Higher Education Bill

HL Deb 22 June 2004 vol 662 cc1136-94

4.7 p.m.

Lord Grocott

My Lords, I have it in command from Her Majesty the Queen to acquaint the House that she, having been informed of the purport of the Higher Education Bill, has consented to place her Prerogative and Interest, so far as they are affected by the Bill, at the disposal of Parliament for the purposes of the Bill.

Bill read a third time.

Lord Shutt of Greetland moved Amendment No. 1:

After Clause 25, 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, I again speak on the issue of volunteering. There may be advantages and disadvantages to having three bites at a cherry, but there is a sense in which markets move upwards or downwards. I feel very much that markets are moving upwards so far as the amendment is concerned, or at least in terms of my enthusiasm for it. I am therefore pleased to move the amendment.

There are three relevant areas. I do not want to go over old ground, and I understand that it is the convention of the House that we do not do so. First, I should establish volunteering as worth while and valuable for young people. There has been support all round the House for that principle.

My second point is that we do not really know at this stage where the Bill will lead us in a variety of ways, the effect that it will have on young people and their parents in their attitudes to university education—and on many other areas of later life. All that we know is that there will be another element of debt, on top of other debts, in our present society. Therefore, there is a major worry that volunteering will not be uppermost in the minds of people who are about to make their way in the world after obtaining a degree. The amendment aims to suggest to them that perhaps it might be worth considering volunteering.

My third point is that there is a gap in the volunteering market for people who have obtained their degrees and at that point might consider, "Shall we do some volunteering or do we make our way in the world?". That gap is not there at other times of life. For example, the "gap year" is a time when there are opportunities for volunteering and there are no associated financial problems.

There are also opportunities for people later in life. It is interesting that Voluntary Services Overseas—VSO—is keen on people who can bring many different experiences of life, who then go overseas and give their services in the third world and so on. The numbers of people who have graduated who take up volunteering at that stage are very low. They could benefit in many ways from the amendment.

I was grateful at an earlier stage to have the support of the noble Lord, Lord Campbell-Savours, who is present. He referred to VSO. Its chief executive, Mark Goldring, has pointed out that this amendment, or an amendment similar to this, would be valuable to that organisation. He has been mooting that idea and said that it should be passed on to the Minister.

A concern was raised earlier over the nature of the scheme. In moving the amendment we believe that it is important to establish the principle and not be prescriptive over the details of the scheme. There are two possible ways forward. One would be for the Government, who are invited to propose a scheme, to say, "Our proposal is for there to be 1,000 opportunities a year". They would discuss that with the organisations involved in volunteering and ask them to bid, as it were, for the numbers that they might be able to take from those 1,000 a year. Another way would be to have no fixed limit, but exacting standards on who could benefit from what might be called a fee remission certificate, provided that they did the appropriate amount of volunteering.

We are right to say, "Let us establish this important principle to fill an obvious gap", but not to go into details that might well cover half a dozen pages in the list of amendments. I beg to move.

4.15 p.m.

Lord Phillips of Sudbury

My Lords, I am grateful for the opportunity to support the amendment, even at Third Reading. It is immensely imaginative and in years to come, if passed, might be seen as a landmark. As my noble friend Lord Shutt said, it could develop, by degrees, into a quiet revolution in opportunities for young people to serve society. We all know that the modern world of education is such that the fees students must pay for university, and then for post-university qualification, are a huge disincentive for many young people to engage in voluntary activity. We also know that the level of giving of time and money by young people under 30 has declined and is declining. We know, too, that the top 10 per cent of earners in the population gives less than a third of what the bottom third gives as a proportion of their income. Those are manifestations of the pressures and the particularities of modern life.

I urge the Government to give the amendment a fair wind because they know better than anyone that the voluntary sector often does the job of government in a more effective and cost-efficient way. If this scheme is established, the benefit to the community from all angles, particularly regarding the cost to the Exchequer, will not be the concession by the Exchequer to those students that it might appear to be, but will be of huge net benefit in real terms, admittedly in ways that are not easily quantifiable. I would hope that in future it might be possible to extend the scheme to provide opportunities for people before university, so that they could gain a credit for doing their voluntary service before going up. I hope that the amendment will be accepted by the Government.

Lord Campbell-Savours

My Lords, I spoke to a similar amendment on Report. I do not believe in repetition on Third Reading and I hope that the amendment is carried.

Lord Forsyth of Drumlean

My Lords, I echo the sentiments expressed by the noble Lord, Lord Campbell-Savours. If I have a reservation about the amendment, it is that it should not be necessary to amend the Bill to make the Government use their powers for this purpose. Both the noble Lord, Lord Shutt, and the noble Baroness, Lady Sharp of Guildford, have tabled the amendment in the hope of teasing the Government to go down this course.

Of course there will be much detail to be decided relating to how the scheme would work, how it would be evaluated and so on. But it is a good idea that would encourage many of our youngsters, who, more than in any other country in the world, have a distinguished record of involvement in volunteering. So, I hope that, even if the Minister is still reluctant to accept the amendment, the Government might hint that they are open-minded about considering a scheme of this kind.

The Lord Bishop of Portsmouth

My Lords, I am grateful to the noble Lord, Lord Shutt, for moving the amendment and I was glad that on Report we could agree the inclusion of part-timers. Voluntary work is a fact of modern life and an indication of its complexity. If the Government cannot look kindly on the amendment, I hope that they might smile on the creatively Jesuitical intervention of the noble Lord, Lord Forsyth—and I use that adjective in ecumenical brotherliness.

Lord Dearing

My Lords, I have not spoken on this matter before, but I shall be brief, nevertheless. I agree with the noble Lord, Lord Shutt, that voluntary service is a valuable part of national life. It is vital to society and, perhaps, no less to the individual who gives it. However, I am less than enthusiastic about putting this amendment in the Bill. A minor reason is that it would be the third time that we have, as it were, diverted some money that was intended for higher education to another cause. My particular reason is that the essence of voluntary service is of giving without payment. We diminish that when we begin to say that it attracts remuneration. A second point is that it is a bad principle to identify this form of financial stipend with graduates, rather than to all members of our society who give. There are other people in straitened circumstances who give to society. Let us celebrate that, along with the gift that young graduates make to society. On those grounds, I do not think that this is an appropriate matter for the Bill.

The Parliamentary Under-Secretary of State, Department for Education and Skills (Baroness Ashton of Upholland)

My Lords, I agree with all noble Lords who have spoken about the importance of volunteering. I support what the noble Lord, Lord Forsyth, said about celebrating our young people who do so much to ensure that people give to society in the most appropriate ways. I declare my interest as having spent a great deal of my life working around the voluntary sector. Indeed, I spent part of it with the Charities Aid Foundation looking at the whole question of incentivising people to volunteer.

I start by echoing the sentiments of the noble Lord, Lord Dearing, because there is an issue of principle about which I am uneasy. I believe that volunteering gives huge benefits to society—I agree completely with the noble Lord, Lord Shutt, about that—but I also believe that it gives huge benefits to the individuals who participate in it.

It is important to understand that the principle behind volunteering is that one gives of oneself. We would need to think very carefully about incentivising people. In the work that I have done, that has always been a matter of training and providing opportunities for accreditation of the work that people do as volunteers. It is also a matter of recognition by employers and universities of the fact that people have worked in a voluntary capacity in some way. Much of the work that I have undertaken personally has related to ensuring that recognition is given to the contributions that people make to society in this way.

The amendment concerns a different principle—that is, it states that we shall also, in a form, remunerate people for doing that work. I have some difficulty with that. I understand that underlying the amendment of the noble Lord, Lord Shutt, is the desire to look at the issue of volunteering and to ensure that a real pool of talent is available. It is a desire to ensure that young people, including young graduates, participate in this way with the talents that they have.

Noble Lords will know that we have established the Russell Commission, which is specifically working towards a national youth volunteering strategy. As the noble Lord, Lord Shutt, indicated, we believe that it is very important to examine any deterrents that may exist to participation in voluntary work.

I say to the noble Lord, Lord Phillips, in particular, that I recognise that there are issues surrounding the number of people who take up voluntary work. But, as the noble Lord knows very well, all the research in which I have been involved and the work that I have done with organisations has indicated that one of the critical factors is not financial incentive but time. The inability of people to take part in regular volunteering led to, for example, the setting up of the New York Cares project, which I consider to be spectacular. I recommend that noble Lords take the opportunity to have a look at that project. Rather than trying to persuade people to make a regular commitment, which they find impossible to meet, the project allows young professionals to volunteer in imaginative and creative ways.

Therefore, I hope that one way in which the Russell Commission will support such work is in examining how we can ensure that opportunities exist to volunteer in appropriate ways. As I said, that includes considering the issue of availability of time.

Lord Phillips of Sudbury

My Lords, I am most grateful to the noble Baroness for giving way. Does she accept that the amendment does not remotely require remuneration at what one might call a "market" level and that it would provide the possibility of modest financial assistance to the young people involved, which might make all the difference between their being able to give a major chunk of their time and not being able to do so at all?

Baroness Ashton of Upholland

My Lords, I return to the issue with which we began our deliberations on the nature of the proposals before your Lordships. We are saying that people who earn less than £15,000 a year will not pay back any of their student loan. Indeed, after 25 years, the loan would be written off. A salary of £15,000 is not huge; in many cases, it is a modest sum. None the less, the Bill contains what we believe to be appropriate measures in relation to the contributions that students make. I do not consider it to be debt in the traditional sense, as the noble Lord knows very well.

I simply say to the noble Lord, Lord Shutt, that if one remunerates people for carrying out voluntary work, a different principle is involved. In his amendment, the noble Lord is clearly saying that there could be an incentive for people to participate in such work. We cannot ignore that and say that it should be viewed in the same way as volunteering, as I understand the concept.

Real issues arise concerning the number of voluntary organisations that we have and how we would ensure that such a scheme recognised the kind of volunteering that would be eligible. The noble Lord, Lord Shutt, touched on that when he described the scheme that would need to be set up. I am very keen that people volunteer in all kinds of ways in all kinds of communities. I would be nervous about saying that if one volunteered for VSO, that would be acceptable, but that if, for example, one volunteered for Home-Start (Stevenage), that would not. We want to encourage volunteering in all its forms in all our communities and, again, I have some concerns in that respect. I am not sure that we would be able to find ways around that which would be satisfactory to all concerned. It is very nice of the noble Lord, Lord Shutt, to leave it to the Government to sort out the detail. I thank him very much.

There are also issues of principle behind the detail concerning how the scheme would be run. If we had such a scheme, we would need to ensure that people turned up to volunteer when they said they would. They would need to be monitored because we would, indeed, be writing off student loans. Therefore, a system of fraud prevention would need to be in place. Noble Lords will appreciate that this is public money and we would have to ensure that the scheme was carried out properly. It sets a challenge in terms of bureaucracy and so on, and, as I said, there is an issue of principle about which I have some concerns.

I have set out my reservations on the matter and I hope that the House will appreciate that they are genuine. We have already raised this proposal with the Russell Commission. I can say to the House that if, having deliberated on it, the commission decides that it has merit, then, under Section 186 of the Education Act 2002, we already have the power to pay off loans and we do not need to amend this Bill. I am happy to accept the general concerns raised by noble Lords, but I hope that I have balanced them to some degree by describing not only the logistical issues concerned but the issues of principle.

We cannot agree to a duty on the Government to provide such a scheme without looking at the implications of that duty, and I have outlined some of those. I have not even raised the issue of the cost that would be involved. Costs have already been mentioned but, again, this would involve another sum of money to come out of the higher education budget. I simply refer to the theme of top-slicing in passing; none the less, it is important.

I give the commitment to your Lordships that we shall raise the matter with the Russell Commission and we shall do so in the spirit of those who tabled the amendment. We need to think through how to obtain high-quality volunteering from our young people. If the Russell Commission felt that this issue was important, we would already have the power to carry it out. I believe that, at this stage, that is a commitment worth having from the Government. On that basis, I hope that the noble Lord will feel able to withdraw the amendment.

Lord Shutt of Greetland

My Lords, I thank my noble friend Lord Phillips of Sudbury, the noble Lords, Lord Campbell-Savours and Lord Forsyth, and the right reverend Prelate the Bishop of Portsmouth who have spoken in favour of the amendment. It was helpful to have the comments of the noble Lord, Lord Dearing, although they were not quite as helpful as others.

I hope that your Lordships will accept the challenge. Reference has been made to remuneration and incentive. I have never thought that there was anything wrong with an incentive—people have to live whatever the position is in the scheme. The beauty of the different stages of a Bill is that it gives one an opportunity to speak to experts in the field. I understand, for example, that VSO pays people at the rate paid in that country and they do not bring any money home.

So there will need to be remuneration, but it will be fairly low. I suppose that if I had worked up the scheme in absolute detail it would have been attacked in absolute detail. The Government have an army of people who are very good at writing documents which eventually become schemes and so on. If they have difficulties I will offer to help. It may well be that other noble Lords would offer to help and we could create a really good scheme.

I feel that noble Lords would like to give such a scheme a fair wind. I should therefore like to test the opinion of the House.

4.30 p.m.

On Question, Whether the said amendment (No. 1) shall be agreed to?

Their Lordships divided: Contents, 145; Not-Contents, 155.

Division No. 1
CONTENTS
Addington, L.	Garden, L.
Alton of Liverpool, L.	Glenarthur, L.
Anelay of St Johns, B.	Glentoran, L.
Astor of Hever, L.	Gray of Contin, L.
Attlee, E.	Greaves, L.
Avebury, L.	Greenway, L.
Barker, B.	Griffiths of Fforestfach, L.
Beaumont of Whitley, L.	Harris of Richmond, B.
Biffen, L.	Hayhoe, L.
Blaker, L.	Henley, L.
Blatch, B.	Higgins, L.
Bowness, L.	Holme of Cheltenham, L.
Bradshaw, L.	Home, E.
Bridgeman, V.	Howe, E.
Brooke of Sutton Mandeville, L.	Howe of Aberavon, L.
Brougham and Vaux, L.	Howell of Guildford, L.
Burnham, L.	Hunt of Wirral, L.
Buscombe, B.	Hurd of Westwell, L.
Byford, B.	Jenkin of Roding, L.
Caithness, E.	Kalms, L.
Campbell-Savours, L.	Kimball, L.
Carlisle of Bucklow, L.	King of Bridgwater, L.
Clement-Jones, L.	Kingsland, L.
Cope of Berkeley, L.	Laird, L.
Courtown, E.	Lamont of Lerwick, L.
Cox, B.	Lane of Horsell, L.
Crathorne, L.	Lester of Herne Hill, L.
Crickhowell, L.	Lindsay, E.
Dean of Harptree, L.	Linklater of Butterstone, B.
Denham, L.	Livsey of Talgarth, L.
Dholakia, L.	Lucas, L.
Dixon-Smith, L.	Luke, L.
Dundee, E.	Lyell, L.
Eden of Winton, L.	McColl of Dulwich, L.
Elles, B.	Mackay of Clashfern, L.
Elliott of Morpeth, L.	Mackie of Benshie, L.
Elton, L.	Maclennan of Rogart, L.
Ezra, L.	McNally, L.
Falkland, V.	Maddock, B.
Falkner of Margravine, B.	Maginnis of Drumglass, L.
Fookes, B.	Mar and Kellie, E.
Forsyth of Drumlean, L.	Marlesford, L.

Masham of Ilton, B.	Roberts of Conwy, L.
Mayhew of Twysden, L.	Rodgers of Quarry Bank, L.
Methuen, L.	Roper, L. [Teller]
Michie of Gallanach, B.	Rotherwick, L.
Miller of Chilthorne Domer, B.	St. John of Bletso, L.
Miller of Hendon, B.	St John of Fawsley, L.
Molyneaux of Killead, L.	Saltoun of Abernethy, Ly.
Monro of Langholm, L.	Sandberg, L.
Montrose, D.	Sandwich, E.
Morris of Bolton, B.	Scott of Needham Market, B.
Mowbray and Stourton, L.	Seccombe, B. [Teller]
Murton of Lindisfarne, L.	Selborne, E.
Newby, L.	Selsdon, L.
Noakes, B.	Sharp of Guildford, B.
Northesk, E.	Sharples, B.
Northover, B.	Shaw of Northstead, L.
Onslow, E.	Sheppard of Didgemere, L.
Oppenheim-Barnes, B.	Shutt of Greetland, L.
Park of Monmouth, B.	Simon of Glaisdale, L.
Peel, E.	Skelmersdale, L.
Perry of Southwark, B.	Taverne, L.
Peyton of Yeovil, L.	Thomas of Gresford, L.
Phillips of Sudbury, L.	Thomas of Walliswood, B.
Plumb, L.	Tope, L.
Portsmouth, Bp.	Tordoff, L.
Prior, L.	Waddington, L.
Quinton, L.	Walmsley, B.
Razzall, L.	Walpole, L.
Redesdale, L.	Williams of Crosby, B.
Renton, L.	Williamson of Horton, L.
	Willoughby de Broke, L.

NOT-CONTENTS
Acton, L.	Evans of Parkside, L.
Ahmed, L.	Evans of Temple Guiting, L.
Allenby of Megiddo, V.	Falconer of Thoroton, L. (Lord Chancellor)
Alli, L.
Amos, B. (Lord President of the Council)	Falkender, B.
	Farrington of Ribbleton, B.
Andrews, B.	Faulkner of Worcester, L.
Archer of Sandwell, L.	Filkin, L.
Ashton of Upholland, B.	Fitt, L.
Bach, L.	Fyfe of Fairfield, L.
Bassam of Brighton, L.	Gibson of Market Rasen, B.
Berkeley, L.	Gilbert, L.
Bernstein of Craigweil, L.	Golding, B.
Bhattacharyya, L.	Gordon of Strathblane, L.
Billingham, B.	Gould of Potternewton, B.
Blackstone, B.	Graham of Edmonton, L.
Borrie, L.	Grantchester, L.
Bragg, L.	Gregson, L.
Brennan, L.	Grocott, L. [Teller]
Brooke of Alverthorpe, L.	Harris of Haringey, L.
Brookeborough, V.	Harrison, L.
Brookman, L.	Hart of Chilton, L.
Brooks of Tremorfa, L.	Haskel, L.
Carnegy of Lour, B.	Haskins, L.
Carter, L.	Henig, B.
Carter of Coles, L.	Hilton of Eggardon, B.
Chorley, L.	Hogg of Cumbernauld, L.
Christopher, L.	Hollis of Heigham, B.
Clark of Windermere, L.	Howe of Idlicote, B.
Clinton-Davis, L.	Howells of St. Davids, B.
Cobbold, L.	Howie of Troon, L.
Corbett of Castle Vale, L.	Hoyle, L.
David, B.	Hughes of Woodside, L.
Davies of Coity, L.	Hunt of Chesterton, L.
Davies of Oldham, L. [Teller]	Hunt of Kings Heath, L.
Dean of Thornton-le-Fylde, B.	Irvine of Lairg, L.
Dearing, L.	Janner of Braunstone, L.
Desai, L.	Jay of Paddington, B.
Dixon, L.	Jones, L.
Donoughue, L.	Jordan, L.
Drayson, L.	Kilclooney, L.
Dubs, L.	King of West Bromwich, L.

Kirkhill, L.	Randall of St. Budeaux, L.
Layard, L.	Rendell of Babergh, B.
Lipsey, L.	Richard, L.
Lockwood, B.	Rix, L.
Lofthouse of Pontefract, L.	Rogan, L.
Macdonald of Tradeston, L.	Rooker, L.
McIntosh of Haringey, L.	Sainsbury of Turville, L.
McIntosh of Hudnall, B.	Sawyer, L.
MacKenzie of Culkein, L.	Scotland of Asthal, B.
Mackenzie of Framwellgate, L.	Simon, V.
Marsh, L.	Slim, V.
Mason of Barnsley, L.	Smith of Leigh, L.
Massey of Darwen, B.	Stallard, L.
Merlyn-Rees, L.	Symons of Vernham Dean, B.
Mishcon, L.	Taylor of Blackburn, L.
Mitchell, L.	Temple-Morris, L.
Monson, L.	Thomas of Macclesfield, L.
Morgan, L.	Thornton, B.
Morgan of Huyton, B.	Tomlinson, L.
Morris of Aberavon, L.	Triesman, L.
Morris of Manchester, L.	Tunnicliffe, L.
Moser, L.	Turnberg, L.
Nicol, B.	Turner of Camden, B.
Norton of Louth, L.	Uddin, B.
O'Neill of Bengarve, B.	Varley, L.
Palmer, L.	Walton of Detchant, L.
Patel, L.	Warner, L.
Patel of Blackburn, L.	Warwick of Undercliffe, B.
Paul, L.	Whitaker, B.
Pitkeathley, B.	Whitty, L.
Plant of Highfield, L.	Wilkins, B.
Ponsonby of Shulbrede, L.	Williams of Elvel, L.
Prys-Davies, L.	Wilson of Dinton, L.
Puttnam, L.	Wilson of Tillyorn, L.
Quirk, L.	Winston, L.
Radice, L.	Woolmer of Leeds, L.
Ramsay of Cartvale, B.

Resolved in the negative, and amendment disagreed to accordingly.

Clause 27 [Condition that may be required to be imposed by Higher Education Funding Council for Wales]:

4.40 p.m.

The Deputy Speaker (Lord Carter)

My Lords, before calling Amendment No. 2, I should point out that it has been misprinted. The last line should read: the first three years of a first degree course". I call Amendment No. 2.

Lord Renfrew of Kaimsthorn: moved Amendment No. 2:

Page 13, line 45, at end insert— (d) 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 degree course.

The noble Lord said: My Lords, with the leave of the House, I should like to dissolve the proposed grouping and speak to Amendment No. 2 now and Amendment No. 15 in its place when it is called. I hope that that will be for the convenience of the House. My reasoning is that I have learnt that a number of noble Lords have reservations about Amendment No. 2 but are much happier with Amendment No. 15, so I shall not deal further with Amendment No. 15 at present.

Amendment No. 2 relates to Wales, which is why it becomes more complicated than might otherwise be the case. Your Lordships will recall that on Report precisely the same wording was carried as an amendment proposed by my noble friends Lord Forsyth and Lord Skelmersdale. It was proposed to Clause 24: Condition to be imposed by English funding bodies". It therefore had the effect that students on a first degree course lasting for more than three years—such as not only medics, vets and architects but many studying four-year courses in science and engineering at many universities—would be required to pay top-up fees only for the first three years of their course, not subsequently. That amendment was carried in relation to England.

When we reach Amendment No. 15, I will point out that the amendment carried on Report left the burden of paying those fees on universities, whereas Amendment No. 15 would place that burden on the Secretary of State. But for the moment, Amendment No. 2 would introduce provisions to Clause 27: Condition that may be required to be imposed by Higher Education Funding Council for Wales", to establish a symmetry between the situation in Wales and that in England. Although I am no expert on higher education in Wales, it seems inequitable that students at Welsh universities should be expected to pay top-up fees for fourth, fifth or even sixth years for a first degree course whereas, in the Bill as already amended, students at English universities are not expected so to do.

That is the purpose of the amendment. I beg to move.

Baroness Ashton of Upholland

My Lords, I am grateful to the noble Lord for raising the issues that, as he rightly says, he raised on Report. I hope that he will forgive me; I started off on this Bill by trying to make him a happy Peer but have consistently made him unhappy ever since. I must say that he has also made me an unhappy Peer from time to time. I shall simply repeat what I said about the situation in England. I know that the noble Lord has degrouped his amendment, but he made a slight reference to Amendment No. 15 and, with the forbearance of the House, I shall make a similarly slight reference. There is one pot of money. Wherever the noble Lord puts the onus, it is one pot of money and the effect on universities is the same. We will debate that at greater length.

The passing of this amendment for Wales would create exactly the same problem that it would in England. That is twofold. First, the costs that we anticipate for England are roughly £180 million for universities to continue to offer the courses that they currently offer for more than three years. Secondly, it is a huge disincentive to offer courses, including sandwich courses, modern foreign language courses, engineering, veterinary and architectural courses. Noble Lords know those courses very well; indeed, institutions with which some noble Lords are connected offer them.

I genuinely say to the noble Lord, Lord Renfrew, that that is not the way to go. It is important to stick with the two principles for which I have tried to argue throughout the proceedings on the Bill. First, we are trying to ensure that we do not top-slice the money for universities, which I am afraid that both amendments would do. Secondly, we want to give universities the flexibility to offer the courses that they feel right and proper. Noble Lords have fought very hard and I hope that I have been supportive in ensuring that those two principles rest within the Bill.

I urge the noble Lord to withdraw his amendment for Wales. It is for another place to consider what happens in England but I hope that noble Lords will understand the Government's position. It is important that we do not endanger four-year courses, nor make assumptions that there is additional money. There is one pot of money. I hope that the noble Lord will withdraw his amendment.

4.45 p.m.

Lord Renfrew of Kaimsthorn

My Lords, I am grateful to the noble Baroness for the unfailingly courteous way in which she puts her points. The doctrine of the one pot of money of inflexible size is at the heart of the Bill. It is a doctrine to which I hope to return at greater length on Amendment No. 15, which is really about who pays the money. I shall not speak to it now. I take the points made by the noble Baroness and, as I feel myself rather out of my depth in the affairs of Wales, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 30 [Director of Fair Access to Higher Education]:

Baroness Ashton of Upholland moved Amendment No. 3: Page 16, line 10, after "education" insert "(whether full-time or part-time)".

The noble Baroness said: My Lords, when we debated part-time provision on Report, the noble Lord, Lord Dearing, said that he knew of no issue that attracted more solid consensus than the need to do something for part-timers. Many noble Lords have spoken on the issue on Report and during previous stages at the Bill. Sadly, there is not time to do them all credit. I shall mention a few and hope that others will forgive me.

The noble Baroness, Lady Sharp, said that there was a need for the director to take account of access to part-time education. The right reverend Prelate the Bishop of Portsmouth said that there needs to be a signal in the Bill to recognise an important growth area and a fact of modern life. The noble Baroness, Lady Seccombe, reminded us that the director needs to see the effects of the new system in an holistic manner. The noble Lord, Lord Rix, and the noble Baroness, Lady Boothroyd, have been passionate throughout the Bill's progress in arguing the case for part-time students. My noble friend Lady Blackstone said that it was important not to pass a Bill that neglects to recognise the existence of part-time higher education and that the director had a duty to consider both kinds of students. As she reminded the House, part-time students make up 40 per cent of the student population.

I agree with those sentiments, and we have listened and responded. I agreed on Report to return with two amendments, which I have now tabled in my name for your Lordships' consideration. Amendment No. 3 explicitly extends to part-time higher education the role given to the director on Report of spreading good practice. Like my noble friend Lady Warwick, I have every expectation that many institutions will include part-time provision in their access plans. It is therefore eminently sensible for the director to consider the good work that they are doing and encourage good practice.

In considering good practice, the director will consider the whole range of what institutions are doing through their access plans in respect of part-time study: outreach to ensure that potential students are aware of the part-time options available; ways in which institutions provide financial support for part-time students; and information on the range of financial support available to them. I believe that that will be a very positive move to help institutions and their part-time students.

Amendment No. 4 confers on the director a duty to perform his functions in such a way as to promote and safeguard equality of opportunity in connection with access to higher education, including part-time education, in so far as his functions are exercisable in relation to it. On Report, the noble Baroness, Lady Sharp, tabled an amendment with similar intentions, which I could not accept because of a technicality. I was, however, glad that she had tabled it and accepted the principle behind it.

Although the director will focus principally on full-time students, because it is those fees that the director will regulate, I agree that his remit should extend to part-time students. Many institutions will want to include their study in their plans. This amendment makes clear that the director will take an interest in what institutions are doing to encourage students in both full-time and part-time education.

The amendments put a clear signal on the face of the Bill that part-time education matters, and its importance should be reflected in the role of the Director of Fair Access. I beg to move.

Baroness Sharp of Guildford

My Lords, as one of the main proponents of a similar amendment on Report, I am very grateful to the Minister for the amendments that she has now tabled. It is absolutely right that the director's remit should include part-timers and that it should be on the face of the Bill. When we discussed the matter on Report the Minister mentioned that that was not necessary, but, as the right reverend Prelate said, it is a signal and it is very important that it is in the Bill. I welcome the two amendments and thank the Minister for them.

The amendments are important. We also recognise that the survey of part-time students is being accelerated—which is also good—and that the director's remit starts here in 2005–06. However, institutions providing part-time education, particularly the two specialist institutions, the Open University and Birkbeck, face problems in attracting graduates to apply for courses.

We did not proceed further with the amendment tabled by the noble Baroness, Lady Lockwood, about pro-rata grants and loans to part-time students; we left it for the Government and HEFCE to sort out with the institutions. Nevertheless, for the moment, it leaves the institutions in a very difficult situation. I urge the Government to do their best to ensure that, in the negotiations between HEFCE and the institutions, HEFCE realises the importance of part-time education and its development.

As we discussed on Report, part-time education is the way of the future for many of the extra students who will come into higher education over the next few years. It is very important that the opportunity exists for those students, and that institutions such as Birkbeck and the Open University can flourish. It would be very sad if, as a result of the Bill, in the short term both institutions suffered.

Lord Rix

My Lords, it is always a pleasure, and sometimes a pleasant surprise, to be able to thank the Minister and the Government for changing their minds and accepting an amendment, even if they had to rewrite two amendments on this occasion. As we have heard from the noble Baroness, Lady Sharp, there are still many issues to be settled in regard to part-time education. But if the Government are as receptive to the remaining changes that are needed as they have been to these two amendments. I am sure that all will be possible in the very near future. I extend my grateful thanks, certainly on behalf of the university that I represent. I am sure that goes, too, for all the other universities which have many part-time students.

Baroness Lockwood

My Lords, as I have tabled amendments in support of the principle that the noble Baroness, Lady Sharp, has mentioned, perhaps I may say how much I welcome the two amendments tabled by my noble friend. Not only are they a signal, as the right reverend Prelate the Bishop of Portsmouth said in an earlier debate, they underwrite the principle of part-time education in the Bill so that we now know that it is an important part of government policy.

The amendments will strengthen the hand of the Minister's department when it deals with HEFCE in relation to financial assistance for part-time education, particularly for Birkbeck and the Open University, but also for better facilities throughout the system. It is important that the Government grasp the opportunity that they have given themselves in the Bill, and make clear to HEFCE that this is a prime part of government policy and strategy that it should take on board when considering the position of the Open University and Birkbeck and completing its wider review of part-time education. I hope that the Government will press the advantage that they now have.

Baroness Carnegy of Lour

My Lords, the noble Baroness has put it very nicely. We all welcome the inclusion of a signal in the Bill. It would have been extraordinary to exclude from the Bill any mention of part-time students. However, the Government have not done much except to give a signal and to create a possibility. They have done nothing in response to those of us who pointed out the threat to the Open University and Birkbeck because of the Bill.

The Open University has written to me—and, I expect to other noble Lords—to point out that largely nothing has changed for it. There is a threat that if it increases its fees it will lose nine-tenths of its undergraduate students. The Minister always looks as though she does not believe that, but I have seen the figures and can assure her that it is a serious point that she must take on board. I suspect that Birkbeck is in a similar position, although it has not written directly to me.

The Minister has done nothing about those two urgent points. Money is needed now to go direct to those two universities because of what the Government are doing in the Bill. Unless they do that, the Government will find that the university that they created will have virtually disappeared. I hope that they are not sanguine about that.

Baroness Howe of Idlicote

My Lords, I thank the Minister very much for the changes. At least now we have an acknowledgment that part-time higher education exists. However, I re-echo the point made by the noble Baroness, Lady Carnegy of Lour. I have also received the letter to which she referred and seen the figures. I fear that the situation remains and that urgent action is still needed.

I spent the morning chairing a seminar on equal pay in higher education. One of the points raised was the duty of equal opportunities between the sexes that will be imposed on public services. Women may form a much greater percentage of part-time students at the Open University, in which case there might be yet another reason for the Minister to think carefully about those 40 per cent of students, many of whom are at Birkbeck and the Open University.

Lord Rogan

My Lords, I welcome the amendments tabled by the noble Baroness, Lady Ashton of Upholland. I am not sure whether I am declaring an interest or boasting, but I attended the Open University, during which time my wife was also a student. Over the five years of part-time study and full-time employment, we produced between us two degrees and two bonny baby boys. So, I am very conscious of the good work performed by the Open University, and others.

5 p.m.

Much of the debate has revolved around—rightly so—the full-time university institutions. This legislation is set to generate around £1 million in extra funding for English universities, but not one penny will go to either the Open University or Birkbeck College. The Open University has been overlooked in this legislation, and the Government must now listen to and address these concerns. The Open University provides an accessible educational service for part-time and mature students who work full time, and those whose needs are matched by the option to learn from home.

The Open University has asked the Government to ensure that it is not disadvantaged financially by this legislation in comparison to other universities. It has made its case to HEFCE for additional funding, to ensure that the resources available to it to teach part-time undergraduates are not less than those available to other universities to teach full-time students, taking the fees and the grants together.

Basically, the Open University needs an interim funding allocation to ensure that it can compete in the market place at this time of change. In the long term, the Government must think hard about how the Open University and Birkbeck can continue to provide their essential educational facilities to those who opt not to take the conventional university path. The new fee regime for full-time universities will be introduced in 2006, but HEFCE says that the earliest that it will be able to introduce any new funding methodology as a result of the review will be 2007. Consequently, this leaves part-time institutions in a precarious position compared to full-time universities, which will be able to plan and prepare for the future.

Furthermore, the very nature of the Open University means that if it wishes to remain open it cannot simply raise fees to the equivalent of £3,000 a year in line with the other universities. This will simply not be affordable to a great number of those who take the part-time option. I ask the Government to look again at this position and help the Open University.

Lord Graham of Edmonton

My Lords—

Baroness Seccombe

My Lords, I thank the noble Lord for giving way. I, too, welcome these amendments, which we see as a welcome first step to tackling these proposed worrying circumstances that part-timers find themselves in. I thank the Minister for bringing the amendments before us today, and we look to her to confirm that the ongoing discussions will continue with all the institutions to address the serious matters that they face.

Lord Graham of Edmonton

My Lords, I rise to thank the Minister most sincerely for giving effect to the requests made at the previous stage. The proof of the pudding is in the eating. Together with other noble Lords who have Open University links, I have had a letter that is somewhat bleak in looking at what will be done.

I have sufficient confidence and faith in the Minister and in her ministerial colleagues, and sufficient political savvy, to recognise that in this House it will not be a political matter; it will be an all-party matter for those who have accepted the good faith of the Minister. If there is any lesson to be learned, I am delighted, as an ex-Open University student and graduate, to find that there is support in depth all around the House, not just for the Open University or for Birkbeck but for the ethos of part-time education.

The Minister will take careful note of the reservations and caveats that have been mentioned. She will recognise that as we continue to be briefed by others, including the Open University, we will not hesitate to come back to this House and find a device of one kind or another to express that point of view. After the previous debate on this matter, I am satisfied that the Minister and her colleagues appreciate that there is a case to be answered. They have answered it by the words in this amendment. If it turns out that that does not do the trick, we will—without malice but with a great deal of forethought—come back again.

I was heartened by the Minister's words on the previous occasion. The agitation from the Open University then was about the timetable for the review, the survey and so on. There was a gap year, but, as I heard the Minister, that disappeared when we last dealt with this matter. If the point at which the Open University could be in trouble were removed, that would solve the problem. However, we will have to wait and see. I have confidence that when the survey is carried out by HEFCE it will find that the part-time student institutions—led by Birkbeck and the Open University; but not them exclusively, there are others—deserve a better crack of the whip.

I thank the Minister for what she has done, and I thank her for her attention to the matter. As I said, the proof of the pudding will be in the eating. I hope that we will hear from the Open University in particular that it is satisfied that what is needed to safeguard it as an institution will be taken care of. As a noble Lord said in this debate, it is precious to the Labour party that the Open University was started, but it is not a party matter. There were some queries at the beginning, but it is now accepted by all parties as one of the finest institutions in the world.

Tonight I will have the pleasure, along with other Labour colleagues, of warmly welcoming Mary Wilson, the wife of Harold Wilson, when the Labour Peers have a party on the Terrace. If there is a vote between 6 p.m. and 8 p.m., rest assured that we will be well represented. Mary Wilson is an embodiment of the Open University and all that it did, and there will be others. The Minister should be glad of the warm welcome for the efforts that she has made. She has done what she said she would do at the last meeting. Whether that is enough remains to be seen.

Baroness Blackstone

My Lords, I, too, welcome these amendments, which are about the Director of Fair Access and ensuring that part-time higher education is looked at when that office is operating. I want to pick up what has been said about the Open University. I also received the letter from the Open University, and I say to the noble Baronesses, Lady Carnegy of Lour, and Lady Howe of Idlicote, that I was a bit surprised by it. It did not seem to me that the letter reflected what my noble friend the Minister said when we had a debate about part-time higher education last week.

Like my noble friend Lord Graham, I believe that over the coming months and years your Lordships' House will be looking at what the Government said on that occasion, and we will be ensuring that the commitment that was made is followed through. Like my noble friend Lord Graham, I am confident that it will be. If it is not, plenty of us in this House will take it up again. We should recognise the major concession that the Government made last week, not just through these two amendments, but on the issue of funding part-time student places.

We are grateful for that, as is Birkbeck College. I happened to be there last night, as was my noble friend Lady Lockwood. Birkbeck is pleased about what happened last week. I believe that the Open University is probably pleased as well, even if that was not reflected in its letter.

Lord Dearing

My Lords, as the Minister referred to me in her opening sentence it would be curmudgeonly not to thank her, and I do, most warmly. For what we hope to receive, may we be reasonably thankful.

Lord Campbell-Savours

My Lords, as someone who has had a lot of difficulty with this Bill—and has indicated that in the Division Lobbies—I congratulate my noble friend, my noble friend Lord Graham of Edmonton and my noble friend Lady Blackstone, all of whom have been lobbying the Government very powerfully over the past week or two, on this extremely important issue. It is pleasing to know that flexibility was possible in this Bill.

Baroness Ashton of Upholland

My Lords, I thank all noble Lords who have contributed yet again to this very important debate. I have one disappointment of course in that there will be one Peer not at the Labour Peers' party this evening, for I have two Bills back to back. I hope noble Lords will think of me, if nothing else.

I am also sorry that I did not receive the letter from the Open University. I appear to be the only Peer who has not done so. It is very difficult to deal with some of the issues raised in it, as I am not fortunate enough to have a copy.

I can say a number of key things, however, to noble Lords. The first is to say to my noble friend Lord Graham, the noble Lord, Lord Rogan, and others who have spoken yet again with great passion about the Open University, that the commitment of this Government remains firm. The Open University receives £150 million, almost 4 per cent of the total for the sector. The next highest payment is to Leeds, just under £80 million. The Open University receives that money because we believe in that institution. It is in all our interests to ensure that it continues properly. I stand by all the commitments I made on Report, but I am not going to reiterate them. I am sorry the noble Lord, Lord Rogan, was not there, because a lot of what he is looking for from me was addressed then. Perhaps I might ask him to look back at that debate and come back to me if he has further queries. The Higher Education Funding Council is looking at the case for the Open University and Birkbeck. We have commended it for that.

I say to the noble Baroness, Lady Carnegy of Lour, that I always look concerned about this "nine tenths", because I am waiting for the figures. We sometimes have real difficulty with lots of figures being around, but it is actually very difficult to get underneath them. I hope and am sure that the Open University will provide the information to the Higher Education Funding Council in order for it to look at it carefully and properly. I urge it to do so as soon as possible.

The main thing I take away from this is broad welcome and support for what we have already achieved, support for the role of the Director of Fair Access within this, and recognition that this job is not yet finished, as I made plain on Report. I made a commitment that we would look at the needs of part-time students, the student income and expenditure survey—to include part-time students for the first time and, having looked at our students and who they are, we will then consider what more can be done. We have funded the Open University to get this information for us. Although noble Lords have been concerned about it, there is nothing in this legislation to stop us moving forward if that seemed the appropriate thing to do.

I stand by all those commitments. I recognise that if I were to fail in those commitments, there are plenty of noble Lords who have made it perfectly clear that I should be back here answering important and detailed questions. There is no intention to do other than what we said on Report, and I hope these amendments will be received in that spirit.

On Question, amendment agreed to.

Clause 31 [General duties of relevant authority]:

Baroness Ashton of Upholland moved Amendment No. 4: Page 16, line 20, after "education" insert "(including part-time higher education in so far as his functions are exercisable in relation to it)".

On Question, amendment agreed to.

Baroness Ashton of Upholland moved Amendment No. 5:

Page 16, line 20, leave out from "education" to end of line 26 and insert— (1A) In the performance of his functions under this Part, the Director has a duty to protect academic freedom, including, in particular, the freedom of institutions—

1. (a) to determine the contents of particular courses and the manner in which they are taught, supervised or assessed, and
2. (b) to determine the criteria for the admission of students and apply those criteria in particular cases.

(1B) The Director must, in the performance of his functions under this Part, have regard to any guidance given to him by the Secretary of State.

The noble Baroness said: My Lords, I am delighted that during our debates on this Bill, this House has continued its tradition of defending academic freedom. We have had some very helpful discussions about this in Committee, on Report and with other noble Lords outside of the Chamber. I hope that I have by now reassured noble Lords that it is not our intention that the Director of Fair Access should interfere in matters which are, quite rightly, for institutions to decide for themselves, particularly the criteria for the admission of students.

As noble Lords will know, I was happy to accept an amendment to the Bill in Committee and another on Report, tabled by the noble Baroness, Lady Warwick of Undercliffe, one of which confers a duty on the director to have regard to the need to protect academic freedom. The other ruled admissions criteria out of regulations. But I recognise the desire of the House for further clarification on this. I am very grateful to the noble Lord, Lord Forsyth, for tabling an amendment on Report which sought to define academic freedom. Although, as the noble Lord knows, I could not accept the exact wording of the amendment, I undertook to consider further and come back at Third Reading with a proposal.

I agree entirely that academic freedom should be safeguarded, and Amendments Nos. 5 and 13, tabled in my name, will further strengthen that principle. Amendment No. 5 will clarify Clause 31(1)(b)(i), which confers a duty on the director to have regard to academic freedom. We have already made it clear that it embraces the freedom for institutions to determine their own admission criteria for students. The Bill will now make it clear that that freedom also embraces the freedom to determine the content of courses and the manner in which they are taught, supervised or assessed. I know that there has been concern, for example, about whether the director might think that the manner in which a course was taught had affected applications from under-represented groups and whether he might therefore be tempted to intervene. The amendment puts it beyond doubt that he cannot. The definition used in the Further and Higher Education Act 1992 also refers to freedom in the matter of the selection and appointment of staff. We have not included that phrase here simply because that is so clearly removed from the functions of the director that its inclusion is not necessary and, indeed, would not make sense.

Amendment No. 13 is a corresponding amendment, which clarifies that regulations may not require plans to contain anything relating to such matters or any reference to particular courses. In other words, it absolutely rules out the possibility that institutions will have to include measures related to individual courses in their plans in order to gain the freedom to charge higher fees.

The amendments, together with the earlier amendments that I accepted on the matter, will protect the important principle of academic freedom, which the House rightly holds dear. I beg to move.

5.15 p.m.

Lord Forsyth of Drumlean

My Lords, I thank the Minister for tabling the amendment. I agree that the wording is better than that of the amendment considered at an earlier stage. It will go a long way to meeting the concerns that were expressed. I know that it was an issue of concern not just on these Benches but on the Liberal Democrat Benches and on the Cross Benches. My noble friend Lady Perry of Southwark was particularly concerned about it. I have two short words for the Minister: "Thank you".

Baroness Sharp of Guildford

My Lords, I add my thanks to those of the noble Lord, Lord Forsyth of Drumlean. We were anxious about the issue, but we are much reassured by the amendment that the Minister has tabled.

Baroness Warwick of Undercliffe

My Lords, I support the amendments. I congratulate the noble Lord, Lord Forsyth of Drumlean, on his persistence and am grateful to the Government for tabling the amendments.

Amendment No. 5 builds helpfully on the amendment that I tabled in Committee. It gives an even more powerful assurance that institutions are to retain their autonomy over admissions, course content and delivery.

Amendment No. 13 goes further and makes it clear that OFFA cannot require institutions to refer to individual courses in their plans, except as provided for in Clause 32(1). That is very welcome. Universities UK, in which I declare an interest as chief executive, has pressed for it since the Bill was first published, and I must say that I had all but given up on it. Universities UK felt, as I do, that it was rather important that OFFA should look at widening participation strategies as a whole. OFFA should not have the power to require institutions to focus on individual courses. One can imagine how, if OFFA had that power, it might be abused or used innocently in such a way as to distort the priorities of institutions in widening participation. It would also, inevitably, lead to a degree of micro-management, which would, in my view, be unacceptable. The amendment is very welcome, and I thank the Minister for it.

I wonder, though, whether the Minister might clarify the meaning of the phrase "general provisions" in the amendment. I hope that she means "except as provided for in Clause 32(1)". If that is what she means, I am entirely happy with the amendment.

Baroness Ashton of Upholland

My Lords, it is indeed my understanding that that is what I mean. I hope that that clarifies things for the noble Baroness.

On Question, amendment agreed to.

Clause 32 [Contents of plans]:

Lord Roberts of Conwy moved Amendment No. 6: Page 16, line 36, leave out "In relation to England,

The noble Lord said: My Lords, in moving Amendment No. 6, I shall speak also to the other amendments in the group, with the exception of Amendment No. 8, which will be spoken to by the noble Baroness, Lady Sharp of Guildford.

The amendments would extend to higher education institutions in Wales the freedom from potentially gross interference that has already been granted to similar institutions in England by a government amendment tabled on Report. The freedom was conferred in England by confining the power of OFFA to insisting that plans for access should include provisions to ensure equality of opportunity only. It should not seek to promote higher education generally, which your Lordships strongly argued is best left to the institutions. Perhaps this is the point at which to note that the welcome government amendments that have just been agreed refer to what the institutions can do rather than to the institutions themselves.

The Government accepted the arguments that were put forward in your Lordships' House, but only as regards England. The power to insist that access plans promote higher education was retained for Wales. OFFA does not cross the dyke in this Bill to operate in Wales. But there will be a similar authority, which will probably be the Higher Education Funding Council, sponsored by the Labour Government of the National Assembly. Our amendments seek to ensure that the remit of the Welsh authority will be identical to OFFA and similarly restricted, and that higher education institutions in Wales will be as free as similar institutions in England. Your Lordships may well ask, "Why not"?

The main objection is that we are dealing here with a devolved matter. There is a presumption that amounts to a principle among ardent devolutionists that whatever the National Assembly wants in primary legislation, it should get. It was well expressed—albeit with a hint of mild embarrassment—by the noble Baroness, Lady Sharp, at Report. She said: My party, in particular, is concerned that Wales should be able to do its own thing and should not be dictated to by this Parliament".—[Official Report, 14/6/04; col. 572.]

I do not know how far that Liberal latitude extends. Would it extend, for example, to the total abolition of higher education or some other extreme? That remains to he seen. I shall be very interested to hear how members of the Liberal Democrat Party reconcile taking one view in England—after all, on a matter of principle—and another view in Wales on the same principle.

The Minister confirmed that the Assembly had asked specifically for this differential between England and Wales. But, with respect, the request came from the Assembly Government within the National Assembly. As far as I am aware, there is no record of any such request being made by the National Assembly as a whole. I am not sure that it has scrutinised the Welsh clauses of this Bill in what your Lordships would call "any detail". It has certainly not discussed the issue that we are considering today. So I counsel caution.

This Parliament is still responsible for providing primary legislation for Wales. We should be careful when we issue blank cheques to the Assembly Government for the exercise of powers, which we deny to central government in the United Kingdom. We should be especially careful when central government concur that we are right to do so.

So why should we insist on these amendments? I respect those who believe in the prime importance—indeed, the sanctity—of the devolution process. But I must remind them of their current responsibility to provide sound primary legislation and, where important principles such as academic freedom are threatened, to lay down parameters for the exercise of powers that may undermine such principles.

We have reason to believe that higher education institutions in Wales feel threatened. They have told us so through Higher Education Wales, which comprises 14 vice-chancellors and principals. I quoted a letter from its secretary, Mr D G Lewis, at length at Report. I shall remind your Lordships of his view that the power to require an institution's plan to "promote higher education" may be used, in ways not directly connected with fair access to higher education … [but] to direct their business plans and even to force merges. … Some members of HEW fear that the power is there to ensure that institutions comply with the Minister's wishes and to fine them if they do not".

I have checked on Mr Lewis and his position. I have to say that the fear is not groundless. The chairman of Higher Education Wales, Professor Anthony Chapman, said recently: The Vice Chancellors and principals in Wales are concerned at the coincidence of several recent statements by the Welsh Assembly Government which taken together suggest an undermining of university autonomy, notwithstanding protestations to the contrary". I am afraid that that is the true position.

On 9 June, the Minister, Miss Jane Davidson, said: I will ask the HEFCW to use the core grant to the sector more strategically, along with elements set aside for the same purpose. I will expect the Council to consider how those monies should be distributed to provide concrete benefits to those institutions which have embraced reconfiguration"— which, I think, means mergers and collaboration— and to provide further incentives to achieve it".

If that is not an enforcement of policy on institutions, I do not know what is. Such actions would be clean contrary to the wishes of this House and this Government as regards England. I urge the House and the Government to stand by their principles and extend the protection of academic freedom, which, as the noble Baroness, Lady Blackstone, memorably said, is indivisible to Welsh institutions too. Our duty is clear and we must not shirk it. I beg to move.

Baroness Sharp of Guildford

My Lords, I perhaps should have asked for Amendment No. 8 to be degrouped. If Amendment No. 7 is agreed, Amendment No. 8 will fall. Therefore, it depends on whether the noble Lord, Lord Roberts, wishes to test the opinion of the House on his amendment. Amendment No. 8 is tabled on behalf of RNIB and SKILL, which were very concerned about the changing of the wording of the Bill in relation to England. I remind your Lordships that the original wording of the Bill was that the responsibility of the director should be the promotion of equality of opportunity or the promotion of higher education. We picked that up at a fairly early point and changed the wording. Indeed, this came forward at Report to cope with that. Nevertheless, as the noble Lord, Lord Roberts, explained, we left that wording in in relation to Wales.

The two organisations are very concerned because it would suggest that one is counterpoising the promotion of higher education against the promotion of equal opportunities. The suggestion therefore is that in order that those two sub-paragraphs should not seem to be alternatives, the word "or" should be substituted with the word "and". This is a minor amendment that would just clarify the wording.

The noble Lord, Lord Roberts, referred to the position of the Liberal Democrats on the devolution issue. Our spokesman on Welsh affairs, the noble Lord, Lord Thomas of Gresford, will speak on that for us. I do not want to speak on that issue. I just wanted to explain my amendment and also make clear that basically it stands only should the other amendments fall.

5.30 p.m.

Baroness Warwick of Undercliffe

My Lords, I rise to support fully the amendments tabled by the noble Lord, Lord Roberts, to which I have added my name. Noble Lords may know that this was the subject of amendments which I tabled on Report and I am delighted to be able to return to the matter. I know that for many noble Lords, the amendments before us pose a problem. Those who support devolution, as I do, instinctively feel that the Welsh Assembly must be free to determine its own path and that it should not be for Westminster to dictate what can and cannot be done.

However, we retain responsibility for making primary legislation for Wales. I do not believe that, that primary legislation should be subject to a lower standard of scrutiny than that for England. It is not good enough to say, "That's what Wales wants, so we should not interfere". Given the extensive and anguished communications I and others in this House have received from the Welsh universities which are the most closely involved, this is not what Wales wants. It may be what the Minister in Wales wants, but I do not think that we would be so trusting as to give Ministers in England everything they desire without stern challenge, and I do not see why we should adopt a different attitude to Wales.

With this Bill we are creating a regulator. We have tested the limits of that regulator through rigorous debate, and it is right that we should have clone so because the regulator will have power to tine institutions up to half a million pounds and withhold their grants. It is clear that, with respect to England, the regulator is to regulate access to higher education.

The Government brought forward an amendment on Report to make it clear that that is all this regulator can do.

But that will not be the case in Wales. The RNIB and SKILL, to which the noble Baroness, Lady Sharp, also referred, are concerned that in Wales the powers created by this Bill will not be used to promote access. I think they are right to be worried. Wales has a very good record on access to higher education, as have many institutions in England. That should not mean that it is neglected as a priority in the future. As the RNIB and SKILL note, there is always more that we can do.

Even if it were true that there was not a problem in relation to access in Wales, surely the response should be to remove the regulator with respect to Wales rather than to keep the regulator to do other, unspecified, things. I do not know what the regulator will regulate in Wales; nor do the vice-chancellors of Welsh institutions and nor, I suspect, does the Minister. It is not right that a regulator should be created without clarity as to what he or she will regulate—and with the power to fine, but no clarity about what the criteria will be.

I will certainly support this amendment should the noble Lord, Lord Roberts, decide to test the opinion of the House. I shall do so knowing that I have the strong support of higher education institutions in Wales.

Lord Thomas of Gresford

My Lords, it is with some regret that Members on these Benches are unable to support the noble Lord, Lord Roberts of Conwy, on this amendment, in particular having regard to his many years of outstanding leadership in the education field as a Minister of State in the Welsh Office. But he has urged us to stand by our principles, and there are principles other than academic freedom at stake. He reminded us that the Minister assured the House that the Welsh Assembly had asked specifically for the differentiation contained in this Bill to exist between the English provisions and those for Wales. I have said from this Bench on many occasions that we believe that, if devolution is to work, the National Assembly for Wales should have its way and that primary legislation, subject to a reserve only in the most exceptional circumstances, should mirror the requirements of the National Assembly.

I said that over the four years when we were in a partnership government in Wales with the Labour Party. Am I to move away from that principle because at the moment the Labour Party is exercising power in the National Assembly on its own? We believe not. We believe that the purpose of primary legislation in Westminster is to enable the National Assembly to do its job and not to limit or curb it.

If this is all about money and the way that money should be used in Wales to fund higher education, I should make it quite clear that the Welsh Liberal Democrats in the National Assembly have called for the release of £50 million from the reserves of £726 million in order to support and enhance higher education in the Principality.

We do not necessarily believe that the policies being followed by the present National Assembly government are right or even sensible. The noble Lord, Lord Roberts of Conwy, referred to what was said by Jane Davidson on 9 June in plenary session. She has stated that she intends to change the landscape of higher education in Wales and sharply strengthen the financial incentives for reconfiguration. That may not be sensible where the institutions of higher education in Wales do not agree and where they have not been consulted. But that is what devolution is about. It is a power given to the National Assembly government to make mistakes and it will be punished for those, we hope, at the ballot box.

If the Assembly wants, for example, to introduce variable fees for higher education in Wales, I am sure that the Labour Party will not have missed the fact that in the recent elections, the Liberal Democrats scored enormous successes in the university towns, taking every ward in Cardiff Central where there is a higher proportion of students to the population than anywhere else in the United Kingdom. Students and young people across the whole of the United Kingdom are responding to the policies of the Liberal Democrats on education. If the Labour Party wants to pursue other policies, whether elsewhere in the United Kingdom or in Wales, let it be punished for them. That is what the democratic process is all about and that is what devolution is all about.

So it is in support of that principle—that it is for the National Assembly for Wales to make up its own mind, right or wrong—that we are not in a position to support the amendment of the noble Lord, Lord Roberts. This House is a not a Court of Appeal. This is not the place for Universities UK to make representations about the future of education. It should concentrate its efforts in Wales by bringing students out into the streets in peaceful demonstration if that it what it wants, but it should not come here for us to second-guess what the National Assembly has done.

Baroness Carnegy of Lour

My Lords, the noble Lord has enunciated the theory that devolution means that Westminster should simply rubber stamp that which the Welsh Assembly wants, that we should be agents for the Assembly in making primary legislation because it does not have the power to do so. I find that very difficult to accept. This is an interesting devolution issue and I think it is one that worries us; it certainly worries me that it has arisen at all. It is something that we shall have to look at when we consider the Richard report.

As the noble Lord knows, although I am no expert on Welsh matters, I know how Scotland has dealt with the problem of getting universities to consider co-operating more and perhaps merging in the future. That has been achieved by asking the Scottish Higher Education Funding Council to make it a condition of funding that they do consider this. That has worked well and there is no question about the fact that it is open to Wales to do so as well.

The point here is that we have a Bill which is the job of the Westminster Government; we have to legislate. This Bill creates the possibility of a regulator in Wales which could be extremely threatening to universities if it is not limited. But we have created the Bill and we are approving it. If we leave the Bill as it is, as the noble Baroness, Lady Warwick, has said, universities in Wales will have no protection from the threat that the regulator, which would he the creature of the government of Wales, will do what it will with them. We have a responsibility to ensure that the Bill does not create a situation where the universities in Wales could suffer in a way in which the universities in England will not suffer. We owe it to the people of Wales to do so.

Had the Assembly consulted properly with the universities in Wales and obtained their agreement that they did not want limitations on the regulator, the situation would he quite different. But it apparently has not done so. I believe that the noble Lord is getting slightly carried away with his enthusiasm for devolution and the Assembly in thinking that the Government are right to accept this simply because the Welsh Assembly says so.

I think that the Government are deeply wrong. If, with the help of the Liberal Democrats—who are also enthusiastic in this way—they do not accept the amendment, they will show that they have not done their thinking about the lop-sided kind of devolution that we now have in this country. We owe it to the people of Wales that the Bill should give the same kind of protection to universities in Wales as it gives to universities in England.

I hope that the Government will listen to the universities in this respect. Noble Lords sitting behind the Government Front Bench may or may not have gone into this issue in great detail, but I hope they realise that, having created devolution, we have to be extremely careful how we operate it. Some matters may have to be changed as a result of the Richard report but I hope that the House will accept my noble friend's amendment and that the Government will see the danger of the course they indicated they were on at the previous stage.

Lord Morgan

My Lords, I declare an interest as a former vice-chancellor of the University of Wales and of Aberystwyth. Give me liberty or give me death", is a famous phrase from the American Revolution. This seems to be a case of "Give me liberty or give me devolution". As Tom Paine observed, I am for liberty. Although I sit on these Benches, I am not a politician; I am a life-long academic and I have always supported devolution.

There are two aspects of devolution to which I should like to refer. Noble Lords may not agree with the noble Lord, Lord Thomas, with whom I invariably agree on these matters. First, this is a case of devolution within Wales as well as a case of devolution in relation to Wales and Westminster. Devolution has always been said to rest on a consensual attitude, but this policy is part of a programme which is being imposed upon the universities and institutions of Wales.

I have spoken to many vice-chancellors over the past few days and we have had communications from the higher education body in Wales representing vice-chancellors and principals. They are totally opposed to the implications of this policy, as my noble friend Lady Warwick said. They are also deeply apprehensive that it makes Wales, in various ways, less free than England. The supreme quality of a university is its freedom. That matters more to me than anything else. I have spent my life as a university teacher and it seems to me that a lack of freedom from overt—and, even more, from covert—interference is very dangerous.

There are implications in the broader provisions for higher education which arouse suspicion, particularly in regard to the amalgamation of institutions where pressure has been imposed. When I was in Aberystwyth there were two amalgamations, but they were carried out by free, autonomous institutions. We cannot have it both ways. Universities are either free, autonomous institutions, or they are not.

There has been a good deal of double talk in these matters. In this case, the universities in Wales feel that they are not given the same degree of freedom. They have already raised grave concerns about funding and whether or not the possible gap in 2006–07 will be made up. They have grounds for believing that they will be more regulated. After reading the letter from the National Assembly Minister, Jane Davidson, which many of us have received, I am quite glad that I am not now a vice chancellor and subjected to such a degree of interference and regulation.

I suspect that my noble friend Lord Prys-Davies will take a different view—which is rather like arguing against God, as far as I am concerned—but, with great respect and great regret, I feel that academic freedom and academic autonomy are threatened, that Wales will suffer and that the Welsh higher education system, which has been one of the glories of our nation since the late 19th century, is likely to diminish. I hope that the Government will think very seriously about the amendment.

5.45 p.m.

The Lord Bishop of Portsmouth

My Lords, I do not argue against God very often. If a DNA test were carried out on me, I do not think it would reveal any Welsh or English blood in my veins.

Having supported the Liberal Democrat amendment on voluntary work, I rise to support the amendment of the noble Lord, Lord Roberts. It relates to the complex issue of the balance between what is right to be devolved and the national educational policy, as the noble Lord, Lord Thomas, indicated.

In my view, the Bill appears to have become the victim of what might be called the negative side of well-intentioned positive discrimination and needs to be rectified. In other words, as it stands, the Bill would involve undue interference in Welsh institutions. Like the noble Baroness, Lady Warwick, I very much hope that the amendment of the noble Lord, Lord Roberts, will be accepted. If the will of the House is to be tested, I hope that the amendment will be agreed to.

Lord Livsey of Talgarth

My Lords, I am in favour of liberty and devolution and I respect the views of the noble Lord, Lord Morgan, very much indeed. However, I believe that it is not right necessarily to assume that the Education Secretary in the Welsh Assembly Government is the most popular person in Wales. I know that to be not a fact.

The principles outlined in Amendment No. 6 give rise to an interesting situation, as my noble friend Lord Thomas said. As currently drafted, Clause 32(2) relates specifically to England. This is an England and Wales Bill and matters relating to higher education are specific to the Secretary of State in England and the Welsh Assembly Government in Wales. We agree with Clause 32(2) because it is consistent with the devolution settlement, and Clause 32(3) spells out what should apply in Wales. Indeed, it places duties on the Welsh Assembly Government either to promote equality of opportunity or to promote higher education. My noble friend Lady Sharp has tabled Amendment No. 8, which seeks to put that right. We are confronted with an interesting situation. We would obviously prefer that the Bill did both.

The principle of devolution is very important. Amendment No. 7 seeks to strike out specific reference to Wales and therefore goes against the principle of devolution. We oppose the deletion of Clause 32(3) and we will vote against Amendment No. 7 for this reason.

However, a great many issues arise. My noble friend Lord Thomas made the point that although we are consistent in our attitude to devolution, that does not necessarily mean that we agree with what might happen to higher education under the present Minister for Education in the Welsh Assembly Government.

I should like the Minister to consider several matters. In Wales, equality of opportunity is very important and should be essential, not just an option. Why is this? Will she explain why the Welsh Assembly Government want this distinction?

Secondly, is there a price tag connected specifically with the word "promotion"? Thirdly, will promotion as specified in the Bill be used as a means of amalgamating a number of university colleges and higher education establishments in Wales, which has been hinted at by several contributors to this debate? Fourthly, will moneys be withheld from establishments that do not comply with the diktat of the Welsh Assembly Government's Education Minister if she so desires them to amalgamate?

There are also wider questions. What impact would this measure have on the federal university colleges of the University of Wales? Indeed, the Government will know that the right honourable Dafydd Wigley has been appointed by the University of Wales to produce a report into its constitution. I have not seen that report and I do not know whether it has been published yet, but it might have an impact on what we are discussing.

What measures will the Government take to redress the substantial under-funding gap, to which the noble Lord, Lord Morgan, referred, between the higher education sector in England and that in Wales? Historically, Wales has fallen short by approximately £300 per student in comparison with England, and I believe that the gap may be greater at the present time. Clearly, it has an impact on equality. The Government should surely provide equality of funding for both England and Wales, as well as equality of opportunity for students to access higher education in Wales. If the Welsh Assembly wants to go ahead, I would like to know whether it has said that it wishes to use promotion as a means of getting additional funding to force higher education establishments in Wales to amalgamate. That would be extremely foolish of the Welsh Assembly because of the geography of Wales and the paucity of physical communications—it is practically impossible to get Bangor to amalgamate with the North East Wales Institute of Higher Education or Trinity College Carmarthen to amalgamate with the University of Wales, Swansea.

There are many issues that need to be raised. If the Welsh Assembly in Cardiff is foolish enough to pursue this path, as my noble friend Lord Thomas of Gresford said, it should have the freedom to do so. However, the electorate in Wales will deliver a verdict that will not be favourable to the Welsh Assembly government.

Lord Roberts of Conwy

My Lords, I would like to clarify one point. The speech by the Minister, Jane Davidson, to which I referred, was made on 9 June and actually states that the Higher Education Funding Council for Wales, will take a much more proactive approach to delivering on the reconfiguration agenda. For a sector with a large number of relatively small institutions, funding will continue to be available for mergers. However, I shall also be looking to promote innovative ways of working to enable the sector to take forward other forms of collaboration". There is not much doubt about the Government's intentions.

Lord Livsey of Talgarth

My Lords, I accept what the noble Lord says. It is obviously correct. However, if the Minister is unwise enough to pursue this course, frankly, judgment will be made by the people of Wales.

Lord Triesman

My Lords, this is a Third Reading debate and we should try to stick to the conventions of Third Reading.

Baroness O'Neill of Bengarve

My Lords, I do not think that this amendment bears on devolution at all. It is open to the Welsh Assembly to promote higher education. The clause that we are discussing is about the requirement to include the promotion of higher education in an access plan. This is something very specific. I support the amendment.

Lord Prys-Davies

My Lords, when my noble friend replies to this debate, it would be helpful if she would confirm two matters: first, that Clause 32(3) has been brought forward at the request of the Welsh Assembly Government and, secondly, that the UK Government themselves are satisfied that the new power is justified given the circumstances prevailing in Wales. If my noble friend can give us that assurance, there is a presumption that the clause as it stands should be acceptable to the House. I remind the House that between 31 July 1999 and 31 December last, Parliament passed 42 Acts of Parliament containing distinctive Wales-only clauses or Wales-only Bills. To the best of my recollection and belief, on no occasion did your Lordships' House reject a Wales-only clause or a Wales-only Bill. If that is correct, there is no need for me to emphasise the obvious. If the series of amendments is agreed, an important precedent would be established.

If the Welsh Assembly, which has a democratic mandate, is to be denied the primary legislation to enable it to pursue policies that it considers to be in the interests of the Welsh people and if that legislation is agreed by the UK Government—the two conditions that I mentioned at the beginning of my speech—we are bound to ask how the devolution settlement will work. That was the question put by the noble Lord, Lord Thomas of Gresford. It greatly saddens me that so much criticism has been levelled at this clause by the Higher Education Funding Council for Wales. The Welsh higher education sector is small, but it has made a substantial contribution to Welsh life during the past 120 years, and continues to make a contribution. I should declare an interest: I am hugely indebted to the University of Wales, Aberystwyth, and the University of Wales, Swansea.

When I read the evidence of the Welsh Assembly Education Minister to the Richard Commission on the powers of the Welsh Assembly, it seemed to me that she was seeking the legislative powers to promote higher education in Wales. That is what emerged from her evidence to the commission. When did Higher Education Wales first make representations to the Welsh Assembly about this power? That is a very difficult question to put to my noble friend the Minister; indeed, the noble Lord, Lord Livsey, has asked a series of questions.

6 p.m.

I see that the noble Lord, Lord Norton of Louth, is in his place. I am wondering whether we are faced with a basic weakness in the devolution model. The clause emanates from the Welsh Assembly but is being scrutinised by this forum. The Welsh Assembly Minister is not present to explain or defend the clause or to answer the questions that have been put to our Minister. That "split responsibility", as the Richard Commission called it, is partly the cause of the difficulties that we are in tonight. Of course, if a Welsh Minister were present in the House or in a Special Standing Committee to consider the Welsh clauses of an England and Wales Bill, she might be able to give assurances to noble Lords who are concerned about the Bill.

I hope that the House is not asked to vote on the amendment. However, if the amendment were passed, I believe that the Ministers of the Welsh Assembly Government and many people in Wales would think that the time had come for the conferment of primary legislative powers on the Assembly. That has never been more necessary nor more timely than tonight.

Lord Brooke of Sutton Mandeville

My Lords, I declared my Welsh pedigree in support of my noble friend Lord Roberts of Conwy at an earlier stage. I shall not dwell on the niceties of the devolution issue. However, in comparison with the knowledge that some of us could once have had about the entire UK higher education sector—even though the department's writ did not run throughout the land—we are in these matters severely constrained by devolution. We are also constrained by the purity under which, as Westminster parliamentarians, we cannot be given information by Ministers relating to devolved institutions on the one hand and, on the other, we have no right as Westminster parliamentarians to receive information from those in devolved institutions who could tell us. All I can say is, "more's the pity".

I rise to support my noble friend Lord Roberts of Conwy. In relation to his anxieties about what may happen in Wales, I can cite analogously an ILEA episode from long ago. I was resident in Highgate and was, or had been, a governor of the Camden School for Girls, to which the episode relates. The Hampstead and Highgate Express reported that a senior elected member of ILEA had addressed the parents of Camden School for Girls and had said that in her view it was absolutely wrong for girls—or, indeed, women—to go into higher education. The paper reported that officials from ILEA sitting on the platform with her put their heads in their hands and presumably hoped that the roof would fall in. Like the thunderbolt that fell on York Minster shortly after the Bishop of Durham expressed his famous views, as the paper also reported, the roof obligingly did fall in that very night, though after the meeting when everyone had left. In that time-honoured phrase of the Metropolitan Press, "Provincial papers, please copy"—and, if I may say so, Liberal Democrat Benches, please note.

Baroness Perry of Southwark

My Lords, I briefly offer my support to this amendment. To me the issue is very simple. Whatever the rights or wrongs of devolution, we in this Parliament currently have the responsibility for primary legislation in respect of universities in Wales. We have already achieved a great deal in the passage of the Bill though this House, and with the concessions made by the Government on the issue of academic freedom for English universities. It seems to me totally wrong that we should not just as stoutly defend the academic freedom of Welsh universities. That is why I give my support.

Lord Dearing

My Lords, I speak briefly in support of the amendments. It seems rather extraordinary that we have been invited to endorse Clause 32(3) when, seemingly, no decision has been taken in Wales as to whether they want to promote higher education or about access. I cannot see how there are alternatives. That seems to make no sense whatever, and I find it difficult to endorse a proposal that does not seem to make sense.

There is another reason, however, why I very reluctantly speak on a matter that one would regard as properly the business of Wales. It is not a concern for me that the universities in Wales feel threatened and do not like what the Government have in mind. However, I do care that they have not been consulted on a matter, on which, if they are found wanting, they face a serious financial penalty. That cannot be good for the process of government in Wales. Therefore, I support the amendments.

Baroness Finlay of Llandaff

My Lords, I apologise for not having been involved before in this debate. I must declare an interest as an employee of one of the universities that has benefited from the merger process and which is now in the process of merging.

I have listened very carefully to the debate, and fear that we are muddling up two different things. There is devolution and whether Wales should have more powers; that, in a way, is a separate debate. The amendment tabled by the noble Lord, Lord Roberts, relates to the situation as it stands today. It is with great regret that I feel inclined to support the amendment.

My gut feeling is that I want to support Wales and the Assembly Government in Wales, but things work in Wales when everyone works together, when consultation is wide and there is a consensus view. If the universities in Wales are giving a message that they are anxious, forcing things on them will only create unhappiness. Sadly, there is an exit across Offa's Dyke for the brightest and best among our academics. I fear that if we allow those universities to become unhappy, the fantastic tradition of academic excellence of which we in Wales are so proud will be under threat.

Baroness Ashton of Upholland

My Lords, I am very grateful to noble Lords. The debate has been long and interesting, as befits what is an important part of the Third Reading of the Bill. I shall try to keep my remarks as brief as possible, as I am mindful that many comments have been made that cover the points well.

I should tell my noble friend Lord Prys-Davies that the provision is the desire of the Welsh Assembly, as he knows. Jane Davidson, to whom noble Lords have referred, has made clear to me her commitment to the autonomy of higher education institutions. The provisions in Clause 32 will in no way undermine that principle. The Assembly has requested the inclusion of the phrase, the promotion of higher education", to enable institutions to propose plans drawn more widely than simply in terms of access. The intention is to free the hands of institutions, not bind them further.

Noble Lords referred to the differences within the sectors. The sector in Wales is much smaller than that in England, and its concerns are also different. Access is an area of success in Wales, where higher education institutions have a very good track record. Jane Davidson has made it clear, too, that if variable fees were introduced in Wales, there would be no question of the Assembly imposing requirements on individual institutions. The Assembly would not envisage defining the content of fee plans in such tight terms as to infringe the autonomy of Welsh institutions. Rather, fee plans would be an integral part of the sector's strategic engagement with the Funding Council and the Assembly Government.

During Report, the noble Baroness, Lady Sharp, raised concerns that the inclusion of promotion of higher education or equality of opportunity could lead to disregard for equality of opportunity in Wales. I assure the noble Baroness and other noble Lords that the National Assembly for Wales is committed to equality of opportunity in all its functions. Indeed, Section 120 of the Government of Wales Act 1998 makes this a statutory duty on the Assembly, which applies to all its functions. This Bill sets out the framework under which a system of variable fees would operate in Wales, but we contend that it is essential that the Assembly has sufficient flexibility to determine and deliver a policy suited to Wales.

The noble Lord, Lord Roberts, was concerned about granting power to the Assembly without rigorous scrutiny of how it will be used. The Assembly regulation-making procedures involve at least as much scrutiny as the affirmative procedure in Parliament. The relevant subject committee and the legislation committee will consider the Assembly regulations. There will be a full public consultation, which is also a requirement. I hope that covers, at least in part, the point made by the noble Baroness, Lady Finlay. It will be important. Of course, higher education institutions will be part of the full public consultation. In view of the number of comments that have been made about the need to consider scrutiny, that is an important point. There is no negative procedure in the Assembly, other than in cases of urgency, so draft regulations are open to scrutiny and debate.

The noble Lord, Lord Roberts of Conwy, asked whether the Assembly has already debated these provisions. The National Assembly has debated the Higher Education Bill in plenary on more than one occasion since it was introduced. On each occasion, the Assembly voted to welcome the devolution of the powers in the Bill. That addresses the second point made by the noble Lord, Lord Prys-Davies.

We are satisfied that the Assembly is best placed to make the judgment about how it wishes to take this forward. It has a statutory obligation to consult, it has debated these issues at length and it will make any regulations within the affirmative procedure, as I have made clear. We believe that we should offer the flexibility for the National Assembly to make its own decisions. I believe that the assurances about scrutiny and consultation, which would precede any Assembly regulations under this clause, and the assurances from the Assembly Minister on the policy context should be enough to satisfy noble Lords. I hope that the noble Lord will agree to withdraw his amendment.

Lord Roberts of Conwy

My Lords, we have had a very interesting debate. There has been a fairly clear clash between those who stand by the principle of academic autonomy and freedom and those who give priority to devolution. It was very interesting that, right from the beginning, the voice of higher education in Wales was very clearly heard, starting with the noble Baroness, Lady Warwick, who was followed by the noble Lord, Lord Morgan, a former principal. Then we heard the voices of my noble friend Lady Perry and the noble Baroness, Lady Finlay of Llandaff, an employee of the University of Wales College of Medicine. She is very much in touch with academic feeling in Wales.

There is no doubt about it: academic institutions feel threatened and rightly so, from what I have read of the intentions of the Assembly's education executive. It is no wonder since, as the noble Lord, Lord Dearing, implied, there has been no consultation. This is what has really caused anxiety in institutions of higher education in Wales.

The noble Lord, Lord Thomas of Gresford, was very firm in his belief in devolution and also in his belief that devolution means the freedom to make mistakes. I am not sure that that freedom extends to this Parliament while it has responsibility for providing Wales with primary legislation. We cannot contemplate the road to ruin as far as institutions of higher education in Wales are concerned with any degree of equanimity. I agree with the noble Lord that devolution may well mean freedom to make mistakes. However, while we have responsibility for primary legislation there is no doubt that we should do our best to ensure that no major errors occur.

I am very grateful to all noble Lords who have spoken in this debate, but the fact is that the clause as it stands is rightly seen by academics and students in Wales as a Trojan horse. There is no doubt that the Assembly government would like to use their financial muscle to shape higher education in Wales as they think fit. We have ample words from the Minister herself. The question is, is that the right way to go about achieving these ends? I doubt it very much. The impression that has been given is that the Minister is riding roughshod over the institutions of higher education. They do not like it and I do not like it either. I have a feeling that the House will not like it. I wish to test the opinion of the House.

6.16 p.m.

On Question, Whether the said amendment (No. 6) shall be agreed to?

Their Lordships divided: Contents, 100; Not-Contents, 115.

Division No. 2
CONTENTS
Astor, V.	McColl of Dulwich, L.
Attlee, E.	MacGregor of Pulham Market, L.
Biffen, L.
Bowness, L.	Mackay of Clashfern, L.
Bridgeman, V.	Mayhew of Twysden, L.
Brooke of Sutton Mandeville, L.	Monro of Langholm, L.
Burnham, L.	Monson, L.
Burns, L.	Morgan, L.
Byford, B.	Moser, L.
Caithness, E.	Mowbray and Stourton, L.
Campbell of Alloway, L.	Moynihan, L.
Carlisle of Bucklow, L.	Murton of Lindisfarne, L.
Carnegy of Lour, B.	Noakes, B.
Chadlington, L.	Northbourne, L.
Chorley, L.	Northesk, E.
Colwyn, L.	Norton of Louth, L.
Cope of Berkeley, L.	O'Neill of Bengarve, B.
Cox, B.	Onslow, E.
Craig of Radley, L.	Oppenheim-Barnes, B.
Craigavon, V.	Palmer, L.
Crickhowell, L.	Park of Monmouth, B.
Cumberlege, B.	Pearson of Rannoch, L.
Dean of Harptree, L.	Peel, E.
Dearing, L.	Perry of Southwark, B.
Dixon-Smith, L.	Plumb, L.
Elliott of Morpeth, L.	Portsmouth, Bp.
Ferrers, E.	Prior, L.
Forsyth of Drumlean, L.	Quinton, L.
Fraser of Carmyllie, L.	Quirk, L.
Freeman, L.	Renfrew of Kaimsthorn, L.
Gilmour of Craigmillar, L.	Roberts of Conwy, L.
Glenarthur, L.	Rotherwick, L.
Glentoran, L.	St John of Fawsley, L.
Greenway, L.	Seccombe, B. [Teller]
Henley, L.	Selborne, E.
Higgins, L.	Selsdon, L.
Howard of Rising, L.	Sharples, B.
Howe, E.	Shaw of Northstead, L.
Howe of Aberavon, L.	Sheppard of Didgemere, L.
Howe of Idlicote, B.	Skelmersdale, L.
Hunt of Wirral, L.	Stoddart of Swindon, L.
Jenkin of Roding, L.	Sutherland of Houndwood, L.
Kimball, L.	Trefgarne, L.
Laird, L.	Tugendhat, L.
Lane of Horsell, L.	Ullswater, V.
Lawson of Blaby, L.	Walpole, L.
Lewis of Newnham, L.	Warwick of Undercliffe, B.
Lindsay, E.	Wilcox, B. [Teller]
Listowel, E.	Williamson of Horton, L.
Lyell, L.	Wilson of Dinton, L.
	Wilson of Tillyorn, L.

NOT-CONTENTS
Acton, L.	Brooks of Tremorfa, L.
Ahmed, L.	Campbell-Savours, L.
Alli, L.	Carter, L.
Amos, B. (Lord President of the Council)	Carter of Coles, L.
	Chandos, V.
Andrews, B.	Clark of Windermere, L.
Archer of Sandwell, L.	Clinton-Davis, L.
Ashton of Upholland, B.	David, B.
Bach, L.	Davies of Oldham, L. [Teller]
Bassam of Brighton, L.	Dean of Thornton-le-Fylde, B.
Berkeley, L.	Desai, L.
Bernstein of Craigweil, L.	Dixon, L.
Bhattacharyya, L.	Donoughue, L.
Billingham, B.	Dubs, L.
Borrie, L.	Evans of Parkside, L.
Bragg, L.	Evans of Temple Guiting, L.
Brooke of Alverthorpe, L.	Farrington of Ribbleton, B.
Brookman, L.	Filkin, L.

Fyfe of Fairfield, L.	Mallalieu, B.
Gale, B.	Massey of Darwen, B.
Gibson of Market Rasen, B.	Mitchell, L.
Gilbert, L.	Morgan of Huyton, B.
Golding, B.	Morris of Aberavon, L.
Gordon of Strathblane, L.	Morris of Manchester, L.
Gould of Potternewton, B.	Nicol, B.
Graham of Edmonton, L.	Patel of Blackburn, L.
Grantchester, L.	Paul, L.
Grocott, L. [Teller]	Pendry, L.
Harris of Haringey, L.	Pitkeathley, B.
Harrison, L.	Plant of Highfield, L.
Hart of Chilton, L.	Prys-Davies, L.
Haskel, L.	Puttnam, L.
Haskins, L.	Radice, L.
Hayman, B.	Ramsay of Cartvale, B.
Henig, B.	Randall of St. Budeaux, L.
Hogg of Cumbernauld, L.	Rea, L.
Hollick, L.	Rendell of Babergh, B.
Hollis of Heigham, B.	Rooker, L.
Howells of St. Davids, B.	Sainsbury of Turville, L.
Hoyle, L.	Scotland of Asthal, B.
Hughes of Woodside, L.	Simon, V.
Hunt of Chesterton, L.	Smith of Leigh, L.
Hunt of Kings Heath, L.	Symons of Vernham Dean, B.
Irvine of Lairg, L.	Taylor of Blackburn, L.
Janner of Braunstone, L.	Temple-Morris, L.
Jones, L.	Thomas of Macclesfield, L.
Jordan, L.	Tomlinson, L.
Kennedy of The Shaws, B.	Triesman, L.
King of West Bromwich, L.	Tunnicliffe, L.
Kirkhill, L.	Turner of Camden, B.
Layard, L.	Uddin, B.
Lea of Crondall, L.	Varley, L.
Levy, L.	Warner, L.
Lipsey, L.	Whitaker, B.
Lofthouse of Pontefract, L.	Whitty, L.
Macdonald of Tradeston, L.	Winston, L.
McIntosh of Haringey, L.	Woolmer of Leeds, L.
MacKenzie of Culkein, L.
Mackenzie of Framwellgate, L.

Resolved in the negative, and amendment disagreed to accordingly.

6.27 p.m.

[Amendments Nos. 7 to 11 not moved.]

Baroness Ashton of Upholland moved Amendment No. 12: Page 17, line 27, after "(2)" insert "or (3)

On Question, amendment agreed to.

Baroness Ashton of Upholland moved Amendment No. 13:

Page 17, line 27, leave out "to include provisions" and insert—

1. "(a) to include among the general provisions of the plan any provision referring to particular courses or to the manner in which courses are taught, supervised or assessed, or
2. (b) to include any provision"

The noble Baroness said: My Lords, I spoke to this amendment in moving Amendment No. 5. I beg to move.

On Question, amendment agreed to.

Baroness Ashton of Upholland moved Amendment No. 14:

After Clause 37, insert the following new clause—

"REVIEW OF DECISIONS MADE BY RELEVANT AUTHORITY

Regulations made by virtue of section 35, 36(3)(b) or 37(3)(b) must include provision—

1. (a) requiring any decision of the relevant authority under section 35, 36 or 37 affecting the governing body of an institution to have effect in the first instance as a provisional decision,
2. (b) enabling the governing body of the institution to apply for a review of the provisional decision to a person, or panel of persons, appointed in accordance with the regulations—
1. (i) in relation to England, by the Secretary of State, or
2. (ii) in relation to Wales, by the Assembly,
3. (c) enabling the Secretary of State or the Assembly to pay remuneration and allowances to any person so appointed,
4. (d) prescribing the grounds on which an application for the review of a provisional decision may be made, and
5. (e) requiring the relevant authority to reconsider its provisional decision having regard to any recommendation of the person or panel."

The noble Baroness said: My Lords, I am very grateful to the noble Lords, Lord Sutherland, Lord MacGregor and Lord Norton, for tabling an amendment at Report which sought to give institutions a right of appeal against a decision by the director. Having discussed the issue with the noble Lords—I am most grateful for the time they have given me—and having read the report of the Select Committee on the Constitution, which we hold in high regard, I said at Report that I accepted the principle that it should be possible for an independent panel to make the director think again about his decisions and promised to come back at Third Reading with a government amendment.

I should say at the outset that I do not expect any review procedure to be much in demand. I hope that the need for such a mechanism will arise very rarely, if at all. I have every confidence that the director will make careful and well considered judgments, and I am also sure that institutions will not appeal to the review body lightly. However, there was consensus in your Lordships' House that there should be some form of extra safety net, which this amendment provides.

The amendment allows for a review of the director's decisions. It specifies that regulations must provide that the director's decision is, in the first place, provisional. If an institution wishes to contest that provisional decision, it may appeal to a panel to review it. That panel would be appointed by the Secretary of State. Any appointment to the panel would be made under the Nolan rules and would therefore be subject to scrutiny by the Commissioner for Public Appointments.

We will put in regulations the grounds on which a review could be demanded, and will need to secure detailed advice on this from legal advisers. However, I can say that we would expect the grounds for review to include: new facts that had come to light since the director took a decision; the director's having ignored any relevant fact; and the director's decision being manifestly disproportionate or unreasonable.

I shall give an illustration of that last point. If the director were able to impose a sanction on an institution for non-compliance with its plan, and the institution felt that it had taken all reasonable steps to comply, I believe that that would constitute potential grounds for review. There is a clear correlation here with the amendment we have already accepted from the noble Lord, Lord Butler, who is not in his place, and now at Clause 36(2), providing that an institution should not be liable to sanction if it has taken all reasonable steps to comply with the provisions of its plan.

The panel would look at the director's decision and, if it felt it appropriate, ask the director to reconsider his decision. This regulation must require the director to reconsider his decision, having regard to the panel's recommendation. I assure noble Lords that that gives the panel teeth. The director cannot ignore what the panel says. It is quite clear in law that he actively has to reconsider the original decision, giving due weight to the panel's recommendation. Were he not to do so, any future judicial review would take that into account.

Lord Forsyth of Drumlean

My Lords, perhaps the Minister can clarify a possibly "daft laddie" question. On the face of it the provision seems welcome. However, would the appeal procedure include the right to appeal any financial penalty? I understand the Minister's point about particular decisions, but will that encompass the right to question particular fines or sanctions?

Baroness Ashton of Upholland

My Lords, yes, indeed, it would. That would be a matter of proportionality. The issue that is not covered in this amendment is appeal against approval. On accepting the amendment of the noble Baroness, Lady Perry, we deleted the regulation-making powers in this clause for the approval of plans. I am not able to bring forward an amendment to appeal a measure that we no longer have in the Bill as that would be against the rules.

The amendment also gives the Secretary of State the power to pay the panel. We think that that payment should be assessed according to the time spent carrying out a review as we expect reviews to be very infrequent. Noble Lords will have noticed that the amendment covers decisions made by the relevant authority in Wales.

I hope that the amendment addresses the concerns raised by noble Lords. I am very grateful to those noble Lords who have worked with me on this matter, if I can put it like that. I hope the House agrees that the measure provides greater security for institutions. I believe that the principles of reasonableness and fairness, which we have always maintained were our intentions, are now very clear on the face of the Bill. I beg to move.

Lord Sutherland of Houndwood

My Lords, I warmly welcome what the Minister said on the matter. In the light of what she had to say, I welcome the acceptance of the principle of a review or appeal procedure being inserted into the Bill. I, too, hope that the mechanism will be used rarely and that discretion will be used by universities and that the director will act in a way that will not provoke the need for appeals. None the less, it seems to us—I am glad that this has been accepted—that in the interests of justice being done and being seen to be done one can reasonably look for an appeal and review procedure.

The matter was debated in a civilised fashion in Committee and informally. I appreciate the exchanges that have taken place and the support of colleagues, particularly that of the noble Lord, Lord MacGregor, in framing the measure. I particularly welcome the mention by the noble Baroness of appointment according to Nolan rules and the itemisation of the grounds on which an appeal might be heard—that new facts are available that were not reasonably available previously; that facts may have been ignored or perhaps overlooked; and particularly the point about disproportion. I was pleased that the noble Lord, Lord Forsyth, clarified the fact that that might apply also to the level of penalty that is imposed.

The new clause makes provision for such a review. Clearly, the devil will be in some of the detail. We shall listen with great interest to what is said in due course if the new clause is accepted. The detail of the regulations will be critical but the noble Baroness has put matters on the record which are of great importance. I thank the noble Baroness and the Government for moving on this matter.

Lord MacGregor of Pulham Market

My Lords, I, too, thank the Minister not only for the way in which she has responded so positively to the debate but also for the way in which she engaged us fully in the discussions prior to the new clause being tabled. If I may say so, that is an example of this House at its best. I hope that the outcome is satisfactory to everyone.

I had intended to raise two points but I need to raise only one because the Minister has already dealt with one of my concerns, which was to ensure that the Nolan rules applied to the selection of whoever deals with the appeal. The Minister gave a clear guarantee that that will be the case.

The only other point I wanted to raise was in relation to the grounds on which an application can be made. I listened carefully to what the Minister had to say but obviously the regulations will contain more detail on the matter. I hope that they will not be too narrowly drawn so that they replicate almost what could happen with a judicial appeal, except that, of course, the process will be faster and less costly. I hope that the matter will go wider than that. We shall certainly want to consider the regulations when they are drawn up. I thank the Minister again for the way in which she responded to the debate.

Baroness Warwick of Undercliffe

My Lords, I am delighted that the Government have brought forward this amendment. I congratulate the noble Lord, Lord Sutherland, who has pursued the matter with such determination. I also congratulate the noble Lord, Lord MacGregor, who spoke to it so cogently on Report. Given the powers that OFFA will have to fine institutions and prevent them charging fees, an appeals mechanism is vital. It was difficult to come up with a solution that was not just as expensive and potentially as time consuming as the original proposal of judicial review. I believe that the measure before us will be satisfactory in that regard. It explains why the decision of the appeals panel will not be binding. If it were legally binding, it is likely that the scheme would have offered no advantages over judicial review. I look forward to hearing how the Minister proposes to take the measure forward in regulations. I hope that the Minister will confirm that she will consult sector bodies before bringing forward the necessary regulations.

Lord Norton of Louth

My Lords, I, too, welcome the amendment. Like my noble friend Lord MacGregor, I appreciate the work that the Minister has done in order to bring the amendment forward and also what she said for the record in moving it.

As I said on Report, I believe that it is one of the most important changes needed to the Bill. It addresses some of the concerns that universities have about OFFA. It will ensure that, if universities believe that the Director of Fair Access has not met the criteria to be stipulated in regulations, there is a body to which they can have recourse. Judicial review, as I argued on Report, is not sufficient: it is too narrow in scope, time consuming and expensive.

The mechanism that is created by the new clause is not a full-blown independent appeals process. The appeals body will not be able to overturn the decision of the director. What is created is essentially an independent review procedure—a fact recognised in the wording of the clause. The decision can be referred back to the director. The Minister and I have had interesting discussions on the legal effect of the provision "to have regard to". The director may be required to think again—to reconsider, as the Minister said—but the appeal body cannot overturn the decision. The provision may not go so far as I would wish but I acknowledge that it represents a significant step forward.

My noble friend Lord MacGregor and I have a particular interest in the subject of an appeals process deriving from our membership of the Constitution Committee. The committee issued its report on the regulatory state in May and included a chapter on the means of appeals from the decisions of regulators. For the reasons given in the report, which I summarised on Report, there is pressure for the decisions of regulators to be subject to an appeals process on the merits of the case, not least because of Article 6 of the European Convention. This amendment is therefore an important move in that direction. As we recommend in our report, there is a need for the Government to take what we describe as a "whole of government" view of regulation. I hope that there will be a generic template for new regulatory regimes, which will include an appeals process on the merits. Though I would prefer a full-blown independent appeals process, I none the less very much welcome the new clause that the Minister has brought forward.

Baroness Ashton of Upholland

My Lords, I am very grateful for the welcome given to the amendment, and shall briefly respond to a couple of the points raised. I can tell the noble Lord, Lord MacGregor, that the regulations will be subject to affirmative procedure, so we will have the opportunity beforehand to make sure that we continue to fulfil the obligations that we have set out. I am sure that he will have a contribution to make, to which I shall look forward. I say to my noble friend Lady Warwick that we will, of course, talk to sector bodies, as she indicated would be important.

I confirm to the noble Lord, Lord Norton, that I have checked again with the lawyers to make absolutely certain what the process would be. It is clear that the obligation set out means that the director has no choice but to look at the original decision again and examine very carefully the issues that the panel has raised. In the light of that consideration, he would have to make the final decision. If he did not take account of the views of the panel, the institution could apply for a judicial review of the director's decision. If the panel had identified procedural failure by the director, that would in itself furnish a reason for judicial review. I hope that we have covered the point as carefully as we can. I am happy to continue the dialogue, because the issue is important.

It is extremely nice to see the noble Lord, Lord Sutherland, in his place and to see that he looks to be fully recovered. Once again, I say how grateful I am for the work of the noble Lords to whom I have referred in helping us to get to this position.

On Question, amendment agreed to.

Lord Renfrew of Kaimsthorn moved Amendment No. 15:

After Clause 37, insert the following new clause—

"QUALIFYING FEES BEYOND FIRST THREE YEARS

In respect of any qualifying course, the Secretary of State shall, through the relevant funding body, pay to the relevant institution any qualifying fees for any academic year which, but for the provisions of sections 24(1)(d) or 27(1)(d), would have been charged to the eligible student."

The noble Lord said: My Lords, with the leave of the House earlier, I was able to separate the amendment from Amendment No. 2. In moving Amendment No. 15, I seek to alleviate what would be the unfortunate consequence of an opposition amendment made on Report. It was the amendment that very rightly sought to remove from students at English universities the burden of fees beyond the first three years of a first degree course. That amendment is now in the Bill, in Clause 24(1)(d). The unfortunate effect of that amendment was to make the universities undertake that cost by forgoing the fees, rather than to arrange that the fees should be paid by the Secretary of State.

I have learnt through the researches of the excellent research department in the Library, with the help of Universities UK, that the cost to English universities of that amendment—unless we rectify it by Amendment No. 15—is likely to be of the order of £180 million per year. That would be an outrageous consequence of our work in this House. The crux of the matter is that our universities are under-funded, and will remain under-funded as a result of the Bill. The fees will go about half-way to meeting the recurrent deficit. It is very important that we seek to remove the additional financial burden that the provision would place on the universities unless it were amended.

The point of my amendment is to provide that: In respect of any qualifying course, the Secretary of State shall, through the relevant funding body, pay to the relevant institution any qualifying fees for any academic year", as specified in Clause 24(1)(d). The reference to Clause 27(1)(d) falls away, I hope, because I did not press the Wales amendment, Amendment No. 2. I hope that the Minister will confirm that the cost to universities of Clause 24(1)(d), unless amended, would he of the order of £180 million per year, and therefore that the cost to the Secretary of State of the amendment would be of the same order.

My amendment is intended to ensure that the fees for the fourth and subsequent years will indeed be waived, as was discussed fully on Report. I particularly hope that that position will be supported by colleagues on the Liberal Democrat Benches, because their stated policy is, as I understand it, that fees in general should be paid by the state, not by individual students. Therefore, it would be a strange anomaly if they encouraged the universities to pick up the burden rather than the Secretary of State. I shall be interested to hear their position. I shall also be very interested to hear from the noble Baroness, Lady Warwick, what the position of Universities UK is on the amendment. I would find it altogether astonishing if Universities UK were to accept cheerfully the additional burden of £180 million per year to be paid by the universities.

6.45 p.m.

I feel a sense of shame that the only financial provision that your Lordships have implemented in the course of amending the Bill should place an additional financial burden on the universities, rather than on the state. The purpose of my amendment is to rectify that. I could almost write the speech of the noble Baroness, Lady Ashton, for her. She will tell us that there is no money, that the amendment would mean top-slicing, and that everything must come from the same pot. I assume that she will say that because she is instructed to do so by the Treasury.

We are, however, talking about legislation in Parliament, which is the sovereign body. I could never accuse the noble Baroness of arrogance—she has been charm itself in our debates—but it seems a rather arrogant statement to say that an amendment should not be passed in this House because it does not suit the Treasury, and essentially that the Treasury will not follow it because everything should come from the same pot. I hope that noble Lords will not be tempted to accept that argument. It may have the ring of financial reality, as I am sure that she will remind us, but I would regard it as a discourtesy to this House to advance that argument in such a way.

I invite noble Lords to shift the burden in the matter to where it belongs—to the Government, to the state. I beg to move.

Lord Campbell-Savours

My Lords, I supported the then Amendment No. 7 on Report and I cannot see how it is possible not to join the noble Lord in the Lobby tonight, in the event that he presses his amendment. Those of us who spoke on the matter on Report have a responsibility for finding where the money will come from. I shall support him.

Earl Russell

My Lords, one of the points on which the least thought has been given in the preparation of the Bill is its differential effect between subjects. I drew attention at Second Reading to its harmful effect on departments of chemistry. The provision multiplies that. I say that on behalf of the late Lady Young, as well as on my behalf; it is a cause on which we often worked together, and were proud to do so.

Chemistry is a four-year course. It needs to be; it is expanding all the time, because new discoveries are made all the time. It is also a subject very vital to our industrial development. It is not the only four-year course, either. Medicine takes much more than four years on occasion. The burden of the Bill to medical students is one about which we have already heard a great deal and will, I hope, hear a great deal more before it is finished. The burden to people doing greats at Oxford, which is in effect two subjects, is also considerable.

The provision will encourage universities to close departments of chemistry and other departments whose courses take more than three years because, as the noble Lord, Lord Renfrew, said, they simply cannot carry the costs. The universities are in no position to carry extra costs. I do not believe that that is the Government's intention, because if we have to buy in all of our chemistry from abroad we will be in for major national expense that is unnecessary, probably undesirable and possibly not as good as what would have been done in this country.

There is much concern in my own college, for example, about the closure of its department of chemistry. I spoke recently to the students' union, which had a great deal to say about it. So the Government have shot themselves in the foot and they might be wise to get the bullet out before any poison from it is taken into the system. If the noble Baroness, Lady Ashton, believes otherwise, I would be glad to hear why.

Baroness Warwick of Undercliffe

My Lords, I was opposed to the amendment on Report that imposed a three-year limit precisely for the reasons to which the noble Lord, Lord Renfrew, referred. This is not new information. Amendment No. 15 could be seen as repairing some of the potential damage to universities that would be caused by the three-year limit, but there should be no limit at all. I am opposed to that limit for the obvious reason that the noble Lord, Lord Renfrew, has identified. He is right about the consequences—it would prevent universities from charging any fees at all after the first three years. In addition to the loss that he has already indicated, it would mean a loss of £180 million. That would be disastrous for the universities.

Perhaps I should see the amendment as a relief in that it puts the bill at the door of the Government. However, there is no guarantee at all that that additional resource will be found. The Department for Education and Skills faces a tight spending round, as does the university sector, and there is a limited pot of funding. Therefore, I fear that any money to pay for the imposition of a three-year limit would have to come from elsewhere in the Budget or from elsewhere in the higher education sector. I cannot see that the universities would not suffer in some way if the amendment is carried.

The amendment deals with a symptom, not the cause of these difficulties, which is the three-year funding limit that I will continue to oppose.

Lord Forsyth of Drumlean

My Lords, the cause of these difficulties is the central core of the Bill. Listening to the contribution by the noble Baroness, Lady Warwick, and that of my noble friend, Lord Renfrew, I felt that I had received something of a wigging for having proposed an amendment that I thought my noble friend supported, but that the noble Baroness did not. My concern was for those people who decided that they wished to be architects or wished to take a longer degree course such as chemistry—and other groups who would find themselves discriminated against to an enormous extent. That is certainly not reflected in the labour market.

So, although I support my noble friend's amendment, he is looking at this matter from the wrong perspective. He regards it from the point of view of money for the universities, which he says is £180 million. I do not know whether that figure is correct, but I was looking at the matter from the perspective that it was £180 million that those students would have to find to pursue their professions.

Earl Russell

My Lords, are not both those perspectives correct, which is why the Bill is mistaken?

Lord Forsyth of Drumlean

My Lords, the noble Earl is absolutely right, which is why I said in my opening remarks that this matter is at the heart of the Bill. Listening to the noble Baroness, Lady Warwick, who represents Universities UK and the Labour Benches in these matters, it struck me as extraordinary that this was the consequence of a Faustian deal made by the universities. From now on they will be told that, "There is a limit to how much money we can provide publicly. You will have to find more money from the students themselves".

My noble friend's amendment is welcome and I support it, but I am concerned at the way in which the debate about the funding of higher education has been skewed—undermining the notion that there is a public good in people taking longer courses that are not only valuable in themselves but that many of them produce an economic contribution to our country. We now have the Treasury and the universities as unholy allies, because the Government, which was elected on a platform of "Education, education, education", are refusing to meet their obligations. So I welcome my noble friend's amendment from a slightly different perspective.

Baroness Sharp of Guildford

My Lords, I entirely endorse the remarks made by the noble Lord, Lord Forsyth. This matter is, indeed, a Faustian deal. He said the Government were elected on a platform of "Education, education, education". They were also elected in 2001 on an explicit platform of "We will not impose top-up fees". The central problem that now confronts the Government arises from their own doing.

The noble Lord, Lord Renfrew, asked whether the Liberal Democrat Benches would support the amendment. He is right. We have always argued that the fees should be paid by the central Exchequer and we were prepared to waive taxes to increase the revenues of the Exchequer to fund the universities properly. We have a fully funded and worked-out plan to that effect, which is viable. As I have argued on previous occasions, it is an alternative that the Government have not allowed to be discussed.

Lord Dearing

My Lords, when he introduced his amendment the noble Lord, Lord Renfrew, said that he was concerned to alleviate an "unfortunate consequence"—more recently an "outrageous consequence". It should have come as no surprise, given that on the first day of Report on 8 June, when the noble Lord, Lord Triesman, replied (column 181 of Hansard) he warned us that there would be no extra money to fill the funding gap. It was an unfortunate consequence, but it was not one that we were not forewarned about before we chose to vote.

I was among those who voted against the amendment. I confess that I did not know what the bill would be—although I guessed that it would be considerable—but it had not crossed my mind that it was £180 million. That concerns me.

Lord Forsyth of Drumlean

My Lords, I am grateful to the noble Lord, but he his talking as if the matter was an inevitable consequence. This problem only arises as a result of the Bill, which he has consistently supported. It is a little odd and inconsistent for him just to accept the Government's position, given what has been said in respect of other groups, such as part-timers, by other people who have taken a similar view.

Lord Dearing

My Lords, I was not arguing about the merits of the figure, I was saying that it should not have come as a surprise, because we were forewarned by the Government that there would not be funding. That is a fact that can be cross-checked in Hansard.

The second reason that I voted against the original amendment was that I did not accept the principle that anyone who took more than three years should not make a contribution beyond three years—partly because the student going to university is not only concerned to gain a degree but to benefit from the experience of higher education. If a student is there for four years there are benefits, other than career benefits, that come from those four years.

A Noble Lord

No.

Lord Dearing

My Lords, noble Lords may disagree but it is a fact that people benefit from the experience of higher education in addition to obtaining a degree.

There is the matter of the £180 million. I voted against that amendment. I was very much in favour of avoiding any pre-emption or opportunism by the Chancellor in taking some of that £180 million, or, more accurately, the money that comes from fees, to reduce Exchequer contributions. But here the noble Lord is arguing that there should be a pre-emption of Exchequer resources to fill the funding gap that arises from the amendment.

7 p.m.

I want to raise two points. First, I do not think that the proposal would be effective because there would be nothing to stop the Chancellor taking out of the funding some other element that the higher education institutions were hoping to obtain. After all, the bid by Universities UK on behalf of the sector was about £8.7 billion for the three years. A great deal is being required but the money is simply not available to meet everything. Therefore, I do not think that the proposal would be effective.

However, if it were effective, I should not like the principle that the Chancellor, in deciding how he was to use the money that he was prepared to make available for education, should be able to pre-empt that £180 million, regardless of the claims of other sectors in higher education. Perhaps I may advance the cause of those who have special educational needs or advocate the cause of those who come from disadvantaged communities.

Earl Russell

My Lords, if the noble Lord, Lord Dearing, is correct in saying that the money is simply not there, why are we trying to educate more students than there is the money for?

Lord Dearing

My Lords, that is one reason why I believe the Government are right to seek a contribution from students, as that would enable that to happen.

I shall continue briefly. We have, and I think the noble Lord, Lord Forsyth, has been leading us into, a repeat of the Second Reading debate on the basic principles. I am saying that the Chancellor should not make financial allocations other than on the basis of what is most to the national advantage—that is, on behalf of all the people of this country at all levels. In taking that decision, he must think about, for example, the very early years, children with special educational needs and lifelong learning. He must consider a range of issues in principle. First, I do not believe that the proposal would be effective and, secondly, it is wrong in principle.

Baroness Carnegy of Lour

My Lords, when we discussed this matter on the previous occasion, I suggested that the Minister should look at what was happening north of the Border. The same Chancellor, the Member of Parliament for Dunfermline, is funding the Scottish Parliament so that it can pay fees over the basic length of a degree course in Scotland, which is four years. That is how the courses are funded.

I do not think that on this issue the Scottish Executive thought, "Here's a pot of money and we must fit into it", in the way that the noble Baroness, Lady Warwick, and the noble Lord, Lord Dearing, seem to think must happen. That is not how it works. This is a government policy to charge fees, which will be paid back after graduation. The question is whether medical education, architectural education and so on matter enough to ensure that students are not put off going into those areas. The system has worked in Scotland. Medical education in, for example. Dundee University is flourishing, but students there pay for only four years of their course; the rest is paid for by the Scottish Executive, and the same Chancellor has agreed to that.

Therefore, I think that it is wrong for us to defend the Government on the issue of a pot of money. They can talk like that if they wish and try to make us realistic. Everyone has to be realistic. But if a government have a policy, they must fund it and they must find the money from somewhere else. That has happened in Scotland; why should it not happen here?

My noble friend is right to move the amendment. I believe that we were wrong to agree to the amendment on the previous occasion without the necessary funding being available. I said that the Minister should look to Scotland to see how it was done. We understood perfectly what we were doing but it was necessary to have this additional amendment. We now have it and I hope that the Government will agree to it.

Baroness Ashton of Upholland

My Lords, I recognise the passion with which noble Lords have spoken on this issue. I must correct something that the noble Lord, Lord Forsyth, said. He said that the problem arose only as a result of the Bill. In fact, the amendment would prevent all fees. That includes not only an increase in fees; it removes the prospect of the additional income and also the income that higher education institutions receive today. Therefore, it is a different matter, and I would argue that it does not only arise from the Bill because, in that context, we take away all fees for higher education institutions.

It might make the noble Lord, Lord Renfrew, smile to hear me say that the amendment is defective because Amendment No. 2 was not agreed to. Amendment No. 15 refers to Section 27(1)(d), which does not exist.

I shall resist the temptation to go down the route of discussing the whole principle behind the Bill because I feel that I have already discussed that at great length. I recognise what the noble Baroness, Lady Sharp, said regarding the option that she put before your Lordships of additional taxation in order to fulfil the promise to universities. I have argued—I hope coherently—the case for saying that the purpose of government is to make rational choices with the money available. I have also argued that universities are important to us but that we need to think creatively about funding all the important aspects of our lives.

I have noted, too, the Conservative Party's latest proposal concerning endowments. From the figures that I have been given, I understand that £38 billion would be required to be invested in order to raise the necessary money. However, I do not want to go down that route now because I think that we debated that issue at great length. The Bill before the House is what we as a government believe is the best way forward for higher education, putting responsibilities where responsibilities should lie. I believe that that is very important.

I do not accept the argument that students are deterred. Because of the support that we have put in place in the Bill, we believe that students will be able to make the right kind of choices in relation to the courses that they take up, and they can benefit in making those choices. We are very keen to see students do that in the right context. That is important.

Lord Forsyth of Drumlean

My Lords, I am most grateful to the Minister, and I do not wish to prolong matters. However, can she answer the point obliquely alluded to by my noble friend Lady Carnegy, who I think was talking about the position of Scottish students in Scotland? I know that the Minister's response to that will be that that is a matter for the Scottish Executive. But can she explain to the House the difference between what is proposed and what I understand the Government are doing now? Currently, students from England go to Scotland for a four-year honours degree—in Scotland, the honours degree lasts for four years, whereas in England it lasts for three years. The Government—the Minister's department—pay the Scottish Executive for the fourth year completed by the English student in Scotland. I am finding it difficult to understand where the problem lies with regard to the amendment, given that that precedent has already been established.

Baroness Ashton of Upholland

My Lords, the precedent is set under the Quigley arrangements, and I know that there is a recommendation before the Scottish Executive to continue with that. The answer to the noble Lord is very simple: the norm in Scotland is that it takes four years to complete what we, in England, would regard as a traditional undergraduate course. That arrangement—I cannot answer if the noble Lord is bantering with me; it is very difficult to hear what he is saying—was put in place because the two courses are comparable. A three-year undergraduate course in England equates to a four-year undergraduate course in Scotland. I do not mean that that is the case in terms of quality, and so on—I do not wish to raise issues concerning the wonderful Scottish higher education system. I am simply saying that that is the logic behind the arrangement and the Scottish Executive makes the necessary funds available. A four-year-plus course in England—whether it is a sandwich course, a modern languages course, including time spent abroad, or a course in architecture, veterinary surgery, and so on—is different.

It is not a case of saying that the Treasury has told me to say certain things—

Lord Campbell-Savours

My Lords, therefore, is my noble friend saying that the first year at a Scottish university in no way equates with a foundation year in a four-year English university course?

Baroness Ashton of Upholland

My Lords, I am saying precisely what I have just said. The norm within Scotland is that an undergraduate degree is completed within four years. The norm within England is that an undergraduate degree is completed in three years. The reason that the fourth year is paid for is that the two courses are comparable. My contention is that it is quite different from a situation where a degree course lasts for four years either because that course needs to be longer—that is, it is a course in medicine or architecture and so on—or because the nature of the course is different, such as a modern foreign language course which includes a year abroad. That is all that I am saying in this context.

The figure that I have been given for the amount of money that that equates to is between £130 million and £180 million. It is hard to be precise, but that is what I understand the cost to be. I am clear that there is one pot of government money, and we can all agree on that. It is not a question of whether it is for higher education, but that there is an amount of money available to the Exchequer from its entire works across government. The noble Lord will know well that decisions about funding are made within that.

The Department for Education and Skills recognises that we have had very generous settlements from government and that this matter will fall to the next settlement. However, it is my responsibility on the department's behalf to make clear, as I did through my noble friend Lord Triesman on Report, the consequences we foresee of the generosity we have already had from the Exchequer. We contend that although we expect further generosity, none the less there will be implications for higher education of this change, not only in additional fees but in the fees that universities charge today. It will be of that order. I think that I must put that responsibility before the House.

I consistently have said throughout the passage of the Bill that the two things I seek to avoid on behalf of universities are top slicing and taking away their freedoms. The difficulty I have with what the noble Lord, Lord Renfrew, sought to do in his previous amendments, which your Lordships accepted, and with this amendment, is that I believe we run into both items.

The amendment provides for top slicing because it requires the funds to be paid by the funding council, so there will automatically be a top-slicing operation. Because that takes away the private contribution universities would lose out. I also believe that we would have to create bureaucracy in order to take money out of higher education and then put it back in a slightly different place.

So I contend—and as I have said already, it is up to another place to determine what it wishes to do about the amendments already passed by your Lordships—that the implication is that the sector may well find itself losing resources, not only because of the additional moneys we hope to raise through fees, but also because of the fees currently made available to universities.

I do not believe that it would be right to say other than that. That is the position I want to put before your Lordships' House. I ask the noble Lord to withdraw the amendment. I do not believe it adds to what I understand the noble Lord wishes to achieve. It has serious implications for universities and the impacts would be as I have said.

Lord Renfrew of Kaimsthorn

My Lords, I thank all noble Lords who have spoken. It may well be that we would not wish to be where we are. But where we are is that the amendment was passed on Report. I see the merits of it and I agree with the résumé by my noble friend Lord Forsyth that students in the fourth year and above of a first degree course are absolved from the burden of paying fees after the third year.

So the question is: who pays? The noble Baroness was very clear on her cause and the noble Lord, Lord Dearing, was almost clearer. The noble Baroness, Lady Warwick, was less clear. She saw the problems but did not clarify exactly where she would vote or where indeed she will vote. Perhaps that will be very interesting to observe.

I would say to the noble Lord, Lord Dearing, that he was not the only person to see the potential consequences of the amendment on Report. In Hansard of 8 June, col. 180, he will see that I mentioned that I had tabled Amendment No. 14 but did not move it, which would have had consequences similar to those that I propose now. That was why I did not go through the Lobbies in support of my noble friend's amendment. So the noble Lord, Lord Dearing, was not the only one who foresaw the problem.

However, the noble Lord, Lord Dearing, has a view of the Treasury which is almost as sacrosanct, though less understandably perhaps, as that of the noble Baroness, Lady Ashton. He points out to us with prescience, that there is nothing to stop the Chancellor—he did not use the word—"fiddling" the books; in other words, meeting this and taking the resources from elsewhere in the higher education sector. So I take the point.

The noble Lord went on to say—and I think I quote him accurately—that, "There just isn't the money and the money is not available". That is the same point as the noble Baroness made. But that is a matter for decision by the Government. It is exactly what we are debating; and it is the purpose of the amendment. If carried, I hope the amendment will strengthen the hand of the noble Baroness when she goes to the Treasury and says, as she would have to, "Look, we have a problem here".

Also I have taken some advice. The amendment contains the negative clause, but for the provisions of sections 24(1)(d) or 27(1)(d)". I do not believe that the amendment is defective, although I accept that the reference to Section 27(1)(d) is no longer necessary. I think that the amendment is intelligible and not defective, although that phrase could certainly be dropped, as I hope it would be, in a tidying up procedure.

Your Lordships have heard the arguments. I still find it an arrogance—I must be careful; I must not say that word looking at the noble Lord, Lord Dearing, because I used another disagreeable word and had to withdraw it at an earlier stage of our proceedings—to say that the money is not there. The money is not there because the Government are not putting it there. That is the central problem with the Bill. That is why many of us in this House are distinctly dissatisfied and why I feel it is necessary to test the opinion of the House.

7.16 p.m.

On Question, Whether the said amendment (No. 15) shall be agreed to?

Their Lordships divided: Contents, 71; Not-Contents, 125.

Division No. 3
CONTENTS
Anelay of St Johns, B.	Mackie of Benshie, L.
Brooke of Sutton Mandeville, L.	McNally, L.
Brookeborough, V.	Maddock, B.
Brougham and Vaux, L.	Mancroft, L.
Caithness, E.	Mar, C.
Campbell-Savours, L.	Mar and Kellie, E.
Carlisle of Bucklow, L.	Mayhew of Twysden, L.
Carnegy of Lour, B. [Teller]	Miller of Chilthorne Domer, B.
Colwyn, L.	Moynihan, L.
Dean of Harptree, L.	Nicholson of Winterbourne, B.
Dixon-Smith, L.	Noakes, B.
Falkner of Margravine, B.	Northesk, E.
Ferrers, E.	Onslow, E.
Fookes, B.	Park of Monmouth, B.
Forsyth of Drumlean, L.	Peel, E.
Fraser of Carmyllie, L.	Perry of Southwark, B.
Garden, L.	Renfrew of Kaimsthorn, L. [Teller]
Glenarthur, L.
Greenway, L.	Renton, L.
Hamwee, B.	Roberts of Conwy, L.
Harris of Richmond, B.	Roper, L.
Howe, E.	Russell, E.
Howe of Aberavon, L.	St John of Fawsley, L.
Jenkin of Roding, L.	Saltoun of Abernethy, Ly.
Laird, L.	Seccombe, B.
Lindsay, E.	Selborne, E.
Linklater of Butterstone, B.	Selsdon, L.
Luke, L.	Sharp of Guildford, B.
Lyell, L.	Shaw of Northstead, L.
MacGregor of Pulham Market, L.	Shutt of Greetland, L.
	Skelmersdale, L.
Mackay of Clashfern, L.	Smith of Clifton, L.

Thomas of Gresford, L.	Walmsley, B.
Thomas of Walliswood, B.	Watson of Richmond, L.
Tope, L.	Williams of Crosby, B.
Waddington, L.	Windlesham, L.
Wallace of Saltaire, L.

NOT-CONTENTS
Acton, L.	Hoyle, L.
Ahmed, L.	Hughes of Woodside, L.
Amos, B. (Lord President of the Council)	Hunt of Chesterton, L.
	Hunt of Kings Heath, L.
Andrews, B.	Janner of Braunstone, L.
Archer of Sandwell, L.	Jones, L.
Ashton of Upholland, B.	Kennedy of The Shaws, B.
Bach, L.	King of West Bromwich, L.
Berkeley, L.	Kirkhill, L.
Bernstein of Craigweil, L.	Lea of Crondall, L.
Bhattacharyya, L.	Levy, L.
Billingham, B.	Lipsey, L.
Borrie, L.	Lockwood, B.
Bragg, L.	Lofthouse of Pontefract, L.
Brooke of Alverthorpe, L.	McCarthy, L.
Brookman, L.	Macdonald of Tradeston, L.
Brooks of Tremorfa, L.	McIntosh of Haringey, L.
Burns, L.	McIntosh of Hudnall, B.
Carter, L.	MacKenzie of Culkein, L.
Carter of Coles, L.	Mallalieu, B.
Chandos, V.	Mason of Barnsley, L.
Clark of Windermere, L.	Massey of Darwen, B.
Clinton-Davis, L.	Merlyn-Rees, L.
Currie of Marylebone, L.	Mitchell, L.
David, B.	Morris of Aberavon, L.
Davies of Oldham, L. [Teller]	Nicol, B.
Dean of Thornton-le-Fylde, B.	O'Neill of Bengarve, B.
Dearing, L.	Palmer, L.
Dixon, L.	Parekh, L.
Donoughue, L.	Patel, L.
Dubs, L.	Patel of Blackburn, L.
Evans of Parkside, L.	Pitkeathley, B.
Evans of Temple Guiting, L.	Plant of Highfield, L.
Falconer of Thoroton, L. (Lord Chancellor)	Portsmouth, Bp.
	Quirk, L.
Farrington of Ribbleton, B.	Radice, L.
Faulkner of Worcester, L.	Ramsay of Cartvale, B.
Filkin, L.	Randall of St. Budeaux, L.
Finlay of Llandaff, B.	Rea, L.
Fyfe of Fairfield, L.	Rendell of Babergh, B.
Gale, B.	Rooker, L.
Gibson of Market Rasen, B.	Sainsbury of Turville, L.
Gilbert, L.	Scotland of Asthal, B.
Golding, B.	Simon, V.
Gordon of Strathblane, L.	Smith of Leigh, L.
Gould of Potternewton, B.	Sutherland of Houndwood, L.
Graham of Edmonton, L.	Symons of Vernham Dean, B.
Grantchester, L.	Temple-Morris, L.
Grenfell, L.	Tomlinson, L.
Grocott, L. [Teller]	Triesman, L.
Harris of Haringey, L.	Tunnicliffe, L.
Hart of Chilton, L.	Turnberg, L.
Haskel, L.	Turner of Camden, B.
Haskins, L.	Varley, L.
Hayman, B.	Walpole, L.
Henig, B.	Warner, L.
Hilton of Eggardon, B.	Warwick of Undercliffe, B.
Hogg of Cumbernauld, L.	Whitaker, B.
Hollick, L.	Whitty, L.
Hollis of Heigham, B.	Wilkins, B.
Howarth of Breckland, B.	Williamson of Horton, L.
Howe of Idlicote, B.	Wilson of Dinton, L.
Howells of St. Davids, B.	Woolmer of Leeds, L.
Howie of Troon, L.

Resolved in the negative, and amendment disagreed to accordingly.

7.26 p.m.

The Deputy Speaker (Viscount Simon)

My Lords, before calling the next amendment I should point out that the line reference for this amendment has been incorrectly printed. It should read, "page 19, line 30".

Clause 38 [Provision of information]:

Baroness O'Neill of Bengarve moved Amendment No. 16:

Page 19, line 31, at end insert— ( ) If so requested by the governing body of a relevant institution in relation to which an approved plan is in force, the Higher Education Funding Council for England must provide that institution with any information which is in its possession and is reasonably required to enable the institution to inform its students about the level of publicly provided resource for each category of course offered at that institution, and about the level that would have been available had the level of publicly provided resource for that category of course in the previous year been uprated by an index of higher education institution costs.

The noble Baroness said: My Lords, I shall be brief; I expect that we need that by now.

At present, Clause 28(4) provides that any fees paid by students will be additional to and not in substitute for public funding. The Government opposed this amendment, and it may well be removed when the Bill returns to the Commons.

On Report, I moved but then withdrew an amendment to ensure that any reductions in funding for teaching were matched by proportionate reductions in student numbers. The Minister objected that such an amendment would require the Higher Education Funding Council for England to control student numbers more tightly than it does at present. The Government may also have opposed the amendment precisely because it would have made it explicit that reductions in public funding mean that, for any given level of fee, either numbers of places must be reduced or quality of provision must be lowered. That is the truth of the matter.

At this stage I wish to move a weaker amendment; that is why it relates to a different part of the Bill. Its aim is only to ensure transparency about levels of public funding for university teaching and courses of different categories.

On Report the noble Lord, Lord Sutherland of Houndwood, supported the amendment that I had moved, pointing out the degree of transparency that it would achieve. He said: 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".—[Official Report, 8/6/04; col. 251.]

Those are aims with which all of us can agree. I hope that the Government will be able to accept the amendment. The amendment would secure a degree of transparency. It allows taxpayers to know the extent to which students on courses in different categories are supported from public funds. It allows students and their families to know how far the costs of their education are met by their fees and how far by public funding. It allows universities to make a secure case for any fee they charge. It also allows them all to know if public funding is reduced or increased in real terms. In the past, the unit of resource for university teaching has very often been reduced by an adequate suppositious uprating of funding at less than the rate of increase of university costs, labelling the resulting gap in funding and efficiency gain, and in effect meeting the shortfall at the expense of students, who received less teaching, and academic staff, whose level of pay was eroded.

It would at least help to be clear about those matters. The amendment does not add to the burdens on universities. It neither requires nor allows HEFCE to exert more precise control of numbers admitted or of their distribution across categories of courses. It does not determine which index of university costs—whether the higher education pay and prices index or another index—should be used. That would be a matter for HEFCE in consultation with the sector. Universities that find the funds to admit more students, despite any future reduction in public funding per student, would remain free to do so. However, I think that students, their parents, universities and the public would be able to see what was going on. I beg to move.

Baroness Warwick of Undercliffe

My Lords, I congratulate the noble Baroness, Lady O'Neill, on what she has said and for exploring the complexities that will be part of all our discussions on the unit of resource. We will ensure that the Government stand by their commitment that the income from fees will be additional, and if necessary that they must be made to stand by it.

What the noble Baroness has sought to do in her amendment is already possible. The information referred to here is at least in part already publicly available. Institutions can use a measure—it is a Universities UK measure, but it is produced by the London School of Economics—called the HEPPI index, the higher education pay and prices index.

However, the amendment proposed by the noble Baroness touches on an important point. While I do not think that the Bill should be amended in the way that she suggests, it would be helpful if the Minister could indicate that the retail price index does not give an accurate measure of inflation in the higher education sector. While the Minister may not be prepared to accept that the HEPPI is the only possible, or even the right measure, perhaps as part of our discussions on the definition of unit funding, which has already been agreed, we might discuss what an appropriate measure of inflation would be and arrange for that to be published annually.

Baroness Sharp of Guildford

My Lords, I will be brief. I had hoped that my name would appear alongside those of the noble Baroness, Lady O'Neill, and the noble Lord, Lord Wilson of Dinton, on the Marshalled List. I had asked for it to be so, but a slip up in the Public Bill Office meant that it was not so. I had an apology this morning to that effect.

We support this amendment, because it adds to transparency. There is already ambiguity as to what constitutes unit funding, and it would be useful to clear that up. There is also ambiguity as to what price index is used when we have real figures as distinct from those on current terms. On all scores, and for the reasons already set out splendidly by the noble Baroness, Lady O'Neill, we support this amendment.

Lord Wilson of Dinton

My Lords, I also support the amendment. It will be fair for students, who are already going to be expected to contribute to their education, to know what the Government are going to contribute. That transparency is very much in line with the openness that the Government want in many fields. I also point out—this may be some encouragement to the Government—that if, as we all hope, the Government are going to be much more generous to higher education in the future, it will be a good way of indicating to people in higher education how their generosity is moving over time. I support it very much, and I hope that the Government will respond positively.

Lord Renfrew of Kaimsthorn

My Lords, I, too, support this amendment. The notion of transparency is admirable. I am enchanted by the suggestion made by the noble Lord, Lord Wilson, that it might bring us increasingly good news. On that happy thought, I warmly support it.

Baroness Ashton of Upholland

My Lords, I congratulate the noble Baroness, Lady O'Neill, for the way in which she has identified the issues that are of concern to her. I know that the purpose behind this amendment is to look at the transparency around the amount of funding that the Government commit to higher education. This amendment is not necessarily the way to do it. Although I shall be brief, I hope that in doing so I shall reassure the noble Baroness.

I spoke to HEFCE this morning. It confirmed that it already provides extensive information to heads of higher education institutions, as my noble friend Lady Warwick pointed out, about their annual funding allocations, including information on the effects of inflation using the GDP deflator. The grant letter that it provides is around 50 pages long, plus annexes. I have a copy here, but I will resist the temptation to read from it. I cannot say that I have read every page—

The Countess of Mar

My Lords, I hate to interrupt, but I remind the noble Baroness very gently that she is addressing the whole House, not just my noble friend Lady O'Neill. The Liberal Democrats are seeing only the back of her head.

Baroness Ashton of Upholland

My Lords, it is always my intention to move around the House, as I believe the noble Countess will see as she watches me in the course of this speech. I was addressing the noble Baroness, Lady O'Neill, and I shall move to address those who have spoken in this debate, as is my wont on every occasion—

The Countess of Mar

My Lords, the noble Baroness is not addressing those noble Lords who have spoken, she is addressing the House.

Baroness Ashton of Upholland

My Lords, in doing so, I always attempt to be courteous. As I have indicated, there is the letter from HEFCE. Detailed information is available on how the higher institution block grant figures are arrived at, based on a combination of the expectations of the mix of courses that institutions provide. Of course, higher education bodies are autonomous and are free to use their overall block grant to fund provisions at they see fit. I say particularly to the noble Baroness, Lady O'Neill, that HEFCE is happy to provide additional details on request.

On Report, I took care to respond to the issues around additionality, which I know your Lordships' House feels strongly about, and our plans to work with Universities UK on such a definition. As I explained, we plan to publish the new definition in the departmental annual report, which is laid before Parliament in the usual way. We know that HEFCE has plans to carry out a further fundamental review of the funding method, to take into account the impact of variable fees. This will lead to further changes in due course.

I have a number of concerns about the practicalities of the amendment before us, because I do not think that it will be so straightforward to devise a new index—the index of higher education costs. To summarise, I hope that I can reassure the noble Baroness that this amendment is unnecessary. HEFCE already provides regular annual information, and we are planning to develop a new definition of the unit of funding. Taken together, this will provide institutions with the clarity that they need about levels of public funding.

I am also concerned that we ensure that the noble Baroness, Lady O'Neill, who has such an interest and expertise in this area, is able to do that. I offer the opportunity to bring the noble Baroness and the noble Lord, Lord Wilson of Dinton, to discuss these issues with HEFCE, so that there can be absolute clarity about the way in which we are proposing to go forward. I should point out to my noble friend Lady Warwick that university costs are generally estimated by Universities UK to be higher year-on-year, as the noble Baroness will know, than the retail price index or the gross domestic product deflator. The amendment is unclear on which index to use. In our deliberations with HEFCE, we shall be concerned to ensure that consideration is given to how we might take forward the correct way of identifying the means of inflation.

In the context of recognising the work that HEFCE is already doing, the offer to discuss this further with the noble Baroness and to facilitate those conversations, and our continuing work with Universities UK to identify the transparency that noble Lords want, I hope that the noble Baroness will feel able to withdraw her amendment.

Baroness O'Neill of Bengarve

My Lords, I am grateful in many respects for that reply. I was interested in the shift in the course of the Minister's reply from an emphasis on the amount of information that HEFCE discloses to the clarity of the information that it discloses. These are rather different considerations.

One of the concerns that lay behind our amendment is that institutions should be able to make apparent to students the extent to which their education is being paid for by the public purse and to what extent it is covered by their fees. I have in mind, for example, a student taking a course of study which includes a bit of laboratory work. It is not a simple matter for any student, or their family or their sponsors, to answer that question from the scads of information that HEFCE produces.

If the noble Baroness can assure me that this issue of firm, communicable information on an annual basis for category of course is the objective of this review, then I would consider withdrawing the amendment. If, however, it is simply the development of a new index—and I was very careful not to tie the Government's hand to one index or another—then I think I would consider dividing the House. I wait to hear what the Minister has to say.

Baroness Ashton of Upholland

My Lords, it is my understanding that we would look to do that. I will try and be as firm in my commitment to the noble Baroness as I can. My only hesitation in being absolute is to make sure that when the noble Baroness joins us—it is to be hoped—in discussions with HEFCE she will feel confident that the way in which the work is undertaken—and, indeed, the work with Universities UK, which I am sure will also wish to join in the discussions—will cover that issue properly. I can commit to the underlying issues behind the amendment being addressed fully by the ongoing work. With that assurance, I hope that the noble Baroness will feel able to withdraw the amendment.

Baroness O'Neill of Bengarve

My Lords, I thank the Minister for her reply. I have listened carefully and, on that basis, it should be possible to work something out that would provide a degree of comfort and information which would be useable by students and their families, not merely by the finance departments of universities and HEFCE. These are vital figures for students, and quite vital politically. On the understanding that this is one of the objectives of the exercise, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Clause 50 [Commencement]:

Baroness Ashton of Upholland moved Amendment No. 17:

Page 25, line 14, at end insert— section (Review of decisions made by relevant authority), so far as relating to England;

On Question, amendment agreed to.

Baroness Ashton of Upholland

My Lords, I beg to move that this Bill do now pass. In moving the Motion, I wish to say a few words of thanks to noble Lords who have given so much time to the Bill and have spoken during its passage through your Lordships' House. I am particularly grateful to my noble friend Lord Triesman, whose detailed understanding of the higher education sector has been immensely helpful.

I want to say to the noble Lord, Lord Forsyth, that while I regret the circumstances of the absence of the noble Baroness, Lady Blatch, it has been a pleasure to work with him. I have been impressed by the noble Lord's knowledge and understanding of the issues and, while we have differed in our views in some respects, we have shared a genuine commitment to the autonomy of the sector, with a special regard to academic freedom.

The noble Baroness, Lady Sharp, has, as always, played an important part in our debates, and I thank her for her constructive approach. I am particularly pleased that we have been able to accommodate a number of the amendments of the noble Baroness, where she has characteristically been supporting the views of groups such as the RNIB and SKILL, and also dealing with part-time student matters.

Sometimes we have disagreed on the Front Benches, but debate has never been less than thoughtful and courteous. Other noble Lords have contributed greatly, and I will resist the temptation to name them all at this time. I am extremely grateful to everybody who has spoken.

I want to end by giving my thanks to the Bill team. They have been fantastic. They have good sense and high intellect, and it has been a privilege to work with them.

Moved, That the Bill do now pass.—(Baroness Ashton of Upholland.)

Lord Forsyth of Drumlean

My Lords, I have no wish to detain the House, but I want to say a few words of thanks to my colleagues and noble friends Lady Seccombe and Lord Skelmersdale. At the risk of destroying her future ministerial career, I also want to pay tribute to the Minister and to the noble Lord, Lord Triesman, for the very positive way they have dealt with the amendments and probing which we have tried to carry out in the proceedings on the Bill.

I do not know if I am giving away any secrets in saying that there has also been a lot of time spent behind the scenes, arguing the case. I am particularly grateful to the Minister for the way in which she has been prepared to listen to argument and to help us in trying to reach agreement.

This House is sometimes portrayed as being asleep and not doing much. One need only compare the consideration of the Bill in the other place with that given here, where the Government have agreed to important amendments in respect of OFFA, appeals and part-time students. I hope that we will not have finished with the consideration by the Commons of other matters that have come forward.

At the risk of causing difficulty to the noble Baroness, Lady Sharp of Guildford, I offer her my thanks. We are in different parties, but we have tried to work in the interests of the universities and higher education institutions, as we see them. The noble Baroness has been a pleasure to work with. I have rather enjoyed the experience, but I have no intention of repeating it.

7.45 p.m.

Baroness Sharp of Guildford

My Lords, we are very grateful to the Minister for the consideration and good humour with which she has dealt with the Bill. There were occasions on which our positions were diametrically opposite, but there was always a feeling that there was a degree of understanding of where we were coming from. I find that encouraging.

I reciprocate the comments of the noble Lord, Lord Forsyth of Drumlean. It has been a great pleasure to work with him. It is very sad that the noble Baroness, Lady Blatch, is not in her place. I suspect that, had she been there, we would have spent many long hours on the Bill and, perhaps, considered more amendments than we have done. In some senses, we might have done a slightly more thorough job on occasions. Nevertheless, we have done a very good job, and it has been a pleasure to work together in this way.

Finally, I thank my noble friend Lord Shutt of Greetland, who came in at the last moment to help me to cope with the Bill. I am extremely grateful to him.

The Lord Bishop of Portsmouth

My Lords, I do not want to preach a premature funeral oration, but, on behalf of those of us on these Benches and others, I add my thanks for the way in which the Minister has responded to no end of approaches and the way in which she has listened. Although she was unable to work in our concern to have a statement of the values of higher education because of lawyers and litigation, I look forward to a future opportunity to explore that theme in another way in the House.

I am sure that I speak for many others when I say, "Thank you very much". It has been fascinating to watch not just the "Punch and Judy" show of Forsyth and Ashton but the triad involving the noble Baroness, Lady Sharp of Guildford, as well—and, occasionally, to take part in it.

On Question, Bill passed, and returned to the Commons with amendments.