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Earl Russell: My Lords, is the noble Lord aware that when asked in a Question for Written Answer for quantitative data the Minister said that he was unable to supply it? Therefore, I do not believe that it is possible to blame my noble friend for being in the same position.

Lord Skidelsky: My Lords, I do not blame the noble Lord for being unable to supply the data. I say merely that policy should be based on information and if we want to find out how best to meet cases of hardship we must establish the quantitative amount of hardship. There are many ways in which we can try to deal with the issue and recreating the proposed entitlement may not be the most obvious. Further, what proportion of students cannot live at home during vacations because they have no homes or because family relations are too bad?

Lord Addington: My Lords, the point was not that they cannot live at home but that they must maintain property because of 12-month leases. Many students are legally obliged to maintain property throughout the long vacation.

Lord Skidelsky: My Lords, how many are legally obliged to do so? Those who have property with such leases are so obliged, but what proportion of the 930,000 students are in that position? My argument is that one does not establish a universal entitlement to crack a small problem, if it is a small problem. There are other ways of doing so.

I wish to know what proportion of students are in the situation in which they cannot live at home because they have 12-month leases which they cannot give up. How many full-time students cannot count on any parental support during the vacations? That is further data that we must have. I should be loath to create, or to recreate, a system of entitlements based on the idea that most students are homeless, are without parental support, or are so tied to leases that they cannot give them up during the long vacation. I believe that that is what the noble Lord is asking us to do.

The noble Lord, Lord Addington, mentioned a safety net for students. Of course I agree that there should be a safety net but the question is how best to supply it. In 1994-95, £26.7 million has been provided for limited access funds. The noble Lord did not mention that. It is administered by universities and colleges to help students in serious financial difficulties. I believe that an expansion of such arrangements, if and when financial difficulties are established, is the way forward. After all, the people who administer the funds will know the personal circumstances of the students concerned and

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will be in the best position to judge the level of support that is needed. It should not be dealt with by way of entitlement to benefits that are generally associated with labour-market conditions and interruptions. One must deal with the problem through an extension of the facilities already available to students.

That brings me to the last general point that I wish to make. I am suspicious of any approach that treats full-time students as part of the labour market. They are not in that position. I am not sure whether the noble Lord, Lord Addington, believes that students should or should not be looking for vacation jobs. That varies in different countries. Many students would benefit from having jobs in the vacation, especially in the earlier part of their degree courses. But income support is related directly to the job market. If you do not believe that students should be in the job market because their studies will be disrupted, logically you cannot also call for income support under conditions related directly to the number of hours worked—less than 16 hours per week. Housing benefit is paid to people who cannot afford to pay their rent. That is not true of most students for most of the time that they are at university.

Everyone must be aware that there has been increasing hardship for students. There is a case for being more generous in order to meet that hardship. However, I do not believe that there is a case at all for recreating a system of entitlements which are bound to be demanded by more and more students as time goes on.

5.21 p.m.

The Lord Bishop of Chester: My Lords, I am grateful to the noble Lord, Lord Addington, for tabling this Motion for debate.

I begin by quoting from a Motion accepted by the General Synod of the Church of England. I should underline that that is a body elected from 43 dioceses of the Church of England and from all different sections of society. If a private Motion is debated there, it has to carry the maximum number of signatures. At the last meeting of the General Synod, the Motion was passed unanimously that it is:

    "deeply concerned at the low level of financial support available to full-time students in higher education and requests Her Majesty's Government to consider means of alleviating the position".

Therefore, that is well in tune with the Motion before us.

I am connected most closely with Liverpool University which generously gives out doctorates in different directions. The welfare officer of the Guild of Students at Liverpool University has given me a very careful breakdown which accords with the calculations given earlier by the noble Lord that there is a difference of £9.82 per week between the income of a full-time student and that of someone who is receiving income support and housing benefit, with the reminder that those on benefit receive also free prescriptions and other benefits. That is a considerable difference. Therefore, there is a sense of deep injustice about that for those students living away from home rather than being unemployed.

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That concern is expressed in many ways. I am not concerned, neither can the Church be concerned, necessarily with those students who have parental support. Many of us, when we were students, benefited from parental support and many of us have suffered from having students of our own to support. We know that it is not an easy business and sometimes relationships become very difficult. But in speaking in the debate, my primary concern is with students who do not receive any such support; and there are quite a number of them. I do not believe that the figure is as high as one-third, but there are many such students.

Many students are living on a very tight budget. I wish to quote information given to me by a student who is a member of the chaplaincy at Liverpool University. Therefore, she is not a renegade or a beer-swilling student. She is trying to live sensibly and trying to get through her studies in order to graduate. She lives with three other girls in an apartment. On her careful budget that she has given to me, undramatically, she is left with £5 per week for food and heat. That girl does not want to take out a loan. The Government state that their reason for removing housing benefits and so on during the vacation is to make people more economically self-reliant. Her argument is that she wishes to be economically self-reliant and, therefore, does not wish to take out a loan. The argument goes both ways: she has been forced into taking out a loan against her will.

This subject is larger than the long vacation, but clearly we are concerned with the long vacation. However, before I turn to that, perhaps I may say that I know from my experience of Liverpool University that there has been an increase in the demands on the health and welfare resources of the university. More students are under stress and seeking counselling, and debt counselling is now commonplace in the university. That is a serious matter which we must consider.

However, we are considering the long vacation. How does one meet that challenge at a time when it is extremely difficult to obtain employment? Many of us, when we were students, found it extremely easy to obtain employment, but we are now living in a very different age.

Ideally, I should argue for an extra lock-on grant for the long vacation because the grant is already means-tested and that would be a way of taking it through into the vacation. I am sure that in that regard it will be argued that the grants are already thinly spread; that we wish to increase the numbers of people in higher education; and, therefore, to increase the size of the grant will reduce the numbers receiving higher education. Against that, I ask whether we want more students in increasing poverty or X number of students who can at least survive properly. I put that forward as a serious consideration. To my mind, that would be the best way forward.

The second way in which to tackle matters is for students to take out loans. The girl to whom I referred is very hesitant about the loan which she was forced to take out, as are many students, and, in particular, how it is to be repaid. Repayment is often to be made just at the time when students are taking on family responsibilities and just at the moment when they least

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want to repay it. Therefore, if that is the only answer, we should reconsider seriously how those loans are repaid. Linkage with income tax would take into account the circumstances of life at any particular time and I suggest that that would be a fairer way of repayment.

I imagine that neither of those suggestions will be acceptable. In view of that and in spite of the problems locally, which I recognise, in relation to administering housing benefit and income support, it seems that that is the only way in which to proceed unless the alternatives that I have put forward are accepted. If that is so, and the need is certainly there to be met in one way or another, I warmly support the Motion tabled by the noble Lord, Lord Addington.

5.27 p.m.

Baroness Williams of Crosby: My Lords, I too congratulate my noble friend Lord Addington for moving the Motion this evening. I should like also to congratulate the right reverend Prelate on what he said about it.

We now have a Secretary of State for Education who seems prepared to listen to some of the problems which confront those of us who are interested in educational matters. Therefore, I hope that she will consider very carefully this debate, and that the Minister who is to respond will consider all those suggestions which are intended to be helpful and positive.

Following on from what the noble Lord, Lord Skidelsky, said, we are clearly moving towards a different philosophy of student support, whether for good or for evil. That new philosophy is to base student support on a mixture of loans and the ability to meet the costs of higher education from private sources and away from the concept of grants.

I suspect that that is the philosophy, and I believe that the 10 per cent. cuts which started in 1994 and which should conclude in 1997 will not conclude in that year. I believe that we shall see a steady decline in the grant system to the point at which there is no longer a grant of any kind for maintenance.

I merely wish to register that there are two great drawbacks which should be put on the record. The first is that that is a particularly harsh system for those whose earnings after graduation are low; primarily those who work in the public service. Some noble Lords will know that at present I am a professor at Harvard University. It is one of the great problems of American education that many former students in low-paid employment are unable to pay back the sums involved in their education—and many of them are engaged in some of the most socially necessary jobs which any society has to offer.

The second point that I should like to make is that the system we have adopted in Britain is one that is extremely harsh on students who suddenly experience a change in their life circumstances, perhaps because of the death of a parent or because of disability in the family or because, for one reason or another, they are affected as regards their ability to gain employment after graduation. As I said, the system is peculiarly harsh with no element of fairness to those students who, for a

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variety of reasons, encounter financial responsibilities and commitments which they could not have envisaged when they took out the loan.

With regard to the system, and in response to the noble Lord, Lord Skidelsky, I should like to point out that of course one has to consider the numbers in higher education —indeed, the noble Lord is quite right in that respect—and we must also consider the desirability of an expansion in those numbers. However, one has also to consider how many students actually take degrees. As the noble Lord will know, in France and Germany, for example, and several other countries, a great many students enter university but far fewer actually complete their university and higher education studies. One of the great glories of this country is that a very large proportion of all our students goes from beginning to end of a university course because the work involved is so intensive and spread over a very short period.

I should also like to mention the fact that the British university structure is one with which the system that we are now moving to is peculiarly incompatible. Again, in American universities the provision for student jobs—many of them in the university itself, in libraries or in occupations such as a research assistant, a teaching assistant, and so on—actually complement the studies that the students are undertaking. That is not characteristic of the kind of jobs that our students undertake; for example, they take mostly bar jobs, waitressing jobs and jobs which are in direct conflict with the students' time and energy as regards their academic studies.

Implicit in what the Government want ought to be a major move towards discussing with the CVCP, and others in higher education, the possibility of deliberately planning for a much larger number of student jobs associated with and related to the university. Incidentally, I believe that it should also lead to a great willingness by the Government to pursue with employers within the public and private sectors the possibility of a major expansion of summer internships. In the United States and Canada, students find it relatively easy to get summer jobs which complement their education. As the right reverend Prelate has just said, it is increasingly difficult in Britain for students to find summer jobs. Moreover, summer jobs related to one's studies are virtually impossible to find.

My final subject relates directly back to the remarks made by the noble Lord, Lord Skidelsky. I respect the gritty frankness of his remarks and his willingness to associate himself with what is certainly an unpopular cause; namely, student loans as compared with student grants. However, I appeal to the noble Lord's own sense of intellectual coherence and his willingness to be frank about facts. I ask him whether he can really support the indefensible system of student loans which has been adopted in this country over the objections of the universities, of the other sectors of higher education, of students themselves and of virtually anyone else who knows anything about the subject.

The system is spread out over five years within which rigid, fixed amounts must be paid. There is virtually no flexibility at all under the system to allow for differences in circumstance, and the scheme is not

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related in any way to the income that students will earn. It means, for example, that those who enter the NHS as house doctors will find it incredibly difficult to repay loans because their earnings are so low in the early years of their profession. All of that makes the existing scheme quite straightforwardly indefensible. I am surprised—although, not altogether surprised—that the noble Lord, Lord Skidelsky, did not address himself to the existing scheme.

If we are to support the idea of a move from grants to loans, we must, first, soften that move in the way suggested by my noble friend, Lord Addington: we must allow for some redress for hardship. Everyone from universities who is present in the Chamber knows perfectly well that the access funds do not amount to an adequate safety net; they amount to a ragged net which is full of holes. Secondly, we must accept greater flexibility and a link to the income earned after graduation in the way that has happened with the Australian scheme, which is a great deal fairer than ours. Thirdly, there must be recognition of the fact that students would not be entitled to universal benefit as suggested by the noble Lord but rather to the means-tested benefits such as housing benefit and income support. Until we have a much better framework, I urge the House to accept the annulment of the grant awards as suggested by my noble friend, Lord Addington. I am very honoured to be present and to be able to support my noble friend this evening.

5.35 p.m.

Lord Beloff: My Lords, it is a particular pleasure to follow the noble Baroness. Since the noble Baroness faced me across the table of the Oxford examination school, some years ago, we have confronted one another on many occasions, usually on educational matters. However, this evening is an exception in that we are, for once, in total agreement. I find nothing with which to quarrel in what the noble Baroness said, but I should like to expand on it a little.

As the noble Lord, Lord Addington, said, many speakers in your Lordship's House—all, I believe, with university experience—warned the Government when the loan scheme was established that, even if it was correct in principle (as I believe it is to say that people who derive benefit from society at large might, in later life, be under a moral obligation to repay some of it) it was bound to be a tragic disaster. Indeed, the particular scheme mentioned by the noble Baroness and which the Government adopted was a disaster. It had no merits compared with the Australian scheme to which the noble Baroness referred.

Even I—and I believe my noble friends on that occasion—thought that, at any rate, it would actually work and that the loans would be forthcoming. We also thought that when students applied for loans their letters would be answered and their telephone calls dealt with. However, we now know from the Committee of Vice-Chancellors and Principals which has reported on the matter that nothing could be further from the truth. It is not only a bad scheme, it is also a scheme which has been administered with monstrous incompetence. In

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fact, looking at the record of the Student Loan Company makes me think that Lambeth Borough Council is a model of business efficiency.

Why did not the Government adopt what was urged upon them; namely, a recovery of some of the costs of higher education through the taxation system, either by means of income tax, national insurance or in some other way which could be clearly related to income and repayable when the income was actually available?

The Government never gave any conceptual argument. They stated that the Treasury said it was not possible: it was technically too difficult for the Treasury to work out a scheme for recovering money in that way. If the Australians can do it, one might think that we could also do it. But, apparently, that argument is not convincing. There is a curious aspect in the whole story. Noble Lords may be aware that the Chancellor of the Exchequer is proposing to sell off the Treasury building in order to provide better for its refurbishment. I urge the Minister to inform his right honourable friend that it is not the building that needs refurbishment; indeed, it is the chaps inside it.

We are fighting a very difficult battle to try to introduce sense into the system. We cannot cover the entire range of hardship. I, myself, have seen the surveys that have been carried out by the ancient universities, especially the University of Edinburgh. There is no doubt that a considerable degree of hardship exists which will, inevitably, lead to the lowering of academic standards. You cannot be worried about whether you can afford a meal the next day and at the same time contemplate the finer points of Aristotelian logic, or whatever it may be. That is a really serious question of which I think many students, particularly the more serious students, are very well aware. They are aware that their great opportunity is being affected by this situation.

There are also categories of students whose existence the noble Lord, Lord Skidelsky, omitted altogether—the mature students. We are always told that education should be a continuous process and that we want more people to go back to higher education at a later stage if they have missed it at an earlier one. But the whole scheme at the moment is heavily biased against mature students for whom many benefits are not obtainable. There is, of course—I am encouraged here by the presence of the noble Lord, Lord Dahrendorf, who knows a great deal about this—also the question of postgraduate students. Why cannot the college of the noble Lord, Lord Dahrendorf, attract more British students to its magnificent programmes of postgraduate research? It is because the provision of support for postgraduates is almost totally lacking.

The noble Lord, Lord Skidelsky, says all this is a consequence of expansion, and expansion has been much applauded on all sides. As noble Lords will be aware, I am unconvinced. My own feeling is that there is no point expanding a system unless you have thought out the way to pay for it. It is quite clear that when this expansion was accelerated—by a very high proportion, as the noble Lord, Lord Skidelsky, said—no serious effort was made to see how it would be paid for. It is being paid for either by putting additional burdens—

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administrative as well as teaching—upon university staffs who, if not yet reduced to the student level of poverty are moving in that direction, or at the expense of the students themselves. I see no benefit to the economy or to the national well-being by putting out into the world a number of graduates who, by reason of their circumstances if nothing else, are not going to be able to make the contribution which a generation ago we would have expected of someone with a graduate degree.

Therefore, this is a situation which really demands a great deal more thought than is being given to it. The National Commission on Education funked this. The Labour Party's commission on social justice has funked it also. It is time that, from all sides of the House and from all sides of the political spectrum, we began to ask ourselves what is the point of having a system which is badly run, which creates so much hardship and which is unacceptable to the universities themselves as well as to their students. What is the point of this? Is it not better to say that we now need to think very carefully before we go any further with expansion? The CBI wants to have another huge burst of expansion from 30 per cent. of the age group to 40 per cent. but the CBI's pronouncements on public affairs are nearly always beside the point.

Before we do anything of that kind we really must ask ourselves what to do. I have a tiny glimmer of sympathy with the noble Lord, Lord Skidelsky. My favourite solution would not perhaps be the solution that the noble Lord, Lord Addington, has put forward. But in the absence of anything seriously proposed—and in the absence, for instance, of a great increase in the amount of money available to universities to deal with hardship cases, which would be the simplest short-term solution—I feel the House has no option but to support the Motion of the noble Lord, Lord Addington.

5.44 p.m.

Lord Redesdale: My Lords, I would like to make a short speech based on my own experience as a student. Many noble Lords here will be surprised to learn that I obtained a degree in Newcastle. I left Newcastle University in about 1989. I remember that student loans were on the horizon and I remember a cry going up from all of us who were leaving, "Thank God it will happen to somebody else"! Unfortunately for the students around today, it has happened to them.

I wish to point out a few of the realities on the ground today in Newcastle. One of the points that I wish to underline is the fact that the Government have been successful in their attempt to raise the number of students in higher education. That very success has led to some of the major problems for students in Newcastle. I wish briefly to consider two areas: housing and jobs. I know that both areas have been covered by other noble Lords.

I wish first to consider housing. One of the problems with raising the number of students in Newcastle is that it has placed a massive burden on the available housing stock for students. The vast increase in student numbers has meant that there is now a great deal of competition for housing. The houses have not got any better; they

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are still the same dumps that I stayed in but they now cost double the amount that they cost in my day. I remember renting a house in Fenham in the west end of Newcastle for £14 a week. The price gives an indication of the kind of house it was. I visited that same area and asked students about houses there. The houses there today are still in the same state as when I lived there—in fact they are probably worse—but they are now being rented out at the average rate for Newcastle which is £35 a week.

As regards the point about houses being rented out for 12 months of the year, it obviously does not make any sense to a landlord who is renting out commercially to rent out for anything less than 12 months of the year. The customers of those landlords are students and why should the landlords leave their houses empty over the summer period? Problems can arise if houses are left empty over the summer period. The one good asset in the house I rented was a marble fireplace. However, I remember returning after the holiday to find that it had been stolen. That was rather annoying because we did not get our deposit back. Someone had broken into the house over the summer period and stolen the fireplace. That is an indication of what Fenham was like.

I now turn to jobs. The increase in the number of students has meant a decrease in the number of jobs available to students. The jobs available to students are very limited in nature. At the time we last debated this matter I visited Newcastle and I went into McDonald's and asked whether I could get a job there. The staff said I would be put on the waiting list. If one has to be put on the waiting list for a job at McDonald's, that shows there must be a massive scarcity of jobs because the work there is so badly paid.

The only jobs that are available in some areas are bar jobs. However, due to the unemployment in the area, there is competition for those jobs with people living in Newcastle. Sometimes employers in the area will not employ students for those jobs. As regards summer vacation jobs, if one is a student in Newcastle—I know this from what my friends have told me—and one wishes to obtain a job there, one has to lie and say that one is not a student. If one does not do that, one will not be employed because employers know one will only be employed for a short period of time.

Those are just some of the problems. Although one is bound to keep one's accommodation for the summer period—and I calculated that for 12 weeks in Newcastle one would pay £420 at the lower end of the housing market, which is a significant sum for a student to have to pay—one might have to move away from Newcastle to find a job. That will be a problem in any town with a student population.

The noble Lord, Lord Skidelsky, estimated the cost of the scheme as £443 million. Perhaps I am cynical, but taking into account the rise in student numbers and the fact that a third of those between the ages of 18 and 21 are now students, there must be an enormous saving to the taxpayer because if they had stayed at home and had not become students they would have received benefits. Considering that there is a large amount of unemployment in that age group there must be a saving to the taxpayer.

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There is no safety net for students at present. There should be a safety net for the summer period. It is difficult to spot student poverty because it is an age group which will not be the most visible. If one takes out a loan one will probably be able to pay it off, but that does not mean that student poverty does not exist. It is a growing problem.

I hope that the Minister will give one commitment when he sums up and will agree to review the access fund and the university hardship funds. That is the only safety net which exists at present. Many noble Lords are concerned that that is not an adequate safety net because so many fall through it. I hope that the Minister will give a commitment to take another look at the matter.

5.52 p.m.

Baroness Park of Monmouth: My Lords, I too am grateful to the noble Lord, Lord Addington, for promoting the debate. We have all received statistics on student finances which are deeply disturbing. I propose to quote very few, but that is not for lack of data.

It is claimed by the Department of Education that such evidence as is available is fragmentary, anecdotal and insufficient to justify the immediate and urgent review of policy which I believe to be essential. Is it really not enough that the vice-chancellors at their meeting with the new Secretary of State on 2nd December pressed her to review the level of student support as a matter of urgency and said that many students were now in real poverty and that the question was wider than the balance between grant and loan? Is it not enough that the students themselves have carried out reviews of 1,718 students at St. Andrews, 1,266 at Edinburgh, 3,062 at Aberdeen, 767 at Glasgow and 1,000 at Lancaster), all of which tell the same story of serious financial strain?

I could cite many detailed statistics provided both by those surveys and by the CVCP's student financial support survey of home full-time students in the autumn of 1994 which demonstrate clearly the substantial number of students suffering a degree of financial stress and real hardship over long periods. That is seriously damaging to their academic work and hence to their prospects in a society which urgently needs good graduates, not students who have been driven to become only part-time students while notionally taking a full-time course because they are obliged to take low-paid jobs with long hours in term time, even in their last year, to survive.

Employers are looking for bright graduates with transferable skills. They expect much more from a graduate than proof of academic quality. They are looking for young men and women who, in addition, have acted, made music, communicated, been part of teams, taken initiatives or led expeditions. How are students who are already only part-time students because they are stacking shelves at Sainsbury's when they should be spending Saturday nights deciding how to run the world (which is what we did in my day) to afford the time to learn those skills which make a rounded human being and which are part of a university education? This is the time when the young can explore

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new ideas, make friends for life, learn to respect other points of view—in short, enjoy a truly catholic education. That is the experience good employers are looking for, and many of today's students are not getting it, to the great loss of our country.

There are four issues which I urge the Government to address with immediate practical measures without delay. The first is to create forthwith an additional interim means-tested payment in lieu of housing benefit but directed to the rent and accommodation problem while a proper review of student poverty is carried out. I have never understood or agreed with the Government's extraordinary thesis that students going into higher education have deliberately removed themselves from the labour market and thus disqualified themselves from entitlement to social security benefits, but I am prepared to see some logic in requiring money for students to come from the education budget. But some such money is urgently needed.

In the past, Ministers have said that they wanted, first, to increase the total resources available to students and, secondly, to increase students' economic awareness and self reliance. As I said in an earlier debate, it is difficult to learn to manage money when you have none to manage. Can the Government suggest how to manage a budget based on the following figures? In 1995-96 the maintenance grant outside London will be £2,040 and the loan available will be £1,150 (or £840 for those in their last year). Therefore the total will be between £3,190 and £2,880. The median rent, countrywide, is £42 per week—per room, not per house—for a 52-week year (landlords do not work in academic terms) or £2,184 per annum. That leaves the student without private means (who are the students we are talking about) with between £1,006 and £806 for all other purposes for the whole year. That is between £20 and £15 a week to cover food, heat, books, travel and sometimes council tax.

The Minister will say, "There are those splendid access funds". The difficulty is that those funds serve both undergraduates and postgraduates and the latter receive no loans and need help. Now mature students are to lose their allowances, so they too will need help. Secondly, only between one-half and one-third of applications can at present be met, even partially. It is worth noting that the vast majority of those receiving access funds last year were living in rented accommodation, so that is undoubtedly where the need lies.

However, the whole infrastructure of student life is suffering. One shocking example is the lack of access to libraries, whether to terminals or to books. Edinburgh University library bought no books at all for six months because of lack of funds. If students cannot buy textbooks at £20 each or more and cannot borrow them how are they supposed to do their academic work?

Why should we press for an interim subsidy, whatever we may call it and from whatever pocket of the Exchequer it may come, pending an early review and a fresh approach to student funding? It is because we see a valuable national asset being frittered away. At present, students are living in a state of total uncertainty. They are existing on a variable and unpredictable mix

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of the student loan, the maintenance grant, possible money from the access funds, possible private or bank loans, occasional possible parental help and possible short-term, part-time jobs with low pay and long hours. Many cannot expect parental help. Most cannot get a decent job in the long vacation which might, as in the past, help them to clear bank debts as they go along. Some are precluded from that anyway because of course work. Only a small number will get help from the access funds, and universities are precluded by law from using their funds to subsidise students. How on earth can anyone plan his or her finances in the face of so many imponderables which are beyond control? I find it disgraceful that student unions have to carry out extensive and complicated debt arrangement counselling as one of their chief functions.

I argued earlier for an interim mechanism to introduce one more element of certainty into students' finances: that they should have the grant, the loan and an interim payment of some kind while the whole system of financing is reviewed and rethought. I agree with other noble Lords that that payment might be made through the existing countrywide mechanism of access funds and could be presented simply as a significant increase in those funds. For instance, in Oxford, 60 per cent. of this year's applications for access fund which are awaiting consideration are from undergraduates living out and therefore liable to pay 52 weeks' rent.

Another simple and thoroughly useful recognition of the need to improve the present appalling lines of communication between students seeking loans and the Student Loans Company would be the immediate provision of a Freephone line for students to use. One of the many problems which students have encountered is the virtual impossibility of getting through by telephone, as they seek to do after successive letters and applications have vanished into the black hole either of a computer or a pending tray. It is surely disgraceful that a student can exhaust a £5 telephone card, bought especially to ensure that he or she actually gets to talk to someone, and still gets no further than being put on hold and dealt with by the answerphone. I know that students have urged that there should be a Freephone link with the Student Loans Company only to be told that that is a Department for Education decision. I appeal to the Minister to please make that decision now.

That lack of communication, coupled with gross inefficiency on the part of the Student Loans Company in dealing with its proper business, has extended even to face-to-face contact. The student loans consultative group, itself made up of representatives of large student unions selected by the loan company, was unable to obtain an interview for three months, while the backlog of 35,000 unprocessed applications built up. It was finally seen in January of this year.

Perhaps I may urge the Minister to lose no time in asking the Secretary of State, whose coming—I am happy to agree with the noble Baroness, Lady Williams of Crosby—has brought such a breath of fresh air and common sense to education, to set up without delay a review body. This should include representatives of the CVCP and the appropriate student bodies such as the NUS and some of the larger student unions—for

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instance, the Ancients and others such as Manchester, London and some of the new universities, and rethink the whole method of student financing.

In my view, there should be an independent audit, not a domestic one, of the Student Loans Company. Could not the National Audit Office do that? The Student Loans Company should be required to account for its proceedings and to operate a better management structure in future, with more staff allocated to the processing of applications as opposed to the pursuit of debt. I understand that that was done in December in order to clear the backlog. That principle should be maintained.

Students themselves could make some valuable suggestions. They have a great deal of sense. Just as the Government have had the common sense and honesty to revise their policies and management processes for child support, so must they make the Student Loans Company work or scrap it. It has not worked hitherto, although there are hopeful signs of a better approach to problems with the departure of its unlamented head. This is the moment to do some radical rethinking. The Government regard all surveys—and, of course, statistics can be interpreted variously—as tending to be skewed in some way. It should surely be possible to devise questions which will provide honest answers.

The other area in which there needs to be radical rethinking is the method of repayment. Other noble Lords have spoken about that. I say only that I strongly support the proposal, made and rejected long before the recent Labour commission, that repayment should be income related, with repayment linked directly to pay level and collected probably through the national insurance system. Under the present system, whereas in Hansard of 25th January 1994, at col. 950, the then Minister in this House quoted a repayment figure of a mere £11 a week, the figure for a student going down this year will be something like £70, and that figure will rise to £96 per month within five years. That is a daunting prospect.

I have said nothing about the proportion of students who are dropping out, because as yet there is no mechanism for establishing whether the reasons were solely financial. However, the combination of no money, no way of planning to secure it, and the effects on work and future prospects of continual anxiety and stress must be a powerful factor.

We are asked to believe that there is a feelgood factor in the country arising from a gradual and welcome improvement in the economy. I hope that we do begin to feel that. Too many students, however, are experiencing the "feelbad" factor. It is in the power of the Minister to persuade the Secretary of State to exert her undoubted energy and goodwill to change students' lives. All it needs short-term is free phones, a better use of staff in the Student Loans Company, a major increase in access funds, and the setting in train of an objective and radical review, in consultation with the CVCP and student bodies, both of student finances and of the operations of the Student Loans Company. I cannot but wonder whether that monstrous animal should survive.

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Long-term, I hope that we shall see a different formula for recovering loans, and a real hope that students will once again be full-time students, able to use the resources of their universities to the full and to emerge as valuable graduates.

6.8 p.m.

Baroness David: My Lords, I must apologise for failing to put my name down in time to get it on the list, but I did want to speak about the effects of government policies over the last number of years on student finances, which I consider to be disastrous as I think quite a few people tonight have also said. I felt that it was important that a good number of us said how totally unsatisfactory are the present arrangements that the Government have put in place.

From September 1986 when students lost their entitlement to supplementary benefit and unemployment benefit during the Christmas and Easter vacations, things have gone from bad to worse—housing benefit withdrawn and vacation hardship grants gone, among others. Then the flawed Education (Student Loans) Bill was introduced; and what an appalling mess the Student Loans Company is now in since the new fast-track application system for loans was introduced in May last year. Chaos and widespread student hardship have resulted. Of 320,000 forms for loans sent out, for the current academic year, only 60,000 were ready for processing at the start of the new term. Thousands of students were left without loans. The company was forced to take on extra staff to try to clear up the mess it had created. Eleven thousand telephone calls a day were being received. At the end of December 1994—that is, at the end of the first term of a new academic year—35,000 students had not received loans. In the context of steep grant cuts, this meant significant student deprivation and suffering.

Many borrowers (over 20,000—7.7 per cent. of those in repayment status) were in default at the end of July. Legal action was in progress against 749 borrowers and judgments had been received or enforced against a further 1,483.

Students do not like getting into debt, and the right reverend Prelate made that clear in his remarks. It is a heavy burden and more and more almost inevitably are in bad debt—up to several thousand pounds at the end of their courses. One survey indicated that nearly half of all undergraduates are finding it difficult to pay their way through university and a quarter are turning to term time jobs. That is not good for their work. In particular, one hears about the number of hours per week which a great many are working. A survey last year showed that,

    "nearly nine out of 10 academics strongly agree or agree that financial hardship is damaging students' academic achievements".

Some students have given up altogether. Access funds, which are available only if a loan has been applied for, have proved totally inadequate for need. That has been pointed out by a good many speakers.

I would like to speak of postgraduate students, who face particular problems. This is linked to the decrease in discretionary awards. The Gulbenkian survey shows that they had fallen to 1,700 in 1993-94 from 4,000 in

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1990-91. They and part-time students and mature students have had to face many more problems than the ordinary undergraduates who can claim a grant, albeit any grant is now a very reduced one. The average proportion of those in debt rose by nearly 20 per cent. among postgraduate students at St. Andrews. I was there last Saturday, as it happens.

Conditions for students have got worse, too. The increased numbers of students have not been provided with increased facilities. Libraries have not enough space for the larger numbers, nor enough books for their needs, as has already been pointed out. Because of inadequate funds more and more students are relying on books from libraries. The demand for study space in libraries has increased, too, for many reasons, but one is the result of cramped and cold living conditions. Student numbers have gone up by 70 per cent. in the last seven years; library provision by only a few per cent. Many universities have responded to these needs by having longer opening hours. Oxford and Cambridge colleges have long offered overnight study facilities. Bath University library opens until midnight in term-time but the new study centre which it is building will be open all night. More universities should follow these good examples. The rise in accommodation costs—faster than inflation, as the noble Lord, Lord Redesdale, said—is another cause of students getting into debt. Payment for rent takes up such a very large proportion of a student's income.

Could the Government not accept that all is not well in the financing of higher education? Could they institute a proper financial review—as was suggested by the noble Lord, Lord Beloff, the noble Baroness, Lady Park, and others —and not only of higher education but also of further education, as it does not seem fair that an 18 year-old at university should be treated very much more favourably than an 18 year-old in a further education college?

What one fears will happen is that it will be only the well-off who will be able to afford a university education, that it will become for the elite, available to those with well-heeled parents. It is very disturbing that those without considerable support from parents or relations will become reluctant to take on the daunting financial responsibilities and the possibility of large debt at the end of their course that now seems inevitable for a great many young people. This I find deeply disturbing. The possibility of equality of opportunity and education for all up to degree standard will become more and more remote. And that is bad both for individuals and for the country.

6.13 p.m.

Earl Russell: My Lords, not for the first time I should like to thank my noble friend Lord Addington for introducing this subject and for speaking about it with so much expertise. This has been an excellent debate. If someone were to read the Official Report without knowing anything of our names, he would not be able to guess from what has been said to which parties we all belong. The voice of experience seems to be unanimous.

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I must also declare an interest, both as a university teacher and as a parent. In both those capacities I have reached the same conclusion—that the basic package of support is short by approximately £1,000 a year. In this profession we seem to be fated to be Cassandras: our remarks do not get attention until it is too late for them to be of any use. I remember very vividly sitting on these Benches almost seven years ago waiting to make my maiden speech and listening to my noble friend Lord Jenkins of Hillhead saying that if present policies were to continue this country would be without a world class university in the 1990s. I can still remember the shock and horror which came back from the other side of the House when he said that. The word "alarmism" flashed by a telepathic signal across the Chamber. That remark looks a lot more on the spot now than it did then. One of the biggest reasons why it does so is the collapse of the system of student financial support. I agree with everything said by the noble Lord, Lord Beloff, about the funding of expansion and I will say that, though we have more students in higher education, whether more students are getting more education is something as regards which I have very profound doubt.

We might pause a moment to think why the funding of higher education has been a problem all round the world in the past 20 years. It is the clash of two tendencies. One is that higher education is a quality market. In a quality market competition does not lower the price; it increases it. If one thinks, for example, of fighter aircraft, in 1940 to have the second best fighter aircraft in the world was worth nothing. So one does not think in a quality market of saving a few pounds; one thinks of making the product better. The tendency in all the world's great universities, with the growth of more expensive ways of tackling the big sciences, has been to drive the cost down. That is inevitable. At the same time it has been the tendency of the world in the late 20th century to want to move towards a greater degree of equality and to spread privilege more widely. Those are both good tendencies, but until we can accept that they are capable of conflicting we shall not be in a position to come anywhere near planning our higher education.

I wish to touch on one or two small points. We have heard a good deal about the recent misfortunes of the Student Loans Company. I should like to thank the Minister, Mr. Boswell, for being kind enough to have a meeting with me on that subject about three weeks ago. I found I was pushing on an open door. When one is pushing on an open door, one stops pushing, just as when one is in a hole one stops digging. I did not feel that anything I could do could make the Minister more determined to do something about it than he was already. I agree, though, with what has been said by the noble Baroness, the right reverend Prelate and my noble friend Lady Williams of Crosby about repayment.

Two basic problems arise from this debate. One is that the total package of student support is not big enough. The other is that, even if it were big enough, the breach in the universal safety net will cause hardship. However, I think we need to split these matters up. I shall deal first with the total inadequacy of the package.

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The real measure of that is the number of students who are now regularly in employment. That point has been made from every quarter of the Chamber. The right reverend Prelate made it particularly effectively. A lot of universities, including my own, have always had a rule that students may not take full-time paid employment during full term. A lot of universities, including my own, now have institutions to help undergraduates to find such employment during term. One does not get into that kind of position lightly. One does not make the tremendous cultural revolution in one's own thinking involved in encouraging the students to get jobs during term unless one knows very well that what they are getting is not enough or anything like enough. That cultural change is an enormous one and a measure of all our experience of what is really wrong.

I do not think everyone is up to date with it. The noble Lord, Lord Mackay of Ardbrecknish—I gave him notice that I intended to quote this—said on Monday 16th January:

    "most full-time students I know are not seeking employment".—[Official Report, 16/1/95; col. 401.]

I am sorry that his acquaintance is so limited. If he would like to come down to King's at lunch time one day, I will enlarge his acquaintance. The noble Lord also said (col. 401):

    "I should have thought that those two conditions—being a full-time student and actively seeking work—cannot apply concurrently".

There I agree with what he says. What I am not so sure about is that he agrees with government policy—because for most people it is not now possible to be a full-time student without getting paid work. The effect of that on their academic work is as the noble Lord, Lord Beloff, described it. I cannot put it more strongly than he did. I will let him speak for both of us.

A certain number of comments will always be forthcoming when we try to make these points. Some people will say that it was ever thus. The last time that that point was made in this Chamber I reviewed my memory bank while the speaker was on her feet. It was true that I could think of six cases which were as bad as anything that happens now. But those were my worst six cases in 30 years before the present system came into being. When I compared them with the worst six cases of my past two weeks, they were identical. That is a measure of the change that has come about.

People may ask why the Government got it wrong. It is a fair question. I think the answer is that the survey that was carried out by Research Services Limited when the new system was being brought in, estimating how much money students were getting from social security, got it wrong. I believe the reason was that those who completed their questionnaire filled it in wrongly. That, I suspect, was because, since people read the newspapers, they were afraid of a massive campaign against them for scrounging. If so, I hope that they learn their lesson and are more honest next time they fill in a survey.

I agree with my noble kinsman Lord Henley that one cannot blame the Government for believing independent research. But after four-and-a-half years the

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Government ought to begin to wonder whether research that contradicts the experience of everyone who knows anything about the subject was perhaps wrong.

It may be said that if the situation were this bad, students would not continue to go to university. I speak to every new pupil of my own in his or her first week and explain roughly what the financial position is. I meet utter incredulity. They have no idea that it is like that. Six or nine months later they turn up and say, "You were quite right". But they do not go to university believing that it will be the way that it is. So the Government cannot rely on the number of applications to prove that matters are all right.

Then there is the safety net. Even if the basic package were all right, there would always be unexpected cases: people who fall ill during the long vacation, who of course cannot get jobs; people who do not get any support from their parents, in some cases because their parents have thrown them out; people who transfer courses, which happens for perfectly good reasons, and who may end up doing a three-year course on two years of grant; people who suffer an accident or an injury, something that is not covered by an insurance policy—a misfortune that leads to extra costs; people whose parental contribution cheque bounces—and during the recession we have had a good many of those instances, which are not the fault either of the parent or of the student; and exactly the same category of people as are entitled to social security in every other walk of life, namely, those who try to find work and cannot. Finding work in Bournemouth during the Christmas vacation is, I have learnt, particularly difficult. If one cannot find work, one ought to have, simply because one is a human being, entitlement to support from the social security system. It is a citizen's right.

The Government may invoke costs. If so, they have not thought all round the problem. My noble friend Lord Redesdale made the point that in many cases students are in competition for jobs with ordinary members of the public. I know that some work in the students' union. But if—to take actual examples—I find my pupils behind the till at Waitrose or behind the counter at Liberty's, they have taken jobs which would otherwise have gone to ordinary members of the public. Because they have those jobs, somebody else is on income support. So the Department of Social Security is paying just as much as it did before; it has merely shifted its saving from one person to another. That is not a particularly useful process.

The Government will undoubtedly invoke the Access Funds. The Access Funds might possibly be useful if they were designed simply to deal with unexpected hard cases. What those funds cannot possibly deal with is a system which is short by £1,000 per student. There is simply not that kind of money in the system. I do not believe that the Minister will deny that. But if they were to deal even with the hard cases, I am not sure whether trebling them would be enough.

The Minister may say that social security is not the ideal means of educational support. If he says that, I shall not argue with him. It is true, just as it is true that social security is not the ideal form of support for people

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in full-time employment. But in both those cases, if the support that they receive from their normal occupation drops below benefit levels, then as citizens they should have an entitlement to social security support. It is for one thing the only way to create pressure to keep their income up to a level on which body and soul can be kept together.

People may say, "In that case we cannot have the expansion that we want". I say: there is no point in expanding higher education unless what you are expanding is in fact higher education. If people cannot get about £1,000 a year more than the size of the present package, I will advise them in public, as I have done before and, if need be, will do again, that it is much better not to go to university at all.

6.27 p.m.

Lord Morris of Castle Morris: My Lords, Alexander Pope, at the end of The Dunciad, writes as follows:

    "Lo! thy dread empire, Chaos! is restor'd;

    Light dies before thy uncreating word".

That well describes the situation revealed to us by this debate, for which the House is deeply indebted to the noble Lord, Lord Addington. And how many times in recent years has the noble Earl, Lord Russell, reminded the House that the academic standards of many university degrees have fallen because students are now forced to waste their time earning money in term and throughout vacations simply to pay their bills?

On 17th March 1993 I myself pointed out that students of English Literature, my own subject, no longer have time to read the plays of Shakespeare. Assume a reading speed of about 30 pages an hour, and it takes 469.9 hours to read Shakespeare. Assume that a student works a 40-hour week, and it takes 11.7475 weeks (doing nothing else) to read Shakespeare. A long vacation, for which the student now receives no extra financial support, is about 12 weeks. He could not read Shakespeare. He does not read Shakespeare. He gets a job because he has to. And the fact that students now have to fight to get paid jobs in the summer vacation is proof positive, if we needed it, that academic standards have indeed fallen in most of our university subjects.

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