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Earl Russell: The noble Lord, Lord Desai, always interests the House and he always tends to deal with arguments with which he does not agree by the use of the technique of reductio ad absurdum. That technique is, of course, a revolving door. I agree with the noble Lord that we can never hope to abolish anomalies; I am not that Utopian. What I believe and what I think the noble Lord also believes is that one can occasionally attempt to make the anomalies slightly more logical. The real anomaly in what the Government are proposing is not the charge on the parent but the contrast between the obligation to the student to rely on the parent and the lack of any obligation on the parent to support the student.
As I believe the noble Lord knows, I have been asking for quite some time for the age of majority to be referred to the Law Commission because, as with the case of part-time students, we are dealing here with a problem that stretches much wider than the educational world or this amendment. We are regularly developing a gap between the age at which parents cease to be bound to maintain their children and the age at which children are treated as having the rights of adults. That is the gap into which students are now falling.
It is obviously a disadvantage to those from low income households, but it is not only a disadvantage to them. It is a disadvantage to any people whose parents do not think they should be having higher education or, indeed, do not think they should be having that particular sort of higher education. Of course, power is capable of abuse among parents as among any other people who hold it.
Just last night I was talking on the telephone to somebody still in her 30s, who almost missed the chance to get a higher education because her father believed that women should not be educated. It still happens. It was not my first case of this by a very long way. I had hoped by now I would be past meeting it, but not yet.
There are, of course, also people who are estranged from their parents. In the increasingly common situation of fractured families, very often people are not on speaking terms with the parent on whom they are compelled to rely for financial support. That is a situation which creates a great many strains within families. The harm it does is not just the harm of being sometimes without money; it is the harm of a great deal of resentment and tension within the family.
There are people who do not get the money from their parents because they are the less favoured child, sometimes because another child is getting his fees paid at an independent school. That is also within my experience. In these cases there is obviously no justice, no connection between the person's claim to higher education and their actual chance of getting parental support.
During the last recession one of the commonest reasons I found why my pupils were not getting what their parents were assessed to pay for them was bankruptcy which, of course, the parent cannot do anything about. The grant can be reassessed, but it takes a very long time and, as with so many things in this new, flexible universe, there is a very big gap.
Before the noble Baroness, Lady Blatch, leaves the Chamber, I should like to say that I am extremely grateful to her for the trouble she took, when Minister, in regard to grants being assessed more quickly. But not even the noble Baroness's industry and dedication was enough to get the job done properly. There will always be a problem.
It is also true that means tests are inefficient. There will always be people who fall through the net and people whose circumstances are not assessed properly. In particular, with the students' means test, when residual income is assessed it does not properly take account of housing costs. That is based on the mortgage interest tax relief system. It takes account only of the first £30,000 which, as those of us who live in London or the south east know, amounts to practically nothing in terms of a mortgage.
Again, there may be higher as well as lower income people who fall through the net. And an injustice is an injustice, no matter to what sort of person it is done. I hope therefore that we do not assume it is only low income people who are involved. The ultimate objective must be to get higher education to the best people. We will not do it unless this amendment is carried. I am glad to support it.
Lord Glenamara: This difficulty, so far as it relates to tuition fees, arises because the Government are trying to achieve their objectives in the wrong way. Parental income need not enter the situation at all. Let me remind the Committee that the Dearing Report said:
When it says, "income contingent mechanism", to whose income does it refer? The way the Government are doing it, it is contingent on the income of the parents and the family home which the student probably left 10 years earlier. Let me give an example. There are two students, John and Jane. John comes from a low income family. Under the Government's proposals, he does not have to pay any tuition fees. Jane comes from a middle-income family. Her parents do not pay the fees and so she must borrow £3,000 towards her tuition fees. Ten years later John, who is a bright boy, has become a barrister, maybe a QC--who knows, he may have married a QC--and will be on a high income, perhaps £100,000 a year. Jane, on the other hand, is a schoolteacher and will earn £15,000 a year if she is lucky. What happens? John, with an income of £100,000 a year, has to pay nothing towards his tuition fees. Jane, with an income of £15,000, must pay off the whole £3,000. That is grossly unjust.
Have the Government thought out this situation? It is ludicrous. Parental income need not enter the equation at all. If the Government wanted to do this, they should have introduced a graduate tax for all new graduates. I would still have opposed it, but it would be logical and fair. It would be collected through the Inland Revenue. But the Government are basing the system on the original parental income and that is a grossly unfair way of doing it. This difficulty therefore arises because of the way the Government are operating the system.
Lord Desai: The Dearing Report must have meant the income of the student. The words "income contingent" must have meant the future income of the student. My colleagues at the LSE have for a long time worked out and argued that a loan system based on income contingent repayments will finance higher education and time and again that has been shown to be so. When I read the Dearing Report I understood "income contingent" to mean the income contingent of the students who enjoyed the higher education.
I agree with my noble friend that the problem is not what is happening to maintenance grants. Indeed, the anomalies of maintenance grants could be eliminated if they were made into loans. An anomaly arises with the tuition fees. If the Government did not press means testing on the tuition fees and everybody paid them, regardless of what they are, all students would pay £1,000 and pay it back from their future income. If that amendment was proposed, I would embrace it. But Amendment No. 90 does neither one thing nor another.
Baroness Blatch: The noble Lord, Lord Desai, says almost exactly what was said by the noble Lord, Lord Glenamara. The noble Lord, Lord Glenamara, made it absolutely clear that if the Dearing package was put before the Committee, he still would not support it. But it makes more sense.
We shall attempt, in the course of the passage of the Bill, to turn this back into a Dearing recommendation. What is incredible is that the income of the parents will be taken into account for £1,000 and yet the students from the poorest families in the land start off life by borrowing almost £4,000 each year they are at university.
We have a scheme that leaves the poorest families and the poorest students with the highest and greatest burden of debt when they leave university. I cannot better the example given by the noble Lord, Lord Glenamara; it is absolutely right. The future income of students may reflect different situations to the backgrounds of the families from which they come. It makes no sense to have a means test for a family for £1,000 and to consider the student economically independent for the purposes of borrowing almost £4,000. This hybrid system has not been thought through.
That is one aspect. Members of the Committee have given other examples of where there is unfairness. For the student from the affluent family, the family is deemed to be paying part of the loan, whereas the student from the poorest family has to meet the whole of the loan. There are lots of anomalies. It is a scheme which is extremely badly thought through and which will be costly in administration.
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