Teaching and Higher Education Bill [H.L.]

HL Deb 02 March 1998 vol 586 cc958-1035

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 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. (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 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 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.

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.

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.

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, 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 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 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.

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 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 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 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 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 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 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 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 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 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 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 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 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 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.

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.

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 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. 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.

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.

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.

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.

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 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 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 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 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 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 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 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 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 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 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 moved Amendment No. 49:

Page 11, line 46, at end insert— ("(3A) In relation to loans under this section—

1. (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
2. (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 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—

1. (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
2. (b) provision continues to be made for maintenance grants to be payable to such a student, subject to—
1. (i) a maximum amount of half the prescribed cost of maintenance, and
2. (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 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.

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.

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 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 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 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 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 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 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 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.

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 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, 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.

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.

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 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 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 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 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.

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 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 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 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.

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.

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) 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 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 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. 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 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 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 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. 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.

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 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; 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 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.