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Baroness Maddock: I rise to reply on behalf of my noble friend Lord Tope. I take to heart the Minister's words that we must try to proceed in a logical order. Therefore, my comments will be brief. I wish to reply briefly to the sideswipe from the noble Lord, Lord Davies of Oldham, about funding. Later on, when we come to tuition fees, we shall make quite clear how we would fund what we have in mind. The funding arrangements we propose are based on the work of

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Nicholas Barr and Iain Crawford, who gave evidence to the Select Committee and are considered to be experts in this field.

The whole point of our amendment is that it needs to be looked at in conjunction with the other proposals we have made today, first, about equality between part-time and full-time students; and, secondly, the proposal we shall be putting forward later that all students' fees are paid. This amendment together with our amendments on those proposals would be supported by many people, including students. Finance could be found to make sure that it happened. However, I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Baroness Blatch moved Amendment No. 91:

Page 11, line 35, at end insert--
("( ) Regulations under subsection (2)(b) which prescribe the maximum amount of fees payable for attending a course of higher education shall ensure that the prescribed amount does not exceed 25 per cent of the average cost of courses of higher education.").

The noble Baroness said: I make the assumption, as I rise to move this amendment, that the Government, with their majority, will introduce tuition fees. I have therefore had to anticipate what that might mean for students. There have already been debates concerning the pros and cons of tuition fees but there is a real concern on the part of students about where it will all end. When Australia introduced tuition fees they started off as a relatively small percentage of all the course fees that had to be met. Year by year, the figure has crept up, until now it is a much higher percentage of the average cost of course fees.

The Bill has been brought forward to us in a skeletal state and we have been denied the opportunity to discuss, other than through amendments, the policy of the introduction of tuition fees and the abolition of grants. I therefore believe it is right that Parliament--not the Labour Party, not the Conservative Party and not the Liberal Democrat Party--should determine whether the figure, which I understand to be 25 per cent., should increase or decrease. My amendment seeks to put on the face of the Bill an absolute constraint on the Government not to go beyond £1,000 or 25 per cent. of the average cost of courses. I beg to move.

Lord Wallace of Saltaire: Amendment No. 97 has been grouped with Amendment No.96 and has much the same effect. I merely wish to underline that we are putting down a marker. We are embarking on a major change in the nature of the funding of higher education--the introduction of tuition fees and a contribution to tuition fees. We all know from the Australian experience that once this starts Ministers of Finance are greedy for more and that one slips down that road. I therefore wish to ensure that the level at which the costs of university education are imposed on students should be specified more clearly on the face of the Bill. I understand that there were discussions about whether there should be a flat £1,000 fee or whether the figure should be fixed at 25 per cent.

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We are trying to make the best of a bad job. I agree with the noble Lord, Lord Glenamara, that it would have been more satisfactory to have gone down the road of a graduate tax. That would have been less offensive in a whole host of ways. It would have raised questions about who can pay and it would not have been seen to overload the student immediately. However, we have to make the best of the Government's proposals.

We would not be rushing the Bill through at this speed if the two Front Benches had not agreed before the election that the Dearing Report was a way of putting off the debate, knowing that the financial crunch which all the universities, including my own, would be facing in 1998-99 would require immediate action. The purpose of the two amendments is to ask the Government to specify more clearly what proportion of overall university costs they wish to take from students and to require that before they raise that contribution, as we anticipate some future government will, we have a thorough debate.

6.30 p.m.

Baroness Carnegy of Lour: I have met several groups of students and discussed this business with them at some length. One of their fears is that, above all, they do not know whether the proportion will stay the same. It is alarming to face this situation as a student and to wonder whether one can cope with it. An assurance on the matter, preferably on the face of the Bill, would go some way towards alleviating that particular fear.

Lord Desai: Perhaps I may make it clear that, more than at any other time, I am now speaking entirely for myself and do not represent the policy of my party on this matter. This amendment can be passed, but it will not make the slightest difference to the fact that the financial crisis in higher education will not be solved at this stage. Very soon, and within the lifetime of this Parliament, the Government will have to ask for more money because the great British public has decided that it does not want to fund the full cost of higher education. Therefore, we shall have to find ways of passing on the burden to those who benefit from it.

The present government have faced the problem to some extent and proposed the figure of £1,000. People do not like that. If all that income from students, without means testing, were to go to universities, it would not make even a small dent in the financial crisis in higher education. As I said at Second Reading, the true cost of higher education is not £4,000, but £8,000. That is the sum we charge foreign students and that is the real cost. Foreign students subsidise British students. Those students are not from the OECD countries, but from poor countries. We tolerate a situation in which Singaporeans, Malaysians, Chinese and Indian students subsidise British students.

Very soon, after this Bill has been passed, British universities will face further financial problems. No one should kid themselves that this matter will be solved straight away, because very soon ways will have to be found for students to pay a much higher proportion of

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their education costs than they do at the moment. I hasten to add that that is my view and not that of my party.

Lord Wallace of Saltaire: As an economist, is the noble Lord concerned about the inter-generational dimension of this issue? Some of us talk about inter-generational transfers. But what we are all saying now is that the great British public--namely, all those who went through higher education and were given it free because their parents were paying tax--now do not want to pay tax so that their children can have higher education. Therefore, we are imposing on future generations costs for further education which our parents did not pay. Let us recognise what we are doing.

Lord Desai: Let us get this straight: this is a middle-class subsidy. This scandal has gone on for about 30 years. A very small proportion of the population were subsidised by way of free higher education. The sum of £4,000, after tax, is about £7,000 before tax is deducted. A £21,000 loan was being given to middle-class students. We have concluded that working-class students do not get access to higher education, not because of what it costs, but because secondary school education is lousy. However, I shall not go into that.

The British public is saying, "The majority of us did not have higher education and the majority of us pay tax. How long are we going to continue giving £21,000 to every 18 year-old whose parents put them through A-levels?" It will have to stop. We are just holding back the tide. If we were really sensible and cared about access to higher education, we would say that we cannot continue paying a middle-class subsidy. The full £4,000 will have to be paid by students in higher education. They should take loans of £4,000 for fees with the £4,000 maintenance grant.

I get tired when people say that the British public do not like debt. But many of them have mortgages. People are willing to borrow in order to buy a house, so why should they not borrow for human capital? We have to pretend that everyone is poor and that we should go on subsidising the great British middle class in the comfort to which they are accustomed. It is real welfare dependence. The middle class have a real dependence on the welfare state. That will not stop because the world is not rational. Sooner or later we will have to transfer to a system in which all higher education is fully paid for by the students, financed by loans. If one wants to educate 30 per cent. of the population and not 10 per cent., no society is going to pay for it.

Baroness Blatch: I wish to speak to my amendment. I do not know whether I speak for the noble Lord, Lord Wallace of Saltaire. This is a fascinating debate on where we shall finish up in future. The two amendments in the Marshalled List have been tabled for two reasons. The first is because the Government, through primary legislation, have introduced tuition fees without reference to this House. That has caused great disquiet in the Chamber. Secondly, if at some future date the Labour Government wish to go further and take

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the £1,000 beyond the 25 per cent. of the cost of the average course, then it is our view--certainly my view--that that should be a parliamentary decision and not simply a sleight-of-hand decision by the Government. I hope that they will at least agree that Parliament should be involved in the debate and be allowed to vote, not simply through secondary legislation, but through primary legislation. Parliament should be allowed to vote, and through my amendment I wish to put that constraint on the face of the Bill.

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