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Lord Peston: My Lords, I should point out to the noble Baroness that most of those she has just mentioned have not been near a classroom for many years. I was in fact referring to practising teachers.

Baroness Blatch: Nevertheless, my Lords, there are a number of people who have teaching experience. We also have governors and parents of children who are in school or in college and university.

Following the unilateral pronouncement of the Scottish Minister which created a different system for the setting of fees, we shall challenge the principle and the proposal of differential fees for UK students within the European Community. There is no justification--

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and, I believe, possibly no legal basis--for treating a student from France, Scotland or Southern Ireland differently from a student living in England, Wales or Northern Ireland.

I move on to consider gap-year students. There has been a considerable lack of understanding of the impact of these proposals on students who take a year out before entering university. There have been a number of changes concerning gap-year students. However, for clarification, can the Minister say whether those students who will have the tuition fee waived in the year 1998-99 will also enjoy the benefit of the present system of maintenance grants?

Local authorities, too, are in a state of flux. I believe that they will continue to means test applicants for loans and grants, although I understand that is in the melting pot. But how are they expected to means test families of overseas applicants? If they are successful in means testing the families of Italian students--something that even the Italian Government have not managed to do over many years--they really will deserve a bouquet.

We shall seek to ensure that all of the income generated by the introduction of fees is dedicated to higher education. If it is not, then the Secretary of State is wrong in his claim that the fee is not a tax. If the money is exclusively generated from higher education students and not dedicated to higher education institutions, it cannot be anything other than a tax on higher education students and their families. When the noble Baroness said that the tuition fees would go direct to the university that each student attends, I believe she was referring to a mere technicality because my understanding is that the money will be clawed back, pound for pound, and then reallocated. It would be helpful to have clarification on that point.

As regards the impact of the new funding system on the public sector borrowing requirement, I was interested to read the Select Committee report on this area of funding. Is there any example of a situation where public money is loaned and collected by a public body, for example the Inland Revenue, which is not counted against PSBR? Under the system that is proposed there will be large cash flow costs to the Exchequer which must impact on the PSBR. Will the Minister tell the House what are the intentions of the Treasury in this matter? Does the Inland Revenue have a system already up and running to deal with a measure that will be in place in a matter of months?

As regards the pay-back arrangements, will there be a point at which the debt owed by a student will be written off over a period, and if so what will that period be? At the moment it is the age of 50, or a period of 25 years, whichever comes first. What size of fund will be created for the £250 additional hardship grant available to students under the new proposals? Who will administer it? Who will determine the level of hardship that will qualify for such grant, and is it new money?

I turn to Clause 23 and the entitlement for 16 and 17 year-olds, and indeed some 18 year-olds, to time off work, with pay, for studies. That is a laudable aim and I agree with everyone who has talked about the desirability of that measure. However, I see this in the

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context of burdens on business. The right to time off is an entitlement. To give paid time off poses an obligation on an employer irrespective of cost and irrespective of whether a small, medium-sized, or large employer can afford the expense of that. When consulted, employers asked for flexibility but there does not appear to be scope for that in the Bill. This Government are no friend to small and medium-sized businesses. They are imposing many measures--for example, the minimum wage, social chapter provisions, working time directives, paternal leave and maternal leave. I could go on. The cost of this measure was deemed to be derisory--£80 million to £130 million--but one has to add that to the cost of the other measures that employers will have to fund. Frankly, this is another example of a policy where the intention is laudable but the policy is counter productive. Employers will be cautious about employing a 16 or 17 year-old who does not have a government decreed standard of education, as opposed to one who does. We shall oppose the imposition of this further burden on business while helping the Government to look for ways and means to ensure that these young people gain their qualifications.

Like many who voted on 1st May, I am baffled by these policies. In the run up to the election the Government asked the electorate to take them on trust. The Government said that they would not remove single parent allowances, but yesterday they did so. Right in the middle of the election the Prime Minister said that he would not introduce tuition fees. We now have a proposal to introduce tuition fees. The Government wish to widen access but these proposals have produced the reverse effect. The Government have argued for fairness. How can it be fair to hit the students from the lowest income families the hardest? The Government wish to promote greater professionalism for teachers. Yet the Secretary of State has taken many powers of direction over the life of a teacher, not only in this Bill through the general teaching council but also through the Schools Standards and Framework Bill. We shall have a lot of fun when that Bill comes to this House. The Government profess to be friendly to business. Yet Clauses 23 and 24 add another cost and another practical burden on business. This Government are without principles, and, frankly, their policies lack consistency.

Baroness Blackstone: My Lords, before the noble Baroness sits down, will she accept that the number of questions she has asked in a Second Reading debate is unacceptable? She has put my noble friend in a quite impossible position by asking up to 50 extremely detailed questions, some at the level of minutiae which the noble Baroness should raise at the Committee stage of the Bill and not at Second Reading. Had I done so when I was principal spokesman on education in Opposition, she would have refused to answer them and would have been very critical.

Baroness Blatch: My Lords, first, having sat on that side of the House, I can say with some feeling that the Front Bench spokesman for the Opposition did it to me every single Second Reading speech. If the noble

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Baroness has time in between dealing with her red boxes, she can turn up Second Reading speeches and look at the long list of questions.

Secondly, Second Reading speeches are about flagging up our concerns and putting the Government on notice about specific anxieties we have. As a Minister I found it enormously helpful to know what the concerns were so that between Second Reading and the first day of Committee I could do some homework and return better prepared for the first day in Committee.

Thirdly, a large number of my questions were repeated by many noble Lords who have spoken in the House today; many questions were repetitious. I shall not be offended if the noble Lord, Lord Whitty, says at the Dispatch Box that he is sorry he cannot answer all those questions tonight, but that he will read Hansard carefully, and that he and the noble Baroness will come back better prepared at the Committee stage of the Bill.

10.42 p.m.

Lord Whitty: My Lords, this has been a stimulating debate, witnessed by the fact that we are all still awake. From the discussions we have had there is no doubt that we shall have many late nights on this issue.The House has a good and proud tradition of concern for higher education and for the teaching profession. The proposals in the Bill and the debate today take that tradition further.

First, I congratulate my noble friend Lady Rendell of Babergh on her effective maiden speech. It reminded us what education policy is about. Teenage and adult illiteracy is a stark reminder of the failure of an education system; and there are too many such failures in our society today. It is fitting that the reminder should come from a new Peeress who is herself very literary, very literate and--I was going to say very "literable" but that might rule me out from ever taking part in any education debate--very readable. We welcome her into our midst and welcome that timely reminder of what education is about.

It has been a complex debate. Perhaps I may indicate how I shall deal with the comments. First, there are clearly two areas which raise points of principle for noble Lords: tuition fees and top-up fees. I shall deal with those two issues first, upfront and in some detail, if I may. Then there is the general teaching council on which there seems to be broad consensus about the principle and a lot of anxiety and misunderstanding on the details. I shall deal with that. If I have time I shall deal with the other areas of the legislation in the sequence of the Bill.

On tuition fees, maintenance costs and related matters, we have had a good explanation by my noble friend Lord Davies, and the noble Lord, Lord Walton. They reminded us of how we reached the present position. My noble friend Lady Dean explained the background to the Dearing Report. We are facing up to a situation whereby, unlike the time when some noble Lords were in higher education and were among only 5 per cent. of the population, the age cohort now has 30 per cent. of people in higher education.

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I was relieved in that I had expected an attack from the Left all the way through this debate but had to wait for my noble friend Lord Peston and the Liberal Bench at the end of the debate to raise anxieties of principle on a front that I was standing ready to deal with. I understand the position that they take. They must be arguing that the system we propose, and proposed by Dearing--given that there is a cash problem within the higher education system as a result of the higher take-up--and the whole question of tuition fees would be better dealt with by higher (as the Liberals would say) or more progressive (as my noble friend Lord Peston would say) taxation.

I understand that argument, and it is possible that I have been sympathetic to it in the past. But that was not the policy on which the Labour Party went into the election. That was quite clear; and it is quite clear that we have to act on the basis of what already exists. What I cannot understand is why my noble friend Lord Peston objects to the changes that we have made to the "dog's breakfast" situation that we inherited, and which in a sense move in his direction. Those changes are income-contingent. The fees will be paid by those who can afford to pay them. It means that the 30 per cent. of people who are in higher education will not be subsidised by the 70 per cent. who are not. And it means that we begin to tackle the problem outlined by my noble friend Lady Kennedy; namely, that under the previous situation the higher subsidies went to the better-off. We are therefore talking about a very progressive system of payment for higher education at a time when we want more and more people to enter that field.

The loans repayment system, as compared with the one we inherited, will mean slower repayments, and will be better geared to the income of graduates. It will also make it more sure--a request that noble Lords have repeatedly made clear--that the money goes to the educational institutions.

I was also slightly surprised that my noble friend Lord Peston advocated the abolition of parental contributions. Providing subsidised loans to cover total living costs would be extremely regressive and would surely be counter to my noble friend's intention. I was also surprised that the Liberals appeared to support that view.

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