able to disprove my cynical accounting. I believe that it will cost £1,000 a year and that there will be no net gain to the higher education budget.
We are told that the funding councils will tweak their formulae to provide more money to pay for this administration. I suspect that that money will be top-sliced from the higher education budget and that therefore there will be less for engineering, English, economics, chemistry and so forth. I should like reassurances that my cynical accounting is not as bad as I think it is.
The situation has become a farce, rather like an Aesop's fable. Vast machinery will have to be put into place for a measly £1,000. That is not commensurate
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and does nothing to give a net increase in the money going to higher education, as the Dearing recommendations intended.
In the past 10 years the task of a vice-chancellor has been difficult. I shall not dilate on it to any great extent for fear of bringing tears to your Lordships' eyes. However, I offer a contrast between the role of a vice-chancellor during the past decade and power station managers in Mongolia at the height of Stalinism. I thought that there was not much to choose, but I fear that if the system is accepted we will be able to show that Mongolian power station managers had a better time than vice-chancellors do now.
Baroness Blatch: My Lords, the noble Lord, Lord Desai, criticised the present system of higher education funding for students as being biased against the middle classes. Perhaps I may point out to him
Lord Desai: My Lords, I said that the system was biased in favour of the middle classes. It subsidises them; it is not against them.
Baroness Blatch: My Lords, I am sorry, I thought that I said "biased in favour". If I did not, that is what I meant. The noble Lord said that the system was biased in favour of the middle classes. Perhaps I may tell him that the package before the House is biased against students from lower income families. That is indisputable if one looks at the burden on relative students—those from wealthy families and those from low income families—as they leave universities. The burden on students as a result of the Bill will be considerable and will without doubt disadvantage students from lower income families.
The noble Baroness, Lady Lockwood, stated that the applications to universities have risen and not fallen. I do not know her source—
Baroness Lockwood: My Lords, I thank the noble Baroness for giving way. I said that at my university, Bradford, the number was slightly up. I asked the Minister to give the exact figures covering the whole country.
Baroness Blatch: My Lords, that is wonderful for the University of Bradford, but I understand that the numbers are down all over the country, albeit by a small percentage. The category of student that is most affected by applications to universities is mature students. Those numbers are down considerably. My university, Teesside, where I was recently awarded a doctorate, is very worried about applications because its number is down.
On the basis that the Dearing Report was commissioned with all-party agreement, and it was agreed that more resources were needed in education, we backed the recommendations. However, it must be said that the Government's package as a whole is not acceptable to my noble friends on these Benches. The overall burden for a student borrowing all of his maintenance costs and having to find £1,000 to pay for

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tuition will act as a deterrent to many young people, particularly those from low income families. There is no question about that and there is evidence for it already.
That is why, in the interests of fairness, we on these Benches wish to address the greatest financial cost to students; that is, their maintenance costs. We would prefer maintenance costs for students from low income families to be retained at the 50/50 arrangement.
I wish the Government to note that many aspects of the application of tuition fees give rise for concern. I refer, for example, to the Government's objection to any limit on the percentage of fees to be met by students in the future. All amendments to that effect have been rejected. The Government have failed to support any amendment to the Bill which will ensure that higher education exclusively benefits from the income from tuition fees and that, for the purposes of funding higher education, fee income will be disregarded in order that the income from fees will be genuine additional funding.
The noble Lord, Lord Glenamara, referred to a graduate tax. I understand his point that in principle he would not agree with it but that it would be better than the proposals before us. There is a widespread view that there is to be a graduate tax. In fact, many students and some people from schools have said to me that what is proposed is a graduate tax. People are being told, "Don't worry about how much you borrow. It is irrelevant". The Government's information has not penetrated into the minds of many families and their young offspring who are contemplating going to university.
The noble Lord, Lord Tope, talked about the provision of free tuition being broken for the first time. The point has already been made by the noble Baroness, Lady Lockwood, but I expect that the Minister will disabuse the noble Lord of that view. I hope that the noble Lord, Lord Glenamara, will agree that when tuition fees were paid the number of students was very small indeed. Furthermore, the amount paid in real terms, even as a percentage of today's prices, was also very small indeed. However, it was the noble Lord, Lord Glenamara, who in about 1976 rejected the recommendation to his government that the tuition fees should be retained. They were rejected then and have not been reintroduced until now.
For the reason I have given, it is with reluctance that I cannot support the amendment. However, depending on how the Government respond to other amendments tabled today, should there be no move whatever, and bearing in mind that the overall package is not acceptable, on Third Reading one will have to reconsider tuition fees in the context of the dogged rigidity of this Government.
Baroness Blackstone: My Lords, I hope that Members of your Lordships' House will accept that it would be exceedingly difficult for me to pick up every single point made in what has turned into something of a Second Reading debate on some specific amendments, as was said by the noble Lord, Lord Baker. The noble Lords, Lord Baker and Lord Renfrew, and the noble
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Baroness, Lady Blatch, made points about maintenance grants. It would be better if we deal with those when we discuss one or more later amendments.
However, I will give an immediate answer to the noble Lord, Lord Renfrew, who asked about the package and how much additional funding will be gained as a result. By the year 2015 to 2016 there will be additional money coming in from fees of between £450 million and £500 million. Furthermore, there will be between £550 million and £600 million from the switch from grants to loans. I hope that that information is helpful to the noble Lord.
Noble Lords on the Liberal Democrat Benches raised many issues which, as I intimated, are not particularly relevant to the amendments before us. In fact, in some senses they are a long way away from them. They and other Members of your Lordships' House made a number of points which seem to me to be relevant to later amendments. It would be right for me to address the amendments on the Marshalled List since I cannot be sure whether Members opposite intend to divide on them. I believe that I need to explain to the House what would happen if there were to be a Division and the amendments were placed on the face of the Bill.
The amendments would have far-reaching implications and would run counter to the fair funding arrangements for higher education which this Government intend to set in place. They would have the effect of requiring higher information to be free to all home students whether studying full or part-time, whether qualified to first degree level or not, and whether in paid employment or not.
Perhaps I may remind the House of the guiding principle underlying the Dearing Report, a principle which this Government have endorsed; that is, that the costs of higher education should be shared among those who benefit. On average, graduates earn 20 per cent. more than those without degrees. In other words, they see their earnings rise by as much as £4,000 for every £20,000 of earnings. It is only fair that individuals who stand to benefit so much from higher education, compared with those who have not had the rich opportunities that it offers both at the time and in terms of the impact later on their lives, should also have to share some of those costs.
These amendments, taken together, would require the state and the taxpayer to bear the full costs of higher education at all levels, including those who will stand to earn the highest salaries. For example, they would mean that a clerical officer at the lower end of the earnings scale, who had never benefited from higher education, would be subsidising a highly-paid city executive who had embarked on an MBA course.
Earl Russell: My Lords, perhaps the noble Baroness would clarify one matter because I think she may have slightly misphrased what she said. She said that the

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amendments call on the state to bear the full costs of higher education. She is not suggesting, is she, that the tuition fee has ever been likely to do that?
Baroness Blackstone: My Lords, no. The full costs of higher education of course include the grant paid through the HEFCE. But that is already covered by the Government.
Those who stand to increase their earning power still further would have their expensive courses paid for them by taxpayers some of whom, on average, earn less than they do. Where is the fairness in that?
The noble Earl gave the House a little anecdote about graduate students in the United States. But these amendments would also amount to a licence for those who were so inclined to become perpetual students at the undergraduate level, taking one course of higher education after another, never having to pay any fees and borrowing money for living expenses which they may never have to pay back. Again, where is the fairness in that?
I should say to the noble Earl that graduate students are supported in this country, unlike in the United States, by a national system of postgraduate awards through the research councils as well as by the system that we are discussing today for undergraduates. Therefore, it is a very different system.
We believe that it is only right and fair that the investment of the nation should be balanced by the commitment of the individual. I am very grateful to the noble Lord, Lord Baker, for his support on that matter. The alternative approach underlying the amendments of subsidising all those who enter or re-enter higher education, regardless of their families' income, would mean a heavier burden on all taxpayers.
I remind the House of the Dearing Committee's figures for the longer-term funding requirement of universities. Depending on the scale and pace of the growth in student numbers, the committee put the figure at up to £2 billion. The effect of these amendments would be that all that cost would fall on the taxpayer. I wonder whether my noble friend Lord Glenamara really thinks it is right to ask taxpayers to cover the full cost of tuition for all students regardless of their income or their parents' income. As my noble friend Lord Desai said, 75 per cent. of the costs of tuition will still be borne by the taxpayer, and I am grateful for what he said about that being the right balance.
Taken together with other amendments proposed by the noble Lord, Lord Tope, these amendments would also allow universities and colleges to charge as much as they liked in fees. In essence, they would amount to giving higher education institutions a blank cheque from the Government. While we readily accept that universities and colleges have been facing a financial crisis left by the previous government—and our reform of the funding arrangements for higher education are designed to address that crisis—no government can write universities a blank cheque. We are duty bound to the taxpayer to ensure that public funds are spent efficiently and provide value for money.
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If these amendments were carried, the only real way in which the Government could keep the higher education budget under control would be to impose strict limits on the numbers of students that universities and colleges could recruit. That would mean returning to a system where only a privileged handful could benefit from higher education. The country would find itself increasingly without the higher level of skills. knowledge and understanding that we need to compete in the 21st century. We should rapidly fall behind other countries which are equipping more and more of their workforce with higher education qualifications. The social benefits of widening participation would also be lost.
I remind noble Lords who support the amendments that government reforms are intended to address the serious funding problems facing higher education in a realistic and forward-looking way, to which the noble Lord, Lord Quirk, referred. The Government have said on countless occasions now that their intention is that both further and higher education should benefit from those changes. The noble Baroness, Lady Perry, suggested that some £90 million was going to further education.
Baroness Perry of Southwark: My Lords, I believe that the figure of £19 million was given in Hansard.
Baroness Blackstone: My Lords, I am obviously getting deaf. The actual figure is £16 million. But the funding package for universities for next year will be greater than we expect to be raised from the introduction of tuition fees. Therefore, it is a reasonably good deal for the universities. The Government have been able to provide them with additional funding over and above that which will be raised from tuition fees. The FE sector provides various access courses and courses at sub-degree level which help students to go on to a degree course and enter university. It is important that we should ensure that there is adequate funding also for those courses.
The Dearing Committee recognised that further improvement and expansion of higher education could not be afforded on the basis of current funding arrangements. Our new funding arrangements, which will generate savings of more than £1 billion, as I have mentioned already, by 2015–16 will make it possible to move forward into the 21st century with a revitalised higher education system. I repeat that the vast majority of vice-chancellors have welcomed this new package.
To return to a narrower system with lower levels of participation will really serve no one's interests. It will not serve the interests of students, either young students seeking to acquire the skills and experience needed to start off on their careers or mature students seeking to update and improve their skills and to maintain and enhance their employability. It will not serve the interests of universities from which, as I said, there has been widespread support for the Government's determination to act decisively to address their funding problems. And it will not serve the interests of the country in an increasingly competitive world.

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I am extremely sad that my noble friend Lord Glenamara feels unable to support the Government on this occasion. I wish I could persuade him to do otherwise, but I fear that I have failed already in the past and I shall probably fail this afternoon. But my noble friend said that all tuition is and has always been free. As the noble Baroness, Lady Blatch, said just now, that is not the case with respect to full-time undergraduates. There was a long period when a contribution from parents was expected towards those tuition fees.
But even today, before the new arrangements were introduced, I remind my noble friend and others who have spoken in favour of the amendments that further education students already pay towards their tuition costs. On the whole, those are far, far less privileged people than those who go to university. I also have to remind my noble friend, and others, that one-third of all students now study part time. They, too, have always paid, and are still paying, a contribution towards their tuition costs. For the most part, they, too, are very much less privileged than many of those who are full-time undergraduates in our universities.
However, I understand the concerns of my noble friend Lord Glenamara, and others, about those students from lower-income families who may genuinely he unable to afford the fees. That is why, in building on the proposals of the Dearing Committee, we have provided safeguards, in line with our commitment to secure access to higher education, which will ensure that higher education continues to be free for the least well-off.
I turn now to means testing. I should tell the noble Lord, Lord Baker—indeed, I am sure he knows this very well—that we already means test. Therefore, I am afraid that we will not be providing welfare to work for large numbers of local education authority bureaucrats. People are already working on the means testing for the current arrangements. There will be a very small additional central unit which will take on the task of means testing a small number of EU students.
Our arrangements for means-tested support with tuition fees, backed up with a reserve power to control top-up fees, will ensure that the one dependent student in three who enters full-time higher education from a lower-income family will still receive free tuition. A further one in three from middle-income families will contribute less than the full fee which may be charged.
I am most puzzled by something said by the noble Lord, Lord Tope. For example, how, in these circumstances, can the charging of tuition fees be a poll tax? As I understand the usual meaning of that term, a poll tax is a tax on individuals regardless of their financial circumstances. Let us not forget that a significant proportion of students entering higher education will actually have been to independent schools where the fee charged is several times higher than the contribution that we are proposing. Moreover, according to an opinion poll commissioned by the CVCP last autumn, over 80 per cent. of parents are now prepared to contribute to their children's tuition. That same poll found that 69 per cent. of adults agreed that students and parents should foot some of the bill for
984
higher education, compared with only 38 per cent. in 1991. That illustrates the shift of opinion which has taken place.
Perhaps I may point out to the noble Lord, Lord Tope, and the noble Baroness, Lady Maddock, that only around one in three dependent students—that is, those from higher income families—will have to pay the full fee. Even then, they can expect, on average, to have three-quarters of the real cost of their course paid by the state through funding council grant to universities.
I am aware of concerns about the position of students whose parents are unwilling to help them, although I must point out that the figure quoted by the noble Earl, Lord Russell, does not in any way corroborate figures that I have seen. Indeed, I would want to know how the survey was undertaken, what the nature of the question was, and whether the figure of 43 per cent. related to a total refusal to pay any part of the cost or just a small proportion of it.
Perhaps I may remind the House that many parents are already expected to make a contribution. There is no reason why parents should refuse to help their children in the future because, as my noble friend Lady Lockwood, said, they will not be expected to contribute any more than they do under the current system. The noble Baroness, Lady Maddock, suggested that it will be more difficult for parents and gave the House some examples. However, she is quite wrong in that respect. She appears to have totally misunderstood the arrangements which are being introduced. Moreover, on a more detailed point, perhaps I may mention the fact that the number of children whom parents have at university at any one time is of course taken into account when assessing the contribution that parents have to make. I am a little surprised that the noble Baroness is unaware of that fact.
I should like now to deal with a point raised by a number of speakers in the debate; namely, the impact of the new arrangements on applications. The noble Baroness, Lady Blatch, said that applications were down all over the country. That is not true. As my noble friend Lady Lockwood said, there are many universities where applications have increased rather than decreased. Of course, there are some universities where the number of applications is down. Indeed, there are very big variations as regards the apparent impact. I have another point to make to the noble Baroness, Lady Maddock. I believe that she started to say that overall applications had fallen by 18 per cent. I think that the noble Baroness then corrected herself and said that that figure only applied to mature students. I give way to the noble Baroness.
5 P.m.
Baroness Maddock: My Lords, I thank the Minister. Perhaps I may now confirm what I meant. That was indeed what I intended to say and I apologise to the House. I was thinking about students over the age of 25.

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I believe the figures in that respect have decreased by 18 per cent. to 22 per cent. That is the group of students about whom we are most concerned.
Baroness Blackstone: Yes, my Lords; the noble Baroness is quite right. However, perhaps I may point out to her that it is a very small group. The vast majority of students over the age of 25 study part time. We are concerned about the situation and we shall try to do everything we can to ensure that the kind of information we have been able to get to younger applicants—for example, on access courses—is given to older applicants. It is a little more difficult to identify them and, therefore, it is not an easy task. However, we are addressing the problem.
Perhaps I may tell the House that the latest figures show that applications are down by about 3 per cent. overall and less than 1 per cent. as regards students under the age of 21. All that must be looked at in the context of a situation where there was a 6 per cent. increase in the number entering university last October over and above the numbers that were expected. Therefore, I really do not think that this is accurate—
Baroness Blatch: I am grateful to the Minister for giving way. Can the noble Baroness confirm that the number of applications by mature students, according to UCAS figures, has fallen by 18 per cent?
Baroness Blackstone: My Lords, I referred to that a few moments ago. Perhaps the noble Baroness did not hear what I said. I literally said it two minutes ago. Indeed, I can confirm that fact.
The targeted support that we propose will offer help where it is most needed and raise the money required to improve quality, standards and opportunities for all in further and higher education. I hope that those who have contributed to today's debate and who asked specific questions—for example, the question posed by my noble friend Lord Dormand in respect of which he quoted tables used to determine parental contributions—will forgive me if I do not go into what would be very complex replies. However, I can tell my noble friend—I repeat what I said earlier—that approximately 30 per cent. of parents will make no contribution to tuition, while about another 30 per cent. will only make a partial contribution. So there is a substantial number of parents who will be paying nothing like the full fees.
Various questions were raised regarding the position of teachers. I should tell the noble Lord, Lord Annan, that fees will be based on parental income and not on the future possible earnings of students. However, low-paid teachers will not be expected to pay back their maintenance loans if their level of income does not justify it.
The amendments before the House would run counter to the fair funding arrangements for higher education which the Government intend to introduce. I note that the noble Lord, Lord Tope, said that the amendments were a device to expound the views of his party.
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Therefore, I assume that the noble Lord intends to withdraw them. Indeed, I hope that that is the case. However, if it is not, I urge the House to reject them.
Lord Dahrendorf: My Lords, before the Minister sits down, I ask for some clarification—I must be a bit thick here—of her answer to the noble Baroness, Lady Perry. Is tuition fee income additional funding for higher education, or not?
Baroness Blackstone: My Lords, yes, it is.
Baroness Blatch: My Lords, before the noble Baroness sits down, and with the leave of the House, I make a specific point about how years at university are counted. There are many examples of people who do three years' higher education training, sometimes in preparation for studying medicine or dentistry, or people who for one reason or another undertake a second degree. Is the first year of the second course considered to be the fourth, fifth or sixth year, as opposed to the first, second or third year, for the purposes of tuition fees? How will the Government view an extra year at university when a student is re-taking a year, either because of illness or because that student simply did not make the grade in a particular year at university?
Baroness Blackstone: My Lords, the arrangements will be as they are at present. A student who decides to take a second first degree, having already been supported from public funds, will be expected to make a contribution and indeed to provide for his own maintenance support. The noble Baroness referred to a re-take year. If someone has been ill and there is clear medical evidence of that, that would of course be taken into account and that person would not be expected to pay twice over.
Lord Tope: My Lords, we have had a full debate of nearly two hours in prime time in your Lordships' House. It has been a useful opportunity to discuss the whole issue of tuition fees. I hope I may correct the Minister. I think I quite clearly said at the beginning that the amendment was not a device for me to discuss my party's policies. Indeed I said specifically that the amendments, and certainly any vote, did not concern my party's policies, but comprised an opportunity to debate the whole issue of tuition fees. As the Bill has been drafted, it is difficult to frame an amendment that enables us to do that. That was, and is, the purpose of this amendment.
I am grateful to all noble Lords who have taken part in this debate which I know will be read with great interest outside this House. I am of course grateful to the Minister for her reply to it. She has not convinced me by her arguments—I think she would expect that to be the case—and I am tempted to re-open the debate and answer all the points she has made. However, that is not appropriate after such a long debate. I shall make just a couple of points. The Minister suggested that, because part-timers have to pay fees now, everyone else should. We are about to address the issue of part-timers on the next amendment.

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I refer again to the "thin end of the wedge" argument. I say again that if we abandon this principle now, there is no reason why everyone over the age of compulsory education—that is, 16—should not have to pay fees sooner or later. That is a point which your Lordships need to bear in mind. If these amendments are accepted, one effect will be that the Government will have to think again about what they are going to do and how they will deal with the situation. I am sorry that the Conservative Front Bench does not feel able to support the amendment on this occasion, although I hear with interest that perhaps on Third Reading we may be able to move them a little closer to our position. Given the recent pronouncements of their leader, I had hoped they would be able to support us on this amendment. I hope that many Back-Benchers from the Conservative Party will feel able to do so for no better reason than that made in a memorable speech by the noble Lord, Lord Glenamara; namely, that the amendments may not be perfect, but they are not only the best opportunity but the only opportunity for your Lordships to express a view on the important issue of tuition fees. For that reason—
Baroness Carnegy of Lour: My Lords, before the noble Lord tells us what he is going to do with this amendment—
Noble Lords: Order!
Lord Tope: My Lords, I am advised that the noble Baroness is out of order to intervene at this stage, although I would have given way to her. I was about to say that it is not only the best opportunity for your Lordships to express a view on this issue but it is also the only opportunity. For that reason I believe it is vitally important that we now test the opinion of the House.
5.14 p.m.
On Question, Whether the said amendment (No. 37) shall be agreed to?
Their Lordships divided: Contents, 96; Not-Contents, 110.

Division No. 1

CONTENTS

Addington, L.

Davidson, V.

Alexander of Tunis, E.

De Freyne, L.

Ashbourne, L.

Dholakia, L.

Avebury, L.

Dundonald, E.

Beaumont of Whitley, L.

Ellenborough, L.

Biffen, L.

Ezra, L.

Bridges, L.

Geraint, L.

Brigstocke, B.

Gilmour of Craigmillar, L.

Butterfield, L.

Glenamara, L.

Calverley, L.

Goodhart, L.

Campbell of Alloway, L.

Grey, E.

Carlisle, E.

Halsbury, E.

Chesham, L.

Hamwee, B.

Chichester, Bp.

Harris of Greenwich, L.

Clancarty, E.

Holderness, L.

Dacre of Glanton, L.

Holme of Cheltenham, L.

988

Hooson, L.

Ritchie of Dundee, L.

Hylton-Foster, B.

Rochester, L.

Jacobs, L.

Rodgers of Quarry Bank, L.

Jeger, B.

Roll of Ipsden, L.

Kinloss, Ly.

Rowallan, L.

Kirkwood, L.

Russell, E. [Teller.]

Leathers, V.

Russell-Johnston, L.

Lichfield, Bp.

St. John of Fawsley, L.

Linklater of Butterstone, B.

Sefton of Garston, L.

Ludford, B.

Smith of Clifton, L.

Mackie of Benshie, L.

Stallard, L.

McNair, L.

Steel of Aikwood, L.

McNally, L.

Stoddart of Swindon, L.

Maddock, B.

Sudeley, L.

Malmesbury, E.

Swansea, L.

Mar and Kellie, E.

Taverne, L.

Milverton, L.

Teviot, L.

Molyneaux of Killead, L.

Thomas of Gresford, L.

Naseby, L.

Thomas of Gwydir, L.

Newall, L.

Thomas of Walliswood, B.

Newby, L.

Thomson of Monifieth, L.

Nicholson of Winterbourne, B.

Thurso, V.

Norton, L.

Tope, L. [Teller.]

Ogmore, L.

Tordoff, L.

Park of Monmouth, B.

Wallace of Saltaire, L.

Pender, L.

Weatherill, L.

Peyton of Yeovil, L.

Wigoder, L.

Pym, L.

Williams of Crosby, B.

Quinton, L.

Winchilsea and Nottingham, E.

Razzall, L.

Windlesham, L.

Redesdale, L.

Wright of Richmond, L.

Renfrew of Kaimsthorn, L.

Wynford, L.

NOT-CONTENTS

Ackner, L.

Hardie, L.

Acton, L.

Hardy of Wath, L.

Ailesbury, M.

Haskel, L.

Ampthill, L.

Hilton of Eggardon, B.

Archer of Sandwell, L.

Howie of Troon, L.

Bassam of Brighton, L.

Hoyle, L.

Berkeley, L.

Hughes, L.

Blackstone, B.

Hughes of Woodside, L.

Blease, L.

Hunt of Kings Heath, L.

Blyth, L.

Inchyra, L.

Brooke of Alverthorpe, L.

Irvine of Lairg, L. [Lord Chancellor.]

Brooks of Tremorfa, L.

Burlison, L.

Islwyn, L.

Carmichael of Kelvingrove, L.

Janner of Braunstone, L.

Carter, L. [Teller.]

Jay of Paddington, B.

Chandos, V.

Jenkins of Putney, L.

Charteris of Amisfield, L.

Kennedy of The Shaws, B.

Cocks of Hartcliffe, L.

Kennet, L.

Craig of Radley, L.

Kilbracken, L.

David, B.

Lloyd-George of Dwyfor, E

Davies of Coity, L.

Lockwood, B.

Davies of Oldham, L.

Lofthouse of Pontefract, L.

Dean of Beswick, L.

Longford, E.

Dean of Thornton-le-Fylde, B.

Lovell-Davis, L.

Desai, L.

McCarthy, L.

Dixon, L.

McIntosh of Haringey, L. [Teller.]

Donoughue, L.

Dormand of Easington, L.

Mallalieu, B.

Dubs, L.

Mason of Barnsley, L.

Evans of Parkside, L.

Merlyn-Rees, L.

Falconer of Thoroton, L.

Milner of Leeds, L.

Farrington of Ribbleton, B.

Mishcon, L.

Gallacher, L.

Molloy, L.

Gilbert, L.

Monkswell, L.

Gladwin of Clee, L.

Montague of Oxford, L.

Gladwyn, L.

Moyne, L.

Gordon of Strathblane, L.

Murray of Epping Forest, L.

Gould of Potternewton, B.

Nicol, B.

Gregson, L.

Northfield, L.

Grenfell, L.

Paul, L.

Hanworth, V.

Plant of Highfield, L.

989

Ponsonby of Shulbrede, L.

Stone of Blackheath, L.

Prys-Davies, L.

Strabolgi, L.

Puttnam, L.

Symons of Vernham Dean, B.

Quirk, L.

Taylor of Gryfe, L.

Ramsay of Cartvale, B.

Tenby, V.

Randall of St. Budeaux, L.

Thomas of Macclesfield, L.

Rendell of Babergh, B.

Thurlow, L.

Richard, L. [Lord Privy Seal.]

Turner of Camden, B.

Saltoun of Abernethy, Ly.

Varley, L.

Serota, B.

Walker of Doncaster, L.

Sewel, L.

Walton of Detchant, L.

Shaughnessy, L.

Warnock, B.

Simon, V.

Whitty, L.

Simon of Highbury, L.

Williams of Elvel, L.

Smith of Gilmorehill, B.

Williams of Mostyn, L.

Resolved in the negative, and amendment disagreed to accordingly.
5.23 p.m.
Baroness Maddock Baroness Maddock moved Amendment No. 38:
Page 11, line 6, at beginning insert ("On or before 1st April 2000").
The noble Baroness said: My Lords, in moving the amendment, I speak also to Amendment No. 39. It is best that the amendments are argued together. They relate to the provision of a facility for loans for part-time students. We have had some discussion today about part-time students. We know that the Government are keen to promote the principle of life-long learning. I believe, as they do, that the financial support offered to part-time students will play a key role in the development of life-long learning. Many groups are in favour of that, not least students themselves, who have long believed that support for part-time students should be made available. The Dearing Committee was attracted to the principle of levelling up the support for part-time students. However, I realise that the Minister is likely to tell me again that Dearing did not consider this to be the priority.
A recent study undertaken by London Economics uses a model that would make a loan available to part-time students earning less than £10,000 a year, or £16,000 a year. It was supposed that the average loan would be about £500 per year. The study indicates that extending loans to part-time degree and sub-degree level students would cost the Government only an extra 0.5 per cent. per annum in the short term and 1.5 per cent. per annum in the long term. I maintain that that is not a large increase in public spending despite the fact that when we discussed this matter at Committee stage the noble Lord, Lord Whitty, indicated that he thought it was a huge amount of extra money. I maintain that that is not the case.
When we proposed similar provisions at Committee stage, the Government agreed in principle that they would like to offer student loans for part-time students. They also indicated that the Bill as drafted allows them to do so. The problem is that the Bill does not state when the Government will do that. Our amendment deals with that. We want loans,
"on or before 1st April 2000"
—that is, in two years' time.
Perhaps I may explain why we have chosen that date. We have all suffered somewhat since 1st May last year because of the Tory freeze on government spending. That freeze was adopted by the Chancellor, the right honourable Gordon Brown. However, we are trying to guess when the thaw in that freeze will come. The Government have used the phrase "about two years". We are testing whether they mean about two years. That is why we refer to the date 1st April 2000.
The Minister was cautious when she responded at Committee stage. I hope that today the Minister will be able to give us some idea when the freeze on the Government's spending is likely to be lifted. I believe that the provision would not cost as much as the Government say. Not all full-time students take up grant offers. Given the cross-section of part-time students going into higher education, it is likely that fewer would take up loans than those students going into higher education straight from school.
Our views were widely supported at Committee stage. The noble Lord, Lord Peston, and the noble Baroness, Lady Lockwood, backed the principle but spoke of "priorities". We realise that it is a matter of priorities. From the Liberal Democrat Benches our priority is to ensure that we extend help to part-time students by the year 2000. I look forward to the Minister's response. I hope that it will be favourable. If the noble Baroness is not in favour of the year 2000, perhaps she will give some indication about when the Government expect to be able to give some support to part-time students. The Government have agreed that it is important. I hope that the noble Baroness will be able to respond positively.
Lord Whitty: My Lords, as my noble friend made clear earlier, we recognise the vital importance of part-time students. But, as we have also made clear, the Bill as drafted already enables the Secretary of State if he so wishes to make grants or loans available to part-time or full-time students. Clause 16(2)(d) enables him to prescribe in regulations the categories of attendance which will qualify for any purpose of the regulations. So the power to do so already exists. The intention of these two amendments when read together is to require the Secretary of State to make a regulation extending loans to part-time students before 1st April 2000, and the noble Baroness tried to press the Government on that provision.
However, as we have said previously, in terms of priorities the Government do not at this stage intend to introduce regulations extending the loans scheme to the generality of part-time students. I reiterate that we agree with the Dearing Committee on this matter. As the committee pointed out, a high proportion of part-time students are in employment, and are therefore largely supporting themselves.
The noble Baroness referred to the cost of extending loans to part-time students. It is a key issue. If loans were made available to part-time students at the same level as for full-time students, on a pro rata basis, the

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average loan would be at least £1,500. On that basis, the cost per year would amount to some £370 million each year in the short term. I am afraid that I cannot give—
Baroness Maddock: My Lords, I am grateful to the Minister for giving me the opportunity to repeat that there was some research done which indicated (I will not say proved) that the average grant was expected to be £500.
5.30 p.m.
Lord Whitty: My Lords, I believe the noble Baroness refers to the study commissioned by the Open University. That suggested an average loan of £500. If that figure is compared with the average take-up and the average loan for full-time students, I do not see why there should be any dramatic difference between that and the figure for part-time students. On a pro rata basis, which is surely the more legitimate way to consider it, the average loan would be £1,500. That would amount to £370 million per year. It is not, I fear, a figure that I could guarantee to the House; nor can I give any comfort that my right honourable friend the Chancellor of the Exchequer would immediately allow me to commit the Government in that direction.
That is not to say that we do not recognise the vital importance of part-time students, or rule out the possibility that loans could be made at some stage in the future. However, we are not at this point prepared to accept the date set down by the noble Baroness, or indeed to give a date for that to be done.
However, one of the features of the Bill is that it is suitably flexible to ensure that support could be extended to categories of students who are not currently eligible without recourse to further legislation. I am afraid, however, that I cannot commit the Government to making such provisions by 1st April 2000. Recognising the public expenditure involved in making such a commitment, I hope that, given the general assurance of the Government's good will and the fact that the Bill is flexible enough to allow us to make those orders at a later stage, the noble Baroness will agree to withdraw the amendment.
Baroness Maddock: My Lords, I thank the Minister for that reply. I regret that it veers not one inch away from the reply that I received in Committee. I am extremely disappointed. However, in view of the circumstances, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 39 to 42 not moved.]
Lord Addington Lord Addington moved Amendment No. 43:
Page 11, line 35, at end insert—
("() Regulations under this section shall make provision for the disregard of disability benefits in the calculation of income for repayment purposes.").
The noble Lord said: My Lords, this amendment is comparatively straightforward and simple. It deals with an issue that has been very much in the public eye and in the eye of the ministerial Bench; namely, ensuring
992
that those with disabilities are allowed access to all areas of life. In reality, that is done primarily through some form of pump-priming. This amendment seeks to ensure that the extra support given to those students with a disability is not taken into account when repayment terms are being calculated.
The reason is simply that the extra payments are given to meet specific needs, and therefore specific costs. For instance, if you are given extra payments to help with mobility costs, they are an essential part of the way in which you function. Thus, they are not disposable income and should not be counted.
We have heard a great deal recently about how the Government do not want to alienate those in our society who are disabled. I suggest that this would be a small measure towards that, in keeping with what has gone before. The Government could show their commitment in this field and in others by backing this amendment or a similar one. I beg to move.
Lord Tope: My Lords, I rise to support my noble friend and to speak particularly to Amendment No. 44, grouped with this one, standing in my name and those of my noble friends.
Amendment No. 44 returns to the important principle that at the age of 18 people are adults and should be regarded and treated as responsible adults. In almost every other walk of life, when people reach the age of majority they are treated as adults. If they wish to marry or enter into any other form of contract, fight for their country, and so on, they are regarded as adults. The only significant area of life where that is not the case is where they are students—they are dependent upon their parents, and their income is dependent on their parents' income. We feel that, as a point of principle, that is wrong. Therefore this amendment proposes that a student over the age of 18 should be assessed as an adult on the basis of his or her own income.
The Minister objected in Committee that our proposals were making available support for fees and loans for living costs without regard to the income of the households from which the students come, and that that would be both regressive and extraordinarily expensive. That is to misrepresent the proposal. Of course the calculation should take into account all the income of an intending student. That might typically include any allowances or gifts received from parents, spouse or friends; any earnings; any investment income from capital and savings, and so on. The important point is that it is the income of that student, not the income of his or her parents, that needs to be taken into account.
Students from wealthy homes whose parents wish to subsidise them generously should not be receiving the same help as those who have no such additional income. It may well be true that for families who are not very well off this new arrangement will make them decide that it is unnecessary to offer financial help. Perhaps for such families it is time that the burden of supporting their adult children was lifted from them. To that extent, the provision would increase government expenditure. However, noble Lords will recall that it was proposed earlier in debate that the Treasury should stop regarding

993
student loans as government expenditure. This is an important amendment. It is intended to recognise that, at age 18, students are adults, must be treated as such, and that their right to loans and grants should be assessed on the basis of their income, not that of their parents or spouse.
Baroness Carnegy of Lour: My Lords, yet again the noble Lord is separating one issue in a package contained in the Bill. He has just moved an amendment which, had it been won, would have cost the country £2 billion. I wonder whether the noble Baroness, in replying, will tell us what this one would cost.
Baroness Blackstone: My Lords, these amendments deal with the way in which income is assessed for the purpose of determining, on the one hand, the repayment arrangements for disabled borrowers; and on the other, the level of contribution that students' parents or spouses are expected to make towards the costs of their higher education.
I am pleased to be able to reassure the noble Lord, Lord Addington, that the Government are totally in accord with the spirit of his amendment. At Second Reading the noble Lord expressed the hope that he was pushing at an open door in seeking confirmation that the Government's response to the Dearing Committee's recommendations on the treatment of disabled students would be positive. Members of your Lordships' House will know that we have already announced that the disabled students allowance will no longer be means-tested for full-time students. We are currently exploring the possibility of extending it to other groups, including part-time and postgraduate students and those who have become disabled and wish to seek a second qualification. So they would be treated differently from other students wishing to seek a second qualification.
We also intend to ensure that disabled borrowers continue to be treated fairly when it comes to repaying the costs of their maintenance. I can unequivocally assure your Lordships that we shall ensure that disability benefits are disregarded for the calculation of income for repayment purposes.
I have reservations about the noble Lord's amendment as it stands, however. In the first place, I am not sure that the amendment would have the effect that the noble Lord intends when considered in isolation. For example, there is no specific provision elsewhere in the clause relating to the calculation of income on which this amendment might bite. But this is not simply a question of the amendment being defective. If that were the only difficulty, I should happily undertake to come back to the noble Lord with another form of words. The fact is that the structure of the Bill simply does not permit an amendment of this kind; nor do I believe that it would be appropriate to make such detailed provision on the face of primary legislation.
Moreover, the amendment is based on the assumption that it will be necessary to make provision in regulations under Clause 16 to disregard disability benefits when calculating repayments. In fact, it is far from certain to what extent that will be the case. As Members of your Lordships' House will know, we intend that loan
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repayments should be collected by the Inland Revenue alongside tax and national insurance contributions. At present, most disability benefits are disregarded for taxation purposes because they do not fall within the definition of taxable income. Under certain definitions of income, therefore, it is quite possible that such benefits would similarly be automatically disregarded for repayment purposes. If they were not automatically disregarded, we should make specific provision to ensure by other means that they were disregarded. It would be quite inappropriate to require provision to be made in regulations under Clause 16 when that provision might be made elsewhere.
We have stressed throughout our debates on the Bill the need for flexibility to ensure that the legislation can cater for a wide range of future possibilities. It is quite likely that in the future the definition of income to be used, or indeed the types of benefits to which disabled people are entitled, will change from time to time. We should, of course, make specific provision in regulations under this clause to exclude disability benefits from the calculation of income if that were necessary. But, as I indicated, disability benefits might be disregarded by other means in which case the amendment would be otiose and would fail to achieve the effect that the noble Lord intends. Therefore, with the assurance that the Government will take whatever steps are necessary to put in place fair arrangements, as I have outlined, for disabled borrowers, I invite the noble Lord to withdraw the amendment.
Your Lordships may not be surprised that my response to the second of the amendments is less positive. The provisions in Clause 16(2)(c) enable us to target support for fees and maintenance on those who most need it. In the Government's view, there is a clear case for relating the level of support to family income; otherwise our proposed system of grants and loans would disproportionately benefit the better off. Our aim is to encourage access to higher education from those sections of society that are currently under-represented. Means testing grants will ensure that students from less well-off backgrounds will not have to contribute to tuition fees. Means testing loans will mean that these students will have access to the maximum funds available for maintenance. Since the loans will be highly subsidised, this also means that the largest subsidies will go to those from the poorest backgrounds.
The amendment, if accepted, would allow the means testing of grants and loans but only on the basis of an individual's income, not that of the parents or spouse. Means testing an individual's income without regard to the income of the household to which that individual belongs and from which he or she benefits, would be regressive and unduly expensive, as the intervention of the noble Baroness, Lady Carnegy of Lour, indicated. For example, as I highlighted in Committee, we estimate that ending means testing altogether might cost around £700 million per annum in the short term. That is money we can ill afford to divert from our higher education system; nor would it be right to reduce the support available to the poorest students in order to give additional subsidies to those who could well afford to

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do without them. This is a view shared by the Dearing Committee which also recommended maintaining the parental and spouse's contribution.
I accept that, as the noble Lord, Lord Tope, said, 18 year-olds are, for most purposes, adults in the eyes of the law. But in reality, as I am sure Members of your Lordships' House agree, most 18 year-olds are not fully independent of their parents and receive support from them in a variety of ways. I myself have had that experience and remember it from the size of my telephone bills at the time. This is particularly true of 18 year-olds whose sole activity is full-time higher education. Young people in this position are inevitably not economically independent, and it is not the function of the student support system to make them so. We believe therefore that where parents are able to continue to provide support by contributing to their child's living costs such support should be encouraged. This position is widely recognised across the world and indeed by many of our European friends. In some countries—Germany and Italy, for example—parents are under a legal obligation to maintain their children for as long as it takes the child to complete a course of vocational or professional education, irrespective of their age. In other countries—Austria and Italy, for example—this obligation does not cease until the child first becomes financially independent, whenever that is. I see no reason to fall completely out of step with the rest of the world in the way this amendment would have us do.
The current system in the UK, which we are proposing to retain, steers a middle course. Where students are financially supported by their parents, that support will continue to be taken into account, as it is at present. However, students will be treated as "independent" once they reach the age of 25—or in some cases sooner if they have been married for two years or supporting themselves for three—and their own income or that of their spouse will be assessed. The essence of the argument remains. Where a student is married and his or her spouse has the means to support him or her while he or she studies, he or she should be encouraged to do so. Government resources can then be targeted on those who do not have recourse to such support.
At the same time, our policy relating to such contributions essentially maintains the current situation. Only those who can afford it will be expected to contribute, and they will have to pay no more than they would under the current arrangements.
I acknowledge that some noble Lords may have concerns about students whose parents or spouses do not make the contribution expected of them. There is no reason why this should be more likely to happen when our proposals are implemented than under the present arrangements since, as I have made clear, no parent or spouse will be expected to pay more.
Our proposals build on the existing and generally accepted principle that students' families should, where they can, meet a proportion of the costs of their
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education. They do not, however, impose any additional burden on parents or spouses. I therefore urge your Lordships to reject the amendment.
Lord Addington: My Lords, I had hoped to receive an answer in that tone. At the same time, I cannot help feeling a little wary when I hear about regulations that might apply, that will apply, or that will cross-apply. With the caveat that I shall study the Minister's answer and perhaps seek guidance in trying to decipher that spider's web of regulations, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
5.45 p.m.
[Amendments Nos. 44 to 46 not moved.]
Baroness Blackstone Baroness Blackstone moved Amendment No. 47:
Page 11, line 37, leave out ("a loan") and insert ("loans").
The noble Baroness said: My Lords, in moving Amendment No. 47, I shall also speak to Amendments Nos. 48, 49, 53 and 68.
I announced at Second Reading that the Government would be seeking an amendment to limit the rate of interest that can be charged on loans. My noble friend Lord Whitty reiterated the Government's intention in Committee. I am pleased to be able to move these amendments, which will have the effect of ensuring that the rate of interest charged will be no more than is necessary to maintain the value of loans in real terms. This is consistent with the provisions contained in the current Education (Student Loans) Act, and will mean in practice that the rate of interest charged will be equivalent to the rate of inflation.
I alluded at Second Reading to certain technical difficulties which delayed the bringing forward of this amendment. Members of your Lordships' House might find it helpful if I explain what these difficulties are, and why these amendments take the form which they do.
The difficulties to which I alluded relate to the way in which repayments are credited to borrowers' accounts and in particular the timing of that. For students in employment, repayments will be deducted at source from graduates' salaries by their employers and passed on to the Inland Revenue. The Inland Revenue will then remit these payments on to the Student Loans Company, which will be responsible for crediting individual borrowers' accounts. There are likely to be time lags between each stage of this process. Moreover, there will be separate repayment arrangements for graduates who are self-employed, as their repayments will be calculated as part of the self-assessment procedure and deducted as lump sums accordingly. Of course specific provision will also need to be made for the small proportion of borrowers who will be for any reason outside the UK tax system.
Under the current scheme, interest is accrued on borrowers' accounts on a day-to-day basis. This will be impracticable under the new arrangements, since the Student Loans Company will not know immediately when repayments are made through the tax system.
Instead, interest will be credited retrospectively, only after repayments have been remitted to the company and credited to individual borrowers' accounts. In order to compensate for the delays that are inherent in the collection mechanism, we envisage that regulations will specify the dates on which repayments will be deemed to have been made or received. Interest will be accrued as if the repayments had been made or received on those dates. This will help to ensure that all graduates are treated equitably, regardless of whether they are in employment, are self-employed or are outside the UK tax system altogether.
Amendments Nos. 47, 48, 49 and 53 cover the position in England and Wales, while Amendment No. 68 inserts the equivalent provisions in Clause 21 dealing with Scotland. Taken together, this group of amendments provides the reassurance on interest rates that many Members of your Lordships' House and others have been seeking. I beg to move.
Earl Russell: My Lords, I thank the noble Baroness for these amendments, which meet an assurance she gave to me in Committee. I am satisfied with them, I am happy and I am delighted to welcome them.
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 48:
Page 11, line 38, leave out ("any such loan to hear interest at such rates") and insert ("such loans to bear compound interest at such rates, and calculated in such manner,").
On Question, amendment agreed to.
Baroness Blackstone Baroness Blackstone moved Amendment No. 49:
Page 11, line 46, at end insert—
("(3A) In relation to loans under this section—

(a) the rates prescribed by regulations made in pursuance of subsection 3(a) shall be no higher than those which the Secretary of State is satisfied are required to maintain the value in real terms of the outstanding amounts of such loans; and

(b) such regulations may make provision, for the purpose of calculating the interest to be borne by such loans, for repayments by borrowers to be treated as having been made or received on such date or dates as may be prescribed by the regulations.").

On Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 50:
Page 12, line 30, at end insert—
("() The Secretary of State shall ensure that, in any regulations made under this section in relation to any eligible student for any prescribed purpose for any academic year—

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

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

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

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

The noble Baroness said: My Lords, when the Government solicited support for reducing the maintenance grant, they did not make it clear that maintenance grants would be abolished completely and in one fell swoop; nor that it would be introduced to impact on students who had already selected places at university and college well before the legislation had passed through Parliament; nor that it would be accompanied by the introduction of tuition fees; nor that the proposals would impact disproportionately on students from lower income families.
Students who had opted to take a year out between school and university were accused of being worried about nothing. This was followed by frenzied activity and some back-tracking by the DfEE. Even the criteria which determined which gap-year students were to be exempted from paying fees were subsequently changed because they were in practice unworkable.
Students can be forgiven for feeling let down by these proposals because of the indecent haste with which they were proposed as a supposed response to Dearing. Frankly, they could not have been a considered response to Dearing, first, because there was deliberate leaking of the proposals to the press the weekend before the Dearing Report was produced and, secondly, because there could hardly have been time to read the report, let alone consider its recommendations and findings between the publication of the report and the issuing of the Government's response.
Students will have noted, as indeed many of us did, the words of the Prime Minister on 14th April, only two weeks before the General Election last year, when he declared that the introduction of tuition fees paid for by students were not planned, as indeed did the right honourable Robin Cook who, on 24th April, just one week before the General Election, speaking to students, confirmed that view. Further, in an extraordinary display of ignorance, the Prime Minister on 25th February—only last Wednesday—when speaking to Parliament about student finance said that the Labour Party had accepted the Dearing recommendations. In fact, he said that they had promised that they would specifically abide by the outcome of the Dearing Committee Report, even accusing the Conservatives of not doing so. To put the record straight, we did support the Dearing recommendations; the government of the day did not.
As the noble Baroness knows, the Dearing Committee looked very carefully at the proposition that maintenance grants should be phased out from the 50–50 grants and loans to 100 per cent. loans. After much deliberation, they concluded—and I quote from paragraph 108 of the Dearing Report:
"We would be particularly reluctant to see any reduction in public subsidies being concentrated on students from the poorest families and even more reluctant to see the funding released by this, and more, being used to increase the subsidies for others".
When students are contemplating going to university they do not make the distinction, despite what people say, between tuition fees and maintenance grants. They want to know how much money it is going to cost them. In order to take up a place they will each require approximately £4,000 per year for maintenance plus, for 66 per cent. of them, anyway, some or all of £1,000 for

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tuition fees to be paid up front. For the students from the lowest income families, this will mean that they will have to borrow more than their fellow students who come from higher income families and repay the loan regardless of parental income. It is indefensible that a proposal leaves a student from a lower income family worse off, with a greater burden of debt, than a student from a higher income family. If ever there was a desire to introduce a disincentive for people from lower income backgrounds, especially from families with no tradition of entering university, the Government could not have done better.
We know already that there has been an overall decline in applications for places. The decline is very much more marked in two categories: students in the age bracket 21–24 and students over the age of 24. I would suggest it is the sudden quantum leap in the overall level of borrowing—that is, tuition fees plus maintenance grants—which will act as a deterrent for the students. Maintenance for the lowest income families is by far the greatest part of such borrowing.
My amendment would mean a level playing field for students leaving university, whatever their family background and whatever their future earnings. It has to be the irony of all time that a Labour Government is penalising more heavily lower income families, and I predict that there will be much disquiet in another place on this issue. I beg to move.
6 p.m.
The Earl of Longford: My Lords, I have not troubled the House up till now on this subject, but I should like to say a few words about the abolition of free tuition. If this is the wrong moment, I must be told; but I was informed that it was the best time to say what I want to say, which will not take more than a minute.
I do not like the abolition of free tuition. I have as much vested interest in retaining it, I suppose, as anybody here. I am one of many people who have been university teachers, but I cannot think of many other noble Lords who have had 20 children and grandchildren who have benefited from free tuition. I now have eight children and 12 further great-grandchildren to come. I therefore have a very big vested interest in maintaining tuition fees.
However, if there is only a limited amount of money available for education then the interests of people like myself and many others here must be subordinated to those of the poorer classes—I put it as crudely as that. I do not like it. I would much rather more money was spent on education, and I hope one day it will be. But if money is limited, for whatever reason, I am afraid that, with much reluctance, I must support the proposal.
Baroness Carnegy of Lour: My Lords, I did not vote on the amendment in relation to fees because, as I have just explained, I do not believe that it is possible to separate the fees issue from the maintenance issue. As my noble friend Lady Blatch said, it is the package that is important.
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It is interesting how responsible and perceptive the students are who come to visit various noble Lords, including myself, on this issue. The National Union of Students talked in public about fees. I understood that it had agreed with the Government that it would not oppose the removal of maintenance grants. Of course, when it did that, it did not know the extent to which that would happen and that there would be a charge for fees. It felt therefore that it could only discuss fees. But student associations which do not belong to the National Union of Students have been extremely frank. They explained that they are worried about maintenance charges.
The Edinburgh Association of Students said that its concern was not for well-off students, but for people who were "at the end of the bus queue". It quoted the figures mentioned by my noble friend and explained that poor students would lose much more than better-off students under this deal. The association was greatly concerned about that and was worried about its less well-off members. I felt that that was extremely laudable and assured the association that I would convey those feelings to the House.
Other students in associations which are not members of the National Union of Students have also been able to talk about the matter publicly—St. Andrews and Warwick to name but two. I received a great many letters, as I am sure did other noble Lords. Students understand the problems of maintenance. It is a real difficulty for them and the House must look carefully at the amendment. From the students' point of view it is probably the most important amendment we will look at today, and I shall support it.
Baroness Young: My Lords, I support my noble friend Lady Blatch, who set out the arguments so well. One of the curious aspects of the Bill is that, when we look at the funding—the combination of the tuition fees, the removal of the maintenance grants and the importance of the parental contribution added together—on the figures that I have seen, in a number of cases it is the poorer students who will end up paying the most. I cannot believe that that could possibly be intended and hope that, if the Government will not accept the amendment, they will undertake to take a long hard look at the matter.
The key to the whole curious mixture of figures is probably the parental contribution. It is arguable that some parents will not pay it, but the assumption is that they will. It is therefore a serious and important matter. It is important for poorer students, but we should be under no illusions that students as a whole are extremely worried about it. I speak not only in my capacity as chancellor of Greenwich University, which has a number of poor students, and certainly students who are doing part-time and sandwich courses in order to obtain their degrees (one admires enormously the effort that they put in), but I know that I speak also on behalf of the university when I say how concerned the students are about this combination of moneys that they will have to pay. We delude ourselves if we imagine that they do not understand it. In fact, students are perfectly intelligent and quite able to do the sums.

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Like many other noble Lords, I received a great many letters from student unions expressing different views. But the most tragic case is that of the student left with tuition fees to pay, no maintenance grant and parents who are unwilling to contribute their parental contribution. Those students will be the worst off of all. I hope, therefore, that the Minister will look again at my noble friend's amendment.
Lord Renfrew of Kaimsthorn: My Lords, in supporting the amendment perhaps I may briefly reiterate the point that this does not arise from a proposal of the Dearing Committee. Dearing did not propose that both tuition fees of £1,000 and a total abolition of the maintenance grant should be introduced. There is an element of injustice that the two provisions should be brought in simultaneously by the Government. I do not understand why the Government have done that. It seems to place a great burden upon students and was not a provision proposed by the Dearing Committee. For those reasons and others that we have already heard, I support the amendment.
Lord Walton of Detchant: My Lords, I too favour the principle underlying the amendment, but there is one problem to which I should perhaps draw attention.
If we were to accept the amendment under subsection (a),
"the maximum amount of any loan made available to that student is no greater than half the prescribed cost of maintenance",
and so forth, it does not take account of the recommendation of Dearing which followed that of the National Commission on Education, which I had the privilege of chairing. That was to the effect that the loan should be able to take account not just of the contribution to maintenance, but should also cover the contribution to the fees. I therefore ask the noble Baroness, Lady Blatch, whether that would rule out the student being capable of taking out a loan which would cover the fee contribution as well as half the cost of maintenance. That is an important and fundamental point.
Lord Peyton of Yeovil: My Lords, I have two reasons for speaking shortly now. First, because my noble friend Lord Renfrew most eloquently stated exactly the reasons why I support the amendment. Secondly, I do not want to be accused of making a Second Reading speech, which I would be if I spoke on anything except maintenance.
In passing, I say to the noble Baroness that I hope she will not rely too much, in the course of the remainder of these proceedings, on that worn out, shabby excuse which is used by every government in difficulties and comes ill from a government that produced a Bill such as this. I hope that the amendment will be accepted.
Lord Davies of Oldham: My Lords, I have two interests to declare. First, I am chair of the Further Education Funding Council—a direct interest. Secondly, I have a more general interest in that for several years before the last election I was shadow spokesperson on
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further and higher education in the other place. Consequently, these issues have exercised my mind as much as they have Members of this House.
Let me say why the amendment should be rejected. First, we should recognise that students, in making their representations, valued the fact that the proposals from the Government brought two significant advantages. Despite the fact that any student contribution is bound to be regretted. None of us believe that we would not be in favour of giving full support to every student in the land if we could afford to do so and if we could expand our educational opportunities on that basis. But, as we know, for several decades that has not been the case. That is why the expansion of higher education under the previous government led to the Education (Student Loans) Bill.
I recall, with regard to that Bill, the suggestion at the time that there would be a slow introduction of the loans element alongside the maintenance grants. If the noble Baroness, Lady Blatch, is suggesting that the Government are acting with indecent haste, will she recall the fact that the previous government went from a 0 per cent. contribution by students to 50 per cent. in the space of three years? It is true that the amendment suggests that what the Opposition believe is "so far and no further". There was no understanding of gradualness at that time, but a recognition that the resources necessary for higher education must involve a contribution by the students. How rapid was the contribution? Students had to repay within five years.
Under these proposals students pay over a lifetime of earning on a contingent basis. The arguments have been well rehearsed in the House. I have to say to the Opposition that it is not the case that the National Union of Students or the student bodies are critical of those dimensions of the development with regard to the policy. Tuition fees are something else. But the important part with regard to the tuition fees is that this is exactly the area where they are made contingent on parental income, reflecting the fact that the Government are making it abundantly clear that young people from the more deprived homes will not be faced with a tuition fee. That is where the element of discrimination and support for students from the less well-off homes cuts in.
I maintain that this amendment would turn back the clock to a position which was rejected before the last general election. It was rejected not just during the election by the nation which clearly had before it the fact that, if my party formed a government, the issue with regard to maintenance grants in favour of long-term student loans would be altered; and students themselves had rejected that former model. What is the real way in which we can guarantee fairness and opportunity to our students in higher education?—by taking the single most constructive action the Government have taken and which they were able to take only on the basis of their proposals with regard to tuition fees and maintenance support. It is by raising the cap on student numbers and

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increasing the resources available to higher education so that we can create more places. Without that, there is no way in which we can provide equity in this country.
Lord Baker of Dorking: My Lords, most of the arguments on this issue took place about two hours ago, so I shall be very brief. By the vote that took place earlier, the House has accepted the principle of tuition fees. I can see there is no going back on that. What we are really debating now is how we can give help to those students who will have difficulties when there are tuition fees.
I could only get the student loans system through Cabinet by saying that we would introduce it slowly—which is what I was condemned for, but I can assure the House that it was the fairest way—and that it would get to a balance of 50:50–50 per cent. grant and 50 per cent. loan, which is what it is now. It has taken three or four years to get to that point, and I think it is a reasonable balance. However, the proposals in the Bill completely change that. The grant element will disappear. There will be a 100 per cent. loan with some relief for the tuition fee element, which will involve an elaborate system of means testing.
I hope that the amendment will be passed. I believe that the Government should think again about a combined system of tuition fees and maintenance grant, modified in some way. I think the point raised by the noble Lord can in fact be met with ingenuity and a little subtlety. That would be much better from the point of view of students. I hope the House will take this opportunity to deal with what my noble friend Lord Renfrew called the double whammy.
6.15 p.m.
Lord Tope: My Lords, before the Minister replies, I should like to comment briefly on the amendment. When I explained on the first amendment my party's package for the funding of higher education, I said that an important part of the package was the abolition of maintenance grants. It was long and keenly discussed at our party conference a couple of years ago, but that remains my party's position. We would replace maintenance grants with income-contingent loans, loans which would be repaid on the basis of so many pence in the pound of the graduate's eventual income, which would mean that he or she would not inherit a debt of so many thousands of pounds or a mortgage repayment model of so many pounds a month but instead inherit an obligation to repay so many pence in the pound of his or her income. However, because it is our party's policy and an important part of our package to fund higher education that we have to abolish maintenance grants, I am afraid that we are unable to support the amendment.
Baroness Dean of Thornton-le-Fylde: My Lords, I oppose the amendment. I declare an interest in that I was a member of the Dearing Committee. This is a difficult area to consider and I know that the decisions are difficult for all of us. On the Dearing Committee, we were talking about a compact. Tuition fees and
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maintenance are linked, and that is how we approached the matter. I accept that we are dealing with maintenance grants, but the Dearing Committee proposed that for tuition fees there should be a flat 25 per cent. contribution. We never considered that students from lower income families would pay nothing. We never considered that students from lower income families would pay just a portion. The proposal was for a flat 25 per cent. contribution which would be repaid as a loan when the student graduated and found employment. The contribution would then be gathered through the Inland Revenue—I am delighted that the Government have accepted that point—so if the person was not in work he would not pay. It was hoped that if he was on a very low income he would not pay.
One has to consider this issue in terms of the compact. The proposals in the response to Dearing published last week show clearly that, on the means testing which the Government will apply, around a third of students will not have to pay tuition fees—40 per cent. in Scotland—and another third will not have to pay the full amount. That has to weigh in the balance of what Dearing called the compact.
These are serious matters to consider. I hope that the amendment will not be carried for the reasons I have given. There has been a long debate and so I will not take up too much time. I would point out that we are talking about a compact and we talking against a background of the tremendous success of getting 30 per cent. of young people going into higher education. However, the figures show that the numbers of students from low income families have not increased in the same way as the numbers of students from middle and upper class families. We have made hardly a dent in that area. I would suggest that means testing so that a loan does not have to be taken out will encourage children from lower income families to go into higher education. I hope the amendment is rejected.
Baroness Park of Monmouth: My Lords, I hesitate to speak when it is so important to get on and vote but I am very concerned about two points. First, I regard the maintenance grant as a vital safety net. So many of our young people will come up with no money. They will have rent to pay and books to buy. If their loans are delayed—let us face it, the record of the Student Loans Company and the Student Support Agency is not impressive—they could wait two or three weeks. There will be chaos and a very demoralised group of young people.
Secondly, the Government think it is perfectly reasonable for students to pay back their living costs eventually. Eventually, yes, but today many students are desperately worried about the size of the loan they will have to repay. They are working in term as well as working in the vacations when they ought to be either doing academic work or some academic related work. The result is that they will get much worse degrees than they really merit. That in turn means that they will not get the good jobs that everyone believes that they will get. Employers expect a certain standard. More than that, they expect a CV which shows that the students have been able to benefit by the many other

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extra-curricula activities that a good university offers such as music, sport, debates and learning how to run things. Employers look for that, but students today will be putting on their CVs, "I filled shelves at Sainsbury's" full stop. That is not going to get them very far. So the whole purpose of this exercise, which is to get more people into higher education—and let them actually have that education—will be nullified because the students will be in a state of very considerable anxiety. They will be doing all the wrong things with their lives. So I urge that we consider restoring the maintenance grant.
Earl Russell: My Lords, I believe that the difficulty on these subjects is that we all tend to want incompatible things. We all want a large increase in student numbers; we all want a reasonably low level of taxation; we all want—if we can have it—free tuition; and we all want a maintenance grant. I agree in principle with everything the noble Baroness, Lady Park, said about the maintenance grant. The trouble is that, with our present number of students, it seems that we cannot have free tuition and a maintenance grant both at once. We simply cannot make the arithmetic work.
For what appear to me to be good reasons, we on these Benches have decided that our priority is to keep the principle of free tuition, first and foremost because there is a charge on the parents, it is a lump sum and it cannot be dealt with on the arrangements we have now by an income-contingent system of repayment which seems to be the fairest way of doing it. So we cannot have everything. We believe that what we supported as regards the first amendment is more important. We cannot manage both because the arithmetic does not work.
Baroness Blackstone: My Lords, I spoke at length in Committee in response to an identical amendment tabled by the noble Baroness, Lady Blatch. I hope that your Lordships' patience will not be tried too much if I again speak in some detail about the issues that have been raised because they are obviously very important ones.
I have listened carefully to the views expressed by your Lordships both in Committee and in our debate today. I genuinely appreciate that there is concern on all sides of your Lordships' House that students should receive the support that they need in a way which ensures that they are not deterred from entering higher education, regardless of their circumstances. Before going on to explain again how our proposals meet that objective, I would like to take a little time to separate the facts from the fiction because there is still some misunderstanding here.
I am disappointed that some noble Lords are seeking to either detect confusion where it does not exist or else create it at this late stage in the Bill's progress through your Lordships' House. As the Prime Minister made clear—not in a display of ignorance, but in full knowledge of what we have done—we support the
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principles of Dearing. We support a contribution to fees. We support improved loan repayment arrangements, and we support—
Baroness Blatch: My Lords, I am grateful to the noble Baroness for giving way. With the leave of the House, may I repeat the precise words used by the Prime Minister in another place?
"First, on student finance, since we said specifically, as indeed the Conservatives said, that we would abide by the outcome of the Dearing Report, I think it is the richest possible hypocrisy for the Conservative Party, having supported those proposals, now to denounce them".
That is what the Prime Minister said. He said that the Government would support the Dearing proposals in principle and that we would denounce them. We have accepted them; it is the Government who have denounced them.
6.30 p.m.
Baroness Blackstone: My Lords, no, we have not denounced the Dearing recommendations. As my noble friend Lady Dean indicated, we have accepted the principles of the Dearing Report and built on them. We have accepted the proposals as regards ensuring that there should be access for students from all social backgrounds to higher education. My right honourable friend the Prime Minister made that absolutely clear. We accepted the principle that fees should be charged although we decided to mitigate them by means testing them.
We support a contribution to fees. We also support improved loan repayment arrangements. I must put the emphasis here on "improved". We support improved arrangements to encourage access. It is true, as some Members of your Lordships' House, including the noble Baroness, have been at pains to point out, that we have not adopted all the detail of Dearing's recommendations on student funding. However, our plans are in accord with the principles of Dearing. I am grateful to my noble friend Lady Dean for her clear explanation of the Dearing Committee's position and the Government's modification of it by means testing the fee and balancing that with the abolition of grant.
I say to the noble Baroness, Lady Park, that I very much share her view that we want to maintain the highest possible standards in our higher education system. As someone who has worked for many years in our universities, I have always fought personally to do that and I shall continue to do so. I say to her that no student will pay any more up front under the scheme. From what the noble Baroness was saying, I believe that she was implying that they would; that they would be unable to afford to live and would have to take jobs because they would have less money. But they will not. They will have exactly the same amount of money as they have at the moment, but it will be in the form of a loan. It is very important that we do not have any misunderstanding.
We are abolishing grants because we believe that they have no place in a modern student support system. It is right that students' living costs should be met out of their future earnings and in part by their parents where

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they can afford to do so. We stated clearly in our manifesto that on those grounds we would abolish grants and replace them with income-contingent loans. So no member of the electorate and no Member of this House or student can have any doubt about that. We are talking about a manifesto commitment.
It has also been said, by the noble Baroness, Lady Blatch, in particular, that the Government rushed their response to the Dearing Committee's report. The Government responded rapidly and decisively. Having inherited a worsening funding crisis—some noble Lords are laughing. I do not believe it a laughing matter that a government should respond decisively to a very important set of recommendations of this kind.
Having inherited a worsening funding system in higher education, we could hardly stand idly by once Dearing had reported. We had to act quickly, and that quick response has resulted in an extra £165 million for the higher education sector for 1998–99. I know that that has been widely welcomed by many of my former colleagues in the university sector. In fact, I have not heard of a single person who has not welcomed it.
Nor did we want to leave students and their parents in the dark over the summer as they made important decisions against UCAS deadlines. That is why we mobilised our information campaign as quickly as we could. LEAs and institutions have already been notified of the detailed procedures. We have consistently kept them informed of developments and will continue to do so. The Local Government Association and the CVCP have had a key role in the development of the implementation arrangements for the new system.
When one considers the scale of our information campaign, and the positive response we have had to it, it is rather unconstructive for noble Lords to persist in suggesting that students are in the dark. Our freephone orderline has received about 33,000 calls, and sent out over 1 million booklets, posters and other materials explaining the new student support arrangements. Over 80 per cent. of those organisations which received initial copies of the leaflets have ordered more for their students. Clearly they recognise it as a worthwhile and informative read. We also know from research that a high proportion of would-be students have read the information and understand what the new arrangements mean for them; 99 per cent. of them were aware of the introduction of tuition fee contributions; 87 per cent. knew that the contribution would depend on income and 80 per cent. knew that increased maintenance loans would be available. Equally encouraging awareness was shown by potential mature students, even though those students are harder to target with information. I have already recognised that and said that we want to address that concern. I think that the vast majority of people know what our plans are. Our intentions in this area are clear.
My noble friend Lord Davies referred to the previous government's legislation. I would remind Members of your Lordships' House that when the current mixture of grants and loans was introduced by the previous government we were assured before the publication of the student loans Bill that loans would be introduced
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gradually, and would not constitute 50 per cent. of the total maintenance package until the year 2007–08. But only four years after the Bill was enacted the previous government announced without any consultation or debate that the process would be accelerated, and indeed the 50 per cent. target was reached by 1996–97. So I am surprised that some noble Lords opposite have developed an attachment to grants when before they were eager to reduce the value of the grant as quickly as possible.
We have heard some alarmist statements about what the effects of our proposals might be, but little hard evidence, I am afraid. I gave some evidence about the impact of loans in Committee, and I shall repeat it here. In the five years before the current loans scheme was introduced, participation among younger students from lower socio-economic groups rose by only two percentage points. In the following five years, between 1990 and 1995, when students received an increasing amount of support through loans, the rise was some seven percentage points. I am sure that the noble Lord, Lord Baker, will remember that and that he will be pleased that that was the impact.
Of course there were, and there remain, many reasons influencing a young person's choice to enter higher education. By far the most important of these is the level of educational attainment reached at school. Quite simply, if a young person gains good A-level results—or the equivalent in vocational qualifications—he or she is likely to go into higher education. Financial considerations are secondary. Nevertheless, the key point is that providing maintenance support in the form of loans does not act as a disincentive; or, to put it another way, there is no evidence to suggest that grants help to encourage students from lower socio-economic groups to enter higher education. What matters is that students have access to the funds that they need while they are studying.
The noble Baroness, Lady Young, referred to the impact of our arrangements on applications. I have already said in answer to an earlier group of amendments that applications from students under the age of 21 are down by less than 1 per cent. Indeed, the National Union of Students has accepted that it is reasonable to expect that maintenance costs should be repaid later on the new basis that we are introducing.
Several Members of your Lordships' House have argued that under our proposals, students from poorer backgrounds will incur the highest debt, and that this is unfair. I would remind your Lordships that it is a fact of life—a hard fact of life, I acknowledge—that students from wealthier backgrounds are likely to receive more support from their parents, and so need less support from other sources. Our proposals take account of that fact by ensuring that students have access to the resources that they need when they are studying, regardless of their or their families' circumstances. Of course, the amount that individual students borrow will depend on a variety of factors, including where they decide to study and the length of the courses they take, as well as their family income.

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In judging the fairness of our proposals, I would also ask Members of your Lordships' House to take a somewhat longer view of the support that the Government are making available to students from poorer backgrounds. I have already made it clear that the terms on which we are proposing to make student loans are generous. Loans will be heavily subsidised to ensure that graduates repay no more in real terms than they borrowed, however long the loan is outstanding. In most cases, graduates will repay their loans over a longer period than they would under the current arrangements. On this basis, therefore, students from poorer backgrounds who take out the full loan available to them will be eligible to receive the largest public subsidy over time. This subsidy is, of course, additional to the support that students from poorer backgrounds will receive towards the cost of their tuition. Indeed, they will not pay a tuition fee.
The introduction of fair and progressive repayment arrangements under our proposals was a key factor leading to our conclusion to abolish maintenance grants. Income-contingent loans will be quite unlike other forms of borrowing in that the level of repayments will be commensurate with the borrower's ability to repay. In this respect, our proposed arrangements are more attractive (as far as potential lenders are concerned) than the existing loans scheme, as the right honourable friend of the noble Baroness, Lady Blatch (the shadow spokesman on education in another place) has publicly admitted.
We have consistently made it clear that our proposals are aimed at generating additional resources for investment in further and higher education. The Government are not ashamed to admit that abolishing maintenance grants, rather than keeping them at their present level, will make much more money available for colleges and universities. The effect of this amendment, however, would be to deny institutions and students the benefits of this additional investment. I note that the noble Baroness, Lady Blatch, has failed to suggest an alternative way of bridging the funding gap that would result were her amendment to be accepted.
The noble Baroness asked me to reflect on her amendment between Committee and now—and I have done that. I have also listened to the arguments that noble Lords have advanced in favour of retaining maintenance grants, the most compelling of which relate to access. Like all other Members of your Lordships' House, I want to be sure that we do not in any way damage that access. However, I would invite your Lordships again to consider the evidence that I have cited. That evidence shows that grants have not discouraged participation by students from lower socio-economic groups; that even the flawed system of loans which currently exists has not deterred them from entering higher education; and that graduates are not disadvantaged by a system which enables them to contribute to the costs of their education on an
1010
income-contingent basis. I would, therefore, again urge Members of your Lordships' House to reject this amendment.
Baroness Blatch: My Lords, so everything is all right then and students can go away happy because, frankly, this will not affect them—in fact, it will increase their participation in higher education?
Perhaps I may refer briefly to one or two points. I must say to the noble Lord, Lord Davies of Oldham—this is not a personal remark—that I find it deeply disturbing that a chairman of a funding council who has a very political profile in this House should speak on these matters. It is not the first time—
Noble Lords: Oh!
Baroness Blatch: My Lords, I know—indeed, the noble Lord knows—that this is not the first time that such a comment has been made, but the fact that he has spoken today has let all those students out there know exactly whose side he is on—and, given what he said, it is not the students' side.
I speak with some diffidence in the presence of the noble Earl, Lord Russell. My understanding of everything that the Minister has said on a number of occasions is that it is expected that the £1,000 tuition fee in part or in whole must be met by the student. In order to convince us that no more money must be found by the families, it has been said that the £1,000 must be deemed to be paid by the student, albeit a loan facility will be available for that.
I say to the noble Baroness, Lady Dean, that it was precisely that package that I took into account when I considered Dearing. Dearing said that even though, under the Government's proposals, there would be some exemptions from and means-testing of the £1,000 fee, when £1,000 was weighed against £5,000—which is the figure if maintenance is included—the burden would be considerable. The committee said that the tuition fee could be a flat rate fee to be paid some time in the future when the student was able to do so but that the maintenance fee would have a disproportionate impact on a lower income family.
Baroness Dean of Thornton-le-Fylde: My Lords, I am grateful to the noble Baroness for giving way. Recommendation No. 79 of the Dearing Report states clearly that a contribution of about 25 per cent. will be made by students to tuition fees. The Dearing Committee had no idea that the government of the day would means test so that some students should make no contribution at all. They had no idea that a means test would be applied and that students would pay only a proportion of the loan. Taken one with the other, how could the Dearing Committee have recommended maintenance grants? The Dearing Committee looked at a situation in which it felt that, in requiring each student to make a flat contribution irrespective of his or her financial position or that of his or her family,

1011
consideration should be given to maintenance rates as well. What has happened is that the Government have now made it subject to means testing.
Baroness Blatch: My Lords, the noble Baroness makes my point for me. It is a great irony that the student who qualifies for full exemption from the tuition fees is the very one who has to borrow £4,000 a year, whereas the student who pays the tuition fees has to borrow only half the maintenance costs. A student who is exempt from tuition fees will owe up to £12,000 at the end of a three-year degree course. That results in a disproportionate impact on poorer students. I beg to move.
6.42 p.m.
On Question, Whether the said amendment (No. 50) shall be agreed to?
Their Lordships divided: Contents, 143; Not-Contents, 102.

Division No. 2

CONTENTS

Ackner, L.

Gardner of Parkes, B.

Ailsa, M.

Garel-Jones, L.

Alexander of Tunis, E.

Geddes, L.

Anelay of St. Johns, B.

Glenarthur, L.

Astor, V.

Harlech, L.

Baker of Dorking, L.

Harmsworth, L.

Beloff, L.

Hayhoe, L.

Berners, B.

Henley, L.

Biddulph, L.

Hesketh, L.

Biffen, L.

Higgins, L.

Blackwell, L.

Holderness, L.

Blaker, L.

Home, E.

Blatch, B.

Hood,V.

Boardman, L.

Hope of Craighead, L.

Bowness, L.

Howe, E.

Bridgeman, V.

Hunt of Wirral, L.

Brigstocke, B.

Inchcape, E.

Brookeborough, V.

James of Holland Park, B.

Brougham and Vaux, L.

Jeffreys, L.

Burnham, L. [Teller.]

Kimball, L.

Butterfield, L.

Kingsland, L.

Butterworth, L.

Kinnoull, E.

Byford, B.

Knight of Collingtree, B.

Cadman, L.

Lane of Horsell, L.

Caithness, E.

Lauderdale, E.

Carnegy of Lour, B.

Leigh, L.

Carnock, L.

Lichfield, Bp.

Cavendish of Furness, L.

Liverpool, E.

Chalker of Wallasey, B.

Long, V.

Chesham, L.

Lucas, L.

Clanwilliam, E.

Lucas of Chilworth, L.

Coleraine, L.

Luke, L.

Colwyn, L.

Lyell, L.

Cope of Berkeley, L.

McColl of Dulwich, L.

Courtown, E.

Mackay of Ardbrecknish, L.

Crickhowell, L.

Mackay of Drumadoon, L.

Davidson, V.

Macleod of Borve, B.

Dean of Harptree, L.

Malmesbury, E.

Denman, L.

Mancroft, L.

Elles, B.

Marlesford, L.

Elliott of Morpeth, L.

Massereene and Ferrard, V.

Feldman, L.

Mayhew of Twysden, L.

Flather, B.

Mersey, V.

Fookes, B.

Miller of Hendon, B.

Fraser of Carmyllie, L.

Molyneaux of Killead, L.

1012

Mottistone, L.

Renton, L.

Napier and Ettrick, L.

Renwick, L.

Naseby, L.

Roberts of Conwy, L.

Newall, L.

Rotherwick, L.

Newton of Braintree, L.

Rowallan, L.

Noel-Buxton, L.

St John of Fawsley, L.

Norrie, L.

Seccombe, B.

Northesk, E.

Selkirk of Douglas, L.

Onslow, E.

Shaw of Northstead, L.

Onslow of Woking, L.

Skelmersdale, L.

Oxfuird, V.

Skidelsky, L.

Park of Monmouth, B.

Stewartby, L.

Pearson of Rannoch, L.

Strange, B.

Pender, L.

Strathclyde, L. [Teller.]

Perry of Southwark, B.

Sudeley, L.

Peyton of Yeovil, L.

Thomas of Gwydir, L.

Trenchard, V.

Pike,B.

Trumpington, B.

Pilkington of Oxenford, L.

Tugendhat, L.

Prentice, L.

Ullswater, V.

Prior, L.

Waddington, L.

Pym, L.

Warnock, B.

Quinton, L.

Wilberforce, L.

Rankeillour, L.

Windlesham, L.

Reading, M.

Wise, L.

Renfrew of Kaimsthorn, L.

Wynford, L.

Rennell, L.

Young, B.

NOT-CONTENTS

Acton, L.

Hunt of Kings Heath, L.

Archer of Sandwell, L.

Irvine of Lairg, L. [Lord Chancellor.]

Barnett,L.

Bassam of Brighton, L.

Islwyn, L.

Berkeley, L.

Janner of Braunstone, L.

Blackstone, B.

Jay of Paddington, B.

Blease, L.

Jeger, B.

Blyth, L.

Jenkins of Putney, L.

Brooke of Alverthorpe, L.

Kennedy of The Shaws, B.

Brooks of Tremorfa, L.

Kennet, L.

Burlison, L.

Kilbracken, L.

Carter, L. [Teller.]

Kilmarnock, L.

Chandos, V.

Lockwood, B.

Cocks of Hartcliffe, L.

Lofthouse of Pontefract, L.

Currie of Marylebone, L.

Longford, E

David, B.

McIntosh of Haringey, L.

Davies of Coity, L.

Mallalieu, B.

Davies of Oldham, L.

Merlyn-Rees, L.

Dean of Beswick, L.

Milner of Leeds, L.

Dean of Thornton-le-Fylde, B.

Mishcon, L.

Desai, L.

Molloy, L.

Dixon, L.

Monkswell, L.

Donoughue, L.

Montague of Oxford, L.

Dormand of Easington, L.

Murray of Epping Forest, L.

Dubs, L.

Nicol, B.

Evans of Parkside, L.

Northfield, L.

Falconer of Thoroton, L.

Peston, L.

Farrington of Ribbleton, B.

Pitkeathley, B.

Gallacher, L.

Plant of Highfield, L.

Gilbert, L.

Ponsonby of Shulbrede, L.

Gladwyn, L.

Prys-Davies, L.

Gordon of Strathblane, L.

Puttnam, L.

Gould of Potternewton, B.

Ramsay of Cartvale, B.

Greene of Harrow Weald, L.

Randall of St. Budeaux, L.

Gregson, L.

Rendell of Babergh, B.

Grenfell, L.

Richard, L. [Lord Privy Seal.]

Hanworth, V.

Serota, B.

Hardie, L.

Sewel, L.

Hardy of Wath, L.

Simon, V.

Haskel, L.

Simon of Highbury, L.

Hilton of Eggardon, B.

Smith of Gilmorehill, B.

Hollick, L.

Stoddart of Swindon, L.

Howie of Troon, L.

Stone of Blackheath, L.

Hoyle, L.

Strabolgi, L.

Hughes, L.

Symons of Vernham Dean, B.

Hughes of Woodside, L.

Taylor of Gryfe, L.

1013

Thomas of Macclesfield, L.

Walton of Detchant, L.

Watson of Invergowrie, L.

Thurlow, L.

Whitty, L. [Teller.]

Turner of Camden, B.

Williams of Elvel, L.

Varley, L.

Williams of Mostyn, L.

Walker of Doncaster, L.

Wright of Richmond, L.

Resolved in the affirmative, and amendment agreed to accordingly.
6.54 p.m.
Lord Mackay of Ardbrecknish Lord Mackay of Ardbrecknish moved Amendment No. 51:
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: My Lords, in moving Amendment No. 51, I shall speak also to Amendments Nos. 76 and 77. It is a small amendment about one of the unfairnesses which the Government left behind when deciding to charge £1,000 a year for university fees. In Scotland, an honours degree takes four years to complete. In England, by and large, an honours degree takes three years to complete. Therefore, it is clear that at £1,000 a year a Scottish honours degree will cost £4,000 and an English one only £3,000.
The Garrick Committee, which met in Scotland in parallel with the Dearing Committee, recommended that graduates of a four-year degree course should not be burdened unduly by comparison with the shorter degree courses in England and Wales. After a bit of a fuss, the Scottish Office announced that, in line with the Garrick Report, it would cover the cost to Scottish domicile students of the fourth year of the degree course. Therefore, a student resident in Scotland attending a Scottish university will pay £3,000, as will a student resident in England attending an English university.
However, a problem remained relating to those students not domiciled in Scotland, but attending Scottish universities. The first group are students from England, Wales and Northern Ireland. Currently, approximately 5,000 students apply each year from the rest of the United Kingdom to Scottish higher education institutions. Indeed, 22,000 students from England, Wales and Northern Ireland are currently studying at Scottish universities. Forty-seven per cent. of the students at St. Andrews University come from England, Wales and Northern Ireland and 45 per cent. of students at Edinburgh University are from England, Wales and Northern Ireland. Therefore, we are not talking about small numbers of students. Currently, students from England, Wales and Northern Ireland who go to the universities of Aberdeen, St. Andrews, Glasgow or wherever, will be asked to pay £4,000, whereas students resident in Scotland will pay only £3,000.
That anomaly might be bad enough when we are trying to maintain the fact that the United Kingdom is one country, but it is made a thousand times worse by
1014
the discovery that, in order to obey European Union legislation, students from EU countries must be treated in the same way as Scottish students. They must pay only £3,000 and not £4,000.
Perhaps I may give an example in order to explain the consequence of that. I have two granddaughters, one living in Italy and one living in Kent. If both decide to follow their grandfather and their parents to the University of Glasgow, the one who lives in Milan will have to find £3,000, but the one who lives in Kent, where her father and mother pay into the British Exchequer, will have to find £,4000. That is simply daft! It cannot be right that students from Paris and Paisley pay £3,000 while students from Coventry and Cardiff pay £4,000.
The noble Lord, Lord Alderdice, on the Liberal Democrat Benches, unfortunately cannot be here today but we spoke last week about the matter. He made the telling point that the anomaly is even sillier in terms of the island of Ireland where students from Limerick will be asked to pay £3,000, but students from Limavady will be asked to pay £4,000. A considerable number of students from Northern Ireland have opted to study elsewhere in the United Kingdom, and in particular in Scotland. I hope that the Liberal Democrats will follow the wise words of the noble Lord, Lord Alderdice, the last time we discussed the matter and if I press the amendment will vote with me in order to make the position fairer.
The last time we discussed the matter in your Lordships' House I asked the noble Lord, Lord Sewel, how much the proposal would cost and he kindly wrote to me about that. It is not a cost on the Scottish Office, which stated that it will fund the cost of its domiciled Scottish students. It is a cost on the Department for Education and Employment in England and Wales and the Northern Ireland Office. Once again, I am amazed that the poor old noble Lord, Lord Sewel, is being put up to answer for a policy which he and his department have decided they do not approve of. They believe that students in Scotland attending Scottish universities should pay only £3,000.
I would have been greatly impressed, therefore, if the noble Baroness, Lady Blackstone, had been prepared to come and argue in defence of the decision of her department, instead of sending the noble Lord, Lord Sewel, whose colleagues decided some time ago that it would be unfair to charge Scottish students £4,000 and are prepared to pay the additional cost in order to reduce it to £3,000. But the noble Lord, Lord Sewel, it must be. However, it is interesting that two or three weeks ago, on the radio, I heard his colleague, Mr. Brian Wilson, the Education Minister, saying that it is nothing to do with the Scottish Office and that one should attack the Department for Education and Employment. Would that I could do so, but its representatives will not come here to deal with this issue.
Let us look at the vast amounts of money that it will cost. The noble Lord, Lord Sewel, said that in England—I am not sure whether that means England and Wales or only England—it would cost in the region of £1.5 million per year and for Northern Ireland about £0.3 million per year. The money still comes from the same government, despite the fact that we are about to go down the

1015
devolutionary road. It will cost the Government about £2 million per year. That is all it would cost to put right what is an absolutely appalling anomaly.
It is a disgrace for the unity of the United Kingdom that students from England, Wales and Northern Ireland should be treated so unfairly, not just compared with students in Scotland but also compared with students coining to the Scottish universities from any other European Union country. I beg to move.
7 p.m.
Baroness Carnegy of Lour: My Lords, earlier the noble Baroness, Lady Blackstone, said that in responding to Dearing the Government had been decisive. I do not believe that the Scottish Office has been very decisive about this matter. There was an anomaly which was cured by another anomaly and a third anomaly has now been added. We really are in rather a muddle. It is very unjust to English students, very bad for the image of the Union and it creates a very bad outlook for the future of the Scottish Parliament. I am extremely sorry that it has happened.
I am grateful to the Government for one thing. After a discussion with Heriot-Watt University, I asked who would fund the fourth year and as my noble friend has just said, we now know that the Government are to fund the fourth year in Scotland. That is confirmed in their response to the Garrick Report where I am happy to see it in black and white. That will be a great comfort to everybody.
I hope that the Government are going to do something about this. If my noble friend's amendment were to be accepted, the position would be fairer in all directions. Students would appreciate that and those of us who want Scotland to hold together with the United Kingdom in the future in the work of the Scottish parliament would also greatly appreciate it. Therefore, I support the amendment.
Lord Tope: My Lords, we have now debated this issue several times in your Lordships' House. I watch with some interest the growing embarrassment of the noble Lord, Lord Sewel, who must rise on every occasion to reply to this frankly untenable position. So often we have talked about the student from Cumbria who must pay £1,000 more than the student from Umbria. We had some more alliteration today.
This clearly is a ludicrous anomaly. I do not know why the Government have not yet corrected it. My Amendment No. 76 seeks to achieve exactly the same purpose as the amendment moved by the noble Lord, Lord Mackay. We are at one on this issue. I do not know why the Government are persisting with this situation. Perhaps the noble Lord, Lord Sewel, will no longer be embarrassed and will be able to tell the House that he understands and accepts the position and that he will accept at least one of the amendments.
Earl Russell: My Lords, before Christmas, at Prime Minister's Question Time, my right honourable friend Mr. Ashdown asked the Government whether their policy was based on a principle of non-discrimination and he was
1016
told that it was. My honourable friend came straight back with his supplementary question and asked why the Government were charging English and Scottish students different sums for the same education. The Prime Minister had no answer. It may be that the noble Lord, Lord Sewel, can do better than the Prime Minister, but he will have a job.
Baroness Park of Monmouth: My Lords, I have only one further point to add to this interesting idea of making some EU nationals more equal than others. I should like to know the legal basis. How do the Government propose to reconcile the arbitrary discrimination against some British members of the EU with the new clause in Article 1B of the Amsterdam Treaty which requires all member states to;
"strengthen the protection of the rights and interests of the nationals of its member states through the introduction of a citizenship of the Union".
If I were a student in Northern Ireland, so many of whom have gone to Scottish universities, I should find it very difficult to understand.
The Parliamentary Under-Secretary of State (Scottish Office) Lord Sewel: My Lords, we have indeed discussed this issue in Committee but we return to the basic and fundamental point that both the school and higher education systems in England and Scotland are different. It is interesting that a separate committee—the Garrick Committee—was set up in Scotland to look at the issues which Dearing was examining in relation to England and Wales. That is a recognition that the two systems are fundamentally different.
Garrick recognised that the fact that there were two systems could leave students who had followed a Scottish secondary education course at some disadvantage in relation to tuition costs for higher education because many of the courses at Scottish universities, for the same degree, are one year longer than elsewhere in the United Kingdom for comparable courses.
The Garrick Committee recommended that that issue should be addressed and the Government have done so by agreeing that Scottish students studying in Scotland will not be required to contribute to their tuition costs in the final year where the course is one year longer than the equivalent course in England, Wales or Northern Ireland. That is the point that we all understand. However, it is important to make clear what is the basis of the disagreement, if we have a disagreement, by understanding the basic position as it exists.
It does not follow that the same arguments can be advanced for students from elsewhere in the United Kingdom where the pattern of school education is different. I shall try to advance an argument that even the noble Earl will recognise as having some credibility. The nub of the argument is that the idea for compatibility between students domiciled in England and Scotland is based on a misunderstanding because it falsely conflates two things: the first is the idea of intellectual development; and the other is the period of time necessary to cover the syllabus in any one discipline.

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It is important to bear in mind in the Scottish context that, traditionally, Scottish students have gone to university one year earlier than English students. My own daughter is in what I believe to be a not particularly desirable position of having spent an additional year at school but still going to the University of Glasgow at the age of 17. That does not happen with any regularity in English universities.
Therefore, the reason that the four-year honours degree course exists in Scotland and is of value in Scotland for Scottish domiciled students who have come through the Scottish educational system is that their intellectual development has not reached the same stage by the time they leave school as is the case in England where students go to university aged 18 and have often gone through a two-year A-level course. In Scotland, students predominantly undertake a one-year higher course or, effectively, a two-term higher course. Therefore, there is a very strong case to persist with the four-year honours degree course for Scottish students.
English students, having undertaken a two-year A-level course, are that much further along the road of intellectual development than their peers in Scotland. In that case, the challenge is basically for the Scottish universities. That challenge is to recognise that students coming from the English school system and going into the Scottish higher education system should properly go in at what is the second year.
Many Scottish universities make provision in that respect. Indeed, it should be encouraged. As a former university teacher, I see no reason why it is not possible to cover the actual range of many disciplines in three years. I do not believe that any strong argument can be advanced against the possibility of covering an honours degree in three years. The reason it is not done in Scotland rests with the argument of intellectual development: they come there a year early, a year less prepared.
Therefore, the challenge is to the Scottish universities to ensure that they can be attractive to English domiciled students as regards coming in at the second-year level. Of course, there is a certain reluctance on the part of some Scottish universities to go down that road. I do not believe that I am being particularly cynical in suggesting that the possible reason behind persisting with a four-year degree course for English domiciled students is that it is a nice way of maintaining institutional income. I put it just like that as perhaps one of the reasons why some universities have not been too enthusiastic to make it possible for students to come in at the second year.
Earl Russell: My Lords, the Minister puzzles me. Is he saying that he is using the extra charge as a means of encouraging English students to enter in the second year and not the first? If so, is it not a matter of academic rather than political judgment?
Lord Sewel: My Lords, as a politician I am not encouraging them. As a former university teacher I am saying that the situation exists at present in some universities in Scotland where students with A-level qualifications enter the second year of the Scottish degree course. That is a perfectly sound academic route. Indeed, I have had students who have done that and they have not
1018
been at any disadvantage whatever. I commend it to those of my former colleagues who are active in higher education in Scotland. I give way to the noble Baroness.
Baroness Carnegy of Lour: My Lords, I am sorry to interrupt the Minister again, but he is making this sound as if it is just in the nature of Scottish courses. They vary very much. In many universities the first year is an integral part of the course; it is not just a sort of top-up on school education to get people ready for the three years. I suggest to the Minister that the Government are interfering with the curriculum of universities. That is very dangerous.
Lord Sewel: My Lords, we are not interfering with the curriculum of universities; I am suggesting how universities may respond if they wish to do so. It is not for me to interfere with their curriculum. If the argument is that the first year is an integral part of the degree course, perhaps we should look at the structure of that course to ensure that students with A-levels can come in at the second year. I have done it and my colleagues have done it elsewhere in Scotland. It works. Indeed, it is capable of working.
The point has been made about St. Andrews and about the effect that this policy may have upon it. It has been pointed out that a large number of English students attend that university. That is perfectly true—Hastings by the sea. If we have a look and see what has happened this year, we find that English student applications to St. Andrews have increased by 6 per cent. for the upcoming year.
Lord Taylor of Gryfe: My Lords, I am sorry to interrupt my noble friend the Minister, but can he also quote the figures for Edinburgh University?
7.15 p.m.
Lord Sewel: My Lords, I am sorry, I do not actually have the figures for that university. However, I can tell my noble friend that, if we consider the whole business, there are still more English than Scottish applicants to Scottish universities. There are more English domiciled students applying to Scottish universities than there are Scottish domiciled students applying to Scottish universities.
If one studies the predicted major drop in applications in Scotland from England, about which noble Lords opposite have been warning us, it will be seen that it has not occurred. The drop in English applicants is actually less than the overall drop—it is 5 per cent. compared with 6 per cent. When one compares the upcoming year with the year that is just going through, one finds a very interesting situation. One finds that applications were up on average by 8 per cent. last year, while this year they are down overall in Scotland by 6 per cent. So there is no fundamental evidence to suggest that the policy has actually put off students. What has happened is that there has been a less than compensating decline for the increase that took place last year. Clearly, if people applied last year, they are out of the system and so, naturally, there would be a drop this year.
Let us keep what the extra £1,000 means in perspective. I have put forward my suggestion of how universities may respond. It may well be proper for universities to respond

1019
and say that the four-year degree is something that they wish to market as a quality product for English domiciled students. They will be required to take an extra year. But they are already required to take an extra year over their degree courses than their fellow students who applied to English universities. There is also a cost involved. The cost is in foregone income which is estimated at £16,000 a year. There is a cost in the additional year's maintenance which is about £3,000 a year. Therefore, we are already talking about an English domiciled student going on a four-year degree course in Scotland, which is already effectively carrying a cost of about £19,000 to £20,000 a year in one way or another. What we are saying here is that, yes, they will have to pay an extra £1,000 a year for the fee, which is equivalent to something like just over 5 per cent. of the additional cost they are already paying.
Reference was also made to the European paradox. I agree that it is a paradox, but the Government cannot be blamed for the situation. The matter is clear: we have sought legal advice—and, indeed, I have confirmed this—on the matter. We have received that advice and are confident that we have a robust position and can defend it robustly if there is any challenge in the courts. Therefore, there is no problem in terms of our position being incompatible with our European obligations.
We have gone round the course a number of times both in Committee and today on Report. I have a sneaking suspicion that it is not yet over. Basically it boils down to three issues: first, there is no evidence to show that this year, when knowledge has been available about the changing practice, it has in any way adversely affected the application rate for English domiciled students. I say that because the application rate of English domiciled students has fallen by a lower percentage than the overall fall. Therefore, it is clearly not having a discriminatory effect on applications.
Secondly, the opposition to the Government's proposals is based on a misunderstanding—an understandable conflation of two different ideas. I have in mind the amount of time that it takes to achieve a degree of intellectual development and the time that it takes to cover the syllabus in any one discipline. Thirdly, there is no question that the Government are in any way falling short of their European obligations. On all those criteria the Government's position is sound. I invite the noble Lord to withdraw his amendment.
Lord Mackay of Ardbrecknish: My Lords, this time at least we have had a more robust defence of the Government's policy than we had on the previous two outings. If the noble Earl, Lord Russell, were marking this, perhaps he would give quite a high mark for effort. However, I am not entirely sure that he would give too many marks for content.
It seemed to me that the noble Lord's argument was largely about school and the interaction with university and the fact that English students on leaving school have developed further intellectually than Scottish students and therefore they need only three years at university and they can join a course at the end of the first year. Some of them do that and there is evidence that a slightly greater number are doing that this year. However, that assumes that they
1020
start a university course following on directly from A-levels. If they do not do that, they will probably start a fresh subject, and, in the case of an honours course at a Scottish university, they will have to start at year one. While the noble Lord's argument may have some validity for some students, it cannot apply to them all.
In any case, my understanding is that the Government are not going down the road of trying to take into account the total education bill by saying, "You have already cost us X pounds in school education, and therefore you can cost us only Y pounds in university education. If you cost us slightly more than X pounds at school we will pay less than Y pounds in further education". At one stage in the Minister's speech I wondered whether we would hear of the introduction of vouchers and fees in schools to equate costs as between primary, secondary and university education. I thought that the argument was ingenious and I congratulate the noble Lord on his robust defence of the Government's position. However, he did not address the real issue of fairness as between students from different parts of the United Kingdom studying the same course.
He did not address the European issue at all. He just said that the Government could not be blamed for the paradox. However, the Government have created the paradox. They have caused the paradox. I am providing a way out of the paradox. All they have to do to get out of the paradox is to do what the Scottish Office has done and pay out £2 million to students from England, Wales and Northern Ireland who want to study in Scotland. Then the position is on all fours inside the United Kingdom and on all fours as regards Europe. Frankly, I do not think that my son and daughter-in-law, who would be asked to pay £4,000 to send a child to Glasgow University, would be at all impressed by that reply when a girl from Italy would have to pay £3,000, as indeed would a girl from anywhere in Scotland. The Government say they believe in the integrity of the United Kingdom—we may return to this matter after Easter—and they have a Bill to devolve certain powers to Scotland. They do not seek to split the UK. However, their proposal on this issue splits the UK. I am not in the least satisfied and I wish to test the opinion of the House.
7.23 p.m.
On Question, Whether the said amendment (No. 51) shall be agreed to?
Their Lordships divided: Contents, 134; Not-Contents, 89.

Division No. 3

CONTENTS

Ackner, L.

Blatch, B.

Addington, L.

Boardman, L.

Ailsa, M.

Bridgeman, V.

Alexander of Tunis, E.

Brookeborough, V.

Anelay of St. Johns, B.

Brougham and Vaux, L.

Archer of Weston-Super-Mare, L.

Burnham, L. [Teller.]

Beaverbrook, L.

Butterfield, L.

Beloff, L.

Cadman, L.

Biddulph, L.

Caithness, E.

Biffen, L.

Calverley, L.

Blackwell, L.

Carlisle, E.

Blaker, L.

Carnegy of Lour, B.

1021

Carnock, L.

Molyneaux of Killead, L.

Chesham, L.

Moynihan, L.

Clanwilliam, E.

Napier and Ettrick, L.

Coleraine, L.

Newall, L.

Colwyn, L.

Newby, L.

Cope of Berkeley, L.

Newton of Braintree, L.

Courtown, E.

Northesk, E.

Dahrendorf, L.

Ogmore, L.

Darcy de Knayth, B.

Onslow, E.

Dean of Harptree, L.

Onslow of Woking, L.

Denham,L.

Oxfuird, V.

Dholakia, L.

Park of Monmouth, B.

Flather, B.

Pearson of Rannoch, L.

Fookes, B.

Perry of Southwark, B.

Gardner of Parkes, B.

Perry of Walton, L.

Garel-Jones, L.

Peyton of Yeovil, L.

Glenarthur, L.

Pilkington of Oxenford, L.

Goodhart, L.

Prior, L.

Hacking, L.

Pym, L.

Hamwee, B.

Razzall, L.

Harmsworth, L.

Redesdale, L.

Harris of Greenwich, L.

Renfrew of Kaimsthorn, L.

Henley, L.

Renton, L.

Hesketh, L.

Rochester, L.

Higgins, L.

Rodgers of Quarry Bank, L.

Holme of Cheltenham, L.

Rotherwick, L.

Holm Patrick, L.

Rowallan, L.

Home, E.

Russell, E.

Hope of Craighead, L.

Russell-Johnston, L.

Hunt of Wirral, L.

Seccombe, B.

Hussey of North Bradley, L,

Selkirk of Douglas, L.

Inchcape, E.

Shaw of Northstead, L.

James of Holland Park, B.

Skelmersdale, L.

Kimball, L.

Smith of Clifton, L.

Kirkwood, L.

Steel of Aikwood, L.

Knight of Collingtree, B.

Stewartby, L.

Lichfield, Bp.

Strange, B.

Linklater of Butterstone, B.

Strathclyde, L. [Teller.]

Liverpool, E.

Thomas of Gresford, L.

Lucas of Chilworth, L.

Thomas of Gwydir, L.

Ludford, B.

Thomas of Walliswood, B.

Lyell, L.

Tope, L.

McColl of Dulwich, L.

Tordoff, L.

McConnell, L.

Trenchard, V.

Mackay of Ardbrecknish, L.

Ullswater, V.

Mackie of Benshie, L.

Warnock, B.

McNair, L.

Wilberforce, L.

McNally, L.

Wilcox, B.

Maddock, B.

Williams of Crosby, B.

Mancroft, L.

Winchilsea and Nottingham, E.

Mar and Kellie, E.

Windlesham, L.

Marlesford, L.

Wise, L.

Massereene and Ferrard, V.

Wright of Richmond, L.

Mayhew of Twysden, L.

Wynford, L.

Mersey, V.

Young, B.

NOT-CONTENTS

Acton, L.

Desai, L.

Amos, B.

Dixon, L.

Archer of Sandwell, L.

Donoughue, L.

Barnett, L.

Dormand of Easington, L.

Bassam of Brighton, L.

Dubs, L.

Berkeley, L.

Evans of Parkside, L.

Blackstone, B.

Falconer of Thoroton, L.

Brooke of Alverthorpe, L.

Farrington of Ribbleton, B.

Brooks of Tremorfa, L.

Gallacher, L.

Burlison, L.

Gilbert, L.

Carter, L. [Teller.]

Gordon of Strathblane, L.

Cocks of Hartcliffe, L.

Gould of Potternewton, B.

Currie of Marylebone, L.

Greene of Harrow Weald, L.

David, B.

Gregson, L.

Davies of Coity, L.

Grenfell, L.

Davies of Oldham, L.

Hanworth, V.

Dean of Beswick, L.

Hardie, L.

Dean of Thornton-le-Fylde, B.

Hardy of Wath, L.

1022

Haskel, L.

Nicol, B.

Hilton of Eggardon, B.

Northfield, L.

Hollick, L.

Peston, L.

Hoyle, L.

Pitkeathley, B.

Hughes, L.

Plant of Highfield, L.

Hughes of Woodside, L.

Ponsonby of Shulbrede, L.

Hunt of Kings Heath, L.

Prys-Davies, L.

Irvine of Lairg, L. [Lord Chancellor.]

Puttnam, L.

Ramsay of Cartvale, B.

Islwyn, L.

Randall of St. Budeaux, L.

Janner of Braunstone, L.

Rendell of Babergh,B.

Jay of Paddington, B.

Richard, L. [Lord Privy Seal.]

Jeger, B.

Serota, B.

Jenkins of Putney, L.

Sewel, L.

Kennedy of The Shaws, B.

Simon, V.

Kilbracken, L.

Simon of Highbury, L.

Lockwood, B.

Smith of Gilmorehill, B.

Lofthouse of Pontefract, L.

Stoddart of Swindon, L.

McCarthy, L.

Stone of Blackheath, L.

McIntosh of Haringey, L. [Teller.]

Strabolgi, L.

Mallalieu, B.

Symons of Vernham Dean, B.

Merlyn-Rees, L.

Thomas of Macclesfield, L.

Milner of Leeds, L.

Turner of Camden, B.

Molloy, L.

Varley, L.

Monkswell, L.

Watson of Invergowrie, L.

Montague of Oxford, L.

Whitty, L.

Murray of Epping Forest, L.

Williams of Mostyn, L.

Resolved in the affirmative, and amendment agreed to accordingly.
Lord Haskel: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion perhaps I may suggest that we do not come back to the Bill before 8.30 p.m.
Moved accordingly and, on Question, Motion agreed to.
Public Processions (Northern Ireland) Act 1998 (Code of Conduct) Order 1998
Public Processions (Northern Ireland) Act 1998 (Procedural Rules) Order 1998
Public Processions (Northern Ireland) Act 1998 (Guidelines) Order 1998
7.33 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland office (Lord Dubs)The Parliamentary Under-Secretary of State, Northern Ireland office (Lord Dubs) rose to move, That the draft orders laid before the House on 23rd February be approved [24th Report from the Joint Committee].
The noble Lord said: My Lords, I beg to move en bloc the draft Public Processions (Northern Ireland) Act 1998 (Code of Conduct) Order 1998, together with the draft guidelines order 1998 and the draft procedural rules order 1998 also made under the Act which were laid before your Lordships' House on 23rd February.
With the enactment of the Public Processions (Northern Ireland) Act the Government have delivered on their undertaking to address the problems of public order and sectarian divisions which are caused by some contentious parades in Northern Ireland.
As we consider this delegated legislation, I should be grateful for your Lordships' forbearance if I recap briefly the background to the main legislation and its purpose. I am conscious that we have already covered the ground extensively and that these matters have enjoyed the full rigour of parliamentary scrutiny, both here and in another place. Those of your Lordships who have followed these debates may indeed consider themselves to be as familiar with the myriad aspects of the parades question as they would ever wish to be!
Following the serious public disorder at Drumcree in 1996, the previous government set up the independent review on parades and marches under Sir Peter North which provided a very thorough analysis of the issue. The report of that review, published in January 1997, sought to create a framework which would encourage and reward local accommodation. The Public Processions (Northern Ireland) Act effectively implements the recommendations of the report.
The central recommendation of the report was to set up an independent body, the Parades Commission, which would work to facilitate accommodation on contentious parades and, where this failed, would take over the decision-making role of the police on such parades. In effect, the Act will introduce a new way of dealing with contentious parades which will enable all the relevant factors to be fairly weighed up by an independent body.
The North Report recommended that the existing statutory criteria for determining whether a parade be subject to conditions should be extended to include a new factor of the impact on relationships within the community. North suggested that the key role of the guidelines should be to clarify for the Parades Commission, parade organisers, participants, police, protesters and all other interested parties, what is the practical application of this new factor.
The report also recommended that an initial task of the commission should be to prepare guidance on the procedures it would follow, in addition to those that are to be followed by the police and the organisers of processions, open-air public meetings and protests.
North also recommended that the commission should produce a code of conduct covering the expected behaviour of participants in a parade and of protesters. The Parades Commission will take ownership of the code, keeping it under review and proposing such amendments as it sees fit.
The Government fully accept those recommendations of the North Report and appropriate provisions requiring the commission to produce a code of conduct, guidelines and procedural rules were included in the Bill; and those provisions of the Bill were the subject of lengthy and rigorous debate both in this House and in another place.
The code of conduct has been prepared in accordance with Section 3 of the Act. Your Lordships will recall that there was considerable support in the House for the extension of the provisions of the code of conduct to cover those who wish to protest against parades as well as those who organise or participate in them. The Government recognise this, and an appropriate amendment was made to what is now Section 3 of the Act.
The code is designed to assist organisers of parades and of protest meetings by providing both a check-list and reminder of the points they will need to cover and the issues they will need to address in planning and on the day.
Similarly, the procedural rules have been made under Section 4 of the Act. They set out the procedures to be followed by the commission in the exercise of its functions under the Act and those to be followed by others in their dealings with the commission.
The procedural rules explain how the commission will accommodate information about the various factors detailed in the guidelines: how it will hear the views of supporters and opposers of parades; how it will express an informal broad view of the overall pattern of parades in the areas in which they are contentious; and how it will issue formal determinations on individual parades within a fixed timescale.
Section 5 of the Act requires the commission to issue a set of guidelines to which it is to have regard in deciding whether to impose conditions on a public procession. The guidelines are, in essence, the factors to which the commission will have regard in making a judgement on each individual case and they are intended, as the North Report said, to lead to greater transparency and consistency on decision making.
The Parades Commission issued the code of conduct, procedural rules and guidelines in draft form for public consultation last October. The revised versions which we are considering today have benefited greatly from this consultation. The commission then submitted the documents to the Secretary of State for laying before Parliament in draft.
We believe that these documents get the balance right and can play a very valuable role in getting to grips with what is undoubtedly a difficult and thorny issue. However, we recognise that experience on the ground may lead to a need for change and it is for this reason that Schedule 2 to the Act sets out the mechanisms by which the documents can be changed in the light of experience.
The Public Processions (Northern Ireland) Act and the mechanisms it is setting up will break new grounds in the handling of parades in Northern Ireland. I recognise that we are moving into uncharted waters and that the commission will have a very challenging task in the months ahead. We do not expect that the commission will immediately bring about a marching season free of controversy or dispute. There will undoubtedly be problems and many hurdles on the way to overcome. But I believe that, with the passing of the Act and the introduction of these three documents, we

1025
are laying a secure foundation for new arrangements which will lead to a lessening of tension in the area of parades.
The draft orders, which will bring into effect the three Parade Commission documents, are vital components in the effective working of the new legislation. They are mechanisms which will directly assist and improve the regulation and conduct of parades and will as a result immeasurably improve prospects for peace and stability for the people of Northern Ireland over the coming months. I commend them to the House.
Moved, That the draft orders laid before the House on 23rd February be approved [24th Report from the Joint Committee].—(Lord Dubs.)
7.40 p.m.
Lord Holme of Cheltenham: My Lords, although from these Benches we unreservedly support the orders in the light of the debates that have taken place and the amendment to the Bill itself, the notice has been very short. We are discussing orders that are already printed (and I shall say a word about the attractiveness of the design) and which come into effect at midnight. One might be tempted to say that their progress through this House is being taken pretty much as a formality and a rubber stamp. That seems regrettable. We were originally to have discussed the orders last week, and I am unclear as to why even that short space of time has disappeared. As a result, we are almost literally discussing them at the 59th minute of the 11th hour. However, carping aside, the Public Processions (Northern Ireland) Act has finally reached the statute book—based on the North Report and substantially amended, it must be said, in many cases by the initiative of this House—and it deserves our support.
I said that I would comment on the presentation of the booklets. They are supposed to be written so that they are useful to the man in the street, and even more so to the man who might march down the street. They are well designed and a great deal more attractive than many Northern Ireland Office documents. However, I wish I could say the same for the content. I wonder what the Plain English Campaign would say about the sentence on page 7 of the guidelines:
"Where, however, communication is problematic, the Commission will expect disputants to explore how to resolve the problem including, for example, seeking assistance from facilitators";
or the sentence,
"Where it is not possible to reach agreements on self-imposed restrictions, it will be important to take steps to establish a line of communication aimed at achieving accommodation on the proposals for the parade".
They do not exactly have the ring of clear English.
Perhaps I might make a suggestion to the Northern Ireland Office. It might be sensible in future to use the draftsman of the appendices to the Code of Conduct, which are absolute models of succinct Anglo-Saxon clarity. Nobody who reads the appendices is left under any misunderstanding as to what they are supposed to say. Perhaps whoever drafted the appendices might in
1026
future be given the job of drafting the whole document, so that the people for whom the documents are intended can understand them.
That said, the booklets need to be widely distributed. In responding, will the Minister say how they are to be made available? It will be no use at all if they sit in the office. I know that leading members of the Orange Order, the Apprentice Boys and most other marching groups will already be aware of the implications of the public processions Act, as, I suspect, the organisers of some counter-demonstrations will be, too. However, I wonder whether the people who participate in marches are going to know about the new rules. I should be interested to know how they are to be made available. When I last visited the Parades Commission in Belfast, it was impossible to escape without being given the sets of draft guidelines. Although I have complained about the fact that we are discussing these orders at the last minute, I wish to pay tribute to the long period of consultation which preceded the publication of these documents.
Finally, I hope that the whole House will wish Mr. Alistair Graham and the newly announced members of the Parades Commission success in their work. We are now beginning to enter the preliminaries of the parade season, from Easter weekend onwards beginning to build up to the marches of the summer. This year of all years it will be a particularly sensitive season. I hope that the codes of conduct and the guidelines will be helpful and will be made available to all those who would benefit from reading them.
7.45 p.m.
Lord Fitt: My Lords, the noble Lord, Lord Holme, and myself have had occasion over many years in this House to draw to the attention of the House, when there is a debate on Ireland, the vast attendance of noble Lords, who rush in to hear the debate. It is potentially one of the most dangerous situations in the United Kingdom. It is something of a shame that there are not more Members present in this House to take an interest in what is happening in Northern Ireland.
The noble Lord, Lord Dubs, will understand that he will meet no opposition in this House in relation to the orders. We have already debated them at great length both in this Chamber and in Committee. This is unique legislation for Northern Ireland, a part of the United Kingdom. It is unique and unprecedented—and, as yet, untested. I do not think that there is anyone in Northern Ireland with experience of being a representative or of living there who is not apprehensive about the marches that will take place there this year.
The noble Lord, Lord Holme, made a point that I fully support. An hour ago I received a telephone call from a journalist friend of mine whom the Minister may have met in Northern Ireland. He told me that he had read this paraphernalia, which I understand has been sent out to 600,000 people. He told me that he could not understand it. And he is a journalist—with, I suspect, a certain command of the English language. If he cannot understand it, there will be many, many people in Northern Ireland who will be even more doubtful about its contents.

1027
Perhaps I may ask the Minister a few questions. I understand that there is a mediation role for the commission. I believe it has attempted to meet some of the more controversial figures who will be in charge of the more controversial areas in Northern Ireland. As the Minister said repeatedly, they will oversee certain marches, and there are only about 20, or at the very most 30, very difficult areas. Will the Minister tell the House whether the commission has met the spokesmen for those areas? I think immediately of the Bogside in Derry, the Ormeau Road in Belfast and a location in County Antrim. Have the persons responsible for those areas met the commission? Have they had discussions? Or have they rejected any submissions made by the commission? Is it true about the extremes on both the nationalist and the unionist sides? I feel sad to have to say that I understand the unionist side contains some Unionist Members of Parliament, elected representatives, who refuse to meet members of the commission. In the dangerous situation that exists in Northern Ireland now those elected representatives are not acting in the interests of their own constituents or in the wider interest of the people of Northern Ireland.
I understand that today Alistair Graham and two or three other members of the commission have gone to America. Whom are they expected to meet in America? With whom are they expected to hold discussions? Is it the Irish-American lobby? Because, to say the least, the Irish-American lobby has been very unhelpful in the past. Indeed, many of its members come to Northern Ireland every year at the end of July or in August, which is a very dangerous marching season in Northern Ireland, and they have been anything but helpful. They have thrown their full support behind one set of nationalist extremists against unionists in Northern Ireland. I wonder whether anything will come out of the meetings with Alistair Graham and those with him.
At the end of the day, as has been said repeatedly in this House and in another place, the conduct of the marches will be a matter for the RUC. The responsibility will fall on the police, whatever the commission may or may not do. The responsibility for maintaining law and order in Northern Ireland will rest on the shoulders of the RUC. All I can do is to wish them every vestige of luck, because they will certainly need it.
I said to the Minister that he will find no opposition in this House. In whatever way we can we should support the Minister on this legislation.
7.50 p.m.
Lord Molyneaux of Killead: My Lords, we find ourselves in a distinctly peculiar position this evening. We are invited to approve drafts produced by a newly appointed commission, the composition of which was decided by the Secretary of State in accordance with powers conferred upon her by both Houses of Parliament in an Act which received Royal Assent on 16th February 1998.
But only this weekend the authority of the Secretary of State, and thereby the authority of this Parliament, has been called into question by the Foreign Minister of
1028
another member state of the European Union; namely, the Irish Republic. I understand that the said Foreign Minister, Mr. Andrews, put forward a list of nominees to the Secretary of State for membership of the new commission. His complaint is that not all of his favourites were accepted by Her Majesty's Government.
I understand that there is to be a meeting of the Anglo-Irish conference in Dublin later this week. Your Lordships will have to wait until then to discover whether the Irish Government agree with your Lordships' decision tonight or whether the drafts before us really have the approval of yet another new commission more to the liking of the Irish Government. From the way the situation was developing in Northern Ireland before I left today, it seems very doubtful that the new commission, with its present membership, will remain in being in that form.
If anyone should doubt the leverage of Irish governments in the internal affairs of the United Kingdom, they have only to look at the scandal of an earlier Irish Government's blatant action in overturning the report of the Parliamentary Boundary Commission on which the general election last year was conducted. The Irish rejection of the Boundary Commission report, forcing Her Majesty's Government to send the commission back to the drawing board, had the effect of depriving Dr. Hendron, formerly the Member of Parliament for West Belfast, of his seat and securing the election of one Mr. Gerry Adams in his place. That was a direct result of the intervention of the Irish Government.
Last year, around 12th July, some of us were credited with taking decisions which averted a planned IRA uprising over that weekend. I shared a hope that a pattern had been established for future years. Such hopes have today been dashed by the irresponsible outburst of the Irish Foreign Minister, who is also his government's spokesman on Northern Ireland and involved in the current talks.
Even if Her Majesty's Government remain firmly in support of the membership of the commission, which they have recently appointed, the perception—and noble Lords will agree that perceptions are everything in Northern Ireland—will be that, in all its determinations, the commission will be doing the will of Dublin, and every decision of the commission, the police and the Government will henceforth be suspect. That is the uncomfortable truth.
The same perception and suspicion will surround the commission's powers to review and revise its own rules and procedures, as authorised in the Act, and also the power to review the working of the Act itself now that the commission has been contaminated by the unwise intervention of Mr. Andrews.
Last Thursday in another place, in the First Standing Committee on Delegated Legislation, the Minister for security explained that the new commission was appointed on 19th February, met the following day and endorsed the orders before your Lordships' House this evening. It is not clear to me whether the drafts were produced by the former members of the commission and then rubber stamped by the new commission within

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hours. If that is the case, the new commission has to be commended on its speed—or haste, as may turn out to be the case.
In the changed circumstances, I have to ask the Minister whether the chief constable will still be required to supply to the commission and all its members copies of advance notices of processions, giving very sensitive information in regard to the names and addresses of every organiser and details of dates, times, routes and numbers of any procession.
The opening words of Schedule 1 to the Act stipulate
"The Commission shall not be regarded as the servant or agent of the Crown or as enjoying any status, immunity or privilege of the Crown".
I gather that that was the express wish of the commission at that time.
Although disclosure of what should be strictly confidential information was not objectionable when the Bill was drafted last year, the position has been transformed, whether we like it or not, by the injection of the Irish Government and its agents and the probable insertion of placemen of the Irish Foreign Minister at this late stage.
In the light of these unforeseen developments, I trust that Her Majesty's Government will think again about disclosure of what amounts to classified information to persons who refuse to be classified as Crown servants. I trust that Her Majesty's Government can be persuaded of the risks involved before it is too late.
7.58 p.m.
Lord Cope of Berkeley: My Lords, unlike the noble Lord, Lord Holme, I am grateful to the Minister for agreeing to hold this debate today rather than last week. The debate was not signalled on the Order Paper until the day before it was due to take place last week and the documents were not available in the Printed Paper Office until later that day. I do not regard that as an acceptable way to put legislation before this House. It has happened before; it should not happen again, in my view. It means that we are discussing this matter shortly before the code of conduct and the other documents are due to come into force. Were we not to approve these orders—although I do not anticipate that—obviously that timetable would go by the board. That is not something I would recommend to the House, on grounds of timetable or anything else.
The documents have been some time in gestation. We saw earlier drafts of them when we discussed the Bill and previously. The procedural rules document sets out the elaborate system for the commission to gather information, to take evidence and to express, first, a preliminary view and then a determination in the case of contentious parades. It is crucial—indeed the basic point of the commission's existence—that determinations should be as acceptable as possible to all concerned. It therefore seems to me right that an elaborately fair method of decision-making should be put in place, as the procedural rules do. But the rules provide much less information about how the
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commission intends to facilitate mediation. That is also right, as that process is obviously a much more flexible one.
I should point out that in the explanatory note to the procedural rules order this part of the commission's power is described as to mediate, not to facilitate mediation. The Minister will know that this point was a matter of some contention in discussions on the Bill, and it is disappointing that those who drafted the explanatory note seem to have missed that. It does not form part of the order, so we do not need to fuss unduly, perhaps. However, it does not inspire confidence. The commission has taken that point fully on hoard, and that is what matters in this case.
The next document, the guidelines, sets out the factors which the commission will have to take into account in making decisions about parades and about protest meetings. They seem to cover the relevant factors, but the skill of the commissioners will lie in how they weigh up the different factors in each case. On that skill hangs their contribution to this aspect of peace in Northern Ireland.
It is the third document, the code of conduct, which is the most important of the three documents before us. It provides a check list of what needs to be considered by the organisers of parades and the organisers of protests. For those of goodwill it will be useful, no doubt, in avoiding the causing of offence and disorder. Of course, we all know that some organisers of parades wish to cause offence and some organisers of protests go to some lengths to be offended or to encourage others to be offended and sometimes to cause disorder, too.
It is, after all, obvious that no legal parade leads to disorder unless there is also a protest. That is why it is right for the code of conduct to cover protests as well, and I am glad that the Government agreed to that in the course of the Bill and that it is included in this code of conduct. But no code of conduct can prevent disorder, particularly when, as in this case, the commission's only sanction if the code is broken is to take that fact into account next time that particular organisation applies to it for a parade or for a protest. What a code of conduct may be able to do on the day is to help make clear who is responsible for causing offence or for causing disorder. As always, the disorder will fall to be dealt with by the police—by the RUC—and it is they who remain responsible for the maintenance of public order. As the noble Lord, Lord Fitt, said, that is the heaviest responsibility of all, over and above the responsibility of the commission, important as that is.
There may be some who set out to use the commission as an additional excuse for grievance. For that reason it is vital that the commission, both in its membership, which was the point of the speech by the noble Lord, Lord Molyneaux, and in the way it goes about its duties, is seen to be fair to the point of obsession. Fairness in this context does not mean the same as balance. Often in Northern Ireland's history, balance has been used as a substitute for fairness, but fairness is an altogether more complicated concept. Reading the code of conduct, it seems to me that the commission realises that, but the difficulty will come in putting it into practice.

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Of course, there are some people, it has already emerged, who are deeply distrustful of this whole process. That was particularly obvious in the debates on these orders in Committee in another place. They want to have as little to do with the commission as possible. I do not believe that is a wise course for them to take. Anyone who is thinking of ignoring the commission or trying to sideline it should think again. It has been given, by statute, a job to do and every citizen should help it to do just that job.
On the general subject of parades in Northern Ireland, the question is sometimes asked over here as to why people in Northern Ireland need to march as they do. What good does it do? Having spent yesterday marching in London in the countryside march, I have had reason to ponder that question in a different context. There is no doubt that marching in public with those who think alike is a natural and satisfactory way of expressing one's point of view. In a democracy there are other ways, too, and there are legislatures whose job it is to make decisions, but marching is a legitimate way of drawing attention to views, and legislatures are wise to take account of those views.
I am glad to say that yesterday's march was very good tempered. Incidentally, that was by no means a foregone conclusion. The origin of the march and the immediate motivation was the proposed abolition of hunting. Small counter-protests were mounted by the "antis" and feelings run high on both sides. There has been a lot of violence at demonstrations of that kind; there has been violence at meets of the hounds. When I was representing a constituency in another place there was an attempt to dig up the grave of His Grace the Duke of Beaufort a few months after he died while his widow was still living nearby. Very strong emotions were afoot yesterday; it was nevertheless a peaceful march. In my view, it was stronger in its message for that reason. The same applies to marches of all kinds in Northern Ireland. The message is stronger when the march is peaceful.
I hope that during the coming marching season in Northern Ireland the activities of the commission will help to allow the expression of strong and enduring emotions without violence. The commission, however carefully and wisely it discharges its responsibilities, cannot achieve the impossible. But its existence can help, even if the police have to carry the ultimate responsibility.
8.7 p.m.
Lord Dubs: My Lords, I thank the few noble Lords who have taken part in this debate. I will deal with the specific points made. I am sorry that the noble Lord, Lord Holme, thinks that the notice was very short. In fact, as the noble Lord, Lord Cope, said a few moments ago, it was originally suggested that the House might wish to debate these orders last week. The debates were delayed in order to give noble Lords more time to consider the contents of the three documents. It was done entirely to meet the wishes of certain Members of this House. I hope that that was helpful.
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The Government do not regard this House as a rubber stamp. This debate is not a formality. It is a proper debate and, throughout the discussions on this particular Act, we have listened very carefully to this House. The noble Lord will have to agree that the Government took into account many of the points made during the debates in this House. Indeed, the Bill was amended accordingly. One point which was made in this House was subsequently the subject of an amendment in another place. Nobody should accuse us of treating this House as a rubber-stamping body. I am sure that the noble Lord was not suggesting that.
I understand that copies of the draft orders and all the Parades Commission documents were sent to all noble Lords who contributed to the Second Reading debate when the Bill was going through the House. Some effort was made to ensure these were in the possession of all those who might want to contribute.
The documents were written by the Parades Commission, not by the Northern Ireland Office. I shall certainly pass on the comments about the appendices and the text to the Parades Commission, but it is not the responsibility of the NIO. I agree that we should endeavour to produce all government publications in good and clear English so that anyone can understand them. I made similar complaints over the years about the previous government's documents, so I am very sympathetic to the point made. The Government want to improve the standard of English so that what we turn out in any form is comprehensible to all who wish to read it. However, I thank the noble Lord for his helpful and supportive comments in relation to the orders and the Bill as a whole.
My noble friend Lord Fitt put his finger on the point: this is a unique piece of legislation. It is untested and clearly there must be some apprehension as to how it will work in the coming marching season. If there is goodwill, it will work well; if there is not, then we may face some difficulties. However, I hope that it will be seen by all fair-minded people that the three publications are intended in all good faith to make the situation sensible and to show that we are adopting an even-handed approach to these contentious issues.
The noble Lord, Lord Fitt, referred to a leaflet going out to 600,000 people. That was not the code, the rules or the guidelines, which have not yet gone out because they have not yet been passed. However, he referred to a leaflet that has gone through many doors in Northern Ireland. It is fairly clear. I do not know to whom he was talking, but that is the history of that matter.
The noble Lord, Lord Fitt, asked a number of specific questions. He asked whom the members of the commission had met. I understand that a number of meetings have taken place between the commission and representatives of the Bogside and Ormeau Road residents groups. He also asked whom the commission would meet on its present visit to the United States. I understand that the commission intends to meet a whole range of opinion formers in the United States on the role of the commission and how the legislation will work. I do not have precise details of the commission's itinerary or plans. I repeat that the commission is an

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independent body and that it is for its members to decide whom they want to meet and how they want to handle their trip.
The noble Lord, Lord Molyneaux, slightly confused me. He said on the one hand that the Republic of Ireland had indicated that it was unhappy about the most recent appointments to the commission. On the other hand, he suggested that the commission would do the bidding of the Republic. I am not sure that both those propositions can stand and I suggest that neither is on the mark.
Lord Molyneaux of Killead: My Lords, perhaps I can assist the noble Lord. I was simply making the point that if Mr. Andrews succeeded in getting some of his placemen, who were not included in the present list, injected into the new list, then they would ensure that the commission did the will of those who nominated them in the Irish Government.
Lord Dubs: My Lords, the position is that we receive nominations from the Government of the Republic for a whole range of bodies. But it is up to this Government, or the appropriate Minister, to decide whether any of those nominations are acceptable and whether those persons should be appointed. All we are saying is that we are willing for names to be put before us, but we shall then decide who is to be appointed.
As regards the comments of the noble Lord, Lord Molyneaux, I am sure that he is not suggesting that two of the recent appointees—Mr. Tommy Cheevers and Mr. Glen Barr—are likely to toe a Dublin line. I should have thought that the criticism of any recent appointment has been that those two individuals would take an altogether different view.
Viscount Brookeborough: My Lords, perhaps the noble Lord will give way. Am I right in assuming that the composition of the commission is not settled? The Minister said that the Government are open to suggestions. I understood that the commission had produced the codes and therefore that that was the work of the commission at that given point. The point in relation to the Foreign Minister of the Republic is that at this moment the credibility of the commission is vitally important for the parades. If the Foreign Minister can object publicly to its composition, as he appears to have done, and then inject his own members publicly—he obviously feels that by doing it publicly there is a better chance of getting them injected than by doing so privately, otherwise he surely would have done so—then it would appear to all and sundry that the commission is being swayed in favour of the Republic and therefore the nationalists.
Lord Dubs: My Lords, membership of the commission has been announced. There is no intention to change that membership in the foreseeable future. I am not clear what the argument is about pressure coming from outside. The fact is that the commission consists of a number of people with good reputations covering different communities in Northern Ireland;
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people who will bring their minds to bear on the difficult problems facing the commission. They will do that independently of outside pressure.
Lord Molyneaux of Killead: My Lords, I am reluctant to intervene again, but the misunderstanding may have arisen because the Minister said that the Government would be prepared to consider other nominees. That gave the impression that this was a kind of movable feast and people could be co-opted or added at any time.
Lord Dubs: My Lords, if I gave that impression, it is not the impression that I intended to convey. As a generality, in terms of government appointments, of course we receive names for a whole range of bodies to which we appoint people. But in the case of the commission, the membership is now settled for the foreseeable future. There is no question of any other names coming forward. We have a commission which will do its job with great skill and independence. The formal position is that the Irish Government make their suggestions and the names of any persons nominated by the government are confidential, and we keep it that way. That is the position of this Government.
The noble Lord, Lord Molyneaux, asked also about the role of the chief constable in giving the commission details of proposals for parades. The answer is that he will do so; otherwise the commission could not do its job as required under the Act. However, the commission will treat all such information as confidential. That is an assurance that I am able to give.
The noble Lord, Lord Cope, made a number of comments and I thank him for his helpful and supportive approach. Any of the documents can be reviewed in the light of the Parades Commission's experience, and that is why we spent some time discussing the method by which Parliament could endorse new documents. We see the commission as learning from the experience of the present set of documents and it will make changes if that should prove necessary.
I appreciate the comments made by the noble Lord, Lord Cope, about the skill of the members of the commission, the importance of the guidelines and the code of conduct and his endorsement of the need for marches to be peaceful. Until he spoke, I did not see the noble Lord, Lord Cope, as a marcher and demonstrator. But he has cast himself in a new light today and no doubt, when he writes his memoirs, I shall read with interest about the various marches and demonstrations in which he has taken part.
I appreciate the helpful comments that have been made. These documents are important. They will make a significant contribution to the way in which the marching season this year is approached in Northern Ireland. Of course, we cannot assume that they will work. We believe that we have given the Parades Commission every possible chance and these documents will make it clear to the people of Northern Ireland that the commission will have an even-handed approach. Those that wish to march and those who wish to protest

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against marches will see how they should sensibly behave in order to have a peaceful marching season this year. I commend the orders to your Lordships.
On Question, Motion agreed to.

Valuation and Rating (Exempted Classes) (Scotland) Order 1998
8.20 p.m.
Lord Sewel Lord Sewel rose to move, That the draft order laid before the House on 15th January be approved [20th Report from the Joint Committee].
The noble Lord said: My Lords, the draft order before the House tonight is a straightforward provision which is necessary to maintain cross-border harmonisation of valuation practice. A discrepancy exists in respect of seaward jusrisdiction. In England and Wales and in Northern Ireland the extent of local authorities' seaward boundaries for valuation and other purposes is defined in statute. Pipelines extending out to sea there are non-rateable. In Scotland, however, the seaward boundaries of local authorities for valuation and other purposes are substantially undefined except for some subjects such as coal-mines, piers and bridges which have been held by courts to be properly entered in the valuation roll. Legislation exists to exempt certain offshore installations from entry in the valuation roll. However, the assessor for Dumfries and Galloway has concluded, after taking legal opinion, that the Premier Transco and Bord Gais Eireann (the Irish gas board) undersea gas pipelines are not covered by the existing provisions and has entered valuations in the roll for them. We accept that the current regulations are not clear and this draft order, made under provisions of the Valuation and Rating (Exempted Classes)(Scotland) Act 1976, clarifies the position. It excludes those parts of the pipelines lying seaward of the low water mark of ordinary spring tides from the valuation roll. This order will ensure that cross-border harmonisation of the valuation practice is maintained. I commend the draft order to the House. I beg to move.
Moved, That the draft order laid before the House on 15th January be approved [20th Report from the Joint Committee].—(Lord Sewel.)
The Earl of Courtown: My Lords, I thank the Minister for his explanation of the order to me and other noble Lords. We support the order but there are one or two small points which I hope the noble Lord will be able to clarify for me. Can he tell me whether any other pipelines under the sea are rateable? How will new pipelines, when laid, be treated? If the legislation going through another place at the moment concerning devolution becomes law, how will pipelines supplying gas or oil from Scotland to England or Wales be treated; and, if rateable, how will the rateable value be calculated?
The noble Lord said that each new pipeline will be considered on its own merits. What guidance will be given by the Government as to how they are to be rated?
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I know that I have asked one or two questions more than perhaps the Minister was expecting. I would be only too happy to have answers by letter.
Lord Sewel: My Lords, I thank the noble Earl for his helpful observations on this particularly abstruse matter. He asked a number of questions, all of which I had failed to anticipate, so I will rely to a large extent on writing to him. However, I can give him some words of assurance and comfort in that I think that, as a result of the order, we are tidying up one of the last remaining anomalies in terms of achieving cross-border harmonisation. So I doubt whether there are any other examples of pipelines being treated differently north and south of the Border. But if there are, I will ensure that the noble Earl is informed about them.
The noble Earl has obviously been in cahoots with some of his noble colleagues and has raised yet again the prospect of devolution. We look forward to devolution. I have to tell the noble Earl that, following devolution, valuation will be a devolved matter, but we are working to achieve cross-border harmonisation. Work that one out!
On Question, Motion agreed to.
Baroness Farrington of Ribbleton: My Lords, I beg to move that the House do now adjourn during pleasure until 8.35 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 8.24 to 8.35 p.m.]

Teaching and Higher Education Bill [H.L.]
Consideration of amendments on Report resumed on Clause 16.
Lord Renfrew of Kaimsthorn Lord Renfrew of Kaimsthorn moved Amendment No. 51A:
Page 12, line 37, after ("terms,") insert—
("() the Secretary of State has first commissioned an independent view and published the findings,").
The noble Lord said: My Lords, there is real anxiety that the Government will, despite their present protestations, at some future date use the powers of the Bill to increase the tuition fee, which is compulsorily payable, above the figure of 25 per cent. proposed by Dearing, which is represented in the Government's current figure of £1,000. But, in addition to the need for an affirmative resolution in this matter, the Dearing Report proposed a further safeguard. Its Recommendation 79 proposed,
"that it ensures that the proportion of tuition costs to be met by the contribution cannot be increased without an independent review and an affirmative resolution of both Houses of Parliament. The contributions made by graduates in work in this way should be reserved for meeting the needs of Higher Education".
However, the Government, while accepting the tuition fee concept from Dearing, and the provision for an

1037
affirmative resolution, says on page 55 of the new glossy document Higher Education for the 21st Century, Response to the Dearing Report,
"the Government does not see the need also for an independent review".
There are anxieties here that a future Administration might well seek to increase the proportion of the total tuition costs which would be charged through a tuition fee. I have in my hands a letter from the Students' Union of the University of Wolverhampton referring to an unpleasant experience in the Antipodes. It says,
"The [present] Bill is skeletal and leaves the powers given to the Secretary of State wide open and without detail. We find this alarming, especially when we see how the percentage of tuition fees charged in places such as Australia has increased dramatically over recent years, from 23 per cent. to an average of 45 per cent".
What Dearing has already proposed is, in many quarters, felt to be bad enough. When the Government set aside the safeguards suggested by Dearing, it is time to smell a rat. I think it is necessary that, in addition to the affirmative resolution procedure, there should be some independent review as proposed by Dearing. So, I beg to move.
Baroness Blatch: My Lords, I rise to support my noble friend Lord Renfrew. One's suspicions are aroused when, in response to the Select Committee report, the Government appear to see no reason why an independent committee should be established to consider any increase in tuition fee charges. Contrary to what the Government said on that occasion, it would not necessarily mean that any increase in grants or fees paid to students, however minor, would have to go before Parliament. That was the argument used by the noble Lord, Lord Whitty, at a previous stage. However, it would mean that an independent review, which is what my noble friend is seeking, would be able to give an independent view of the fairness and appropriateness of the case for any increase. That would make any changes to the level of tuition fees paid by students more transparent. We think that it is the transparency that is important.
It is deeply worrying that the independent review, which was recommended by the Select Committee, has been conveniently dropped by the Government. I know that students are particularly worried about this. It may well be that they are reading more into it than is appropriate, but the Government should not use the argument that Parliament will be bothered by itty-bitty pieces of legislation for very minor changes. That is not the argument that I am advancing in support of my noble friend. I am saying that there should be an independent review body to consider any increases that may be suggested so that we do not end up going down the Australian route. It is true that, since the introduction of those proposals in Australia, fees have risen; the threshold at which post-graduate students are required to start repaying their loans has been lowered, and applications for places have certainly declined, particularly from mature students. That result is mirrored here in the United Kingdom for the coming year. Furthermore, the funding crisis which the
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proposals set out to address in the first place has not been resolved and, hey presto, in Australia yet another review is pending.
Great disquiet has been spread among students and they are fearful about what the Government may do in the future. I believe that the Government should either accept my noble friend's amendment or accede to the recommendation of the Select Committee that there should be an independent review to act in the interests of the students.
Lord Whitty: My Lords, I recognise that the noble Lord, Lord Renfrew, has reflected the anxieties in the student community. Nevertheless, I believe that those anxieties are misplaced in view of what the Government have already said and in view of what we intend to be in the Bill. The Dearing Report recommended that the proportion of costs to be met by student contributions should not be increased without an independent review as well as an affirmative resolution of both Houses. However, that was in the absence of any explicit and clear government commitment reflected on the face of the Bill. We have said that we intend that the maximum annual student contribution should remain broadly at 25 per cent. More importantly, we are seeking an explicit provision in Clause 16(5) that parliamentary approval should be required before we can increase the maximum annual contribution by more than the rate of inflation—in other words, there is a built-in control. We start from a figure of 25 per cent. and we cannot increase it by more than the rate of inflation without parliamentary approval. When Dearing was considering these issues, there was not the commitment—and certainly not the draft clause—which limited us, without parliamentary approval, to the rate of inflation.
Baroness Blatch: My Lords, can the noble Lord point to where in the Bill there is an absolute guarantee that fees could not rise beyond 25 per cent?
Lord Whitty: My Lords, Clause 16(5) provides that we would not increase it. We need a certain flexibility. We can increase it by less than the rate of inflation, but we are limiting any increase to the rate of inflation. That is a changed situation from that which faced the Dearing Committee and the immediate comment after the Dearing Report. We are committed to not raising it significantly differently from the 25 per cent. which Dearing recommended. That guarantee should convince the student community that we are committed to not increasing the proportion in the way that has happened in Australia. I give that commitment again tonight. I hope that in the light of that the noble Lord can withdraw his amendment.
8.45 p.m.
Lord Renfrew of Kaimsthorn: My Lords, I am grateful to the noble Lord for that explanation which gives some encouragement. I am aware also that circumstances have not allowed us this evening to discuss another safeguard which would have been offered under Amendment No. 46, so it may be better

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to reserve these matters for further discussion at Third Reading if it then seems appropriate. I thank the noble Lord again, and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 52 not moved.]
Baroness Blackstone Baroness Blackstone moved Amendment No. 53:
Page 12, line 40, after ("subsection") insert ("(3A)(a) or").
On Question, amendment agreed to.
Baroness Blatch Baroness Blatch moved Amendment No. 54:
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 be subject to annulment in pursuance of a resolution of either House of Parliament.").
The noble Baroness said: My Lords, in moving Amendment No. 54, I should like to speak also to Amendments Nos. 69 and 71. I return to the specific recommendation of the Select Committee on Delegated Powers and Deregulation. As I said at a previous stage, this Chamber has a 100 per cent. record of always agreeing the recommendations of that Select Committee. I believe that there should be no exception here. I beg to move.
Earl Russell: My Lords, I am happy to support this amendment. I have here the recommendation of that Select Committee. It states:
"We invite the House to consider whether the subject matter of the regulations under section 16 is so important that the bill should be amended to require affirmative procedure for the first regulations".
I explained in Committee why that is the strongest wording that the committee puts forward.
I agree with the noble Baroness, Lady Blatch, that this Chamber has so far accepted all the recommendations of that Select Committee. No rule is true forever, but I have been shown no reason why this should be the first occasion for departing from it.
Baroness Blackstone: My Lords, Members of your Lordships' House will see that I am proposing amendments to Clause 25 which have a very similar effect to that which I believe the noble Baroness, Lady Blatch, is seeking here. Clause 25 provides for the making of regulations and orders under this Bill and is, therefore, the more appropriate place to bring forward amendments of this type. Therefore, I very much hope that the noble Baroness will feel able to withdraw the amendment.
I also hope that my amendments need not detain us for very long. They are very similar to those tabled by the noble Baroness, Lady Blatch. They require the use of the affirmative resolution procedure for the first set of regulations made under Clause 16. The last of them makes parallel provision for Scotland by amending the Education (Scotland) Act 1980, under which the
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equivalent Scottish regulations will be made. They also provide for the possibility of a choice in future years between the affirmative and negative procedures. As the noble Baroness is aware, that is the approach favoured by the delegated powers scrutiny committee.
The student loans regulations for the academic year 1998–99 will be made under Clause 16 and under the equivalent Scottish provision; and they will come to your Lordships' House before the Recess. I remind noble Lords of the undertaking that I have already given that the student support regulations for the academic year 1999–2000 will also be subject to the affirmative procedure. These amendments will enable us to honour that important commitment. Furthermore, they will enable regulations to be considered under the affirmative procedure in subsequent years if those regulations introduce substantial changes. For example, such changes may include the extension of eligibility for support to different groups of students or substantial variations to the way in which the level of repayment is calculated. I stress that currently the Government have no such changes in mind. We undertook to reflect on what was said in Committee about the report of the Delegated Powers and Deregulation Committee. We have done so. I hope that these amendments fully meet the concerns, and I commend them to your Lordships.
Baroness Blatch: My Lords, I thank the noble Baroness for her clarification of the amendments that she has tabled. Perhaps it is due to my own inadequacy, but I need to be absolutely certain that they meet in every way both the recommendations of the committee and the concerns that I have expressed. I am relieved by what the noble Baroness has said. However, one of the examples that the noble Baroness gave was the possibility of a change in the level at which students repaid loans. That was precisely what happened in Australia. The level at which students began to repay loans was changed quite dramatically but not in favour of the students.
Baroness Blackstone: My Lords, I should like to reassure the noble Baroness. The Government have absolutely no intention of changing the 25 per cent. level. However, I said that at some future date perhaps there would be another government—maybe a government formed by the party of which the noble Baroness is a member—that wanted to make a change and at that time regulations subject to the affirmative procedure would be in place.
Baroness Blatch: My Lords, I am delighted by the intervention of the noble Baroness. I am reminded that there has been almost a switch in positions. The noble Baroness at one time pressed me and said it was very important that the House should take a view on any changes. I am very happy to be the one who today presses the noble Baroness. But the noble Baroness has made my point. I was delighted that in giving her example she said quite clearly that the Government had no intention and had no plans whatever to make a change. However, for the purposes of Pepper v. Hart

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I believe it is very important to have it on the record. Subject to reading carefully what the noble Baroness has said, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 18 [Imposition of conditions as to fees at further or higher education institutions]:
Baroness Perry of Southwark Baroness Perry of Southwark moved Amendment No. 55:
Page 13, line 45, after ("secure") insert (", to the extent of its powers,").
The noble Baroness said: My Lords, Amendment No. 55 represents my second attempt to try to persuade the Government that the current wording of Clause 18 gives rise to a problem with specific reference to the Universities of Oxford and Cambridge. Clause 18 gives the Secretary of State power to impose conditions on the grants by a funding council relative to the fees that universities and colleges of further education charge their students. Subsection (3) specifically gives the Secretary of State power to impose conditions relative to higher education. In subsection (4) it is provided that the Secretary of State shall require the governing bodies of such institutions to ensure that neither they nor any institution connected with them charges more than the prescribed amount of fees—a sentiment with which I heartily concur.
There is a real constitutional and legal difficulty for the Universities of Oxford and Cambridge. In particular, Clause 18 goes on to provide that the funding council is required to impose a sanction on any university if it or any institution connected with it charges more than the prescribed fee. The difficulty is that in both Oxford and Cambridge the colleges are quite clearly connected with the universities in many ways. I am quite sure that on any reasonable definition of "connected with" the funding council will be convinced that the colleges of the universities are connected with the universities.
However, the legal position begins to fall apart when one considers that the governing bodies of neither Oxford nor Cambridge has any power whatsoever over the fees charged by the individual colleges of those universities. We may deplore this; it may be inconvenient, or it may cause all kinds of difficulties because of the wording of the Bill, but it is a fact. The colleges are chartered, independent institutions. Many of them under their statutes have not only a right but a duty to charge fees which cover their own tuition costs. The university cannot tell them not to do it or stop them from doing it if it tries. I have every expectation that the colleges at present have no intention of doing this but, as the Minister has just reminded us, time moves on and the current heads of Oxford and Cambridge colleges and their governing bodies will change.
It may be that if a college found itself in financial difficulties it would have a duty to charge its students additional fees, at which point the mechanism set out in the Bill would be triggered. The funding council would be obliged to sanction the university by taking away some of its grant. The college would not itself be subject to sanction but would have caused this very tough sanction to be imposed on the university; in other words, the university would be punished for something over
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which it had no control. That is not natural justice. I am assured by both universities that their advice is that should this happen and the matter came before the courts the Government would not have a leg to stand on in arguing that they had a right to sanction the university itself. I hope that the Minister can be persuaded that the right course is for the Government to encourage civil servants to come up with a different form of words applicable to those two universities. If not, although I have no intention of dividing the House tonight. I shall return with the same amendment on Third Reading. I beg to move.
Lord Renfrew of Kaimsthorn: My Lords, in rising to support my noble friend Lady Perry I should like to remind the Minister that I indicated at Committee stage how with a skeleton Bill of this kind it was sometimes difficult to understand the substance. In the debate a week ago on the Motion that the Report be now received I asked the noble Baroness a question. I declared an interest at that time because of my association with a college at Cambridge. I asked how the Bill bore upon the fees of colleges at Oxford, Cambridge and elsewhere, particularly Durham. The answer of the noble Baroness, which I do not believe to be correct, was:
"The noble Lord. Lord Renfrew, will forgive me if I do not become involved in the issue of college fees at Oxbridge. That is quite a different matter. It is not an issue for this Bill".—[Official Report, 23/2/98; col. 420].
But the question of how the Bill bears upon college fees and to what extent is indeed an issue. My noble friend Lady Perry said at Committee stage:
"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 [in financial terms]".—[Official Report, 22/1/98; col. 1734]
The noble Lord, Lord Whitty, replied:
"we are looking at mechanisms for dealing with the colleges in Oxford and Cambridge. We may well need to look further at the wording".
That was a very wise remark. However, we have absolutely no evidence that the Government have yet looked further at the wording. Certainly, they have tabled no amendments at Report stage. The observation of the noble Lord, Lord Whitty, scarcely tallies with the reply subsequently given to me by the noble Baroness, Lady Blackstone. I submit that it illustrates the confusion which surrounds Clause 18. We are receiving different responses from government spokesmen on different days in respect of a matter which is of serious importance to the universities of Oxford and Cambridge. At present, the Bill provides no explicit mechanism for dealing with college fees. I reiterate, as did my noble friend Lady Perry, that top-up fees are not the agenda of the colleges. It is not clear how top-up fees would be dealt with.
As I mentioned during the debate on the Motion that the Report be now received, I have had sight of a draft amendment to Clause 20 in the name of the noble Baroness, Lady Blackstone, making explicit reference to

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college fees but not in a way which would recognise their particular features. Fortunately, the amendment, Amendment No. 67, no longer contains that element.
The Bill appears to treat college fees precisely as though they were top-up fees. I say "appears" because I do not understand it too well. We have received no explanation from Ministers other than the general statement that they might look at the wording. If they have done so they have not yet communicated the results of their ratiocination. The Bill makes no explicit distinction between the fees. That is why its structure is so deeply unsatisfactory and difficult to argue with, as some of us said at an earlier stage.
I make it clear that at this stage I am not arguing against the Government's policy on college fees, particularly as I do not have the slightest idea what it is. The noble Baroness says that it is not an issue for this Bill. But what is an issue, or should be, is the mechanism which the Bill affords for dealing with the matter. The Government may or may not have a policy on college fees, they may or may not tell us what the policy is, but we are debating the legal mechanisms. The noble Lord, Lord Whitty, conspicuously failed to answer the questions put by my noble friend Lady Parry on the second day in Committee and the Minister brushed the point away last Monday.
That is not good enough. If the Government do not yet have a policy or are making a policy on the wing—as on matters such as the gap year, the four years for Scottish students and the means testing of students from the European Community—that is up to them, but we are debating legislation. The Government must have a mechanism or the Bill is defective. The noble Lord, Lord Whitty, says laconically that we need to look at the wording. It is now the Report stage and we are still mired in confusion on this and a number of other issues. I support the amendment.
Baroness Warnock: My Lords, I, too, support the amendment. The colleges have their own charters and are entitled to do what they wish and act as they believe necessary, in many cases for their survival. It is easy to write off such issues as concerning only Oxford, Cambridge and Durham and as of no central importance to the Bill. But if the Bill is not clear, Oxford, Cambridge and Durham will be in real trouble. I share the college of the noble Baroness, Lady Perry. We would not wish to do that. Therefore, I strongly support clarification of the issue at the present time—and there is not much time left.
The Lord Bishop of Lichfield: My Lords, the universities of Staffordshire and Wolverhampton are well established in my diocese in the West Midlands. I therefore share the concern of other Members of this House and of the Minister that all colleges and universities in the UK should flourish equally and as a whole. However, I am among those who are not yet persuaded that to maintain the particular prerogatives of a college at Oxford or Cambridge is to detract from the distinctive ethos and excellence of other colleges and universities elsewhere. I am among those who fear that
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if by any means extra funds which an Oxford or Cambridge college at present receives are removed or drastically reduced, such colleges are in danger of becoming the preserve of the well off.
That point was made in another debate in your Lordships' House by the right reverend Prelate the Bishop of Oxford. Sooner or later, some of the colleges in the ancient universities may be obliged to charge more, thereby becoming a club for the wealthy. That would mean excluding students who are now there on their academic ability simply because their parents would not be able to afford the extra fees. It would sad if colleges in the ancient universities became clubs for the relatively well off, with all that that could imply for future jobs and careers in this country. There would be an accentuation of the worst kind of élitism.
I therefore support the amendment, with the background of being identified with the establishment of new universities in my region, but in the hope that a way can be found of safeguarding the historic diversity and character of our colleges and universities on the basis of academic ability alone.
Baroness Blatch: My Lords, I support my noble friend's amendment and what has been said by my noble friend Lord Renfrew and the right reverend Prelate the Bishop of Lichfield. The right reverend Prelate had a wonderful ability to show support for the amendment while at the same time understanding the relationship between the old institutions and the rest of the university sector.
A pincer movement appears to be making almost impossible the survival of some of the colleges. That is the only point I wish to make in supporting the amendment. It was November when the Department for Education and Employment received advice on the allocation of college fees. It is time—in fact, one is overdue—for a response from the Government. It is highly suspicious that we might not receive that response until the Bill has passed through this House. That would be unfortunate. The amendment is tabled not only in the vacuum of not knowing precisely what the Bill means, but in the vacuum of not knowing what the DfEE plans in terms of allocating funds to college fees.
Baroness Park of Monmouth: My Lords, one of the great problems about all this is the continuing uncertainty. At present in Oxford it is proving virtually impossible to make long-term appointments. The colleges do not know where they stand. They do not know whether they dare commit themselves to the costs of a long-term, permanent tenure. Therefore, very many short-term appointments are being made.
That will have a serious effect for several reasons. First, graduates will be deterred from the academic life because they see that there is no permanent future in it. Also, because of the uncertainty, the colleges are having to think about whether they can continue to afford to sustain endangered subjects; whether they can afford to have three tutors in chemistry or whether it had better be two. That will be to the disadvantage of students from every financial situation. They will not be able to

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be there because there will be no one to teach them. There is a serious problem of long-term uncertainty which needs to be resolved.
Earl Russell: My Lords, I do not believe that the Government have realised quite how modest this amendment is. It requires governing bodies to do things to the extent of their powers. I hope it is not the Government's view that they should do things beyond the extent of their powers. We are all bound to respect the law. I hope the Government realise what are the limits of the relevant powers.
Lord Whitty: My Lords, as the noble Baroness, Lady Perry, spoke, it became clearer as to what is behind the amendment. I am not entirely sure that subsequent contributions have helped because we have gone into areas concerning the future of Oxbridge colleges and their funding which are not matters for this clause or for us today.
On the face of it, the amendment is unnecessary in that, as the noble Earl has just said, we should not expect a governing body to act beyond its own powers. Indeed, we could hardly legislate to that effect. Therefore, the amendment is otiose, as they say.
However, I now understand more clearly what is in the noble Baroness's mind in relation to the amendment; namely, the concern that Oxford and Cambridge in particular, and possibly other institutions, do not have sufficient power over connected institutions to ensure that they do not charge top-up fees. I understand her view that it is those colleges which should be penalised rather than the university. Of course, having said that, there may some room for debate as regards the interpretation of what is and what is not within the governing body's powers. I still find it difficult to accept that universities should continue to receive grants for students attending connected colleges if they are not prepared to use their powers to the full to ensure that those students are not charged top-up fees.
However, having said that, I recognise the problem. As the noble Lord, Lord Renfrew, said, we have looked at the wording, but we do not believe that any amendment should be made to this clause. Rather than amend subsection (4), we are prepared to look again at that part of subsection (8) which refers to fees payable to connected institutions with a view to bringing forward in another place an amendment clarifying that reference. That would be an amendment to subsection (8) to clarify the links between funding council grants for certain students and the aggregate fees that may be charged to those students by both parent universities and any institutions connected with them with a view to ensuring that institutions can be penalised for top-up fees charged to students only if they are claiming funding council grants for those students.
Therefore, we intend to come forward in the Commons with amendments to subsection (8). I hope that, at least to some extent, that commitment will
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reassure the noble Baroness, Lady Perry, and that, in the meantime, she will be prepared to withdraw the amendment.
Lord Pilkington of Oxenford: My Lords, before the Minister sits down, my noble friend asked when the Government are going to give an opinion about Oxford and Cambridge fees. No answer has been given to that question.
Lord Whitty: My Lords, I have said already that that is not of relevance to the Report stage of the debate. However, the answer is that that will be done shortly.
Lord Pilkington of Oxenford: My Lords, as ever.
Baroness Perry of Southwark: My Lords, I thank the Minister for his reply and his acknowledged understanding of the point I was trying to make. I thank other noble Lords who spoke on related matters.
I am rather disappointed that we are being offered an amendment which will come not to this House but to the other place. Many people in this House understand the issue very well and they would have a particular interest in ensuring that what is provided is something which can be accommodated in terms of the legal structure of Oxford and Cambridge.
Although I know that Third Reading is almost upon us, I hope it may be possible for the Government to bring forward an amendment at that time so that it can be considered here before the Bill leaves this House rather than waiting until it reaches the other place. I shall look forward to seeing an amendment tabled in time for Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 56 to 59 not moved.]
9.15 p.m.
Baroness Blackstone Baroness Blackstone moved Amendment No. 60:
Page 14, line 18, at end insert—
("() The Secretary of State shall not exercise the power to prescribe descriptions of courses under subsection (4) in such a way as to discriminate

(a) in relation to courses of initial teacher training, between different courses on the basis of the subjects in which such training is given, or

(b) in relation to other courses, between different courses at the same or a comparable level on the basis of the areas of study or research to which they relate.").

The noble Baroness said: My Lords, at every stage of this Bill, we have heard allegations in this Chamber that Clause 18 poses a threat to academic freedom. I do not believe that to be the case. But, nevertheless, I share and understand the value which many in your Lordships' House and outside attach to the principle of academic freedom.
The noble Earl, Lord Russell, along with his noble friends, has tabled the same amendment—Amendment No. 61—as he put down in Committee, with the aim of restating the principle of academic freedom that is enshrined in the Further and Higher Education Act

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1992. In responding to that amendment in Committee, I said that I fully understood the motives behind it and sympathised with its aims, even though most of it was unnecessary. More than that, I promised that we would look with the CVCP at Clause 18 to see whether an appropriate amendment could be drafted to ensure that, as far as possible, conditions on grant to control top-up fees could not be framed by reference to courses in particular subjects.
Amendment No. 60 fulfils that commitment. Subsection (4) of Clause 18 makes provision for courses of prescribed description provided by higher education institutions to be covered by conditions on grant controlling top-up fees. It is for the Secretary of State to prescribe the courses in regulations. But subsection (8) already makes clear that such courses may not include part-time or postgraduate courses, other than those of initial teacher training. The amendment adds to that safeguard by preventing the Secretary of State, when he draws up the regulations, from singling out courses at any particular level by area of study or research.
That makes it absolutely plain that the Secretary of State cannot, through conditions controlling top-up fees, affect the freedom of universities to decide which courses to offer, which subjects to teach or which areas of research to pursue. He can, thus, prescribe first-degree courses or courses leading to a diploma as those that can be covered by conditions on grant controlling top-up fees. But he cannot name in those conditions particular areas of study or research—whether any branch of medicine, science, technology, social science, arts or humanities.
The only exception is initial teacher training; and it has been necessary to deal with courses in initial teacher training separately for technical reasons. That is because not all courses of initial teacher training lead to a first degree. Some courses lead to a postgraduate certificate. Other courses—for, say, intending craft instructors who are seeking a qualification to teach in FE colleges—lead to an undergraduate certificate below first-degree level. We want to ensure that, whatever the level of the course, students on courses of initial teacher training should still receive financial support for fees from public funds. We have made clear all along that we need to be able, if necessary, to control any top-up fees that may be charged to students on those courses. That is why, paradoxical though it may seem, we have made special provision in this amendment for courses of initial teacher training to ensure that they are treated like first degree courses and not differently.
However, so as to ensure, again, that the Secretary of State cannot, through conditions controlling top-up fees, interfere in universities' freedom to decide which courses of initial teacher training to offer, this amendment prevents him from singling out such courses by subject. Thus the relevant regulations could prescribe that conditions might apply to all courses of initial teacher training. But they could not prescribe that conditions might apply to courses of initial teacher
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training specialising in any particular subject—such as social science—but not in another, such as the physical sciences.
I made plain in Committee the Government's commitment—and it is a total commitment—to upholding the principle of academic freedom. I hope that the amendment before the House speaks louder than any words that I could utter and enshrines that commitment in the Bill. For its part, the Committee of Vice-Chancellors and Principals has made clear in its briefing that,
"government amendment (No. 60 on the Marshalled List) meets universities' concerns about the protection of academic freedom".
I very much hope that it will also meet the concerns of your Lordships' House. I beg to move.
Earl Russell: My Lords, I thank the noble Baroness for the amendment. Indeed, one must always thank Ministers for small mercies. But I think that this is a very small mercy. If the Minister compares the words of Amendment No. 60 with those of Amendment No. 61, which I do not intend to move at this time of night, she will observe a very considerable discrepancy. I grant that Amendment No. 60 prevents the Government from distinguishing between different academic subjects. As far as I can understand it, it does not prevent the Government from imposing a term or condition such as, for example, the abandonment of the tutorial system on all academic subjects. I do not know why not. I can find nothing in Amendment No. 60 or any of the material in Amendment No. 61 relating to the academic conditions for the selection of staff or the admission of students. Can the Minister tell the House why not?
Baroness Blackstone: My Lords, I have made clear in Committee and in speaking earlier this evening that I fully understand the motives behind the noble Earl's amendment and I sympathise with its aims. I know that university autonomy is a sensitive issue for vice-chancellors; after all, I have been one. I quite understand concerns about academic freedom. I can only assure the noble Earl once again that this Government are committed to upholding the principle of academic freedom. We have no intention of prescribing how universities should carry out their teaching, to refer to one example that the noble Earl has just mentioned. We have no intention—under the 1992 Act I do not think the Government would be able to do so of prescribing how any university should select its students. I do not think that I can say any more than that. I have tabled what I believe to be a helpful amendment to meet the concerns of your Lordships' House on the issue of academic freedom in relation to the kind of subjects that are taught. Of course that is a matter for the universities, as is the question of how they carry out their teaching. It is quite unnecessary for us to bring forward an amendment that prescribes the powers of the Secretary of State in relation to teaching methodology or indeed the selection of students.
Lord Pilkington of Oxenford: My Lords, with the leave of the House, I have a worry which the Minister will most probably be able to dismiss. It seems to me

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that the Government have taken control of university tuition fees. The financing of universities will now be a matter for the Treasury and the university concerned. Let us suppose the universities want to raise tuition fees. In the old days they negotiated with the HEFC. Now they have to negotiate with the Treasury. The Minister shakes her head, but where will the money come from? The Minister's colleagues look worried. If universities want to raise tuition fees two years from now, how would they do that?
Baroness Lockwood: My Lords, before the Minister replies I wish to ask her a question. As I understand it, there is no difference between the funding of universities and the role of the Higher Education Funding Council as proposed under the Bill, and the position which exists at the present time. Would it be appropriate to prescribe in a Bill what the academic responsibilities should be of either the governing body or a vice-chancellor of a university? Would that not in itself be breaching the principle of academic freedom?
Baroness Blackstone: My Lords, I say to my noble friend Lady Lockwood that I think I have already answered that question. The Government have no intention of interfering in the academic decisions that are made by our universities. I am puzzled by the point raised by the noble Lord, Lord Pilkington, as it does not appear to have anything to do with this amendment. It is perhaps relevant to the subject of later amendments when we shall discuss whether top-up fees should be included on the face of the Bill. All I can say to the noble Lord is that the Government have not taken control of university tuition fees. In this clause they are taking a reserve power to prevent universities charging top-up fees. It is a power that we hope we shall never have to use.
On Question, amendment agreed to.
[Amendments Nos. 61 and 62 not moved.]
Earl Russell Earl Russell moved Amendment No. 63:
Leave out Clause 18.
The noble Earl said: My Lords, I beg to move that Clause 18 do not stand part of the Bill. I must declare one more interest. I am advised on this by the principal of my own college who says among other things, "In my dealings with foreign delegations considering to what country their students should be sent, reassurance is often sought that the government of the day do not have control of the university. It would be difficult to have to say that the law provides power for a Secretary of State to impose conditions on the amount and nature of fees to be charged to students—conditions which may impact on the general quality of education we can provide".
I am in agreement with that view. Clause 18 is not fit for a curate's breakfast. No parts of it are excellent. It is objectionable both in whole and in part. Clause 18(2) is a Henry VIII clause. It was not identified as such by the Delegated Powers and Deregulation Committee.
Clause 18(3) deals with the matter we have just discussed. I am not in the least satisfied by the Minister's answers. Ministers always say that they do
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not intend to interfere with academic freedom. What Ministers intend to do is to save money; and they do that absolutely regardless of the effect on academic freedom. That is an old story and it is independent of party.
Clause 18(4) is a power to impose a cap—the reserve power to which we referred just now. It gives the Government in the end ultimate power to determine costs. Clause 18(6) is in effect a power to exclude from the state system those who do not co-operate with that cap. That is intended, I think, to be a bluff. One day that bluff may be called. The end of a state-funded system of higher education would indeed be a disaster. If the clause reaches the statute book I, for one, cannot be certain that that will not happen.
The clause strikes me as being somewhat like sending someone to sea in a rather rickety submarine which has suffered a certain amount of war damage, and then barring the escape hatch. The power to charge a top-up fee is precisely that; it is an escape hatch. No one wishes to exercise the power any more than he wishes to escape from inside a submarine in deep water. But there may be circumstances when it is not possible to provide a competent academic education for the amount the Government provide. The options may be only to do that or close down. It is in that spirit that I describe the provision as like closing the escape hatch of a submarine.
Perhaps a more appropriate parallel is the air force in World War I. It appeared to those in command that it would diminish the courage of those who were flying if they were allowed parachutes. So it was decided that they should not be allowed parachutes for fear they might desert their planes and avoid battle. It is not my intention, nor I believe the intention of anyone else, that any university should charge top-up fees. But it appears to me to be necessary that in the process of adjusting what shall be paid for the support of universities there should be a process of negotiation.
It is entirely proper that the Government have the final say in how much public money should be spent. Where the Government cannot have the final say is in deciding how much that money will buy. For that is to enter an area where government's competence is limited. It also breaks the basic principle of the market: the Adam Smith principle that a deal must be in the interests of both sides. For if the Government have the power to determine both how much they will spend and what that money will buy, we then get into what is best described as the Aeroflot system of funding. I have not forgotten the noble Lord, Lord Boyd-Carpenter, asking in this House that the Government should deny landing rights at Heathrow to Aeroflot for reasons for air safety.
There is here an issue of academic freedom. At Second Reading the noble Lord, Lord Whitty, said that if that was so, he did not understand what the words "academic freedom" meant. The content of courses inevitably has implications as to costs. If the cost of a course cannot be decided, its content cannot be decided; library or laboratory provision cannot be decided upon. So in the end you are told, as the Treasury always does, that you have to cut your coat according to your cloth.

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If that principle gains control, there will be no way in which we can decide upon the content of courses according to their academic merit. When that happens, I do not know whether it will be worth preserving a state-funded system of higher education any longer. I should regret its disappearance desperately.
The one serious argument from the other side during our discussions was put at Second Reading by the noble Baroness, Lady Kennedy of The Shaws. I gave her notice that I intended to refer to it. She raised the point of access. I care about that as deeply, I believe, as she does. I have not forgotten one of my school contemporaries who was in the first year with me at Oxford referring to somebody who was 10 times the scholar he would ever be as, "You know, the sort of person who ought not to be here", simply because he had a Lancashire accent. I have no truck with that sort of attitude.
But I also remember the noble Baroness, Lady Symons of Vernham Dean, a few weeks ago answering a Question from my noble friend Lord Carlisle about why there were not more ethnic minority ambassadors. She had some suggestions as to things that might be done, as indeed do I. But in the end her answer was that the problem was lower down. It was perfectly obvious both that that answer was true and that she was having great difficulty putting it over to the House. If people ask about the proportion of people from state schools in universities, that is very often the answer. The place where we need to look is not university admission procedures, but school libraries.
The other response is: what is the point of providing more access if that to which we are providing access no longer deserves the name of higher education? To say that more and more people should receive higher education—which is a good proposition—is no excuse for ensuring that what they receive does not deserve the name of higher education at all. If this clause remains in the Bill, that is what will happen. I beg to move.
9.30 p.m.
Lord Beloff: My Lords, I support the amendment proposed by the noble Earl, Lord Russell, although from a rather different perspective. Unlike the noble Earl, I hope that there will be top-up fees in many universities. I believe it is the only way in which we can meet the type of model which the noble Lord, Lord Desai, outlined for us in a debate on the Bill earlier today; that is to say, to depart from the obviously catastrophic attempt to finance on equal terms out of the public purse 150 institutions of higher education in order to proceed to something closer to the American model where a range of different institutions are funded in different ways, partly from the public purse, partly from private purses and partly from students, making it possible, as the noble Lord, Lord Desai, pointed out, for entry not to be governed by the ability to pay. That is the key to a proper system of higher education.
The cause of our present problems is a notorious failure on the part of the Department for Education over a period of years to foresee that it was creating an
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insoluble problem. It postulated a growth in the number of institutions and students without reference to whether it would be able to pay for those students to receive the kind of instruction to which they felt they were entitled. In addition, to take up a point made by the noble Lord, Lord Glenamara, the assumption was that there would be places for everyone with suitable ability; but, in order to maintain the pace of expansion, the ability threshold—perhaps not in terms of individual talent, but in terms of preparation for university work—was allowed to fall.
I believe that the noble Earl, Lord Russell, is right. If this provision remains in the Bill, we shall eventually see a collapse of the higher education system funded primarily by the state without making it possible for the lacunae in that system to be filled by enterprise, different forms of financing and endowment and different levels of fees.
I know that this is wholly different from the view of the Government as it was expounded. They have not been able to convince people with direct experience of universities today that what they propose is workable and that they can somehow produce a system which will be generally acceptable and admired internationally, as the British system has been in the past, without some departure from their rigidity on the matter of fees.
The noble Lord, Lord Whitty, mentioned that the Bill would be further amended in another place. I hope that the Bill will never reach another place. After all, the Government have been defeated twice today on amendments of importance, although not as important as the one we are discussing now. They know perfectly well that they are riding for a fall, even if the amendment of the noble Earl, Lord Russell, is not accepted. The general university world will not accept their outlook. It would be far better for them to let things ride for a year or two, to look at what should be done about the financing of higher education and to come back with a Bill which is not only better prepared but also better drafted so that much time will not have to be spent in your Lordships' House in trying to penetrate the intention of the Government on this or that issue.
This is a very sad matter. It is sad to have to speak in these terms in your Lordships' House, but I find it impossible to do otherwise.
Lord Wallace of Saltaire: My Lords, I rise to support my noble friend Lord Russell on this amendment. This clause is not a necessary part of the Bill and it seems to me extremely important to remove it. It has an authoritarian style. Indeed, to use a word I know the Government do not like, one might almost say that it is a socialist measure which seeks to impose uniformity on 120 or 130 higher education institutions which revel in their diversity. It is an accumulation of executive power. The Minister herself has talked about reserve powers. Generally stated, it is a minefield of complexities of interpretation and it takes us down a road which we should not at this stage be following.
What we are doing in this Bill, reluctantly and with the opposition of many of us on these Benches, is moving away from a state-funded system towards a

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system in which universities are going to have to find more resources from non-state sources. The Government wish at this stage, as they start out, to insist that their hands are tied behind their backs and that, as we start out—not knowing how far we will go, not knowing where the £1,000 for the first year—will move in the second or third year—all higher education institutions, perhaps with the exception of Oxford and Cambridge, will have to charge the same amount.
I speak as an academic at the London School of Economics, and one has to think about the other quality universities in this country. We have heard a great deal about Oxford and Cambridge. There are other world-class universities in Britain. We have managed to survive so far by expanding the number of students from outside the European Union. The last government used to reply, every time we protested about the squeeze on our funding, that we should merely attract more students from outside the European Union. We have reached the stage where one of the priorities many of us in my institution now have is to increase the number of British students in our institution, because that seems to us to be one of our fundamental functions.
None of us wish to move down the road towards top-up fees, but if it is a choice between maintaining the quality of British higher education institutions in years to come and accepting that, like universities on the continent, we will allow our quality to fall as numbers expand, then we have to have that option in front of us. I regret that, but that may be, as my noble friend Earl Russell has said, one of the reserve powers we need in negotiating with the Government—the future government—over future funding.
Ministers currently say that they are not intending to use these powers. This House should make it very clear that it does not therefore wish to give Ministers these powers. The British constitution operates far too much already on the basis of executive power and parliamentary acquiescence. To remove this clause from the Bill would be to mark that Parliament wishes to insist that it does not go too far in giving government the benefit of the doubt.
Lord Baker of Dorking: My Lords, I strongly support the amendment moved by the noble Earl, Lord Russell. This is a very unhappy clause, and I suspect that several members of the Government are rather unhappy about it. Clearly, it has a confusing implication and consequences which they are now slowly beginning to recognise.
We saw one aspect of that tonight in the earlier debate on Oxford and Cambridge fees, when the Ministers recognised that there is a real issue here: namely, if one penalises a university like Oxford, can that penalty be passed on to the individual colleges? The Minister has indicated that there will be some amendment to subsection (8) of this clause. I would not welcome that kind of amendment, because then one has an immediate problem, which I indicated at Second Reading.
In a debate on a procedural matter I remember the noble Baroness, Lady Blackstone, saying that it was not flagged up, but, earlier in the debate on this whole
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question of the powers of old chartered bodies, I did in fact rather immodestly mention this at Second Reading, as when I was the Secretary of State I had my own fingers burnt on exactly the same issue dealing with academic tenure. I found that in order to introduce a reform—not impose a will—I had to establish a great institution, and the commission took five or six years. The Ministers, when they come to deal with that little aspect of this clause, will find that they have the same sort of problem.
The problem with the clause—I share the anxieties expressed by the noble Lord, Lord Wallace—is that it will impose a straitjacket upon the future development of universities. No one can foresee how universities will develop; no one could have foreseen 10, 15 or 20 years ago the nature of higher education in our country today, the variety and depth of courses.
The concern of the Government is that by introducing tuition fees some universities and colleges may charge top-up fees and become, as the right reverend Prelate said, clubs of the rich—rich, dull students attending only because they are rich. I must say to the right reverend Prelate and to the Government's worries about this that the country that charges the highest top-up fees has the highest quality universities. That is not the pattern that developed in Harvard, Princeton, Berkeley and the other great American universities where the fees are infinitely higher than the levels about which we are talking now. They have not become playgrounds for the rich playboys and playgirls of America. If they did, their reputations would fall and students would not want to go there. That is a self-correcting mechanism for which we should allow flexibility in the future.
When we introduced per capita funding for universities and student loans I hoped that one day we would set out on a path which would make our universities truly independent, and those would be, together with endowments, the main sources of income. In that case the Government's interference and the duties and the need for a funding council would disappear. I hope that funding councils will eventually disappear. I am sorry to say that in the presence of the noble Lord, Lord Davies, who has just become the chairman of one of them. I do not wish him personal redundancy, but the sooner he disappears from the scene in his official capacity, the greater will be the independence of higher education in our country. I believe we want a more self-correcting mechanism in the funding of higher education.
I am disappointed that the clause appears to be going backwards. It is taking greater powers of direction and that will create a tension and restriction which higher education does not want. It is not in the best interests of higher education. I do not argue for the rich to go to high colleges, and so forth; I share the same anxieties in that regard. I am concerned with the quality of higher education.
Let us suppose that a new course is established in some area of academic study about which we have not yet thought and suppose the university says that the cost of the course is £8,000 a year. Overseas students will pay that. In many cases they come from countries with

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a much lower per capita income than this country, but they are prepared to pay it. However, we will only charge English students £1,000. Suppose, as a result of that, that the sums cannot be made to add up and the best teachers cannot be attracted to take the course—it is not an existing course, but a new course. It would be an infringement upon the academic freedom of that institution to offer that course and we cannot get away from that.
For all those reasons, I would not like to see this clause stand part of the Bill. The anxieties expressed by my noble friend Lord Beloff, the noble Earl, Lord Russell, and the noble Lord, Lord Wallace, are real ones and I hope that the Government will think again about this. The interests of higher education in our country are extremely important. It is one of the real jewels in the Crown. We have in this country a number of universities which are the envy of the world. They will become even more the envy of the world with greater freedom and flexibility; not with greater control.
Lord Desai: My Lords, when I was young I was a revolutionary Socialist. I thought that the revolution should happen instantaneously and immediately and I went from A to Z in one fell swoop. Perhaps age, not wisdom, mellowed me.
I know where I want to go, but I do not want to go there through this Bill. The noble Lord, Lord Beloff, correctly described how I would eventually want to see the British university system operating. It will have differentiated fees. There will be no funding councils, better capital markets and lots of freedom for students to work while they learn. However, I would not charge £1,000. As I said at Second Reading, I would charge 1 0,000. The average cost of teaching is £8,000. To that we add £2,000 so that we can give fellowships—merit scholarships—and that is how we will arrive at the American system.
This Bill will not take us there immediately. This is a first small Bill in a system which has been used to a good deal of government control—I shall come to that point with the noble Earl, Lord Russell—and in which we have been used to thinking, as many noble Lords have said, that higher education is free in this country and that we have equal fees and so on. We are breaking away from that system in a very small way. The reason why I am in a dilemma is that I want to go from here further but not through this Bill.
The noble Earl, Lord Russell, said that in a sense only the supplier of education knows the cost of providing good courses and that if you tell that person what to charge then you have violated academic freedom. I have been in the higher education system for 33 years—perhaps not as long as the noble Earl has been—and I have never had the freedom to decide the price I charge for a course. Academic freedom has thrived—this is the system we are trying to defend. In this system we have always had uniform pricing and by and large in this system we have not had freedom to charge any price we like. We are about to enter a stage in which we are breaking the system of free tuition for 18 to 21 year-olds and we are saying they must pay. At this stage there will
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be a great temptation for the top 10 to 15 universities including the LSE—we have had a good deal of discussion at the LSE about top-up fees—to break out of this system and go immediately to charge £1,000, £2,000 or £3,000 more.
I am rather puzzled by the Liberal Democrats on this subject. Either they want no fees whatever and complete equality or, as soon as you break out, they want lots and lots of inequality. They have to make up their minds about this.
Lord Wallace of Saltaire: My Lords, with respect, diversity is part of what we wish to maintain, a good Liberal value; and uniformity and lower quality are what we fear.
Lord Desai: My Lords, the noble Lord has been as long in higher education as I have been. We have maintained diversity and quality of educational courses with great difficulty and the moral is uniform pricing. I know it does not happen in theory—it cannot happen in theory—but that is the system we have built up. We want to go away from that system. We want to keep as much as possible the diversity of the system and not so greatly increase inequality of the system that it breaks down.
What I see the clause as saying is that there will be no immediate and undisciplined breakaway by the Russell group, or other such group, which will make the universities which are going to toe the line feel very badly done by because they will have to have uniform pricing, they will not be able to charge top-up fees and they will therefore suffer both from a loss of students and from a loss of quality. I see the clause as saying that we will go from here to there, as the noble Lord, Lord Baker, said. He wanted reform. He started in 1990; this is a next step; and perhaps within the next five or six years we will take another step. However, I do not see that this is the Bill in which we want to give that freedom.
I really think that the noble Earl, Lord Russell, is exaggerating the consequences of this clause. Until now we have had no freedom to decide what prices to charge and we have managed to preserve academic freedom. Suddenly, as soon as the Bill is passed, his world will come to an end because he is not allowed to charge a little extra. I do not understand that world. I live in the world of higher education where we try to manage our difficulties.
Earl Russell: My Lords, I am sorry to intervene, but this is the third time that the noble Lord has said that he does not understand. Does he not know enough about the public spending round to appreciate that what comes out of it is the result of a negotiation?
Lord Desai: My Lords, I do. Does not the noble Earl know that the overall culture of higher education funding in this country has been largely of not much choice for the universities as regards what they buy and charge? The same system is going to continue. Academic freedom is not going to die because of the fact that we shall charge tuition fees but not be allowed

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to charge top-up fees. The system of fees will break up in about five to 10 years. I do not believe that this Bill is the appropriate place to start the process.
Lord Walton of Detchant: My Lords, at this stage of the evening I would not wish to introduce what may be a discordant note. I begin by congratulating Her Majesty's Government and the noble Baroness on the Front Bench on certain features of the Bill. For many years some of us in your Lordships' House attempted to persuade the previous administration of the crucial importance of having a general teaching council, but invariably that proposal was blocked for a variety of reasons.
However, as regards this particular amendment, one of the things that concerns me most is the present state of the universities. They have suffered a 40 per cent. reduction in unit costs over the past 20 years. I wholly accept the concerns that have been expressed by the Government Benches as regards future funding and aspects of student support. I found it extraordinary that earlier tonight Amendment No. 50 was passed by your Lordships' House. That is an amendment which, put on the face of the Bill, will establish the principle of 50 per cent. contribution to student support in tablets of stone and in perpetuity, taking no account of the crucial importance of accepting that loans should also take account of the contribution that students will make in future to their fees.
Having said all that, however, I am deeply concerned about the university sector, which in many respects is in serious difficulty. I believe that the amendment proposed by the noble Earl, Lord Russell, and others is crucial to the future of the sector. How can one tell what the future holds as regards government funding for universities and higher education in the next few years? How can one be sure what future governments will decide in relation to funding higher education? For that reason alone, and as responsible institutions, universities must be allowed some flexibility in being able to raise funds from sources other than government funding in order to support the initiatives in higher education that they wish to pursue. How can one possibly accept this clause, which would act as a kind of straitjacket in restraining them from raising funds from other sources in order to maintain the quality of education which they wish to provide? Therefore, I support the amendment with the greatest of enthusiasm.
10 p.m.
Baroness Lockwood: My Lords, this House has a reputation for defending the universities, particularly their academic freedom. However, I feel that too much is being read into this clause. When the Bill was first published there was, rightly, some concern about the breadth of the clause and the possible interpretations. However, since then my noble friend the Minister has been able to introduce amendments which have more clearly defined what is meant by the "funding" of courses. Apparently, those amendments have now satisfied the CVCP to the extent that it is prepared to support them, as well as the clause.
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There seems to be some misunderstanding also about what the different fees mean. We are talking about the £1,000 which students will be expected to contribute to their university fees, but that is only a contribution. Fees for different university courses differ according to the nature of the course. The student is not being expected to pay a 25 per cent. contribution towards any particular course because the costs of courses have been amalgamated and, on average, students are now being asked to pay 25 per cent. However, that does not mean that the costs of the courses (as they are now) will remain static. The noble Lord, Lord Baker, said that there is the possibility of future developments which will demand much higher funding of some courses. I am sure that if there are scientific developments in the university world, the universities, the funding council and the department will together be able to accommodate such charges. However, that matter is entirely different from individual universities being able to charge their own top-up fees.
In earlier debates we heard a lot about what the National Union of Students was saying about the Bill. So far, no mention has been made of what the NUS is saying about Clause 18, which is that it should be preserved. Although the NUS might oppose the introduction of the £1,000 contribution to fees, it is certainly opposed to the ability of universities to introduce top-up fees. I should like to quote from a letter from the University of London, written on behalf of the Aldwych Group, which represents the student unions of the universities in the so-called "Russell Group". It stated that,
"the issue of 'top up' fees is particularly pertinent to our institutions. This would lead to a two tiered higher education system based on wealth rather than academic ability".
I feel that we must take note of what the student unions are saying in this respect.
If the House does not accept Clause 18, it will lead to different charges at different universities. I do not disagree with what the noble Lord, Lord Walton of Detchant, said earlier. He is concerned about the funding of universities per se. I, too, am concerned about that, but I do feel that a better system of funding needs to be introduced. However, that is quite different from this clause which prevents individual universities introducing differential fees—not for differential subjects because there is a differential in the fees for social sciences as opposed to the sciences—which would have to be borne by individual students. That would be a divisive force in our university system and I would oppose it on those grounds.
Lord Wallace of Saltaire: My Lords, before the noble Baroness sits down, does she accept that we have a two-tier university system and do not have total uniformity? We have Oxbridge versus the rest. Oxbridge receives funding additional to that received by the rest. Is the noble Baroness in favour of maintaining that two-tier system, or does she wish to impose total uniformity on the higher education sector?
Baroness Lockwood: My Lords, there was a substantial debate on this subject some months ago. Had

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the noble Lord taken part in it he would have been aware that at that time I was very conscious of the history of the universities of Oxford and Cambridge and the need to protect that system to some extent. But I do not believe that because we have that situation in relation to those two universities all universities should be treated differently.
Baroness Park of Monmouth: My Lords, I should like to deal briefly with the point just made that students are not concerned about the effect of this clause. On the contrary, for example, University of Edinburgh students have been very concerned about the effect on teaching and the academic programme in relation to the fourth year. Equally, they were concerned when Mr. Brian Wilson suggested to one of his colleagues one very simple solution to the problem: the universities should be asked to re-jig their four-year courses to make them suitable for those with A-Levels from England to enter the second year. The students believed that that was exactly the kind of interference in the academic syllabus for purely management and financial reasons that should be feared because of the present wording of Clause 18. Therefore, I believe that students are more concerned than might be supposed.
Baroness Young: My Lords, I believe that this debate illustrates extremely well the value of your Lordships' House. We have heard a sequence of contributions from noble Lords beginning with the noble Earl, Lord Russell, my noble friends Lord Beloff and Lord Baker and the noble Lord, Lord Desai, who have had extensive experience of the university world. They know how things work. I speak here as a university person one removed, although I know a little about the universities. My anxiety is threefold. This is such a serious worry that I very much hope that the noble Baroness will consider the matter further. First, Clause 18 puts universities in a straitjacket. If there is one thing that universities do not want if they are to flourish it is uniformity. If one is to achieve excellence one must have diversity, as the noble Lord, Lord Wallace, said. That gives one the best of everything. Universities can specialise in what they believe they do best. To prevent the universities from getting extra money will hinder academic freedom.
The second point about which I am concerned is that which has already been very well made by my noble friend Lord Baker. We are legislating for the future. One does not know what the future may bring. Who would have thought 10 years ago when I was an education Minister that one-third of young people would be in higher education at all, let alone an even greater proportion? I have been married for a very long time to a scientist. Scientists will always say that one never quite knows where the frontier will be or from where the next development will come. Therefore one requires flexibility for these courses.
I do not know what the noble Earl will decide to do with this amendment, but I believe it raises such a very serious matter for the whole future of the education system that the matter must be looked at again.
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Although I welcome the amendment in relation to the courses, it is a small part of a much bigger problem and needs careful thought.
Baroness Blatch: My Lords, the noble Baroness, Lady Lockwood—
Noble Lords: Oh!
Baroness Blatch: My Lords, as spokesman on the other side of the Chamber, I believe that I am entitled to respond to an amendment.
The noble Baroness referred to and prayed in aid the CVCP. I do not know what her words were, but I know that words were carefully brokered between the CVCP and the Government. The committee admits to "being reasonably" satisfied rather than very happy. I am sure that the Minister will also pray in aid the CVCP. However, having met its representatives and had discussions with them throughout the progress of the Bill, I know that there is deep puzzlement throughout the higher education sector about the stand which the CVCP is taking on behalf of higher education. Given that what we agree in this Chamber will stay on the statute book for a long time, I say only that 10 years down the line it may regret not having made a better and more effective stand for the right of academic freedom in higher education.
Although I greatly respect the views of the noble Lord, Lord Walton of Detchant, perhaps I may say a few words in order to justify an amendment won earlier tonight in respect of maintenance. There is nothing strange about the amendment. When individual students leave university having undertaken the same course, students from lower income families should not be disproportionately disadvantaged compared with their fellow students who may well come from a more affluent family. It would be deeply unfair if a student from a poor family, irrespective of tuition fees, had to borrow all his maintenance money whereas a student from an affluent family had to borrow only half. That would be unfair and the amendment corrected the situation.
Earlier the noble Lord, Lord Whitty, promised to bring forward an amendment. There is a read-across from that amendment to the debate we are now having on Clause 18. That amendment must be seen and considered by this House before the Bill moves to another place. My noble friend has made known her concerns about the issue not only tonight but on Second Reading and in Committee. It is not beyond the wit, certainly of the noble Lord, Lord Whitty, to spell out the Government's intentions and what they hope to achieve. I hope that between now and 10th March it will be possible for us to see an amendment, even if it is not perfect. It is important that we do so before the Bill leaves here for another place. If the Government do not come forward with an amendment, this House will have lost its only opportunity to discuss its merits and to give voice to the concerns of my noble friend Lady Perry.
Whatever the Government say, their proposals in the Bill and their intention to use its powers will in practice, although I accept not technically, be setting fees at

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universities. I accept the criticisms made about previous governments and it will be interesting to see how much more generous the present Government are. However, one cannot rule out tight settlements in future by a Chancellor of the Exchequer. In fact, I could almost write part of the Chancellor's Budget speech next year. At the back of my mind, I can almost hear him saying that in 1998–99 higher education received an extra £165 million and it cannot expect such generosity every year. That £165 million is a one-off payment and there has been no promise that it will be built into the base revenues of higher education. I do not believe that that promise can be given, but if it is not, not only must one make up the £165 million into the future, but there must be additional moneys.
If there is a tax settlement in future, the straitjacket referred to by my noble friends Lady Young, Lord Baker and others will be real. Where are the universities to go? The fact that there are to be no top-up fees is to be written on the face of the Bill if it is passed in its present form. There has been a promise that the proportion of tuition fees paid for by students is not expected to rise in real terms beyond 25 per cent.; but that is not to be on the face of the Bill. Therefore, I advise those students who are anxious to see Clause 18 remain part of the Bill to be careful because they will be extremely vulnerable in the future. If there is to be more finance to fund higher education, if it does not come from the Treasury and cannot come from top-up fees, it will have to come from the students. That 25 per cent., willy-nilly, will be raised beyond the limit intended by the Government.
If that does not happen, something must give. My noble friend Lady Park referred to the academic programme. First, it will affect staffing and then the course programmes. All the other points about quality then come into play. It is a straitjacket. So far, the Minister has been unable to explain the scope of Clause 18. That was a question put directly by the noble Earl, Lord Russell, and my noble friend Lord Limerick, who is not present this evening. I ask the noble Baroness whether she is able to enlighten us further this evening on the absolute extent of the scope of this clause.
10.15 p.m.
Baroness Blackstone: My Lords, I find it very strange that the noble Earl, Lord Russell, and his noble friends should seek to leave out Clause 18. I found his metaphors somewhat perplexing too. They were all transport metaphors. We moved from parachutes to submarines and Aeroflot all within the space of two or three minutes.
I have tried also, without success, to find some consistency in the noble Earl's approach to future funding arrangements for higher education. On the one hand, he and his noble friends are opposed to students' contributions to fees. On the other, they are seeking to leave out Clause 18. In doing that, they are opposing the safeguard which is designed to protect students from being asked to pay additional top-up fees. Where is the logic in that? It is quite extraordinary.
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I remind the House of the purpose of Clause 18. Contrary to some of the claims made both in your Lordships' House and outside, Clause 18 is not about altering the relationships between government and the universities. Rather, it is just one component, albeit—and I am perfectly happy to admit this—an important component of new arrangements to secure adequate and appropriate funding for higher education in the 21st century.
The noble Lord, Lord Baker, quite rightly raised issues about the quality of higher education and underlined its importance. I agree with him 100 per cent. about that. However, the Government recognise also that the funding of universities over the past few years has been totally inadequate. The government of which the noble Baroness, Lady Blatch, and the noble Lord, Lord Baker, were members did not recognise the inadequacy of the funding that was provided for universities. If they had, we should not be in the position in which we are today. We might not even be charging tuition fees because the universities would be properly funded.
Baroness Blatch: My Lords, the noble Baroness makes that point but it was precisely because there needed to be some very serious, fundamental thinking about the funding of higher education that Dearing was commissioned with all-party support. There was absolute agreement across all parties that more money had to be found for education. Later, we shall be discussing how we can secure additional money to remain in higher education. But it is not true to say that we did not recognise the problem. We certainly did, which is why we commissioned the report, the recommendations of which gave rise to this Bill.
Baroness Blackstone: My Lords, I was going to deal with that later, and indeed I will. Eventually, when the then government were absolutely up against it because there was a revolt of the vice-chancellors, they set up the Dearing Committee. Unfortunately, they were in office for 18 years and failed to provide adequate funding for the universities. There was a per capita cut of 40 per cent. over that period. I really do not think that the noble Baroness has a leg to stand on.
The Government recognise that, as the Dearing Committee found, the further improvement and expansion of higher education cannot be afforded on the basis of current funding arrangements. Other sources of funding for higher education have to be found. But the question is: who should fund universities? In the Dearing Committee's view, which the Government have endorsed, the costs should be shared between those who benefit from higher education.
Of course, the country as a whole benefits from higher education, socially, culturally and economically; and so the taxpayer bears the major burden of funding higher education. The taxpayer will continue to bear the major financial burden, even after the introduction of the new funding arrangements.
But it is not just society as a whole that benefits from higher education. Students themselves stand to benefit, not only from the personal enrichment that higher

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education brings but also the financial advantages of higher salaries that graduates on average earn, as I said earlier today. But we also recognise that there need to be safeguards for students, in return for the financial contributions that they will make. We have made clear that the Government will ensure that the savings are used to improve quality, standards and opportunities for all in further and higher education. As universities stand to benefit from the new funding arrangements that we are proposing, so they too must be prepared to accept a little restraint in the fees that they charge students.
Too few Members of your Lordships' House speaking in today's debate seem to recognise that basic fact. However, most universities do. But that is all that Clause 18 requires from universities—a little restraint in the fees that they charge home and EU full-time undergraduates and students on courses which lead to a qualification for teacher training.
The noble Baronesses, Lady Young and Lady Blatch, said that we were legislating for the future here. I must remind the House again that we are only talking about a reserve power. The Government hope never to have to use that power. It is true that there are other countries in the world where the Government do not become involved in controlling higher education fees for students. Some of our universities may look with envy particularly at American universities with their larger resources and long to be able to charge fees in the same way as they do.
I must say that I often looked with envy at them. I have been a Fellow at Harvard University and at the University of California at Berkeley. Of course, they are extremely well funded. But our higher education system has long been fundamentally different from the American and heavily dependent on government funding. I understand that the noble Earl and his noble friends are not seeking freedom for universities from government funding: quite the contrary, they wish to increase that dependence. Yet they seek a free market in the level of tuition fees that universities may charge beyond a certain minimum threshold. I believe that the noble Lord. Lord Beloff, is much more consistent in his argument. He wants a completely free market and his argument stands up much better than that put forward by the noble Earl, Lord Russell.
However, a completely free market is totally at odds with our system of student support with which, if I may point out to the noble Lord, Lord Baker, there has been nothing comparable in the United States. If the noble Earl wishes universities to benefit from a national system of grants for institutions and loans for students, then he needs to recognise that it may not be compatible with a market system where universities are free to charge what they like without any government regulation, even in reserve. As long as we in this country value—as I believe we do—a national system of grants and loans, then the Government must be able to balance the needs of universities and students, as well as taxpayers. The current Bill does just that; indeed the Government's new funding system will provide substantial additional funds for our universities. Noble Lords opposite might perhaps recognise that. Perhaps
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there ought to be just a little more optimism about the negotiations that we have to have on these matters. A little more optimism would go a long way.
I understand the concerns of the noble Lord, Lord Walton of Detchant. However, there is a great deal of flexibility for universities to raise funds from a vast variety of other sources. Many of them do that. I speak from personal experience as I spent huge amounts of my time raising funds from a whole variety of other sources. We are in no way imposing a straitjacket, to use the term that I think was used by the noble Baroness, Lady Young.
It has long been the case that if universities wish to accept public funds they need to accept that there may be conditions attached to those funds. One cannot have it both ways. We have sought to minimise those conditions. All that Clause 18 does is to give the Secretary of State a reserve power to place conditions on grant through the higher education funding councils to control, if necessary, the level of fees that universities charge to home and EU full-time undergraduates and students on courses of initial teacher training.
We have made amendments to clarify the fact that conditions cannot apply to overseas students, or to part-time or postgraduate students other than those on courses of initial teacher training. We have made clear that the only penalties that might be imposed on an institution that decided to impose top-up fees would be financial ones and that imposing some other penalty would be absolutely out of the question. We have brought forward amendments to make clear that conditions could not single out courses of initial teacher training by subject or all other courses at any particular level by area of study or research. Later this evening we shall bring forward amendments to the definition of fees in Clause 20. Taken together, these amendments put beyond doubt that it will not be within the power of any Secretary of State—whether current or future—to control top-up fees in order to interfere in a university's academic affairs.
We have done our best to make clear the limited nature of Clause 18. As my noble friend Lady Lockwood said, the amendments we have brought forward, or are bringing forward today, follow discussions with the CVCP and have been welcomed by it. Indeed its briefing note makes clear that the amendments to Clause 18 address its concerns. I deeply regret the comments made by the noble Baroness, Lady Blatch, which I thought were singularly unfair to the CVCP, which represents the HE sector as a whole. It does that well and with commitment, honesty and integrity. The vast majority of vice-chancellors are opposed to top-up fees. They accept that safeguards on the charging of additional tuition fees are necessary for students. As my noble friend Lady Lockwood said, that also applies to the National Union of Students, which will be deeply disappointed—as will most parents—if the Tory Members of this House and Members of the Liberal Democrats decide that they will support this amendment and remove Clause 18 from the Bill.

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In supporting the leaving out of Clause 18, the noble Lord, Lord Wallace of Saltaire, acknowledges no obligation on the part of universities towards either students or taxpayers. He and his noble friends require either the taxpayer or the student to pay as much in fees as the universities choose to charge. I am surprised that he should take that position. It strikes me as frankly bizarre.
Lord Wallace of Saltaire: My Lords, the Minister might care to answer the point I made. As the Minister well knows, expansion on the Continent has been achieved by allowing quality to decline. However, we have managed to avoid that in British universities by expanding the number of foreign students. As the Minister well knows, many of us involved with universities are currently struggling with the possible impact on next year's finances of the Asian financial crisis. I am not sure whether the Government will give us a rescue package if that turns out to be a disaster. However, the Minister has not addressed the question of maintaining the quality of British universities which was my main concern.
10.30 p.m.
Baroness Blackstone: My Lords, with respect, I have referred to the issue of quality at least three times in responding to the debate. Indeed, the whole purpose of the new system of funding of universities is to do our very best to improve quality. The noble Lord, Lord Wallace of Saltaire, and I share—as I share with the noble Lord, Lord Baker—a wish to improve the quality of higher education in this country.
But it strikes me as, frankly, bizarre—coming from a party which the noble Lord, Lord Tope, said only a week ago was,
"totally and fundamentally opposed to the imposition of student payment of tuition fees".
So why on earth do he and his noble friends oppose provisions which would control the charging of additional tuition fees? The noble Earl, Lord Russell, often tells us during the course of our debates in this House that he needs to explain to his students—I understand that—what the Government or this House has decided. How will he explain to them that he was responsible for ensuring that students will be required to pay far more in fees than the Government ever proposed that they should? How would he justify his actions to the thousands of students up and down the country who might, as a result, be prevented from entering higher education?
A number of points have been made about uniformity. We have a diverse system of higher education; and so we should. We have a diverse system through different levels of research funding that relate to the quality of research undertaken by our universities. We have very different proportions of postgraduate students in our universities. We have very different levels of vocational provision in our universities. We have different levels of overseas
1066
students. Some institutions are specialists and some provide a wide range of courses. Nothing in the clause will alter that diversity.
Perhaps I may say this to the official Opposition. The previous Government, from the Prime Minister and the Secretary of State for Education and Employment down, opposed top-up fees and said so in terms. I think that it is rather surprising that Members opposite are now taking a quite different view within less than a year of leaving government. It was indeed the threat of top-up fees by some universities when they genuinely were at their wits' end as to how they were going to provide the quality we all want and need that led the previous Conservative Government to set up the Dearing Committee; and I am glad to say that the Dearing Committee came up with proposals to prevent the need for top-up fees which the Government are now implementing. Indeed, the Government are finding ways of raising even more money for universities than the Dearing recommendations would have led to.
The noble Earl, Lord Russell, may tell us that he is concerned with protecting university autonomy and academic freedom. But this clause is not fundamentally about academic freedom; and we have brought forward an amendment to make that quite clear. Clause 18 is about offering students safeguards in return for their contributions towards the tuition from which they individually stand to gain so much. It is about offering safeguards to their parents too. It is about achieving a complex balance between the needs of universities for extra funding and for autonomy, between the demands on the taxpayer and the demands on the student.
I believe that with all the amendments that we are bringing forward Clause 18 achieves the appropriate balance. This amendment, on the other hand, would wreck that balance; and I urge the House to resist it.
Earl Russell: My Lords, I shall not attempt to match the noble Baroness for length. She has invited me to explain to my students. I have done so. I shall tell her what I tell them. First and foremost must be a concern for quality; and Government are no judge of quality. If quality is not preserved it does not matter who has access. Once quality is preserved, then we would like to see access as far as possible independent of parental income or social conditions. Thirdly, we would like to continue to see diversity.
The noble Baroness talked about conditions. We understand that he who pays the piper can call the tune. But he is unwise to exercise that prerogative if he happens to be tone deaf. I ask the House to imagine somebody running a restaurant. He is making a loss; he cannot get any more people in—there is no room for any more tables; he cannot reduce the quality of his meals without falling foul of the Health and Safety Executive; and he cannot lower his prices because they are capped. What does he do? He closes down. I do not want to do that, and that is why I ask the opinion of the House.
10.35 p.m.
On Question, Whether the said amendment (No. 63) shall be agreed to?
Their Lordships divided: Contents, 63; Not-Contents, 73.

DIVISION No. 4

CONTENTS

Addington, L.

Mayhew of Twysden, L.

Avebury, L.

Newby, L.

Baker of Dorking, L.

Nicholson of Winterbourne, B.

Beloff, L.

Northesk, E.

Biffen, L.

Ogmore, L.

Blatch, B.

Park of Monmouth, B.

Brookeborough, V.

Perry of Southwark, B.

Butterfield, L.

Pilkington of Oxenford, L.

Carlisle, E.

Rawlings, B.

Carnegy of Lour, B.

Redesdale, L. [Teller.]

Camock, L.

Renfrew of Kaimsthorn, L.

Chesham, L.

Rodgers of Quarry Bank, L.

Cross, V.

Russell, E [Teller.]

Dean of Harptree, L.

Russell-Johnston, L.

Dholakia, L.

Ryder of Wensum, L.

Dundee, E.

Seccombe, B.

Goodhart, L.

Selkirk of Douglas, L.

Hamwee, B.

Smith of Clifton, L.

Harris of Greenwich, L.

Steel of Aikwood, L.

Taverne, L.

Inglewood, L.

Thomas of Gresford, L.

James of Holland Park, B.

Thomas of Walliswood, B.

Lichfield, Bp.

Tope, L.

Linklater of Butterstone, B.

Tordoff, L.

Lucas, L.

Wallace of Saltaire, L.

Ludford, B.

Walton of Detchant, L.

Mackie of Benshie, L.

Warnock, B.

McNair, L.

Williams of Crosby, B.

McNally, L.

Winchilsea and Nottingham, E.

Maddock, B.

Wise, L.

Mar and Kellie, E.

Wynford, L.

Marlesford, L.

Young, B.

NOT-CONTENTS

Acton, L.

Hardie, L.

Amos, B.

Hardy of Wath, L.

Archer of Sandwell, L.

Haskel, L.

Bassam of Brighton, L.

Hilton of Eggardon, B.

Berkeley, L.

Hoyle, L.

Blackstone, B.

Hughes, L.

Brooke of Alverthorpe, L.

Hughes of Woodside, L.

Burlison, L.

Hunt of Kings Heath, L.

Carter, L. [Teller.]

Irvine of Lairg, L. [Lord Chancellor.]

Cocks of Hartcliffe, L.

Currie of Marylebone, L.

Islwyn, L.

David, B.

Jay of Paddington, B.

Davies of Coity, L.

Judd, L.

Davies of Oldham, L.

Kennedy of The Shaws, B.

Dean of Thornton-le-Fylde, B.

Kilbracken, L.

Desai, L.

Kirkhill, L.

Dixon, L.

Lockwood, B.

Donoughue, L.

Lofthouse of Pontefract, L.

Dormand of Easington, L.

McIntosh of Haringey, L. [Teller.]

Dubs, L.

Evans of Parkside, L.

Mallalieu, B.

Falconer of Thoroton, L.

Merlyn-Rees, L.

Farrington of Ribbleton, B.

Milner of Leeds, L.

Fitt, L.

Molloy, L.

Gallacher, L.

Monkswell, L.

Gilbert, L.

Montague of Oxford, L.

Gordon of Strathblane, L.

Murray of Epping Forest, L.

Gould of Potternewton, B.

Nicol, B.

Grenfell, L.

Northfield, L.

1068

Ponsonby of Shulbrede, L.

Simon, V.

Prys-Davies, L.

Simon of Highbury, L.

Puttnam, L.

Smith of Gilmorehill, B.

Stone of Blackheath, L.

Ramsay of Cartvale, B.

Symons of Vernham Dean, B.

Randall of St. Budeaux, L.

Thomas of Macclesfield, L.

Rendell of Babergh, B.

Turner of Camden, B.

Richard, L. [Lord Privy Seal.]

Whitty, L.

Sewel, L.

Williams of Mostyn, L.

Resolved in the negative, and amendment disagreed to accordingly.
10.44 p.m.
[Amendment No. 64 not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 65:
After Clause 18, insert the following new clause—
RECEIPT AND DISPOSAI, 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: My Lords, Amendment No. 65 is grouped with Amendment No. 66. It concerns the money which goes to universities which is derived from income from tuition fees. I was fascinated to hear the noble Baroness's one-word answer to the noble Lord, Lord Dahrendorf, who is not in his place at the moment, when he asked whether it was right that higher education would benefit from the money generated from income fees. The noble Baroness's answer was, "Yes". In speaking to this amendment, I wish to explore that answer.
Let me say, first, that Amendment No. 66, standing in the name of the noble Lord, Lord Tope, has the same aim as my amendment. I believe that the noble Lord has produced a more effective form of words than I have. I shall therefore seek to withdraw my amendment and throw my support behind that of the noble Lord, which I believe achieves more concisely what we are both looking to achieve.
Whether higher education will benefit from income generated from savings made as a result of these proposals is something we wish to explore. If the noble Baroness is correct, then it must be the case that for the purposes of funding higher education institutions, this money, this newly-generated money and income, must be disregarded in order that it is genuinely, in its entirety, additional funding. That should not only apply to this year. We have had promises this year that the money will go into higher education, although we know that not every penny of it will, because some will be spent in other places.
What we do not know from the noble Baroness and what we ask for a specific answer on is this: will this money, pound for pound, go in and remain within higher education? Can we have an absolute assurance that it will not displace other moneys that would normally come from the higher education funding council? In other words, can we have an assurance that this money is pure pound-for-pound additionality into the higher education sector, enjoyed institution by institution?
If the answer is not unequivocal and should any part of this money that is generated from higher education students and their families be used anywhere else in the system, for example, in further education—and no one is arguing that further education could not use more money—or in any other part of government expenditure or, worse, should it end up in Treasury coffers, then the tuition fee is not a tuition fee; it is a tax.
I look forward to hearing from the noble Lord, Lord Tope on Amendment No. 66 because, as I said, I believe that that amendment has rather more effective wording. I beg to move.
10.45 p.m.
Lord Tope: My Lords, as the noble Baroness, Lady Blatch said, we are trying to achieve exactly the same object here. I am very grateful to her for acknowledging so graciously that the amendment in my name and that of my noble friend achieves that object more succinctly and more exactly.
The case has been made by the noble Baroness, Lady Blatch, and was made previously in Committee that we are concerned that all the money raised should go to higher education. I suspect that the Minister may tell us in a moment that the amendment is unnecessary. However, I believe that it is necessary, if for no other reason than to reassure those in higher education at all levels who have doubts on the issue.
Much earlier today the Minister asked me to justify how this could be a student poll tax. I do not particularly wish to pursue that now, especially at this time of night, but I agree with the noble Baroness, Lady Blatch. If it should be otherwise, then it is a tax; it is a tax on students. That is analogous to a student poll tax.
I shall not press my amendment tonight, but I shall be seeking the same assurances that the noble Baroness, Lady Blatch has sought, and I shall certainly be considering, perhaps with her, what we will do in the light of those assurances.
Lord Whitty: My Lords', the noble Baroness asked that we repeat some assurances that she was given at earlier stages of the Bill when these matters were raised. At various points there seems to have been some confusion as to how the present system of funding of higher education works and perhaps some of our assurances were not as clear as she would have liked.
Let me make clear now to the noble Baroness that the money which students pay directly to universities and colleges in tuition fees will remain with the instituions. That is the first point. The second point is that the contributions that local authorities pay on students' behalf, if the assessed income of students and their
1070
families means that they do not have to pay the fee in full or at all, will also remain with the institutions. It will of course be for universities and colleges themselves to decide on how to use those resources.
In relation to the original amendment of the noble Baroness, Lady Blatch, and the first part of the amendment of the noble Lord, Lord Tope, that is a sufficient and clear assurance that the objectives of those amendments will be met. I therefore do not believe that those parts of the amendments are necessary. Nor can I accept the rather more complex implication of the second part of Amendment No. 66, which is to disregard the fee income for the purposes of calculating the grant for the higher education funding councils.
A large proportion of fee income will continue to come from public funds. Therefore, while universities and colleges will receive £1,000 for every home or EU full-time undergraduate new entrant in Autumn 1998—either from the students, their families or local authorities—by no means all of that will be new money. Local authorities have long paid tuition fees on students' behalf to universities and colleges and will continue to do so. But we estimate that the total contribution will be just over £1 billion in England alone. We clearly cannot leave such a large sum of taxpayers' money out of account when calculating the level of the other channel of public funds for higher education; that is, grant to the HEFCE.
Nor can the funding council leave out of account the fee income received by institutions. That is primarily because it needs to ensure some fairness in funding across institutions where the aim is to fund similar activities at similar rates. As a result, it will be necessary for the funding council to make adjustments to the grant it provides to ensure that some institutions do not lose out in consequence and that others do not gain unfairly. Institutions should not depend for their income on the level of income of their students and therefore the degree to which students are required to meet their own costs.
The aim is that universities and colleges should receive similar support in grant and fees to fund similar activities. Obviously institutions receive more funding, for example, to educate a medical student than a law student because of the extra costs involved. But all institutions, broadly speaking, should receive similar amounts to teach medical students on the one hand, and broadly similar amounts to teach law students on the other. That will require some adjustment rather than disregarding the level of contribution from the students themselves. That fairness of outcome—the noble Lord, Lord Wallace may call it socialism; I call it fairness and common sense—is certainly the approach that we will adopt in the allocation of funds.
For the coming year, following the crisis in the funding of higher education to which everybody referred, we have already announced a package of measures which, as a result of these changes, will allow an extra £165 million to be spent on higher education in 1998–99. Universities and colleges will receive directly £130 million of that and there will be £40 million basically on access packages. The higher education

1071
sector will therefore benefit fully from the money derived from students' contributions to tuition fees, which is approximately £130 million; that is, it will benefit to a greater degree than the saving that we acquired as a result of that by allowing £165 million to be spent on education. That also refutes the suggestions that were made that we are robbing the higher education sector to provide funds for further education. We make no apology for applying further funds to further education, but that has not come out of the savings that we have made on the higher education side.
We have been asked to give undertakings for subsequent years. We are not in a position to give cast-iron undertakings in relation to future years. The reply of my noble friend to the noble Lord, Lord Dahrendorf, related to next year. We are, as noble Lords will be aware, in the middle of a comprehensive spending review. It would be unrealistic for noble Lords to expect me to pre-empt decisions on public expenditure for future years or to put undertakings relating to future public expenditure decisions on the face of the Bill. However, the savings over time will be substantial and higher education will benefit seriously from those savings.
As far as concerns the amendments, to leave out of the reckoning fee income for the purposes of calculating the grant for the higher education funding councils would prevent those councils making the adjustments that are needed to create a fairness of outcome for the institutions, one compared with another. Nor would it be right to place on the funding councils restrictions which would in themselves lead to unfairness in the way in which they allocate grants in the process which they adopt for allocating them.
This has been a somewhat complex response to what is a complex issue. I hope it has cast some light, if not total light, on the way in which these allocations will take place. Given those explanations, I hope that the noble Baroness will be prepared to withdraw the amendment.
Baroness Perry of Southwark: My Lords, before the Minister sits down, perhaps he can clarify something for me. I think he said unequivocally that no money from the higher education savings—the private fee money—will go to further education. Why is it then that on 19th December in another place his honourable friend Dr. Howells, in an answer to a similar question, said:
"the introduction of private contributions to tuition fees for higher education will mean an extra £125 million for higher education institutions, plus £4 million to allow for a modest increase in students on sub degree courses mainly in FE colleges. In addition some £15 million of the higher education savings has been allocated to the further education sector".—[Official Report, Commons, 19/12/97; col. 365.]
Can he explain the apparent contradiction in that quotation?
Lord Whitty: My Lords, the £16 million allocation to further education does not come from the charging of tuition fees. The total saving which arises from the saving of tuition fees is £130 million. In total, the extra
1072
money going to higher education will be £165 million. A small element of double counting on the sub-degree courses will probably to some extent take place in the further education sector, but that is a very small amount of double counting. In other words, the benefit of all the changes to the higher education figure is greater than the saving on tuition fees. The allocation to further education referred to in that announcement relates to the changes in the loan system and not to the saving on tuition fee contributions.
Baroness Blatch: My Lords, this is as clear as mud. I agree with the noble Lord when he says that moneys paid by the state for those students who are exempt from paying the tuition fees is not new money. It comes from within the state system. Money paid for parts of the £1,000 for those students who are subject to means testing, where it is paid by the local authority, is not new money. It is money from within the system. So I accept that. Money paid in part by students themselves who are means tested but still qualify to pay part of the fees and all of the £1,000 paid by one-third of the students who are subject to paying the full amount is totally new money. It is money that is not there now and it is money that will be there as a result of these changes.
What the noble Lord has said has not made anything clear beyond 1998–99. The red herring in this debate has been, and continues to be, the £165 million. As I understand it, the £165 million has been found from restructuring the way in which grant is paid on a term basis rather than on an annual basis, or vice versa. There has been some restructuring of how that money is paid and it has thrown up a one-off saving of £165 million. The Government, in the kindness of their heart, have decided that that money shall go to higher education. It is not linked, although from time to time the noble Lord says, in passing, that the new money, which sometimes is £125 million and at other times is £130 million, is a sum of money that is exceeded by the £165 million. I would also argue that it is subsumed by £165 million because, as I understand what the noble Lord said, higher education is not going to receive additional moneys of £165 million plus £135 million from tuition fees in 1998–99.
What the noble Lord has not said and what the noble Lord, Lord Tope, and I wish to achieve by these amendments, relates to the additional money. It would be helpful if the noble Lord will confirm for clarification at the Dispatch Box tonight the situation as regards the money that is derived from £1,000 paid in full by one-third of the students and the parts of £1,000 paid by other students. What does that total in new money? Is that £130 million? If so and if the noble Lord cannot agree in principle that that will be treated year on year—whatever is commensurate with the number of students paying it—and that it is guaranteed and considered to be additional money, disregarded for the purposes of funding higher education, then we do not get the assurances we are asking for.
The noble Lord says that he is continually giving the assurances that we seek. There has not been an assurance that this money will not be considered replacement money, substitute money, displacement

1073
money, for that which is already in the system. For example, if the Chancellor comes down rather heavily in terms of a settlement for the higher education sector—it will not happen this year because it would be difficult presentationally for the Government, and may not even be next year or this side of the election—are we going to find over time, in the medium to long term, that the money provided by students has simply disappeared into the system? Will we find that additionality no longer applies and therefore the rationale for the proposals expounded by the noble Baroness and the noble Lord? It has been stated constantly that this money will be additional and will be spent exclusively and in its entirety on higher education. We seek much firmer assurances than the noble Lord has given tonight.
11 p.m.
Lord Whitty: My Lords, I repeat that the money paid directly by students—a proportion of which the noble Baroness refers to as new money—will remain with the institutions. I thought that I had made that clear, but the noble Baroness does not regard it as satisfactory. I do not believe that noble Lords would expect me to pre-empt the outcome of public expenditure decisions on what the totality of expenditure will be on the higher education system in future years. We have a comprehensive spending review under way. In any case, as with all governments, public expenditure decisions are taken year by year.
Baroness Blatch: My Lords, the Government must be very relieved that they won the vote on Clause 18. But that is as nothing to the consequences of what the noble Lord is now saying. Throughout this Bill the noble Lord has been saying to the students, schools, colleges and institutions that the reason the Government are producing these proposals is so that more money will go into the university sector. There is one point that the noble Lord has made which we accept. The money will remain with the colleges. If that money is to be genuinely additional money then it must be disregarded for the purposes of funding higher education. If the noble Lord cannot give that guarantee then his proposals and the rationale for them fall on deaf ears.
Lord Whitty: My Lords, I do not believe that I can say much more than I have already. This is the mechanism for getting new money into the higher education system. If the noble Baroness is pressing me to say what the expenditure on higher education in total will be, that is not possible and I do not believe that noble Lords would expect me to do so.
Baroness Blatch: My Lords, before withdrawing the amendment, I advise the noble Lord that we wanted an assurance in principle that this was meant to be new, additional money which was not to be displaced by the normal funding of higher education. If that assurance cannot be given, we shall return to the matter on Third Reading. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 66 not moved.]
Clause 20 [Interpretation of Chapter I]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 67:
Page 15, leave out lines 9 to 12 and insert—
(" "fees", in relation to attendance on a course, means fees in respect of, or otherwise in connection with, attendance on the course, including admission, registration, tuition and graduation fees but excluding—

(a) fees payable otherwise than to the institution providing the course in respect of the awarding or accreditation of any qualification,

(b) fees payable for board or lodging,

(c) fees payable for attending any graduation or other ceremony; and

(d) such other fees as may he prescribed;").

The noble Baroness said: My Lords, I promised in Committee that we would look again with the Committee of Vice-Chancellors and Principals at the definition of fees in Clause 20. That is the definition that makes clear what costs are expected to be covered by the fees that are charged by universities and colleges and for which means-tested financial support will be made available to students under regulations to be made under Clause 16 (2)(b). It is also the definition that makes clear what additional fees universities and colleges might charge without risking a condition on their grant under Clause 18.
This amendment makes it clear that we expect the essentials of any course of higher education to be covered by the basic fee for which means-tested support will be available up to a maximum of £1,000 next academic year. That sum is intended to cover all tuition costs and any administrative costs associated with the processes of admission (or matriculation), registration (or enrolment) and graduation. We would thus not expect students to pay any extra for admission to an institution, for annual registration with that institution, for tuition during their course or for graduation. We accept that a university may charge for the costs of providing a social occasion to celebrate the awarding of a degree, but there should be no question of a university charging a fee to a student for the actual award of a degree.
If universities or colleges charged extra for any of those essential items—admission, registration, tuition or graduation—the Secretary of State would have to consider whether or not to seek to control such fees by exercising his reserve power to place conditions on grant under Clause 18.
The amendment also makes it clear that, on the other hand, there are certain costs that the Government do not consider to be covered by the basic fee, and so universities may charge separately for these. They include fees charged by external awarding or accrediting bodies; board and lodging; and the cost of special ceremonies. So any university which charged extra for a graduation ceremony or any college which levied charges for board and lodging would not run the risk of having a condition placed on its grant under Clause 18.
Let me make it clear that this amendment has no implications for college fees and that the outcome of our review of Oxbridge fees is an entirely separate matter. That review follows the Dearing Report which pointed

1075
out that college fees represented a substantial addition to the standard funding for higher education institutions and proposed that the Government should review them. It also recommended separately that there should be no variations in the level of public funding for teaching, outside modest margins, without very good reasons. We therefore asked the HEFCE to conduct a review of college fees, taking into account its proposed new teaching funding method and the relevant points in the Dearing Report. We are still considering that advice and hope to be able to make an announcement shortly.
As the noble Lord, Lord Renfrew, said—I am sorry that he is not in his place—it is true that an early draft of the government amendment, which we showed to the CVCP, contained a reference to college fees. But we concluded that it was technically defective because either college fees fall into the first category of fees in this government amendment, where we do not wish to see top-up fees charged—that is, tuition fees and the like—or, in the case of board and lodging, they fall into the other category of fees where we believe that institutions should be able to decide on an appropriate level of charges. So we concluded that it would be tautologous to mention college fees separately. That early draft has now been revised; and noble Lords will see that the government amendment on the Marshalled List has no reference to college fees in order to avoid technical defects. But let me stress again that the amendment does not in any way pre-empt the outcome of the review of college fees.
Finally, the definition allows the Secretary of State to prescribe in regulations other fees that universities and colleges would be able to charge without being liable to a condition on their grant controlling such fees. Those fees could include fees for field trips and possibly fees for materials, which the noble Earl, Lord Limerick, raised in Committee. This provision for regulations will allow us to consult widely with appropriate representative bodies such as the CVCP and the Committee of University Chairmen before drawing up a detailed list. It would also allow for amendment of that list in due course if it appeared that we had omitted some important fee.
This amendment clarifies which fees universities may or may not charge in addition to the basic fee, for which financial support will be available to students. It also allows for further elucidation through regulations. I beg to move.
On Question, amendment agreed to.
Clause 21 [Grants and loans: Scotland]:
Lord Sewel Lord Sewel moved Amendment No. 68:
Page 17, line 20, at end insert—
("() Regulations to which this section applies shall not prescribe a rate of interest to be borne by loans higher than that which the Secretary of State, having regard to such retail price index as appears to him to be appropriate, is satisfied is required to maintain the value in real terms of the outstanding amounts of such loans.
() Regulations to which this section applies may make provision, for the purpose of calculating the interest to be borne by loans, for repayment by borrowers to be treated as having been made or received on such date or dates as may be prescribed.").
On Question, amendment agreed to.
[Amendment No. 69 not moved.]
Baroness Carnegy of Lour Baroness Carnegy of Lour moved Amendment No. 70:
Page 17, line 34, at end insert—
("(2A) Where the Secretary of State has determined a maximum amount under subsection (2) above, he shall not include in the maximum amount of allowances payable those bench- and field-trip fees, or increases thereto, operated by institutions prior to 26 November 1997.").
The noble Baroness said: My Lords, in speaking in Committee to amendments to Clauses 18 to 22 the noble Baroness, Lady Blackstone, said that after further consultation with the CVCP the Government were willing to consider amending the definition of "fees" in the English and Scots clauses. We have just debated the Government amendment to the English clauses in response to that assurance. Not knowing whether an amendment would be forthcoming from the Government, and after further consultation with the Association of University Teachers (Scotland), I tabled Amendments Nos. 70 and 73 to elicit further information on the Government's intentions for Scotland and also for England and Wales.
The amendments use the examples of bench fees for the use of, say, equipment and materials by chemistry students and extra fees for field trips, perhaps for geography students. Amendment No. 70 seeks an assurance that such fees charged before publication of the Bill will not in retrospect be considered to have been part of the course and so carried forward into the future. Amendment No. 73 seeks confirmation that should a financial penalty be imposed on top-up fees then fees such as bench- and field-trip fees would be excluded from the calculation.
These are details. However, can the Scottish Office Minister, the noble Lord, Lord Sewel, say whether it is the intention of the Government to amend the Bill to match the amendments which his noble friend Lady Blackstone has just achieved in relation to the English clauses? If that is the intention, can the Minister give an assurance that the specific items on the face of the Bill will also be on the face of the Scottish clauses and that the regulations will be properly discussed with Scottish institutions and will cover the same areas as in England, because that is the Scottish institutions' desire? I believe that that assurance is very important, and I look forward to the reply of the Minister. I beg to move.
Earl Russell: My Lords, I am most grateful to the noble Baroness for tabling these amendments. I believe that it is very good for us to have England riding on the back of Scotland. One hopes that someone will remember to mention England as well. I congratulate the noble Baroness on putting the matter that way round. We learn from it.
The question of what is intended by "fees" has given rise to a good deal of confusion and doubt. Field trips are an academic necessity for some subjects. I think in particular of geology. These matters cost money and it must come from somewhere, sometimes from fees. A lot of courses simply cannot be done without field trips. I hope that there will be further clarification on the subject. The Minister seems to be eager to give it and I look forward to hearing him.
11.15 p.m.
Lord Sewel: My Lords, I fully appreciate the points made by the noble Baroness, Lady Carnegy, and the noble Earl, Lord Russell. I make it clear from the outset that there is no difference between my noble friend Lady Blackstone and myself in terms of the policy objectives in England and Wales, on the one hand, and Scotland, on the other.
A difficulty arises because the Scottish legislation that is amended is structured differently from the English legislation. The Education (Scotland) Act 1980, which provides the basic legislative framework for the substantive issues discussed and put forward in the amendment, is different from the provisions in England and Wales. As I made clear, the policy objectives are the same; we seek to arrive via a slightly different route compatible with the 1980 Act.
We intend to have a period of full consultation during which regulations will be evolved. It is our intention that institutions will not be prevented from making reasonable charges for the services they provide. We will be issuing draft regulations. At that stage, my colleague from the Scottish Office and I will be interested to hear the reaction of the representatives of the institutions of higher education in Scotland and will take them fully into account. No issue of principle is involved, and I do not believe that there is an issue of practice between us.
There is a difficulty with Amendment No. 73 as drafted. If agreed, it would require the Secretary of State to authorise every single change in bench and field-trip fees. Even the Secretary of State, who works very long hours, would find that difficult to encompass. However, I assure the House that we intend to reach the same policy objective as that achieved by my noble friend in her amendment to the Bill. It is just that, in order to keep the matter all square with the Education (Scotland) Act 1980, we will arrive via the different route of regulation and I give an assurance that there will be full consultation with the higher education institutions.
Baroness Carnegy of Lour: My Lords, I thank the noble Earl for his support and I thank the Minister for his reply. I am glad to note that there is no policy difference. However, it is extremely disappointing that the Scottish Office is not up to speed and able to produce an amendment when the English department can do so. There is no reason why that has not been done and I do not know why we should have to go to the lengths of inventing an amendment when the Government intend to do so. That is disappointing and one wonders what will happen in the Scottish parliament if things move so slowly. I hope that everything will brisk up a little.
Having said those few crisp words, I accept the Minister's assurance. I hope that the draft regulations will be available soon so that everyone can look at them properly. That is important because a great deal of money is at stake for the institutions in Scotland. In the mean time, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 71 not moved.]
Clause 22 [Imposition of conditions as to fees at further and higher education institutions in Scotland]
Lord Sewel Lord Sewel moved Amendment No. 72:
Page 18, line 31, at end insert—
("() Where the functions of the Secretary of State under section 4 of this Act are exercised by the Funding Council, the prohibition contained in subsection (3) of that section shall not apply in relation to conditions imposed under subsection (2B) above."").
The noble Lord said: My Lords, I should start by saying that these amendments introduce into Scotland the corresponding provision in Clause 18(9) which applies to England and Wales. I hope that will be a convincing argument for the noble Baroness, Lady Carnegy.
These are technical amendments to make clear that certain existing provisions in the legislation governing the funding of higher education and further education in Scotland do not impinge on the new fee regime for further education and higher education institutions which we are introducing in the Bill. The equivalent legislation has been provided in the English provisions in the Bill in Clause 18(9), as I said, although drafted in a slightly different way, but that is understandable. Originally it was thought that such provisions were not necessary but, on reflection, we believe that it is advisable that the matter should be put beyond doubt. I hope that that is agreeable to the House. I beg to move.
On Question, amendment agreed to.
[Amendment No. 73 not moved.]
Lord Sewel Lord Sewel moved Amendment No. 74:
Page 19, line 7, at end insert—
("() The Secretary of State shall not exercise the power to prescribe descriptions of courses under subsection (3B) above in such a way as to discriminate—

(a) in relation to courses for the training of persons preparing to be teachers which are open only to persons holding a degree, between different courses on the basis of the subject in which such training is given; or

(b) in relation to other courses, between courses at the same or a comparable level on the basis of the particular areas of study or research to which they relate.").

The noble Lord said: My Lords, Amendment No. 74 brings forward for Scotland provisions equivalent to those already debated for England and Wales as Amendment No. 60. Subsection (2) of Clause 22 makes provision for courses of prescribed description provided by higher education institutions to be covered by conditions on grant controlling top-up fees. It is for the Secretary of State to prescribe the courses in regulations. This amendment prevents the Secretary of State, when he draws up the regulations, from singling out courses at any particular level by area of study or research.
This makes absolutely plain that the Secretary of State cannot—through conditions controlling top-up fees—affect the freedom of universities to decide which courses to offer, which subjects to teach or which areas of research to pursue. He can thus prescribe first-degree courses or courses leading to a diploma as those that can be covered by conditions on grant controlling top-up fees. But he cannot name in those conditions particular

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areas of study or research—whether any branch of medicine, science, technology, social science, arts or humanities. I believe that that goes all the way that can reasonably be expected to defend the whole principle of academic freedom. I beg to move.
Earl Russell: My Lords, I wonder whether I may ask the Minister the question I asked his English colleagues. Why do these amendments make no reference to the other term of Amendment No. 61—the academic conditions for the selection of staff or the admission of students?
Lord Sewel: My Lords, I am sorry. I did not hear that.
Earl Russell: My Lords, I beg the Minister's pardon. I wanted to ask why these amendments that he is offering do not include the term which was included in the 1992 Act, which is also included in Amendment No. 61, of not imposing conditions on the academic conditions for the selection of staff or the admission of students. That is a gap in the amendment and I want to know why it has not been filled.
The Minister, I think, is not quite clear what we are talking about here. This Bill replaces the Beloff amendment which was in the 1992 Act which made it impossible to impose conditions, as conditions of grant, on the terms for selection of staff or admission of students as well as conditions on the academic content of particular courses.
This Bill of course supersedes the earlier legislation. The conditions in the Beloff amendment do not apply to this Bill. Therefore, that concession, which is welcome as far as it goes, covers some of what was in the 1992 Act but not all of it. I want to understand why the part that has been left out has been left out. It is a question of considerable importance to a number of people as well as to me. It is a question which we hope will not require too lengthy a consideration because a lot of us are rather anxious to hear the answer to it. The answer we hear may make a considerable difference to what we decide to do when we return to the Bill on Third Reading. Therefore, I hope the Minister is in a position to answer.
Lord Sewel: I believe that I understand what the noble Earl is saying. I should make it clear that we have no intention of imposing the type of conditions which the noble Earl envisages. I make it clear that this amendment relates only to top-up fees. It is certainly not the Government's view that anything in relation to the approval of top-up fees should in any way be conditional on matters relating to the selection of staff or admission of students. I can give the noble Earl the assurance that I will look at this further. If there is a matter of substance between us, I shall so inform him.
Earl Russell: My Lords, I thank the Minister.
On Question, amendment agreed to.
Lord Sewel Lord Sewel moved Amendment No. 75:
Page 19, line 17, at end insert—
("() The prohibition contained in section 40(4) of this Act and the duty imposed by section 41(2) of this Act shall not apply in relation to conditions imposed under subsection (3B) above." ").
On Question, amendment agreed to.
[Amendment No. 76 not moved.]
Baroness Blatch Baroness Blatch moved Amendment No. 77:
Page 19, line 17 at end insert—
("(3F) In exercising his powers under this section, the Secretary of State 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 Scotland apply equally to a student whose parental home or normal place of residence for purposes other than attendance at that institution is in England, Wales 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 Scotland." ").
The noble Baroness said: My Lords, this amendment was taken with Amendment No. 51, which the House accepted earlier. Therefore, I beg to move.
On Question, amendment agreed to.
Clause 23 [Right of young persons to time off for study or training]
Baroness Blatch Baroness Blatch moved Amendment No. 78:
Page 20, line 48, at end insert ("; and
(b) shall be laid in draft before Parliament for approval by resolution of each House.").
The noble Baroness said: My Lords, I shall be brief. The measures set out in Clause 23 are most serious and I shall not repeat the points that I made in Committee. At that time, I fully accepted the arguments put forward by the noble Baroness; namely, that these are two clauses which ought to be seen and considered by another place. For that reason, I withdrew my amendment which sought to remove them from the Bill.
Nevertheless, if employers are going to find themselves subject to the law in order to fulfil their obligations under the measures contained in Clause 23, I believe that it is incumbent upon the Government to place any regulations in draft before Parliament,
"for approval by resolution of each House".
I beg to move.
Lord Whitty: My Lords, two regulations would be covered by the amendment, both relating to insertions in the Employment Rights Act 1996. The first relates to the power to specify a body to award a qualification and the second to the power to prescribe the standard of achievement. As regards the power to prescribe that standard, we have already said that we want young people to get to Level 2—that is, five good GCSEs, an intermediate GNVQ or an NVQ Level 2. As for the power to award or authenticate qualifications, we have said that, for example, the Qualifications and Curriculum Authority will be the guardian of standards in England.
Throughout the debate reference has been made to the report of the delegated powers committee which has considered regulations arriving under these clauses. The committee has agreed with the proposal in the

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memorandum of the department that such statutory instruments should be subject to the negative resolution procedure and not the affirmative procedure. In all other respects, we have now accepted in full the recommendations of the committee and we consider that we can also do so in this case. I hope, therefore, that the noble Baroness will feel able to withdraw her amendment.
Baroness Blatch: My Lords, the point made by the Minister is a fair one. However, there are a number of companies—and, again, I believe that I mentioned this in Committee—which are decidedly disquieted by what they see as prescription of the training. Many companies provide training which is entirely adequate for their employees to enable them to do the job for which they are employed. Some of the companies to which I refer are actually quite big companies. However, because they do not specifically fit the particular mode of training or the particular content of training that will be prescribed, they will be expected to provide additional training, to send people off campus for training or to make expensive modifications to their training.
We are discussing a rather serious matter. Therefore, even though I intend to withdraw my amendment, I would ask the noble Lord to ensure that, in the negotiations with commerce and industry, the Government will take those points on board and introduce as much flexibility as is consistent with the quality of training. I trust that companies will not be required to make unnecessary—or what they consider to be superfluous— expenditure to meet the demands of a bureaucrat, as opposed to the demands that they would seek to address; namely, the quality training that is consistent with the people who work in their company doing the job for which they are employed. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
11.30 p.m.
Baroness David Baroness David moved Amendment No. 78A:
After Clause 24, insert the following new clause—
REPORT TO PARLIAMENT BY SECRETARY OF STATE
(" . The Secretary of State shall lay a report before both Houses of Parliament twelve months after the coming into force of this Part stating what, in his opinion, has been the effect of this Part on the labour market for persons aged 16 and 17.").
The noble Baroness said: My Lords, the purpose of this amendment is to require the Secretary of State to report to Parliament on the impact of these provisions on the labour market for 16 and 17 year-olds one year after the coming into force of this part.
Local authorities are concerned that a combination of the exclusion of 16 to 17 year-olds from welfare-to-work and this right to time off will have a serious adverse impact on the employability of this age group. Local authorities are keen to ensure that the employment and training options for 16 and 17 year-old young people are enhanced.
While the Government's measures, as set out in these clauses, are welcome, they must be considered in the context of the assistance currently available to this age
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group. Unlike their older counterparts, 16 and 17 year-olds are denied assistance from the social security system and have no recourse whatsoever to other moneys. Those who may have been accommodated or assisted by local authority social services departments are often compelled to seek financial support from social services departments. This is neither desirable in terms of providing consistent financial support to young people in need, nor in terms of local authority budgets, which show that, increasingly, payments under Section 17 of the Children Act have been used to meet the income support needs of young people denied help elsewhere. There is therefore a cost both to the individual and a cost which is unaccounted for in the local government finance settlement for local authorities in having to meet these income support needs.
This group of young people are not as yet eligible to participate in the Government's New Deal for the unemployed. The official school leaving age is 16 and the expectation is that those young people leaving school at this age will seek employment, training or education opportunities. They do, in effect, enter the labour market. However, as far as employers are concerned, subsidies are available for employing 18 to 24 year-olds under the welfare-to-work programme, which is not available to this younger age group. The impact of the welfare-to-work programme may be inadvertently compounded by the Government's proposal to require employers to release 16 and 17 year-olds for training. The measures will represent a further cost to employers in recruiting from this age range and may thus act as a potential disincentive. The Government estimate the full-year costs of compliance to employers to be in the range of £60 million to £130 million per annum—large sums.
The Government have recently launched their policy initiative, Investing in Young People, which together with projects in the new start strategy is intended to support, amongst others, those 16 and 17 year-olds. But the IIYP policy has yet to take effect in full and the new start projects are not a nationwide approach but are funded only in 17 pilot areas. In order to monitor these measures, and those in the Bill, and to assess whether they are the most effective way of achieving the Government's objective of improving opportunities for 16 and 17 year-olds, this amendment would provide the opportunity for a full parliamentary scrutiny of their effects.
In Committee my noble friend Lady Blackstone said,
"The Government recognise that there is a potential issue here concerning the interaction of two important commitments. But we believe that that will be a local rather than national issue. However, we shall monitor closely the impact of the New Deal and will be able to assess its possible interaction with other policies. Of course that is important, but it is quite right to give priority to those young people aged 18 to 24 who have been unemployed for more than six months. But we wish to ensure that that does not put at risk the opportunities for 16 and 17 year-olds, a group who have the benefit of other opportunities such as modem apprenticeships, national traineeships and other government supported work-based training. But it is a group also which does not always take up those opportunities".—[Official Report, 26/1/98; col. 33.]
Can the Minister explain how the Government intend to monitor the New Deal and its impact on the proposals in the Bill? I want an answer. It is an important point. The 16 to 17 year-olds may be disadvantaged. I look forward to the Minister's response. I beg to move.
Baroness Blackstone: My Lords, in considering this amendment, I should first like to reassure the House that we have already stated categorically in the regulatory appraisal published alongside the Bill that the impact of this legislation will be evaluated progressively over the two years following implementation. We shall also wish to look at the interaction between the provisions and the New Deal. At this stage I cannot give my noble friend details of the actual structure of the piece of research that will be undertaken, but I can assure her that it is important that we look at this interaction and we shall do so.
I can also reassure the House that we shall publish the evaluation reports that are commissioned and that there will be no delay in making the material publicly available in the usual manner.
I can also confirm that the legislation will be implemented only as and when resources are available, and the costs and numbers of participants are expected to phase in. We are continuing to listen to the views of key partners, especially employers, but also local authorities, so that the legislation can be implemented in a way that is both sensible and flexible, and guidance can be given on best practice.
As this amendment is about the labour market, it may be helpful if I set out the wider context. Comprehensive data for the UK are not available, but the department estimates that there are over 350,000 16 and 17 year-olds in employment or on government supported work based training. Of these, around one-third have already achieved qualifications at level 2, around one-third are already working towards level 2, and around one-third are not receiving any training, or only training below level 2. This last group, totalling an estimated 115,000, is the primary focus of this legislation.
However, this amendment would require the Secretary of State to be in a position to lay a report before both Houses of Parliament 12 months after the introduction of this new employment right. There would of course be some information available from a variety of sources, but it might at that early stage be qualitative rather than quantitative, difficult to aggregate to give a true national picture, and possibly partial. If an evaluation study were to be commissioned to report by the due date, it would need to be in the field some six or nine months after implementation, and that would seem rather too early.
More importantly, many young people exercising their right to time off for study or training will not be able to show at this early stage any tangible outcome or benefit such as a qualification achieved, and it would be quite wrong to send any signal that might try to rush them. The full effect of this initiative will only be felt in the medium to long term, by improving young people's
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employability, and employers' competitiveness. An evaluation that had to report 12 months after implementation would not be able to identify these benefits.
As your Lordships will be aware, one of the key aims of this part of the Bill is to improve the long-term employability of young people and to give them those opportunities while they are young. My noble friend may be right that this could bring about some changes in the labour market, but such changes are unlikely to be substantively evident within 12 months of introduction. We need to allow time for both young people and employers to take full advantage of this new employment right, which will be implemented both sensibly and flexibly.
I hope that I have reassured both my noble friend and the House that there will be progressive evaluation arrangements as set out in the regulatory appraisal, and that the evaluation reports that are commissioned will be published. I hope that my noble friend will accept these reassurances and will be able to withdraw her amendment.
Baroness David: My Lords, I thank my noble friend for that partially reassuring answer. I think it does convey that she is aware of the problem. The local authorities are anxious about this matter, because their social services departments have to pick up the tab if things do not go well. However, I should like to discuss this with the Local Government Association, which wanted this amendment put down, and hope that it will be satisfied with what the Minister said. I see that perhaps there is a problem in getting a response within one year that will be satisfactory and complete. But after my noble friend's reassurances I will, at any rate for the moment, withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 25 [Orders and regulations]
Baroness Blackstone Baroness Blackstone moved Amendments Nos. 78B to 80 en bloc:
Page 23, line 3, leave out ("section 16(5))") and insert ("the following provisions of this section)").
Page 23, line 5, at end insert—
("(Subsection (2) does not apply to the first regulations to be made—

(a) in relation to the General Teaching Council under section 1(3), or

(b) in relation to the General Teaching Council for Wales under section 1(3) as applied by an order under section 6(1).
and no such regulations shall be made (whether made alone or with other regulations) unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.").

Page 23, line 5, at end insert—
("() Subsection (2) does not apply to the first regulations to be made under section 16; and no such regulations shall be made (whether made alone or with other regulations) unless a draft of the

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statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.
() That subsection also does not apply to—

(a) any regulations in relation to which paragraph (b) of section 16(5) applies, or

(b) any other regulations under section 16 a draft of which has been laid before, and approved by a resolution of, each House of Parliament.").

Page 23, line 13, at end insert—
("(6) Once the General Teaching Council or (as the case may be) the General Teaching Council for Wales have been established, the Secretary of State shall, before making regulations under Chapter I of Part I of this Act, consult the Council to which the regulations will relate.").
On Question, amendments agreed to.
Schedule 2 [Minor and consequential amendments]:
Baroness Blackstone Baroness Blackstone moved Amendment No. 80A:
Page 29, line 16, at end insert—
("Education (Scotland) Act 1980 (c.44)
In section 133 of the Education (Scotland) Act 1980 (regulations)—

(a) in subsection (2), at the beginning insert "Subject to subsections (2A) and (2B) below,"; and

(b) after subsection (2) insert—

"(2A) Subsection (2) above shall not apply to the first regulations to be made under section 73(1)(f) of this Act with respect to loans; and no such regulations shall be made (whether alone or with other regulations) unless a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.
(2B) Subsection (2) above shall not apply to any regulations under section 73(1)(f) of this Act with respect to loans, other than the regulations mentioned in subsection (2A) above, where a draft of the statutory instrument containing the regulations has been laid before, and approved by a resolution of, each House of Parliament.".").
On Question, amendment agreed to.
House adjourned at twenty minutes before midnight.