§ Further consideration of amendments on Report resumed on Clause 31.
§ Lord Rix moved Amendment No. 40:
§ Page 15, line 2, at beginning insert "subject to the approval of the Director of Fair Access under subsection (4A) below,"
§ The noble Lord said: My Lords, my probing amendments, Amendments Nos. 40 and 43, relate to the tax and benefit implications of bursary schemes.
§ It was said of John Erskine, the Earl of Mar—a distant kinsman of my noble friend Lady Mar, who is certainly non-Jacobite—after he had lost the battle of 591 Sheriffmuir, that he was a better Churchman than he was a general because his right hand knew not what his left hand was doing. I have tried to imagine our present Secretary of State for Education and Skills clad in tartan, claymore in hand, striding through the heather; on the whole, it is an exercise in the imagination best left unattempted. Yet there are concerns that the Secretary of State's policies have a passing resemblance to those of the ill-fated Jacobite general.
§ There is a concern that our current taxation and welfare benefit systems will take away with the Chancellor's left hand what the universities through their schemes of financial assistance provide with their right hand. There is a concern that all these arrangements will generate much churning of finances but leave few of the neediest students better off. Indeed, there is also concern that mature students and part-time students will be at particular risk of being net losers.
§ At the very least there needs to be an urgent ministerial statement to confirm that students will not lose benefits or be penalised through the tax credits system if they are in receipt of bursaries. I look forward to hearing the Government's response. I beg to move.
§ Baroness Warwick of Undercliffe
My Lords, noble Lords will know that I am deeply concerned about the lack of clarity about whether bursaries and government grants will be taken into account in the assessment of eligibility for means-tested benefits. It is not at all clear that the very poorest students will not have the support given to them with one hand taken away with the other, as the noble Lord has said. Furthermore, it is by no means clear that universities will not be required by OFFA to use precious resources to provide bursaries to students, only to see the Government claw back the same amount or even more by reducing the appropriate benefits. We are particularly concerned that students with children might lose tax credits.
I understand that there are complicated arguments involved but I should be grateful if the Minister could assure the House that the Government will recognise that university students from poor backgrounds will not lose benefits as a result of the Bill. After all, the Government are committed to providing a significant increase in support for students on the grounds that that will enable and encourage the poorest to participate.
Universities have agreed to offer bursaries and to submit their plans in this regard to OFFA for approval on the grounds that the poorest students may need additional financial support and incentives to apply to university. We know that, when striving to attract poor students to apply to university, the perception can be as important as the reality. The perception that students will lose income from benefits may constitute a major barrier to participation from this group. I urge the Government to consider that university students are a special case and should be treated as such by government. I look forward to the Minister's reply.
592 That said, I note that the amendment tabled by the noble Lord, Lord Rix, refers to OFFA having a role in approving provisions for financial assistance. That is not what OFFA will do, as I understand it. I think that it is important to hold on to the principle that OFFA will look at an institution's widening participation strategy as a whole and make a summative assessment, rather than approving individual components of it.
I am also not convinced that it should be OFFA's role to sort out the problem of eligibility for means-tested benefits. That is a matter for the Government. Having said that, I support the thrust of the presentation by the noble Lord, Lord Rix, and I look forward to the Minister's reply.
§ 8.45 p.m.
§ Lord Triesman
My Lords, happily devolution means that my right honourable friend Charles Clarke will not have to go to Scotland on any war-like missions. I ought to tell the House that so expert are the civil servants who are helping us on this that they have already given me a briefing note on Sheriffmuir and the battle of 1715, just in case there was any gap in your Lordships' knowledge. Apparently, there are some who say that we won, and some who say that they won, and some who say that no one won at all. I think that I have got it right.
I welcome the opportunity that these amendments provide to explore the impact of bursaries and other financial assistance on students' entitlement to welfare benefits and their tax status. I am grateful to the noble Lord, Lord Rix, for providing this chance to debate further an issue that has been raised by Universities UK and by the noble Baroness, Lady Warwick, who has played a vital role in advocating this case.
Let me deal first with the question of tax status and tax credits. Section 331 of the Income and Corporation Taxes Act 1988, the ICTA, states that income arising from a scholarship held by a person receiving full-time instruction at a university, college, school or other educational establishment shall be exempt from income tax, and no account shall be taken of any such income in computing the amount of income for income tax purposes. In this section, "scholarship" includes an exhibition, bursary or any other similar endowment. The Inland Revenue has advised us that in practice any grant of money for support of students in full-time education would qualify. As for tax credits, we have been advised that income that is exempt from income tax by virtue of Section 331 of the ICTA is disregarded in calculating a claimant's income. Therefore, it appears that bursaries and other financial assistance that institutions will offer to full-time students will not affect students' tax status or entitlement to tax credits.
The position with benefits, as was explained to noble Lords in Committee, is more dependent on the purpose for which the additional assistance is given. Assistance towards fees or course costs is normally disregarded for benefits purposes. I expect that institutions' proposals on financial assistance will be many and varied. The impact of different schemes will 593 no doubt vary according to students' individual circumstances. For example, a student who had the option of cheap lodgings with friends or relatives might not be persuaded by cheap halls of residence, should an institution decide to offer its financial assistance in the form of subsidised accommodation. The same principle will also apply in the case of welfare benefits. In other words, students on welfare benefits can look at the bursary options available to them in deciding which best suits their needs.
We are working closely with the Department for Work and Pensions to reach an agreement on arrangements for the small proportion of full-time students who can simultaneously be eligible for benefits. Our objective, like that of the noble Lord, is to ensure that students receive real additional benefit from grants and bursaries, although I cannot give a firm commitment at this stage on the precise outcome of those discussions. However, in the interim period, I do not think it right to pass the burden of responsibility for this issue on to institutions through the Director of Fair Access. I hope that the noble Lord agrees with that point and will decide to withdraw his amendment.
I confirm that we are working actively with the DWP on this. Only a small proportion of full-time students receive benefits, but they are in the most vulnerable groups, and it is therefore right that we should pay the greatest attention to their position. I am referring to lone parents and those with disabilities. Fee support and targeted support are not set against benefits, but support for living costs is taken into account in assessing benefit entitlement.
We have reached an understanding with the DWP that the HE grant, which will be introduced for new students in 2004–05, will not be taken into account in assessing entitlement to means-tested benefits. Looking forward to 2006–07, we are working with the DWP to reach agreement about arrangements for the proportion of full-time students who are in receipt of benefits. Our objective, like that of the universities, is to ensure that students receive real additional benefit from this grant and bursary. We hope to be able to ensure that.
§ Lord Triesman
My Lords, mature students could be full-time or part-time. They would not necessarily be only part-time, although I do not take that to be the imputation of the question. Our aim in discussions with the DWP, which have not reached a conclusion because of the intricacy of the issues, is to ensure that grants and bursaries of any kind should not damage the student's benefit regime.
§ Lord Rix
My Lords, so far—and it is a question of so far. We will look closely at the Minister's response. I shall consult with various vice-chancellors and directors of finance at one or two local universities. If I need to return to the subject at Third Reading, I shall do so, but at the moment I am happy to withdraw my amendment. I hope that the Minister's answer will suffice.
§ Amendment, by leave, withdrawn.
§ The Lord Bishop of Portsmouth moved Amendment No. 40A:
§ Page 15, line 2, after "assistance" insert "and high quality financial guidance"
§ The right reverend Prelate said: My Lords, these amendments concern the broad question of how to manage money responsibly. At Second Reading, I used a shorthand expression "debt education", which was perhaps not entirely helpful. In Committee, the Minister drew a distinction between what she called "traditional debt" and "contingent repayments". I accept that they are not the same thing, but I want to return to the issue, supported by the noble Lord, Lord Puttnam, who is in his place but has asked me to speak to these amendments, and the right reverend Prelate the Bishop of Manchester, who has considerably more students in his patch than I have.
§ In discussion of Amendments Nos. 86A and 87A in Committee, the noble Lord, Lord Puttnam, made a good case for the need for high-quality financial advice for students. The Government need to acknowledge that they must be the default provider. The amendments before the House today take account of that discussion.
§ Some students, particularly those outside the qualifying thresholds, will find themselves under increasing pressure. Others who are entitled to the maximum support may find themselves in receipt of cheques for substantial amounts of money which they will have to manage. In the earlier debate, there was strong support for the amendment on the provision of financial advice and the responsibility which government and the institutions need to take. It was acknowledged that many are already doing so.
§ However, if the provision of advice is over-burdensome for regulatory reasons, perhaps guidance would be more acceptable. I trust that the word "advice" is not problematic in the second amendment as others will be providing it.
§ There are difficulties in asking universities to provide ongoing financial advice or guidance for graduates up to 25 years later. The amendment would help ensure that students were properly equipped to know where to seek support in the future.
§ I shall go briefly into the question of the citizens advice bureaux. The noble Lord, Lord Phillips of Sudbury, who wishes to be associated with the amendments but did not get his name to them in time, spoke to me this evening. 595 He told me that citizens advice bureaux are sympathetic to the idea of endeavouring to supply a service to universities. There are a thousand CABs in the country, and a major commitment to debt advice is part of their remit.
§ In conclusion, I shall, at the risk of boring your Lordships, use the word "signal" for the third time this evening. The amendments would provide a signal. It is not just that financial support is necessary, as many of us believe, in information and guidance as well as cash if students are to have the best opportunity to thrive. The amendment will be a signal—I end on a slightly lugubrious note—that will help make the Government's higher education finance policy marginally less unacceptable to those who have been opposed to it. That is the bottom line of my enthusiasm for the amendments, but I hope that I indicated it at a rather higher level earlier. I beg to move.
§ Lord Shutt of Greetland
My Lords, I am inclined to support the amendments, although I have a reservation. Amendment No. 40A refers to "high quality financial guidance". That sounds good, and it had better be good if we make the amendment. The Bill says,to provide, or secure the provision of".I suspect that it had better be the latter. We have heard about the deprivation of universities, but one wonders where the liability will lie if the advice is not very good. It would be better to have such advice given by people who are suitably qualified and who will carry the can, rather than placing another burden on the universities.
It is certainly right that people who do not have a clue how to organise themselves financially should have a clue and that such advice should be provided. However, we are talking about advice to people taking on different forms of debt or, in a minority of cases perhaps, advice on making some form of investment. There should be proper guidance, and the people who give it should be properly qualified.
§ Lord Puttnam
My Lords, I identify entirely with the remarks made by the right reverend Prelate. Everything that I said at Second Reading and in Committee related to the quality of advice, which should come from the most expert sources that we can find. It is not a complicated matter.
I take issue to some extent with those who say that someone seeking graduate education ought to have the kind of inquiring mind that will automatically seek out advice. That just is not true. I shall not trouble the House with it, but I have any amount of anecdotal evidence that makes it clear that very bright students are perfectly capable of getting themselves into the most appalling mess in such situations. It helps neither the House nor the students to pretend otherwise.
In fairness, I must say that the Minister has been helpful. We have continued the discussion, and we will have some meetings this week with the sort of high-quality advisers to whom the noble Lord, Lord Shutt of Greetland, was referring. I have every hope that we will not have to press the issue at Third Reading. That 596 would be unfortunate. There is no particular reason why such an issue must find its way into the Bill, but there is a feeling around the House that the Government must say something to make it clear that they are conscious of the need to ensure that some form of default provision is available to students who need it.
§ 9 p.m.
§ Baroness Ashton of Upholland
My Lords, I am grateful to the right reverend Prelate the Bishop of Portsmouth and my noble friend Lord Puttnam for bringing us back to this issue. I shall not detain the House for long because, as my noble friend Lord Puttnam said, we are continuing our dialogue. This week, we are meeting others to discuss those issues further. I, too, have the ambition that my noble friend and the right reverend Prelate will not need to bring this matter back at Third Reading.
As interesting as the comments about the citizens advice bureaux were, members of the National Association of Student Money Advisers—NASMA—already provide that advice to students. Of course, they have specialist knowledge of student affairs and finances. I am not suggesting that the CAB is not an important organisation, but we just need to be aware that there are organisations in place.
Amendment No. 40A would change one of the provisions of an access plan; namely, the provision of financial assistance to students. I appreciate that in their wording of the amendment the right reverend Prelate and my noble friend have listened to what I said about advisers having to be licensed by the Office of Fair Trading. But changing the word "advice" to "guidance" does not solve the problem, although I suspect that my noble friend and the right reverend Prelate were hoping that it might; in fact, it would still be the same.
All through the Bill, we have been very careful to avoid overburdening institutions with the contents of access plans. Noble Lords will not be surprised that I am not tempted in that direction with this amendment. In Committee, we talked about how much the Government are doing in terms of the website, leaflets and so forth, as well as the work that is being done by the National Union of Students, which is critical. There is nothing like peer groups—I am not sure whether that is another pun in your Lordships' House—to put across the case.
My noble friend Lord Puttnam, in particular, knows that Amendment No. 40B would create a difficulty of interpretation—I am not really sure of what the wording would become. I know that my noble friend is interested in looking at what more can be done as regards national helplines, what the Government might do and so forth. I have already indicated that NASMA does important work.
I am not tempted by the access plans. I am continuing to have meetings with my noble friend Lord Puttnam—the right reverend Prelate is always welcome to join us—in order to determine what we can do between now and Third Reading to ensure that we 597 do not have to debate this matter again. On that basis, I hope that the right reverend Prelate will feel able to withdraw the amendment.
§ The Lord Bishop of Portsmouth
My Lords, it is always a pleasure to watch the Minister like an angel dancing on the pinhead. I am ready to enter into dialogue and future non-claymore battle over this. I graciously beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ [Amendment No. 40B not moved.]
§ Baroness Ashton of Upholland moved Amendment No. 41:
§ Page 15, line 6, leave out from "objectives" to end of line 7 and insert "relating to the promotion of equality of opportunity and, in relation to Wales, the promotion of higher education"
§ On Question, amendment agreed to.
§ [Amendment No. 41A not moved.]
§ Baroness Warwick of Undercliffe moved Amendment No. 42:
§ Page 15, line 12, at end insert—
§ "( ) Regulations made under subsection (2) may not require a plan to include provisions relating to the criteria for the admission of students."
§ The noble Baroness said: My Lords, in Committee, the Minister indicated that she was willing to accept my amendment, which would prevent OFFA requiring institutions to include in their plans matters relating to admissions. I am grateful for that. However, I must confess to the House that in Committee I failed to move the amendment in the appropriate place. With apologies, I therefore wish to move it now.
§ On Question, amendment agreed to.
§ [Amendment No. 43 not moved.]
§ Baroness Ashton of Upholland moved Amendment No. 44:
§ Page 15, line 13, at end insert—
§ ""equality of opportunity" means equality of opportunity in connection with access to higher education;"
§ On Question, amendment agreed to.
§ Baroness Ashton of Upholland had given notice of her intention to move Amendment No. 45:
§ Page 15, leave out lines 23 to 25.
§ The noble Baroness said: My Lords, I should like to inform the House that Amendment No. 45 is consequential to Amendment No. 34A, which the noble Baroness, Lady Perry, did not move. I have discussed this with the noble Baroness and she is fully aware of what is happening. I apologise if that has caused confusion.
§ [Amendment No. 45 not moved.]598
§ Clause 32 [Approval of plans]:
§ Baroness Warwick of Undercliffe moved Amendment No. 46:
§ Page 15, line 43, at end insert—
§ "( ) The Secretary of State may not make regulations under this section unless a draft of the statutory instrument containing them has been laid before Parliament and approved by a resolution of each House."
§ The noble Baroness said: My Lords, in Committee, I made it clear that I welcomed the Government's decision to bring forward amendments that accept the recommendations made by the Delegated Powers and Regulatory Reform Committee and subject regulations under Clauses 31 and 35 to the affirmative resolution procedure. That was a very positive move. However, I also indicated that I thought that regulations under Clauses 32, 33 and 34 should be similarly subject to the affirmative procedure. The Government did not accept my argument, although the Minister did agree that they would consult with the sector on changes to the regulations. That is also welcome. However, since I feel strongly about this point, I want to return to it.
§ A great deal of what OFFA will do is to be set out in regulations. The Government will have significant power to make OFFA more interventionist or bureaucratic by means of regulations, which will make it much harder for institutions to work constructively with it. For example, the powers in Clause 32 cover the approval of plans. These regulations may specify matters to which the relevant authority is or is not to have regard in making any determination relating to approval.
§ Universities UK—as I have done on each occasion, I declare my interest as chief executive—never much liked this provision, and the noble Baroness, Lady Sharp, will recall that we strongly supported the Liberal Democrat amendment accepted by the Government in Committee in another place which sought to narrow the scope of the Secretary of State to dictate the terms by prescribing in regulations cases in which the relevant authority must or may not approve a plan. That provision was removed by the Liberal Democrat amendment and was an important victory.
§ But the fact that the Secretary of State retains the powers contained in Clause 32(5) means that it is vital for Parliament and the sector to have some opportunity to influence what the regulations dictate. Clauses 33 and 34 also contain significant regulation-making powers. For example, Clause 33 relates to the duration of plans, currently expected to be five years, which we think strikes the right balance between keeping them current without them becoming overly burdensome. But what if a future Secretary of State were to specify that plans have to be renewed every year? That would constitute a very significant increase in the bureaucratic burden on institutions.
§ I hope that my noble friend will accept that the regulations under these clauses ought to be subject to the affirmative resolution procedure and I look forward to hearing what she has to say. I beg to move.
§ Baroness Carnegy of Lour
My Lords, I think I am right in saying that it was claimed in Committee that 599 because the Delegated Powers and Regulatory Reform Committee had not said that this should be dealt with by affirmative resolution, it meant that it thought it should not.
Speaking in general about the committee, of which I am a member, I should make it clear that the committee advises the House when it feels strongly about something, but it does not always consider matters very carefully. I have forgotten whether the committee considered this in detail. However, clearly it did not feel strongly or it would have said that this should be under the affirmative resolution procedure.
However, it is for the House to do what it wants—always. The committee merely advises the House. I hope, therefore, that the Minister will not feel that she has to take the line of resisting the amendment because the committee expressed the opposite view. I think that it expressed no view. I contribute these words in the hope that they are helpful.
§ Baroness Sharp of Guildford
My Lords, I added my name to the amendment because the noble Baroness, Lady Warwick, is quite right to point out that much of what is to be done in this Bill will be by regulation. It is therefore appropriate that the House should keep an eye on what is happening. I think it is part of open government that we should not only know but should also take a positive view on such matters when they come before the House. Therefore I endorse the amendment moved by the noble Baroness.
§ Baroness Lockwood
My Lords, I hope that my noble friend on the Front Bench will be able to accept these amendments. They relate to some very important clauses in the Bill about which concern has been expressed. It would be in the interests of the success of the Bill as a whole if these regulations were dealt with under the affirmative procedure and could therefore be automatically debated before coming into effect.
§ The Lord Bishop of Portsmouth
My Lords, the amendment has a great deal of sense to it and I hope that it will receive support from the Minister.
§ Baroness Ashton of Upholland
My Lords, I have listened carefully to the debate on these issues. I appreciate the concern that there should be robust safeguards and I recognise the importance of having them. We have accepted the recommendation of the Delegated Powers and Regulatory Reform Committee that regulations made under Clauses 31(2) and 35(2)(c) should be subject to the affirmative resolution procedure. Noble Lords will know that we tabled two government amendments to that effect in Committee.
I should say to the noble Baroness, Lady Carnegy, that I always assume that the Delegated Powers and Regulatory Reform Committee considers these matters very carefully. I hope that members of that committee will recognise that, with respect to the Bills for which I am responsible, I take great note of what it recommends. Therefore, when it tells us not to do something, it is not that we ignore it; it is simply that 600 we anticipate that it does not have the same strength of feeling about it. I think that that is the only basis on which I can proceed.
I know that my noble friend has great concerns about this issue. However, we have said that the first regulations—which in a sense, from my noble friend's point of view, and that of other Members of your Lordships' House, are the most critical—will be laid as one set of regulations and they will all be subject to affirmative resolution. I hope that that will allay noble Lords' concerns that something might slip through under the negative procedure. It is critical that the House should understand what will happen.
In my experience of your Lordships' House, there is no suggestion that regulations introduced under the negative procedure are not subject to parliamentary scrutiny. Noble Lords have prayed—and I am sure that they will continue to pray—against regulations and other measures about which they have concerns.
We have accepted what the Delegated Powers and Regulatory Reform Committee said. In addition, we will introduce the first regulations under the affirmative procedure; we have left the negative procedure for subsequent regulations. I believe that that fits very well with the normal parliamentary procedures of your Lordships' House. I hope that the noble Baroness will be satisfied with that.
Finally, I should say to my noble friend that we have already shown our willingness to be open by publishing draft regulations far in advance of the need to lay them. It is our policy to do so. I hope that in the light of those reassurances my noble friend will feel able to withdraw the amendment.
§ Baroness Warwick of Undercliffe
My Lords, I thank the Minister for her thoughtful reply, which I shall obviously consider. I shall need to look at the constitutional consequences and think about the matter before deciding whether to return to it at Third Reading. I beg leave to withdraw the amendment.
§ Amendment, by leave, withdrawn.
§ Baroness Perry of Southwark moved Amendment No. 47:
§ Leave out Clause 32 and insert the following new Clause—