In the interests of pressing forward a little this afternoon, lunch was very late and I know that everybody will have refreshed themselves, but I hope not so much that we will need to spend quite so long on some of the amendments. I put the point very respectfully.
In moving Amendment No. 38 I shall speak also to Amendments Nos. 42 and 49. In the interests of making some progress, I will try to be brief. The purpose of these amendments is to add a duty to the governing body of the relevant institution under Clause 23(1) to ensure that those students who are awarded a deferred unconditional place through the UCAS system prior to
"an agreed firm or conditional deferred entry place for 1998—taking a 'gap-year' in 1997—will be treated as if they are entering higher education in 1997. This will mean that they will not be required to pay tuition fees for the duration of their course".
I appreciate that the circumstances are slightly different, in so far as the vessel that is this Bill has been spotted on the horizon and has been sailing into port over a longer period of time. However, it does not alter the fact that nowadays most students wish to take a gap year. Indeed, when reading the Scottish papers this morning, I found in the Glasgow Herald—or the Herald as it likes to call itself—a statement about a new initiative by the Scottish Executive to give up to £40 a week to students from poorer families who wish to take a gap year, and marvellous statements from the executive about the importance of gap years.
It could be argued that under the new regime poorer students will be entitled to some support through maintenance grants, and that that would be an improved position from their point of view. However, the fact is that they will face fees which are £2,000 a year more for three years. While people might argue that these will be deferred for payment, that still involves an obligation to pay them off over a 25-year period with a higher effective rate of tax being paid by the graduate, and it must act as a disincentive for some students to take a gap year. I do not need to declare an interest because my youngest daughter is currently studying for her A-levels and will be applying for university on a deferred basis and having a gap year. But were I in that position, I think I would be encouraging my offspring perhaps to consider having a gap year at the end of their university education and not at the beginning. If I were a parent who felt that I did not want my children to start life with large amounts of debt, I would be even more concerned about that. The issue is serious and I hope, even if the Minister cannot tell us today that he would be prepared to accept the amendment, that he will recognise that it matters a great deal.
There is a whole industry out there that exists to put youngsters into all kinds of weird and wonderful places around the world, doing marvellous work. We have seen that most recently demonstrated by some of the younger members of the Royal Family. It would be greatly damaged—I am sure that it is an unintentional consequence—if we found that many of the students were no longer available to take those gap-year places. The organisations clearly would not be able to put people in placements. There is another side effect, which is that, if the whole cohort of people who were previously going to do a gap year decided instead that they would go to university, there would be a huge additional demand in one year. That will mean that many students who would otherwise have got a place on the course that they really wanted to do at the institution to which they really wanted to go would get a rejection notice from UCAS.
For all those reasons, I very much hope that the Minister will think about the matter, discuss it with his colleagues, and come back with a proposal to repeat what was done on the previous occasion in 1998. We should treat those students who meet the conditions that I have described and who are taking a gap year exactly as though they had started without having a deferred year before beginning university. I beg to move.
The noble Lord put the case for a gap year briefly and concisely. Every year approximately 29,000 students take a gap year. Such a year gives the student, as well as the advantages of the gap year itself, a degree of time to reflect after they have done their A-levels on whether they are really going for the right course. It also gives them time to make applications and know for certain whether they have been accepted at the university. Many of them have that certainty during their gap year, which helps them to make greater use of the experience. It also gives the universities greater certainty. They know by about Christmas whether a student will be on their books. I know that the universities also welcome the greater maturity shown by many students who take a gap year in their approach towards study.
The gap-year experience, whether in Britain or abroad, widens horizons and broadens the mind. That increasing understanding of the way in which the world works often helps to make students better, both in individual terms and in terms of participating in the team. The only exception, interestingly enough, is mathematics. Mathematicians are not very keen on students taking a gap year because, in a sense, they forget too much in that long period. It is obviously a subject where sequential development is of considerable importance.
The difficulty with which we are confronted in the Bill is that, as in 1998, a cohort of students will come through who would have taken a gap year and are now confronted by the choice of dropping the gap year and not having to pay the fees. When the matter was discussed in the other place, the Minister immediately said, "Ah, yes, but they are also going to lose the opportunity of having maintenance grants", as, alongside having to pay fees, the opportunity is there for the students to have the higher maintenance grants if they come from lower-income families. That is the issue that we discussed just before lunch. One problem with it is that, perhaps disproportionately, those who take gap years come from higher-income rather than lower-income families. Therefore, the advantage of being able to get the maintenance grant will not appeal that much.
Before I finish, I want to quote from a letter received by my honourable friend Mr Phil Willis, who is my party's spokesman for education in the other place. We have the writer's permission to quote from it. His name is Sammy Driscoll, and he is a sixth-form student at Dame Alice Owen's School in Potters Bar. He writes that he will be finishing his,
"A levels in July 2005. I have always planned that I would take a gap year and do some voluntary work overseas before going to University in October 2006. As a result of the Government's proposal . . . I am now faced with a really difficult choice. If I go on the gap year placement in Africa, which will cost about £2,000, I will have to pay the higher tuition fees and end up with an extra £6,000 loan at the end of my degree.
"I think this is really unfair. When tuition fees were first introduced, special provision was made for students taking a gap year so that they were not worse off. There are thousands of us who would want to do a gap year in 2005 and we are all going to be faced with this choice. I think many of us will be forced to miss the gap year, which is not only going to be worse for us, but will also mean there are a lot fewer volunteers for all the projects round the world . . . It probably also means . . . a lot more competition for university places in 2005, so we all lose out again".
That very neatly summarises the arguments in favour of some movement on the gap years. Last time there were adjustments. There will be losses all round. The students and universities lose the benefit of the widening experience, the voluntary organisations lose the volunteers, and there will be more competition for places, which will squeeze some 18 year-olds and 19 year-olds out. I ask the Minister to think again and to consider whether some more encouragement could be given to students in this case.
I support the amendment. In addition to all that has been said—I completely agree with the noble Baroness, Lady Sharp, and the noble Lord, Lord Forsyth—another very important role is played by such a year off, if it indeed is a year off. It is simply that in subjects such as engineering, although it is not mandatory in all universities for students to take a year to get experience of industry, in Cambridge it has been a very successful operation. A large percentage of the students who read engineering take the year off and provide themselves with a very good background on which they can then proceed with their studies.
I accept that the issue is important. We share the views expressed by the noble Lord, Lord Forsyth, and the noble Baroness, Lady Sharp, about the value of gap years, of the experience that they engender, and of the maturity that they manage to produce in the students who take them. All the amendments are about the position of people who wish to take a gap year before they go to university. Before I speak to the amendments specifically, I should set out the Government's thinking on gap years. I ought to congratulate the noble Lord, Lord Forsyth, on inventing a few months ago the post-university deferred gap year. It is a rather ingenious concept to suggest taking such a year at the end of university.
The points made by Members of the Committee, including the noble Lord, Lord Lewis, were about ensuring that young people should be able to take a gap year if they chose. However, the amendments assume that variable fees will deter them from doing so.
I should like to explain why the Government do not believe that this will be the case. The support package which we have announced for new students from 2006–07 is, we believe, a generous one. The poorest students, for example, will receive a grant of up to £2,700 as well as a bursary support from the institutions themselves. This support, and the removal of up-front fees which will prove to be a real financial obstacle, may actually encourage some students to take a gap year. We believe that is what will happen.
In addition to bigger grants and bursaries, we are providing higher loans for living costs; introducing fee deferral; and we have announced that loans will be written off after 25 years. So, in many ways, starting a course in 2006–07 is more attractive.
The intended effect of this amendment may be to achieve transitional arrangements for gap year students similar to those when tuition fees were first introduced in 1998. That was the case that was put.
I apologise for interrupting the Minister, but I am not sure I understood what he was saying. Is it that because the poorer students will get a package of £3,000—if we take the elements that make up the maintenance grant, the deferred fees and the bursary—they might want to take advantage of that and wait to go to university? It is true that they will get that package of £3,000 but it is also true that in many universities they will have to pay fees of £3,000. So it is cost-neutral, albeit that the fees are paid "post graduation".
Is that the Minister's argument—that there is an additional liability that is post, which is matched by the grant, and that therefore they might want to take advantage of that rather than go for the present position, where they have a liability of only £1,100? Is that what he is saying?
It is the combination of all of those factors: the amount, the deferral and the fact that unlike at present, they will not have to find that money at the beginning. That we believe should be at least neutral, and possibly better than neutral in encouragement terms.
There are key differences between the circumstances which surrounded the introduction of tuition fees in 1998–99, and of variable fees that are proposed for 2006–07. In order to illustrate why we have not proposed similar arrangements in the Bill I will say a word or two about those differences.
By the time the decision to introduce tuition fees in 1998–99 was taken and made public in the summer of 1997, many students had already decided to do a gap year. They had committed themselves to activities: some had even made financial commitments in relation to those activities. They had done so on the entirely fair assumption that the student support arrangements for 1998–99 would be the same as they were for 1997–98. That is why we felt it was right that these students should not have to pay tuition fees for their first year at university. I know that my noble friend Lady Blackstone was concerned that that unfairness and unpredictability should not be a burden for those involved.
But the introduction of variable fees is being proposed in very different circumstances. First, students will have had three years' notice of the intention to allow universities to introduce variable fees. Secondly, the system is changing from one of up-front payment of fees to one in which students can get loans for fees—and they start to repay those loans only after graduation when they earn more than £15,000 a year. Thirdly, in a fixed fee regime, universities had no choice but to charge gap year students the standard fee unless we legislated to allow otherwise. That is not the case now. Universities under a variable fee regime will have flexibility to decide how to treat gap year students in exactly the same way as they have the flexibility to set fees for other students below the cap of £3,000. Indeed we know that Universities UK, on behalf of the sector, has supported previous amendments, and therefore the principle of transitional arrangements for gap year students entering higher education in 2006–07.
Under the legislation, the universities have freedom to make such arrangements themselves. They are not prevented from doing so if they wish. I believe it is right to give institutions this choice, and right that they should have responsibility for setting their fees at levels which are appropriate to them.
The student support package which we have announced for students from 2006–07 will ensure that all those with the ability to do so may participate in higher education. We are firmly committed to widening participation, as indeed are Members on all sides of the Committee, and our proposal has been put forward to that end.
I shall turn to the individual amendments, but there is a point which has to be made. Were we to accept any amendment, however generously in spirit that amendment had been put, that automatically exempted gap year students from variable fees, it is the universities that would lose as a result. They would get less fee income from each and every student to whom the exemption applies, and there is no question of the Government making good the loss.
To complete the point in response to the question posed by the noble Lord, Lord Forsyth, it is true that some institutions have said they will give much larger bursaries than £300. We have talked about some of them earlier today: Cambridge University, Imperial College, Exeter University and I think some others have already said that their bursaries will be additional—some up to about £4,000 on top of the maintenance package. I would contend that in those circumstances the fees should not be a disincentive.
Amendment No. 42 has an unintended consequence. By setting a cut-off point of
It is not unknown for institutions to make such offers to outstanding candidates. A cut-off point of April for offers would therefore mean that some students would be exempted from variable fees where that is not the intention.
Amendments Nos. 38 and 49 have a still more serious flaw. Although I understand that noble Lords want further to protect gap year students, these amendments would exempt both gap year and existing students from the condition of grant. That does not mean that such students are exempted from higher fees. It actually exempts them from the controls that the condition of grant gives us over fees. The amendments thus have the effect of leaving such students open to wholly unregulated fees. I am sure that that is not the intention. There are further technical problems which I could go into at length but I do not think the Committee would welcome that.
Perhaps I may say a few words about Amendment No. 53. I draw the attention of noble Lords to the way in which the amendment would operate. While I understand its intended effect, the amendment does not provide for a mechanism through which the Secretary of State could exempt gap year students from variable fees. It does not enable him to disapply the higher amount for such students as a condition of grant. As a result, it would not work.
If the intention is to protect gap year students, then I believe that the amendment also has an unintended consequence. It sets a cut-off point of
To sum up, these amendments have a number of technical defects which noble Lords perhaps have not foreseen. I am not sure that those are areas that they would have wanted to cover. There is some doubt as to whether students will now be deterred from pursuing a gap year in 2005, given the improvements in student support which are starting in 2006.
Universities have the flexibility to respond to this issue themselves. The freedom of universities to do that is, I believe, an important freedom in a world which is becoming over-regulated.
In the light of all that, I hope that the noble Lord will agree to withdraw their amendments.
I thank the Minister for his responses, in particular that in relation to my amendment. I take on board the technical points he makes, but, more substantively, I am sorry that on the general issue he has not seen fit to be a little more sympathetic to the students.
While arguing that they will be eligible for maintenance grants, he has not taken on board the fact that a number of them, as a result of their parents' joint income, will not be so eligible. There is therefore a real incentive for such students to do away with the gap year and go to university earlier. That poses problems. At present, 29,000 are taking gap years and there is the potential of an extra 20,000 students or so applying to universities. That can create a bulge in universities and in 1998 the noble Baroness, Lady Blackstone, conceded on this issue in order to try to smooth that process. However, there is a possibility that that smoothing will not be achieved and that some students will find themselves excluded.
The Minister made a great deal of the fact that it would be up to individual universities to use their discretion. In other respects, many of us are arguing that we would be delighted to see universities having a little more discretion on a number of these issues. Equally, he makes the point that any reduction in income will be a reduction in the universities' income, but, as he pointed out, the universities need the money in their own coffers. Therefore, the chances of universities making that concession to individual students is probably not that great.
I thank the Minister for his answer and I am sorry that he was not a little more sympathetic towards these students.
I am not as enthusiastic about the Minister's answer as is the noble Baroness. He did not deal with any of the substantive points. I did not understand the argument that universities will lose out on income. If the student decides not to take a gap year, the university will not receive the enhanced fees. It makes my brain hurt to try to understand the Minister's point.
When the Government introduced tuition fees for the first time, the noble Baroness, Lady Blackstone, recognised this as a real problem. She created a precedent by making an exemption for people who had places and I pay tribute to her for doing that. It was appreciated at the time. However, I understand that the Minister's argument for not doing so on this occasion is that students knew it was coming. May I remind him that this Bill has not passed through the House? This Bill is not yet on the statute book, so no one knows what is coming. Whether it is coming is a matter for Parliament. Therefore, the Minister is taking things a little for granted in suggesting that they have had three years' notice.
The Minister also argued that there is some incentive. I cannot imagine that many parents will say to their sons and daughters, "By the way, we think you should have a gap year because you will get a great deal by doing so. Instead of paying £1,100 in fees, you will pay £3,000 in fees and you will pay it off for 25 years after you have graduated if you get a salary of more than £20,000". Parents who give their children that advice could get a job in Barclays bank persuading people to take out more debt on credit cards. It is not a sensible proposition and I am surprised that the Minister cannot see that there will be a powerful incentive for students to forego their gap year. That would be a tragedy for the reasons mentioned by the noble Lord, Lord Lewis, and the noble Baroness, Lady Sharp.
I do not for the life of me understand why the Minister is not taking exactly the same position as was taken previously. I have dealt with his argument that the universities would lose out on funding, but, equally, that argument applied when the noble Baroness, Lady Blackstone, made the exemption. I therefore hope that the Minister will take away the proposal and think about it. He said that on the previous occasion people had already decided to take a gap year, but my experience of my own children is that they decided to take a gap year five years before going to university. It is a major cultural event nowadays.
We in this House who are considering legislation are of a generation who received their education free; who received grants for their education; and who now pay tax at 40 per cent as highest earners. Yet we are opposing these additional burdens on students for reasons we will debate later in the Bill. It seems a small request that, given there is a transitional difficulty in respect of the gap year, the Government should make a concession. The Minister argued that he will not do it because it will put a cost on the universities if students decide not to take their gap year. It will not do so and that is the weakest of grounds on which to stake his claim.
The matter was not properly discussed in the House of Commons because of the absurd way in which business is now guillotined there. I hope that the Minister will think again. I am happy to agree to withdraw the amendment, but should he not think again, we will certainly return to it and will want to press the matter very strongly indeed. I hope that he will discuss with his colleagues whether there is room for second thought. I beg leave to withdraw the amendment.
moved Amendment No. 39:
Page 9, line 7, leave out from "course," to end of line 11 and insert "no fees are payable by any qualifying person, and"
In moving Amendment No. 39, I shall speak also to Amendments Nos. 40, 43, 44, 45, 47, 48 and 79. Their purpose is to eliminate from the Bill any reference either to basic amounts or to higher amounts of fees and to substitute instead the notion that qualifying persons—namely, the students as defined by Clause 23(6)—should pay no fees at all.
In the Second Reading debate, I spoke at some length about the reasons why I and my noble friends in this House and my honourable friends in another place support a policy of no fees. I do not intend to repeat that speech. However, I want briefly to reiterate the points we made and explain why we oppose the proposals which this Bill will bring into effect.
I argued that the proposals were, first, ineffective in their prime purpose for raising money for the university sector. At most, they were likely to bring about £900 million into the university sector at a time when current deficits on teaching budgets alone are running in the region of £2 billion.
Secondly, I argued that it was an inefficient way of raising these moneys because in order to make the proposals acceptable to their Back Benchers and to overcome the real problems of debt aversion among students from low-income families, the Government were pouring some £1.4 billion into a complicated set of schemes. In effect, they paid the students to enable them to pay their fees. I argued then, and I still argue today, that both universities and students would be better off if the money went straight into the university coffers rather than being diverted in these round-about ways.
Lastly, I argued that it was unfair. While we support the notion of students repaying after graduation, the size of the debt that we are now expecting young graduates to shoulder means that many of them are likely to be landed with a repayment, at an effective marginal rate of tax of 42 per cent, for a considerable period of time. Anyone earning less than £30,000 will not be repaying much of his debt during that period. Therefore, many young graduates will find themselves spending 20 or 25 years—the absolute maximum—shouldering a marginal rate of tax of 42 per cent, which is above our current top rate of tax. That is very tough at a time when graduates are trying to establish themselves with jobs, homes and a family. We fear many perverse and unintended consequences, such as a complete drying-up of applications to become doctoral students, as a result of the imposition of these fees.
I have heard two main sets of criticisms about our stance. The first is to ask from where universities will get the resources that they need to gain from fees. My answer is, first, to point out that universities do not receive very much from those fees. They are receiving only £900 million, whereas they reckon that the current financing gap is about £2 billion. On the other hand, our proposals envisage that £2 billion a year should go into the university coffers from 2005 onwards—only £500 million net more than the Exchequer is already having to fork out to fund the Government's proposals. Unlike the Government or, if I might say so, the Opposition, we have made it very clear that we intend to finance that extra expenditure by introducing a higher, 50p-in-the-pound band rate of income tax for those earning over £100,000.
To those who say that such a tax would make Britain uncompetitive, I respond: show me the evidence. All major European countries have top rates of tax at the 50 per cent level at least and some higher. In the United States, by the time state income taxes are added to federal taxes, very few states have a top rate of income tax as low as 50 per cent. At 1.1 per cent of GDP, Britain spends a lower proportion of its national income on higher education than practically every other advanced industrialised country. The USA, to whose participation rates we aspire, spends 2.6 per cent of GDP on higher education, of which 1.6 per cent is met from government sources.
I do not deny that we need to spend more on nursery education, although I think that for the moment we are spending about as much as the sector can absorb. But I would argue, along with many noble Lords, that such has been the rundown in spending per student on higher education that unless we put in more resources now there will not be any universities for our nursery school children to attend in 15 years' time. Noble Lords also need to understand that in that case, in the first instance under the Government's plans, most of the money comes from the Exchequer.
More persuasive is the criticism that argues for finding some stream of independent funding for the higher education sector, so that it can be isolated from the short-term exigencies of Treasury control. But short of ring-fencing a specific stream of tax, I cannot see how that can happen. However, I would argue that the HFCEs of this world, like the old style UGC, should be given greater freedom to make their own decisions.
What is more, fees or no fees, the higher education sector will be substantially dependent upon the public sector for many a long year. What is particularly hypocritical about that line of argument is that, under the current proposals, which impose a cap on fees that could be lifted only by affirmative resolution of both Houses of Parliament, universities are subjected not only to the vagaries of public sector resource management but also to the whims of Parliament. In the mean time, all our universities will be exploiting as far as they can the one stream of independent income that they have—foreign students. Indeed, one of the perverse effects of the imposition of top-up fees is that in the next few years they are likely to discourage applications from English students for places in higher education and encourage the recruitment of overseas students.
In essence, those are the arguments in favour of the set of amendments that I have tabled. I shall end by explaining each amendment. Amendment No. 39 is the key amendment and would alter Clause 23(1)(a) to read,
"that, in respect of any qualifying course, no fees are payable by any qualifying person".
Amendment No. 40 would eliminate paragraph (b) of Clause 23(1), leaving only paragraph (c), which provides that some point of access has to be in force. Amendments Nos. 43 to 45 would eliminate paragraphs (a) and (c) of Clause 23(3), leaving it open to the funding body to impose penalties if universities fail to comply with access agreements. Amendments Nos. 47 and 48 would eliminate the references to basic and higher amounts in subsection (6). Amendment No. 79 would eliminate Clause 31(1), which establishes a procedure for setting the higher and lower amounts of fees. I beg to move.
I have some sympathy with the amendments tabled by the noble Baroness, Lady Sharp, but I have one difficulty. Although I am with her on the no-fees policy, I am not entirely with her on increasing income tax to 50 per cent. Fortunately, it is not for me to respond to that; it is for the Minister, as it is his Bill.
I am concerned about one aspect of the amendments: they would leave the universities subject to an access agreement under OFFA, which is the part of the Bill that concerns me greatly. I cannot support the amendments, but I look forward to hearing the Minister's response to many of the points that the noble Baroness has made on fees. I shall not repeat them for the obvious reason that we wish to make progress this afternoon.
Perhaps I may speak very briefly. I shall not repeat my argument in response to the amendment tabled by the noble Lord, Lord Renfrew, that to seek an after-graduation contribution on an income-contingent basis was equitable. I have not moved from that opinion. However, in response to the noble Baroness, Lady Sharp, having seen how much Universities UK says it needs—an extra £8.7 billion—perhaps we need also the money that she talks about.
Yes, indeed; but it is a lot of money. From what I know of Universities UK, we must watch out for the next round, because it asked for an extra £8 billion in the last round. Universities are in sore straits over funding. Here is an equitable means of seeking some relief from their present predicament, and I think that we should take it.
I cannot support these amendments because I fear that they would leave the universities in the worst possible position: no sign of extra cash coming down the system that is clear and unambiguous and, at the same time, an extra layer of regulation and bureaucracy. Tying those two together causes real difficulty.
I share the views just expressed by the noble Lord. Of course in an ideal world I would not wish to see tuition fees at all, as I have already said. However, the noble Baroness makes the important point that, even if her amendment is rejected, there will be a striking shortfall between what the universities need and what they will get now. In her reply to the amendment, will the Minister tell us what the Government will do about that? Since there is no immediate prospect of the implementation of the tax rates that the noble Baroness, Lady Sharp, proposes, I predict that the Minister's answer will be that the amendment would result in a colossal shortfall. I would say to the Minister that we will have a colossal shortfall anyway, although the noble Baroness's amendment might double it. Even if it is not doubled, the shortfall will be very large. I wish to hear some words of comfort from the Minister. She made me happy the other evening, but I would be surprised if she made me happy today.
I have not spoken in our discussions on the Bill before, so I should declare an interest as Pro-Chancellor of the University of Birmingham. I shall tell the noble Baroness why I cannot support the amendments.
Most universities—certainly the one with which I am involved—do not wish to become nationalised industries. We do not wish to depend for all our financing on the general taxpayer. Nor do we think that it would be a sound basis, as it has not proved to be a sound basis in the past. So, the noble Baroness takes us up to a high mountain and shows us the many wonderful pastures laid out, after they have introduced a 50 per cent rate of income tax for those earning over £100,000—a move that may be some way off—but, in the end, it is not an attractive vista. The attractions of the Government's proposals, which are not perfect, are that they give us a little more autonomy with regard to the resources that we receive.
It is a pleasure to follow the noble Lord, Lord Hannay of Chiswick, and so many other noble Lords who have made important points on what, I presume, are the wrecking amendments to which the noble Baroness referred. I sense a shudder from the Liberal Democrat Benches, but I did not use the term; the noble Baroness used it. I am sorry for teasing, but I cannot resist it.
I am sorry that I will not make the noble Lord, Lord Renfrew of Kaimsthorn, as happy as I made him the other evening. In all our debates, noble Lords in all parts of the Committee have recognised the shortfall that universities face. This is part of the answer, not the whole answer.
I have indicated how university funding will grow over the next few years. We will get to £10 billion by 2005–06, if my memory serves me correctly. It will be additional funding of the kind that the noble Lord, Lord Hannay of Chiswick, suggested, allowing universities to use as they see fit within the context of what has been said about the Director of Fair Access. I accept that it is not the complete answer, but it is progress. It is important to recognise that. I am sure that Universities UK, an organisation that represents the universities, individual institutions and, not least, noble Lords will say clearly and often to us that it is important that we continue to consider what else we can do to support universities.
We should reject the amendments because, as noble Lords have said, they would take away not only what we propose in the Bill, which is additional funding, but the £800 million that universities collect in addition in fees. That would lead to job losses and to cuts in the number of places, and it is not in keeping with the spirit of the Liberal Democrats to want to do that. I know that the noble Baroness has moved the amendment from the perspective of a potential Liberal Democrat government. Their commitments, should they be in power, have been made clear.
I shall concentrate on what I call the art of the possible. It is important that we recognise the number of calls upon the Exchequer and the fact that the things that governments can do across a spectrum of activity are inevitably curtailed by the amount of money available. The noble Baroness should reflect on whether a Chancellor of the Exchequer of Liberal Democrat or other hue would make this area the primary focus for additional spending.
As it is part of the area for which I have responsibility in the department, I have made much play of the disparity between the amount of money that we spend on younger children and the amount spent on students. However, it is true that we spend far less on our youngest children. As I have said in the House many times, we are aware that, by the age of 22 months, the difference in background between children is evident in their ability to achieve. Our desire is for universities to reach out into communities that have no tradition of university education, but universities have been quick to say—rightly—that it is the responsibility of government to ensure that children get the best possible start in life, in order to obtain the educational qualifications that will entitle them to apply to those universities.
For this Government, it is imperative that we see that our funding goes to the areas of government expenditure that need it most. As the Committee knows, the situation is that the annual sum spent per student is about £5,000, whereas we spend £1,775 on a three year-old. The noble Baroness said that we may be at saturation point. I disagree. There is far more that we can do in the Sure Start programme. I will not take up the Committee's time, but I hope that I have made that point clearly.
It does not provide much comfort for the universities to assume that a Liberal Democrat Chancellor of the Exchequer would make them the first port of call. I do not believe that that would necessarily be the case. It is important that we go back to where the noble Lord, Lord Dearing, came in on the matter of who should take responsibility for paying. He said that it should be a combination, with society, in the shape of government, paying the most, but we should also recognise that, as we have said, university students gain a great deal from a university education. We should look elsewhere—to industry, endowments and so on—to see what more we can do to support universities. That is important for universities. On that basis, I hope that the amendment will be withdrawn.
I thank noble Lords who participated in the debate. I am sorry that more did not support me, but I must, like Mandy Rice Davies, say, "They would say that, wouldn't they?".
It is appropriate that there should be one party in the Chamber that says that there is an alternative. Most noble Lords who are connected with universities have swallowed hook, line and sinker the view that the Government and Universities UK have taken; namely, that there is no alternative. We have argued consistently that there is an alternative. Funding universities from the public purse, from taxation, is a feasible alternative. We are not a highly taxed country, and an extra band of income tax would not be impossible to consider or live with. The Committee has rejected that notion, and I take that on board.
The noble Lord, Lord Hannay of Chiswick, said that universities did not want to be a nationalised industry: they are already. Whether they like it or no, they will remain a largely nationalised industry. They will remain substantially dependent on the public sector for financing. There will be no real alternative to that. We cannot have it both ways. It cannot be argued that universities are not under the control of the government, while rejecting what we say about the cap being lifted as soon as it can be. It will not. The Government control the cap completely.
I return to what I said: there is a degree of hypocrisy. I understand what has been said, but my job, as an Opposition spokesman, is to point out that there is a viable alternative. It works in some countries; the Scandinavian countries have a system whereby universities are generously financed by the state. It works. In some of those countries, there are extremely highly achieving universities.
We are contemplating a world that is, in many senses, different from the current one. We are contemplating a world in which there is a more open university system. This morning, we talked about the concept of the climbing frame for e-learning and about the ease with which people will move in and out. Those issues are for another day. I am sorry that I did not find more support in the Committee. In the mean time, I beg leave to withdraw the amendment.
moved Amendment No. 41:
Page 9, line 18, at end insert ", and
( ) to ensure that, in respect of any qualifying course, no qualifying fees are charged to any eligible student for any academic year beyond the first three years of a first degree course."
I think it was the noble Lord, Lord Rix, who first raised the subject of fairness. This amendment will ensure that under Clause 23(1) the governing body of the relevant institutions will not be able to charge fees above the basic rate for any qualifying course beyond the first three years of a first degree course. In other words, I propose that those studying for courses such as architecture, veterinary sciences, dental sciences and medicine will be able to complete any extra years required without having to bear the cost of the fees.
I am grateful to the British Medical Association for raising this problem with us. It has calculated that the measures contained in the Bill could lead to a medical student in London incurring a maximum debt of just over £64,000. It claims that the Government have not produced any figures whatever to disprove that, and it argues that a student's family with a residual income of £20,000 will be committing itself to 91 per cent more debt if the student chooses to study medicine rather than follow a three-year degree. I should be grateful if the noble Baroness could enlighten me as to her thoughts regarding the position of such students.
The increased levels of debt that medical students will incur will cause them to think twice about studying medicine, regardless of their social background. Laboratory-based subjects, such as medicine, are among the most expensive courses for a university to provide, with teaching costs per student of around £10,500 a year. Thus, those universities are likely to charge the maximum fee of £3,000.
It is true that in his wind-up speech at Second Reading the Secretary of State announced that a "gateway to the professions" review will begin, but only after the Bill is passed, in order to assess the impact of variable fees on such professionals and to look into this area further. I argue that we should put this amendment in place to ensure that, in a comparison of the effect of variable fees on such professions, they are on a par with those for other undergraduate courses and between themselves in so much as they can be for this review. We should not wait up to seven years for a medic fully to complete his or her training before a full and proper assessment can be made of the detrimental effect or otherwise of variable fees.
Architects are in much the same position. The figure of £30,000 of debt incurred by one of my noble friend's research assistants, to whom I referred the other day, would be about half what she would need once this Bill is enacted, should she elect to follow one of these professional degree courses. As I said, not being in the public sector, architects are as badly off, if not worse off. They have to study for five years in the institution and for two years in practice before passing their professional exams.
I calculate that the average debt per student will be at least £57,000 in London. I accept that that figure may be a little lower elsewhere. But it is not generally realised that during the two years of practical experience that they must undertake as part of their professional course, they are very badly paid. I believe that the average is about £10,000 a year. They have to subsidise their own living costs, and therefore the £57,000 debt that I mentioned is probably on the modest side.
Whatever happens to student fees once the Bill is on the statute book, I am concerned that all students, whatever they choose to study, should be treated equally and fairly. I beg to move.
I support the point made by my noble friend, although I am not sure that I fully agree with the solution that he proposes. As many noble Lords will know, quite a few first degree courses in English universities are now four-year courses. In a number of universities, that is certainly true in the case of the sciences and engineering. That means that many students on those courses will be faced with a heavier debt burden in terms of fees, and no doubt in terms of maintenance. These are sometimes the very subjects that the Government are trying to encourage. In fact, it is not so long ago that I read about a Minister—presumably in the Department for Education and Skills—who said that the Government were giving consideration to waiving, or diminishing in some way, fees for courses in physics. Noble Lords opposite will be aware of the dire situation of applications, and consequently of admissions, in subjects such as physics and chemistry. Therefore, there will be very serious consequential end products when this Bill is implemented.
My noble friend made the case for medicine. Although some medics may well earn a very healthy income when they graduate, I am not certain that they will earn that much more than lawyers, for example. Some lawyers complete their graduation procedures—certainly their initial procedures—more rapidly than medics. My noble friend also mentioned architecture. That is a very good case in point. As I understand it, the current level of unemployment for architecture graduates is fairly high. One can predict a complete collapse of applications in architecture if the point made by my noble friend is not taken on board.
The only thing that prevents me giving my wholehearted support to the amendment is that, as on a previous occasion only an hour or two ago, the issue of university income has not been sufficiently considered. The consequence of this amendment is to deny additional fee income to the universities. If my noble friend had said that students should be obliged to pay only three years' worth of tuition fees for their first degree, or whatever the correct terminology may be, and that, beyond that, it would be paid by the Government, the consequence of the amendment would not be a reduction in the income to universities. I disagreed only a few moments ago with the amendment of the noble Baroness, Lady Sharp, precisely because the consequence would be a striking reduction in university income with no evident compensation in the near future, despite her understandable aspirations to be the Minister for Education in just a couple of years' time.
I very much take the weight of the point made by my noble friend, but I do not think that the answer is simply to say, "Let the universities take the pain and pay the difference" because, as we have heard, and as the noble Baroness opposite has more or less acknowledged, they cannot afford to.
Does my noble friend accept that I am trying to amend the Bill, not the Red Book?
I hope that when the noble Baroness replies to the debate she does not simply say that everything will be all right after the review. This is basic to the Government's policy. They are talking of fees for students. Many students have to study for more than three years and all the circumstances prevail that have been mentioned. The Bill simply must not leave Parliament with those people uncatered for. It is no good hiding behind a review. I hope that the noble Baroness does not do that.
As with Amendment No. 37, my initial reaction is that the amendment has noble aspirations. However, on reflection I am not convinced that in the long term it would be equitable. I know that architects are not paid as well as general practitioners. I am glad, for example, that noble Lords have repeatedly referred in the discussions on the Bill to the fact that academics are not adequately paid. However, I do not think that that is the way to deal with the problem. Therefore, I am reluctant to support the amendment.
I should like to ask for a point of clarification. I do not know whether this should be addressed to the noble Lord moving the amendment or to the Minister. I am someone who was sensible enough to go to a Scottish university, rather than to an English one, which had a four years honours course and where an MA is awarded for work rather than for money. I should like to know whether, if I had a fifth child and she or he wanted, from a Fareham base, to study at a Scottish university where the four year honours course is de rigeur, that child would benefit from the amendment.
Very briefly, it is my impression that in other countries such as the United States where students continue to pay fees for a particular course as long as they are at university, this has not acted as a major disincentive for entry to a particular course. When the noble Baroness replies, perhaps she might address what evidence there is from other countries which have such experience. I think that would help in consideration of the amendment.
First, perhaps I may say to the noble Baroness, Lady Carnegy, that I do not intend to hide behind anything; that is not my wont. However, I shall be talking about the review because it is important in this context, not least because the noble Lord, Lord Winston, has just challenged me to produce evidence from other countries. I am not sure whether I shall be able to do that in the course of my reply. None the less, it is important to look carefully. These are important issues and I am grateful to the noble Lord, Lord Skelmersdale, for ensuring that we are debating these issues because they are of great significance.
I understand the issues raised by noble Lords about considering the package of support, particularly in the context raised by the noble Lord, Lord Skelmersdale, of architects and doctors or medics. But, as the noble Lord said, there are other professions in this context too.
I shall speak briefly about the five main groups which have been mentioned: education—interestingly, education was not raised but noble Lords would be astonished if I did not raise it—medicine and dentistry, which are linked; architecture, and veterinary medicine. I shall speak first about what happens in education because it is important to give a flavour of what is being undertaken. This is not about leaving things until the legislation takes effect; it is about looking at what happens now.
Those who train as teachers by taking a postgraduate course do not have to pay the standard fee for that course and we provide incentives: a £6,000 training bursary to students on postgraduate certificate of education (PGCE) courses and a £4,000 golden "hello" for those who qualify as teachers in priority subjects, which is about one-third of those students. The department is spending about £230 million in 2003–04 on those measures and we believe that that is working. Noble Lords may be interested to know—I was surprised at the figures—that there are 50 per cent more teachers training than there were five years ago, which is an indication of the popularity of teaching.
I turn to medical and dentistry students. As noble Lords will know, my department has responsibility for fee support for English domiciled medical and dentistry students in years one to four. During that time those students have the same support as other eligible higher education students. They also benefit from the additional week's loan entitlement when their term lasts longer than the usual 30 weeks.
Currently, medical and dentistry students have their fees paid for the fifth year and, where there is one, the sixth year of their courses by the National Health Service. In addition, as noble Lords will know in years five and six they may also receive a means-tested NHS bursary of up to £2,703 in London. They also remain eligible for the lower level of student loan for living costs.
We do not anticipate that there will be a significant effect on applications for these courses as a result of the introduction of higher fees, particularly when we look at the existing situation. Applications to medical schools have gone up since 1998.
The noble Lord, Lord Skelmersdale, talked about the BMA £64,000 debt figures. There are some issues about how those figures were arrived at. We have calculated that the maximum a six-year medical student will owe is likely to be around £40,000. Of course many students will owe far less than that because of the grants and bursaries.
The average figure for newly qualified medical graduates in hospital posts is about £35,000 per annum. They would be paying back £34.62 per week on the basis of the proposals. I add that at the moment they pay £43.27. In that sense they would be paying back a lower amount.
As we have said, we shall continue to monitor demand for and take up of places on medical courses after the introduction of fees and we will consider measures to safeguard the supply of students.
The noble Lord focused particularly on architecture. My next comments will be on that because I believe it is very important. Currently the five-year course of undergraduate study is covered by the same package of student support as that of other full-time students. Interestingly, architecture features one of the biggest increases in accepted applications. Architecture courses have seen a rise of 10.3 per cent in the last year, which demonstrates its popularity as a profession .
Once an architecture graduate starts working after his or her course, he or she would be no worse off in terms of monthly repayments. In fact, an architecture graduate on £18,000 per year, which I believe is the figure for an architectural assistant, will be £37.50 per month better off than he or she is now.
I recognise noble Lords' concerns about the professions. We recognise that we need to ensure that we measure the effect on the professions and safeguard them.
Perhaps I may interrupt my noble friend to ask her to clarify something, which perhaps many understand but I do not. Are these repayment figures on gross income or on net income after tax?
It is on gross income. I hope that answers that question.
The question I thought was when you are earning £15,000 a year, which is a gross figure, that would be the amount that would be paid. If that was not the question that the noble Lord asked me then I shall deal with the one he did ask. But the gross figure when one starts to repay is £15,000 plus. That is the question I thought the noble Lord asked. If it was not, I am quite happy to answer his question appropriately.
The important purpose of Sir Alan's report is to look at sustaining and improving recruitment opportunities for graduates.
I am grateful to the noble Lord for clarifying that. I thought I heard a different question, which is whether we were describing the £15,000 as net or gross. It is gross. I hope that clarifies the position. I am grateful to the noble Lord, Lord Forsyth, for doing so.
If the noble Lord wishes to look at it in that way then he would not be incorrect. Actually, it is quite common to look at net figures in terms of the repayments. I do not think I have misled anyone in what I have been saying. Indeed, I suspect that everyone was aware of what I was trying to say. But if my noble friend has further problems with that, I shall be very happy to write or to discuss the matter with him.
The purpose of Sir Alan's review is very important. It will be reporting by mid 2005. That is also important in the light of the comments of the noble Lord, Lord Skelmersdale. It is very important that the review takes place. It is looking at the recruitment and sustaining of the professions. Sir Alan is well placed to be able to do that.
However, that does not mean that in the mean time employers in both the private and public sectors would not be trying to ensure that we do not deter students from joining the professions, which are so important. It is very important in that context to refer back to what the noble Lord, Lord Renfrew, said about a misinterpretation with regard to physics. It was not the Government but some institutions that were beginning to think about variability. The point about variability, as I have said before in this Chamber, is the ability to vary fees downwards, so that universities have the opportunity, if they so wish—and it is entirely up to them—to recruit more physics students and to vary the fee downwards.
That is an important part of setting universities free to think about opportunities. The disadvantage of a fixed fee is that it is a fixed fee, and that is it. But there are opportunities to do things that are slightly different.
Before the noble Baroness sits down, I will develop a point made by the noble Lord, Lord Renfrew, with respect to physics and engineering, but more generally with respect to the natural sciences, where there are four-year courses. These are not areas where recruitment is buoyant; they are areas where recruitment is difficult because of the numbers of qualified sixth formers. They are also areas where costs of provision of courses are high. They are important to the country and to schools, because these are areas where we desperately need more teachers who have studied the subjects in depth. They are also areas where many universities have closed their departments. King's College, London has closed its chemistry department. A recent casualty is Swansea, which is closing its department. We cannot wait for a review before we know what the terms and conditions for students studying the natural sciences on four-year courses will be.
I am not suggesting that we have to wait for a review to look at the terms and conditions. We have set this out clearly. As the noble Baroness will know, many of the courses that she describes are three-year courses. We are clear about the package of student support that we have offered to students. The noble Baroness made an important point. As Minister last year with responsibility for science, I was much taken in talking to people in chemical engineering, civil engineering, physics, and other sciences to ensure that we are able to recruit the right numbers of students with the right kind of qualifications into the right professions.
That is why in teaching, for example, we offer packages to try to encourage people to think about going into those areas of teaching where we have shortages. That is very important, and it is important to the private sector as well; it is not just a public sector phenomenon. These are issues that are in our minds at all times, in our discussions with universities, and universities in their discussions with other bodies. The point about Sir Alan Langlands's work is to focus specifically on what more we would and should be doing. It is important to allow that work to take place, but it is in conjunction with public, private and voluntary sector employers. It is not just about what the Government do.
The noble Baroness could ease our minds considerably if she acknowledged that some of these longer courses are in fact the most valuable in terms of the professions and the subjects taught. There is the corollary, as mentioned by the noble Baroness, of the closure of the science department at Swansea. That is because of the proliferation of the less worthwhile courses. An assurance that these longer, more worthwhile courses will be safeguarded—and similarly that the proliferation of the less worthwhile courses will be discouraged—would be reassuring.
It is not for the Government to discourage universities from putting on the courses that they think are appropriate. I would not go as far as the noble Lord, Lord Roberts, in determining that long equals better. For example, in this country we are desperately short of social workers, who have three-year courses. We really need to enhance that profession, for all the reasons that have been too evident in recent times. Noble Lords know well that those are three-year courses, and they are important to this country. There are many two-year foundation degrees that are important. It is not that long equals important, but I accept the critical importance of some of the professions. I do not dispute that for one moment. That is why the NHS plays the part that it does in paying off fees. That is why we are looking to ensure that the professions have the opportunity. We should value that.
We would not wish to support the amendments for the reasons that have been given. We do, I hope, wish to engender a sense in the House that we recognise the value and importance of the professions, and that as a government we will work with the professions and with the universities, also through Sir Alan Langlands's review, to ensure that we do as much as we can to support, sustain, encourage and grow in all the professions—however long the courses are—to ensure that we have the right numbers of people that we need to create the society that we all want.
Before my noble friend the Minister sits down, I advise her to address, either now or later in the debate, the question that was raised on the position of English-domiciled students studying in Scotland, and Scottish-domiciled students studying in England. This question was raised by the right reverend Prelate. Does she have a comment on the pernicious argument that is being heard in Scotland that somehow Scottish universities should limit the number of English-domiciled students attending Scottish universities?
The noble Lord will understand that I would rather leave a discussion of the second issue until a later stage, when we will have the opportunity to debate that, either today or at another time, but certainly during the passage of the Bill. I know that the noble Lord, Lord Forsyth, is very keen to ensure that we do. At the present time, the Quigley arrangements are in place, which is that the fourth year is paid. Fourth year fees are waived for English students in Scotland. The Scottish Executive is considering the future position and we are expecting a report shortly.
Many of us will be influenced in our attitude to the Bill by the view the Scottish Executive takes, and we will wish to have that position resolved before we have to take a definitive view on the Bill.
That may well be the case, but it is for the Scottish Executive to determine that.
Before the noble Baroness sits down, might it not have been very much simpler if all these matters had been resolved under the "Sewel procedure" and then we would not be in the position where we were having to wait for the Scottish Executive?
While we are on the subject of Scotland, have the Government talked to the Scottish universities and, indeed, the Scottish Executive, about their present system and how they deal with fees which are paid later on courses which are four years or more? There is a system which has worked up to now and it will have to be changed because of the Bill. There is a system which has worked regarding the fees for doctors, architects, and so on. Has the Minister talked to the Scottish Executive? Or if she cannot wait for that she could talk to the noble Lord, Lord Sewel, who is Vice-Principal of the University of Aberdeen, who knows very much more about that than I do.
I have deep reluctance about getting into a debate on Scottish issues at this stage, for reasons that the noble Lord, Lord Forsyth, knows. But there are always dialogues about what is happening in the UK and Scotland, and I argue that we have in place some very good mechanisms for courses that are four years and beyond. What we have asked Sir Alan Langlands to do, in the light of our new proposals, is to look at a range of issues concerning sustainability and improvement for those we wish to attract into the profession. I believe that is the way forward.
I am extremely grateful to all noble Lords who have spoken and particularly, perhaps, to the noble Baroness, Lady O'Neill, for putting her finger on the point I was trying to make, which was about the review and the timing of the review, and things like that. I am grateful too to my noble friend Lord Renfrew for his—how can I describe it?—half-hearted support for my ideas.
The question by the noble Lord, Lord Winston, was very fair. I am afraid I cannot answer it; nor indeed could the Minister. But I am sure that from one or other source he will get an answer in due course, probably in writing.
As to the English/Scottish border issues, I agree with the noble Baroness, Lady Ashton, and my noble friend Lord Forsyth. If the Committee and individual Members of the Committee would be prepared to contain their souls' impatience for what I hope will be only a little longer, all—or perhaps not, but certainly a certain amount—will be revealed.
The problem with the Minister's arguments was that she was mixing up two things. If this debate were being conducted in a different atmosphere—and perhaps in a different place—I might have commented on the Government producing subsidies, even bribery, to get people to work in the public sector, in the teaching profession, in the university and academic world, in medicine, and so on. But although it was the BMA that raised the problem with me I am much more concerned with those professional courses that rarely lead to public sector jobs. Therefore, I shall have to consider carefully what the Minister said.
The Minister did not tell me when the department is planning to publish its assessment of the new fees system—either her own department or the Department of Health. Nor did she indicate how long the "gateway to the professions" review will take and when it will report, although she told me who was undertaking it, for which I am grateful. It may be my fault for not hearing her say it, but given that we are more and more pressed for time I do not expect her to answer now. I shall read Hansard carefully and if necessary correspond with her before deciding what to do in the future. I am grateful to all noble Lords who have spoken. I beg leave to withdraw the amendment.
moved Amendment No. 46:
Page 10, line 20, at end insert—
"( ) In imposing any condition under this section, the funding authorities shall have regard to the position of part-time and mature students."
In moving the amendment I shall speak also to Amendments Nos. 83, 84, 88 and 104. Amendment No. 46 is a small and seemingly innocuous amendment. Its main purpose is to add to Clause 23 that for any conditions imposed by the English funding bodies under the clause the same funding authorities shall have regard to the position of part-time and mature students. All the other amendments in this group relate to the position of part-time and mature students.
I had hoped that the noble Lord, Lord Rix, would be able to move his Amendment No. 66, but he has unfortunately had to leave for another engagement. I believe he has asked for his amendment to be degrouped and will speak separately to it later.
Because your Lordships have heard my voice rather often I had hoped that other noble Lords, including the noble Lord, Lord Rix, would take the main part of the debate. I do not want to spend too long explaining what it is all about because I know that others wanted to say a great deal. But I shall set the scene. As many of your Lordships know there are 1,800,000 students in Britain today. Of that 1,800,000 students, 800,000 are part-timers; 42 per cent of the students in Britain today.
We have two specialist institutions for part-timers. The Open University, which is far and away the largest of any of our universities, has over 200,000 students. Birkbeck College, which is a specialist college for part-timers within the London University complex, has about 3,000 students. But as is apparent, other universities, particularly but not exclusively the post-1992 universities, also cater extensively for part-time students.
Yet in the Bill there is only one mention of part-time students. That is in Clause 38, where it is proposed that all the provisions should not apply to part-time students. But, as I say, there are very large numbers of such students in this country.
When we were discussing the 50 per cent target we referred to the expansion of universities, to the development of foundation degrees—I, for one, am sorry that we have dropped the term "HND" in favour of "foundation degree"—and to the fact that many of those whom we are now trying to attract to degree level education and level four training of one kind or another will be part-timers. It is therefore extremely important that we consider the position of part-timers within the package of proposals being put forward.
Most of these people will be doing precisely what the Government want them to do—that is, improving themselves; upgrading their skills and working for vocational and technical qualifications. Many of them will enter two-year courses as stepping stones to further qualifications. Given the emphasis that the Government place on this new part-time route to higher education and wider participation, it is illogical that they should ignore part-time students in the Bill. As I said, the only reference is in Clause 38(1), which excludes part-time courses from consideration. In addition, there was hardly any mention of part-time students in the White Paper.
It is a myth that most part-time students are funded by their employers. Only one-fifth are funded by their employers; four-fifths pay their own fees. As has been remarked, part-time students are already paying fees up front and qualify for little, if any, support towards their expenses while they are studying.
As I said, there was hardly any mention of part-timers in the White Paper; their fees are paid up front and they have little access to loans. Whereas full-time students are now being offered the facility of substantial loans which have to be paid back after graduation, part-timers have to pay everything up front.
This catches some institutions and part-time students in two ways. Currently the average fee is £570 a year. If there is no increase in the fee level, institutions with part-time students will not gain the increased income of other universities and will be disadvantaged in that respect. As far as the students are concerned, they will have no access to low-interest loans. There is a means-tested £250 grant for part-time students, but many of them have no access to that grant and receive no help with living costs. Given the generous terms now being offered to full-time students, many people may prefer not to study part-time and switch to being full-time students. So the present proposals discriminate against both institutions and part-time students to some extent.
Given the fact that there will now be fees and that living costs are rising, many students who wish to follow the part-time route may feel that the present package discriminates against them and be dissuaded from taking it. Rather than taking on debt, they may feel that they do not want to move into higher education at all.
In conclusion, perhaps I may make one suggestion as to what might be done for part-timers. As I have indicated, four-fifths of part-time students are paying their own fees. Those fees are paid from taxed income. In most cases, they are paying those fees in order to take courses that upgrade their skills and improve their qualifications. Where that is the case, would it not be reasonable for the Government to grant them tax relief on the fees that they have paid? Will the Government consider that idea? Given that employers are able to write off fees as an expense against their tax liabilities, it would be quite reasonable perhaps for individual students to be able to do so too. With that thought in mind, I beg to move.
I have tabled two amendments in this group. Amendment No. 84 is limited in its scope, but it would ensure that part-time courses are included in the plans that higher education institutions have to prepare under the new access arrangements. It would not mean that universities and other institutions have to include part-time courses, but where they do make such provision, those courses would be regarded as a part of their access programme.
My second amendment, Amendment No. 105, is more extensive in its scope. It would remove the exclusion of part-time education from the provisions of the Act as set out in Clause 38(1). The amendment would provide for the inclusion of part-time courses that last for at least one year and/or part-time courses that do not exceed twice the length of full-time courses. That would enable most university part-time courses to come within the scope of the Bill and enable part-time students to have the same financial provisions on a pro rata basis as full-time students.
In moving her own amendment on this issue, the noble Baroness, Lady Sharp, went into great detail about the disadvantages faced by part-time students when compared with full-time students. I do not intend to repeat what she said, but I endorse completely the case that she is putting forward for the inclusion of part-time students. After all, 42 per cent represents a high proportion of those in higher education. If, as we are led to believe, part-time study is to become a major part of widening access, we surely need to remove the distinction between the two groups.
The institutions providing part-time courses need the same support for those courses as they do for their full-time courses. Again, as the noble Baroness, Lady Sharp, has indicated, the institutions which concentrate entirely on part-time study—like Birkbeck College and the Open University—are at a particular disadvantage. Birkbeck in particular feels there is a danger that, if it were to introduce a pro rata increase in fees, its students—who largely pay their own fees—would withdraw from higher education altogether. That is something we do no want to happen. I would like the Minister to comment on this anomaly in the system.
I share some of the concerns that have already been expressed about the differences in treatment between part-time and full-time students. I hope that noble Lords will agree that OFFA ought not to micro-manage institutions' widening participation strategies. OFFA should be concerned with widening participation and efforts to widen access generally, and not with reference either to particular courses of study—which is the subject of other amendments—and which I am very concerned about, or particular modes of study, such as part-time.
There is nothing in this legislation that would prevent institutions from making specific reference to part-time students in their plans. However, neither is there anything to require it, and I think that is the right approach. I note too that efforts to reach out to potential students are likely to impact on students' decisions to embark on both full-time and part-time courses. In terms of outreach activities, it is as likely that part-time student numbers will be increased as full-time students.
Noble Lords will know that Universities UK has pressed the Government for movement towards greater equity of treatment between full and part-time students. Part-time students account for 40 per cent of all students in higher education. That proportion is bound to increase, as is movement—and again my noble friend Lady Lockwood has mentioned this—by individual students from full-time to part-time courses and vice versa, as current trends already show. I believe that point has been consistently made by Members of this House, and as I understand it, the Government have taken note of it. In fact, I recall a helpful statement by the Minister in another place, where he recognised that the Government had some way to go. However, I do welcome that statement and I welcome the recognition that there is more to be done.
To be fair to the Government, they have begun to move in the right direction by announcing real improvements to the support available to part-time students—including the introduction of grants, albeit at a low level. I join noble Lords in calling on the Government to address this at the earliest opportunity. However, I accept that improvements to the support available to part-time students, including fee support, needs to be made on the basis of evidence. We are rather lacking in evidence about the nature of part-time students across the board. I support the Government's intention to include part-time students in the Student Income and Expenditure Survey, but I think the Government will be judged on whether—once that survey produces its results—they act on the basis of the evidence produced, and come forward with appropriate proposals.
One other point is that the costs for teaching part-time students have not been fully recognised in the English Funding Council's funding methodology. I know that that has been a cause of great concern to universities, particularly those with large numbers of part-time students. Noble Lords, notably the noble Baroness, Lady Boothroyd, have spoken eloquently on behalf of the Open University, and my noble friend Lady Lockwood has also referred to the OU and to Birkbeck. I warmly welcome their staunch support of those institutions in this House. I also welcome the review of the HEFCE funding methodology which the funding council is currently undertaking. Can the Minister offer an assurance that the results of that review will be taken into account when the Government consider the funding of the sector in the next spending review?
I do not wish to speak to the amendments and I wish to be very brief. If I recall, more people spoke on the part-time issue at Second Reading than on any other. They and many outside this Chamber will be hoping today to hear some further enlightenment from the Minister on the direction in which the Government's thinking is going.
I yield to no one in my admiration for part-time students but, in my experience, they are an extremely heterogeneous group that includes the most prosperous students in the country. That is because if one is doing a job that pays reasonably well, one will think twice about becoming a full-time student, but one may have the energy to be a part-time student. Time was—not very long ago—when some universities, such as the University of Essex, at which I then taught, had a rule that part-time study was open only to those in employment who could get minor release from their employers for their study.
We should not imagine that part-time students are, without exception, among the needier category of students. I hope that their needs will be addressed but I do not think that it can be done, as it were, in passing in this legislation, because of the complexity and diversity of the category's composition. The same goes for mature students, who often include people doing a second BA, having perhaps already been publicly funded for their first BA and now thinking that they will move their interests into a new field of endeavour.
Of course, there are extremely needy cases among part-time students, as among full time-students. That often owes to caring or childcare obligations. However, there are very complicated issues about the incentives for part-time and full-time study, so I hope that we will not hurry in that area.
On the other hand, the Open University, on the council of which I had the privilege of serving for 12 years, as well as serving on its finance committee, has a very large number of students who either do not work or earn low salaries. The Open University takes a great deal of trouble to test the market when it sets its fees. It has variable fees, and they vary very much according to what it thinks that potential students will pay.
I had not prepared a speech about the Open University because I hoped that the noble Baroness, Lady Boothroyd, who is its chancellor, would have done so. However, she has not been able to attend this afternoon. The noble Baroness, Lady Blackstone, is not in her place either; she knows the subject very well because of Birkbeck College. I cannot fill in all the details at the moment, but I note that the Open University is very anxious that there be some first-aid measure in the Bill to carry it through until the review is complete, so that it can take advantage of it.
The Open University has estimated what would happen if it set its fees at £1,500 per part-time course, which would match the £3,000 for full-time students. It now has 140,000 undergraduates, and it would have only 14,000 as a result of those fees, taking into account the recent announcement of grants. There is a very serious problem for the Open University. Everyone in the Committee knows that it is hugely important in our undergraduate provision. It would be disastrous if the Bill, in attempting to help full-time students, had that effect on the Open University.
I hope that the Government are taking the matter very seriously. Representatives of the Open University have apparently met Ministers twice so far, and have not had much help. I do not believe that the Government realise quite what they are doing to the Open University with the Bill. It is such a success, with its variable fees, that it is easy to think that that success will continue. However, the Bill will have an enormous effect on it. I hope that we will see some amendment before the Bill leaves Parliament.
The question of funding for part-time students was eloquently raised, as we have heard, by the noble Baroness, Lady Boothroyd. She highlighted the fact that despite this Bill's proposal to raise £1 billion, not one penny of that money will go to institutions such as the Open University or Birkbeck College. Part-time students make up just over 40 per cent of all students in higher education, almost all of them being aged over 21.
This seems to me just another example of a lack of joined-up thinking by the Government. There is a technical flaw in the Bill: the Government cannot impose top-up fees on the higher education institutions who cater for full-time students without giving special consideration to the treatment of part-time students. They must not just pay the lip service that has been paid so far. This is the only way to ensure that they are not financially disadvantaged in the marketplace, leaving their students swimming in a pool of uncertainty.
The Universities' Association for Adult Continuing Education (UACE) argues that this Bill is inequitable because it excludes dealing with the issue of part-time students. As pointed out by so many noble Lords, there are major concerns that higher education institutions that teach part-time students will not have access to any of the new moneys that will flow via this Bill. The Government have proposed a review of funding to address the imbalance between part-time and full-time students, but as so many noble Lords have said, it is unlikely to take effect before 2007 at the earliest, and that is too far away.
"there is much that we have to offer the Open University in the passage of this Bill,"—[Hansard, 19/4/04; col. 15.]
We understand that, despite meetings, there is currently nothing realistic on the table. Under the Government's current proposals on student finance as outlined in the Bill, from 2006 full-time students will pay back their fees after graduation. This is not true, however, for those on part-time courses. The student support arrangements are changing from 2004 to give them means-tested grants of up to 50 per cent of the full-time fee—estimated at £575. Those on incomes of between £14,600 and £21,487 will get partial support. Part-time loans are being replaced by a course grant of up to £250, and institutions can at their discretion waive part-timers' tuition fees. Unlike full-time courses, the fees for part-timers already vary according to the course being studied.
There will be no facility for part-time students to repay their fees at a rate they can afford, or benefit from interest-free repayments. Employers will help some students, but not many. About 16 per cent of Open University students receive financial help from their employers. Surely it is in the interests of the economy that people are enabled to study flexibly on a part-time basis—because they can do so from home while continuing to work and, maybe, maintaining a family.
Professor David Latchman of Birkbeck College argues that if the Government and the Higher Education Funding Council for England are serious about part-time study, they should "develop a funding system that supports it".
So I ask the Minister: can she tell the House what her department has done to ensure that the resources available to the Open University to teach part-time undergraduate students are not less than those available to other institutions teaching full-time students? Can she comment on how she plans to increase unit funding for part-time students? What progress have the Government made on putting together an alternative "first-aid" solution, as suggested by the noble Lord, Lord Dearing, as an interim measure while awaiting this 2007 review?
This is a very important issue that highlights the one-sided priorities of this Government, and I look forward to hearing what the Minister has to say on this issue.
I am pleased that we have the opportunity to discuss part-time students. I say immediately to the noble Baroness, Lady Seccombe, that I am equally interested to hear her proposals on behalf of her party for part-time students in higher education. I agree that they are an important group of people and I hope to offer the noble Lord, Lord Dearing, further enlightenment—but the hour grows late and perhaps it will not be as enlightening as he would have hoped.
I am sorry that we do not have with us today noble Lords for whom this is an issue of great passion and interest. As the group contains amendments tabled by noble Lords who are not present, I suspect that this may be the first of several debates on the subject. Perhaps I may therefore put on the record a reply which I hope will be of value overall, recognising that we may return to the subject during the Committee stage and at later stages of the Bill.
Members of the Committee have indicated the important work of the Open University, and my views are in accordance with theirs. This party on this side of the Committee is rightly proud of the Open University because it is a great institution. I am sorry if it does not feel that my meetings with it were of great value. I understood from the noble Baroness, Lady Boothroyd, when she left the meeting in which I took part with my right honourable friend the Minister for Higher Education, that she was satisfied with what we had discussed. If that is not the case, I shall endeavour to do better next time. Dialogues are in place and it is important that we continue to talk with the Open University and other institutions. I am sorry that I misinterpreted the situation.
I also attended meetings in your Lordships' House with NIACE, referred to by the noble Baroness, Lady Carnegy, and am keen to continue that dialogue. My door, as they say, is open on that basis.
The Open University accounts for only 20 per cent of the numbers of part-time higher education students in the UK, so it is right to indicate that 80 per cent of students are not of the OU. Therefore, this is an issue that we need to think of more broadly with institutions such as Birkbeck and many others. It is being said by your Lordships that not enough is being done to support students and I have sympathy with that view.
I want to be clear from the beginning where we are with our support for part-time students. In my discussions with noble Lords, including the noble Baroness, Lady Boothroyd, I was able to explain for the benefit of noble Lords a little more about what we are currently doing. It is worth remembering, too, that as recently as 1997 there was no financial support of any kind for part-time students. I am therefore pleased that we have introduced measures designed to help part-time students, beginning with the fee-waiver schemes managed by universities. We expanded the scheme in 1999–2000, as we did the hardship fund scheme. Part-time students as well as undergraduates and postgraduates who were in financial difficulties were entitled to some help.
In 2000–01, statutory support for part-time students was introduced. As well as being eligible for a loan to cover course costs, part-time students also became eligible for disabled students allowances. That is important in enabling those with disabilities to access a range of non-repayable grants.
In the Teaching and Higher Education Act 1998, which is familiar to the Committee, a specific amendment was made to ensure that part-time students applied to different learning courses as well as traditional study—an important area, I would argue. This meant that students at the Open University, studying for the first time, and other institutions which provide distance learning could receive statutory financial support.
But as my right honourable friend the Minister for Higher Education said in another place, the Government have not paid enough attention to part-time students in the past. It is changing and I hope that noble Lords will recognise the steps we have taken so far.
The White Paper in 2003 made the first commitment to statutory fee and course grant support—as opposed to loans—for part-time students. These new grants will come into force in the academic year 2004–05. This new package includes the fee grant of up to £575, which replaces the discretionary fee waiver scheme, and a course grant of up to £250 in place of the part-time loan. I make no bones about it—the loan system which we introduced in 2000–01 did not turn out to be popular. Take-up rates were disappointingly low. That reflects the fact that part-time students' needs are different from those of full-time students, whose take-up of maintenance loans is very high because they need the money to live on. We must think about treating part-time students equitably, but that does not mean treating them identically, because their needs are different.
For the grants that have replaced fee loans, the income threshold for support is £14,600, which is higher than that which applied to part-time loans and the fee-waiver scheme. Unlike with part-time loans, for which entitlement was assessed on an all-or-nothing basis, students with incomes higher than the threshold will qualify for partial support. A single student with an income above £14,600 and up to £21,487 will be entitled to support on a sliding scale.
Those new part-time grants will give better coverage than the loans that they replace. They are much more attractive because they are grants and no age limit applies—they are available to older students who would not have qualified for the loan. We are also trying to improve the discretionary help available to students through their institution. From 2004–05, part-time students can apply for childcare grants available from the Access to Learning fund. In addition, for the first time those studying less intensively will qualify for support. Students who undertake taster modules will be eligible for fee waivers and course-related costs from the Access to Learning fund, subject to their income.
That is a great deal of improvement over a relatively short time. Of course, we would like to do more, but we recognise that future improvements must target our resources in the best possible way. Before we can plan any changes, we need to know the circumstances of part-time students, particularly their incomes and the costs that they incur while studying. We wish to take steps to address that.
Noble Lords would be concerned to see the Bill go by without having the opportunity to respond. Perhaps I can reassure them that it is true that the fee provisions in the Bill do not apply to part-time courses. However, part-time fees have always been unregulated and will continue to be so, therefore there is no need for the provisions to allow the variability that we propose for full-time courses.
Fee deferral is dealt with in Clause 40, which is not restricted to full-time courses. We do not propose to extend fee deferral to part-time students, as noble Lords are aware. But the Bill's provisions are drafted sufficiently widely to allow us to do so in the future, if in the light of the evidence that we collect we wished to do that.
As the noble Baroness, Lady O'Neill, said, the variety of part-time courses and students is wide. We are conducting another full-scale student income and expenditure survey. For the first time it will cover full-time and part-time students, young and mature, including those at the Open University. That will provide an authoritative study on higher-education students in the UK and in particular will take into account the new package for part-time students introduced this autumn. It will give us valuable data on part-time students that will enable us to consider future student support arrangements. That is a very important aspect.
We have also commissioned through the Open University's Department of Educational Technology a small-scale survey in advance of the main one, which we hope will also help to inform our work. In the light of what Members of the Committee have said about teaching, it is worth saying that the Higher Education Funding Council for England is conducting a fundamental review of how it allocates its teaching funding. As my right honourable friend the Secretary of State announced in another place on
I am very conscious of time, so I shall respond briefly to the amendments that Members of the Committee have tabled. The effects of Amendment No. 46 are not clear. I can see what the noble Baroness, Lady Sharp, wishes to do, but it is not clear that there would be a meaningful legal effect on that basis. On Amendments Nos. 104 and 105, Members of the Committee will be aware that institutions have always been free to determine the level at which fees are charged for part-time courses. It is up to institutions to determine that, and we do not believe that we should regulate part-time fees, as that would impose new restrictions on institutions where there had not been restrictions before. I do not believe that that would be the will of the Committee in any event.
Noble Lords mentioned support for mature students, which is very important. Many of the proposals will help older students. They will also be the main beneficiaries of the adult dependants grant, which is worth £2,280. They will also be eligible for additional funding through the government-funded Access to Learning programme, which is administered by institutions. We are making progress in supporting mature students in the context that I have set out.
I am reluctant to go into more detail, although I shall do so if the Committee wishes. I think that I have given a general overview of the direction in which the Government are moving. We have made inroads into supporting part-time students, and we recognise and value the role of the Open University and other institutions. We wish to conduct the survey. Clause 40 gives us scope to do something on fee deferral, if, in future, we wish to do so. I do not wish to regulate where we have not regulated before. I hope that, on that basis, the noble Baroness will feel able to withdraw the amendment.
I thank the Minister for that full reply to our amendments. As other noble Lords mentioned, there was a great deal of discussion at Second Reading of the position of part-time students. I am sorry that the noble Baronesses, Lady Boothroyd and Lady Blackstone, and the noble Lord, Lord Rix, are not present. We will have a lot of discussion of the same issues, when the noble Lord, Lord Rix, brings his amendment back. I know that the noble Lord, Lord Barnett, will talk to his amendment and wishes particularly to refer to the position of Birkbeck.
As the Minister said, it is right and proper that the Government should know the dimensions of the problem. It is extraordinary that, until now, part-time students have not been included in the student income and expenditure survey. I welcome the fact that we will have the facts before us. I am pleased at the degree to which the Government have increased provision for part-time students over the past few years. As the Minister said, there was practically nothing back in 1997. Gradually, one or two things have come forward, and we are pleased to see that. However, as always, we must ask, "When is 'enough' enough?". It is something of a problem.
In particular, I am glad to hear of the Minister's ongoing discussions with Birkbeck and the Open University. It is vital, as the Minister said, to remember that they are not the only institutions providing part-time education. I hope that the noble Baroness, Lady Blackstone, will be present on a subsequent occasion, given her experience at Birkbeck and the fact that she is about to take up a post at the University of Greenwich. She speaks from a lot of experience and knows the problems that she will have to cope with.
In the light of the fact that we shall return to the matter, I beg leave to withdraw the amendment.
In moving Amendment No. 50, I shall speak also to Amendments Nos. 51 and 52. These amendments are about fairness. This Bill was passed by the other place by a majority of five. The subject of top-up fees is very controversial. The majority for the Bill was achieved with the votes of Scottish Members of Parliament, whose constituencies are unaffected by the provisions in this legislation.
It seems to me that, if a controversial policy is to be imposed which requires students and their families to take on considerable financial obligations, it is entirely reasonable that that should be subject to the approval of the voters and that those who vote for it should be accountable to their voters. Scottish MPs are not accountable for their actions in the House of Commons to the constituents who are affected by any resolution made. Therefore, the amendments make it explicit that, where measures are introduced which apply solely to English constituencies, a majority of Members of Parliament must represent English constituencies.
I shall not take up time by straying into territory which we can cover in a later amendment—Amendment No. 57. However, I want to repeat, and shall continue to repeat for as long as it remains the position, that I think it is perfectly scandalous that we have reached this stage in our discussion of the Bill and we still do not know what the position of Scottish students coming to English universities will be or, indeed, of English students going to Scottish universities because the Scottish Executive is having one of those rather fashionable reviews. It does not seem to me to be a very difficult problem for Ministers there to resolve. But I believe that it is extremely awkward, to say the least, that we are not in a position to consider the overall effect on English institutions and on English students going to Scotland because of Ministers' failure to address these matters.
These amendments are confined solely to the perfectly reasonable proposition that those who take these highly controversial decisions should be limited to those whose constituents are affected. I live in hope that the Minister will feel able to accept them. I beg to move.
This really is a "Forsyth special", if I may say so. At one level, it can be read simply in terms of the specific provisions of the Bill; at the other, if the noble Lord is successful, I suspect that he will try to elevate it to a constitutional convention in terms of what is necessary in English legislation and its passage through the House of Commons. I do not believe that this Bill is the vehicle through which we should discuss or decide significant constitutional issues. Therefore, I shall merely refer to the impact of the amendment in terms of the Bill itself.
There is a tension—I put it no stronger than that—in the position taken by the noble Lord, Lord Forsyth. In an earlier amendment—Amendment No. 36—he sought to impose a UK responsibility on the Secretary of State for Education; now, he wishes to exclude Scottish MPs from a significant area covered by the compass of the Bill. Therefore, there is a tension there whether we are talking about Scotland, England or the UK. I am afraid that these tensions will recur in a number of pieces of legislation which come from either Westminster or the Scottish Parliament.
I am forced into saying that what disappoints me about the amendment is that we must recognise that, although legislative competence and executive responsibility in the area of higher education has been devolved, nevertheless we cannot speak about higher education in England and Scotland as being two hermetically sealed systems. There is an interaction. It is right that Scottish MPs in Westminster should be able to have a view and a vote on what is happening because the Bill will affect the nature of Scottish higher education.
A story that I have repeated here at an earlier stage illustrates this point as regards top-up fees. English universities will find themselves in a more advantageous position so we may well get Scottish academics being tempted to English universities where at the same time it is possible that the fee provision in Scotland will be more advantageous to students. So, English domiciled students may well rush off to Scotland. There is the wonderful possibility of one charabanc colliding with another somewhere between Edinburgh and London to the devastation of the whole of the UK higher education system.
A point I want to make is that the Bill has indirect implications for the whole nature of higher education in Scotland. The challenge must be to Government and to the Scottish Executive to work these things out. There are mechanisms in place—there were when I left the Government—to enable these kind of issues to be discussed and resolved so that we do not have a major destabilisation of the whole UK higher education system. Matters can be considered slightly more in advance of legislation than we seem to have achieved at this stage.
In one sense this is a wrecking amendment. That could be quite attractive, but it is more of a mischievous amendment. We have made clear that we are against all these fees. However, this is the trouble one gets with lopsided devolution. I would prefer devolution in the English regions and a degree of parity. However, that has not been the case.
I agree with the noble Lord, Lord Sewel, that this is not the Bill to take on this issue if it is ever to be taken on. This is just not the place for it. I see the point that he makes. Real, proper, genuine devolution is the one way to solve it.
The amendments are flawed. Noble Lords will notice that they refer to a resolution of each House of Parliament. If we are to have one rule for Members of Parliament in the other place, what about this place? How do we define a Scottish or a Welsh Peer? One thought I have had is that it might be a Peer of the Realm who spends perhaps 40 Saturday nights a year laying his or her head in Scotland or Wales—I did not say who with. We know about the London Scots and the London Welsh. If one were to consider how one would allocate English, Scottish or Welsh Peers, bearing in mind that there is a resolution to come before each House of Parliament, I would submit that the amendment is flawed. In any event, the main point is that it is totally mischievous and not well placed in the Bill.
I feel compelled to support my noble friend in these amendments. Although I understand that there are, by a long way, issues other than devolution in the Bill, nevertheless it is entirely proper that the problems of devolution should be raised every time they are relevant to a particular Bill. My noble friend's amendments underline yet again the constitutional conundrum, indeed, the black hole, of the current Scottish devolution system. Until that is filled by a general solution, the only solution available to us is to raise this every time it arises in individual pieces of legislation, as my noble friend has done.
The general solution is to have a provision that all Bills which are specified by the Speaker of the other place as being English Bills affecting only English constituencies should be voted on only by English Members of Parliament. It is ingenious for the noble Lord to suggest that it is very difficult to see how that works in the House of Lords. I assure him that it works perfectly reasonably in the House of Commons. It may well cause difficulties for the Government but from the parliamentary point of view it is justifiable because English Members are responsible to their own English constituents. Ultimately, that is the basis on which we agree that the other place is the supreme House in this Parliament.
I must say to the noble Lord, Lord Sewel, that he was a bit unfair to my noble friend. There was an analogy with Clause 6, in respect of which he spoke about the United Kingdom approach, because of course Clause 24 and these resolutions would apply only to English universities. Therefore, my noble friend is quite right. It is not enough to say that, for example, some of the issues in these resolutions may apply to Scottish students who come to English universities. On that analogy, English MPs should be able to vote on similar issues affecting Scottish universities where English constituents go to Scottish universities. Of course they do not.
So there is a one-sided process at the moment. The noble Baroness smiled when my noble friend suggested that she might be willing to consider the amendments. I understand perfectly well her position on that. I have to say that the more examples there are of Scottish MPs having crucial deciding votes on matters which affect only English constituencies, the more resentment there will be among English voters, as we already know from opinion polls and as I know from my former constituents.
I give way to other noble Lords in the Chamber who know the Scottish situation much better, but the last time I looked at Scottish opinion polls on the issue, the Scottish people thought that that was a perfectly fair solution for England as well. So I think a general problem will arise. My noble friend was quite right to raise it in the context of the Bill, and I am glad he did so.
Since I have not spoken before in Committee, I should declare an interest not only as someone who considers himself a Scottish Peer, but also as the head of a college at Cambridge University and Chancellor of a Scottish university. It is with those two hats on that body that I should like to speak tangentially to the amendment itself. I could not find myself supporting it for the reasons that have been stated—it is a much wider constitutional issue.
However, I join those like the noble Lords, Lord Sewel and Lord Forsyth, who have asked the Minister to tell us as much as she possibly can, or undertake to tell us in future, what arrangements there will be for, as it were, cross-border traffic. I believe strongly that that cross-border traffic in students is enormously valuable on both sides of the Border and enormously valuable to the future of the United Kingdom.
So anything that prevents people moving from Scotland to England or from England to Scotland to go to university seems to me to be bad news. I very much hope that at some stage the Minister will give us reassurances on what is going to be done on those points.
I very much endorse that last remark of the noble Lord, Lord Wilson. The importance of cross-border traffic in students is crucial, and of course the traffic is much greater from England to Scotland than it is from Scotland to England.
Many students who come to Scotland from the south either stay there to work or return later to work or to retire. They fall in love with Scotland and they return. Scotland needs every one of them who wants to do that. That is really very important indeed.
The noble Lord, Lord Sewel, made the points that are the trickiest about this whole issue. I shall not reiterate them. He knows them very well because he deals with the matter all the time.
On the amendment itself, I was grateful to my noble friend who said that it is right to raise devolution issues as they occur on Bills. I try to do that—in a very much less expert or experienced way than he has just done. Some devolution issues are minor; some are much more important. This is one of the most awkward issues that we have met.
In fact, to someone who knows Scotland the Bill appears to ignore Scotland completely. The fact that we have devolution and that Parliament has agreed to devolution means that Parliament has a responsibility to consider the whole higher education system. Of course the responsibilities are devolved, and the Scottish Executive has an important role. It is no business of the Westminster Parliament to ignore the arrangements in Scotland and to ignore the political imperatives so far on the matter, not all of which I agree with, by any means. However, they cannot be ignored.
It is a rather funny feeling to be someone who spends most of her Saturday nights in Scotland, to see this happening. I ask the noble Lord, Lord Shutt, what is wrong with Tuesday night? There are a lot of nights in the week.
I was suggesting that the noble Baroness might well be here on a Tuesday night, and therefore Saturday is the one night that she might be in Scotland. She may well be here the rest of the time.
One could, of course, travel quite a lot during the process of a Bill, if that was the rule. There are all sorts of ways of thinking about this. It is extremely important that Westminster should not ignore the situation as it is now in Scotland, and the Government so far have not come to terms with that. It is an awkward devolution issue, and I am grateful to my noble friend Lord Forsyth for highlighting it through these amendments.
I want to add my voice to those who say that the uncertainty over the cross-border traffic is worrying. Had that been resolved in a much clearer fashion, perhaps I could have understood the role that those representing Scottish constituencies took in the debate in the other place, but it had not happened, so they were voting blind. I was almost distracted from this point by the thought of counting where I spend my Saturday nights. Noble Lords will be relieved to know that the cross-border sleeper no longer runs on Saturday, so that is one source of uncertainty removed.
I have a theory that no Scottish debate is complete without a Welsh dissenting voice, but my point is a real one. The first of these amendments deals with the basic amount and the higher amount and so on for the purposes of Section 23. I wonder how the Government are coping with the fact, revealed by the Delegated Powers and Regulatory Reform Committee, that the procedures of the National Assembly for Wales do not draw a distinction between negative and affirmative procedure? For Wales, Assembly procedures apply in respect of all increases in the higher and basic amount, whether in line with or above inflation. Furthermore, there is no bar in Wales on the higher amount being increased above the level of inflation before 2010. I am sure that the noble Baroness will recognise that that is from the committee's report. It occurs to me that it is a rather difficult point.
If I may say so, it is right that there should be an attempt to work the two out together. I was chair of the committee that tried precisely to do that. It came forward with solutions, and it produced a constitutional crisis between this House and the other House. Perhaps it is rather difficult. I say to the noble Lord, Lord Forsyth, that I will read with great care what he said in his remarks. I thought that he was persuading me rather strongly that there was a powerful Scottish interest in what was being done here, and that Scottish MPs should have a vote on it. I will read with care what he said.
I spend a good many Saturday nights in Scotland. I am not sure whether that qualifies me to speak in precise detail. I used to go up and down on the sleeper from time to time, but it was closed by the last Conservative government.
I think that the noble Lord can do one better. He can read the debate that took place in this House at the time, which was influential in changing the views that were expressed that the sleeper should go. It was a matter for the rail authorities, but when it was pointed out to them that their grant was up for renewal, they seemed to see the force of responding to the views that had been expressed in this House.
I shall conclude the comment by thanking the noble Lord, Lord Forsyth, because if he saved it, that can only be for the good.
The noble Lords, Lord Wilson of Tillyorn and Lord MacGregor, raised a number of issues which were also raised by the noble Lord, Lord Sutherland, about the interplay between the arrangements in England and in Scotland. Those are issues which I have absolutely no doubt can and will be debated around a later amendment. It is right that they should be. But I take the view that the noble Lords, Lord Sewel and Lord Shutt, are absolutely right—this amendment has almost nothing to do with higher education policy. It has more to do with the fact that some people find the Scottish devolution settlement extremely hard to swallow.
Hard to swallow. I do not say it to cause any offence, but the settlement was endorsed in a referendum by the people of Scotland and by Parliament in the Scotland Act 1998. The amendment is an attempt to shoehorn into this legislation the West Lothian question, and it is hardly appropriate in any respect. It would be a very strange thing for this House—whose Members are unelected—to tell the elected House in which the majority of elected Members form the Government of the United Kingdom, what it is they should or should not vote on. I suspect that the argument about that issue will become the much more fundamental argument, were these amendments to be carried, than any other matter.
I make that point very straightforwardly because the nature of the constitutional clash, which we are invited to subscribe to, is not one which could commend itself at all. In January, in the other place, Members soundly rejected an Opposition Motion seeking to restrict the voting rights of Scottish Members, and this does not seem to me to be a sensible place to try to reinstil it.
The ramifications of the noble Lord's amendments go far further than any matter relating to the provision of higher education. They go in a rather heavy way across fundamental tenets of our constitutional arrangements, and I suggest that it is those arrangements that should be considered on their own merits, or otherwise, rather than being parachuted into the Bill on the basis of a major constitutional provision.
I read in one of this morning's newspapers that the noble Lord, Lord Forsyth, was to fight his corner with great vigour. I congratulate him on doing so. It is always very enjoyable. But the issue of the way devolution handles the movement of students—whether into or out of Wales, or into or out of Scotland—is something that can be debated later. The issue of how the interactions work—the consultation mechanisms which have been described—can be considered in a later amendment. With the utmost seriousness, I ask your Lordships not to try and do it by producing at this moment the constitutional clash that can only sour relationships between the two Houses to no purpose.
I confess that I was opposed to the Scottish Parliament. There was an election; we lost all our seats. There was a referendum and people voted for it. I do not seek to reopen the devolution question.
However, I do think that someone should speak for England, even if it has to be someone who spends his Saturday nights in Scotland. As I have said, this is a question of fairness. We are in a situation where Scottish MPs provided the majority that enabled the Government to impose fees of £3,000 on English students attending English universities. Scottish Members of Parliament voted for that.
We have no idea what is to happen north of the Border, but the Minister responsible in the Scottish Executive, Mr Jim Wallace, is on record as saying that he will take whatever steps necessary to protect the interests of Scottish students and prevent what are described as "fee refugees" coming from south of the Border. The term "fee refugees" is used to refer to the sons and daughters of English parents. It has even been suggested that the Scottish Executive might decide to charge Scottish students £1,100, Italian students £1,100 and Polish students £1,100, but English students £3,000. I have to say that that seems completely inequitable and Scottish MPs provided the majority to achieve those circumstances.
I do not seek to hold a wider constitutional debate or to change our constitution. One has only to look at this Government for an example. If you want to change the constitution, you do not do so in a Bill in this House or the House of Commons, you do it in a press release with a reshuffle or something of that kind. That is how major constitutional changes are made. You then shuffle about for a bit while working out how to move back from what was said in the press release.
The Minister should take the amendment as it is intended. It is a helpful amendment designed to bring a degree of fairness into the way in which the English are treated. I am grateful for the comments of the noble Lords, Lord Wilson of Tillyorn and Lord Sutherland and, indeed, those of the noble Lord, Lord Sewel, drawing attention to the fact that it is quite unacceptable that we do not know the position north of the Border. I hope that the noble Lord, Lord Sewel, will forgive my little joke earlier about this being done under the "Sewel procedures". While he served on the Front Bench he went to great lengths to ensure that devolution was workable by making sure that both administrations talked to each other, and that when cross-Border issues did arise, they were resolved.
But what is happening here is very curious. The Labour administration north of the Border does not agree with top-up fees and, because its members are what I believe are known as old-fashioned "Brownites", they are not having them. The Labour administration south of the Border has a different view. They are doing all they can to frustrate the operation of that policy, but in doing so they are damaging and introducing uncertainty to the interests of those students who, for one reason or another, want to attend a Scottish university. Perhaps they want to go to a really ancient university like St Andrews rather than one of the more modern institutions south of the Border like Oxford or Cambridge, or perhaps they are guided by some other influence. So I do not think that the Minister can get away with turning this into a broader constitutional issue. The issue here is one of fairness.
The Minister suggested in response that, on the issue of devolution, a referendum was held and that was all right. However, the referendum was held in Scotland. The English did not get to vote on it. Most fair-minded people on both sides of the Border would say, "If it relates to our business, then it should be decided by our representatives who are accountable to us". There is nothing that a voter in England opposed to fees can do to put out of office those Scottish MPs who voted for the measure. They can refuse to vote for their English MPs, but the Scottish MPs are not accountable to the people on whom this policy is being imposed.
The noble Lord, Lord Shutt of Greetland, accused me of being mischievous. I am deeply wounded by that. If I had wanted to be mischievous, I would have pointed out that the higher education Minister who does not seem to be able to decide on his policy north of the Border is a Liberal Democrat. I would also point out that he is the architect of and has supported a policy of introducing fees which are repaid post-graduation, against which the noble Lord argues very strongly in this House. If I wanted to be mischievous I would have contrasted the Liberal Democrat position north of the Border with that south of the Border, but it is no part of my make-up to be mischievous so I shall not pursue that matter now.
My noble friend Lord MacGregor put his finger on the wider issue that there will come a moment—the opinion polls show that this is accepted by voters both north and south of the Border—when the wider West Lothian question will have to be addressed, with Bills being certified by the Speaker and with the appropriate voting positions being in place. That has not happened because the Government, even with their huge majority, still need the votes of Scottish MPs to force through legislation that their own supporters in England could not be brought to support in the Division Lobbies.
The Minister said that it was not any part of the House's role to give advice to another place and to spend our lives interfering in such matters. I have to say that I thought that is what we were about. I see no reason why we should not give advice to the other place that it might be more fair and equitable for the matters to be decided and determined by those Members of Parliament who have responsibility to their voters. I note that the implication of what the Minister said is that he would not be able to carry the day on that basis. I beg leave to withdraw the amendment.
moved Amendment No. 54:
After Clause 24, insert the following new clause—
The Secretary of State shall make provision for the repayment from public funds of loans for qualifying fees made to qualifying persons who are subsequently employed as—
(a) teachers in state maintained schools;
(b) public law enforcement officers;
(c) staff in the National Health Service;
(d) social workers employed by local authorities;
(e) any other public sector worker specified by regulations who is required to have a degree level qualification."
This is a helpful and enabling amendment. We have said many times that we are against fees but if we are to have fees let us make things a little easier. Amendment No. 54 seeks to give an incentive for public service. We have already heard the Minister refer to the dire shortage of social workers. Many of your Lordships have spoken about the poor remuneration available to university teachers. The amendment gives the opportunity for those who want to dedicate part of their lives—I would suggest five to seven years—to public service to qualify for not having to repay the fees suggested in the Bill.
That would provide an opportunity for people to give public service, perhaps by taking less remuneration, as has been hinted at in many cases, but with the proviso that they stake a certain number of years of their life to do so. That would be an incentive for public service.
Amendment No. 55 seeks to insert a new clause. It would be an incentive for idealism, so that the repayments would not be made by those who put a significant period of time into voluntary service.
As to the incentives available, a rich person will have the opportunity to use the gift-aid scheme for any contributions he or she may make to voluntary or charitable organisations. Someone who is quite affluent could make a gift that would enable other people to undertake voluntary service.
For a student without resources but with time and talents, this would be an incentive to engage in something that he or she would like to do for the benefit of society as a whole. For them it would be idealism, but it may well cause them a great deal of delay in getting on to whatever ladder they eventually endeavour to climb. They would not benefit from the remunerations and increases that their fellow students had gained from going into work more immediately after obtaining their degrees. I beg to move.
I have two concerns about this well-meaning amendment, with which one has a great deal of sympathy. Of general concern is the fact that the Bill is becoming overwhelmingly complex and will be overwhelmingly complex in its application. Different universities will have different bursarial schemes and be under differential pressures from the Director of Fair Access.
The amendment lists a number of deserving callings for which there will be fee repayment in a way which one finds admirable, but it is not entirely clear how these callings have been chosen other than in a spirit of well-meaningness. I wonder whether that is sufficiently precise. The amendment refers to "public law enforcement officers"—which I take to mean the police, although it may include others besides—but there is no reference to ambulance operatives or the fire service. More particularly, there is no mention of the charitable organisations to which the noble Lord refers in Amendment No. 55.
Amendment No. 54 does not mention charitable organisations which are not directly publicly funded. For example, Sue Ryder Care—which has an exhibition in these premises at the moment—every year has to raise £13 million to ensure that it can provide funds for its hospices and neurological care centres. Such organisations employ some very highly qualified carers—we are talking about university graduates—but would they get their university fees repaid in the same manner as those employed in the public services? That is my first question.
My second question is much more to the point. The noble Lord referred to university teachers, but I cannot see them listed in his exempt categories. If that is the case, and given the subject matter of the Bill, why on earth are they not listed?
I share some of the concerns expressed about the amendment. It seems to me that categories of staff have been left out. I know that there is the all-embracing paragraph (e), which states,
"any other public sector worker specified by regulations", but, for example, why does it not mention FE lecturers, who are often paid less than schoolteachers?
A further problem is that it is a bit of a sledgehammer to crack a nut. It is not sufficiently targeted on the people you may really want to target. "Staff in the NHS", for example, covers a huge category of people. I admit that many of them are not graduates—I know that we are talking only about graduates—but some graduate staff in the NHS are very highly paid and would be the last people whom we would really want to exempt from the repayment of their loans.
The right approach is for successive governments to look at particular professions and particular areas of the public sector where there may be problems of recruitment or retention. If that were to emerge, they should then find a scheme for supporting graduates in those occupations. That is preferable to trying to legislate in 2004 for a labour market that may be very different in as little as three or four years' time and being forced to change primary legislation again. The amendment is not appropriate for legislation of this kind, although, like the noble Lord, Lord Renfrew, I completely understand the motivations behind it, which are perfectly good.
I fully concur with my noble friend Lady Blackstone. Too many areas are left out of the amendment and it is completely uneven. With regard to the NHS, many people take degrees that might not be absolutely pertinent to the course of employment that they subsequently follow. Indeed, the head of my own department gained a first-class honours degree at Oxford in English. Would that qualify him to do medicine? I do not know. That emerges only subsequently. The amendment presents all kinds of problems. What about the Armed Forces, for example? There is a whole range of other categories where one would want to see if this kind of release from fees was equitable. As it stands, the amendment is not remotely workable.
I share some of the concerns that other noble Lords have expressed, but we should give the noble Lord, Lord Shutt of Greetland, some credit for his innovative Amendment No. 55. It certainly suggests a totally new way in which people might repay their heavy debts. I am sure that voluntary services and many charities would welcome it. It should not be dismissed quite so out of hand as it has been.
I have one further negative concern about Amendment No. 54. Other noble Lords have spoken about the list of workers in the public service who would qualify. If any golden handshake scheme were introduced, some kind of minimum on how long one stayed would have to be imposed. If people popped into the public services for a year, would the whole of their fees be written off? I am sure that the noble Lord will be the first to say that the idea needs a great deal more detail to make it a viable proposition. However, the concept of golden handshakes in specific occupations, which, as the noble Baroness, Lady Blackstone, has said, could vary from time to time according to where there are particular shortages, has been employed in Sweden with some success. Again, it should not be dismissed out of hand.
As I understand it, Amendment No. 54 would exempt those working in public service jobs where relatively low pay makes recruitment difficult due to the inability to repay fees. Amendment No. 55 would encourage young people to undertake voluntary service.
We strongly support the idea of the "public good" and put on record our unwavering admiration for those who work in occupations that achieve this. We also recognise the problems of pay within the sectors outlined in the amendment. However, I cannot agree that public good can be achieved only by those working, for example, in the NHS. The practice of medicine is a public good wherever one works. The amendment discriminates against a wide range of people and professions. It also creates divisions within professions. Is it also right or fair to suggest that those who carry out jobs that provide a public good, but did not require a degree course to do so, should be treated differently from those who had to obtain a degree in order to qualify? Public good is public good, regardless of whether it has a degree course to back it up.
Turing to the drafting of the amendment, can the noble Baroness, Lady Sharp explain what paragraph (c) covers? Does "staff in the NHS" cover the cooks and cleaners as well as the nurses, doctors and ambulance drivers? With regard to paragraph (a) and the discussion on my noble friend Lord Renfrew's amendment, perhaps she could have considered—as he so rightly said—including academics in this new clause.
I now turn briefly to Amendment No. 55. Here, too, I commend all those who work in, or offer their services to, the voluntary sector. We recognise the invaluable work that is done in so many different ways, and we are mindful that there are never enough volunteers. As we have already debated, the issue of deferred placements due to gap years does give the opportunity for voluntary work, providing benefits for everyone. It can also be an invaluable life-forming experience. However, I do not realistically think that student loans could be paid off in such a way. I have many concerns with this amendment. What type of volunteer work would be included? Does interning for an MP count, as I understand that is often voluntary? Would the volunteer work have to be based in this country? If not, how can we guarantee that policing of the system ensures the necessary amount of work is done? Talking of the amount of work, how would volunteering be measured—by the number of hours worked on a principle as if they were receiving pay, or perhaps in the public good achieved?
I also ask the noble Baroness how she sees these amendments working with EU students and the financial support arrangements they would be allowed. Does she intend them to be covered by these clauses? We sympathise with the sentiment and the reason driving these new clauses, but do not see how they would be fair or how they would work in practice.
I think these are really interesting amendments, and I am grateful that they have been introduced into the debate. I share the noble Lord, Lord Renfrew's view of that. The motivation for the amendments is commendable. As the noble Baroness, Lady Perry, said, they are innovative as well, and deserve proper attention for that reason as much any.
We are a government committed to the recruitment and retention of high-quality staff in all our public services and to supporting the voluntary sector. However, I do not think it is right to try to regulate in this way—it is unnecessary, nor is it the best way to address these extremely important issues.
Amendment No. 54 seeks to encourage and safeguard applications to various public sector professions, which are listed in the amendment. The Government are absolutely committed to attracting the very best people to work in the public sector. I take the point that expertise in many of these disciplines is not confined to the public sector either. That is why we have already put many measures in place in relation to some of the groups that are mentioned in the amendment. I will not go through them all in detail because my noble friend Lady Ashton did so in an earlier phase of our debates this afternoon. Just to enumerate them, the provisions that she described for the recruitment of teachers are a very good example—in the encouragement of the PGCE and in the arrangements that made for priority subjects: maths, science, modern languages, technology and English.
The point is that these are appropriately tailored measures. That is what makes them work. There are more teachers with qualified teacher status in our schools now than at any time since 1984, and this has made a contribution to it. However, we need to keep what we do for priority subjects under review as well. As the point has been made, what are priorities today may well not turn out to be the priorities of tomorrow. There will be other priorities as time goes by—the demand for teachers will increase in some subjects and probably decline in others. It is essential that we tailor what we do to the prevailing conditions.
I fear that this amendment would unduly tie our hands. It assumes that there is one and only one answer—although it may be a very interesting and good answer at the moment—and that it will always be the true answer. Under this amendment, we would have to follow the write-off policy, even if other incentives were to prove more effective.
I would like to look briefly at some of the incentives provided by other government departments for key public sector workers. Nurses, as well as midwives and the allied health professions, do not pay tuition fees. Instead, the NHS contracts directly with the higher education providers for provision of their training. The consultation document recently issued by the Department of Health proposes that future contracts for learning and development for those groups should prohibit the charging of variable fees. My noble friend Lady Ashton dealt with medical students and the very specific arrangements there; that does not need to be repeated.
The Department of Health is doing all that now. As for the future, we do not anticipate any significant effect on applications to medical courses, because some of those steps have been taken. As we heard earlier, applications to medical schools are up and buoyant. The Department of Health will continue to monitor demand for, and take-up of, places on health professional courses including medicine after the introduction of variable fees in 2006–07, and will consider measures to safeguard the supply of students on health professional courses once the full implications of the introduction of variable tuition fees can be assessed.
It is worth noting that students taking social work qualifications are often funded to do so by their employers. The Department of Health has made funding available to employers towards the support of social work students. Where employer support is not available, the Department of Health makes available bursaries as an additional incentive to train in social work. The bursary currently includes the student's full liability for tuition fees. The department is also reviewing the impact of variable fees on any support arrangements.
On the subject of law enforcement officers, I understand that there are no national schemes in place to recruit graduates specifically into the police force. However, I am aware of the high-potential development scheme, which was launched in April 2002. The HPD is an individually tailored career-development programme designed to attract the future high-calibre leaders of the police service whom we all want. Applications are invited from both graduates and non-graduates who feel that they have the potential to reach senior positions in the service. In fact, 67 per cent of those who achieved the standard to gain a place on the scheme were graduates on application.
The real point about all the examples is that it must be right for employers—both private and public—to look at the impact of the proposals on their labour markets, and to decide themselves what steps are necessary to recruit and retain. They will no doubt continually review and update that, knowing their employment requirements in a way at which we can only guess in advance. Across the whole public sector, government departments seek to ensure that the new arrangements for student funding do not discourage graduates from all backgrounds entering training for, or taking jobs in, the public sector.
We commented earlier on the inquiry being conducted by Sir Alan Langlands about gateways into the professions.
Given the welcome that the Minister gave to the spirit of the amendments, would the Government wish to take up the suggestion made by my noble friend Lady Blackstone that there be some form of generic amendment to the Bill? By that, I mean an amendment that would allow the Government from time to time to specify such professions as they wished without having, as the Minister put it, their hands tied by a specific list. Will the Government bring forward such an amendment, and if not, why not?
We do not need to do that. All the provisions necessary to provide incentives—I have given a significant list of them—are already available and can be introduced. If employers in the public or private sector—I do not make any distinction in this sense—wish to do so, they can do so. The powers already exist, and we do not need to take further steps.
Amendment No. 55 deals with the repayment of student loans by voluntary service. Again, I fully understand that this is being aimed at encouraging graduates into this area. It is indeed the case that all of us, like the noble Baroness, Lady Seccombe, wish to encourage as much voluntary work and voluntary commitment as we can in our society.
The Government have a number of initiatives to encourage volunteering, for example, the Millennium Volunteers programme which encourages and enables young people up to age 24 to volunteer in areas that interest them. We also have the Higher Education Active Community Fund which enables the development of new volunteering opportunities, allowing both staff and students to increase significantly their involvement in the community.
The Russell commission has been set up by the Chancellor to make recommendations on a national youth volunteering strategy, for 16 to 25 year-olds. The Department for Education and Skills is involved in this, and I am sure that noble Lords will share my interest in seeing the outcome of the work of that commission. These are all important steps in encouraging people to volunteer their time, services and skills for the benefit of the broader community.
We are also aware that those who choose to work in the voluntary sector may be on low pay or no pay at all for some or all of the time. That is the reason that I commend to your Lordships the propositions about the income thresholds, and the other arrangements in this legislation, which mean that people whose pay is either small or non-existent are not penalised or disincentivised.
That means that an individual who wants to dedicate himself to voluntary service need not worry that their student loan is going to become in any way unmanageable. It will simply retain its value in real terms and while it might prolong the time to repay, there is the benefit of knowing that the debt will be cancelled in any event after 25 years.
None the less, should a time come when it was felt necessary to implement a policy of repaying some or all of the student loans of those who engage in voluntary service, we already have the necessary powers to do so in Section 186 of the Education Act. I hope that noble Lords will look at that in considering the benefits of the volunteering route, which is one of the admirable features of the amendment.
We want a flexible system, and we want it to be able to adapt. The noble Baroness, Lady Blackstone, and the noble Lord, Lord Winston, have made that point. In summary, we are considering the impact on the professions, and with that in mind I hope that the amendments proposed for fee repayment for those employed in specific public-service jobs will be accepted as being unnecessarily restrictive. I hope that the argument about waiving repayment in respect of voluntary service proposed by the noble Lord, Lord Shutt, is also answered by my comments. On those grounds I urge the noble Lord to withdraw his amendment.
I thank the noble Lords who have contributed to the debate on this amendment. I think, in retrospect, it is an occasion when I ought to have said that this is a probing amendment. Many of the points that have been raised—on teachers in state-maintained schools, on staff in the National Health Service (and which staff did we have in mind?)—show that it is a probing amendment.
The principle that we are trying to get over is that there ought to be, within the Bill, the opportunity for an incentive that I would describe as a fee-repayment exemption. I believe if something like this is not put into the Bill, that will not be there.
The noble Lord, Lord Renfrew, referred to the complexity of the Bill. I cannot help that: the Bill is complex—and amendments may make it more complex—but that is the way of things, and at least that is one thing not at my door. Part of the concern has clearly been about public service, and that there are not sufficient people dedicating themselves to that. Therefore a major element is to give an incentive to people to dedicate themselves to public service.
I hear what Members of the Committee and the Minister say and clearly we will think about it. However, if there is a feeling within this House that in the Bill there ought to be an opportunity for fee-repayment exemption as an incentive, I hope that we can return to the matter on another occasion.
I am grateful to the noble Lord for giving way. I also asked him to indicate whether it was an oversight on his part and that of his noble friend that he did not include provision for the university teaching profession among those who would have their fees exempted in this admirable manner.
I apologise. Happily, there is one of those wonderful clauses—paragraph (e)—which embraces all. It states:
"any other public sector worker specified by regulations".
That provides the opportunity to include those who are felt to be in a shortage area, as has been mentioned.
This is a probing amendment and if there is a specific issue that Members want to talk about later, that can be done.
I thank the noble Lord again for giving way. As we are probing, does the noble Lord feel that all university and academic personnel are to be regarded as public service workers?
I take the view that teaching in a university is a public service. It is not included as specifically, but there is no reason why it should not be embraced in paragraph (e). I beg leave to withdraw the amendment.
moved Amendment No. 56:
After Clause 25, insert the following new clause—
"Student fees and financial support for students as undertaken by the National Assembly of Wales
(1) This section applies to any function in relation to student fees or financial support for students that has been transferred to the Assembly by—
(b) this Act, or
(c) any other enactment.
(2) In exercising the functions to which this section applies, the Assembly must secure that—
(a) no relevant institution charges different qualifying fees in respect of a qualifying course on the basis of the relevant area in which a student is normally resident; and
(b) eligibility for any grant, loan or bursary is not determined on the basis of the relevant area in which a student is normally resident.
(3) In this section— "normally resident", in relation to a student, means resident at times when not resident at the relevant institution where he is undertaking a course; "qualifying course" has the same meaning as in section 26; "qualifying fees" has the same meaning as in section 26; "relevant area" means— (a) England;
(b) Northern Ireland;
(c) Scotland; and
(d) Wales; "relevant institution" has the same meaning as in section 25."
During the course of the day, we have heard an awful lot about Scotland and the cross-Border issues which, as far as we can see, will occur as a result of the Bill, but we have heard less about the situation in Wales. This amendment seeks to address that. It tries to ensure that although the powers relating to student fees and financial support have been transferred to the Welsh Assembly, they cannot be used to discriminate against individuals because they come from a different area of the country; for example, Dorset, Shropshire or Northern Ireland. The amendment also aims to prevent discrimination in terms of charging different fees or the withholding of grants, loans or bursaries.
The Welsh Assembly has already decided that top-up fees will not be introduced until at least—I emphasise at least—2007. Thus it will be one year or possibly more by the time it has legislated for fees for students in the Principality. Its final decision will be informed by an independent review which is to be undertaken by Professor Rees. I understand that his report is due to be completed by May this year, with an interim report on variable fees in February next year. Will the Minister explain how this report can take full account of the impact of tuition fees when they will not even have come into force here? It is very odd.
I said that the amendment was specifically about Wales and I am mindful of the remarks of my noble friend Lord Roberts of Conwy about paragraph 7 of the report of your Lordships' Delegated Powers and Regulatory Reform Committee. I will not repeat what he said and I will not read out what it said. The main concern relates to the powers devolved under Clause 41 and the various conditions set out by Sections 22(2) and (3) of the 1998 Act. I have no problem with the position on bankruptcy, for example, but I want to ask whether, in the case of student loans and the subsidy for such loans, the Minister can outline the Assembly's position in relation to their provision, especially the relationship of decisions taken about the provision of loan allocations to the overall student loan book. It appears that a decision about loan levels in Wales could have an impact different from the effect of decisions taken about different amounts in the rest of the United Kingdom. Will the Assembly, for example, be able to provide an extra £1,000 a year student loan through the regional allocation budget structure? Would not that have a direct impact on the Treasury?
Similarly, how will the Government deal with the possible effects of the Assembly deciding to charge English-based students higher fees than they do Welsh-based students? I know that the Minister has had a go at the subject in the context of our discussions on Scotland, but it is still unclear to me how it will work. As currently proposed, the system is very unequal.
Although English universities will be able to levy top-up fees, the Welsh ones will not. They are therefore naturally concerned that their recruitment and investment as well as the quality of education that they can provide may be disadvantaged. Surely the introduction of fees in England in 2006 will make it cheaper to go to Wales, creating a rush of applications and a knock-on financial burden. The financial package that the Bill provides is to help compensate for the introduction of fees to those from less well-off families. That package is balanced by the introduction of the access regulator, of whom, I am afraid, there will be more on Monday. However, in response to a Written Question in the other place, the Minister said:
"The Welsh Assembly has said that it will not introduce variable fees during the lifetime of the second Assembly, therefore Welsh Higher Education Institutions will not need to provide access bursaries on similar terms to those being provided in England".—[Hansard, Commons, 26/1/04; col. 30W.]
Will not need to. That does not mean that they will not.
Although the core of the student support package is in place, if institutions do not need to provide access bursaries on similar terms to those in England, will the access regulator have a remit in 2006, or will it be introduced only when the Assembly introduces bursaries and fees? I have heard no words uttered in answer to that question in this Chamber or elsewhere.
The Bill contains many issues of great concern regarding the relationship of Wales. The amendment aims to address a couple of those: namely, that the Assembly cannot use its powers to discriminate against individuals because they come from outside Wales; nor can it charge different fees or withhold grants, loans or bursaries. I beg to move.
I referred to this new clause and its aim of preventing discrimination between students during the first Committee sitting earlier this week, when I fired what some have called a fusillade at the entire Bill. In introducing the new clause, my noble friend has covered many of the implications of the Welsh Assembly Government being totally out of step, as far as I can make out, with the Government in Whitehall, and of the higher education sector in Wales being out of step with that in England.
My first question is: how has this situation come about? We are assured from time to time that there are "constant discussions"—we have heard the phrase today—between the Labour Government in Whitehall and the Labour Assembly Government in Cardiff. None the less, the policies being pursued appear totally different. So, I simply ask, "What has happened?". I wish I could have been a fly on the wall during some of those discussions.
Reading the record of the plenary debate of the Assembly does not enlighten us, except that we have a clear statement of the Assembly Government's policy, which is to conduct their own review of higher education funding, as my noble friend Lord Skelmersdale said, and delay the introduction of top-up fees until at least 2007. Will the Welsh Assembly Government introduce them even then?
Meanwhile, what will be the consequences of the differences between Wales and England on the campuses? Can we have a clear statement from the noble Baroness on the position of students— English-domiciled and Welsh domiciled—at Welsh universities? Will English students in Wales receive grants in 2006, even though they will not have to pay fees? I can hardly believe that. What can we make of the Assembly's intention with regard to Welsh students, as described in the Explanatory Notes, which I quoted on Monday:
"The Assembly intends in practice to make regulations affecting students who have a prescribed connection with Wales when they start their course, regardless of the location of the institution at which they are studying and of their place of residence after graduation"?
We know the effect of the Bill on the University of Wales. It was described in a report to the university court on
"Under the terms of the Bill, which also provides for student funding powers to be devolved to Wales, the Welsh Assembly Government will not be bound to implement the provision. It has in any case given an undertaking that variable fees will not be introduced in Wales at least until 2007. If variable fees are not introduced in Wales, unless an alternative stream of additional funding is provided to Welsh higher education institutions, those institutions will be financially disadvantaged compared with their counterparts in England".
That kind of disadvantage is a form of discrimination.
My final question is whether an alternative stream will be provided, if the Assembly does not allow variable fees. If not, that will inevitably lead to a lower standard of higher education in Wales than in England. I repeat the point that I made about the comment—it is not exactly a recommendation—made by the Select Committee on Delegated Powers and Regulatory Reform. I am sure that the Government have taken it on board. They must have a reaction to it.
On Monday, I said, in reply to an intervention by my noble friend Lord Baker of Dorking that I was in favour of variable fees. I am—in the context of Wales and if variable fees are to operate in England. However, I qualify that answer by saying simply that, if my noble friend and our party were again in power, we would not start from here.
Originally, the amendment was linked to the following one. I understand that it is appropriate that the amendment relating to Wales should be debated separately.
This amendment and the next one are worth debating because we ought to flush out the terms of trade. That is the important thing. It occurs to me that if you have devolution, you have devolution. That means that different decisions can be made, and so on. However, it is possible for Ministers to speak to one another. It is possible for Welsh and Scottish Ministers to speak to other Ministers. It is also very important to understand the effect that different legislation will have.
I can see the situation arising in which the residents of England are under a certain funding regime, as are the residents of Scotland and the residents of Wales. But if the funding regime is higher education institution-based, that may have implications in student flow. I should have thought that it would be improper if, for example, the student flow was such that a great number of students from England were desperate to go to Scottish universities and, because of the funding regime, people who lived in Scotland could not go to those universities because the universities were taking students on their merits.
I think that this is an area where clarification is needed, and I hope that we can get that clarification. That applies to this amendment as it does to the next one, and there is no point in my standing up to say that twice.
I agree with the noble Lord, Lord Shutt, that there is a need to be absolutely clear. I was intending to say at the start of my remarks that I have asked officials to put together a note on the current system, on the implications for England and Scotland in particular, and on what would happen under the new system. If your Lordships wish me to do so, I shall circulate that note to all noble Lords and that will also help our future deliberations.
Does the noble Baroness realise that this is a Welsh amendment? There is equal confusion in relation to Wales, and so why has she excluded Wales?
I apologise to the noble Lord, Lord Roberts. He pre-empted me in that I was about to say that I also intend to do the same in relation to Wales. I was proposing to say something about our position vis-a-vis Wales, Scotland and Northern Ireland as what I might describe as a precursor to the next two amendments. I believe that that will help noble Lords. I am very conscious that many noble Lords who would normally speak in these debates are not here. Therefore, I shall try not to take up the time of the Committee, but I think that this is an important issue and I am sure that noble Lords will benefit from being able to read the note.
As noble Lords have indicated, those involved in the devolved administrations meet regularly with people in my department to discuss the issue of student support across borders. Of course, Ministers also meet regularly. As the noble Lord, Lord Forsyth, knows from our correspondence, as well as from my comments at Second Reading, the Secretary of State and the Deputy First Minister of Scotland, Jim Wallace, who has education responsibilities, have met. If the noble Baroness, Lady Carnegy, were here, I would say to her that Second Reading was not the first occasion on which they met; they meet regularly. As noble Lords know, each of the separate administrations is looking at the direction in which it will take its student support plans from 2006–07 in the light of the changes that we are proposing.
In relation to Wales, noble Lords have referred to the review being conducted by Professor Teresa Rees, which will be concluded in April 2005. In the interim, the Assembly has concluded that it will continue with the current fixed fee for the lifetime of the Assembly. In relation to 2006–07, the Assembly has also said that Welsh domiciled students will not be disadvantaged by the devolution of funding powers. It has confirmed that that means that Welsh students will have access to loans, fees and maintenance grants in the same way as English students do. That applies wherever the students study in the UK.
I take this opportunity to say that English students in Wales will receive the same support package as in England: a loan to cover their fees and the same grant and loan support for living costs. As noble Lords already know, the Scottish Executive is considering the options following the outcome of the third phase of its higher education review, and will be announcing the conclusions shortly. Student support is the responsibility of Scottish Ministers, and their announcement will cover the support package that we shall be making available for Scottish students who study both in Scotland and elsewhere in the UK.
I want to make clear to noble Lords that it is our intention to offer English students studying in Scotland the same package as English students studying in England: a loan to cover their fees and the same grant and loans for living costs. We shall confirm that position formally in the light of the decisions made by the Scottish Executive.
Noble Lords will know that Northern Ireland is currently consulting on proposals to introduce variable fees and fee deferrals. I can confirm that it is our intention, subject to the outcome of that consultation, to offer English students studying in Northern Ireland the same package as English students studying in England: a loan to cover their fees and the same grant and loans for living costs. Again, we shall confirm that formally when the Northern Ireland announcements are made later this year. I hope that is helpful as regards English students.
What will be the consequence of the regime to which the Minister referred? Will there not be a tremendous influx of English students into both Scotland and Wales, because the courses will be cheaper?
We are still waiting for decisions to be made. I do not think at this point that I can comment on that. Debate and discussions are ongoing. Our position is clear. It is crucial that we are clear about what happens to English students studying anywhere in the UK. However, we are waiting for decisions from the Scottish Executive on the level of fee that it will set for English and, indeed, Scottish students. I shall refer to the position on the Welsh Assembly when I turn specifically to the amendment. That is the position. We may not be where the noble Lord, Lord Roberts, would wish us to be, but that is the position.
It is important, as I say, that I am clear about the position for English students. I believe that they will make their decision based on a range of factors, not only the cost of courses. That cost will be variable across England. There may be courses that are cheaper than those in Scotland or Wales, or those that are more expensive. I believe that students will make their decisions for a range of reasons based on a range of factors and that that will continue to be the case.
I turn specifically to the amendment. Noble Lords have made clear what they intend; that is, at one level to safeguard the principles of equity of treatment and equality of opportunity if a system of variable fees was introduced in Wales and, indeed, in the absence of such a system. I can support that aim, but I would not agree with the method of achieving it.
In transferring functions to Wales, as noble Lords will know, we are following the same pattern of delegation already established in England and Northern Ireland. The National Assembly already has responsibility for higher education provision in Wales and we have agreed to transfer responsibility to the National Assembly for providing financial support to residents of Wales undertaking higher education.
The effect of the amendment is to require that in addition the National Assembly should take responsibility for providing financial assistance to UK nationals who are not ordinarily resident in Wales who choose to study there. As 40 per cent of people who undertake higher education in Wales are from other parts of the United Kingdom, we believe that that would represent a very significant financial burden on the Assembly.
I would ask noble Lords to reflect for a moment on the practicalities of the amendment. We believe that it would add an additional layer of complexity, which is unnecessary and unwanted. Students would have to understand all the different systems of financial support before making their decision on where to study.
As noble Lords know, at present the Assembly can impose a condition on HEFCW to ensure that fees charged by institutions are equal to the amount prescribed in the main student support regulations. They are not set at different levels for different individuals or classes of individuals from the UK. We recognise that it is in the interests of the institutions to attract the most talented students wherever they come from and we would not wish them to jeopardise that.
I was much taken by the comments of the noble Lord, Lord Roberts, in his wide-ranging response on Monday. I have had my own discussions on that. I wanted to be sure that I had covered all the points raised by the noble Lord from that discussion. We can both read Hansard and check that we have got to the point that we need to in terms of understanding so that I can continue with other issues.
As I said, the National Assembly made clear that it will not introduce variable fees during the lifetime of the second Assembly, which in effect means before 2007–08 at the earliest. Subject to the passage of the Bill, as the noble Lord knows and as we have already indicated, Professor Teresa Rees will undertake the review to provide advice on how the Assembly might best use its devolved student support powers and on the key question of the introduction of variable fees.
In the mean time the Assembly has made clear that as a consequence of the introduction of the new fee and student support arrangements in England its policy intention is that students ordinarily resident in Wales, wherever they study, should benefit from fee deferral through loans for fees and from the other enhanced benefits associated with the Bill. That includes the write-off after 25 years.
The Assembly's intention is to ensure that students ordinarily resident in Wales receive no less generous a package of student support under devolved arrangements than they would have under schemes administered and funded by the Department for Education and Skills. Noble Lords will agree that that is a reasonable and honourable position for the Assembly to take while they debate the wider questions of variable fees and student support arrangements in Wales.
To be clear, it is intended that the National Assembly for Wales will use its powers under Clauses 48(6) and 43(4) to commence Clause 40(2) and the repeal in Schedule 7 to the Bill of Section 26(5) of the Teaching and Higher Education Act 1998 in time for the 2006–07 academic year. For the transitional period before full repeal of the fixed fee system, the intention is not to commence the repeal of the remaining provisions of Section 26. The effect would be to enable the Assembly to break the current link between the level at which fees can be set by institutions and the existence of a fee remission grant with which to offset those fees. By so doing, the Assembly will be able to offer students ordinarily resident in Wales the same flexibility in student support as offered to students ordinarily resident in England, while at the same time meeting its commitment that variable fees will not be introduced in the lifetime of the Assembly.
I am sorry to have to read all that out, but it is important to get this clear so that noble Lords can study it. In practical terms, this means that for the academic year 2006–07 the Assembly will set a fixed fee for higher education courses in Wales. It will offer maintenance grants of up to £2,700—absorbing the Assembly's existing learning grant—and loans for fees to students ordinarily resident in Wales wherever they study.
Perhaps I have spoken too quickly this evening, but when noble Lords have had an opportunity to reflect on my words I hope that they, particularly the noble Lords, Lord Roberts and Lord Skelmersdale, will see that that reflects the position appropriately and will feel that I have covered the points of concern to them. Always with the proviso that I am more than willing to debate the issues, in Committee or elsewhere, I hope that the noble Lord will withdraw the amendment.
As this short debate has continued, a half-remembered quotation from Cicero came into my mind—I tried to be brief; I hope I wasn't obscure! My noble friend Lord Roberts of Conwy brought that half-remembered quote to my mind. He put the padding on what I said as briefly as I could.
The response from the noble Baroness was quite simply astounding. I will have to read very carefully, with a cold, wet towel around my head, especially her last couple of paragraphs—at least I suspect that they were the last couple of paragraphs. Also, I look forward enormously to what she calls,
"a note on the current position of financing students in Scotland and Wales".
I wrote down her words, I hope exactly. What on earth does she mean by "current" because this Bill is about the future, not the current situation?
I am sorry. I meant the current and the future in order for noble Lords to make the comparison.
I will have to check the accuracy and the translation, both of which are a little hazy in my mind—especially as I only ever did one term of Greek at school! However, that was what is known as "a red herring".
As I said, I am looking forward to this comparative note about Scotland, Wales and Northern Ireland, so that we can really get to the bottom of it. I was saying that I hope to goodness the note does not contradict anything that the noble Baroness has just said, which I also look forward enormously to reading.
Just by way of a parting shot, when the noble Lord, Lord Shutt, mentioned terms of trade, he seemed to provide a rather different Liberal Democrat policy from that which his noble friend Lady Sharp enunciated earlier today. Again, perhaps I had better compare those two. I will be doing a lot of comparison over the weekend. I beg leave to withdraw the amendment.
moved Amendment No. 57:
After Clause 25, insert the following new clause—
"Student fees and financial support for students as undertaken by the Scottish Executive
(1) This section applies to any function in relation to student fees or financial support for students that has been transferred to the Scottish Executive by—
(a) the Scotland Act 1998 (c. 46),
(b) this Act, or
(c) any other enactment.
(2) In exercising the functions to which this section applies the Scottish Executive must secure that—
(a) no relevant institution charges different qualifying fees in respect of a qualifying course on the basis of the relevant area in which a student is normally resident; and
(b) eligibility for any grant, loan or bursary is not determined on the basis of the relevant area in which a student is normally resident.
(3) In this section— "normally resident", in relation to a student, means resident at times when not resident at the relevant institution where he is undertaking a course; "qualifying course" has the same meaning as in section 26; "qualifying fees" has the same meaning as in section 26; "relevant area" means—
(b) Northern Ireland;
(c) Scotland; and
(d) Wales; "relevant institution" has the same meaning as in section 25."
I sense that your Lordships do not want a long exposition on the cross-border issues north and south of the border. We have been round this course a number of times, and many of the arguments have been put. I was struck in the previous debate that the Minister indicated that we could expect an announcement from the Scottish Executive in respect of the position of Scottish students "shortly". I do not know, panning back in my mind through the various episodes of "Yes, Minister" that I have watched on television, what "shortly" means. Does it mean next week, or in the next few days? Amendment No. 57—with which I am speaking to Amendments Nos. 67 and 112—would effectively prevent the Bill commencing, should it pass through its processes in this House and the other place, without those matters being resolved.
If the noble Baroness is correct that it will be shortly, the amendment will be unnecessary. It might be appropriate to withdraw the amendment at this stage, so that we can return to consider it at a later date. I take it that that later date will be longer away than shortly, in which case it will not be necessary for me to move it again. I hope that the Minister will convey to her colleagues in the Scottish Executive the strength of feeling that is being expressed on all sides of the House about the need—to take the rather good phrase of the noble Lord, Lord Shutt—to know the terms of trade and know them shortly. I beg leave to withdraw the amendment.