Lords Sitting of 8 June 2004

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

Lord Garden
Air Marshal Sir Timothy Garden, KCB, having been created Baron Garden, of Hampstead in the London Borough of Camden, for life—Was, in his robes, introduced between the Baroness Williams of Crosby and the Lord Roper.
Lord Drayson
Paul Rudd Drayson, Esquire, having been created Baron Drayson, of Kensington in the Royal Borough of Kensington and Chelsea, for life—Was, in his robes, introduced between the Baroness Jay of Paddington and the Lord Levy.

Deafblind People
2.47 p.m.
Lord Ashley of Stoke Lord Ashley of Stoke asked Her Majesty's Government:
What recent measures they have taken to assist deafblind people.
Baroness Andrews: My Lords, in 2001 we issued guidance under Section 7 of the Local Authority Social Services Act 1970 specifically on services for deafblindness. The guidance has raised awareness among local authorities of deafblindness and services are improving. General measures to improve the accessibility and quality of NHS and local authority services to disabled people will also help deafblind people.
Lord Ashley of Stoke: My Lords, I thank my noble friend for that reply, but in view of those activities can she perhaps explain the fact, as revealed by Sense, the organisation for deafblind people, that more than 50 per cent of deafblind people have not even been identified by local authorities and that more than 95 per cent of deafblind people do not have the services of communicator guides that are so essential for that double disability? Will my noble friend try to explain that to the House?
Will my noble friend also tell me if I am right in assuming that the Government made a big mistake in not backing the Private Member's Bill some four years ago? That Bill would have laid a definite duty on all local authorities to locate, identify and assess all deafblind people in their area and then provide the services. That would have been a clear obligation but the Government said, "No thanks", and opted simply
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for guidance. However, we all know that guidance can be ignored by local authorities. We need a complete change of policy.
Baroness Andrews: My Lords, I begin by paying tribute to my noble friend for the fact that we have guidance in the first place. He may be disappointed that there was no Bill but the guidance is clear and is working effectively. My noble friend, who has been a friend for many years, will know that this is very much a developing situation. Figures from the Social Services Inspectorate show that in 2001 there was not a single senior manager responsible for deafblind people; now 98 per cent of councils have such a manager. Some 89 per cent of councils now make information available in formats accessible to deafblind people and 82 per cent have a database that identifies deafblind people.
I am the first to agree that a lot more needs to be done, but we are starting from a very low base. It is entirely due to my noble friend that deafblindness is recognised as a unique condition which needs a unique set of services. I hope that he will take some comfort from that and will look forward to more progress being made.
Lord Laming: My Lords, will the Minister assure the House that particular attention will be given to the needs of children so that an assessment is made as early as possible and a plan put into operation which will ensure their proper development so that in future we do not have the kind of situation that the noble Lord, Lord Ashley, outlined?
Baroness Andrews: My Lords, I could not agree more with the noble Lord. Deafblind children with communication problems that we can hardly begin to comprehend suffer an additional disability. Early assessment is absolutely essential. The early support pilot project will be one way of picking up these young children very quickly. However, much will depend on their assessment under the framework of assessment of children in need, which is a good framework. We need more interveners to work with those children to develop their communication and social skills. That is something that we are working on very aggressively at the moment.
The Lord Bishop of Chester: My Lords, will the Minister add to her original Answer by also paying tribute to the work of the voluntary societies in this area that often work in partnership with local authorities under Section 7 of the Act? I speak from particular experience as president of the Cheshire Deafness Support Network, which last year opened a specific deafblind facility for people who are among the neediest in our society. One can scarcely imagine what it is like to be deafblind but the workers are very dedicated. They are enabled by Section 7 of the Act but work in partnership with a vigorous voluntary society. Will the Minister join me in paying tribute to those people, too?
Baroness Andrews: My Lords, I certainly shall. One of the major contributions of those people is the

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development of capacity in the service. They are doing so much to develop the specialist profession. I refer to social workers who are specially trained to deal with deafblind people, volunteers who can work on a one-to-one basis who know the real problems that these elderly as well as young people face, and the establishment of a deafblind studies diploma. There is a great deal of partnership with local authorities through the Department of Health. Deafblind UK and Sense are leading the field. I am delighted that we are working so closely with them.
Lord Carter: My Lords, does my noble friend agree that the term "deafblind" covers people with a wide degree of problems, from those with a profound problem with communication—the classic example was Helen Keller—to people who are totally blind with hearing loss but would not describe themselves as deafblind? Even the description now used—dual visual and sensory impairment—does not really help, because it is the degree of difficulty of communication that is crucial in the definition.
Baroness Andrews: My Lords, that is right, and it is why we owe my noble friend Lord Ashley such a debt for identifying it. We need specialists to address the issues of communication particularly. The effort going into building a capacity to understand the specialist assessments carried out by local authorities is the key to making sure that people get the needed services. Those services cross a very wide range of social services to do with disability and being elderly.
Lord Addington: My Lords, has the Minister been made aware that there are many cases of people referring to the guidance being told by social services departments that it is only guidance, and that they do not have to do much about it? Does the attitude of those responsible for that build any confidence within the Government about any duty that there might be for, for instance, the promotion of equality through any future legislation?
Baroness Andrews: My Lords, the guidance is statutory guidance under Section 7 of the Local Authority Social Services Act. It has to be followed unless there is a very good reason for not following it. We would think it reprehensible for local authorities not to try. We have to allow for the building up of progress and capacity in new areas of policy. I reiterate that the guidance is compulsory; it is being implemented at different rates, but there is no excuse for not implementing it.
Lord Morris of Manchester: My Lords, I too thank my noble friend. To put this Question into perspective, is she aware that it was my noble friend Lord Ashley, 35 years ago in 1969, who led the way in enacting—as Section 25 of the Chronically Sick and Disabled Persons Act—the world's first ever legislation specifically to assist deafblind people? Is that not the very best of credentials for being listened to very
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carefully on the urgency of the need for further progress in reducing the handicapping effects of this devastating combination of disabilities?
Baroness Andrews: My Lords, the noble Lord reminds us of exactly how long a history my noble friend Lord Ashley has in developing this area of policy; as, indeed, he does himself. It would be a very unwise government who did not listen to my noble friend, and they would do so to their cost. In terms of implementing his advice, we have a new instrument in the Commission for Social Care Inspection. Its job, following the Social Services Inspectorate, will be to make sure that councils follow the guidance.
Earl Howe: My Lords, the Minister said that the guidance was working effectively. Is she aware that, more than three years after it was issued, 13 per cent of local authorities still do not have any kind of services at all appropriate for deafblind people? Does she not agree that the Government have to keep a close eye on the area?
Baroness Andrews: My Lords, I agree. The figures vary somewhat about who is implementing what at the moment, which is one very good reason for close monitoring. However, with the Commission for Social Care Inspection we have a new and more robust method for following the matter up. With the voluntary sector's participation, I am sure that we will be pressed to reduce the inequalities in the service, as is quite right.

Mental Health Services: Children and Adolescents
2.56 p.m.
Baroness Massey of Darwen Baroness Massey of Darwen asked Her Majesty's Government:
How they are implementing child and adolescent mental health services; and what plans they have to improve these services.
Baroness Andrews: My Lords, local health and social services partnerships are working to achieve the targets set out by the Department of Health in our public service agreement and priorities and planning framework, assisted by the £300 million provided in the three years to March 2006 to increase capacity and reduce inequalities. Future developments will be determined by recommendations in the National Service Framework for Children, which is due to be published later this year.
Baroness Massey of Darwen: My Lords, I thank my noble friend for that reply. Would she agree that, sometimes at a local level, the services are not adequate or given sufficient prominence? Will she give examples of good practice at a local level that might be replicated?
Baroness Andrews: My Lords, 10 years ago, mental health services for children were nowhere on the political map, and the situation is now very different. One of the most difficult challenges is to get local authorities to work closely with health and education services, and we are beginning to see them do so. As the noble Baroness may know, the emerging framework of the National Service Framework for Children, which was published last year, set out a draft children and adult mental health service plan that local authorities could follow. It was a comprehensive plan for children's services, and they are beginning to follow it. It has a very heavy emphasis on partnership. The emerging framework spends pages talking about good partnership, what it should look like and how it should be achieved.
Lord Clement-Jones: My Lords, does the Minister agree that the issue is very broad? She will no doubt have seen the latest WHO study of more than 150,000 young people, which found that teenagers in England in particular, but also their counterparts in Scotland and Wales, have some of the highest rates of drinking, smoking, drug use and underage sex, and the lowest levels of life satisfaction. That is the root of some of the problems under discussion. What are the Government doing to work in conjunction with the Health Development Agency, particularly in schools, to try to root out some of the problems before they arise in the acute form?
Baroness Andrews: My Lords, the WHO paints a rather dire picture. There has recently been a positive development in respect of schools. The National Healthy Schools Standard has published its module on promoting emotional health and well-being as part of the PSHE curriculum as a whole. We need to pay a great deal more attention to promoting positive mental health throughout the curriculum, and that is a place to start.
I shall deal with how we are responding to adolescent crises. We have created 41 early intervention teams to pick up early signs of psychosis, follow through with families, and provide the support to make sure that those young people are treated early. That will help a great deal. It does not deal with the preventive aspect, but it is a response that we need to make. In terms of what we do about the psychological health of our young people, we do not just start with mental health services, it goes very far back to family support during early development.
The Earl of Listowel: My Lords, is the Minister aware of the report last week from the Office for National Statistics that about half of the children in public care in Wales and Scotland have a mental health disorder? Are the one in four such children who are now fostered outside their local authority getting proper access to child and adolescent mental health services? Will she undertake to check that there are adequate relations between local primary care trusts and out of authority CAMH services?
Baroness Andrews: Yes, my Lords, it is a serious problem because children who are taken into care,
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whether foster care or residential care, come with a history of trauma, abuse or neglect which sets them apart from other children. They have to be provided for properly. There is a series of innovative projects on children and adolescent mental health services being funded by the Department of Health that has just come to a conclusion. Many of those projects address the issue of children in care.
In terms of foster care, what we are doing to train foster carers and to enable them to draw on services in a more positive way will help a great deal, as will what we are doing in schools with designated teachers. I am absolutely sure that there is more that we should be doing. We should be closely watching the Quality Protects and Choice Protects programmes to make sure that they pick up on this.
Lord Turnberg: My Lords, I am sure that my noble friend the Minister is aware that yesterday saw the launch of the Mental Health Research Network. Can she confirm that research into children's mental illnesses will be included in its portfolio and that funding will be made available for that purpose?
Baroness Andrews: My Lords, the Mental Health Research Network will act as a host to partnership arrangements to promote high quality research on mental health across all age groups. So I am sure that there will be reference to children. It means that we can conduct bigger research studies that will involve more clinicians, researchers and so on. I should also tell my noble friend—I am sure that he has not forgotten, because it was such good news—that we have announced £100 million over the next four years, £25 million a year, to develop medical research. Two of the four priority groups will be medicines for children and mental health. So, we are looking to more activity in that field.
Baroness Masham of Ilton: My Lords, does the Minister agree with me that adolescents often fall between the adults and the children as far as services are concerned? Will she tell the House if there are enough services and beds in this country for those people with eating problems such as anorexia?
Baroness Andrews: My Lords, I cannot answer the last question. I do not think that I could ever answer a question which asked me whether there was enough of anything, particularly in mental health services. However, the noble Baroness is right to draw attention to the particular problems that occur with 16 and 17 year-olds, because often local authorities will provide well up to the age of 16 and then expect the adult services to take up the 16 to 18 year-olds, although some do not. The 16 and 17 year-olds sometimes fall into that gap, which is totally unacceptable. We expect the National Service Framework for Children to ensure that we have proper, coherent services that are accountable and which provide across that age group, because the answer to psychosis often lies with young people aged 16 and 17.

Skin Diseases
3.3 p.m.
Baroness Finlay of Llandaff Baroness Finlay of Llandaff asked Her Majesty's Government:
Whether they have any proposals to improve the provision of long-term medical treatment for those with chronic skin diseases.
Baroness Andrews: My Lords—
Noble Lords: Hear, hear.
Baroness Andrews: My Lords, I am grateful to noble Lords for their support.
We have developed several initiatives to improve skin disease services. In particular, we have funded the Action On Dermatology programme. New drugs for skin disease have been referred to the National Institute for Clinical Excellence. Between September 1997 and December 2003, consultant numbers in dermatology increased by 35 per cent.
Baroness Finlay of Llandaff: My Lords, I must declare an interest, having had a long association with dermatology and being a member of the all-party parliamentary group. I thank the Minister for her reply and apologise that she has had to work so hard on health issues today. I certainly recognise the importance of the Action On programme and the increase in consultant numbers. However, the Government now have the GMS contract for general practice. Given that 10 per cent of the population suffer from eczema conditions and 80 per cent of adolescents have acne, some of them so seriously that they are driven to suicide, there is a huge need for having skin disease represented in the quality framework for primary care, so that there is adequate education of the primary care team. The National Service Framework for Long Term Conditions seems to have omitted inflammatory skin disease from its long list of conditions that need ongoing care. Does the Minister intend to make sure that those two small omissions will be rectified?
Baroness Andrews: My Lords, they are not small omissions in that creating a national service framework is a huge undertaking, which is why we only ever do one a year and is why we are currently preparing one for children. We may consider one on dermatology in future, but these exercises are major challenges to capacity in the health service and have good outcomes when they work. Regarding GPs, the best news that I could give the noble Baroness is that 104 GPs, 35 nurses and one combined service have opted to become GPs with special interests in dermatology, which is encouraging. It is also significant that that represents more interest than has been shown for any other specialism. I hope that that
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will spread because, the noble Baroness is right. The incidence of skin disease is extremely high and we may not have taken it seriously enough in some ways.
Lord Clement-Jones: My Lords, after that good news, will the Minister confirm that the omission of inflammatory skin diseases from the White Paper to which the noble Baroness, Lady Finlay, referred does not mean that those skin diseases will not be included in the establishment of chronic disease management clinics? Will those clinics also have the function of dealing with inflammatory skin diseases, which constitute something like the fourth highest chronic disease in the country?
Baroness Andrews: My Lords, I simply cannot give the noble Lord the answer to that. I shall have to write to him. As he says, it would seem likely that they would, given that inflammatory skin disease is a chronic condition—although not necessarily life-threatening. However, I shall certainly find out and write to him.
Baroness Masham of Ilton: My Lords, I declare an interest as president of the Psoriasis Association. Does the Minister feel that the waiting lists are adequate for people with skin problems, given that some parts of the country, including north Wales and the West Country, are very short of dermatologists?
Baroness Andrews: My Lords, let me give more good news: consultant numbers have increased by 35 per cent. Interestingly, the number of doctors in training has also increased by 32 per cent, so we have a rosier picture in terms of recruitment and waiting times. No patient is waiting more than 12 months for admission to hospital—there were 74 in 1997. In March 1997 there were almost 29,000 patients waiting more than 13 weeks for an outpatient appointment following GP referral. Now there are only 2,652. Waiting lists are coming down, particularly for skin cancer, where 98 per cent of people are seen by a consultant within two weeks of being referred by a GP. So there is some genuinely good news on waiting times.

United Nations Environment Programme
3.8 p.m.
Lord Clinton-Davis Lord Clinton-Davis asked Her Majesty's Government:
What contribution they offered or made to the United Nations Environment Programme on World Environment Day on 5 June.
The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord Whitty): My Lords, the Government's main contribution to UNEP this year has been a £4.2 million donation to its main Environment Fund, making us the single largest donor to the fund this year. In addition, the UK provides funding for specific UNEP activities, such as on great apes and coral reefs. On

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World Environment Day the Government supported UNEP in its call for urgent international action on cold water coral reefs.
Lord Clinton-Davis: My Lords, I thank the noble Lord for that reply. Does he agree that countless marine species and important undersea habitats are at risk and that marine life, human health and livelihoods are threatened, largely by land-based sources of pollution? These are all exacerbated by climate change. Bearing in mind this important day, are any more initiatives likely to be founded?
Lord Whitty: My Lords, my noble friend is clearly right that the oceans are under significant pressure not only from global warming and climate change but also from development, over-fishing and pollution generally. It is important that the UK plays its part in tackling those problems. We set out our full policies in our first marine stewardship report, published two years ago. We are now taking that forward in an update, taking into account our commitments under the WSSD programme. As to today, which, as noble Lords are presumably aware, is World Oceans Day, the UK Government, along with our EU partners, will be calling for urgent action at the UN to protect high-seas biodiversity in particular.
Lord Renton of Mount Harry: My Lords, will the noble Lord tell us what he believes the UN Environment Programme can do realistically in regard to, in particular, informing the developing countries of the seriousness of climate change? Frankly, I was unaware that today is World Oceans Day. But we must all be aware of the real threat that now comes from climate change. When developing countries put in new industrial equipment, does the UN Environment Programme not have a real role to play in helping those countries to ensure that that equipment emits less carbon dioxide than do the present, older industrial structures in Europe? Is that a programme that the UN Environment Programme will put in place?
Lord Whitty: My Lords, the UN Environment Programme will be looking at various impacts, including that of climate change on biodiversity, the nature of the oceans and the cleanliness of the oceans. The issue of switching away from carbon-based industrial development goes wider than the responsibilities of UNEP, and it is being pursued to a large extent under the Kyoto process and other commitments in which developed countries are taking the lead. But it is clear that the developing countries must be encouraged by all means possible—partnership, aid, trade and private investment—to engage in less carbon-rich technologies in the course of their development than we adopted in the West in previous decades. That programme is the responsibility of us all and it is being pursued by both UN agencies and the UK Government.
Baroness Miller of Chilthorne Domer: My Lords, the fact that many noble Lords, together, I suspect, with
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the rest of the country, are unaware that we have just had World Environment Day and that today is World Oceans Day says to me that the Government have failed to take advantage of what has been put in place to inform citizens of environmental issues. The Government should take a leaf out of the RSPB's book, in whose Big Garden Birdwatch an enormous section of the population of this country took part. I suspect that our beaches and marine environment would benefit from people being more aware of the issues that surround them.
Lord Whitty: My Lords, the Government certainly respect the requirement to inform the public and undertake to do so. If individuals and individual enterprises do not recognise the threats that exist to our environment and change their behaviour, then, in many respects, whatever the number of resolutions, designated days or programmes, they will not reverse the degradation of the planet. As I said, in this context the UK Government are the largest donor to the UN Environment Programme Environment Fund, which, in part, is about informing as well as delivering programmes.
The Duke of Montrose: My Lords, the Minister referred to the fact that the theme chosen for World Environment Day was "Wanted: Seas and Oceans—Dead or Alive". As the main day was celebrated in Barcelona, were the Spanish Government, as one of the hosts, able to offer any concessions towards the conservation of fish stocks and marine life?
Lord Whitty: My Lords, I say with some difficulty that it is true that the Spanish Government have signed up to the changes in the common fisheries policy, which I know some in this House would wish us to withdraw from just at the point where it is becoming a conservation, rather than an exploitation, policy, and the Spanish Government are part of that.
Earl Ferrers: My Lords, can the Minister tell us the purpose of World Oceans Day, which I, like most people, seem not to know?
Lord Whitty: My Lords, it is designed to draw attention to, and bring about some activity in relation to, the problems surrounding oceans. It has clearly failed lamentably in the case of the noble Earl and many other Members of this House. Indeed, it is important that we do not focus on such matters simply on the day designated by particular international organisations. It is important that we have a proper and sustained programme on these issues.
Baroness Thomas of Walliswood: My Lords, following my noble friend's question, is not the problem in this country that many people probably know a great deal about the Great Barrier Reef or underwater fishing or swimming in the Red Sea but they are totally unaware of the richness of the marine environment around our own shores?
Lord Whitty: My Lords, I think that, regrettably, that is correct, but the Government have taken a

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number of steps to create and protect marine sites around this country. We are drawing attention to the problems of development and have restricted development in the most vulnerable sites.
Lord Puttnam: My Lords, does my noble friend agree that, given that this country has an extraordinary reputation historically in linking science to all forms of changes in the natural world, the answers that he has been able to offer from the Dispatch Box today might, in 30 years' time to anyone reading Hansard, look extraordinarily complacent?
Lord Whitty: My Lords, I do not think that that is fair comment. This country is the lead supporter of the UNEP Environment Fund and we have probably put more than anyone else into the development of the programme to mitigate and tackle the problems of climate change. Indeed, some would say that the Kyoto process would not have been achieved had it not been for the intervention of this Government. In Europe, we are seen fairly widely as the leader on virtually all environmental issues. It is, of course, an uphill struggle. That is, in part, due to the fact that we need to change the behaviour not of governments and institutions but of a large range of individuals and commercial enterprises. We all need to recognise that we have a responsibility to safeguard the future biodiversity of the planet and, indeed, as the noble Duke mentioned, the life of our oceans and our atmosphere.

Queen's Counsel Appointments
3.16 p.m.
Lord Goodhart Lord Goodhart asked Her Majesty's Government:
How long they expect the interim system for appointment of Queen's Counsel, set out in the Written Statement by the Secretary of State for Constitutional Affairs on 26 May, to continue.
The Secretary of State for Constitutional Affairs and Lord Chancellor (Lord Falconer of Thoroton): My Lords, before answering, I shall make my usual declaration of interest. I was a QC; my wife is a QC; and my brother-in-law is a QC.
Decisions on how long the interim scheme should continue and in what form will be taken in the light of the outcome of the longer-term study of the legal market and Sir David Clementi's review of the regulation of the legal profession.
Lord Goodhart: My Lords, this is an issue of some importance, and I regret that the noble and learned Lord did not choose to make an oral Statement. That would have given us an opportunity for a short debate—or, indeed, given the number of QCs in this House, perhaps a long one. Does the noble and learned Lord recognise that the interim scheme is, in effect, the restoration of the status quo and must not be allowed
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to continue indefinitely? Is he prepared to set a timescale for the introduction of the wider scheme mentioned in his Written Statement and, if so, what timescale does he have in mind?
Lord Falconer of Thoroton: My Lords, it is not a continuation of the status quo in that the decisions about who should become a QC will now be taken by the professions—namely, solicitors and the Bar—as opposed to the Government. We felt that it was wrong to abolish the rank of QC when there was considerable evidence that it benefited the market—in particular, so far as concerned the international business that came to London in relation to legal services.
Lord Renton: My Lords, is the noble and learned Lord aware that uncertainty is a great disadvantage to busy barristers? It is essential that the Government reach a final conclusion in this matter—preferably one which enables Queen's Counsel to continue as before.
Lord Falconer of Thoroton: My Lords, so far as concerns the uncertainty for barristers, the Written Statement that I made to this House made it clear that we hoped that the professions would put in place a scheme that allowed practitioners to apply for Silk towards the end of this year with a view to decisions being made early next year. I hope that that deals with the question of uncertainty relating to individual barristers.
Dealing with the first point raised by the noble Lord, Lord Goodhart, I believe that it would be wrong to set a time limit on the length of the interim scheme because we need to see both the results of the market study and the report of Sir David Clementi.
Lord Morris of Aberavon: My Lords, given that last year was regrettably a fallow year in the appointment of Her Majesty's Counsel, will that be taken into account in the numbers that are envisaged when normal service is resumed, albeit in a different form? I declare my interest.
Lord Falconer of Thoroton: My Lords, plainly it is for the professions to determine how the decisions are made. But my noble and learned friend is absolutely right: it was a year when no QCs were appointed, and no doubt that will have an effect on the applications.
Lord Thomas of Gresford: My Lords, will the scheme worked out by the professions be subject to the agreement of the noble and learned Lord? If so, will he bear in mind the necessity for playing fair by the provincial Bar and by the specialised Bar?
Lord Falconer of Thoroton: My Lords, as I made clear in the Written Statement that I made on this point, it is for the professions to work out of what the scheme should consist. The role of the Minister is to pass the recommendations to Her Majesty the Queen.

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I would do so only if I were satisfied that the scheme was fair, that it promoted fairness and diversity and that it ensured that merit was the criteria.
Lord Mackay of Clashfern: My Lords, the noble and learned Lord said that he was a QC. Would the present tense be more accurate? I was invited to a nice lunch today, at which he spoke and on the invitation he was described as a QC. I am not sure what he considers his position to be at present.
Lord Falconer of Thoroton: My Lords, my understanding is that on becoming Lord Chancellor I ceased to be one of Her Majesty's Counsel learned in the law because I became one of Her Majesty's judges.
Lord Clinton-Davis: My Lords, does my noble and learned friend recognise not only that counsel—who have been very well represented in the House—should have a say, but that the solicitors' profession is very important in this matter? Would my noble and learned friend underline that?
Lord Falconer of Thoroton: My Lords, I welcome the intervention of my noble friend Lord Clinton-Davis. He is the first person to have spoken in the debate so far who is not or has not been at some stage a QC. My noble friend Lord Whitty spoke of World Oceans Day in an answer, so perhaps we should describe this as "World QC Day". Of course, there is an important role to be played by the solicitors' profession in the selection of people who are to become QCs. Both professions will play a role in the selection.
Lord Henley: My Lords, I speak as someone who has no interest to declare in this matter, unless the noble and learned Lord wishes to change his mind. Does the noble and learned Lord consider that it would have been better to have instituted a scheme before getting rid of the old one?
Lord Falconer of Thoroton: My Lords, the criticisms made about the way in which the old scheme operated, in particular by Sir Colin Campbell and the Judicial Appointments Commission, made the Government conclude that it would be impossible to continue on the old basis. The arrangement that we have made allows for the market to be looked at and, at the same time, the position of QCs will not be prejudiced. For example, because of the arrangement that we shall put in place for the professions, those who apply this year may be selected as QCs next time.
Lord Lester of Herne Hill: My Lords, given that there is a backlog caused by the hiatus, does the noble and learned Lord consider that the interim scheme will be able to double the number of QCs—I plead guilty to being one—or will there be roughly the same proportion as in the past? Will we see a shoal of QCs appointed this year?
Lord Falconer of Thoroton: My Lords, that is roughly the same question as my noble and learned friend Lord Morris of Aberavon asked. It is a matter for the professions when they set up the scheme as to who they select. I know there was a year when no appointments were made. No doubt that will be taken into account in the arrangements that are made.
Lord Tebbit: My Lords, in view of the fact that the Government seem to be losing control of the supply of Queen's Counsel, can the noble and learned Lord say whether the whole matter should be referred to the Office of Fair Trading and to the Monopolies Commission?
Lord Falconer of Thoroton: My Lords, I welcome the intervention of the noble Lord, Lord Tebbit, because he is the first non-lawyer to have spoken on this subject. The OFT considered the matter, and we considered what it said before drawing the conclusion that the right course was to continue on the basis that I have described, but also to look at the market overall. No doubt, the views of the OFT will be taken into account when we do that.

Children Bill [H.L.]
3.24 p.m.
The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland) rose to move, That the amendments for the Report stage be marshalled and considered in the following order:

Clause 1

Schedule 1

Clauses 2 to 7

Clauses 9 to 13

Schedule 2

Clauses 14 to 22

Clauses 24 to 33

Schedule 3

Clauses 34 to 40

Schedule 4

Clauses 41 to 48

Clause 8

Clause 23

Clauses 49 to 53.

The noble Baroness said: My Lords, I beg to move the Motion standing in my name on the Order Paper. I should explain that this order of consideration allows Clauses 8 and 23 to be taken towards the end of the Report stage. That has been agreed through the usual channels for the convenience of the noble Lords concerned.
Moved accordingly, and, on Question, Motion agreed to.

Asylum and Immigration (Treatment of Claimants, etc.) Bill
The Minister of State, Office of the Deputy Prime Minister (Lord Rooker)The Minister of State, Office of the Deputy Prime Minister (Lord Rooker) rose to move, That the Bill be recommitted to a Committee of the Whole House in respect of:
(1) Schedules 2 and 4; and
(2) new clauses relating to—

(a) appeals;

(b) support and benefits for asylum seekers, refugees and others; and

(c) treatment of persons subject to immigration control in respect of the procedure for marriage.

The noble Lord said: My Lords, on behalf of my noble friend Lady Scotland of Asthal, I beg to move the Motion standing in her name on the Order Paper.
The Government have produced some fresh policy in the important areas covered by the Bill, and we believe that these amendments are important and necessary. Asylum and immigration are areas that are subject to unexpected change and require constant review to ensure that the system is robust and resistant to abuse. To allow the House to consider it properly, we have offered to recommit the Bill, and the usual channels have accepted.
We are tabling our amendments today. If this Motion is agreed to, they will be considered in Committee on Tuesday 15 June and on Report provisionally on Monday 28 June.
Moved accordingly, and, on Question, Motion agreed to.

Gender Recognition Bill [H.L.]
3.25 p.m.
The Parliamentary Under-Secretary of State, Department for Constitutional Affairs (Lord Filkin): My Lords, on behalf of my noble and learned friend Lord Falconer of Thoroton, I beg to move that the Commons amendments be now considered.
Moved, That the Commons amendments be now considered.—(Lord Filkin.)
On Question, Motion agreed to.

COMMONS AMENDMENTS
[The page and line refer to HL Bill 56 as first printed for the Lords.]

COMMONS AMENDMENT
1 Clause 21, page 8, line 42, at end insert—
"(6) Nothing in this section prevents the exercise of any enforceable Community right."
Lord Filkin: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 1. This amendment addresses an issue which was discussed at length in Standing Committee in another place.
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Clause 21(1) provides that a person will not be regarded as having changed gender solely by virtue of having changed gender under the law of another country or territory. This is necessary because standards for recognition are not uniform throughout the world, and we wish to ensure that the UK grants recognition only to those individuals who have recognition in a country or territory with criteria at least as rigorous as our own.
Where other countries' criteria are as rigorous as our own, people in that position should receive recognition under a simpler process, and this is provided in Clause 1(1)(b). Conversely, if the recognition is from a country or territory with criteria that do not meet our standards, we believe that, to gain recognition in this country, an individual should have to apply in the standard way, with the gender recognition panels scrutinising a full set of evidence.
Questions were raised in Standing Committee in another place about whether a different approach was warranted for those who have recognition in another country from the European Economic Area. We reviewed the position in light of the comments and concluded that it would be useful to clarify that Clause 21 is subject to any enforceable right under EC law.
The amendment reflects the fact that in practice a national of another country in the European Economic Area who has been granted legal recognition of their gender change in their own country will not need to apply for a UK gender recognition certificate. Equally, no further application will be required for recognition of the post-recognition opposite-sex marriage of an EEA national.
We have recently completed our research on gender recognition across the EEA. This indicates that all the EEA states that have systems for recognition have criteria for recognition that are as rigorous as our own. We expect to add all these states to the list of approved countries, and individuals with recognition there would be able to apply for a UK gender recognition certificate under the simplified process in Clause 1(1)(b) if they wished to do so, but would not be obliged to do so.
This broad mutuality of standards within the EEA also means that the risk that we foresee in extending the principle of mutual recognition any further, and of accepting overseas recognition given on criteria less rigorous than our own, does not arise on the amendment that we have proposed.
Moved, That the House do agree with the Commons in their Amendment No. 1.—(Lord Filkin.)
Lord Tebbit: My Lords, perhaps I may ask the Minister two questions. First, can he explain why the reference is to Community rights and not to European Community rights? Does that involve the issue of rights of people from European Economic Area states or not? It seems slightly odd. Secondly, what will happen if a European Community state grants recognition to someone on the basis of an application that has been made and accepted in a third country, whose standards are not acceptable to the United

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Kingdom? Would such a person become acceptable whether the recognition is endorsed by a European Community country or not?
3.30 p.m.
Lord Filkin: My Lords, on the noble Lord's first question, the changes we are making following the Standing Committee consideration of the issue, simply ensure that the Bill complies with the free movement rights enshrined in Article 48 of the Treaty of Rome 1957. As the House will know, when the UK Government joined the European Community in 1972 we signed up to the various obligations in the Treaty of Rome, and the European Union Community law was given legal effect in the UK by the European Communities Act 1972. If memory serves me right, its effect goes slightly wider than the members of the European Union Community because it also includes Norway, Iceland and Liechtenstein.
I think that addresses the first part of the noble Lord's question. As to the second part, were a member of the European economic area to grant legal recognition to someone from another country, I assume that it would apply its own domestic tests and rights of eligibility. As I said, our research indicates that those countries in the European economic area which grant legal status for recognition to people for a gender change have processes which appear to be at least as rigorous as ours.
The Lord Bishop of Chester: My Lords, perhaps I may ask the Minister a complementary question. Is he satisfied that someone who is granted a gender reassignment certificate in this country will be fully accepted throughout the European Community on the basis of our tests? Given that we will not have some of the requirements of other countries—for example, evidence of being a post-operative transsexual—is he satisfied that our citizens will have equal rights when they travel abroad in the European Community?
Lord Filkin: Yes, my Lords, I am. It follows that the rights that we recognise that we have and obligations to recognition processes in other member states apply exactly to the rights we grant our residents in that respect. We and they are caught by the obligations of the Treaty of Rome with regard to the free movement of peoples. So, yes, we can have no doubt that they should be secure.
Lord Mackay of Clashfern: My Lords, is there an enforceable Community right which, but for this provision, the Act might contravene?
Lord Filkin: My Lords, it is to avoid any doubt that the Commons have made this amendment and why we believe that it is right to do so. As I said when I introduced the amendment, we believe that the Treaty of Rome already gives these rights. Therefore, we are ensuring that there is no implicit contradiction to that by the Bill as it was drafted when it left this place.
Lord Mackay of Clashfern: My Lords, I understood the noble Lord to say previously that the free
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movement of people was in question. Does that mean that the free movement of people requirement would carry with it an implication about recognition of a gender status? Or is he really depending on the fact that apparently in most if not all the European economic area countries the tests are in his view as rigorous as our own?
Lord Filkin: My Lords, that relates to the former point rather than to the latter. The latter point was a point of comfort to those who might have had any anxiety in that respect.
Lord Tebbit: My Lords, perhaps I may return to the point which I raised originally with the noble Lord. I do not think his reply was unduly clear. There are more communities than the European Community. It seems to me that to leave this bare reference to "the Community" or "Community rights" is not adequate. Can the Minister give us some precedents for that? If not, perhaps he will consider that this should be set out as rights under the European Communities Act, or something of that kind, or as rights of citizens of the European economic area, the European Union or whatever other organisation he likes to list. But the matter does not seem to be terribly precise.
Secondly, although I hope that all our partners in Europe will uphold the same high standards in the application of Community law as this country, I am not sure that that is necessarily true.
Lord Filkin: My Lords, as to the last point of the noble Lord, Lord Tebbit, were that to be the case there would he a right of redress in the courts to an individual who felt so aggrieved.
On the other issue of enforceable Community rights, that is the term referred to in Section 2 of the European Communities Act.
On Question, Motion agreed to.

COMMONS AMENDMENT
2 Clause 29, page 13, line 13, leave out subsection (2)
Lord Filkin: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 2. The amendment removes the privilege amendment passed in your Lordships' House at Third Reading.
Moved, That the House do agree with the Commons in their Amendment No. 2—(Lord Filkin.)
On Question, Motion agreed to.

COMMONS AMENDMENT
3 Schedule 1, page 15, line 33, at end insert—
"Council on Tribunals
8A In Schedule 1 to the Tribunals and Inquiries Act 1992 (c. 53) (tribunals under supervision of Council on Tribunals), before paragraph 22 insert—

"Gender Recognition

21AA. Gender Recognition Panels constituted under Schedule 1 to the Gender Recognition Act 2004 (c. 00).""

Lord Filkin: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 3.
During proceedings of the Standing Committee in another place there was discussion of an amendment, the effect of which would have been to require the president of a gender recognition panel to make an annual report to Parliament.
At that time my colleague, David Lammy, gave the assurance that the panels will report annually as part of the tribunals service. He went on to say that the Council on Tribunals will also undertake a supervisory role, reviewing the work of the panels from time to time and investigating any matters referred to it. I gave a similar assurance in correspondence back in February to the noble Lord, Lord Norton, and to members of the Select Committee on Constitutional Affairs.
As many noble Lords know, the Council on Tribunals plays a valuable role in supervising judicial panels. These powers are set out in the Tribunals and Inquiries Act 1992. The Council on Tribunals reports annually to Parliament through the Lord Chancellor. By conferring this supervisory role in respect of a gender recognition panel, the president of the panel will be able to take advantage of the council's specialist knowledge in the good governance of judicial panels.
Moved, That the House do agree with the Commons in their Amendment No. 3.—(Lord Filkin.)
On Question, Motion agreed to.
An amendment (privilege) made.
Lord Filkin: My Lords, as this is the conclusion of our interesting discussions on the Bill, I should like to pay tribute to the Bill team, to Peter Thompson and to all the officials who have worked well, and particularly for the way in which they have engaged positively with both those who disagreed and those who agreed with us outside the Chamber. That was exactly what I wanted. I compliment them on that.

Higher Education Bill
3.38 p.m.
Report received.
Clause 12 [Qualifying complaints]:
Baroness Sharp of Guildford Baroness Sharp of Guildford moved Amendment No.1:
Page 5, line 24, at end insert ", or
(c) as a member of staff or former member of staff of that institution"
The noble Baroness said: My Lords, the amendment is about the inclusion of staff within the Office of the Independent Adjudicator. I have again tabled this amendment, after moving it in Committee, to provide the opportunity to move closer to a solution to the problem.
Let me briefly recap the arguments that I made in the previous discussion. First, the Office of the Independent Adjudicator replaces the visitor system for dealing with complaints, but just for student complaints, not staff complaints.
Secondly, coverage of staff employment complaints by employment legislation and employment tribunals is satisfactory and we are not asking for any change in those procedures. For staff complaints that relate to whistle-blowing, the staff are protected by the Public Interest Disclosure Act. Again we are satisfied that this provides support for the staff in those circumstances.
However, there is a range of issues that are not covered by employment rights or the Public Interest Disclosure Act and are still dealt with for staff by the visitor system. They include, for example, procedural matters and some issues relating to academic freedom. They were the focus of our concerns in discussing the matter in Committee. I quoted to Members of the Committee the Parliamentary Under-Secretary of State in the other place, who said:
"In a small number of cases, there is some ambiguity. The Government do not believe that the status quo is acceptable, or that the independent route that we are establishing for students is necessarily an appropriate route for staff complaints".—[Official Report, Commons Standing Committee H, 12/2/04; col. 93.]
In the other place it was accepted that movement was needed. We talked a lot about that in Committee. The Minister was sympathetic to our case and argued that there was a case for looking at the issue again. He said:
"In the case of employment issues there is a remedy through employment law and the tribunals"—
as I have been saying—
"There are remedies relating to academic freedom, which, for good historic reason, have involved visitors and continue to do so. As I indicated, there is a class of cases that may not fall into either category and that may give rise to the difficulties that, I accepted, could occur, particularly with regard to human rights legislation. In that light we certainly will be prepared to look at that area, where there may be a lack of definition that is precise enough to meet the objections made".—[Official Report, 10/5/04; col. 109.]
It is in the light of that that I raise this issue again. I look forward to hearing from the Minister whether he has made any progress on those issues. I beg to move.
Lord Forsyth of Drumlean: My Lords, I support the amendment tabled by the noble Baroness, Lady Sharp. She is right to point out that Ministers have now made several assurances that they are addressing the problem. At this stage I very much look forward to hearing how the Minister plans to do so.
Clearly, there is an issue. I have found it difficult to get my brain round the difficulty that arises from the replacement of the visitor system for student complaints on the grounds that it does not satisfy the Human Rights Act 1998 and Article 6 of the ECHR, yet apparently the Government are prepared to allow the loose end

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whereby staff are expected under the Bill to continue to use the visitor system. I congratulate the noble Baroness on her persistence on this matter. She certainly has our support in pressing the Government to resolve it now.
Baroness Warwick of Undercliffe: My Lords, noble Lords will be aware that Universities UK, of which I am chief executive, and as such declare an interest, has opposed amendments in this House and another place that seek to bring all staff complaints within the remit of the Office of the Independent Adjudicator. We have done so for a number of reasons, which I shall briefly outline.
I want to make it clear that opposition to these amendments does not mean that we do not recognise that there is a small number of staff complaints in pre-1992 universities which still fall within the jurisdiction of the visitor. Indeed, in Committee I made it clear that there is an issue that warrants further discussion, not least because of the ruling of this House in 1993 that, where the visitor acts within his jurisdiction, that jurisdiction is exclusive and complainants are prevented from seeking redress from the courts. As I think I made clear, there is a question over whether the right way to address that is to remove the visitor's jurisdiction or to remove the immunity from judicial review.
Following the report of the Nolan committee, Universities UK and the Standing Conference of Principals established a group to devise guidelines on procedures for higher education institutions in dealing with public interest complaints. Those guidelines included a final stage for independent appeal against the findings or penalties concluding the internal procedures. The group recommended that all institutions should adopt such procedures.
UUK is committed to reviewing the guidance, so this is an area that we can find an early opportunity to revisit. I know that the noble Baroness, Lady Sharp, has been disappointed with the time that it has taken to respond to concerns raised during the passage of the Bill relating to such complaints. Those are now being taken forward. I hope that the noble Baroness, Lady Sharp, will be reassured to know that I have written to the general-secretary of the Association of University Teachers to invite her to meet me and other interested parties to discuss the issues raised by the debates in this House and in another place. Although I remain opposed to the idea that the Office of the Independent Adjudicator is the appropriate forum for all staff complaints, I hope that through discussion we can find a satisfactory way forward.
There are clearly a number of other issues that should be explored. It would not be right to pre-judge the appropriate way forward without being clear about the nature and extent of the problem.
The amendment includes all staff complaints. Noble Lords will be aware that the Office of the Independent Adjudicator already operates as a voluntary scheme. It was established to deal with student complaints alone. Its establishment was the result of consultation with
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the sector as to the best way forward. It would not be right at this stage, and in this way, to extend its remit so dramatically.
Notwithstanding the areas in which the visitor retains exclusive jurisdiction in pre-1992 universities, we should not lose sight of the fact that staff and students are in essence and in law very different categories. The relationship between higher education institutions and their students is distinct from the relationship between those institutions and their staff. That said, I hope that the noble Baroness, Lady Sharp, will agree that the passage of the Higher Education Bill has thrown light on that subject. I join other noble Lords in congratulating her on her dogged pursuit of the issue.
3.45 p.m.
Lord Triesman: My Lords, I join both noble Lords who have thanked the noble Baroness, Lady Sharp, for raising these issues. As I said in Committee, there is a real issue to be resolved.
I hope that the noble Baroness will appreciate that we accepted during the debate in another place and in Committee that the current position was far from ideal, particularly the visitor's jurisdiction over staff complaints. As noble Lords have pointed out, there is an inconsistency in removing the visitor's jurisdiction over student complaints but not that over staff complaints. There is also an inconsistency between staff rights in chartered universities and those in new universities.
We accept that we should address those problems now; therefore we have tabled an amendment today to remove the exclusive jurisdiction of the visitor over academic staff. If it has taken us a little while to get to this point, it was in the effort to ensure that we got the right solution rather than just a solution. However, it is clear that the student complaints scheme as currently proposed would not be appropriate for staff, as it relies on institutions accepting the recommendations of the reviewer—without the consensus at present on the coverage of staff, they are unlikely to do so.
It is for Universities UK, the Universities and Colleges Employers Association and the staff unions to consider whether separate independent review arrangements need to be put in place. I was very pleased to hear the noble Baroness, Lady Warwick, indicate that Universities UK will be willing to discuss the problems and the current arrangements with the Association of University Teachers, and others. I am sure that that will be welcomed and encouraged by your Lordships' House. Should the parties want the Department for Education and Skills to be involved in these discussions, which would consider the merit of alternative arrangements and the benefits of applying those across the sector, we would obviously be willing to offer our support.
I stress that once the visitor's exclusive jurisdiction is removed he or she will still be able to act in a non-visitorial capacity as an independent reviewer on staff complaints on, for example, matters of academic freedom. I hope that the noble Baroness, Lady Sharp,

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will accept that in the timescale available in this Bill it is not possible to achieve a complete resolution of the issue. However, we have made some progress, and we can use the Bill to address the anomaly—
Lord Forsyth of Drumlean: My Lords, I apologise for interrupting the Minister; I am a bit of a new boy here. He said that he had tabled an amendment today. Could he point out where it is? I am not aware of the text of the amendment, or where it has been tabled.
Lord Triesman: My Lords, the amendment, which removes visitorial jurisdiction, comes relatively late in the order, and I will ensure that its precise identification is available to the noble Lord as quickly as possible.
For the moment, while we have made progress, we can use the Bill to address the anomaly that we all accept exists in the visitors' jurisdiction. We also welcome the point that has been made by the noble Baroness, Lady Warwick, to offer discussions to the staff unions, and we hope that those discussions will progress well. Apparently the amendment is before Clause 43. I urge the noble Baroness to withdraw her amendment.
Baroness Sharp of Guildford: My Lords, I am extremely grateful to the Minister. I was unaware that the new amendment had been tabled. Am I right in thinking that it is Amendment No. 52A? No, that is on the right of appeal. The amendment is not on the Marshalled List, so I take it that we shall be considering this amendment at Third Reading. The Minister indicated to me in discussions that we had outside the Chamber that he was likely to be fairly forthcoming on this issue, so I was expecting a fairly benign answer from him, as indeed we have had. I take it that we will see an amendment at Third Reading.
I am grateful to those noble Lords who have supported me, and to the noble Baroness, Lady Warwick, for the good news that Universities UK and the Association of University Teachers will be getting down to talks on this matter. As I indicated in Committee, my main purpose in tabling this amendment was to try to get some movement on this issue—
Lord Triesman: My Lords, I owe the House an immediate apology. My belief was that the amendment was tabled today, but I understand that in fact it is being tabled, and it will be available for the debate in your Lordships' House next Monday. If I have caused any misapprehensions, I entirely apologise, but the material will be there, and it will precisely meet the specifications that I have identified.
Baroness Sharp of Guildford: My Lords, as I say, I am extremely grateful to the Minister for the real effort that I know that he has put in to securing some movement on this issue. It is excellent that that is so. This issue has been around for the past four or five years. We have a good student appeals and complaints mechanism up and running now, and let us hope that
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within the next year we can see some positive movement. Staff complaints is a fairly minor area, but it is a nagging area. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Triesman Lord Triesman moved Amendment No. 2:
After Clause 18, insert the following new clause—
"EXTENSION OF PERIOD WITHIN WHICH DISCRIMINATION PROCEEDINGS MUST BE BROUGHT
(1) In section 76 of the Sex Discrimination Act 1975 (c. 65) (period within which proceedings to be brought) after subsection (2) insert—
"(2A) Where in England and Wales—

(a) proceedings or prospective proceedings under section 66 relate to the act or omission of a qualifying institution, and

(b) the dispute concerned is referred as a complaint under the student complaints scheme before the end of the period of six months mentioned in subsection (2)(a),

the period allowed by subsection (2)(a) shall be extended by two months.
(2B) In subsection (2A)—

"qualifying institution" has the meaning given by section 11 of the Higher Education Act 2004;

"the student complaints scheme" means a scheme for the review of qualifying complaints, as defined by section 12 of that Act, that is provided by the designated operator, as defined by section 13(5)(b) of that Act."

(2) In section 68 of the Race Relations Act 1976 (c. 74) (period within which proceedings to be brought) after subsection (3) insert—
"(3A) Where in England and Wales—

(a) proceedings or prospective proceedings by way of a claim under section 57 relate to the act or omission of a qualifying institution,

(b) the dispute concerned is referred as a complaint under the student complaints scheme before the end of the period of six months mentioned in subsection (2), and

(c) subsection (3) does not apply,

the period allowed by subsection (2) for instituting proceedings in respect of the claim shall be extended by two months.
(3B) In subsection (3A)—

"qualifying institution" has the meaning given by section 11 of the Higher Education Act 2004;

"the student complaints scheme" means a scheme for the review of qualifying complaints, as defined by section 12 of that Act, that is provided by the designated operator, as defined by section 13(5)(b) of that Act."

(3) In Schedule 3 to the Disability Discrimination Act 1995 (c. 50) (enforcement and procedure), in paragraph 13 (period within which proceedings must be brought) for sub-paragraph (2) substitute—
"(2) If, in relation to proceedings or prospective proceedings under section 28V—

(a) the dispute concerned is referred for conciliation in pursuance of arrangements under section 31B before the end of the period of six months mentioned in sub-paragraph (1), or

(b) in England and Wales, in a case not falling within paragraph (a), the dispute concerned relates to the act or omission of a qualifying institution and is referred as a complaint under the student complaints scheme before the end of that period,

the period of six months allowed by sub-paragraph (1) shall be extended by two months.
(2A) In sub-paragraph (2)(b)—

"qualifying institution" has the meaning given by section 11 of the Higher Education Act 2004;

"the student complaints scheme" means a scheme for the review of qualifying complaints, as defined by section 12 of that Act, that is provided by the designated operator, as defined by section 13(5)(b) of that Act.""

The noble Lord said: My Lords, in moving the amendment, which is grouped with the consequential amendment, I again thank the noble Baroness, Lady Sharp, and the noble Lord, Lord Skelmersdale, who put forward the arguments in Committee for this provision, which I am pleased to say we have decided to accept.
The time limit for submitting court cases under Part 4 of the Disability Discrimination Act is generally six months, but there are provisions to extend this by two months where the dispute has been referred to an approved conciliation service within the time limit. We accept that a similar extension should apply to complaints against qualifying institutions referred under the student complaints scheme. Although the original amendments referred only to cases of discrimination on grounds of disability, for the sake of consistency this amendment also provides two-month extensions to the six-month limits for court cases against qualifying institutions under the Sex Discrimination Act and Race Relations Act. Where the Acts provide for specific extensions in other circumstances, such as cases referred to conciliation, there will be only one automatic extension of the time limit. I hope that the amendment meets the concerns raised by noble Lords. I beg to move.
Baroness Sharp of Guildford: My Lords, I am grateful to the Minister for bringing forward this amendment, which answers precisely the points that I raised in our discussions in Committee. It was not a major issue, but for those affected this amendment means a great deal. I raised the original amendment on behalf of the Royal National Institute for the Blind and for Skill, the organisation that campaigns on behalf of disabled students. I pass on their thanks to the Minister. In the ordinary course of events, the noble Baroness, Lady Darcy de Knayth, speaks on behalf of Skill. As some noble Lords may know, she has been indisposed for some time, but she was back yesterday, and I was able to tell her that we had secured this amendment and she was extremely pleased. She asked me to give her thanks to the Minister.
While discussing disability issues, I also thank the Minister for the letter of clarification in relation to Clause 12(2) and complaints by disabled students about the failure of institutions to make reasonable adjustments to academic processes. It would be useful to get some part of that letter on the record, and I will read one paragraph. The Minister wrote to me:
"It is, as you say, not possible to list all the circumstances in which complaints may qualify, as teaching and assessment methods differ between institutions and within subject areas, and, of course, the OIA will make its decisions on the individual circumstances of each complaint. However, I can confirm that if students are excluded from components of a course, such as field trips, work placements or study abroad and the institution fails to make reasonable adjustments to the assessment arrangements, including to the maximum marks that can be achieved, then such
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complaints would come within the remit of the reviewer. Similarly, if disabled students are treated less favourably than other students in terms of resources available to them, then these too are complaints which are within the reviewer's remit. Of course, we would normally expect the student to exhaust the internal complaints procedures of the institution before referring the case to the reviewer to allow the institution to resolve any problems".
I am grateful to the Minister for this clarification, which has helped to identify and calm the fears around that issue. This is a very satisfactory outcome to the probings that we made on these two issues in Committee. I thank the Minister.
Lord Skelmersdale: My Lords, I too congratulate the Minister on this amendment, which the Government proposed in Committee in answer to an amendment standing in the name of the noble Baroness, Lady Sharp, and another in the names of my noble friends Lord Forsyth and Lady Seccombe. Both covered the single point that this Bill and the Disability Discrimination Act differ in one important respect, that of the time given to disabled students to complain of unfair treatment in higher education establishments. Thanks to this government amendment, which was welcomed by the noble Baroness, Lady Sharp, and by the RNIB and Skill, the Bill and the Act are now on a par. As the Minister has pointed out, it is not only disabled students who need the extra two months, but those who are sexually or racially discriminated against; something that I confess did not occur to me in Committee. My stance then, that it would be easier to amend previous legislation than this Bill, has been vindicated. I am extremely grateful.
On Question, amendment agreed to.
Lord Renfrew of Kaimsthorn Lord Renfrew of Kaimsthorn moved Amendment No. 3:
After Clause 20, insert the following new clause—
"ACADEMIC SALARIES REVIEW BODY
(1) The Secretary of State shall appoint an Academic Salaries Review Body ("the Review Body") to provide independent advice on the remuneration of teachers and researchers in institutions of higher and further education in the United Kingdom.
(2) In reaching its recommendations the Review Body is to take into account—

(a) comparability between academic salaries and those of other professions since 1950, and

(b) the need to recruit, retain and motivate suitable and qualified academic staff in a full range of academic disciplines in institutions of higher and further education in the United Kingdom.

(3) In appointing members of the Review Body the Secretary of State shall include representation from institutions of higher and further education and from other professions including those for which a university degree is not an obligatory qualification.
(4) The Secretary of State shall make arrangements to submit the report of the Review Body annually to both Houses of Parliament together with his own plans in relation to the implementation of its recommendations."
The noble Lord said: My Lords, several noble Lords have already observed that the trouble with this Bill is that it does not altogether effectively address the central problems in our higher education system today. Among these are under-funding of staff, as well as of the under-funding of universities in general, and

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an astonishing insensitivity to the central dilemma of access; namely, that students from low income backgrounds are often debt averse.
I declare an interest as a university professor. In Committee, I introduced an amendment, and my intention was to focus attention on what everyone agrees is one of the most serious problems affecting our universities today. University staff are very poorly paid. The gap in remuneration between university teachers and other professions has steadily increased over the past 20 to 40 years. The noble Lord, Lord Eatwell—I am sorry that I do not see him in his place—emphasised that point at Second Reading. My noble friend Lord Tugendhat spoke very effectively to that amendment, as did other noble Lords.
4 p.m.
In Committee, however, I placed my proposed academic salaries review body under the wing of the new Arts and Humanities Research Council, which was widely felt to be unsuitable. Following the advice of several noble Lords who spoke, I have now been able to rectify that. Moreover, following the later advice of the noble Lord, Lord Walton of Detchant, and others, I have simplified the proposal, which makes the plan much less prescriptive in its specifications concerning the composition of the board.
I was taken aback in Committee when one much respected noble Lord opposite, after endorsing the figures that I had quoted—a 45 per cent decline in academic earnings compared to non-manual income over the past 20 years—very soundly observed that that was so well known that there may be no need,
"to declare again that academic salaries are far lower than comparators. We need the funding to do something about it".—[Official Report, 10/5/04; col. 30.]
I am afraid that it is beyond my power and, I suspect, beyond the power of this House to generate the necessary funding by amendment. We all know that the fee income generated by the Bill will go about half way to cover the universities' current recurrent funding deficit. It is therefore highly unlikely that it will make any significant positive impact on the current level of salaries. It will be lucky to pay them, let alone to increase them.
We can at least show that this is a matter of continuing concern of which we and others deserve to be reminded annually until some effective move can be made to rectify the position. That is what the amendment seeks to do. It is a rather modest amendment, but it will at least have the effect of keeping that important issue before our eyes. I beg to move.
Lord Walton of Detchant: My Lords, I am happy to add my name to this amendment and therefore to support it very much in the terms that have been expressed by the noble Lord, Lord Renfrew. When I began practice in the National Health Service at its inception in 1948—I subsequently served in it for 40 years—there were repeated problems and many
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conflicts between the members of the medical profession on the one hand and government on the other relating to pay and other financial support for doctors.
The first row came within two years when GPs complained, as independent contractors, that their salaries were inadequate. It turned out that the Government had taken GP income tax returns before the National Health Service as a guide to what their subsequent remuneration should be. When the GPs found that to be inadequate, it perhaps suggested that general practitioners were no more honest than the rest of the population in relation to their income tax returns.
Over the years, there was conflict after conflict. There were repeated negotiations between doctors, government and the Department of Health in relation to remuneration issues, which were sometimes so bitter and prolonged that the late Baroness Castle of Blackburn, when she was Secretary of State for Health, referred to the British Medical Association as the shock troops of the middle classes.
This preamble is relevant because when ultimately the Government agreed to establish a review body relating to the remuneration of doctors and dentists those conflicts ceased. Ever since that review body was established, there has been a satisfactory situation where government and the profession have agreed with the advice of that review body on all issues relating to remuneration. Similar issues arose over the pay of nurses and teachers and other review bodies have been similarly effective.
When the Bett report on academic salaries was published a few years ago, I remember asking a question in this House. The then Minister, the noble Baroness, Lady Blackstone, who I am glad to see in her place, said that the Bett report was an important report but that the remuneration of academic staff was a matter for the universities and not for government. No doubt, we shall get the same response from the Minister today.
A major issue of remuneration of university academic and research staff exists in the terms that were so clearly expressed by the noble Lord, Lord Renfrew. To establish a review body to give advice to government on the remuneration of teachers and researchers in higher and further education would help to resolve that problem. I am therefore happy to support the amendment.
Lord Morgan: My Lords, I spoke on this issue before. Again, perhaps I may warmly congratulate the two noble Lords who have spoken on the principle of what has been raised. There is no question but that the low level of academic stipend has been an extraordinary national scandal for a very long time; in fact, since 1979–80. These are very talented people who, commonly and necessarily, because they do graduate work, enter the profession later than many other people. Although top salaries have risen, the starting point is still very low, the spine is very long and the general economic and financial expectations of university teachers are appalling. I speak as a former vice-chancellor. The situation was bad nine years ago and it is worse now.

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We have funding for the universities, which is enormously welcome, but, inevitably, the new funding will go into proper development and the building up of the superstructure facilities for students, and so forth. There will not be anything like sufficient funds for those very talented, very poorly paid people in our society. It may be that the Government will say that this is perhaps the wrong Bill in which to have this particular proposal, which I can understand. But if that is the reply, I should be very grateful if my noble friend the Minister would tell us what would be the right Bill and what would be the procedure.
It seems that a yardstick of some unassailable kind is needed for university stipends: when I began as a university teacher in the 1950s, they were part of the public service scales of the Civil Service. That has long been set aside. Now university teachers are left to the mercy of cash-strapped universities and the most valuable people—the people who create our university system—are the victims. If the amendment is not acceptable in its present form, I hope that we shall hear from the Government what would be acceptable and whether very urgent action will or will not be taken to deal with this national scandal.
Lord Tugendhat: My Lords, I agree so strongly with the three speeches that have just been made that there is very little to add. I declare an interest as Chancellor of the University of Bath. I think that a great many problems in the economy and social matters can often be helped towards a solution if there is a degree of publicity and transparency surrounding them.
It may be very well known in this House, in academia or in Whitehall that academic salaries have fallen very far behind comparable activities, but I do not believe that it is so tremendously well known in the public at large. My impression is that among the public at large there is a certain misunderstanding about the levels of remuneration for academics and a certain assumption that everyone lives like Oxbridge dons used to live before the war. It may be surprising that that misapprehension remains, but I think that to a large degree it does in many circles.
Therefore, the important point in the amendment tabled by the noble Lord, Lord Renfrew, is his reference to providing "independent advice". I think that the provision of independent advice, which would, I hope, receive a suitable amount of publicity in the newspapers, and so forth, would contribute to public understanding and therefore to the resolution of the problem.
I am struck by the success achieved over time—it did take a long time—by the Senior Salaries Review Body in bringing about an improvement in the salaries of senior civil servants and even, to some extent, of Ministers. The extent to which senior civil servants now earn salaries below those of their comparators in some other professions is much less than it was before these matters received publicity.
I want to make only one small comment on the wording of the amendment tabled by my noble friend Lord Renfrew. It refers to comparability between academic salaries and those of other professions. For this
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body to do its work most effectively, it should compare full professors in universities with personal assistants in the financial services sector. Personal assistants in financial services provide an indispensable service, as I know well and to my own benefit, but it is strange that full professors in universities often earn less than such personal assistants. Comparisons of that sort and, indeed, of others made by an advisory body of this kind would be helpful.
Of course I accept, along with other noble Lords, that it is for the universities themselves as employers to take decisions about how much their employees are to be paid, but that in itself is not an argument against a body of the sort recommended by my noble friend. Quite apart from whatever the Minister may say about who is responsible for salaries, I would be very interested to hear why it would be a bad thing for more publicity and transparency to be brought to bear in this area.
Lord Corbett of Castle Vale: My Lords, I declare an interest as president of the Josiah Mason sixth-form college in my former parliamentary constituency of Birmingham Erdington. There is a certain attraction in this amendment and I think that there is agreement on all sides of the House that academic salaries in both higher and further education have become out of kilter. However, I have to say how much I agree with a note I have received from the Association of Colleges, which may also have been sent to other noble Lords. It makes the point that this amendment is an attempt to treat both the higher education sector and the further education sector as if they were parts of the public sector. They are not. Indeed, it was the noble Lord's government of a few years ago that took them out of the public sector and incorporated them as independent bodies. Since then they have been responsible for their own affairs.
I turn now to talk about the further education sector. After many difficulties during the changeover period, the colleges are now responsible for negotiating levels of salary with all their staff, not only their academic staff. An immediate effect of this amendment, were it to be carried, would be to do away with that system, thus sending us back to conducting a plethora of negotiations in colleges up and down the land.
The more important objection to the amendment is that it attacks the independence of colleges. Certainly it was my experience, when the colleges were taken out of the public sector and made to stand on their feet, that part of that process meant that, while standing on their own feet they also went for each other's throats. I can say from personal knowledge that in the city of Birmingham there was a period of some years when every college wanted to attract the maximum number of students. They did not care two hoots about what happened to the college down the road and, let it be said, little consideration was given to the courses on offer—whether they repeated courses already available a couple of miles away or whether the needs

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of certain groups of students were ignored altogether. What had happened was that the accountants were put in control.
Happily, those days are over. I can speak only of the City of Birmingham, but today there is extremely good co-operation between the colleges in the city. I hope that that is also the case elsewhere. Colleges sit down together to plan provision across the city for the various age groups, not least for the enormous number of adult part-time students who, rather than going back into education, are increasingly entering education properly for the first time in their lives. Instead of colleges competing with each other, sensible co-operation now applies.
I have some sympathy for the wish to put the clock back, but I do not think for a moment that the noble Lord is arguing for a return of colleges of further education to the public sector. However, given that they stand on their own feet, I do not see how what is suggested in the amendment can be imposed upon these independent bodies.
The noble Lord, Lord Walton of Detchant, cited the experience of the National Health Service, which makes my point exactly. The National Health Service is in the public sector with one employer, the Government. That example helps to make my point in objecting to what is being proposed in the amendment. Not for a minute do I seek to quarrel with anyone who points out that there is a real crisis in the payment levels of those in higher and further education which ought to be addressed, but I do not feel that this is the way in which to do so.
4.15 p.m.
Baroness Sharp of Guildford: My Lords, I am reminded of the days when I was a parliamentary candidate. When knocking on doors and canvassing, people would say, "I would vote for you if I thought you could win". I have much sympathy with the amendment of the noble Lord, Lord Renfrew, as well as for the point made by the noble Lord, Lord Detchant, who emphasised the satisfactory work of pay review bodies on some occasions. Nevertheless, I also pick up on the point made by the noble Lord, Lord Corbett, that the amendment seems to look back to a different era. As he rightly pointed out, colleges and universities are now independent. When we raised the issue of the Betts report, the answer given by the noble Baroness, Lady Blackstone, at the time was that this is a "matter for the colleges". Today that is a fact.
A new pay scale has just been negotiated and agreed. It is a very long one and embraces its own areas. In a sense, therefore, a degree of locally negotiated pay is now coming in; the system is moving in that direction and it would be difficult to roll it back. Members on these Benches have sympathy for the case for a little more in terms of nationally negotiated arrangements but, equally, times have moved on. Therefore I do not feel that this amendment is appropriate.
Baroness Carnegy of Lour: My Lords, the noble Baroness has just pointed out that there is a new pay
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scale. However, the point here is that—as we were told by the noble Baroness, Lady Warwick of Undercliffe, when this matter was raised in Committee—within universities staff pay accounts for 58 per cent of their total expenditure. That means that if academic salaries in the universities are to be brought up to a reasonable level, they need much more money, but the extra funding that they will receive under this Bill is to be limited by a cap. So the Government are doing nothing to help the universities achieve this.
I hope that the Minister is not going to say in response that this is a matter for the universities and the Higher Education Funding Council for England. However, she is smiling so perhaps that is exactly what she is going to say. However, that is simply not going to help the situation at all because the extra money under the Bill is so limited.
The point made by my noble friends Lord Tugendhat and Lord Renfrew that a little publicity would help things along is important. Whether that comes about from a review body or by some other means, regular publicity highlighting academic salaries would help the public to understand that the Government themselves are being extremely frustrating about this matter. Somehow, academic salaries have to improve, but if 58 per cent of universities' budgets is already accounted for in this way, it is no good us looking to the Higher Education Funding Council for England to achieve that unless it is given a lot more money to do so.
Lord Wilson of Tillyorn: My Lords, I rise briefly to speak in favour of the amendment for much the same reasons just outlined by the noble Baroness, Lady Carnegy of Lour: it would give publicity to this issue. For some years, as Chancellor of a Scottish university, I have been all too aware of the very low level of academic salaries, but it is only recently that I have come more directly back into contact with Oxbridge, referred to by the noble Lord, Lord Tugendhat. How distant it is from any dreams one might have had of what those places were like before the Second World War.
The college of which I am Master has recently lost a Fellow who concluded that he could no longer go on in the expectation of a salary that would always be lower than that of the driver of a train on the London Underground. Consequently we have lost a man of great brilliance and great potential.
I believe that there is a need to bring these facts to the attention of the informed public and Members of Parliament on a regular basis without, I hope, ever getting into a situation where that becomes restrictive. It is terribly important that universities should be able to raise salaries for academic staff who deserve it. We should not get into a situation where everything is rigidly set down in rules and flexibility is reduced.
Lord Norton of Louth: My Lords, I am pleased that my noble friend has returned to the subject that he raised in Committee. I was very struck by what my noble friend Lord Tugendhat said. Not long ago, I was speaking to a leading law firm, not too far from here,

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and was told that its starting salaries were £80,000 a year. An academic finishing a career would not be earning anything approaching that kind of salary.
I have made the point in your Lordships' House before that academics are underpaid, under-resourced, undervalued but overburdened by bureaucracy. If we are to continue to deliver a high quality of education able to compete with that offered in other countries, each of these problems has to be addressed. My noble friend's amendment is therefore necessary but not sufficient.
I declare an interest not only as an academic but, perhaps more importantly in this context, as a head of department. I am conscious of the extent to which universities are surviving on the good will of academics. I am profoundly aware of how much members of my department are putting in to ensure a level of excellence in teaching and research that is not met by the salaries they receive. As the head of department I know the problems of recruitment and retention as a result of inadequate salaries and working conditions. We cannot carry on without addressing the question of poor salaries; we cannot carry on without addressing the issue of resources. That is why the later amendment on additionality is so important.
It can be argued—and has been—that the amendment may not be appropriate in the Bill, but I want to draw out the relationship between the Bill and the problem embodied in subsection (2)(b) of my noble friend's proposed new clause. Students will incur substantial debts in taking a first degree; if they want an academic career, they will need to devote their time and finances to acquiring a doctorate; by the time they are ready to enter the academic world in their mid to late twenties, they will be carrying a massive burden of debt. Why then should they go in to a poorly paid university job when they can earn far more abroad or in another profession? We must recognise the linkage.
We simply cannot go on as we are. There are already major problems with recruitment and retention. They will become worse if the cost of education increases and the salaries paid to academics continue to decline relative to other professions. For the reasons I have touched upon, I therefore welcome my noble friend's amendment. It addresses a major problem that confronts higher education and which is likely to become even more of a problem once the Bill has been enacted.
In replying, the Minister will not only be responding to a specific amendment but sending out a wider message to higher education. It is vital that that is not a negative message.
Lord Forsyth of Drumlean: My Lords, I congratulate my noble friend not only on moving the amendment at this stage of the proceedings on the Bill but also on the splendid debate that we had at an earlier stage on the issue of academic salaries. I do not propose to repeat any of the arguments now.
On the face of it, the amendment looks like a well-designed fly for the Government; it should attract their attention. The Minister is looking puzzled. "Fly" as in fishing. It seeks to establish a review body which would
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achieve nothing, so it should have enormous appeal to the Government. It is very clever of my noble friend to have redrafted it in that way.
I am torn because the noble Lord, Lord Morgan, described academic salaries as a national scandal. I do not think it is a national scandal at all; I do not think the nation knows anything about it. I freely admit that it was a great shock to me to discover what academic salaries were. I found out only by virtue of the role I am carrying out in your Lordships' House in respect of the Bill. I fully acknowledge that some of the shame should be borne by me as well as by the Government because this happened on our watch when we were in government as much as it has happened under this Government.
But the notion that this serious problem—which goes to the central structure of the edifice of higher education in Britain—can be resolved by publicity and the setting up of a review body that will draw attention to the plight of academic salaries is, I fear, a mistake.
If one looks at the salaries of the vice-chancellors one notices that they have not been subject to the same constraint as some of those who work under them—there has been a movement in direction among the vice chancellors if not among the humble lecturers—but I do not believe for one moment that anyone responsible for running any of these institutions would not like to resolve the problem of academic pay tomorrow if they could. The way they would do that would be through resources and funding. While I do not wish to widen the scope of the consideration of the amendment, I do not believe that the Bill addresses the problem of under funding or will provide the resources to do so.
I have a high regard for my noble friend Lord Renfrew and I would like to support him, but I fear that to set up a body of this kind for the sake of creating publicity—a body which will, as the noble Lord, Lord Corbett, pointed out, interfere in what are essentially private institutions subject to public support—would be a mistake. I cannot support my noble friend's amendment but I very much support his urgent plea. I endorse his view that unless we address the question of academic pay we will see crumble our centres of excellence and our institutions of higher education.
Baroness Blackstone: My Lords, I never expected to find myself agreeing with almost every word that the noble Lord, Lord Forsyth, said. He is absolutely right—it is not a good idea to set up institutions that are not very likely to produce results. I entirely agree with him—and therefore disagree with the noble Lord, Lord Tugendhat—that an academic salaries review body is hardly likely to lead to a huge amount of publicity in favour of the cause of increasing academic salaries. This is not an issue on which it is easy to engage the great British public. For all the wonderful work that academics do, they are not like nurses; they do not feature in the public imagination. So I do not believe that we should set up a body of this kind for that reason.
I also disagree with my noble friend Lord Morgan and the noble Baroness, Lady Carnegy of Lour, that there is not enough money under the Bill to make some

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difference to academic pay. It is not inevitable that all the money will go on facilities and other items related to better quality in terms of scientific laboratories, libraries and so on, although I hope there will be an improvement in them as well.
The Government, vice chancellors and those who manage universities must take a responsible view in looking at the extent to which academic salaries have fallen—and, in that sense, I am very sympathetic towards what lies behind the amendment of the noble Lord, Lord Renfrew—but I ultimately agree with my noble friend Lord Corbett. Universities and further education colleges—and we must never forget the colleges because a great deal of HE goes on in them—are independent institutions. I believe that it would be better—this is probably also the position of Universities UK, the body that represents universities—to leave decisions about academic salaries with the universities so that they have the discretion they need, rather than set up a salaries review body which is far more appropriate for those public services that are entirely run by the Government or their agencies, such as the NHS.
The noble Lord, Lord Walton of Detchant, mentioned that when the Betts review was being debated in this House, my response was that I thought it more appropriate for that task to be left to the universities. I said that as a Minister and I now say it again as someone who is about to become a vice-chancellor. I think that that will lead to better outcomes and I agree, therefore, with the noble Baroness, Lady Sharp.
4.30 p.m.
Baroness Ashton of Upholland: My Lords, I begin by saying to the noble Lord, Lord Renfrew, that I was pleased that he was able to disentangle this issue from the Arts and Humanities Research Council. I understand and appreciate all noble Lords' concern. The theme that has run through this debate has been everyone's concern about academic salaries. In our previous discussions, we have talked about the way in which they have lagged behind other salaries and pay awards. I do not think I need add anything more—we have acknowledged it. My noble friend Lady Blackstone acknowledged it as a Minister; my right honourable friend Alan Johnson has acknowledged it as a Minister; and it has been acknowledged in public many times by the department.
At the risk of saying exactly what the noble Baroness, Lady Carnegy, predicted I would say, we do not believe that it is the Government's job to regulate salaries in the further and higher education sector or, indeed, to dictate to institutions at what level they should set salaries.
The amendment would impose a duty on the Secretary of State to prepare an implementation plan for the review body's recommendations. But the Secretary of State does not have any powers to control academic salaries, and the amendment does not confer any on him.
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Higher and further education institutions are independent, autonomous bodies. We want to make sure that they are managing their own resources as they see fit. Institutions, as employers, are responsible for determining the level of pay for their staff through negotiation with staff and the relevant unions. I agree wholeheartedly with everything that was said by my noble friends Lord Corbett and Lady Blackstone.
My noble friend Lord Morgan asked which Bill such a proposal would belong in, if not this one. I do not think it is a question of a Bill. Noble Lords have raised very interesting issues. We have discussed the importance of the Betts report in this House and have talked about Universities UK and the joint negotiations taking place.
In terms of monitoring, measures are in place to extend the data that are now available on staffing matters in higher education through the Higher Education Statistics Agency. That will give institutions a better picture of the situation. From 2003–04 it will look at all academic staff and, for the first time, non-academic staff, and then at all categories of staff from 2004–05. That may generate a little more publicity, although I agree with my noble friend that academic pay does not capture the imagination in the way that the pay of nurses and others does—more's the pity, as I am sure your Lordships will believe, but that is the reality. It is important that we are very mindful of this and recognise the importance of academic pay in providing for world-class institutions and ensuring, as the noble Lord, Lord Forsyth, said, that they do not crumble.
I believe that the Bill represents a way of supporting, with further funding, institutions in order to make the right kind of choices between investment of different kinds, including investment in their workforce, who are so critical. I was pleased that the noble Lord, Lord Forsyth, is supportive of this. I look forward to his plans for further investment. Clearly I will have to get my fishing analogies right, which may be difficult. None the less, this is a very important subject.
We do not believe that this amendment is the right way to go. I accept that the issues are very dear to your Lordships and that it is right and proper for this House to continue to debate them. But we do not believe that the amendment would be effective in terms of doing anything appropriate for institutions. We think it is right for institutions to make the decisions; we think the new joint arrangements on negotiations should be given the opportunity to work effectively. On that basis, I hope that the noble Lord will feel able to withdraw his amendment.
Lord Renfrew of Kaimsthorn: My Lords, it has been a very interesting debate and, indeed, a rather sad one. I am very grateful to all noble Lords who have spoken and to the Minister for her very courteous treatment. "More's the pity" were her words—I quote her with accuracy, I think. That is the position that we have reached in university funding.
The noble Baroness, Lady Blackstone, did not suggest very many solutions but said that it was not easy to engage the great British public in the matter of

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university pay. To my regret, I think that that was the position of my noble friend on the Front Bench. If I felt that he had a clear plan up his sleeve to remedy university funding when the present Opposition are in power, then I would have been much more encouraged by that position.
I also listened very carefully to the noble Baroness, Lady Sharp. In her speech in Committee on the amendment which had the same intention, she said that she was with it in spirit but did not feel that it was in the right place in the Bill. That was when it was associated with the Arts and Humanities Research Council. So I was disappointed to sense today that she was less with the amendment in spirit than she had been, and I did not altogether understand the difference.
I used and withdrew the word "complacency" in a previous discussion on this amendment, but I want to reintroduce it into this discussion in the light of the debate we have just had. I have not heard one individual offer any hope of improvement except, perhaps, the noble Baroness, Lady Blackstone, who said that more money is coming into universities, so why do they not spend it in this way? I will study with great interest the salary trajectory within the university which is so fortunate as to have the noble Baroness as a future vice-chancellor. I predict that she will find it difficult to increase academic salaries substantially when most commentators on the Bill agree that the top-up fees will bring in sufficient funding to go about halfway towards covering current university deficits. I shall be very interested to learn how they are supposed to offer a significant enhancement in academic salaries.
The comments which impressed me the least—to say that I was irritated would be a discourtesy to noble Lords—were those of the noble Lord, Lord Corbett. He said that since universities were not public bodies, we should not give attention in this form to their problems. It is perfectly true that universities are independent bodies and many of us wish that they were much more independent than they are. But one of the defects of the present Bill, it has been argued, is that the top-up fees are capped. I do not wish to enter into that argument; I simply remind noble Lords that if universities wish to spend more money on academic salaries, they would not have the means. My noble friend Lady Carnegy made the point very well: as more than half of the funding coming into universities goes on academic salaries, if the shortfall is of the order of 45 per cent over 20 years, how would they do this without increased funding from public sources?
The Minister's speech was entirely moderate and constructive, but I think that she used the word "regulate" at some point. Certainly, the noble Lord, Lord Corbett, seemed to imply that the proposed review body would be interfering with the independence of universities. I simply cannot believe that to be the case.
I think that this is a sufficiently significant amendment because this is a matter of deep concern in the universities. I noted with interest that Universities
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UK made no comment on this amendment, although it has on many earlier ones, and that, I hope, will be noticed in the country at large.
If noble Lords support me, I intend to test the opinion of the House. It is an occasion to stand up and be counted. I shall be interested to see how many noble Lords in my party are content to follow the Government's line. I shall be interested to see how many Liberal Democrats follow the line advocated by the noble Baroness, Lady Sharp. Although I am not hopeful of carrying the amendment, it is of sufficient importance that the country and universities at large should be able to see how Members of this House have voted and, therefore, I would like to test the opinion of the House.
4.41 p.m.
On Question, Whether the said amendment (No. 3) shall be agreed to?
Their Lordships divided: Contents, 57; Not-Contents, 122.

Division No. 1

CONTENTS

Alton of Liverpool, L.

Monson, L.

Ampthill, L.

Morgan, L.

Avebury, L.

Mowbray and Stourton, L.

Bagri, L.

Naseby, L.

Bramall, L.

Norton of Louth, L. [Teller]

Bridges, L.

O'Neill of Bengarve, B.

Brittan of Spennithorne, L.

Park of Monmouth, B.

Brooke of Sutton Mandeville, L.

Parkinson, L.

Campbell-Savours, L.

Patten, L.

Carnegy of Lour, B.

Perry of Southwark, B.

Chadlington, L.

Prior, L.

Cox, B.

Prys-Davies, L.

Deedes, L.

Quinton, L.

Denham, L.

Quirk, L.

Dundee, E.

Renfrew of Kaimsthorn, L. [Teller]

Eden of Winton, L.

Elles, B.

Renton of Mount Harry, L.

Feldman, L.

Simon of Glaisdale, L.

Fowler, L.

Slim, V.

Howe of Aberavon, L.

Tugendhat, L.

Howe of Idlicote, B.

Ullswater, V.

Hurd of Westwell, L.

Wakeham, L.

Jopling, L.

Walpole, L.

Kilclooney, L.

Walton of Detchant, L.

Kimball, L.

Warnock, B.

Mackay of Clashfern, L.

Weatherill, L.

Mar, C.

Williamson of Horton, L.

Marsh, L.

Wilson of Tillyorn, L.

Molyneaux of Killead, L.

Wolfson, L.

NOT-CONTENTS

Ahmed, L.

Blackstone, B.

Alli, L.

Blackwell, L.

Amos, B. (Lord President of the Council)

Borrie, L.

Boston of Faversham, L.

Andrews, B.

Brooke of Alverthorpe, L.

Archer of Sandwell, L.

Brookman, L.

Armstrong of Ilminster, L.

Burlison, L.

Ashton of Upholland, B.

Carter, L.

Bach, L.

Chandos, V.

Bassam of Brighton, L.

Chester, Bp.

Bhatia, L.

Christopher, L.

Billingham, B.

Clarke of Hampstead, L.

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Clinton-Davis, L.

Lipsey, L.

Cohen of Pimlico, B.

Lockwood, B.

Corbett of Castle Vale, L.

Macdonald of Tradeston, L.

Craig of Radley, L.

McIntosh of Haringey, L.

Crawley, B.

McIntosh of Hudnall, B.

David, B.

MacKenzie of Culkein, L.

Davies of Coity, L.

Mason of Barnsley, L.

Davies of Oldham, L. [Teller]

Massey of Darwen, B.

Dean of Thornton-le-Fylde, B.

Merlyn-Rees, L.

Dearing, L.

Mitchell, L.

Desai, L.

Morgan of Huyton, B.

Dixon, L.

Morris of Manchester, L.

Donoughue, L.

Nicol, B.

Drayson, L.

Ouseley, L.

Dubs, L.

Palmer, L.

Elder, L.

Parekh, L.

Evans of Parkside, L.

Patel of Blackburn, L.

Evans of Temple Guiting, L.

Paul, L.

Farrington of Ribbleton, B.

Pendry, L.

Filkin, L.

Peston, L.

Finlay of Llandaff, B.

Pitkeathley, B.

Fitt, L.

Plant of Highfield, L.

Fyfe of Fairfield, L.

Ponsonby of Shulbrede, L.

Gale, B.

Puttnam, L.

Gavron, L.

Radice, L.

Gibson of Market Rasen, B.

Randall of St. Budeaux, L.

Gilbert, L.

Rendell of Babergh, B.

Golding, B.

Richard, L.

Goldsmith, L.

Rooker, L.

Gordon of Strathblane, L.

Sawyer, L.

Goudie, B.

Scotland of Asthal, B.

Gould of Potternewton, B.

Sheldon, L.

Graham of Edmonton, L.

Simon, V.

Grocott, L. [Teller]

Stone of Blackheath, L.

Harris of Haringey, L.

Sutherland of Houndwood, L.

Hayman, B.

Temple-Morris, L.

Hilton of Eggardon, B.

Hogg of Cumbernauld, L.

Thornton, B.

Hollis of Heigham, B.

Tomlinson, L.

Howarth of Breckland, B.

Triesman, L.

Howells of St. Davids, B.

Turnberg, L.

Howie of Troon, L.

Turner of Camden, B.

Hoyle, L.

Vinson, L.

Hughes of Woodside, L.

Warwick of Undercliffe, B.

Hunt of Kings Heath, L.

Watson of Invergowrie, L.

Irvine of Lairg, L.

Whitty, L.

Jones, L.

Williams of Elvel, L.

Kirkhill, L.

Winston, L.

Layard, L.

Woolmer of Leeds, L.

Lea of Crondall, L.

Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.
4.51 p.m.
[Amendment No. 4 not moved.]
Clause 23 [Condition to be imposed by English funding bodies]:
Baroness Sharp of Guildford Baroness Sharp of Guildford moved Amendment No. 5:
Page 9, line 13, leave out from "course," to end of line 17 and insert "no fees are payable by any qualifying person, and"
The noble Baroness said: My Lords, in moving the amendment, I shall speak to Amendments Nos. 6, 9 to 13, 16 and 31. This set of amendments replicates those that I tabled in Committee and seeks to eliminate from the Bill any mention of fees, whether higher or basic amounts of fees. I have spoken already at length at Second Reading and in Committee about why we as a party object to the policy of charging fees to students and
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would prefer a system which provided the education element of higher education free of charge. I do not propose to repeat the arguments that I made on those two occasions, which have not found much favour in your Lordships' House. In making the arguments, I have been called ingenuous and accused of living in cloud-cuckoo-land. I reject both accusations.
We make much in this country of the importance of democracy and of the democratic machinery of our government. I remind your Lordships that an important element in democracy is the existence of an opposition, which can present and argue for alternatives. This House, to a very much greater degree than the other place, has accepted the line taken by this Bill that there is no alternative—that the only way in which to raise the extra resources that the universities need is to charge fees of the students. My argument has been that there is an alternative.
Our proposals, unlike those of the Conservatives, have been fully worked out and fully costed and. if implemented, would put more resources into the hands of the universities more quickly than the Government's proposals. OK, we propose to fund our proposals from taxation, by imposing a higher. 50 per cent band of tax on the very rich. I take the mood of the House, which is to reject any notion of such a tax. In doing so, however, let me remind your Lordships that you are in effect going to levy a tax.
What is being proposed is a form of graduate tax, and those who will pay it will be young graduates. For those young graduates whose salaries rise very rapidly from the present average of £20,000 up to £70,000, or the £80,000 starting salary with the lawyers to which the noble Lord, Lord Tugendhat, referred, paying back a debt of something like £20,000 or £30,000 may be insignificant. However, for the many whose salaries rarely go above the £30,000 or £35,000 mark, it will last for a very long time. Those who choose to go into careers in the public or voluntary services in which incomes rise slowly will often find that they are paying that graduate tax for the best part of 20 or 25 years, and sometimes even longer. That means that, on top of their income tax and their national insurance payments, a 9 per cent rate of tax is being charged—so the marginal rate of tax is 42 per cent, which is higher than we are asking millionaires to pay on their income. For those young graduates, debts will hang around for a very long time and will bite deeply into their monthly pay packets. Why should we impose on them that higher rate of tax?
However, I see that I make very little headway in persuading your Lordships that there is a better way than that proposed. One of our main objections to the current proposals is that they put so little into university coffers. It is extraordinary that rather less than £1 billion is being put into university coffers, at a cost to the Exchequer of at least £1.5 billion a year.
I rest my case on it being the job of the Opposition to present alternatives. In this case, as in so many, it is not the case that there are no alternatives; there are many alternatives, and we have presented your

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Lordships with one of them, but Parliament has chosen so far not to explore this alternative. I beg to move.
Lord Forsyth of Drumlean: My Lords, the noble Baroness suggested that she did not have support, but I have some sympathy for many of the points that she makes, and for her amendment. Indeed, the previous debate illustrated clearly the scale and extent of the problem and the lack of a remedy in the Bill. The provisions on fees in the Bill, with all the difficulties and hardships which they will cause to students who have to repay the fees over the course of their working lives, do not actually represent good value for money for the taxpayer. The cost of that whole machinery exceeds the revenues by at least £200 million.
I am at one with the noble Baroness in opposing the Bill's remedy on fees, but I cannot quite bring myself to support her amendment, because it leaves the other aspect of the Bill in place—the provisions which leave the universities subject to the OFFA regime and the provisions for access agreements. However, I do not want to repeat the arguments that we had earlier. Perhaps the noble Baroness can be persuaded to consider withdrawing her amendment and coming back at a later stage, focusing on the issue of fees alone. That issue is separate from the issue of access agreements and the role of OFFA, which we on these Benches find deeply repugnant.
Baroness Ashton of Upholland: My Lords, first, I should tell the noble Baroness that I consider her to be a lady of great principle. I do not endorse any of the comments that might have been made about her in your Lordships' House. I believe that she comes to your Lordships' House with a position. Although I do not believe that position is workable, for reasons that I gave at great length in Committee and which I shall reflect on briefly now, I accept that it is a position.
The noble Baroness has made it clear that the position that she would wish to see is to raise more resources for universities through the general taxation of a particular group of people. Noble Lords will have heard me say already that the difficulty with that arises when one considers the number of things that any government wish to achieve in the course of their lifetime, in terms of the range of needs in our society.
I spoke before about the differences in funding levels available to those who pursue higher education and the benefits that accrue to those individuals, compared to the amount of money that we spend on primary or nursery schools to support our younger children. As noble Lords have said on many occasions, that is where the work needs to happen—to support young people into higher academic achievement, if that is appropriate to them. That is a position that noble Lords have understood; they have understood, too, the importance in the Bill of the money being available to institutions for them to spend as they see fit. In the light of the previous debate, given the passion with which the noble Lord, Lord Renfrew, spoke about academic salaries, I believe that that is an important part of it. too.
5 p.m.
We have a balance before your Lordships' House between recognising the role of the taxpayer and the role of the state in higher education. We have not debated the importance of looking to alumni, business or other support for universities much in this House. Critically, those who benefit from higher education do so not just because of their academic abilities and the rewards that that may bring them, or just because of the higher salaries that they may acquire, but because of what we know about graduates' mental and physical health. They are more likely to take part in our democracy and are more likely to be fulfilled, if I may describe it that way. Those are also important benefits.
I do not wish to take more of your Lordships' time but I tell the noble Lord, Lord Forsyth, that when we are debating these issues it is important that we are clear about his party's position and that he brings that into the debate. That is important in looking at the way forward.
Lord Forsyth of Drumlean: My Lords, I am sorry that the noble Baroness is unaware of our position. It is that if the Bill will give universities revenues of £900 million and the cost to the taxpayer is £1.1 billion, would it not be more sensible to give the £1.1 billion to the universities?
Baroness Ashton of Upholland: My Lords, I take that as a commitment from the noble Lord that he intends to give the universities an additional £1.1 billion. I am not sure that I can.
I believe that the way in which we have put together—
Lord Forsyth of Drumlean: My Lords, this is getting like the House of Commons. If the noble Baroness thinks that £1.1 billion is enough to deal with the size of the problem, then I rest my case that the Government's response to that problem in the Bill is inadequate.
Baroness Ashton of Upholland: My Lords, I was alluding to the issues that have been raised by the noble Lord's right honourable friend, Mr Letwin, and where he is saying that his priorities would lie in education. That is a perfectly reasonable stance but not one from which universities would benefit. It is important that when we look at the way forward we are clear about the options available in your Lordships' House, to the Government and to the relevant institutions about what is on the table. Those are important issues to have before us. The noble Baroness should not press her amendment. The Bill recognises the need to ensure that funding comes in to the institutions, to the universities. We recognise that those who benefit should contribute to it. On that basis, she should withdraw her amendment.
Baroness Sharp of Guildford: My Lords, I am grateful to the Minister for her sympathetic response on this issue. We have explored these issues on previous occasions and the answer that I have received is the one that I expected. It is important not to base

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too much hope that financing universities may come from the third leg, as it is called—from industry. I have worked on the economics of research and development for a long time. How little the industrial sector has chipped in to research and development has been continuingly and extraordinarily disappointing. The same applies in the funding of university endowments and so forth. We had a debate the other day sponsored by the noble Lord, Lord Joffe, in which he pointed out that charitable giving in this country has gone down by 25 per cent over the past 10 years. We should not put too much hope in that source. The main stream of funding has to come from the Government.
As I pointed out earlier, in effect the Government are taxing young graduates in order to put more money into universities. This may be the right way to do it but we do not think that it is. I shall withdraw the amendment as I think it might be sensible for the noble Lord, Lord Forsyth, and me to get together to see what we might be able to come up with. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 6 not moved.]
Lord Skelmersdale Lord Skelmersdale moved Amendment No.7:
Page 9, line 24, at end insert—
"( ) to ensure that, in respect of any qualifying course, no qualifying fees are charged to any eligible student for any academic year beyond the first three years of a first degree course."
The noble Lord said: My Lords, all the amendments in this group aim to achieve the same end, namely that those students who are studying courses that are longer than three years should not have to pay any fees for the fourth or further years or, in the case of the amendments of my noble friend Lord Renfrew, any subsequent years after the first three. In other words, his amendments have the same effect as Amendment No. 7.
Our Amendment No. 7 will ensure that the governing body of the relevant institutions under Clause 23(1) will not be able to charge fees beyond the basic rate for any qualifying course beyond the first three years of a first degree course. Meanwhile, my noble friend's amendments will ensure that fees may be charged but that the Secretary of State will foot the Bill. I cannot imagine what the Treasury would have to say about that idea, but the Minister will doubtless enlighten us in due course. We had a long debate in Committee on this issue and I do not want to take too much of the House's time reiterating what I said then, so I shall try to summarise the main concerns.
In the cases of doctors, veterinary surgeons, architects and a few other professions, courses at university extend for more than three years. The British Medical Association has calculated that the measures contained in the Bill could lead to a medical student in London incurring a maximum debt of just over £64,000. It also claims that the Government have not produced any figures to disprove this and argue that a student in a family with a residual income of
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£20,000 will be committing himself to 91 per cent more debt by choosing to study medicine instead of the more normal three-year degree. The increased levels of debt that medical students will incur will inevitably cause some students to think twice about studying medicine, regardless of their social backgrounds.
Laboratory-based subjects such as medicine are among the most expensive courses, with teaching costs per student at around £10,500 a year. Medical colleges are therefore likely to charge the maximum fee of £3,000. The BMA is concerned that the Bill's proposals on the package of fees and finance will be a disincentive to increasing the number of doctors in this country, something that the Department of Health, quite rightly, has as a major policy. As it stands, the Bill, once enacted, will mean that the Department of Health is operating with one hand tied behind its back. It will be looking at this arrangement again, but only after—I repeat, after—the Bill is passed, to assess whether it will pay the full amount of the increased fees, the £3,000, for the fifth and sixth years of training for trainee medics and dentists. That is hardly joined-up governance. Has the Department for Education and Skills any plans to help medics and dentists meet the full increased fees if the DoH decides that it cannot fund the full amount?
Nurses will be similarly affected. According to the DfES, nursing students and other allied health professionals, such as physiotherapists, currently have their fees paid by the NHS, which buys up places contractually from the universities. Will this continue? If so, this amendment would enable the NHS to put the money it would have provided for the fees for the fourth year into other, much needed, aspects of the NHS. If not, the effect will be an inevitable decrease in the membership of professions supplementary to medicine.
Future architects, not being in the public sector, will be badly off too. They have to study for five years and then do two years in practice before passing their professional exams. I calculate that the average debt per student will be at least £57,000. The debt of £30,000 for one of my noble friend's research assistants, to which I referred in Committee, is just about half of what she would be encumbered with once the Bill is enacted. Future veterinary scientists will be in much the same boat.
These very real concerns should all be considered in line with the "gateway to the professions" review announced by the Secretary of State at Second Reading in another place. This too will begin only after the Bill is passed. It will assess the impact of variable fees on such professions and will further consider the matter. In Committee, Ministers failed to indicate how long the review would take. Are they now in a position to inform the House of that?
This amendment is needed to ensure that all higher education students are treated fairly and that these particular students are on a par with those on other undergraduate courses. The Government must not wait for what would have to be up to seven years for a medic, vet or architect to complete fully his or her

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training before a full and proper assessment can be made of the detrimental effect or otherwise of variable fees. I beg to move.
Lord Campbell-Savours: My Lords, I should like to intervene for only a few moments because I was unable to be here for parts of the Committee stage on the Higher Education Bill due to an illness of a member of my family and my need to attend hospital every day.
I should like to have a point in the amendment clarified. It raises with me the issue of what happens in the case of four-year university foundation course degrees in the sciences. I am not entirely sure about what the amendment means by "qualifying course". Can I take it from the noble Lord's comments in moving the amendment that "qualifying course" would include those four-year foundation courses? As I understand it, they are usually characterised by the need for some students who have taken particular courses at A-level, who have often received poor guidance from those in a position of responsibility in schools and taken the wrong subjects, to receive an additional year's training in the form of a foundation year before the three-year training.
Let us say that someone who has done Latin and Greek at A-level suddenly decides that he wants to be a chemical engineer. He would go to a university and do a foundation year perhaps in maths, chemistry, physics and a generality of studies that would equip him to proceed with an engineering degree. In so far as the need for that additional year of study very often derives either from bad advice or simply from a student's inability to decide at A-level—or, post O-level, precisely what A-levels they should be doing—surely they should not have to pay for effectively an additional year at university.
My request is quite clear. I seek to understand what is meant by "qualifying course". If what is meant is a foundation year, then I shall certainly support the amendment.
Baroness Sharp of Guildford: My Lords, my name is associated with the amendment and I should like briefly to speak to it. Perhaps in doing so I can answer the question raised by the noble Lord, Lord Campbell-Savours.
The situation is precisely as the noble Lord suggested. Some courses are four-year courses, and I have in mind another one. Many engineers these days do an MEng, which is a four-year course, rather than the three-year course. They would be hit precisely by this proposal. As it stands, they would have to pay the higher fees through the four years.
Lord Campbell-Savours: My Lords, one of my sons did five years at Leeds University. He did a one-year foundation course, the three-year degree and then an additional year for an MA. That is five years, not four.
Baroness Sharp of Guildford: My Lords, the noble Lord is quite right. If they were doing an MEng course, they would do five years, just as architects, for example, do seven years. A range of degrees require
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longer periods. It is precisely those professions that are extremely worried about the impact that the higher fees might have on entry into the professions.
The point is very unclear at the moment. The purpose of the amendment is to make clear that we are looking for three years' worth of fees from the student and how to handle degrees that extend beyond that period and are not paid for, as with doctors after, as I understand it, the fourth year when payment is made by the National Health Service, where it is not paid for separately. As I said, the aim of the amendment is to make it clear that the student shall pay three years' worth of fees and that any further years of fees should be paid for.
5.15 p.m.
Lord Renfrew of Kaimsthorn: My Lords, I have tabled Amendments Nos. 14, 19 and 20. If I were more confident of my powers of persuasion, I would seek to separate my amendments from Amendment No. 7 which has just been so ably moved by the noble Lord, Lord Skelmersdale. I fully agree with the arguments that he made for the necessity of the amendment; and in that he has been very ably supported by the noble Baroness, Lady Sharp. I also concur that if someone is registered for a degree when they are undertaking a foundation course, which I believe them to be, then under this amendment, and under my amendments, they will stop paying after three years. I think that the answer to the noble Lord, Lord Campbell-Savours, is clear.
However, it became clear at the Committee stage, when a very similar amendment was proposed, that there is a significant problem because the amendment as proposed by the noble Lord, Lord Skelmersdale, and as supported by the noble Baroness, Lady Sharp, means, very properly, that the student pays only three years and after that the university pays. That is what is wrong in general with this Bill. The universities keep on having to carry the can.
If I felt it appropriate, I would seek first to persuade your Lordships, if invited, not to vote for Amendment No. 7, but, when we came to it, to vote in favour of Amendment No. 14. However, I am not sure that I have the courage to divide your Lordships' House again so early in the evening. That is why I have not sought to dissolve the grouping. However, I want to underline the difference. My amendment would be worded identically were it not that I required a separate clause to delete—if noble Lords look carefully, as I did—"university to pay" and insert "Secretary of State to pay".
As I already indicated, and as the noble Baroness on the Front Bench opposite indicated, it is unfortunate that I have perhaps become severely sharp in my criticisms. I detected that hint in her own words. She may be right. I am disappointed that the opposition spokespersons have introduced amendments that very rightly point to a defect in the Bill and very rightly suggested that students have paid enough fees after three years. I agree that three years for an undergraduate course is enough. However, the solution is to say that, after that, the Secretary of State should pay.

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Why should the universities have to carry the can in this way? The problem with the Bill is that it is not giving universities sufficient funding. That is why, with the greatest disappointment—I think I made this clear in our debate in Committee—I do not feel able to support my noble friend's amendment and why I am still critical of noble Lords on the Liberal Democrat side who say, "Yes, that is all right. We want to change it so that the universities pay and carry the can". I do not think that that is acceptable.
So that is why I oppose the amendment. My reason for not pressing my own Amendment No. 14 separately is that I do not wish to try the patience of your Lordships' House.
Baroness Carnegy of Lour: My Lords, I wonder whether the Minister can tell us whether the Government have consulted the Scottish Executive about this matter. The noble Lord, Lord Sutherland, may be able to confirm whether I am right in thinking that in Scotland a student pays fees for the first four years, because courses are four years in Scotland, and after that the fees are funded by the Scottish Executive, and presumably that money is allowed for in the Barnett formula. It would be interesting to know whether the Government have consulted the Scottish Executive.
It seems to me that one of these sets of amendments probably contains the answer to a problem that the Government have with the Bill: what is going to happen about these longer courses. It also presents a problem for Scotland—I have not consulted about this—as it seems to me that as one has to pay only the first four years if one is studying to be an architect or a doctor in Scotland, there may be a flight from England to Scotland for those courses just at the time when the Barnett formula does not increase, as money is coming into the English universities from students. Therefore, the increase in expenditure that would qualify Scotland for a higher amount under the Barnett formula will not be forthcoming. That seems to me an added complication.
However, my main interest is to know whether the Government have consulted the Scottish Executive and what they were told. I mentioned this in Committee, so if it had not been drawn to their attention before, it was then.
Lord Triesman: My Lords, Amendment No. 7 would ensure that fees may not be charged after three years at all, while Amendments Nos. 14 and 19 require the Secretary of State to meet the fees after the third year on the student's behalf. The effect for the student is the same. If higher education institutions are not allowed to charge fees to students beyond their third year of study, they will lose fee income. If the Secretary of State is required to meet the cost of fees for all students after their first three years, resources would need to be found from elsewhere in the HE budget. So both methods of exempting students from fees after three years would have an impact on the funding received by HEIs, and I should leave noble Lords
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under no illusion that the Government could find extra funding to make up that loss in funding. I was invited by the noble Lord, Lord Skelmersdale, to test the feelings of the Chancellor of the Exchequer on that proposal. I suspect that he would be unlikely to be moved by that additional appeal.
There is no reason why our proposals should deter students from studying subjects such as medicine, the courses for which are longer than three years. I want to comment on a number of the professions that have been mentioned.
For each year in which fees are charged, eligible students will continue to benefit from the generous student support package and, regardless of the level of loan which they have taken out, their monthly repayments will be the same. There is no evidence indicating that students are deterred from taking longer courses, and we believe that there are two principal reasons for this: first, the support is there to enable them to complete these courses; and secondly, students recognise the real benefits to them, personally as well as professionally. They study on these courses because they realise that the benefits will outweigh the costs. Indeed the OECD recently confirmed that the rate of return in terms of earnings for graduates in the United Kingdom is the best in the world.
All of this will remain the case under the variable fees system. The importance that the Government attach to courses which last more than three years such as education, medicine, dentistry, architecture, veterinary medicine and so on—many of the courses that were mentioned earlier—is demonstrated now by the significant measures which are being taken to protect training for, and recruitment to, various public sector professions.
A good deal was said on this matter in Committee which I shall not repeat—I am sure that will be welcome—and I shall not repeat much that was said about how our current recruitment initiatives work for the five main groups to which I referred earlier, but I should like to say something about their effectiveness.
Lord Roberts of Conwy: My Lords, will the noble Lord reassure us that, certainly so far as medicine and dentistry students are concerned, the money for their extended years will still be provided by the NHS?
Lord Triesman: My Lords, when I discuss the relevant group I shall be able to give a clear answer to that question.
I shall begin with teachers and discuss various professions. There are more teachers with qualified teacher status in our schools now than at any time since 1984. There are 50 per cent more teachers training than there were five years ago. As for medical and dentistry students, applications to medical schools in the United Kingdom have gone up since 1998, as has the total number of students studying medical courses.
The amendment will make no difference to the arrangements that are made with the National Health Service in respect of the finances. The NHS makes its contracts directly with institutions to deliver the

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courses that the NHS needs at an agreed price. That operates on the basis of no tuition fees being payable by the students, so the level of fees is zero and there will be no difference from the students' point of view or in terms of the overall costs to the National Health Service. There should be no change in that regard as regards the future arrangements.
In 2003, according to UCAS, the number of accepted applicants for pre-clinical veterinary medicine was up 9.3 per cent in comparison to 2002, and places on these courses are heavily over-subscribed. I make the point because, were there to have been a significant deterrent effect, it would not be likely that such a figure would have occurred.
In architecture—another profession mentioned by noble Lords—UCAS 2003 entry figures show one of the biggest increases in applications accepted that has ever been recorded—a rise of 10.3 per cent in the past year. Even when we gross up the figures on levels of debt, which I suspect in some cases are highly speculative, we can see positive movements in all of these professions.
Nurses, who were mentioned, will not be affected by the Bill. As I said, the NHS buys these places direct and will continue to do so. Department of Health Ministers have indicated that, whatever the future levels of tuition fees, they will take measures to ensure that any increase in the cost of university courses will not have an adverse impact on the supply, retention, diversity and quality of students on health professional courses, including medicine.
So it is clear that in general the picture is a positive one and that students are being given the support they need to take courses in these areas. I can assure noble Lords that relevant departments already monitor demand for, and take-up of, places on courses in these key areas and will continue to do so after the introduction of variable fees in 2006–07.
As the noble Lord, Lord Winston, mentioned in Committee, the evidence from the United States also is that students are not deterred from taking longer courses, even where they pay fees for each year. As we all know, fee levels in the United States are hugely higher than in the United Kingdom. Although I do not have the relevant data in front of me, I believe that very much the same picture applies in Australia, for example, where these issues have been considered for some time.
We also described in Committee how we would commission a report next year by Sir Alan Langlands to examine gateways into the professions. We have done so precisely because we recognise the huge importance to our society of a system that provides an adequate supply of entrants to these essential areas.
I was asked to comment on the timing of the review. Sir Alan Langlands will start work on the review directly following Royal Assent, if it is achieved, with the aim of reporting to the Secretary of State by the middle of 2005. I was corrected when I made the presumptuous assertion that Royal Assent might be achieved.
The report will, of course, examine how the public sector and the professions can sustain and improve recruitment opportunities in a general sense for
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graduates and will look at the professions, including medicine and architecture as well as teaching and veterinary medicine.
I should like, finally, to underline a much more fundamental point about the freedom of universities in all of this.
Lord Campbell-Savours: My Lords, before my noble friend comes to his final point, may I take him back to the question of the foundation year prior to a three-year degree? Will he answer specifically the question that I asked, which was about why a young person who is ill advised or simply does not have the knowledge to make the right decision should be penalised in the event that they go to university?
5.30 p.m.
Lord Triesman: My Lords, I certainly intend to address that, but I wanted to deal with the points about the longer courses in relation to professions first. I shall return to the noble Lord's point in a moment.
The freedom of universities is important. Throughout our debates on the Bill, we have stressed the importance of the autonomy of the higher education institutions. Our desire to avoid regulation where none is necessary is also a part of our thinking. As noble Lords know, the variable fees provisions give more freedom to institutions themselves to decide what to charge for each course, within the caps agreed by Parliament. I hope that noble Lords feel that that is a good thing. With that comes responsibility; universities must justify the fee levels. The amendments tabled by the noble Lord, Lord Renfrew, break that fundamental principle. Whatever universities charge for years one to three of a course, they could charge £3,000 for year four, wholly safe in the knowledge that the Government would be expected to meet the bill automatically. That could not be right.
On the other hand, Amendment No. 7 looks to universities themselves to subsidise students on longer courses. An individual university or college might conclude in exceptional circumstances that the final-year fee should be waived or reduced, but that is a matter for each institution, taking account of the demand for their courses. I would see a requirement for all universities to waive fees for the fourth year and beyond as a clear example of over-regulation; such a decision would surely be for local consideration, not central prescription.
I have always been a strong supporter of making sure that access courses and foundation years were successful. If a foundation year is a general access course—because someone has not taken A-levels, taken the wrong A-levels or whatever before wishing to apply to take a degree—those courses are in further education and are not covered. No student support is relevant, but no standard fee is relevant either. The course will probably not have been taken in the same institution as the degree. If it is an integral part of a degree—an engineering foundation year—it is in HE and will be taken in the same way as all other elements of degrees in HEIs, and will get student support.

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It is hard to be precise about the number of students who embark on a course and then conclude that they were given the wrong advice, but I know of examples where that has happened. Potential students can be given the wrong advice in a wide variety of circumstances. I would like to think that there were far greater precision in universities and further education colleges now in making sure that guidance was appropriate, and that it is no longer the case that students—those who present themselves with a set of qualifications that might make taking a heavily oversubscribed degree a good option—find themselves persuaded to take a degree on which they should not embark because it hardly suits their capabilities. I believe that that may have happened in some instances, but such examples happen no longer.
Lord Campbell-Savours: My Lords, I want to press my noble friend on that matter. The advice about which we are talking is given to young people at the age of 16 when they have completed their GCSEs, as they go into the first year of sixth form. That is the critical time. If during the following two years of A-level they find that they have taken the wrong subjects and want to move out of whatever and into engineering, they will pay for an additional year. That seems totally wrong.
Lord Triesman: My Lords, it would be extremely hard to create a system that detected whether someone had taken the wrong advice, or had embarked on something relatively willingly only to find in a relatively short time that it was not what they wanted to do. In a slightly different circumstance, I was asked whether my own children might have made rational choices at 14, 15 and 16 about their higher education. All that can be hoped is that the best possible advice is given by schools, or perhaps by further education colleges when people get to the age of 16, and that people try to establish by the widest possible discussion whether that is the right advice. One could not legislate for the possibility of someone saying that they feel in retrospect that the advice that they received was not as good as it might have been.
The Scottish Executive are reviewing the position, and I confirm to the noble Baroness, Lady Carnegy, that we are in dialogue with them. The Scottish third-phase review of higher education has made a number of recommendations, including that the Quigley agreement be continued. We understand that the Scottish Executive are considering the outcome of that.
In the light of those arguments, I hope that the noble Lord will consider withdrawing the amendment.
Lord Winston: My Lords, my noble friend mentioned my name, so I would like to clarify what I think is on record. My noble friend Lady Ashton very kindly wrote to me on the matter. I did not say that I had evidence from the United States; I said that it was my anecdotal impression that having longer courses
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was not a deterrent. I also asked whether it would be wise to conduct further research on the matter, and the noble Baroness agreed with that in her letter.
Lord Triesman: My Lords, I can only confirm that continuing research on and review of that would be extremely important.
Lord Skelmersdale: My Lords, I am grateful to the Minister for answering the point of the noble Lord, Lord Campbell-Savours, on foundation years, where the situation is totally clear. Where a foundation year is part of the university course and taken at the same university, it is covered by the Bill. Where it is part of further education—for example, a third year at a sixth-form college—it is free anyway. The question simply does not arise in my mind.
I thought that we all agreed that universities should be funded through HEFCE. Once HEFCE has funded the university, that is the university's money to dispose of in any way that it sees fit. Therefore, my noble friend's argument about the Secretary of State funding the position through his amendments independently does not really wash. Anyway, the fourth year for English students at a Scottish university is paid for by the department. That is another reason why the objections to the amendments do not wash.
I am also grateful to the Minister for setting on record the future position under the Bill of the medical profession in its broadest terms, by which I include dentists, nurses and professions supplementary to medicine. However, he cleverly almost ignored the position of such core students as architects or vets. They are not in the public sector, but very much in the private sector. Although in mitigation the Minister told us that we had the highest application rates ever for students to enter professional careers, the point that he does not make is that all those figures come before the Bill becomes an Act. No one knows what will happen after the Bill becomes an Act, although many of my noble friends and I have made good guesses. I wish to test the opinion of the House.
5.39 p.m.
On Question, Whether the said amendment (No. 7) shall be agreed to?
Their Lordships divided: Contents, 156; Not-Contents, 139.

Division No. 2

CONTENTS

Addington, L.

Blatch, B.

Alderdice, L.

Bowness, L.

Ampthill, L.

Bradshaw, L.

Anelay of St Johns, B.

Bridgeman, V.

Ashcroft, L.

Brougham and Vaux, L.

Astor of Hever, L.

Buscombe, B.

Attlee, E.

Caithness, E.

Avebury, L.

Campbell-Savours, L.

Barker, B.

Carlisle of Bucklow, L.

Beaumont of Whitley, L.

Carnegy of Lour, B.

Biffen, L.

Chadlington, L.

Blackwell, L.

Clement-Jones, L.

187

Colwyn, L.

Miller of Hendon, B.

Cope of Berkeley, L.

Monro of Langholm, L.

Craig of Radley, L.

Montrose, D.

Craigavon, V.

Mowbray and Stourton, L.

Crathorne, L.

Murton of Lindisfarne, L.

Crickhowell, L.

Noakes, B.

Dahrendorf, L.

Northbrook, L.

Dean of Harptree, L.

Northesk, E.

Deedes, L.

Northover, B.

Denham, L.

Oakeshott of Seagrove Bay, L.

Dixon-Smith, L.

O'Cathain, B.

Dundee, E.

Oppenheim-Barnes, B.

Eccles of Moulton, B.

Parkinson, L.

Eden of Winton, L.

Patten, L.

Elles, B.

Peel, E.

Elliott of Morpeth, L.

Perry of Southwark, B.

Erroll, E.

Peyton of Yeovil, L.

Falkland, V.

Phillips of Sudbury, L.

Feldman, L.

Plummer of St. Marylebone, L.

Flather, B.

Quinton, L.

Forsyth of Drumlean, L.

Rawlings, B.

Fowler, L.

Razzall, L.

Freeman, L.

Reay, L.

Garden, L.

Redesdale, L.

Geddes, L.

Renton, L.

Glentoran, L.

Renton of Mount Harry, L.

Goodhart, L.

Rix, L.

Griffiths of Fforestfach, L.

Roberts of Conwy, L.

Hamwee, B.

Rodgers of Quarry Bank, L.

Hanningfield, L.

Roper, L.

Harris of Richmond, B.

Rotherwick, L.

Hayhoe, L.

Saltoun of Abernethy, Ly.

Henley, L.

Sandwich, E.

Higgins, L.

Scott of Needham Market, B.

Hodgson of Astley Abbotts, L.

Seccombe, B. [Teller]

Home, E.

Selborne, E.

Hooper, B.

Selsdon, L.

Hooson, L.

Sharman, L.

Howe, E.

Sharp of Guildford, B.

Howell of Guildford, L.

Sharples, B.

Hunt of Wirral, L.

Shaw of Northstead, L.

Jenkin of Roding, L.

Shutt of Greetland, L. [Teller]

Jopling, L.

Skelmersdale, L.

Smith of Clifton, L.

Kimball, L.

Soulsby of Swaffham Prior, L.

King of Bridgwater, L.

Stewartby, L.

Lane of Horsell, L.

Swinfen, L.

Lang of Monkton, L.

Taverne, L.

Lester of Herne Hill, L.

Taylor of Warwick, L.

Liverpool, E.

Tebbit, L.

Livsey of Talgarth, L.

Thomas of Gresford, L.

Luke, L.

Thomas of Walliswood, B.

Lyell, L.

Tordoff, L.

McColl of Dulwich, L.

Trefgarne, L.

MacGregor of Pulham Market, L.

Trenchard, V.

Trumpington, B.

Mackay of Clashfern, L.

Ullswater, V.

Mackie of Benshie, L.

Vinson, L.

Maclennan of Rogart, L.

Waddington, L.

McNally, L.

Wakeham, L.

Maddock, B.

Wallace of Saltaire, L.

Mancroft, L.

Walmsley, B.

Mar and Kellie, E.

Watson of Richmond, L.

Marlesford, L.

Wilcox, B.

Masham of Ilton, B.

Williams of Crosby, B.

Methuen, L.

Windlesham, L.

Miller of Chilthorne Domer, B.

Wolfson, L.

NOT-CONTENTS

Ahmed, L.

Bassam of Brighton, L.

Alli, L.

Bhatia, L.

Andrews, B.

Billingham, B.

Archer of Sandwell, L.

Blackstone, B.

Ashton of Upholland, B.

Boston of Faversham, L.

Bach, L.

Bragg, L.

188

Bridges, L.

Lea of Crondall, L.

Brooke of Alverthorpe, L.

Lipsey, L.

Brookman, L.

Listowel, E.

Brooks of Tremorfa, L.

Lockwood, B.

Burlison, L.

Macdonald of Tradeston, L.

Cameron of Lochbroom, L.

McIntosh of Haringey, L.

Carey of Clifton, L.

McIntosh of Hudnall, B.

Carter, L.

MacKenzie of Culkein, L.

Chandos, V.

Mallalieu, B.

Chester, Bp.

Marsh, L.

Christopher, L.

Mason of Barnsley, L.

Clarke of Hampstead, L.

Massey of Darwen, B.

Clinton-Davis, L.

Merlyn-Rees, L.

Cohen of Pimlico, B.

Mitchell, L.

Corbett of Castle Vale, L.

Morgan, L.

Crawley, B.

Morgan of Huyton, B.

David, B.

Morris of Aberavon, L.

Davies of Coity, L.

Morris of Manchester, L.

Davies of Oldham, L. [Teller]

Nicol, B.

Dean of Thornton-le-Fylde, B.

O'Neill of Bengarve, B.

Dearing, L.

Palmer, L.

Desai, L.

Parekh, L.

Dixon, L.

Patel of Blackburn, L.

Donoughue, L.

Paul, L.

Drayson, L.

Pendry, L.

Dubs, L.

Peston, L.

Elder, L.

Pitkeathley, B.

Evans of Parkside, L.

Plant of Highfield, L.

Evans of Temple Guiting, L.

Prys-Davies, L.

Farrington of Ribbleton, B.

Puttnam, L.

Filkin, L.

Quirk, L.

Finlay of Llandaff, B.

Radice, L.

Fitt, L.

Randall of St. Budeaux, L.

Gale, B.

Rendell of Babergh, B.

Gavron, L.

Richard, L.

Gibson of Market Rasen, B.

Rogan, L.

Gilbert, L.

Rooker, L.

Golding, B.

St. John of Bletso, L.

Goldsmith, L.

Scotland of Asthal, B.

Gordon of Strathblane, L.

Sheldon, L.

Goudie, B.

Simon, V.

Gould of Potternewton, B.

Strabolgi, L.

Graham of Edmonton, L.

Gregson, L.

Sutherland of Houndwood, L.

Grenfell, L.

Taylor of Blackburn, L.

Grocott, L. [Teller]

Temple-Morris, L.

Harris of Haringey, L.

Thornton, B.

Harrison, L.

Tomlinson, L.

Haskins, L.

Triesman, L.

Hayman, B.

Turner of Camden, B.

Hilton of Eggardon, B.

Uddin, B.

Hogg of Cumbernauld, L.

Walpole, L.

Hollis of Heigham, B.

Walton of Detchant, L.

Howarth of Breckland, B.

Warnock, B.

Howe of Idlicote, B.

Warwick of Undercliffe, B.

Howells of St. Davids, B.

Watson of Invergowrie, L.

Howie of Troon, L.

Weatherill, L.

Hoyle, L.

Whitty, L.

Hughes of Woodside, L.

Wilkins, B.

Hunt of Chesterton, L.

Williams of Elvel, L.

Hunt of Kings Heath, L.

Williamson of Horton, L.

Irvine of Lairg, L.

Wilson of Dinton, L.

Jones, L.

Winston, L.

Kirkhill, L.

Woolmer of Leeds, L.

Resolved in the affirmative, and amendment agreed to accordingly.
5.51 p.m.
Lord Forsyth of Drumlean Lord Forsyth of Drumlean moved Amendment No.8:
Page 9, ling 24, at end linsert—
"( ) A condition under this section must require the governing body of the relevant institution to secure that, in respect of any qualifying course, the qualifying fees charged to a person do not exceed the basic amount if that person—

189

(a) had on or before 1st August 2005 received an offer of a place on a designated course or on a similar course which is no longer offered, in either case the first year of which begins before 1st September 2007, and whether conditional on obtaining specified qualifications or not; or

(b) had received an offer of a place on a designated course the first year of which begins before 1st September 2006. and—

(i) he was not able to take up the offer because a specified qualification or grade was not awarded to him,

(ii) he appealed against the decision not to award the qualification or grade to him,

(iii) the appeal was allowed after the last date when he could have taken up the offer, and

(iv) as a result he was offered a place on the course for a year which begins on or after 1st September 2006 and before 1st September 2007.

( ) For the purposes of this section, a course is similar to a designated course, whether or not it is at the same institution, if—

(a) it leads to a degree or other qualification which is the same as the degree or other qualification which the designated course leads to, and

(b) the governing body of the institution at which the designated course would be studied is satisfied that the subject matter of the designated course is for the most part the same as the subject matter of the other course."

The noble Lord said: My Lords, with Amendment No. 8 we return to an issue that we considered at length at a previous stage. It concerns the position of students who wish to take a gap year. I know that the amendment which was considered previously did not meet with the approval of Ministers. Therefore, on this occasion I have taken the precaution of using more or less the same wording as that which, when the Government introduced fees for the first time in 1998, provided for students who took a gap year to be treated in exactly the same way as students who applied for university places.
Therefore, the amendment aims to ensure that students who are awarded a deferred place at an institution in 2005 for the academic year starting in 2006—the same year in which the new top-up fees come into effect—and, indeed, any students who cannot accept an offer due to a failure to fill the grade requirement but who successfully appeal to be offered a place for the subsequent year will be treated as if they had been accepted in the academic year 2005.
I am very disappointed that the Government cannot see the enormity of this problem. It seems to me that several injustices will occur. The first will be that many students, faced with the prospect of paying fees of around £1,000 as opposed to £3,000 over three years, will decide not to take a gap year. I believe that that would be a great tragedy—gap years have become an institution with youngsters.
I know that the Government say that people will have had three years' notice. Ignoring Parliament's role in this matter, it is true that youngsters will have been given notice. Although my youngest daughter will just escape this measure, she, in common with her sister, planned her gap year years before she went to university and found the people with whom she intended to travel. It seems to me to be extremely unfair that the members of one cohort, who did not have any choice about when they were born or their date of birth, will be put in this disadvantaged position.
The Government have sought to argue that some students may very well take the view that the terms that are now being offered under the new scheme are so advantageous that this will not be a problem. I have to say that their parents may not take the same view. According to the sums, the students who take a gap year will be saddling themselves with considerable additional debts which will have to be paid over their working lives. Should their parents encourage them not to take a gap year on financial grounds alone, there will be another consequence—namely, the number of students applying for places at universities will be greatly exaggerated and there will be a bulge of applicants in the year that we are discussing. The effect of that will be that students who would otherwise have obtained a place on the course that they wished to study will be squeezed out of a place and, of course, consequently the following year will see a mirror image of the problem.
For a very wealthy family who do not mind paying the additional costs and who have a child who might struggle to obtain a place on a particular course, the advice is obviously to take a gap year and to fund the additional cost of the educational provision. In the following year it will be easier to get on to the course in question because there will be less competition for places as the "bulge" will not apply.
I think it is wrong for the Government to argue that this measure will somehow be neutral in effect and that it will be equally balanced. I believe that its effect will be to make it harder for children who come from families who struggle to pay the costs of higher education to take a gap year. I do not want to detain the House by rehearsing all the benefits and advantages of gap years. I can refer noble Lords to the very eloquent statement made by the noble Baroness, Lady Blackstone, on behalf of the Government on 13 August 1997. I pay tribute to her and give her credit for having recognised the problem then.
I have no doubt that the Minister will say that this time the situation is different because people will have been given notice. I think that I have dealt with that point already. I have no doubt that the Minister will also say that there is not really a problem because the universities can do what they like. I am told that approximately 100,000 students take a gap year. That represents a substantial sum of money for the universities to find. The Government may argue that the universities can say, "Well, we will just treat gap year students in this way", but they would be giving up considerable funds. I have no doubt that my noble

191
friend Lord Renfrew, who, sadly, is not in his place, will be jumping up to point out that this will be impossible for the universities to bear.
The difficulty is of the Government's making. It arises because they are changing the system and introducing this legislation. The Government should take responsibility for that decision and they should allow students who wish to take a gap year the opportunity to do so. I could understand it if the Government came back and said, "Perhaps it would be fairer if they had the same financial package as they would otherwise have had, as opposed to the revised package" but, so far, the Government have been determined not to deal with this issue.
This is not a party political matter; it is one which is causing great concern around the country. The noble Baroness, Lady Sharp, has pressed this matter as, indeed, have Conservative and Liberal Democrat Members in the other place. They are doing so because there is real concern among families with students who will be going to university at this time.
I guess that for many families the penny has not dropped that this measure will cause a problem, and far be it from me to give the Government political advice to help them. But I guess that the penny may just drop at about the time that the Prime Minister thinks that he needs to call a general election. Therefore, in the interests of helping the Government in these difficult times, I suggest to the Minister that, by accepting the amendment, she may very well prevent much grief and hardship for some of her colleagues in the other place because it is the kind of issue which causes great distress and irritation to parents and voters. I beg to move.
6 p.m.
Lord Campbell-Savours: My Lords, I support the amendment. The noble Lord is absolutely correct in what he says. His analysis fits precisely with the understanding that I have gained from talking to the many friends of my three sons, all of whom went to university, and from whom much of my case has been gleaned during the course of this Bill.
The problem in this debate is that there has been insufficient consideration of the position of students and far too much consideration of the position of universities. I know they have funding problems, but that is an argument that should be had with the Chancellor of the Exchequer, not with students. It seems to me that those who will be punished are people who should, in normal conditions, have the option of being able to take a gap year. From my own experience such people need a year off because at that stage in their lives they are not ready to go to university. They need a year in the real world before they settle down to the serious business of studying at university.
I am really worried about the social profile of those who benefit from a gap year. They will not be kids in Workington who have worked their way through the
192
system and who are frightened of debt but have to take it on if they want to go to university. The sons and daughters of the great British middle class who enjoy very fat incomes will say to their children, "It's all right, you needn't worry, we'll fund your gap year and any additional year at university". I believe that that is wrong. We are penalising the very people who sent many of us as Labour Members of Parliament to the House of Commons. I simply cannot understand the logic behind many of the positions that we have taken on this Bill. The very people who will suffer are our people in the country. If the noble Lord presses the amendment to a Division, I shall join him once again.
Baroness Sharp of Guildford: My Lords, my name is attached to this amendment. I echo the words said on both sides about the advantages of passing this amendment. It is unfair to the students who are not certain whether it is worth their while taking a gap year. I believe that taking a gap year can prove a great advantage to students. As the noble Lord, Lord Campbell-Savours, indicated, it would be unfortunate if they were put off taking a gap year because they did not want to afford it. It is not the wealthy students would be put off but those who are at the margins and who would benefit enormously from a gap year.
As regards universities, there is a total uncertainty about how many will apply. Will there be an extra wave of 100,000 people applying? Universities are unclear on the position. In 1998 the measure was taken and now some care has been taken to replicate in this new amendment the wording used last time. Care was taken to smooth the whole process. It poses uncertainties for parents about what advice they should give. It seems to me that the amendment is well worth passing. I hope that the Minister will accept it.
Baroness Warwick of Undercliffe: My Lords, the impact of the introduction of a new fee regime on student applications is by no means clear, but it is important that we have transitional arrangements in place for those who choose to take a gap year. I am concerned to ensure that the appropriate funding is provided from the block grant and the same fee income as is currently in place for students, but it is important that we address the issue. That is very much in line with the view taken by Universities UK on the previous occasion when the situation arose. I am happy to support the amendment.
Baroness Ashton of Upholland: My Lords, I say to the noble Lord, Lord Forsyth, that I am sure that the Prime Minister will be delighted to have advice from him on elections. I wonder whether he gave advice in 1997 at the time of the election.
The latest figure for the number of gap-year students is 19,600 in 2002. It is worth while putting the figures on the record.
One could extrapolate two positions as regards the amendment and how we are considering the issue. In our view, we should take up neither of those positions.

193
At one end of the spectrum the Bill could provide that universities have to charge all gap-year students the higher variable fees; at the other end of the spectrum the Bill could provide that universities are forbidden from charging gap-year students more than the current fixed fee, which is likely to be about £1,200 in 2006–07. The amendment seeks to do the latter of those two options.
The Bill, as it stands, does neither. Our view is that universities should have the discretion to decide what fees to charge. That is the whole point of variability. The noble Lord, Lord Forsyth, indicated that I would contrast that with the position in 1998—a contrast which could not be greater—when the Government decided to exempt gap-year students.
Lord Forsyth of Drumlean: My Lords, I am grateful to the Minister for giving way. On the figures, I was relying on a briefing from organisers of gap-year fairs which estimated that in anticipation of top-up fees in 2006, applications for entry to universities in 2005 will increase by about 60,000. The other figure is 100,000. The Minister may not have seen this, but there is such a difference between her figures and these, it would be helpful if she could explain why she has come to the conclusion that the figure is so much lower.
Baroness Ashton of Upholland: My Lords, I shall explain where the figures come from. I do not know about the gap-year fares' figures at all, but my figures of the total accepted on a deferred basis of 18 year-olds applying to universities is 19,600.
Baroness Blackstone: My Lords, perhaps I may help. I believe that the figures of students who are accepted on a deferred basis will not cover the entire gap year student numbers. They will be those who decided to apply one year ahead for a place a year later, but many students take a gap year and apply during that gap year. That is a distinction. I think that the Government's figures are a little misleading.
Baroness Ashton of Upholland: My Lords, indeed on that basis they are and I am very sorry if I have misled the House with the figures that I have been given. If we have an exact figure I shall put it in the Library. Noble Lords will understand that the figure of 19,600 relates to what my noble friend has said and I am grateful to her for clarifying that. There is a disparity and I was concerned when I read out that figure. It is important to get that figure in your Lordships' minds. I am grateful to the noble Lord as well.
Our view is that universities should have the discretion to decide, as I have said, what fees to charge. That is the point of variability. In 1998 we had an issue about timing and there was no discretion for universities in terms of the fees that they charged. Fees were fixed and all universities had to charge the same.
194
They were not allowed to make special cases if they felt they should. Exemption was provided by the Government in regulations because that was the only way an exemption could be granted.
There was also a timing issue. The committee of inquiry chaired by the noble Lord, Lord Dearing, reported in July 1997 and the Government took the decision that month to introduce the tuition fee. By that point, students had already applied for entry for 1997 and been accepted. Those who wanted to take a gap year had already agreed with their universities that they would do so. In some cases they would even have entered into financial commitment for the gap years.
So the timing issue is important in the context of the Bill, without pre-empting the wish of Parliament in terms of the Bill. We believed that that was right in 1998 because students had entered into commitments in good faith. We felt it was important for gap-year students to be recognised. However, none of that applies this time round. The noble Lord, Lord Forsyth, implied that those who want to take gap years may already have taken that decision, but I do not believe that that is the same as the position in 1998 when students had already agreed with the institutions to defer. I am sure that some students have already considered taking gap years, but they will not be applying until next spring for entry in autumn 2005 and will agree with their universities next summer to defer entry until 2006. One way or another that will be long after these issues are settled in Parliament.
However, not only is the timing point different; there is also the question of discretion. We are not constraining universities' actions. If they see an advantage in offering exemptions to gap year students, they are able to do so.
It is possible that taking either of the extreme positions I have outlined could lead to unmanageable surges—as I think the noble Lord, Lord Forsyth, is indicating—in applications in one year or another. Requiring higher fees to be charged in 2006–07 could create a surge in 2005–06. Alternatively, exempting gap year students could create a surge in 2006–07, with an incentive to take a gap year so that the students could benefit from the enhanced student support.
Lord Forsyth of Drumlean: My Lords, I am sorry to interrupt the Minister again. Will she explain why there would be a surge if there were an exemption, because the students would not be in any worse-off position? If people want to have a gap year they could decide to do so and would be treated in exactly the same way. I do not understand that point.
Baroness Ashton of Upholland: My Lords, if people decide to take a gap year they could benefit from the enhanced student support arrangements that are being put in place from 2006–07. I understand the noble Lord's position, which is that one would have the current position for students in full and total. However, as I have indicated to the noble Lord, there are huge difficulties in running two systems in parallel that I would not wish to see us undertake.

195
So we think that the best way forward is to give universities flexibility and discretion in this area so that they can properly manage the ebb and flow of student numbers. That is an important and critical part of why we want the amendment withdrawn.
I recognise the importance of the issue to students who wish to undertake a gap year. In creating the Bill—we have one pot of money—we are allowing universities to make the right kinds of decisions. On that basis, I ask the noble Lord to withdraw his amendment.
Baroness Blackstone: My Lords, before my noble friend sits down, does she think that, in giving the universities the flexibility to make a decision, the Government anticipate a general agreement among all universities to do the same thing? Alternatively, does she think that each university will have to decide on the issue and then somehow or other inform all the student applicants what their position is?
I have some worries about the latter position because if that were to happen large numbers of young people would be left in a position where they were not clear on what the university intended to do. Universities will have to get this provision into their prospectuses rather early. Some students may decide to go to one university rather than to another simply on that basis—that is, whether or not they will be given special treatment. I am not sure that is the best basis on which to make a decision about where to study. So I think there are some difficulties.
At the same time I entirely accept what my noble friend has said about the position being different today from that in 1997 when I made a decision to treat differently those students with deferred places. At the time it was absolutely necessary to do that because, as the Minister has said, students had made decisions on the basis of assuming one set of requirements and a totally different one was going to be brought in for the following year. So there are differences. But I still think there are some problems about this provision.
I wonder whether it would be helpful if the Minister were to take the matter away and to look at it to see whether the kind of transitional arrangement proposed by my noble friend Lady Warwick could be considered. It may be impossible, but I do think that there are some problems here.
Baroness Ashton of Upholland: My Lords, I am always grateful to my noble friend. I also want to clarify a matter so that I can get it on the record. I have a note about the 19,600 students. These are the students that would be affected by the amendment. It could not apply to the group identified by my noble friend Lady Blackstone, as the amendment states that they must have applied before 1 August 2005. So it is exactly the group that would be dealt with by the amendment. I want to make that clear.
I understand what my noble friend says, but our position is that we are working with universities to ensure that they make the decisions that they think are right for their institutions.
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Time and again in your Lordships' House we have amendments that try and take out slices of money from this pot and give it to the control of either the Secretary of State or someone else. I have been completely consistent in trying to resist those attempts and saying that either one gives the institutions the responsibilities or that one does not. In this context we wish the institutions to make those decisions based on their best interests and in discussion with their students and applicants about what might be best for them. That may not be where some noble Lords feel we should be, but I think that it is a consistent position from that point of view.
Lord Dearing: My Lords, before the Minister sits down, I should be grateful for her help because I am finding it difficult to follow precisely where we are going. Is the universities' position that they would like the Government to take the decision for them that they cannot raise the fees for students who take a gap year, rather than take the decision themselves? That seems to me to be the issue. Do the universities want to take the decision or are they saying to the Government, "No, take it for us. We will do without the money"?
Baroness Ashton of Upholland: My Lords, effectively I think that would be the position.
Lord Forsyth of Drumlean: My Lords, I am really disappointed by the Minister's response. I hope that I will not in any way damage her ministerial career by saying that throughout the passage of the Bill I have found her very amenable and open to argument. There are matters of principle and policy which are central to the Government's objectives. But on issues of detail, where there were anomalies arising from what is a fundamental and major change, she has usually been quite willing to listen to argument.
Here we have something which affects—we can argue about the numbers—many tens of thousands of students. The noble Lord, Lord Campbell-Savours, spoke very eloquently and, I think, with considerable justification about the effect on people from poorer families and the disadvantage that they will suffer. I mentioned the benefits that could come for wealthier people.
Those students who happen, through no fault of their own, to be in this particular year cohort who do not take gap years are still going to find it more difficult to get the places they want at universities. It seems a very small matter. It is an anomaly created by the change in the system. The fact that the Minister is not prepared to give an inch on this or to listen to the pleas from—and I was extremely grateful for the support of Universities UK—all parties and from the Cross Benches, suggests to me that perhaps some of the noble Baroness's colleagues have not given this matter the required consideration.
So on this occasion I think that I need to test the opinion of the House. Should the House decide to support the amendment, I hope that the Government

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may look to find some accommodation for this problem. The amendment may not be perfect in every respect but the problem is there and is one that needs to be addressed.
6.17 p.m.
On Question, Whether the said amendment (No. 8) shall be agreed to?
*Their Lordships divided: Contents, 143; Not-Contents, 132.

Division No. 3

CONTENTS

Addington, L.

Howell of Guildford, L.

Alderdice, L.

Hunt of Wirral, L.

Ampthill, L.

Jenkin of Roding, L.

Anelay of St Johns, B.

Jopling, L.

Arran, E.

Kimball, L.

Astor of Hever, L.

King of Bridgwater, L.

Attlee, E.

Laird, L.

Avebury, L.

Liverpool, E.

Barker, B.

Livsey of Talgarth, L.

Beaumont of Whitley, L.

Lyell, L.

Blackwell, L.

McColl of Dulwich, L.

Blatch, B.

MacGregor of Pulham Market, L.

Bowness, L.

Bradshaw, L.

Mackay of Clashfern, L.

Bridgeman, V.

Mackie of Benshie, L.

Brougham and Vaux, L.

Maclennan of Rogart, L.

Buscombe, B.

McNally, L.

Campbell of Alloway, L.

Maddock, B.

Campbell-Savours, L.

Mancroft, L.

Carlisle of Bucklow, L.

Mar and Kellie, E.

Carnegy of Lour, B.

Marlesford, L.

Chadlington, L.

Masham of Ilton, B.

Colwyn, L.

Miller of Chilthorne Domer, B.

Cope of Berkeley, L.

Miller of Hendon, B.

Crathorne, L.

Monro of Langholm, L.

Crickhowell, L.

Montrose, D.

Dahrendorf, L.

Mowbray and Stourton, L.

Dean of Harptree, L.

Murton of Lindisfarne, L.

Denham, L.

Noakes, B.

Dholakia, L.

Northbrook, L.

Dixon-Smith, L.

Northesk, E.

Donaldson of Lymington, L.

Northover, B.

Dundee, E.

Norton of Louth, L.

Eccles of Moulton, B.

Oakeshott of Seagrove Bay, L.

Eden of Winton, L.

O'Cathain, B.

Elles, B.

Oppenheim-Barnes, B.

Elliott of Morpeth, L.

Peel, E.

Falkland, V.

Perry of Southwark, B.

Feldman, L.

Peyton of Yeovil, L.

Flather, B.

Phillips of Sudbury, L.

Forsyth of Drumlean, L.

Plummer of St. Marylebone, L.

Fowler, L.

Rawlings, B.

Freyberg, L.

Razzall, L.

Garden, L.

Reay, L.

Geddes, L.

Redesdale, L.

Goodhart, L.

Renton, L.

Goschen, V.

Renton of Mount Harry, L.

Hamwee, B.

Roberts of Conwy, L.

Hanningfield, L.

Rodgers of Quarry Bank, L.

Harris of Richmond, B.

Roper, L.

Haskins, L.

Rotherwick, L.

Hayhoe, L.

Saltoun of Abernethy, Ly.

Henley, L.

Scott of Needham Market, B.

Higgins, L.

Seccombe, B. [Teller]

Hodgson of Astley Abbotts, L.

Selborne, E.

Hooper, B.

Selsdon, L.

Howe, E.

Sharman, L.

198

Sharp of Guildford, B.

Trenchard, V.

Sharples, B.

Trumpington, B.

Shaw of Northstead, L.

Tugendhat, L.

Shutt of Greetland, L. [Teller]

Ullswater, V.

Skelmersdale, L.

Vinson, L.

Smith of Clifton, L.

Waddington, L.

Soulsby of Swaffham Prior, L.

Wakeham, L.

Wallace of Saltaire, L.

Stewartby, L.

Walmsley, B.

Strathclyde, L.

Warwick of Undercliffe, B.

Swinfen, L.

Watson of Richmond, L.

Taverne, L.

Wilcox, B.

Thomas of Gresford, L.

Williams of Crosby, B.

Thomas of Walliswood, B.

Windlesham, L.

Tordoff, L.

Wolfson, L.

NOT-CONTENTS

Ahmed, L.

Hilton of Eggardon, B.

Alli, L.

Hogg of Cumbernauld, L.

Amos, B. (Lord President of the Council)

Hollis of Heigham, B.

Howarth of Breckland, B.

Andrews, B.

Howe of Idlicote, B.

Archer of Sandwell, L.

Howells of St. Davids, B.

Ashton of Upholland, B.

Howie of Troon, L.

Bach, L.

Hughes of Woodside, L.

Bassam of Brighton, L.

Hunt of Chesterton, L.

Billingham, B.

Hunt of Kings Heath, L.

Boston of Faversham, L.

Irvine of Lairg, L.

Bragg, L.

Janner of Braunstone, L.

Bridges, L.

Jones, L.

Brooke of Alverthorpe, L.

Kirkhill, L.

Brookeborough, V.

Lea of Crondall, L.

Brookman, L.

Lipsey, L.

Brooks of Tremorfa, L.

Listowel, E.

Burlison, L.

Lockwood, B.

Cameron of Lochbroom, L.

Macdonald of Tradeston, L.

Carter, L.

McIntosh of Haringey, L.

Chandos, V.

McIntosh of Hudnall, B.

Christopher, L.

MacKenzie of Culkein, L.

Clarke of Hampstead, L.

Mallalieu, B.

Clinton-Davis, L.

Mar, C.

Cohen of Pimlico, B.

Marsh, L.

Corbett of Castle Vale, L.

Mason of Barnsley, L.

Crawley, B.

Massey of Darwen, B.

David, B.

Merlyn-Rees, L.

Davies of Coity, L.

Mitchell, L.

Davies of Oldham, L. [Teller]

Morgan, L.

Dean of Thornton-le-Fylde, B.

Morgan of Huyton, B.

Dearing, L.

Morris of Manchester, L.

Desai, L.

Nicol, B.

Dixon, L.

O'Neill of Bengarve, B.

Donoughue, L.

Palmer, L.

Dubs, L.

Parekh, L.

Elder, L.

Patel of Blackburn, L.

Erroll, E.

Paul, L.

Evans of Parkside, L.

Pendry, L.

Evans of Temple Guiting, L.

Peston, L.

Farrington of Ribbleton, B.

Pitkeathley, B.

Filkin, L.

Plant of Highfield, L.

Finlay of Llandaff, B.

Prys-Davies, L.

Fitt, L.

Puttnam, L.

Gale, B.

Radice, L.

Gavron, L.

Randall of St. Budeaux, L.

Gibson of Market Rasen, B.

Rendell of Babergh, B.

Gilbert, L.

Richard, L.

Golding, B.

Rogan, L.

Goldsmith, L.

Rooker, L.

Gordon of Strathblane, L.

St. John of Bletso, L.

Goudie, B.

Scotland of Asthal, B.

Gould of Potternewton, B.

Sheldon, L.

Graham of Edmonton, L.

Simon, V.

Gregson, L.

Strabolgi, L.

Grocott, L. [Teller]

Sutherland of Houndwood, L.

Harrison, L.

Taylor of Blackburn, L.

Hayman, B.

Temple-Morris, L.

199

Thornton, B.

Watson of Invergowrie, L.

Tomlinson, L.

Whitty, L.

Triesman, L.

Wilkins, B.

Turnberg, L.

Williams of Elvel, L.

Turner of Camden, B.

Uddin, B.

Williamson of Horton, L.

Walpole, L.

Wilson of Dinton, L.

Walton of Detchant, L.

Winston, L.

Warnock, B.

Woolmer of Leeds, L.

[*The Tellers for the Contents reported 143; the Clerks recorded 142 names.]
Resolved in the affirmative, and amendment agreed to accordingly.
6.30 p.m.
[Amendments Nos. 9 to 14 not moved.]
Clause 24 [Regulations under section 23(6) relating to basic or higher amount]:
Baroness Sharp of Guildford Baroness Sharp of Guildford moved Amendment No. 15:
Page 11, line 26, at end insert—
"( ) The Secretary of State may permit through regulations a block exemption from the requirements of the Competition Act 1998 (c. 41) for institutions collectively seeking to develop proposals in relation to the higher amount within a designated geographical area where he is convinced that such proposals contribute to the purposes of widening participation."
The noble Baroness said: My Lords, Amendment No. 15 relates to the Competition Act implications of this Bill. There has been some discussion of the degree to which universities would fall foul of the Competition Act 1998 if they sought to collaborate in raising fees. This is a probing amendment, which I put forward at the behest of the Association of Colleges, not of Universities UK or the universities, to explore how far collaboration between higher education institutions and further education colleges would fall foul of the law if they sought to collaborate over fees for higher education courses taught in further education colleges. Specifically, while the Competition Act, in Schedule 3, allows for exemption of agreements that have been made in order to comply with a legal agreement, the Enterprise Act 2002 allows for market investigation where it appears that the structure of the market or the conduct of suppliers or customers is harming competition. Therefore, potentially there could still be an investigation.
The Association of Colleges has raised three specific scenarios: first, where a higher education institution franchises a course at a further education college and requires the college to charge the same fee as the higher education institution; secondly, where a higher education institution charges for validating a course in a further education college, but where the course is delivered through the college; thirdly, where a higher education institution needs to set a fee level for a student progressing from a foundation course to an honours degree course. In its discussions with the Department for Education and Skills, the Association of Colleges has been assured that none of these scenarios pose problems.
In the first case, where a higher education institution franchises a course to a further education college, that would be treated like any other case of franchising, with the franchiser at liberty to set the price for the product it supplies. Agreement over price between the higher education institution and the further education college would be treated as normal business practice and would not fall foul of the Act. The Association of Colleges would like an assurance that this is the case even where prices are different. When, for example, the further education college sets its price considerably lower than the higher education institution price, in order to adjust to market circumstances, superficially it might appear that the two are in competition with each other, but in practice they have de facto agreed to segment the market and serve different parts of the market at different prices.
Secondly, in relation to the validation by a higher education institution of a course offered by a further education college, the decision over what to charge is for the further education college. Negotiations over the price to charge for the validation process, if this is done by the higher education institution, is a normal business transaction between the college and the higher education institution and does not entail, and should not entail, any agreement over the price charged to students for the course.
Thirdly, in relation to a student progressing from a foundation course to an honours degree, each institution sets its own fees, and while the higher education institution might wish to consider how much the student has already paid in fees in taking decisions as to what fees to charge, this information should come from the student and not from the college, and there is therefore no suggestion of collusion. Here again the Association of Colleges is less sanguine about this advice. It points out that foundation degrees are being developed jointly by higher education institutions and further education colleges precisely to ensure an easy progression, where appropriate, to a full honours degree. In such cases, they may well want to discuss the level of fees to be charged, so as to ensure an easy progression.
Finally, the advice from the department is that where a group of further education colleges collaborates to provide a set of courses at higher education level, whether the HEFCE money comes through one lead college, which in effect then becomes the franchiser, or to the separate colleges, there is no need for discussions about fee levels, and provided this is so, there is no contravention of the Competition Act. Equally, the Association of Colleges points out that where colleges have collaborated to develop a joint set of courses, it is most unlikely that they would not wish to discuss fees and it is in the interests of students that a common fee is charged.
The Association of Colleges therefore comes back to where it began with this amendment. Would it not be easier to have a block exemption from the Competition Act written into the Bill where colleges, whether further or higher education institutions, are collaborating to

201
provide courses that widen participation and that en route inevitably involve some discussion and some collaboration over fee levels? I beg to move.
Lord Dearing: My Lords, I will be quick. I hope that the noble Baroness will not press this to a vote tonight, because it is fresh and we need time to reflect on the detail. My initial reaction to any creation of what in industry is often called an orderly market, and sometimes unkindly called a cartel, is that it is a bad idea. We should be highly sceptical. We should consider it on merit, but not in a hurry.
Baroness Ashton of Upholland: My Lords, I shall attempt to give some of the reassurances that the noble Baroness is looking for. If there are other specific questions that I do not address in what I say, I will be happy to facilitate discussions with the Office of Fair Trading if that would be of benefit.
I welcome the recognition of the importance of widening participation, which underpins the proposals for the reform of higher education funding. Many of the provisions in this Bill—notably the establishment of an Office of Fair Access and the introduction of variable fees—are intended to create a system that is accessible for all of those who have the ability. I do not believe that an exemption from the provisions of the Competition Act is required to enable providers of higher education to succeed in this aim. Indeed, many already take this goal very seriously and do extremely well in encouraging applications from groups that have traditionally been under-represented in higher education. The introduction of variable fees will simply provide institutions with an additional lever to encourage applications.
In many areas, partnerships and discussions between institutions can be positive and can benefit students. Generally speaking, providing that institutions do not exchange information that could lead to collusion over fee levels, it is likely that they can exchange information without falling foul of the Competition Act. For example, institutions may well discuss with each other how best to deliver the measures that they are taking to widen participation. These are examples of areas where collaboration can lead to clear benefits for the student.
However, collaboration on price is never in the best interests of the consumer. The noble Lord, Lord Dearing, referred to that in his comments. This case deals with students, and we must defend their position. Even with the best of intentions, the very fact that prices may be fixed at a level that suits a particular group of institutions in a particular area means that in some cases it will not be in the interests of the students. Of course, institutions will respond to the decisions made by others providing similar courses in gauging how to set their fee levels. Indeed, I see that as one of the real benefits of variable fees, but it would not be acceptable for fee levels to be agreed among providers in advance, in a secret deal, behind closed doors. Such an arrangement would remove the incentive for institutions to improve quality, since it would mean that they could get away with charging a particular price.
202
The noble Baroness specifically asked me about three examples. The first was about fee-setting for a higher education franchise within a further education college. Where a higher education institution takes a decision to franchise into a further education college, it can be legitimate for the higher education institution to require the further education college to charge the same fee. It is not unlike any other franchise arrangement.
On the question of validation by a higher education institution of a course delivered by a further education college, the decision on what fee to charge would rest with the further education college. Any negotiation would be between the further education college and the higher education institution over the price for the validation process, not the fee charged to the student for the course. There would be no need to exchange information on the fee levels for students.
Finally, on the progression from a foundation course to an honours degree, where a student has completed a foundation degree at a further education college, and wishes to upgrade it to an honours degree at a higher education institution, the higher education institution might want to consider how much the student has already paid in fees when taking any decision on what level of fee to charge for the honours degree. In that instance, the HEI would be using the information on fees paid by the student to inform its own decision on fee levels and, of course, could do so without discussing fee levels with the FE college.
As the noble Baroness said, there are two models of collaboration within a consortium: that is, a lead college that would receive funding from HEFCE and would pass some of it on to its members; or several colleges which would receive funding from HEFCE to deliver a jointly developed course. The first model is not materially different from the franchising arrangements that I have already discussed. The lead college would need to have a fee level in its access agreement, which would be the fee charged to the student.
In the second model, each college would need to check its own decision without discussing with other members of the consortium what level of fees to charge for the course. That ought not to present problems as they develop the course to be offered.
That addresses most of the key points. As I have indicated, I am happy to pursue any of the specific issues that the noble Baroness wishes to raise. On that basis, I hope that she will feel able to withdraw her amendment.
Baroness Sharp of Guildford: My Lords, I thank the Minister for her reply. This is a probing amendment. There are a number of issues that the colleges have legitimately raised, which would be worth pursuing with the Minister. But, for the moment, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 16 not moved.]
Lord Shutt of Greetland Lord Shutt of Greetland moved Amendment No. 17:
After Clause 24, insert the following new clause—
"REPAYMENT OF STUDENT LOANS FOR THOSE ENTERING SPECIFIED AREAS OF EMPLOYMENT
The Secretary of State may use his powers under section 186 of the Education Act 2002 (c. 32) (student loans) to repay in whole or in part the amounts payable on loans made in respect of fees charged under sections 23 and 24 of this Act—

(a) for qualifying persons who undertake specified categories of employment within the public sector, or

(b) for qualifying persons who undertake specified categories of employment in the not-for-profit sector of the economy."

The noble Lord said: My Lords, your Lordships will remember that in Committee we were in the territory of Amendment No. 17. I hope that this amendment is written in a way that is more acceptable. It seeks to provide for student loans to be repaid by the Secretary of State using the powers that exist under Section 186 of the Education Act 2002. I am grateful for the response given by the noble Lord, Lord Triesman, in Committee and for the letter from the noble Baroness, Lady Ashton, which indicated that Section 186 has already been used for people who are training to be schoolteachers.
It is my belief that as the Bill stands we have dealt with courses that last for more than three years. We are now looking at courses of three years' length. We are wondering what will be the state of the human condition in terms of how people will consider debt. I can see a situation where the parents of an 18 year-old will say, "You are going off to university. Make sure you get on a course that's going to lead you to employment that's going to give you a substantial salary".
Therefore, I can see that there will be circumstances where careers that do not lead to those substantial salaries and the courses that lead to those careers will not be filled, and that there will be a problem. Of course, we do not know. I can imagine that the Minister will respond by saying, "Well, we have got Section 186 so we can deal with that in due course". That may be the case, but there is no harm in relating Section 186 to a Bill where it may be needed, so that it is absolutely clear that if those circumstances arise there is an answer. I beg to move.
Baroness Carnegy of Lour: My Lords, this amendment is very strange. As I understand it, at present, any employer—private or public—can pay off a debt. In this case, the suggestion has been made that it should be only public sector employees who could have that benefit. Why are the Liberal Democrats so keen on attacking the employment possibilities of private employees as opposed to public ones? Could the noble Baroness tell us that when she replies?
Lord Wilson of Dinton: My Lords, on reflection, could the noble Baroness not consider that this is a rather dangerous statute to have on the statute book? It would convey to the Secretary of State a degree of personal patronage that does not seem to be related to any specific public purpose. Indeed, he might be someone who wishes
204
to advance someone in a political career by giving them a necessary university background. This is an unnecessary clause and I hope that the House will not approve it.
6.45 p.m.
Baroness Seccombe: My Lords, the aim of this amendment is to exempt those working in public service jobs or the not-for-profit sector of the economy—namely, charities—where relatively low pay makes recruitment difficult. We strongly support the idea of public good and would like to highlight our unwavering admiration for those who work in jobs that achieve that. We certainly recognise the problems of pay within that sector. We pay tribute to the noble Baroness, Lady Sharp, who took note of our concerns in Committee and has now incorporated the not-for-profit sector as well as the public sector within the amendment.
However, we still have concerns about distinguishing between individuals because of the jobs that they do when public good can be achieved in so many ways in so many professions. We will listen with interest to what the Government have to say on the matter.
Lord Campbell-Savours: My Lords, I, too, support the amendment. Many decades ago, as a child my mother sat me on her knee and told me that the greatest contribution one could make in life was through work in the public sector. As time passed, I began to realise that very often people in the public sector are grossly underpaid for the contribution that they make. I would include university and further education lecturers in that sector, about which we had a debate earlier today. Of course, they are grossly underpaid. If we cannot deal with that matter directly through the Exchequer in order to give a reasonable settlement to the problem of university and further education lecturers' employment costs, it may be that that is the group who should be incentivised.
I support the amendment because there are groups in society who are underpaid. It seems wrong for a Labour Government to want to develop a regime that entices people to go into higher paid areas of employment if only so that they can afford the costs of higher education. We must have a system that allows people freely to consider whether they are prepared to take a low income in life because they are making a contribution to the charitable or public sector. Surely, people should be free to choose that. The regime that we are setting out has considerable costs—the question of the scale of debt—that are the subject of much dispute, which we have not dealt with today. That group, who potentially will face substantial debt, should not be placed in a position where they may wish not to take on the responsibilities that otherwise they would want to take on.
Lord Triesman: My Lords, this amendment seeks to encourage and safeguard applications to public and voluntary sector professions. It proposes that the Government would have the power to meet the cost of fee loan repayments for graduates entering those careers. The motivation for the amendment is obviously

205
commendable. The noble Baroness, Lady Seccombe, made exactly the point that these are all professions for which we have a high regard, which was also the underpinning of the point made by my noble friend Lord Campbell-Savours. It was discussed to some extent in Committee, but I hope that I can give some reassurances on the key issues.
I said in Committee that we are committed to the employment of the highest possible calibre of staff in our public services, including those who work in the voluntary sector. However, I did not believe then and I do not believe now that primary legislation is the right way to achieve it.
I repeat my reassurance that across the whole public sector, departments will be seeking to ensure that the new arrangements for student funding do not discourage graduates from all backgrounds from entering training for, or taking jobs in, the public sector. As noble Lords are aware after my earlier reference, we will be commissioning a report next year to examine gateways into the professions, including how the public sector and the professions can sustain and improve recruitment opportunities for graduates.
That does not mean that employers in the public sector, any more than in the private sector, should be deterred from implementing strategies now to sustain recruitment and retention. It is open to them to do so, as the noble Baroness, Lady Carnegy of Lour, pointed out. The review is not intended to be prescriptive in its recommendations, rather it will examine and highlight the effectiveness of various interventions that employers have in place.
However, we already have measures to provide for some of the groups that I envisage are intended to benefit from this amendment. The noble Lord, Lord Shutt, mentioned one of them. I outlined the groups in detail in Committee: the teaching professions, nurses and other medical staff. I should also say, as my noble friend Lady Ashton made clear in a letter to the noble Lord, Lord Shutt, following our debate in Committee—and as has been said in another place—that we already have the powers to write off loans, and we are now doing that for teachers in certain priority subjects. The powers are contained in Section 186 of the Education Act 2002.
But it is fundamentally for employers, whether private or public, to decide for themselves what steps they should take to recruit and retain the right staff. They will need continually to review and update those matters by looking at their circumstances and making judgments. They can do that in a way that we are not in anything like the same position to do. Departments will seek to ensure that the new arrangements for student funding do not discourage graduates from all backgrounds entering the public sector.
On a technical point, as the noble Baroness, Lady Seccombe, and I believe the noble Lord, Lord Renfrew, pointed out in our last debate on this subject, it is now difficult to define what constitutes a public sector worker. The list of professions would be arbitrary and, I suspect, rather wide-ranging.
206
Turning to the repayment of student loans in the not-for-profit sector, I understand that this is aimed at encouraging graduates into this area. Graduates who choose to work in the voluntary sector may well be on low pay or none for a time, and it is precisely these graduates who should benefit most from our student support provisions. Individuals who want to dedicate themselves to voluntary service need not worry that their student loan is going to become unmanageable. In response to my noble friend Lord Campbell-Savours, I do not believe that people will be discouraged from entering an area for which they feel great vocational passion if they know that they are not going to have to repay the debt in a way that would be difficult to manage. The debt will simply retain its value in real terms and, while it might prolong the time taken to repay, there is a benefit in knowing that in any event it will be cancelled after 25 years. The terms of repayment are non-commercial, linked to income at a zero real rate of interest.
However, the main point must be this: it is unlikely that we can make judgments about the best opportunities for employment compared with employers who have to make those decisions in the real world. We have thought about this hard and sympathetically and I hope that the noble Lord will feel it appropriate to withdraw his amendment.
Lord Shutt of Greetland: My Lords, I thank the Minister for that response. As he indicated, there was some difficulty about how the public sector could be defined. The terms "public sector" and "not for profit" seemed to cover the point. I know that there is a question whether universities are themselves in the public sector, but I am certain that they are not-for-profit bodies because I do not believe that they pay dividends. Therefore I suspect that universities would be included in the not-for-profit sector.
However, the main aim of the amendment was to ensure that this debate is on the public record. It makes it clear that Section 186 of the Education Act 2002 exists and that the Government, if they are minded and there is a problem, have one way to address any shortage of opportunity by suggesting that people may well be able to take on courses and other related work. The opportunity is there. In withdrawing the amendment, I am glad that the debate has been recorded for the future.
Amendment, by leave, withdrawn.
Lord Shutt of Greetland Lord Shutt of Greetland moved Amendment No. 18:
After Clause 24, insert the following new clause—
"REPAYMENT OF FEES VIA VOLUNTARY SERVICE
(1) The Secretary of State shall use his powers under section 186 of the Education Act 2002 (c. 32) (student loans) to develop a scheme whereby fees charged under sections 23 and 24 of this Act may be repaid in whole or in part through the performance of voluntary service.
(2) Regulations under section 186 of the 2002 Act shall specify both the types of voluntary service eligible and the minimum period of service necessary to qualify for such repayments."
The noble Lord said: My Lords, this amendment concerns voluntary service. Previously, we had a helpful response from the noble Lord, Lord Triesman. This is perhaps more serious in that we can see a real problem arising here. Is it conceivable that youngsters will undertake a significant period of voluntary service if, at the end of it, they have to embark late on a career, take on a mortgage and so forth, and face debt repayment? That is a hill too steep to climb. Although the noble Lord, Lord Triesman, has indicated that there are powers under Section 186 of the 2002 Act to develop a scheme, this amendment would ensure it by stating:
"The Secretary of State shall use his powers"
to put together such a scheme.
In moving this simple new clause to ensure that there will be a scheme, there is no plan to introduce it for a frivolous period of voluntary activity lasting perhaps only three months. I refer to significant periods of voluntary service. This kind of scheme would be very worthwhile for those taking on significant voluntary service. That is why I seek to add to the legislation a provision that the Secretary of State "shall" use powers to develop a scheme so that people know where they stand. They will then know that it is possible to undertake significant periods of voluntary service without feeling that, when they embark on a career later on, they will face too much debt. I beg to move.
Lord Campbell-Savours: My Lords, this is an excellent amendment with much for the Government in it. I can imagine a scheme being set up which Gordon Brown would rather like. I can think of a certain organisation that he would particularly want to foster: Voluntary Service Overseas.
Let us imagine a student coming out of university with a degree in development studies. He wants to go out and change the world and to make a contribution; and he wants to volunteer. He decides to go to a community in need in Africa. Alternatively, someone may want to develop the skills they have acquired in engineering. That person, too, may well decide to join Voluntary Service Overseas.
The question is whether, in deciding to make such a contribution, those students will be worried about the amount of debt outstanding in their names. We are talking about debt here. Predictions at this stage about the scale of that debt are not very precise. All sorts of predictions have been made, some from the Government which we have not gone into this evening, as well as from the National Union of Students and independent think tanks which believe that the level of debt presumed by the Government is far lower than is otherwise being forecast. The point is that the debt will be substantial, whatever the figure may be.
I am concerned to ensure that a critically important group of people willing to make a contribution overseas should not be put off in any way. My noble friend would be doing us a great service if her civil servants were to write to the Treasury and draw the attention of its Ministers to this amendment. I can imagine a scheme being set up that would lead the world in methods of repayment to incentivise our whole approach to overseas voluntary service.
7 p.m.
Lord Renfrew of Kaimsthorn: My Lords, I am interested in the amendment, but who do its proposers imagine will foot the bill? I support the amendment as long as it is not the universities. I was not happy with the two amendments that have been carried today because it seems to me that the universities will foot the bill and not the Treasury.
However, I welcome the amendment—or I think I do—because I take it that the implication of the Secretary of State using his powers is that the Treasury will foot the bill. I am glad to see the noble Baroness, Lady Sharp, and the noble Lord, Lord Shutt, nodding their heads. I have not seen my noble friend Lord Forsyth nodding his head, but he is nodding it now. I am delighted that my Front Bench is now endorsing the principle that the Treasury rather than the universities should pay for this welcome amendment, which I am happy to support.
Baroness Carnegy of Lour: My Lords, I was critical of the previous amendment, but I think this one is excellent; it has huge possibilities. I reiterate what my noble friend has just said.
Baroness Seccombe: My Lords, I support the amendment, to which my noble friend Lord Forsyth has added his name. It places a duty on the Secretary of State to use his powers to encourage young people to undertake voluntary service by making it a form of student loan repayment.
The debate on the pros and cons of top-up fees is not new to the House. It is well known that while we recognise the need to address the funding crisis in universities, the level of student debt that the Bill will effect is of great concern to us. Our concerns range from anxiety about debt acting as a deterrent to the young people we are trying to encourage to enter university, to the fact that it would saddle students with a significant financial burden at a time when they would be encountering the pressures that everyone faces at the start of adult life.
We also reiterate our admiration for those who work in, or offer their services to, the voluntary sector. We recognise the valuable work done in so many sectors where there never seem to be enough volunteers. Voluntary work benefits everyone and can be a life-forming experience.
We welcome the changes made to the amendment following the concerns expressed in Committee and are very happy to support it.
Baroness Blackstone: My Lords, perhaps I may seek clarification as to what the amendment really means. The noble Baroness, Lady Seccombe, referred to the "voluntary sector". The voluntary sector forms an enormous part of the public and private provision of all kinds of services in this country. Most people in the voluntary sector are paid for the work they do. It would not make any sense for the amendment to apply to anyone working in the voluntary sector, as the noble Baroness, Lady Seccombe, implied.

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If I am right and the Liberal Democrat amendment concerns unpaid voluntary service, either overseas or in this country, I wonder whether there will be a problem with defining it. Will it be full-time or part-time? A great deal of volunteering is done not on a full-time basis but on a part-time basis.
Although I can see what lies behind the amendment, were it to be agreed to, the practicalities of implementing it would be enormous. For those reasons alone I suggest that this piece of legislation could not and should not take the amendment on board.
Lord Walton of Detchant: My Lords, in supporting the amendment in principle I should declare an interest: one of my granddaughters and her husband run a small company called www.workingabroad.com, which arranges attachments overseas for a large number of people, both young and old. Many people work in the Third World—where they themselves have worked—and I think that is greatly to the advantage of those individuals. They are not often remunerated for the voluntary service they give.
Who will evaluate the voluntary service given by such individuals in order to justify the repayment of their loans by order of the Secretary of State? It will require a certain amount of accountancy expertise to carry out that evaluation. However, having raised that query, I support the amendment in principle.
Lord Triesman: My Lords, I have just been wished good luck. Perhaps I will need it. If good luck fails me, I shall ask the noble Lord, Lord Walton, to tell me what followed the "www dot" so that I can make a suitable application for one of those jobs.
The amendment seeks to encourage graduates into voluntary service and calls upon the Government to meet the cost of the fee loan repayments for graduates entering these careers. It is, to be candid, another top-slicing amendment. The appeal—which I understand completely—is made once again for the Treasury to provide the money rather than the universities. I am forced to repeat—as my noble friend has done on a number of occasions today—that there is one pot of money; that is the reality. And if there is only one pot of money, accepting the amendment would amount to a top-slicing arrangement.
The Government have already taken a number of initiatives to encourage voluntary work through various volunteering initiatives. Indeed, it has been a passion of my right honourable friend the Chancellor of the Exchequer to do so. For example, the Russell commission, launched by the Home Secretary and the Chancellor on 17 May, will work towards a national youth volunteering strategy which will lead to more young people developing their skills and serving their communities. The commission will build on the wide range of programmes that the Government currently support. Ian Russell will be speaking to the department to ensure that the experience and lessons from existing programmes influence the commission's plans.
We want to put in place a set of flexible opportunities which match young people's lifestyles and aspirations. We believe that the Russell commission will ensure that
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volunteering by young people flourishes, bringing with it benefits not only for the individuals concerned but for the communities in which they volunteer. By promoting active citizenship, we can contribute to stronger and more cohesive communities.
Much of the volunteering involved will be part-time. It will call on people to provide their skills and abilities when they can, not in some predetermined way as may have appeared to be the case in the past.
The Department for Education and Skills is involved in this work. I shall make sure that its officials work closely with the commission and that they are aware that this amendment was discussed during the course of the passage of the Bill. This will ensure that any lessons in this element of the Bill are learnt. I am sure that noble Lords will share my interest in the outcome of the work of the commission. These are important steps in encouraging people to volunteer their time and their services for the benefit of the broader community.
As I said in Committee, we also have the Millennium Volunteer programme, to which more than 130,000 young people up to the age of 24 have pledged their time. They are not all full-time; they are not easy to compute; nevertheless they have pledged their time. There is also the Higher Education Active Community Fund, which enables the development of new volunteering opportunities by funding the administrative costs associated with arranging them.
The people who will take part, particularly young people, are precisely those who will benefit from the income-contingent repayment element of student loans. The points made by the noble Lord, Lord Shutt, and my noble friend Lord Campbell-Savours are very important, but the fact remains that if people do not earn more than £15,000 per annum they will not pay; if they earn more than £15,000,they pay only in relation to income over the threshold; and after 25 years the debt is cancelled. So those who wish to pursue these kinds of activities—and we greatly encourage them—most certainly would benefit from such arrangements. In summary, we are doing a great deal of work in support of the voluntary sector and encouraging graduates into this area, which your Lordships' House has applauded in the course of this discussion.
I am also sure that one of the major factors on which noble Lords will agree is that the great value of voluntary service is precisely that it is voluntary. I have been very struck by a number of the debates in your Lordships' House. There can be no more than a few places where so many people with such extraordinary experience of voluntary activity have been collected in one place, bringing the benefit of that experience to your Lordships' House.
I am also pleased to say that, asking about these matters in the community in which I live. I found that a significant number of younger people, those who are sometimes thought to be rather cynical about the values of community and politics, are involved in running children's playgrounds, visiting hospices and a wide range of other activities. Whether we reflect on

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the experience of those of us in this House or those younger people to whom I have just referred, one thing they have in common is that almost the last thing they think about is finance. Volunteering is about something very much more profound.
I do not for a moment believe that there is not benefit to the individual in the development of skills, compassion and commitment to community, but I am not sure that the motivation to pay off student debt will be high on the list of what makes people volunteer. In that light, it is extremely hard—almost impossible—to think about what voluntary work would mean and where the boundaries would lie.
As the noble Lord, Lord Shutt, mentioned, we already have the power under Section 186 of the Education Act 2002 to pay off student loans for prescribed categories of students. Interestingly, that is a "may" power, which sounds more voluntary than a "shall" power, which sounds rather more prescriptive. However, we believe that it would be right to use that power in appropriate circumstances, but not to make it a compulsory element—to move from encouraging volunteering to the kind of arrangement suggested. The great value of volunteering is, as I said, that it is altruistic.
On these grounds, I urge the noble Lord to withdraw the amendment. I believe that the Government have a good record on volunteering and, with the greatest respect, this amendment may not be the way to carry it further forward.
Lord Shutt of Greetland: My Lords, before I continue, I thank the House authorities for disabling the pigeons, budgerigars or whatever, which have been an impediment to our activities this last hour or so.
I thank all noble Lords who have supported the amendment in principle. I understand that there are one or two reservations, but nevertheless, we have had thorough support in principle.
It was indeed the intention that the Secretary of State should use his powers. Obviously, in doing so, the Secretary of State would have to talk to the Chancellor of the Exchequer. I was delighted that the noble Lord, Lord Campbell-Savours, believed that this was a full toss for this particular Chancellor.
I believe that voluntary is voluntary. There is a case for "voluntary" covering people who are at least given a few bob to feed themselves. In no way does "voluntary" mean people who are paid a significant salary from which they are able to save and start a career, having done so-called voluntary service. No, indeed—the amendment is about voluntary meaning voluntary.
The amendment comprises two simple proposed subsections. One suggests that the Secretary of State develop a scheme, the second sets out the types of voluntary service eligible and also indicates the minimum period of service necessary. All sorts of other matters would be included in a scheme, but it would be a scheme that people understood; if they decided to participate, they would know where things were going.
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We must put ourselves into the position of 18 year-olds. They consider the debt future that life holds and whether they can stomach the idea of undertaking voluntary service when they will incur another debt if they go to university, and so forth.
I would like "may" to become "shall". However, I shall consider the comments of the Minister, who said that he will send a note to the Bill team. We may well return to this matter on another occasion, but in the mean time I thank the Minister for his comments and I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 19 not moved.]
Clause 27 [Sections 22 to 26: supplementary provisions]:
[Amendment No. 20 not moved.]
7.15 p.m.
Lord Phillips of Sudbury Lord Phillips of Sudbury moved Amendment No. 21:
Page 13, line 35, at end insert—
"( ) Student fees paid to relevant institutions pursuant to this Act shall in principle be additional to and not in replacement of state funding provided for and in respect of the teaching of undergraduate students at such institutions which funding will be at an annual real level per student not less than the average provided over the previous three years."
The noble Lord said: My Lords, I should like to ask the indulgence of the House in degrouping this amendment from the succeeding one. I have spoken to the noble Baroness, Lady O'Neill of Bengarve, who accepts this proposition. I have also mentioned this to the other Front Benches, so I propose, if I may, to deal just with Amendment No. 21, which stands in four names. None the less, I entirely support Amendment No. 22 in the name of the noble Baroness, Lady O'Neill, and others.
On 17 May, there was a full debate in Committee on this amendment, or one very like it, which was tabled in the same four names, representing the four corners of the House. In a debate lasting nearly an hour, 11 people spoke and, apart from the noble Baroness, Lady Ashton, everyone was strongly in favour of the amendment. After all, it did no more than put into the Bill the Government's oft-repeated undertaking not to reduce state funding for university education, thus ensuring that the fees charged to students would be new, additional funding for universities.
Those of your Lordships who were present then will remember the striking contribution made by the noble Lord, Lord Baker of Dorking. When Home Secretary, he introduced the national lottery. He gave the same sort of unqualified undertakings then as are being given now. As he remarked, those undertakings were forgotten as Ministers—even in his own government—and governments changed. As he put it,
"such pledges are written in sand … So pledges are not sufficient—[Official Report, 17/5/04; col. 525.]
In very generously responding to that debate, the main argument adduced by the Minister against the amendment was that,
"we do not believe that it is right to tie the hands of governments present and future for an unspecified time, which would be the impact of this amendment".—[Official Report, 17/5/04; cols. 525–28.]
That carries the clear implication that the unqualified undertakings of additionality which the Chancellor of the Exchequer, Secretary of State for Education and the noble Baroness have all repeatedly made are subject to one very leaky qualification. Exactly what circumstances would justify the Government in untying their own hands? The moment the Government answer that is the moment when the rationale for this highly contested Bill slides into incomprehension, verging on farce. What, then, has the legislative equivalent of the battle of the Somme been all about? Is it right that the Government can slide off the hook while, in the same circumstances, the poor students will continue to be impaled on their fee obligations?
The other riposte to the Government's case is that this is an exceptional Bill dealing with an exceptional impost on students. If, for reasons of economic crisis or whatever, the Government wish to abandon additionality, then they can come back to Parliament, as they do when they amend every other taxation measure.
Amendment No. 21 is a truly partnership amendment. It has been greatly helped by those who spoke on 17 May, and others, so as to be recast in the form in which it appears tonight. It would remove the reference to the provision of funding "directly and indirectly", which was felt to be too vague. It also eliminates the EU additionality formula; namely, that the Government are committed,
"subject to exceptional macro-economic circumstances".—[Official Report, 17/5/04; col. 517.].
I suggested in Committee that many of your Lordships would find that a pretty unappealing way of dealing with the problem, and so it proved. Therefore, in order to deal better with the same issue, I have included in the amendment reference to a three-year rolling average of real government spending on universities and have made it clear that that relates only to the teaching of undergraduates and not, for example, to research. That allows flexibility and does not discourage a government from being generous in one year for fear of setting a binding precedent for future years.
I end by urging the Government to accept what is clearly the will of the vast majority of those most engaged with the university sector in this House. The circumstances of the amendment seem genuinely to be the exception that proves the rule and I hope that the Government, however reluctantly, will accept the desirability, if not the necessity, of the amendment. I beg to move.
Lord Forsyth of Drumlean: My Lords, I rise briefly to support the noble Lord, Lord Phillips. He has made the case eloquently. I have only one point to add: we have been here before. An amendment on additionality was passed by this House on the previous occasion when fees were introduced. It went to another place and Ministers said, "Don't worry. It isn't necessary. Don't bind our
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hands", or words to that effect. They said that fees would be additional income. We do not need to look in the crystal ball; we can read the book. The assurances were given previously, with the effect that the money was clawed back. I know that the Minister will say that that was because the Tories were planning their reviews, but the money was clawed back. The assurances that were given were not honoured. I hope that the Minister has listened to the detailed words spoken in debates in the House and will accept the amendment.
Baroness Sharp of Guildford: My Lords, my name is not attached to the amendment, but I make it clear that that was because we felt, as the noble Lord, Lord Phillips, said, that it was an advantage to reflect the views of the four corners of the House. The amendment is tabled with the full blessing of the Liberal Democrat Front Bench.
Lord Dearing: My Lords, during the debate, we have, with some compassion, reflected on the financial obligations that we are asking young graduates to accept at a time when they will be entering the world with a hugely inflated level of house prices. We owe it to them to give them complete assurance that the money that they are being asked to provide will go for the benefit of higher education. We must owe that to them and see them right.
I shall refer briefly to both amendments. I welcome the changes that have been made to the drafting of Amendment No. 21 since it was first tabled. I shall add just one comment, which applies also to Amendment No. 22. Unless we have a precise definition of "teaching", we have nothing against which we can hold the Government to account. I hope that in its further refinement it might be explicitly related to teaching.
I am prepared to accept and support either amendment. If there were any indication from the Government that one had a basis for acceptance, I would rapidly move towards it.
Baroness Warwick of Undercliffe: My Lords, as I said in Committee, this issue brings us to the very heart of the Bill. If the additional funding for which the Bill provides through variable fees is offset by reductions in public funding, we shall be no closer to solving the financial crisis in university funding.
As other noble Lords have said, the noble Lord, Lord Phillips, deserves great credit for his perseverance on this issue. At each stage of the Bill, he has brought forward a proposal for ensuring that fees are truly additional and he has overcome each obstacle placed in his path.
Like my noble friend Lord Dearing, I argued in Committee that it was essential to find an agreed definition of the unit of public funding per student. The various definitions of that unit have led to disputes every year about the level of funding. I am pleased to tell your Lordships that, since then, discussions have

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begun between Universities UK and the Government on a common definition, which will be published annually. I hope that this will underpin the debate on university finance in the future. If public funding is reduced, there will be no statistical arguments for the Government to hide behind.
The Minister, the right honourable Alan Johnson, wrote to me yesterday outlining how this might be taken forward by his department and the Higher Education Funding Council. However, the amendment tabled by the noble Lord, Lord Phillips, binds the Government even tighter and I will therefore support it should he choose to press it to a vote.
Perhaps, like the noble Lord, Lord Dearing, I may comment on the amendment tabled by the noble Baroness, Lady O'Neill. It has the same merit in that it seeks to ensure that fees are truly additional and that student places are fully funded. However, I have a major concern in that in suggesting cuts in student numbers the amendment does not state exactly how they may be determined or managed. Obviously, universities would have great concerns about that. It is a complex issue and I am not sure it could be solved through primary legislation. I would therefore have difficulty supporting the amendment, but it raises issues that the Government must address.
Lord Rix: My Lords, as Chancellor of the University of East London, I trust that the additional funds which students will be providing for their own education are used to enable vice-chancellors to support general student experience and not to enable the other chancellor—the Chancellor of the Exchequer—to support general state expenditure.
Baroness O'Neill of Bengarve: My Lords, I rise only to support most warmly the amendment tabled by the noble Lord, Lord Phillips. I have checked that there is no pre-emption, but I shall not speak to my amendments as they have been degrouped.
Baroness Howe of Idlicote: My Lords, sadly, I did not have the opportunity of hearing what everyone said in Committee because I was out of the country, but I have of course read it. I support both amendments and have added my name to that tabled by my noble friend Lady O'Neill.
Those of us who support the Bill, despite some grave reservations, do so in the full realisation that the proposed top-up variable fees will not immediately bring in sufficient resources to provide the equipment and salaries discussed earlier today which will enable UK universities once again to compete at world-class level. However, it will be a start in giving universities far greater independence and freedom in how they raise and spend their own resources. But clearly that belief would be gravely undermined if the Government—any government, and we have heard of previous scenarios—reduce their current share of university funding in real terms year on year.
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As the noble Lord, Lord Phillips, said, the Government have committed themselves to doing no such thing. Therefore, what possible objection could there be to putting this important provision on the face of the Bill?
Lord Sutherland of Houndwood: My Lords I, too, congratulate the noble Lord, Lord Phillips, on the subtlety of the amendment. It is important that an amendment of this kind—I would happily support this one or that tabled by my noble friend Lady O'Neill—is included in the Bill. The reason is that the Bill is significantly drafted to provide additional funds to universities and the record is clear; the money can begin to be sidelined. The fear is that without a guarantee of this kind it would be.
7.30 p.m.
Baroness Blackstone: My Lords, I wish to raise one issue. The noble Lord, Lord Forsyth, is having a conversation, but my point relates to what he said earlier when. We have had this little spat before. He still refuses to accept what I said, but I am going to repeat it.
It is not true that the Government clawed back the additional funding that came from fee income last time round, when the scheme was introduced. The Government provided substantial additional public funding from the taxpayer to go to universities, in addition to the money that was earned by the universities from the introduction of fees. Indeed, the Government were able to reduce the efficiency savings required by the Treasury from 6.5 per cent, which was the position when the noble Lord's party was in government, to the 2 per cent recommended by the noble Lord, Lord Dearing, in his report. That represented a substantial amount of additional public funding. Moreover, for a short period, the Government were able to provide an increase in the unit of resource. Regrettably, that did not last. However, it is not accurate to say that the previous Labour Government clawed back the money provided from the additional fee income.
I would not want anyone to decide how they voted on this amendment on the basis of what the noble Lord said, because it was not entirely accurate. I hope that he and the House will accept that.
Lord Campbell-Savours: My Lords, in the light of the honesty expressed in the statement made by my noble friend, I see every reason why the Government would want this amendment to be included in the Bill. Therefore, if there is a Division, I shall certainly support it.
Lord Winston: My Lords, I, too, shall listen extremely carefully to what the Minister says. However, like so many noble Lords who spoke at Second Reading. I feel that it is very important that the Government maintain the commitment. The universities, as we have heard constantly throughout the day, are very short of money, and this is a minimum requirement to ensure that the legislation is acceptable.
Baroness Ashton of Upholland: My Lords, we debated these issues at great length in Committee, as the noble Lord, Lord Phillips, said. We considered the extent to which it was appropriate for legislation to tie the hands of future governments and prevent them determining their spending priorities in the light of circumstances. I argued then, as I shall argue again this evening, that primary legislation is not the right place for a financial commitment of this nature.
I appreciate the strength of feeling in your Lordships' House. However, I should say to the noble Lord, Lord Forsyth, as I think he would recognise, his position in support of the amendment is given in light of the fact that the Bill would not be a way in which a Conservative government would pursue education policy in future. Noble Lords may believe that all my words about the track record of this Government in trying to support the sector are true, and that somehow by voting for the amendment they would tie the hands of a future Conservative government. However, I do not believe that would be the case, as I do not believe that a Conservative government would go in this direction on education policy.
When the noble Lord, Lord Phillips of Sudbury, described the amendment in Committee, he compared it to the provisions of a Finance Bill. It is of course true that a Finance Bill binds the hands of successor governments, but they are an annual event and can therefore readily be changed to reflect the priorities of the government at the time. This amendment would inevitably tie the hands of a government for an indefinite period. Of course, that is precisely the point of what the noble Lord is trying to achieve. However, I question whether that is a reasonable objective.
The amendment goes further than looking at the funding for higher education, by ensuring that the new fee income is additional and guaranteeing that public funding for higher education cannot decrease in future. The previous amendment, which we discussed in Committee, included a phrase about exceptional macroeconomic circumstances. I expressed some concern about what that might mean in practice for higher education. I note that the phrase has now disappeared. While that eliminates some of the definitional uncertainty, it leaves the amendment even harder to implement. Even if there were some major and significant financial pressures on a government, the effect of the amendment would be that higher education above all other priorities would be protected.
Our debates in Committee also touched on some of the other practical difficulties inherent in the amendment. The noble Lord, Lord Dearing, highlighted some unintended consequences that might arise. For example, although the current version of the amendment talks of the average funding over the previous three years, a government might still be very reluctant to provide a one-off injection of funding to meet someperceived need: that would increase
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the average and could therefore be unsustainable in the future. The result could be that the funding might be kept at the lowest level permissible under the Act, irrespective of whether additional funding might have been available in any one year. That cannot be in the interests of the sector.
I also raised the issue of whether the amendment would apply at the level of the whole sector or whether it would need to apply at an institutional level. If it is the latter, then noble Lords may readily see that there would be significant practical difficulties, not least in the fact that funding could not be amended if the pattern of provision at an institution changed.
There are also issues about the flexibility that the sector might enjoy. At present, HEFCE allows institutions to change their student numbers and pattern of provision within tolerance bands. If the amendment were passed, and we were bound to ensure that the unit of funding remained at a certain level, we would need much more stringent control over student numbers, and indeed student numbers within specific funding categories. Otherwise, we could find ourselves in breach of the Act if, in good faith, we set our funding at a level which would ensure that the requirement was met, but the sector subsequently over-recruited or recruited into more expensive courses than anticipated.
We need to bear it in mind in thinking this through that universities make offers to students for places based on their predicted rather than actual grades and institutions are obliged to meet those offers. Even with the best intentions, therefore, it would be difficult for an institution to hit exactly a target for student numbers. The complexity and unfairness that the proposal would introduce would be unmanageable.
I want to pick up another couple of points from Committee that I did not deal with. I can confirm for my noble friend Lady Warwick that the Chancellor's Budget Statement about how the funding per student will increase over the spending review period did not include the student support provided to those students. This is good news for the sector. We are committed both to increasing the unit funding paid to institutions and to increasing student support, where the new package of grants and the payment of loans for variable fees will be of significant benefit to students. In other words, they are not at the expense of one another.
I can also confirm that, following my discussion with the noble Lord, Lord Phillips, for which I am grateful, and further discussions with Universities UK, my right honourable friend the Minister for Higher Education has written to Universities UK proposing the establishment of a working group to produce a new definition of unit costs. That would, of course, be published in the annual departmental report in the usual way. That may go some way to considering the issues that the noble Baroness, Lady O'Neill, would have raised if she had spoken to her amendment. It would provide a clear means of

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demonstrating the additional funding being put by the Government into the sector over and above tuition fees. In other words, it deals with the issue of transparency, which noble Lords have been concerned about.
The Government's commitment to the future funding of higher education is clear. I cannot accept the amendment or offer to bring back an amendment of my own, but I can confirm again that income from tuition fees will be additional and that with Universities UK we shall develop more transparent accounting and reporting arrangements, which would enable your Lordships' House to see how we have delivered against those commitments. On that basis, I ask the noble Lord to withdraw his amendment.
Lord Phillips of Sudbury: My Lords, I am grateful to the Minister as always for her politeness, clarity and attempt to bridge the unbridgeable. It is pretty obvious that this is a whole-sector amendment and not an institution-by-institution one, so that query on her part can be laid to rest. Also, I fail to understand why the annual Finance Bill could not have a clause in it amending this formula if the particular circumstances prevailing required it. Therefore, it is simply not the case that the amendment, if brought in, would be there forever.
The Minister talked of complexity and unfairness. There will be unfairness if the Government or any future government resile on the undertakings given or otherwise wheedle their way out of them because they have other fish to fry and other priorities to pursue. It may be a factor in our low level of GNP funding of higher education that we do not have something like this amendment in our legislation. I believe that the provision, while not perfect, would work and could be refined over time. It should be in the Bill, for all the reasons that noble Lords have given. Therefore, I wish to test the opinion of the House.
7.39 p.m.
On Question, Whether the said amendment (No. 21) shall be agreed to?
Their Lordships divided: Contents, 98; Not-Contents, 88.

Division No. 4

CONTENTS

Addington, L.

Carnegy of Lour, B.

Alderdice, L.

Cohen of Pimlico, B.

Alton of Liverpool, L.

Colwyn, L.

Arran, E.

Courtown, E.

Astor of Hever, L.

Craigavon, V.

Attlee, E.

Crathorne, L.

Avebury, L.

Dean of Harptree, L.

Barker, B.

Dearing, L.

Bradshaw, L.

Dholakia, L.

Bridgeman, V.

Dundee, E.

Bridges, L.

Falkland, V.

Brittan of Spennithorne, L.

Forsyth of Drumlean, L.

Brookeborough, V.

Fraser of Carmyllie, L.

Brougham and Vaux, L.

Garden, L.

Buscombe, B.

Goodhart, L.

Butler of Brockwell, L.

Greengross, B.

Campbell-Savours, L.

Hamwee, B.

220

Harris of Richmond, B.

O'Neill of Bengarve, B.

Higgins, L.

Park of Monmouth, B.

Hodgson of Astley Abbotts, L.

Peel, E.

Hooper, B.

Perry of Southwark, B.

Howe of Idlicote, B.

Phillips of Sudbury, L. [Teller]

Inge, L.

Puttnam, L.

Jenkin of Roding, L.

Rawlings, B.

Jopling, L.

Redesdale, L.

Kimball, L.

Renfrew of Kaimsthorn, L.

King of Bridgwater, L.

Rix, L.

Laird, L.

Roper, L.

Layard, L.

St John of Fawsley, L.

Lindsay, E.

Scott of Needham Market, B.

Linklater of Butterstone, B.

Seccombe, B. [Teller]

Livsey of Talgarth, L.

Selborne, E.

Lyell, L.

Sharp of Guildford, B.

MacGregor of Pulham Market, L.

Shutt of Greetland, L.

Skelmersdale, L.

McNally, L.

Smith of Clifton, L.

Maddock, B.

Stewartby, L.

Maginnis of Drumglass, L.

Sutherland of Houndwood, L.

Thomas of Walliswood, B.

Mancroft, L.

Vinson, L.

Mar and Kellie, E.

Wallace of Saltaire, L.

Masham of Ilton, B.

Walpole, L.

Miller of Chilthorne Domer, B.

Walton of Detchant, L.

Monson, L.

Warwick of Undercliffe, B.

Montrose, D.

Watson of Richmond, L.

Mowbray and Stourton, L.

Wilcox, B.

Noakes, B.

Williams of Crosby, B.

Northover, B.

Williamson of Horton, L.

Norton of Louth, L.

Wilson of Dinton, L.

Oakeshott of Seagrove Bay, L.

Winston, L.

NOT-CONTENTS

Ahmed, L.

Gould of Potternewton, B.

Alli, L.

Graham of Edmonton, L.

Amos, B. (Lord President of the Council)

Grocott, L. [Teller]

Hayman, B.

Andrews, B.

Hilton of Eggardon, B.

Archer of Sandwell, L.

Hogg of Cumbernauld, L.

Ashton of Upholland, B.

Hollis of Heigham, B.

Bach, L.

Howarth of Breckland, B.

Bassam of Brighton, L.

Howells of St. Davids, B.

Blackstone, B.

Hoyle, L.

Brennan, L.

Hughes of Woodside, L.

Brooke of Alverthorpe, L.

Hunt of Chesterton, L.

Brookman, L.

Hunt of Kings Heath, L.

Brooks of Tremorfa, L.

Janner of Braunstone, L.

Burlison, L.

Jones, L.

Carter, L.

Kirkhill, L.

Chandos, V.

Lea of Crondall, L.

Clarke of Hampstead, L.

Lipsey, L.

Clinton-Davis, L.

McIntosh of Haringey, L.

Corbett of Castle Vale, L.

MacKenzie of Culkein, L.

Crawley, B.

Mallalieu, B.

Davies of Coity, L.

Massey of Darwen, B.

Davies of Oldham, L. [Teller]

Merlyn-Rees, L.

Desai, L.

Mitchell, L.

Dixon, L.

Morgan of Huyton, B.

Donoughue, L.

Nicol, B.

Dubs, L.

Patel of Blackburn, L.

Elder, L.

Paul, L.

Evans of Parkside, L.

Pendry, L.

Evans of Temple Guiting, L.

Pitkeathley, B.

Farrington of Ribbleton, B.

Plant of Highfield, L.

Filkin, L.

Radice, L.

Gale, B.

Randall of St. Budeaux, L.

Gavron, L.

Rendell of Babergh, B.

Gibson of Market Rasen, B.

Rooker, L.

Gilbert, L.

Scotland of Asthal, B.

Golding, B.

Simon, V.

Goldsmith, L.

Stone of Blackheath, L.

Gordon of Strathblane, L.

Taylor of Blackburn, L.

Goudie, B.

Temple-Morris, L.

221

Thornton, B.

Wilkins, B.

Tomlinson, L.

Williams of Elvel, L.

Triesman, L.

Turner of Camden, B.

Woolmer of Leeds, L.

Whitty, L.

Young of Old Scone, B.

Resolved in the affirmative, and amendment agreed to accordingly.
Lord Triesman: My Lords, I beg to move that further consideration on Report be now adjourned. In moving the Motion, perhaps I may suggest that the Report stage begin again not before 8.50 p.m.
Moved accordingly, and, on Question, Motion agreed to.

Business
7.51 p.m.
Lord Grocott: My Lords, before we start the next debate, perhaps I may make a few comments that I hope are for the convenience of the House. Several noble Lords have asked me how long the debate will last. My answer to that, like my answer to most questions, is that I am not sure. Although it is not, as we know, a timed debate, we try to put business into the dinner adjournment that we think will last roughly an hour. As I have been asked, however, all I can say is that about seven noble Lords have indicated that they are likely to speak. The arithmetic is that if those seven were to speak for about five minutes, and allowing for the usual openings and closings, we would finish roughly within the hour.
I have to re-emphasise that I do not make the rules here. I am simply trying to give noble Lords the best information I have at present.

Guidance issued under Section 182 of the Licensing Act 2003 and Guidance to Police Officers on the Operation of Closure Powers in Part 8 of the Licensing Act 2003
7.52 p.m.
Lord McIntosh of Haringey Lord McIntosh of Haringey rose to move, That the draft guidance laid before the House on 23 March be approved [18th Report from the Joint Committee and 2nd Report from the Merits Committee].
The noble Lord said: My Lords, the guidance before the House is almost 200 pages long and contains more than 2,000 paragraphs. I suspect that the House will not want me to go into detail, but I shall do my best to explain its thrust and effect.
Under subsection (2) of Section 182 of the 2003 Act, the Secretary of State may not issue the licensing guidance unless a draft of it has been laid before, and approved by resolution of, each House of Parliament. Noble Lords will recall that the Select Committee on Delegated Powers proposed that the Licensing Bill be amended to provide a mechanism for scrutiny. We responded to that following the persuasive case put by
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some noble Lords present today. The procedure provides no mechanism for tabling amendments to the draft guidance. The draft must be either approved or rejected. I should also emphasise that the guidance cannot change the primary legislation that was so thoroughly scrutinised by both Houses. I make that point not least because some who have commented on the draft guidance seem to believe that it can override or modify the Act. It cannot.
A draft of the guidance was first made available during the parliamentary stages of the Licensing Bill to inform the debates in both Houses. Following Royal Assent in July last year, a further draft was prepared which reflected amendments made to the legislation and many of the points made in Parliament. It was published for consultation in August 2003. A prolonged and detailed consultation followed publication in August.
I should like to express my gratitude to the expert bodies and organisations listed at page 12 of the draft guidance which have provided an enormous amount of advice that enabled us to produce the draft being considered today. In addition to those who formed our advisory group, many other organisations provided comments and views, including residents' associations, individual local authorities, trade unions, industry trade bodies, individuals and members of the legal profession.
We have also consulted very closely with musicians and performers' groups to ensure that the draft guidance properly reflects their concerns which were much debated during the passage of the Bill. We also turned to a specialist group involving children's organisations such as the Children's Society and the NSPCC and the police for advice about the sections of the draft that deal with the protection of children from harm. And of course, because of the range of issues with which it deals, we have also consulted closely with a range of other government departments, agencies and public bodies. Inevitably, across such a great range of issues and the breadth of the consultation, there has been conflict between some of the views expressed. Where there has been conflict, we have sought to find a balanced position that represents best practice and the broadest possible consensus in the area concerned.
If the draft guidance is approved by both Houses, under subsection (3) of Section 4 of the 2003 Act any licensing authority will be required to have regard to it when carrying out any licensing function. The first licensing function to be carried out by any licensing authority will be to make its local statement of licensing policy. The process cannot formally begin until Parliament has made its decision about the draft guidance. The phrase "have regard to" does not mean that licensing authorities must slavishly follow its terms to the letter. In effect, the guidance will set a national policy framework which we expect local statements of licensing policy to complement and reflect. When carrying out its licensing functions, a licensing authority may depart from the guidance where it is justified by individual or local circumstances. But the authority will need to set out good reasons for doing so.
The purpose of the guidance is to promote consistency and good practice, but not at a cost of eroding local discretion. The Act creates a local system under the control of locally elected representatives for the benefit of local communities. Our concern has therefore been to achieve balance between providing sufficient detail and advice and not being tempted into excessive prescription.
The draft is primarily directed at the professional and technical advisers of licensing authorities to enable them to assist licensing authorities and their committees in carrying out their role as Parliament intended. It is therefore complex and technical in parts. As a valuable by-product, we hope that it will also assist applicants, the police, other responsible authorities, performers and the general public to understand better the processes involved. But I must stress that it is not a substitute for a proper understanding of the Act itself and must always be read in conjunction with the primary legislation and secondary legislation to be made under the Act.
I now intend to touch on three connected issues that have received a good deal of attention in recent weeks: alcohol harm, the position of the police and the cumulative impact of a concentration of licensed premises.
It has been asserted by some that the 2003 Act and the draft guidance are incompatible with the alcohol harm reduction strategy and its focus on binge drinking and irresponsible trading of alcohol. However, there is nothing contradictory between the documents. They were developed together. We deliberately delayed the finalisation of the draft guidance until the terms of the strategy were agreed. Both documents were then published in March this year.
The 2003 Act and its guidance and the strategy aim to help curb irresponsible trading, alcohol-related violence, public nuisance and to protect children from harm. The 2003 Act provides expanded, more flexible and tougher powers to deal with premises that engage in trading that damages our communities and provokes drunkenness and disorder. The strategy, of course, goes much wider, to cover issues including public health education and so on. However, we have to recognise that while we need to act to reduce binge drinking and alcohol-related violence—and I think that anyone who saw the "Panorama" programme on Sunday night needs no convincing on that point—we also need to ensure that the development of the night-time economy can help to regenerate many areas through investment and the opening up of employment opportunities.
I also want to make clear that there is no dispute between the Government and the police about the value of the changes to be implemented through the 2003 Act. On 29 April of this year, Rick Naylor of the Police Superintendents' Association told Radio Four's "PM" programme:
"The Superintendents' Association have always been in favour of relaxing licensing laws and bringing them into the twenty-first century, and it is slightly disappointing we can't get this piece of legislation enacted sooner, because I think it will have an effect on violence in the streets".
Chris Fox, President of the Association of Chief Police Officers, said on the "Today" programme on 11 May 2004:
"However, for the vast majority of people the licensing laws will bring a welcome and civilised sort of approach to the world. They can get a drink and they can go and relax and socialise when they want".
The police have been constantly and closely involved in the development of the draft guidance. It was said in another place that we are just citing a few policemen when others hold misgivings. Chris Fox speaks for all chief officers as president of ACPO and is not just another policeman, and Rick Naylor speaks for superintendents. Within all organisations there will be dissenting voices—indeed, we heard them from Nottingham on Sunday night—but the president of ACPO represents the consensus, as does Mr Naylor.
I turn to the issue of saturation and cumulative impact. During the parliamentary stages of the Licensing Bill, there was much discussion of the need to address the cumulative impact on crime and disorder where there is a concentration of licensed premises. I know that this was a matter of concern in particular to the noble Lord, Lord Avebury, but of course, many others shared that concern.
We have therefore set out in paragraphs 3.13 to 3.28 of the draft detailed advice for licensing authorities about how these issues should be addressed where they arise. The Act does provide the necessary power to assist local communities in dealing with such matters due to impacts on the licensing objectives. However, the draft guidance also sensibly recognises that it can be only one part of a solution that requires a partnership approach.
We have seen briefing issued by the Local Government Association which says that the draft guidance applies the special policy described only to new applications and not to applications for variation or to provisional statements. If noble Lords will look at paragraph 3.19, they will see that the Local Government Association has failed to note that it says:
"The effect of adopting a special policy of this kind—
that is, a policy about saturation—
"is to create a rebuttable presumption that applications for new premises licences or club premises certificates or material variations will normally be refused".
Applications to vary licences are therefore included. As for provisional statements, the Local Government Association appears to have forgotten that there is no provision in the 2003 Act for refusing to make a provisional statement, and the guidance cannot, of course, amend the primary legislation as approved by Parliament. I have to say that its points on cumulative impact are therefore not well made.
The noble Lord, Lord Redesdale, will today argue that it would have been better to consider the draft guidance only after the fee levels have been made by the Secretary of State. I say with great respect to the noble Lord, as he played a most valuable part in the progress of the Bill, that I must oppose this Motion. For completeness, I should also mention that Section 178 of the Act is also relevant in addition to those he has cited.
I am afraid that the noble Lord, Lord Redesdale, is attempting to have it both ways. Among others, he argued persuasively during the passage of the Licensing Bill that we should respect the view of the Select Committee and provide a mechanism allowing Parliament the opportunity to scrutinise the guidance before it is issued. We accepted the points that he and others made and we made the necessary amendment to the Bill. That is why we are here tonight.
We cannot presume that such scrutiny will lead automatically to the approval of the draft guidance today, or, indeed, in any revised form if we were obliged to take it away and return to Parliament. We would certainly be criticised for being arrogant if we sought to do so—if we proceeded with regulations before Parliament had approved the guidance that is related to them. The guidance is central to the processes and activity in which licensing authorities will engage, and indeed particular parts of local authorities. Any changes to the draft guidance can therefore impact on costs and costs in turn impact on fee levels.
Fee levels must be set at a level that allows licensing authorities to recover fully their costs of administration, inspection and enforcement. Until Parliament has finalised its scrutiny of the guidance, the Secretary of State cannot finalise the fee levels. I am sure that on reflection the noble Lord, Lord Redesdale, will agree that he cannot expect us to put the cart before the horse.
I wholly appreciate why licensing authorities and industry are keen to know the final terms of the fees. It is important for planning purposes. I can assure the House that we intend to make the fee levels known to the licensing authorities and other stakeholders as soon as possible following the approval of the guidance. The regulations, which, of course, have to be consulted on, will be in place in good time for the beginning of the transitional period.
The minimum time for the beginning of the transitional period after the passage of the guidance is six months. Representations have been made to us that a longer time is necessary. I assure the House that the Secretary of State is considering those representations carefully.
The Licensing Act 2003 is important legislation that will provide: radical reform of an essentially 19th century system; greater freedom and flexibility for the responsible parts of industry; greater choice for consumers; opportunities for regeneration, increased investment and new employment; a more democratically accountable system; and tougher and more comprehensive powers to deal with irresponsible licensed traders who cause problems within our communities.
The draft guidance that we are scrutinising will provide a national policy framework which will inform and guide the key decisions that licensing authorities will be required to take. I am satisfied that the provisions of the draft guidance are compatible with the European Convention on Human Rights and I commend it to the House.
Moved, That the draft guidance laid before the House on 23 March be approved [18th Report from the Joint Committee and 2nd Report from the Merits Committee].—(Lord McIntosh of Haringey.)
Lord Redesdale: My Lords, I wish to speak to this Motion. For the convenience of the House, and for the elucidation of the process for other noble Lords as I had to seek a degree of guidance from the Clerks on this issue, I should perhaps set out the position that we shall take on the two Motions.
It is not the intention of these Benches to oppose the Motion on the guidance. However, I intend to speak in this debate to the Motion of regret in my name. I ask and hope that all noble Lords speak to that Motion in the first debate. Depending on the Minister's reply, when we move to the second Motion I may then be able to withdraw it hastily due to this debate.
I thank the Minister for his comments about the second Motion, particularly for correcting us about failing to include Section 178. That was most helpful. If I were to table the Motion again, I would include it.
Lord McIntosh of Haringey: My Lords, it was a cheap shot.
Lord Redesdale: My Lords, I would never accuse the Minister of anything quite so underhand.
We support the guidance, with major caveats. One problem that we faced throughout the progress of the then Bill was the late publication of the guidance. The Act itself is the skeleton of the legislation, with all the meat having been left off. It seems unfortunate that we were left without draft guidance to look at throughout the process. It was very late in the process—after Committee and into Report—before we could read the draft guidance. The Minister talked about putting the cart before the horse, but it seems unfortunate that while we had the horse we did not know what was the shape of the cart.
The Minister answered on one of the major issues that we raised, and I ask him to make some further points about the first appointed day. As I understood the legislation, the first appointed day was six months from the end of the debate today, from which it could be extended. The Minister said that that was the minimum period in which the Secretary of State could put forward the first appointed day. Considering the major problems that the Act faces, I very much hope that the Minister will, before finalising any set day for the first appointed day, take into account when the fee structure is published.
That becomes the nub of our disagreement with the way in which the Government have put forward the process. We still have no clear indication of the extent of the fee structure. If the legislation had no further consequences outside the House or in the legal framework, that obviously would not matter. However, there are great consequences for many councils, which have already had to set their council tax levels to take account of a fee structure when they still do not have any real basis on which to know the level set. Obviously there is a difference between the £100 and £500 for every

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licence. Although that is within the guidance, it is not exactly set altogether as staying within the £100 to £500 levels. From the first discussions that we had with the Bill team, it was clear that those were only the parameters to which the Secretary of State was working at that point.
That leaves the councils in the dark. I understand that a number of councils have already raised council tax to meet their expected costs. Although the Minister can speak with a degree of firmness and in a way that is almost irrefutable—only he has that way of putting forward such cases—many councillors are extremely worried that the Government have vastly underestimated the cost of administering the scheme.
There will be added costs. The justices' courts are being moved to the councils, which will place costs outside the licence fee. The magistrates will face costs, because I strongly believe that the Government have underestimated the number of appeals that will go to magistrates. We are not talking about a simple change from one side to another. One side is the industry. I must declare an interest as the owner of an extremely fine pub in Northumberland, the "Redesdale Arms". I can give a map to anyone interested, as I have done before.
Lord Phillips of Sudbury: My Lords, besides giving us a map, will my noble friend give us a free drink?
Lord Redesdale: My Lords, that goes beyond the call of this debate.
The industry has the right to put forward variations. However, large numbers of residents' associations are also becoming extremely concerned; a large number of them have written to me. They will incur costs in considering whether they can oppose the variation. Anyone who has earned easy money from the licensing area—I have talked to a number of noble Lords from the legal profession who said that they had—will say that the legal profession will get involved in it to a great extent.
The Minister has said that it is the Government's intention that the fees structure should lead to a neutral scheme, so that there will be no further costs. There were issues that were raised earlier in which the DCMS said that councils made a profit of £7.1 million out of the licensing regime. However, that has since been refuted, and it turns out that councils have made a loss of £7.1 million. So councils are already making a loss on the fee structure. If this is a cost-neutral scheme, under the present system they will probably make a further loss. I have a particular question for the Minister on that issue. If a council creates a deficit for dealing with these fees, how will that affect those local authorities which have been capped in their spending? Will central government have to meet that added burden?
Of course, there are other costs, as the Minster stated. Policing is one and having not seen the "Panorama" programme—although I have been told about it by many people—I think that it is extremely unfortunate that the Association of Chief Police Officers' report on
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the negative impact of the licensing regime was not brought forward and made more readily available at an earlier stage in the proceedings on the Licensing Bill. Everyone should realise that there has been an increased level of violence associated with alcohol—the Prime Minister talked about the misuse of alcohol as "the British disease". We are taking a leap in the dark into an area where it is not just a question of a quiet drink on a Sunday night at the local that might be extended for an hour, there is a real risk that a large number of violent incidents will take place.
8.15 p.m.
I was going to speak only for four or five minutes, and I have overshot that target considerably. However, I have two further questions. I know that many other noble Lords will raise other issues. I hope that the Minister can give me an answer about circuses, which are unfortunate casualties of the Act. They were given certain assurances by the Home Office when the Bill moved from the Home Office to the DCMS, and those assurances turned out not to be the case. Circuses have been brought within the ambit of the Act to a degree in which it seems that many of them face closure, in the worst case.
The Minister will say that the Act has now been passed, so there is nothing that can be done. However, as the Government drafted the Act, I hope that the Minister will not use that let-out and will say that the Secretary of State, through guidance, will point out to local authorities the wide remit that they have to make it as easy as possible for circuses to carry on a great profession. It seems strange that while money from the Arts Council is being pumped into teaching people circus skills, the very circuses that they will work in might be closed down by this Act.
I could not finish without mentioning live music. I must thank the Minister for the magnificent amendment that the Government brought forward about morris men at the tail end of the Licensing Bill. The Minister is a hero among morris men. In November of last year 600 morris men gathered in Trafalgar Square just to sing and dance the praises of the Minister. It is unfortunate that he was not there that day—it was quite a day—but I thought that I should bring that to his attention.
I have a specific question about live music, about which I have asked many questions during proceedings on the Act. When an entertainment authorisation is required, is it the case that a licensing authority must grant the authorisation without conditions, unless specific shortcomings can be identified in existing legislation covering public safety, noise, nuisance, crime and disorder that relates to the entertainment being proposed?
I look forward to the Minister's answers and the points that will be raised by many noble Lords who have spoken throughout our deliberations on this Act.
Baroness Buscombe: My Lords, it is extraordinary to think that almost a year following Royal Assent, we are now debating the draft licensing guidelines; and

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still there is little confidence that local authorities will be able to cope with the new regime—a regime which will, it is feared, have an enormous and often detrimental effect on our communities. Those fears have already been exacerbated by the Government allowing elected Members in the other place precisely an hour an a half to consider 190 pages of draft guidance.
I have been inundated with complaints from many stakeholders in the past few weeks, who were all deeply concerned about the implementation of the Act, with the guidance as drafted. Unfortunately, there is insufficient time to articulate them all. The key is to know how local authorities, the breweries, the police and other emergency services will cope within the guidelines, especially without any firm sense of the fee levels that will be set by regulation. Will the regime be fully funded, we wonder?
Only yesterday in a Written Answer in another place, the Minister, Mr Caborn MP, stated:
"Fee levels under the Licensing Act 2003 will be set centrally at a level that allows the full recovery of the costs of administration, inspection and enforcement associated with the new system".—[Official Report, Commons, 7/6/04; col. 47W.]
That sounds terrific, but what does it actually mean? Does it mean the internal costs of administering the regime, such as serving enforcement notices and dealing with appeals and complaints, or does it include policing our streets, cleaning our streets and providing sufficient transport to see our young home throughout the night—costs of managing the night-time economy? Is that why we are hearing that councils, such as Camden, are already allowing for an additional £800,000 in their next year's budget from council tax payers' money to pay for the knock-on effects of all-night drinking?
The Prime Minister recently stated that the industry must pick up the true costs of binge drinking. Will the Minister confirm that tonight? I think that the industry should be told.
The Local Government Association has made it clear that the conceptual framework of the guidance document is flawed in that there is insufficient distinction in it between interpretation of the statute and guidance for local authorities on the process and local authority good practice, bearing in mind that the purpose of the guidance is to promote consistency and good practice.
Good practice is solely a matter for local discretion, and the inclusion and wording of these suggestions creates an expectation of local authority activity that would be very costly. The Local Government Association understands that that extends to activities that would not be covered by the licensing fees—hence, councils are now considering huge council tax increases to cover what the Government might call "best practice" but what the public would regard as essential services. In essence, the local authorities believe that they cannot realistically develop licensing policies without knowledge of the fee structure.
Now that we have the Act, which I think everyone must accept was seriously ill-thought-through, the Government are concerned with damage limitation. They have
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published their Alcohol Harm Reduction Strategy. It is a shame that, in the words of Professor Ian Gilmore of the Royal College of Physicians, the strategy is,
"stronger on cleaning up the streets than on preventing physical harm".
Even the Prime Minister, at this late stage, decided to turn up to a brewery a couple of weeks ago to give the brewing industry a hard time about the need to confront the culture of binge drinking. I am afraid that that is rather typical of this Government. They create an impending nightmare situation—many will have had the opportunity to witness on "Panorama" on Sunday the kind of scenario that we can expect to be exacerbated in our cities and also an article written by the "Panorama" reporter, Andy Davies, entitled "The booze ruse killing our cities"—and then they blame others, which, in this case, are the drinks industry and the advertising industry. The Prime Minister said that binge drinking could become the new British disease. My Lords, it already has.
Surely, therefore, it cannot make sense to allow some of these enormous city bars to be open 24 hours a day, seven days a week, before tackling the culture of binge drinking. As the Institute of Alcohol Studies stated, it is wrong to emphasise the value of extending opening hours without adequately taking into account the context within which such a premises offering longer hours operates. It cites the lack of late-night public transport as an example—an issue which we believe is given insufficient weight in the draft guidance.
The Government state in the guidance that they strongly believe that disorder is linked to artificially early closing and so they urge late hours under certain paragraphs in the guidance. In addition, the cumulative impact clauses have caused considerable concern. The residents of Bath believe that their city is already saturated with licensed premises and have asked me to convey the fact that, according to the draft guidance, saturation policies will extend only to new premises. That said, I am very grateful to the Minister for providing us with some reassurances tonight on this issue. Indeed, they are reassurances that I shall want to read again in Hansard. But that is the kind of reassurance that we need from the Minister.
While liberating drinking hours, the Government chose to regulate live music to the nth degree and have now, rather weakly, stuck something in the guidelines under paragraph 3.47 about a duty to promote participation in the arts. How on earth would anyone have any trust in this Government's commitment to the arts when it will be illegal to play a piano in a bar without a licence?
Live music is a great antidote to anti-social behaviour and should be encouraged much more, not discouraged by petty regulation. Music is a positive force for social, economic, psychosomatic and cultural reasons for all ages. Evidence has verified this and shortly Carling is due to publish its commissioned research which has found that 79 per cent of the population like hearing music in public places. That figure rises to 90 per cent among 16 to 24 year-olds; 100 per cent of 16 to 24 year-olds say music helps them relax and feel better about their day; and 90 per cent of

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the entire base agree. Live music has the greatest positive emotional impact and power to make people feel good; that is felt by 32 per cent compared with the next favourite way to relax, which is eating out, at 30 per cent. In essence more live music would mean less trouble.
The Minister in another place referred to points raised by the Joint Committee on Statutory Instruments and in particular the delegation of functions, believing that paragraphs 3.61 to 3.63 lack clarity. I seem to recall there was considerable debate regarding the delegation of powers to the executive within local authorities as the Act was requiring an entirely impractical number of council members to sit on a licensing committee. In some instances this would require the whole membership of the council to sit on the committee. I think that our debates in your Lordships' House on this matter and the amendments that we proposed on this point more readily explain the lack of clarity.
In addition, the transitional arrangements are entirely unsatisfactory, a point amplified by my honourable friend Malcolm Moss MP. He also raised an issue in another place regarding the position of golf clubs. He asked the Minister how golf clubs with large numbers of visiting players who are guests of members will cope with the illegality of selling alcoholic drinks to them. A meeting was due to take place today between the Minister, the English Golf Union and the National Golf Clubs' Advisory Association. Can the Minister confirm whether that meeting took place and say how the issue was resolved?
In addition, the gaming industry remains deeply concerned that it must endure the prohibitive costs of responding to this legislation while awaiting the gambling Bill which will no doubt alter the licensing structure and statutory criteria again. I could go on with so many more issues and suggested amendments submitted to me, if time allowed. While there may have been many consultations between Ministers, officials and stakeholders, the Government must accept that there is, above all else, a strong suspicion in different quarters that the new regime will not work for the benefit of all and that, for example, even where musicians and other live performers may he exempted from licensing requirements, there is insufficient reassurance in the guidance to counter those suspicions. Perhaps some illustrative examples in the guidance could make a difference.
There is also a strong sense of unfairness. Residents will be funding the increased costs of objecting to variation orders, policing and clearing up after extended drinking hours and, further, unlike live performers, broadcast entertainment will be a free for all. Where is the justice in that?
I wish that tonight we were giving our support to legislation that would genuinely encourage a café society, which many of us have experienced across Europe, whereby drink and entertainment go hand in hand, without unnecessary legislation and without turning our cities, towns and villages into living nightmares, but that is not the case. Indeed tonight in
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my own village of Goring, an application will be considered by the parish council which could, if adopted by the district, make my life and that of my family and neighbours intolerable, all because of our culture of binge drinking, particularly among the young. This draft guidance does not begin to address that; it will probably only make it worse and that is deeply depressing.
I shall support the Motion of the noble Lord, Lord Redesdale, tonight and if procedurally I had been allowed to add my name to the Motion as a member of the Conservative Front Bench I would have done so.
8.30 p.m.
Lord Watson of Richmond: My Lords, the debate tonight on the guidance to police officers and my noble friend Lord Redesdale's Motion puts me in a very unusual position. I think that some of your Lordships will know that I am usually a Euro-enthusiast and believe that the greater integration that we have with Europe, the better for all of us.
However, I am moved tonight to make a somewhat Euro-sceptic speech. I simply do not believe that emulating the more lax licensing laws of continental Europe will transform the hard-drinking culture of England into a café society of open air sipping of the odd glass of Sancerre from dusk to dawn. Sadly, as Sunday's "Panorama" vividly demonstrated, the evidence points the other way. It is a pity, as that programme showed, that the DCMS did not take more account of that evidence.
I should like to refer to the borough of Richmond because it illustrates the problem with which we are confronted: idyllic riverside, the matchless Vale of Thames and Arcadian beauty, but, in the past 10 years, the number of bars and restaurants serving alcohol on the Richmond riverside has doubled to over 100 with a capacity for nearly 10,000 people, against the local population of 8,000. The result has been increased rowdyism, litter and drunken excess, necessitating an increased and costly police presence, which, despite greater resources—and we are grateful for that—is very hard pressed.
It is thus paradoxical—is it not?—that the Government urge the greater control of anti-social behaviour and measures against binge drinking and at the same time are relaxing the licensing regime and limiting the rights of objection.
For the Government the paradox is resolved by optimism that, somehow, despite the evidence from elsewhere from Ireland to Finland, our drinking manners will change and that binge drinking will progressively become a thing of the past. What is the evidence; and how is it that "Panorama" was able to demonstrate how much evidence had been ignored or set aside?
One aspect on which I am particularly fearful is that a great burden will now be placed on councils having to contend with the high-paid lawyers of brewers and

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drinking establishments pressing, very actively, for massive relaxation in licensing, without in any way being able to match the resources ranged against them.
Lastly, there is one key factor. Paragraph 3.29 in the guidance states:
"With regard to licensing hours, the statement of policy should generally emphasise the consideration which will be given to the individual merits in an application. The Government strongly recommends that statements of policy should recognise that longer licensing hours with regard to the sale of alcohol are important to ensure that the concentrations of customers leaving premises simultaneously are avoided. This is necessary to reduce the friction at late night fast food outlets, taxi ranks and other sources of transport which lead to disorder and disturbance".
I have referred to Richmond. After midnight there is one Tube train. The remaining buses between midnight and dawn have a total capacity to carry 600 people. Thousands of people will be seeking to leave Richmond during these hours in this new situation. How are they to leave in the early hours of the morning? Taxis will not stop. Minicabs will not respond to calls. Why should they? They are vulnerable to violence and to people being sick in the back of cabs. God forbid that people will seek to drive themselves.
So, what is the solution? Why was the evidence of so great and so many risks, as "Panorama" argued, apparently set aside? How will councils be enabled to contend with high-powered, well paid—with great respect—batteries of lawyers arguing for abolishing or relaxing licensing hours? How are residents to cope, and how is the quality of life and the safety of our town centres to be assured? These guidelines do not reassure.
Lord Jenkin of Roding: My Lords, I wish to raise a point referred to by the noble Lord, Lord Redesdale, and my noble friend Lady Buscombe: the fees that local authorities will be authorised to charge for performing their duties under the Act. I declare an interest as a joint president of the Association of London Government and vice-president of the Local Government Association.
The Government have repeatedly asserted, and indeed emphasised, that no local authority will be out of pocket because of the new duties put on them. Last November, Nick Raynsford said:
"I can confirm the commitment already given by my right hon. Friend the Secretary of State for Culture, Media and Sport that we will ensure that the costs of the licensing system are fully covered by the fees".—[Official Report, Commons, 19/11/03; col. 787.]
Richard Caborn said much the same in a Written Answer last December.
Last year the Government indicated the level of fees that were likely to be authorised. There can be no doubt that, if those fees are what ultimately emerge, many local authorities will be substantially out of pocket.
I shall quote some figures, concentrating on the situation in London. From the surveys carried out, it is clear that all London local authorities will face deficits as a result of their new duties under this Act. Nineteen of the
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22 authorities that responded to an LGA survey estimated minimum deficits of £100,000. The average anticipated deficit from the 22 boroughs was just under £9 million. As an indication, Hammersmith and Fulham faces a deficit of £375,000, Kensington and Chelsea faces one of over half a million pounds and Barnet faces a deficit of almost half a million pounds.
The City corporation, which one might not have thought likely to be affected, receives at present around £280,000 per annum in night refreshment licences. In the first full year of operation, it expects that to fall to £210,000. The proposed reduced annual continuation fee will mean that in following years income will be around half that figure. While the licensing workload that the City corporation faces will increase significantly, the total income that it will be allowed to charge will fall considerably.
The difficulties are even more pronounced in Westminster. Its income projections fall far short of the expenditure that the council anticipates having to make to service the licensing function. At the moment, Westminster's net expenditure on licensing amounts to around £700,000. Westminster estimates that, once the new regime is up and running, that figure will rise by £2 million. It feels, not unreasonably, that without revision of the proposed fee levels, the deficits faced by authorities are bound to add to the strain being placed on the council tax. Although that evidence relates to London, I am advised that urban authorities elsewhere in the country are likely to face similar results.
What has really got under the local authorities' skin was a remark last month in another place by Mr Caborn. He said during DCMS Questions:
"We are in discussion with the Local Government Association and others in the industry. I hope to be able to announce the fees in the not too distant future. We have already given an indication and I do not believe that it will prove to be far from the mark".—[Official Report, Commons, 24/5/04; col. 1294.]
If the fees that the Government are minded to authorise do not increase substantially above the levels that they have already indicated, there will be very serious consequences for local authorities. If they cannot recover their costs there will be huge problems in carrying out their responsibilities, particularly in enforcement and inspection. Inadequate enforcement of licensed premises and inadequate consultation in administering licences are likely to be a major source of concern for residents. They will have to look to other sources of income, and yet once more it will be the unfortunate council tax payer who will have to find the difference.
There has been much reference to binge drinking. If there is inadequate enforcement of the licences, binge drinking can only get worse. Although the intentions of the Act may be excellent, that would be a disaster for all. I have gone on long enough, but I have some questions to put to the Minister. Do the Government still stand by their promise that local authorities will not be out of pocket, and that the fees that they will be allowed to charge will cover their costs, not just as an average figure, but for each local authority? As the figures so far given do not comply with that promise, will the Government now listen to the local authorities, go through their own

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estimates of that cost, and adjust the figures accordingly? Will they consider the alternative basis of charge that some local authorities have been putting forward, which would give a rather fairer measure of the costs that they will incur? I know that the 2003 Act has many supporters, but it will be a tragedy if implementation of the Act is frustrated because the local authorities lack the resources to do it properly.
Lord Bridges: My Lords, a very few words from these empty Cross Benches. I am not alone in wishing to thank the noble Lord, Lord McIntosh, for his characteristically clear and well-constructed introduction to these debates. I also remember with gratitude the help that he gave us in the passage of the Bill over the permission to have music in churches, which was important to me and to many other noble Lords.
It appears that the Government have two objectives: opening up the night-time economy and ending binge drinking at closing time. I am all in favour of ending binge drinking at closing time, but it seems to me that the opening up of the night-time economy casts a different appearance on the whole thing. It is possible that in the remaining hours after normal closing time that a pub stays open it will sell a great deal more alcohol. Therefore, we will end up with higher alcohol consumption spread over a longer period, which is not what we want. I notice that in the document before us there is reference to an alcohol harm reduction strategy. I have not yet been able to obtain a copy, but it seems to me that this should be the overall objective of this Bill; to reduce the excessive consumption of alcohol. Could we have a debate in this House about the strategy for the reduction of alcohol consumption before the Bill comes into force? Your Lordships' experience would be invaluable on this subject. I hope that the noble Lord will be able to give me some reassurance about that.
Lord Avebury: My Lords, in her introduction to the guidance the Secretary of State says that the £20 billion cost of alcohol misuse, including £7.5 billion of crime and disorder costs, must be tackled by local authorities under the licensing regime, which she tells us must be applied proactively to tackle all levels of alcohol misuse. She does not explain how local authorities will deal with the phenomenon of binge drinking, which has occupied so much of your Lordships' attention this evening, as on previous occasions when we debated the Licensing Bill.
The Secretary of State undertakes to monitor the impact of the Act on crime and disorder and, if necessary, to introduce further legislation to strengthen or modify its provisions, which does not indicate a great level of confidence that it will work. So far, with 15 months to go from now until the appointed day when the new licensing system comes fully into operation, the Government have yet to decide what statistics they will use to monitor the effects of the Act. I have suggested using accident and emergency attendances, on the lines of those collected as a one-off exercise by Professor Colin Drummond and others; offences of violence against a person committed on or in the vicinity of licensed premises and similarly for
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ambulance call-outs. Another possibility would be to use the powers in Sections 25 and 44 of the Fire and Rescue Services Bill to keep records of the role of alcohol in fire-related deaths, 39 per cent of which, according to Alcohol Concern, are associated with heavy drinking.
The Minister, Melanie Johnson, said that a full year's baseline data would be necessary and that any preparatory work that needs to be done to collect the data must therefore be carried out in the next three months. Unless we have an effective monitoring system in place, we will have no idea whether the objective of the Bill to reduce crime and disorder is being realised.
The system has to allow comparisons to be made between local authority areas so that any changes in the parameters that are measured can be compared with the corresponding number of on licences or, better still, with the total capacity of on licences in each area to see whether there is a relationship between them. If Ministers think that that is not the way the impact of the new regime should be evaluated, they should explain the alternative and let us get expert statistical advice on the exercise. Is it because the Department of Health, the DCMS and the Home Office all have a finger in the pie that it is apparently so difficult to reach a decision on how the assessment is to be conducted or is there some other reason for the delay in announcing how it will be done? Are the Government paying lip service to the idea of monitoring, while trying to avoid an objective test that would demonstrate a link between the Act and a greater level of alcohol harm?
Complaints have already been made in another place about the inordinate delay in producing this final version of the guidance. From Third Reading in this House, it took them 12 months to make a number of amendments. I suspect that at least part of the dawdling was intended to see that the second appointed day would not be until after the next general election. Any ill effects of the Act would not be felt until after the Government were safely back in office, as they would see it. It could not have been that they were waiting for the alcohol harm reduction strategy, to which the Minister referred, because that was not published until after the guidance. Nor could it be that the paragraphs on cumulative impact, which the Minister also mentioned and a problem much discussed in both Houses, took all that time to formulate.
I am glad to see that local residents are now to be consulted on whether a concentration of licensed premises in any area is nearing the point at which it would have an impact on one or other of the licensing objectives and that local authorities are to be given the freedom to consult anyone they choose in coming to a decision on cumulative impact. In paragraph 3.18, which lists the steps to be followed in deciding to adopt a special policy on cumulative impact, it is now "concern about crime and disorder" without the adjective "significant" that has to be identified.
As the Minister explained, if there is a special policy, under paragraph 3.19, it is now open to responsible authorities, including the police and other interested parties, to make written representations maintaining that

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it is necessary to refuse applications for the prevention of crime and disorder and referring to information that had been before the licensing authority when it developed its statement of licensing policy.
That appears to imply that if more up-to-date information becomes available, it cannot be cited in the representations. As the Minister explained, in the area to which the special policy applies, there is a rebuttable presumption that applications for new premises licences will normally be refused unless the applicant can demonstrate that the operation of the premises to which the application refers will not add to the cumulative impact already being experienced. It would be absurd if the interested party making the representation was denied the opportunity of presenting current evidence on crime and disorder and had to rely on figures that may relate to events long ago when the original statement was made.
The guidance states that extended licensing hours can be expected to reduce conflict, disorder and antisocial behaviour. Again, we heard that from the Minister in his introductory speech. That is a statement of opinion with which most people strenuously disagree, and it flies in the face of common-sense. In the old days when everyone left the pubs at the same time, anti-social behaviour tended to be concentrated in the hour immediately after closing time. But now that people can drink until 2 a.m. in most cities, there are drunks on the streets for hours on end, creating mayhem and tying up enormous resources of police, ambulance and accident and emergency manpower.
What will happen if the licensees of vertical drink factories decide to open until 4 a.m. or 6 a.m.? Disorder will be extended for another two or four hours, as the police fully expect and have warned will happen. For local authorities faced with the additional costs of restoring the streets after the nightly deluge of vomit and urine in an ever-diminishing time slot before the daytime economy kicks in, and with no chance of recovering those costs, that will be one more headache on which the guidance is completely silent.
For the country at large, this will be a catastrophe. Future generations will look back on our failure to stop the epidemic of alcohol harm as another example to be added to those in Barbara Tuchman's March of Folly of the impotence of reason in the face of greed, selfish ambition and moral cowardice.
Lord Hodgson of Astley Abbotts: My Lords, I rise to support the remarks made by the noble Lord, Lord Redesdale. In the light of the comments of the noble Lord, Lord Avebury, I am reluctant to declare an interest as a non-executive director of Britain's largest regional brewer and an operator of 1,500 pubs, of which 1,000 are tenanted and 500 are managed.
The Minister will recall our debates in Committee about the costs of the scheme. They were lengthy, detailed, and it was obvious that there was a great deal of concern both among local authorities and in the industry about what those charges would be. I find it extraordinary and
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ingenuous even—not a word that I would normally apply to the noble Lord, Lord McIntosh—that he thinks he could come as far as this in the process of implementing the new licensing strategy without having provided fresh guidance on what the fees are likely to be, where they are to fall and how they are to be paid.
There is now a clear view that the fees should be cost neutral so far as local authorities are concerned. My noble friend Lord Jenkin of Roding is concerned about whether they will be cost neutral, but that has been stated, and therefore they will fall on the industry. My own brewery is on record as saying that the costs of introduction will be £1 million this year—in our budget that amounts to £600 to £700 per pub; and covers only the introduction, not the cost of running the scheme—and we have yet to be given a clear indication of what the running costs and final implementation costs will be.
I would say to the noble Lord, Lord Avebury, that while it is easy to look at the industry as if this is the only charge it bears, the pub industry is a huge tax contributor, in billions charged by the Chancellor. Therefore simply to isolate this element is, I think, unfair and inaccurate.
When the charges fall, they will fall on the industry, the customers, the staff and the shareholders or, in the case of tenanted pubs, the tenant, who is the owner of the pub. It is often forgotten that half the pubs in this country are tenanted, being run by self-employed entrepreneurs, a class that the Government profess they are keen to encourage, but given that it is submerged in red tape, one wonders how deep that commitment is. The tenants are running small businesses which are not always very profitable. Remarks around the House during the debate have concentrated on city centre pubs with high volumes, but there are valuable social outlets in marginally profitable pubs in many communities. They have been affected by the take-home trade and as such have not remained as profitable as they once were.
These people are struggling to build up their businesses. What they want to know is: how much will it cost to be licensed; what forms have to be filled in and how does one get those forms? So far, in neither case is there a sensible answer. To be frank, for the Government to argue that neither of those questions can be addressed until this piece of legislation is passed is, I am afraid, ingenuous.
We must add to that the third element: the appointed day. If we are to have the appointed day in the pre-Christmas period, that coincides with the period of maximum stress and strain for local authorities, as it is for the operators of pubs. That may not have occurred to those in the ivory towers of Whitehall, which only goes to show how out of touch they are with the commercial reality of operating in the leisure industry. The run-up to Christmas is one of the most important periods of the year.
There is too the issue of the interval, the time to complete the so-far unknown processes as that interval becomes increasingly short, especially given that the period the Minister envisages will include the holiday

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months of July, August and September. I hope that the Minister will be able to tell us that the first appointed day will be put back to 2005, first to allow the smooth introduction of the new legislation—which is in everyone's interest, whatever their views may be and, secondly, to minimise commercial distraction and disruption. The Government have only themselves to blame. The guidance was issued last August with a tight response date of the end of September; they then sat on the guidance for six months. The Government made no effort to re-run the revised guidance past the interested parties and therefore some six months were lost.
My final remarks follow those of the noble Lord, Lord Redesdale, and concern circuses—about which I have no interest to declare. I look forward to hearing the Minister's response to the noble Lord's questions. The position of circuses and the temporary event licence is important and a number of serious issues have been raised in correspondence that I have received. What will happen, for example, if the venue of the circus has to be changed at the last minute because the farmer does not want his field to be used or the ground has become waterlogged? Would another temporary event licence have to be applied for?
What we feared in Committee and predicted would happen has happened. The Government have got themselves into a terrible muddle; they have failed to understand the practical applications of their legislation. There needs to be a fee structure now; there need to be plans and forms now; and we need enough time to assimilate and complete them calmly. In short, the noble Lord, Lord Redesdale, is right.
Lord Phillips of Sudbury: My Lords, I wish to make two points in two minutes. I declare an interest as the chairman of a small hotel company in East Anglia. As we are talking about circuses, I hope that I am wrong in expecting this Act to become one of the greatest legislative circuses of modern times.
Chapter 3, which is the crucial chapter of the draft guidance, deals with statements of licensing policy. Paragraph 3.29, which was referred to by my noble friend Lord Watson, deals only with city centre pubs; it refers only to fast food outlets, taxi ranks, and thriving and safe evening and night-time local economies attractive to domestic and international tourism. It is quite bizarre that there is no mention in this crucial chapter of guidance about rural pubs—and there are still, thank the Lord, thousands of rural pubs.
Given that the guidance is still in draft form, will the Minister make up for that and draw into this section the statement which appears only in Annex G relating to the prevention of public nuisance? Under the heading "General", the second paragraph states that the options in relation to the prevention of public nuisance must take account of a range of factors,
"including the nature and style of the venue, the activities being conducted there, the location of the premises and the anticipated clientele".
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Those are crucial matters. If we have to rely on local authorities operating under paragraph 3.29, which refers to the Government "strongly recommending" the extension of licensing hours, we shall be in a terrible mess.
Secondly, my noble friend Lord Watson said several times that this will provide a field day for lawyers. He is absolutely right. The guidance contains 200 pages; the Act contains 250. It is phenomenally complicated, interlocking with common law rules, statutory rules and definitions galore. There are endless complications. Will the Government undertake to help ordinary citizens? They will be lined up against the big battalions of the breweries which backed the Bill; it will not be an equal combat. Will the Minister contemplate what the Government can reasonably do to help support small groups of local residents? Quite frankly, they will be out of their depth unless they have that support.
Lord Colwyn: My Lords, in her foreword the Secretary of State lists areas of vital importance and principal aims. They include:
"the further development within communities of our rich culture of live music, dancing and theatre, both in rural areas and in our towns and cities".
But surely the licensing of public entertainment has wider application than the licensing of alcohol.
The public performance of plays and music by children or public performances where alcohol is not sold are illegal unless licensed. A wide range of private events are now also illegal unless licensed when arranged to raise money for charity.
Could it be that the focus on alcohol has caused these illogical provisions? The Secretary of State, Tessa Jowell, for whom I have the greatest respect, says that licensing is necessary for public safety and to protect children. So why should a children's public concert in a school be illegal unless licensed, but exempt if performed in a church?
If licensing is to prevent noise nuisance or disorder, why should a piano in a bar used for an occasional sing-song be illegal unless licensed, but a jukebox or a big match broadcast on big screens with powerful amplification be exempt? Why should a public performance of unamplified music accompanying Morris dancers be exempt, but illegal if there are no dancers?
As we have already heard, another issue of concern is the lack of information about the licence fee schedule. It is a fundamental issue for many licensees and should have been published prior to the guidance, which is full of references to regulations and schedules that do not seem to exist.
9 p.m.
The Musicians Union has had discussions with many local authorities and it is clear that those who recognise that there is a full requirement to encourage live music are not sure how they will fulfil this obligation. It would have been helpful if the guidance could have given examples of the different types of live

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performance and how they might be promoted, although I am pleased to see that in paragraph 3.47, the impact of licensing on the,
"provision of regulated entertainment, and particularly live music and dancing",
will be carefully monitored.
Despite assurances during discussion on the Bill, there is a feeling, particularly among small venues that benefited from the PEL two-in-a-bar exemption, that they will have to submit to onerous licensing requirements under the new regime and that the guidance does not go far enough in reassuring them that this is not the case.
Finally, I have heard from the City of Westminster, which says that,
"our view remains that the Guidance would be liable to be quashed by a Court if published in its present form",
and that it,
"will leave local authorities ill equipped to manage the escalating problems of drunken crime, disorder and anti-social behaviour that blight our town centres".
I look forward to the Minister's answers. There are so many unanswered questions.
Lord McIntosh of Haringey: My Lords, I am a sentimental chap, and I love to hear these arguments all over again. It brings back those happy days of the passage of the Licensing Bill. We have not had very many Committee or Report stage speeches, but we have had Second Reading speeches for the original Licensing Bill. Occasionally—and I am grateful for this—flashes of sun came through the clouds and we had a discussion about the guidance before the House tonight. I shall try to respond to the points which have been made about the guidance but I will, I hope, be forgiven if I do not respond to all the points made about the original Bill, which cannot—such is the power of Parliament—be amended by statutory guidance.
I shall deal in order with the issues raised by noble Lords. The noble Lord, Lord Redesdale, raised a matter which was echoed by a number of other noble Lords about the first appointed day. The first appointed day—the beginning of the transition period—is not a statutory requirement and never has been. We have suggested that the minimum period should be six months, but we have never suggested that the maximum period should be six months.
We have listened very carefully, and I have been listening very carefully this evening, to the representations made. I heard what the noble Lord, Lord Hodgson, said about the dangers of the beginning of a transition period, with applications due in, being in the course of the busy Christmas period. I sympathise with that and understand. As I said in my opening remarks, the Secretary of State will take all these representations into account, and I am sure that she will be sympathetic, in the light of what has been said.
Regarding the period before the first appointed day, I have been asked when we are to publish the fee structure. The answer is that given by Richard Caborn
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in the Commons—in the not-too-distant future. However, that has to be in the form of draft regulations and draft regulations have to be the subject of consultation, for which a sufficient period has to be allowed. All we can usefully say in response to the question is what I said earlier: we shall publish the draft regulations, including the fee structure; we will conduct the consultation, respond to it and make final decisions in good time before the appointed day. There is no reason why anyone should suffer from that. If that puts back the appointed day, the noble Lord, Lord Hodgson, and others will no doubt he happy.
The noble Lords, Lord Redesdale, Lord Jenkin and Lord Hodgson, and others asked about fees and our undertaking that local authorities will not be out of pocket. I repeat the reassurance given by Nick Raynsford that they will not be. I perfectly understand that local authorities are incurring up-front costs, because they are acting before the fee structure has been settled and before they are able to charge fees. However, it follows from that, given our undertaking that they will not be out of pocket, that they will recoup those up-front costs when the transition period starts. I give that undertaking as well.
I was asked what would happen if a council had a deficit and how it would be affected by capping. The whole process of setting licensing fees is intended to be without cost to the local authority. Therefore, the authority cannot be affected by any capping on its other expenditure which it has to meet from its own resources.
The noble Lord, Lord Redesdale, asked me about circuses. I had already indicated that because circuses were not included in the original Bill, there was no exemption for them. It is not possible to introduce an exemption which would amend the original Bill in guidance of this kind, but I shall make two points to the noble Lord about that. First, the likely fee to circuses for obtaining licences for the sites at which they are going to perform is, at our best estimate, 2.5p per ticket. It is not a large amount. I admit that there are administrative costs on top of that. Secondly, the noble Lord asked for a wide remit for local authorities to make it as easy as possible for circuses and I can certainly assure him of that. Local authorities that like to accommodate circuses—and there are many—are already starting to make provision for licences to be available for circuses in advance, so that some of the inevitable costs of licensing are met.
However, even if it were legally possible, it would not be right for us to exempt circuses. Imagine what would happen if there were a fire in the circus tent and children were killed. Imagine what would happen if there were a collapse of stands in a tent or if a performer fell. Those are public safety issues and licences are entirely appropriate for that purpose.
A number of noble Lords raised the issue of live music. I am very sympathetic to their views. I agree with everything that the noble Baroness, Lady Buscombe, said about the social and cultural value of live music.
If we look closely at the guidance, we will see changes which I would have wished to make to the Bill if it been entirely up to me. I invite noble Lords to look

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at paragraph 5.18 and other paragraphs about the definitions of live and incidental music. For the first time, the issue of the volume of the music is introduced into the guidance. I wish that we had done that in the Bill, but we did not. But it is right that for the protection both of musicians and those living near the place where the music is performed there should be reference to the decibel count, as well as to the issue of whether the music is live, recorded, incidental or central—if that is the opposite of incidental. These are steps forward from the provisions of the Bill and are well worth while.
I move to the other points made by the noble Baroness, Lady Buscombe. I ought not to respond to her central point, as it relates to the fundamental point of the Bill—her assumption that we shall be promoting 24-hour drinking, which itself will encourage disorder. I simply cannot accept that assumption. The view of those who advised the Government in introducing the Bill—and the view of the police in particular—was that artificial licensing hours, particularly with a crunch time of eleven o'clock and another crunch time in city centres of two o'clock, encourage rather than discourage binge drinking.
I have heard a lot about the "Panorama" programme and I saw it, but I must remind the House that it was about existing licensing laws, not about the regime that will be brought in by this Bill. I simply cannot accept the assumptions that have been made, particularly by the noble Lord, Lord Avebury, who made a very dramatic speech. When I hear words such as "greed", "selfish", "ambition" and "moral cowardice", I am prepared to take it on the chin. However, I do think that he should examine his evidence more carefully. When all-day drinking was introduced into this country in 1988, exactly the same things that the noble Lord is now saying were said about what would happen as a result. What actually happened was that, in each of the five years following 1988, alcohol consumption fell. Let us see what happens as a result of the provisions—but it cannot be taken for granted that the noble Lord's judgment about the effect of the Bill is based on a sound observation of society as I understand it.
The point was raised about golf clubs. I thought we had got rid of that point—it really is a nonsense, although I enjoyed the Conservative research department's piece of paper on it. Guests in those clubs will be allowed to drink, provided that the club frames it rules so that they can be allowed to drink. Guests are not the same as associate members, who are members of other golf clubs. They are not the same as guests introduced by members; one does not have to be signed in by a member to be a guest. If the rules of the golf club say so, a club can accept guests who pay for a round of golf and have a drink afterwards. It is as simple as that—and that is what we shall say to the associations of golf clubs when we meet them tomorrow.
The noble Lord, Lord Watson of Richmond, will not like what I have said, but he is making the same error as the noble Lord, Lord Avebury. He is assuming that all sorts of dreadful things will happen as a result of what are—let us face it—local decisions about what licensing hours and licensing conditions could be. We have come a long way from the Liberal Party of my
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youth, which used to be in favour of local decisions about these things—local democratic decisions by local authorities. The noble Lord is now saying that government should lay down the law to local authorities and forbid authorities such as his Richmond Borough Council from making the kind of decisions that they will be called on to make.
Lord Watson of Richmond: My Lords, with great respect to the Minister, I was not saying that. I was saying that councils are going to find themselves in a David and Goliath situation. The Minister would do well to be realistic about that.
Lord McIntosh of Haringey: My Lords, who is the David and who is the Goliath? Is the council the David and are the breweries the Goliath? Tell that to the noble Lord, Lord Hodgson!
Lord Watson of Richmond: My Lords, I think he knows.
Lord McIntosh of Haringey: My Lords, I enjoyed the "Panorama" programme, but it was not exactly to that effect.
I believe that I have responded to the point made by the noble Lord, Lord Jenkin, and given him the assurance that he seeks that the councils will not be out of pocket. We understand that they are out of pocket now, but that they will recover the money for transition periods. The noble Lord made a particular point about what might happen with each individual local authority, which he may want to raise with me. Or perhaps he does not.
Lord Jenkin of Roding: My Lords, I do not. I am grateful for what the noble Lord has said about recouping the costs that local authorities have already incurred, but that has not actually been the burden of their complaint, although it is part of it. Their complaint is that the level of charges that have so far been indicated will not cover, on a continuing basis, the costs that they are going to incur. I hope that the Minister can give an undertaking that these will be reviewed.
Lord McIntosh of Haringey: My Lords, I have just done so. It is our intention that the charges that we set will recover the costs. If necessary and at whatever interval, they will be reviewed. I am grateful to the noble Lord, Lord Jenkin, for intervening and allowing me to turn off my pager. The noble Lord asked me to look at an alternative basis of charges produced by some local authorities. If he will give me further details of that, I shall be glad to do so.
The noble Lord, Lord Bridges, in a very constructive contribution, asked for a debate on the alcohol harm strategy together with, I would have thought, the wider implications of this legislation, although we cannot go back on the provisions of the Bill. That is, of course, a matter for the usual channels, but I would be very happy to see Cross-Bench time found for such a debate.

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The noble Lord, Lord Avebury, made other points from those to which I have responded. His main point was about the nature of the assessment that will be made. He made some useful suggestions about accident and emergency attendances, statistics on offences of violence near premises, fire deaths and so on. I am grateful for them. In DCMS, we are talking actively with the Home Office, the Office of the Deputy Prime Minister and the Department of Health about assessment. We are planning to use the British Crime Survey and the General Household Survey, which give some of the answers for which he is looking, but we are also concerned with the cultural impact. Issues like the cultural impact of live music, which was raised by the noble Baroness, Lady Buscombe, are part of the assessment that we will be making.
I hope that I have responded to the noble Lord, Lord Hodgson. His points were about the introduction costs and the running costs. They are legitimate points and will be taken into account in the assessment of the fee structure. When he called me ingenuous, I rather think that he meant to accuse me of being disingenuous. There you are, you cannot have everything.
The noble Lord, Lord Phillips, referred to paragraph 3.29 on public nuisance. I must say that he ought to have read a bit further because, in addition to that, in the definition of public nuisance in paragraph 7.40, he will find wise words describing the criterion of,
"The reduction of the living and working amenity and environment of interested parties (as defined in the 2003 Act) in the vicinity of licensed premises".
Why are they wise? They are wise because they are the words of the noble Baroness, Lady Buscombe, which have found their way into the guidance.
I am sorry that I cannot respond to the points made by the noble Lord, Lord Colwyn. I enjoyed hearing them again. I love the Musicians' Union's representations. I shall write to him about it, why not?
Finally, I want to come back to the issue of fee levels and the issue of the prayer of the noble Lord, Lord Redesdale. We are considering the material that has been provided by the Local Government Association and the Association of London Government. We prolonged the period of consultation to allow everybody time to build their case, and we are grateful for the assistance that we have been given. I have repeated many times now the public assurance that the fee levels we will set will allow licensing authorities to cover their costs. We have said that at the end of the transition period there will be not just a review but an independent review of the fee levels, and they can be revised upwards or downwards, as necessary. We are not neglecting any of this material.
Lord Phillips of Sudbury: My Lords, on the question that I raised with the Minister about giving assistance
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to individual parties that are interested in these decisions, will he say whether the Government would contemplate trying to help?
Lord McIntosh of Haringey: My Lords, I am not sure to what type of party the noble Lord is referring. I think that I had better read carefully what he said on that.
I have tried hard not to miss any significant points made in debate. I hope that I have addressed in particular the issues raised in the prayer. I commend the draft guidance to the House.
On Question, Motion agreed to.

Guidance issued under Section 182 of the Licensing Act 2003 and Guidance to Police Officers on the Operation of Closure Powers in Part 8 of the Licensing Act 2003
9.19 p.m.
Lord Redesdale Lord Redesdale rose to move, That this House regrets Her Majesty's Government's decision to lay the draft guidance on 23 March, before they have laid orders under Sections 55, 92, 100, 110 and 133 of and Schedule 8 to the Licensing Act 2003, which set out the level of fees which applicants for licences will be required to pay licensing authorities.
The noble Lord said: My Lords, much as I am tempted to launch into what the noble Lord would describe as a Second Reading speech, raising many of the points he raised, I feel that there are certain Members of the House who are not as interested in these debates as others and believe that I might suffer some displeasure. So I can only say that although the Minister's arguments were, as always, extremely emollient and persuasive, he still could not make a silken purse out of a pig's ear, an analogy which we believe is reflected in some aspects of this legislation.
In speaking to the very issue of the fee structure the Minister used the phrase, "the not-too-distant future". That leads me to press the Motion standing in my name. I should therefore like to test the opinion of the House.
9.21 p.m.
On Question, Whether the said Motion shall be agreed to?
Their Lordships divided: Contents, 56; Not-Contents, 71.

Division No. 5

CONTENTS

Addington, L.

Colwyn, L.

Alderdice, L.

Dholakia, L.

Avebury, L.

Forsyth of Drumlean, L.

Barker, B.

Garden, L.

Bradshaw, L.

Geddes, L.

Brougham and Vaux, L.

Hamwee, B.

Buscombe, B.

Harris of Richmond, B.

Carnegy of Lour, B.

Hodgson of Astley Abbotts, L.

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Hooper, B.

Oakeshott of Seagrove Bay, L.

Howe of Idlicote, B.

O'Cathain, B.

Jenkin of Roding, L.

Park of Monmouth, B.

Jopling, L.

Perry of Southwark, B.

Kingsland, L.

Phillips of Sudbury, L.

Lindsay, E.

Redesdale, L. [Teller]

Linklater of Butterstone, B.

Roper, L. [Teller]

Mackie of Benshie, L.

Seccombe, B.

McNally, L.

Selborne, E.

Maddock, B.

Sharp of Guildford, B.

Mar and Kellie, E.

Shutt of Greetland, L.

Marlesford, L.

Smith of Clifton, L.

Masham of Ilton, B.

Thomas of Walliswood, B.

Miller of Chilthorne Domer, B.

Tordoff, L.

Monson, L.

Vinson, L.

Montrose, D.

Wallace of Saltaire, L.

Noakes, B.

Watson of Richmond, L.

Northbrook, L.

Wilcox, B.

Northover, B.

Williams of Crosby, B.

Norton of Louth, L.

Windlesham, L.

NOT-CONTENTS

Ahmed, L.

Goldsmith, L.

Amos, B. (Lord President of the Council)

Gordon of Strathblane, L.

Gould of Potternewton, B.

Andrews, B.

Graham of Edmonton, L.

Archer of Sandwell, L.

Grocott, L. [Teller]

Ashton of Upholland, B.

Hilton of Eggardon, B.

Bach, L.

Hogg of Cumbernauld, L.

Bassam of Brighton, L.

Hollis of Heigham, B.

Brennan, L.

Howells of St. Davids, B.

Bridges, L.

Hughes of Woodside, L.

Brooke of Alverthorpe, L.

Hunt of Kings Heath, L.

Brookman, L.

Brooks of Tremorfa, L.

Jones, L.

Burlison, L.

Kirkhill, L.

Campbell-Savours, L.

Layard, L.

Carter, L.

Lea of Crondall, L.

Chan, L.

Lipsey, L.

Chandos, V.

Lockwood, B.

Cohen of Pimlico, B.

McIntosh of Haringey, L.

Corbett of Castle Vale, L.

Massey of Darwen, B.

Crawley, B.

Merlyn-Rees, L.

David, B.

Mitchell, L.

Davies of Coity, L.

Nicol, B.

Davies of Oldham, L.[Teller]

Pitkeathley, B.

Desai, L.

Plant of Highfield, L.

Dixon, L.

Rendell of Babergh, B.

Dubs, L.

Rooker, L.

Elder, L.

Scotland of Asthal, B.

Evans of Parkside, L.

Evans of Temple Guiting, L.

Simon, V.

Farrington of Ribbleton, B.

Stone of Blackheath, L.

Filkin, L.

Tomlinson, L.

Finlay of Llandaff, B.

Triesman, L.

Gale, B.

Turner of Camden, B.

Gavron, L.

Warwick of Undercliffe, B.

Gibson of Market Rasen, B.

Whitty, L.

Golding, B.

Young of Old Scone, B.

Resolved in the negative, and Motion disagreed to accordingly.

Higher Education Bill
9.32 p.m.
Consideration of amendments on Report resumed on Clause 27.
The Deputy Speaker (Baroness Turner of Camden): My Lords, Amendment No. 22 has been spoken to already with Amendment No. 21.
Noble Lords: De-grouped!
Baroness O'Neill of Bengarve Baroness O'Neill of Bengarve moved Amendment No. 22:
Page 13, line 35, at end insert—
"(4) In order to ensure that student fees paid to relevant institutions are additional to, and not in replacement of, public funding—

(a) the Higher Education Funding Council for England ("HEFCE") shall annually determine and make public the amount of direct public funding made available per home or EU undergraduate admitted to courses in each category at Higher Education Institution ("HEI") in England;

(b) in the event of a decline in the real value of any of these amounts, as measured by an index of HEI costs, HEFCE shall take steps to reduce the total number of publicly funded home and EU undergraduates on courses in the relevant category, in order to maintain the unit of resource per home or EU undergraduate for courses in each category;

(c) the Higher Education Funding Council for Wales ("HEFCW") shall annually determine and make public the amount of direct public funding made available per home or EU undergraduate admitted to courses in each category at HEIs in England;

(d) in the event of a decline in the real value of any of these amounts, as measured by an index of HEI costs, HEFCW shall take steps to reduce the total number of publicly funded home and EU undergraduates on courses in the relevant category in order to maintain the unit of resource per home or EU undergraduate for courses in each category."

The noble Baroness said: My Lords, I have not spoken to the amendment already. I spoke to the amendment tabled by the noble Lord, Lord Phillips. As other noble Lords were already, by anticipation, speaking to Amendment No. 22, I indicated that I was not then speaking to it, but I shall do so now. The amendment has an error in the printed version, for which I apologise. In its proposed new paragraph (c), the last word should not be "England" but "Wales"; Wales should have the last word.
The point of Amendment No. 22 is quite straightforward. It is designed to achieve a good part of the aims of Amendment No. 21, without the difficulty of setting a commitment to additionality in the Bill. Unfortunately, that straightforward aim requires a certain complexity of drafting, and I am not sure that I have everything technically right. However, I shall outline the proposal.
At present, the funding for teaching costs at universities in England and Wales is set at four levels depending on the category of the course. Medical courses receive the highest funding; courses with heavy amounts of laboratory work are then funded at a higher rate than courses with a small amount of it; those in turn receive more than those with no laboratory work. The basic unit of resource for teaching is set at those four levels.
The amendment requires that, in the event that the real value of those funding levels, as measured by an index of higher education institution costs, cannot be

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maintained, the number of places rather than the support per student would be reduced. This would maintain the real value of funding per student on each category of course, but without committing the present or any future government to additionality.
It is only realistic to accept that we must cut our coat according to our cloth. In the event that public funding per student on a given category of course cannot be maintained, there is only one choice—cutting the unit of resource for students on that category of course, or cutting the number of funded places. The universities have been through long years in which the former salami slicing policy has been followed.
We owe it to future students, who will be paying substantially for their degrees, to make sure that they are not short-changed by further salami slicing. We owe it to universities not to encroach on their autonomy, and the amendment leaves it open to them to accept additional home or EU students for whom they receive no public funding—as is the case at present. Realistically, it will seldom be possible for universities to admit unfunded home or EU students. Nevertheless, their autonomy to do so is not reduced by the amendment.
The amendment is couched in terms of the unit of resource for each category of course in order to remove any incentives for universities to compensate for a declining average unit of resource by shifting their intake away from more expensive laboratory-based courses to other cheaper courses.
The only argument that I can identify against the amendment is that it might take longer to raise the level of participation at first degree level to some notional figure—I pluck it out of the air—say, 50 per cent of the age group. If we want the real thing—serious undergraduate education—we should prefer a sober and, it is to be hoped, temporary reduction in student numbers on specific categories of course at times of economic difficulty. That would be preferable to an unfunded race towards a mesmerising target. I beg to move.
Lord Renfrew of Kaimsthorn: My Lords, if only we had had the effects of the amendment five, 10 or 15 years ago, we would certainly not be in the disastrous situation that we are in now. This is a clear-sighted and well-conceived amendment, like its predecessor. All or, certainly, most of us favour an increase in the numbers of students in higher education, but not if that means that the provision for higher education declines significantly in quality and declines significantly in resource, as has happened in recent years.
Therefore, I warmly support the amendment, which powerfully gets to the heart of the issues that we are addressing and would make the Government, if it was accepted or, more likely, voted for by the House, recognise that if one sets a high target that is fine, but one has to meet the commitments that will underwrite
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such a high target. If we had the chance to re-write the amendment, in line 4 of paragraph (b), where it says that we would,
"take steps to reduce the total number of publicly funded home and EU undergraduates on courses"—
that is, if the ratio is not met—I would be careful to say,
"admitted to courses".
That relates to a point made by the noble Baroness, Lady Warwick. We would not wish to see students who are already embarked on their university courses excluded as a result of the amendment.
The way to proceed, clearly, if the verdict was that unit costs had declined so that the amendment came into effect, would be to reduce the admissions to such courses in a future year. No one would wish to see students who had already embarked on their university careers suddenly excluded by a procrustean application of the amendment. I am sure that that is the intention of the noble Baroness; it certainly was my intention when I put my name to the amendment. I am sure that that is the light in which the amendment should be read, so I commend it to your Lordships.
Lord Forsyth of Drumlean: My Lords, I congratulate the noble Baroness, Lady O'Neill, on her ingenuity. Earlier, I did not move Amendment No. 4, which concerned the issue that we discussed at length in Committee. In order to make progress, I felt that perhaps we should not take time over it again, particularly in view of the amendment that we are discussing now. This amendment provides an ingenious way of ensuring that governments will the resources for the rhetoric of their policy statements.
I am very disappointed that the noble Baroness, Lady Blackstone, is not in her place. I resisted the temptation to respond to her comments about additionality because I was conscious that we wanted to move to a vote. But it is a fact that, since 1997, funding per student provided by the Government has fallen by approximately 10 per cent. It is also a fact that the total amount of money each year has been increasing, but that has been the case since 1979 and not only since 1997. However, funding per student has been lower than in any of the 18 years under the previous government.
I raise those matters not to make a party political point but to highlight the fact that it is not enough to say that participation should go up without willing the funds. I believe that this amendment is devilishly clever and it should be supported. It may give the Treasury less cause for concern than the previous amendment standing in the name of the noble Lord, Lord Phillips.
I believe that, with the two amendments, should the House decide to approve this one, we have been really helpful to the Minister in pressing this case. She will be able to talk to her colleagues in the Treasury, and I imagine that any Secretary of State would be delighted to have an amendment of this kind included in legislation because it would be a guarantee that the declared policy of the Government to meet their target would be followed by appropriate funding and, were

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the funding not there, it would be transparent for all to see. Therefore, I very much support the amendment and, should the noble Baroness, Lady O'Neill, decide to press it at any stage in our proceedings, I shall certainly join her in the Lobbies.
Lord Sutherland of Houndwood: My Lords, I am also very happy warmly to support the amendment. Two or three key words that have echoed around the Chamber in our debates are what underwrite the amendment. One is additionality; one is transparency; and the other is the connection between means and ends. Each of those is included in this very subtle and clever amendment.
I support the amendment because, if funding for teaching is reduced and this amendment is agreed to, it will be clear that there will be consequences for public policy and for government statement. The Government will understand fully the implications of what they do, and that is good for good government. Taxpayers will understand why universities must be supported: they are not a bottomless pit of energy and talent that can be milked and milked. Students, their parents and sponsors will understand why, in the current situation, fees are necessary and they will see what they get for those fees. Finally, also in terms of transparency, universities will know what is expected of them, they will know what the resource is and they will be able to make proper plans over a foreseeable future.
Baroness Howe of Idlicote: My Lords, I spoke to the previous amendment and shall speak to this one very briefly. I definitely support this amendment. Everything has already been said about its clarity, the fact that there is a clear agenda to follow and the very detailed way in which the unit of resource and the other methods by which it is to be measured have been spelt out. Therefore, I hope that these two amendments will be taken very seriously, and no doubt we shall return to them.
Baroness Sharp of Guildford: My Lords, we on these Benches have some reservations about the amendment. In particular, while we recognise how clever it is, we have reservations about the degree to which it picks up what at one time was Conservative policy on these issues—that is, that one should hold the funding and cut the number of students. We on these Benches are with the Government in believing that we need more students. We obviously need more money and more resources. I recognise that the amendment refers to unit funding per student, and we are trying to use that as a lever. I cannot put my finger on precisely why I have difficulties with it, but I have difficulties about that issue. Therefore, I am unhappy about it as it stands.
9.45 p.m.
Baroness Perry of Southwark: My Lords, I entirely support the thrust and the object of the amendment. I admire very much the careful wording of the noble Baroness, Lady O'Neill. My reservation is slightly different. I am not entirely sure what steps HEFCE
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and HEFCW could take to reduce the number of home or EU undergraduate students. If universities choose to take in more students unfunded, thereby reducing the unit of resource for each student, I do not see how HEFCE can stop them. In the past we have had many examples of universities continuing to admit students despite the fact that the funding has already been capped. Although I would love to see this amendment succeed, it could be extremely difficult to lay such a duty on HEFCE because the number of students in higher education is the result of a host of individual decisions taken by universities, departments and students.
Lord Dearing: My Lords, when debating the previous amendment I said that I would be willing to support this amendment as an alternative. I want to make a few points. The noble Baroness, Lady Perry, spoke with knowledge and feeling about days gone by when universities were encouraged to expand at marginal cost and the former polytechnics did so with a will. I am not sure how one can constrain the enthusiasm of various universities to do what they believe best for their communities. That needs further thought. The noble Baroness said that she would wish to give it some further thought. She thought about the possibility of making explicit the fact that this relates to funding for teaching rather than to funding in general.
We have already heard that work is being undertaken on a definition of user funding, which would be relevant. There may be five categories, as I believe that it has been decided that for foundation courses, in whatever subject, there is a 10 per cent premium. As the Government plan that most of the expansion should be in foundation courses, it may be relevant for the noble Baroness to consider that. I believe that this is worth further consideration by this House.
Lord Winston: My Lords, one problem that. I have with this excellent and thoughtful amendment is the consideration to which I referred at Second Reading: by that kind of approach, those universities that can may increase the amount of overseas students who come from outside the EU. I believe that our universities should primarily educate our own community. It worries me to think that there may be increasing pressure not to do that, and in the long term that would be to the detriment of our society. It is very good to have overseas students from far-flung parts of the world, as we do in my university, Imperial College, but that is not ideal for Britain as a whole.
Baroness Ashton of Upholland: My Lords, I too agree with the words used about the amendment of the noble Baroness: the noble Lord, Lord Forsyth, said "ingenious" and "devilishly clever" and the noble Baroness, Lady Sharp, said "clever". I hope she does not mind me pouring more accolades on her. However, she will not be surprised that I am not able to support the amendment.
I have two general points to make. When I reflect on the different stages of any debate in your Lordships' House, I am interested to see how themes return and how tremors carry throughout the House. I have

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noticed two themes: top-slicing and constraining the freedom of universities. At various points today I have tried to position myself and the Government by saying, "I think it is wrong to keep top slicing and I think it is wrong to constrain universities". That has not always done me a lot of good today, but I say to those in the university sector that that is what I am seeking in what I do. In later amendments—not for today's debate—I hope that noble Lords will see further evidence of that.
It is very important, at least for me, that we look at all our evidence in that context. That is really where I start with the amendment. A number of noble Lords have said that the amendment would require HEFCE to behave in a very centralist way. The noble Baroness, Lady Perry, said how difficult it would be and how one would in effect constrain universities in terms of numbers. The only way that that would be conceivable would be by reducing flexibility around individual institutions.
Another theme that I have not used today but one which those representing universities will know well is the increase of bureaucracy, which is something that certainly the noble Baroness, Lady O'Neill, would not wish to see. The funding allocation for teaching students would have to change. It would have to become less flexible. Higher education institutions would lose the scope to vary student numbers within their tolerance bands, which we described earlier.
So I can very straightforwardly say to the noble Baroness that on that basis, although I can understand the sentiments behind the amendment—and I do and have always appreciated what noble Lords are seeking to achieve—I do not believe that it is appropriate for us to accept it. It would change the way in which the relationship between HEFCE and the institutions is formed and founded in a way that would be negative for the institutions. I understand, as I say, why the noble Baroness raises this issue.
I would say to the noble Lord, Lord Forsyth, that I very deliberately, as I think he appreciates, have not got into the banter of it—I have left it to my noble friend Lady Blackstone. We could spend all day on this. I am quite clear on the position the Government hold. What I will say is that the unit funding will rise by 7 per cent in real terms—I can say that categorically—between 2002–03 and 2005–06. It is the measure of commitment of this Government.
I understand that noble Lords seek as much commitment as they can possibly get. I completely appreciate that. But the Government's commitment is in a sense to put our money where my talk is. That commitment is absolute. So we can go on over the past. I am trying to think of a fishing analogy for the noble
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Lord. I cannot think of one because I do not know anything about fishing. None the less, I think I can be very clear about the commitment.
For me today's scenes have been very important. The particular scene about the rights of institutions and the desire of institutions, both academically and in other ways, to operate in that way would not be achieved by the amendment. On that basis, I hope the noble Baroness will feel able to withdraw it.
Baroness O'Neill of Bengarve: My Lords, I thank the Minister for some very clarifying remarks, and other noble Lords who have commented on this amendment. The amendment is less ambitious than the noble Baroness suggested.
We have to remember that at present undergraduate numbers are set for universities. Many noble Lords will know of the interesting acronym BUNs—basic undergraduate numbers—and that universities are fined both for under-recruiting and over-recruiting. In this situation it is hardly an advance in red tape to propose that numbers be cut by HEFCE or HEFCW in order to maintain unit levels of funding. The context in which one must look at this is that these matters are controlled.
There was a time, to which I think the noble Baroness, Lady Perry, referred, when there was a great deal of incentivising of recruiting students who were at marginal cost—the noble Lord, Lord Dearing, also referred to them—for whom no funding was provided. One always hoped that in the following year numbers would be made up and suddenly the students whom one had admitted on an unfunded basis would turn out to be funded students. Those days have passed. We do not have that expectation now. That seems to be the context in which one might look at the Bill. Those things are already controlled.
So, for me, it is simply a matter of means-ends reasoning. If we will the ends, we will the means. I am with noble Lords who think that we should not reduce the number we take into universities. I say to the noble Baroness, Lady Sharp, that that is not the intention; it is that each student whom we admit should be properly funded. Universities, should they find some source of funding, should have the autonomy to admit additional students, but that is not the most likely future.
I shall study very closely what noble Lords have said, reflect upon it and perhaps table an amendment at Third Reading. For now, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Triesman: My Lords, I beg to move that consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at three minutes before ten o'clock.