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Lord Glenamara: I support this amendment. I would have preferred the noble Baroness, Lady Blatch, to have included the figure of £1,000 in her amendment instead of 25 per cent. Either that should be done and this amendment passed, or the Government should undertake that any subsequent regulations made under this part of the Bill will be subject to the affirmative procedure. It must be one or the other. The Government must agree to one. We spent the whole of Tuesday meeting implacable rigidity from the noble Baroness. She did not accept anything at all. We ended up with a travesty of a thing called a general teaching council, which was no such thing. Please, can we have just a little flexibility? Will the Government agree to one proposal or the other? They should either give an undertaking that this matter will be subject to an affirmative vote, if it ever comes up, or that they will accept the amendment of the noble Baroness, Lady Blatch.

Earl Howe: I intervene briefly on this amendment to support what my noble friend Lady Blatch has said and to direct the attention of the Committee in particular to the difficulties faced by medical and dental students. The needs and unavoidable commitments of that group of students differ in a number of important respects from those of other students. I am very concerned that the introduction of tuition fees on the basis proposed will disadvantage those who undertake a course of study in those subjects and indeed discourage others from taking up such courses.

Medical students have to face five or six years of lost earnings rather than three years. Their academic year--at least from year three onwards--can be up to 50 weeks rather than the standard 30 weeks. That in turn deprives them of the opportunity of supplementing their income through part-time work. The expenses of a medical student on things like reference books, clothing and equipment are at the best of times higher than those typically faced by other students and they cannot be avoided.

Similar considerations apply to dental students. A survey by the British Dental Association has already found that 90 per cent. of newly qualified dentists have debts averaging £9,200 per head. The BDA believes that dental graduates with that sort of level of debt will increasingly have to rely on income from private patients. So the level of debt is further increased by tuition fees. The availability of NHS dental treatment is likely to become increasingly limited.

The Secretary of State has said that the Department of Health will pay all tuition fees from year five onwards for all medical and dental students, and that is

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welcome so far as it goes. But why should a student of medicine or dentistry be treated differently from a student who studies another discipline and pays three years' fees? It is not only a matter of equity but a question that is likely to impact directly on the numbers of young people who put themselves forward for courses in medicine and dentistry. We are already woefully short of GPs and specialists in other medical disciplines. It is essential not to exacerbate an already severe recruitment crisis. I hope that the Government will look again at this issue. If fees rise it will hit a key group of students disproportionately, and that can only be a cause of great concern.

Earl Russell: The noble Earl raises a serious point. I observe the Minister shaking his head. I hope that it is about something else. We need a supply of doctors and dentists who have much longer courses than anyone else.

Lord Sewel: Will the noble Earl accept that on the basis of my experience in a university which has a medical school medicine is about the most over subscribed discipline? The A-level and other requirements for entry into medicine are the highest of any discipline. There is no problem about lack of applicants.

Earl Russell: First, the Minister is unwise to suppose that that is written in tablets of stone. Secondly, the Minister should listen to what the noble Earl has said about private practice. As to the effects of very heavy student debt on professional conduct, I suggest that if he has regard to what has happened to American lawyers he will perhaps be a little less confident than he appears to be at the moment.

Lord Desai: The £9,200 debt for a dentist cannot be a serious matter in relation to the income that can be earned. Doctors and dentists are not at the bottom of the earnings table. The reason why they take five or six years to qualify is that at the end of it they can make more money than the people who pursue three-year courses. It is simple economics: people invest money because they know that it will repay them. A sum of £9,200 is not likely to present a serious problem.

Baroness Blatch: Perhaps I may put a question to the Minister so that he can deal with it when he comes to reply. Would a dental or medical student have to borrow the maintenance for each of the six years? At the moment we are talking mainly about tuition fees. However, would students have to borrow the maintenance money, in which case the sum would not be £9,200 but £4,000 a year for six years and so a great deal more than £9,200?

Lord Whitty: The question just asked goes rather wide of the amendment. To deal with the principle, medical and dental students will borrow for each year although very substantial bursaries are available in medical and dental schools for the later years of the course. The statements of the Secretary of State and two

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of my noble friends earlier this afternoon have to a large extent addressed the particular problems faced by medical and dental students. We have ranged rather wider than this amendment. Some of the points raised are not wholly irrelevant to the general strategy, but they are fairly irrelevant to this amendment.

It is the intention of the Government that there shall be a maximum annual contribution. In Clause 18 we seek powers to limit the top-up fees. In Clause 16(5) we provide safeguards to ensure that the Government cannot increase grants for fees, and therefore also the contributions towards fees, by more than the level of inflation without seeking the approval of both Houses. That is how we shall control the absolute level, which at the moment is set at £1,000, beyond the increase in inflation. I hope that that will provide the reassurance that a number of noble Lords suggest students and potential students require. To a large extent I believe that it meets the point raised by my noble friend Lord Glenamara. It would require parliamentary approval before the Government increased the maximum level of student contribution above the £1,000 level set at the beginning. It is set at that level because effectively it is 25 per cent. of the £4,000 that is currently estimated to be the average cost of fees.

If we adopted these amendments that arrangement would be complicated. If one seeks to control the maximum level in relation to inflation one cannot also control it in relation to a proportion. I agree that if the RPI and the average cost of fees go up by exactly the same amount the answer is the same. However, if the average cost of fees goes up faster than the RPI and it is controlled by reference to the 25 per cent. it is a disadvantage rather than an advantage to the student. Therefore, we believe that the safeguard relating to inflation which we propose to build into these arrangements, and which would require parliamentary approval if it were to be breached, offers sufficient protection. This would complicate matters and in terms of the precise form of words would be totally unnecessary. I ask the noble Baroness to withdraw her amendment in the light of the fact that the intention behind it is already met by the Government's proposals.

Baroness Blatch: I have no intention of pressing the amendment at this stage but I have every intention to return to the House with this amendment in future.

Amendment, by leave, withdrawn.

[Amendment No. 92 not moved.]

6.45 p.m.

Earl Russell moved Amendment No. 93:

Page 11, leave out lines 38 and 39 and insert--
("(a) for any such loan to bear interest at such rates as may from time to time be prescribed by regulations made by the Secretary of State but so that--
(i) the interest (which shall accrue from day to day) shall be added to the outstanding amount of a loan; and
(ii) the rates shall be such as appear to the Secretary of State to be requisite for maintaining the value of that amount in real terms,
and for the purposes of this paragraph the Secretary of State shall have regard to the retail price index published

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by the Central Statistical Office, any substituted index or index figures published by that Office or such other index as appears to him to be appropriate;").

The noble Earl said: Amendment No. 93 has been devolved to me. The purpose of the amendment is to introduce what is known popularly as a zero real rate of interest. The noble Lord, Lord Peston, if he were still in his place, would doubtless raise questions as to precisely what a zero rate of interest meant. As I remember from the events of 1990, this is a subject on which he is extremely expert. The general intention is perfectly clear. This provision already exists in the Education (Student Loans) Act 1990 which this Bill repeals while continuing a lot of the main outline. The object is to continue that particular provision. It makes a good deal of difference. A zero real rate of interest is the cheapest credit on the market. Every year I have a great deal of trouble persuading students to take up loans. They all prefer to work in Waitrose or Marks & Spencer rather than take up loans. The fact that it is a zero real rate of interest is rather important in trying to persuade them.

I move this amendment with a certain amount of optimism. Last night I read--a good deal later than I would have liked--the document that the noble Baroness kindly circulated, for which I thank her. I refer to Progress Report on New Student Support Arrangements in Higher Education from 1998/99. In paragraph 5.3 of that document the Government state:

    "Interest rates on loans will, as under the current loans scheme, be linked to the RPI so that borrowers repay in real terms broadly what they borrowed. The Government is considering how best to rule out in primary legislation the imposition of real interest rates, which have no part in its plans, whilst recognising the technical complexities arising from the income-contingent nature of the loans".

Put another way, we are asking the Government to put into the Bill what they already intend to do. I welcome that intention. But why not put it into the Bill? On the previous amendment I drew attention to the fact that the Bill as presently drafted allowed the Government to fix a rate of interest which in cash terms could be anything from nought to 100, even 1,000 per cent. That is a rather extreme form of flexibility. When they intend to do what we ask them to do, why not say so?

I accept that there are technical difficulties because of repayment through the income tax scheme, but I do not believe that they are insoluble, nor do the Government; otherwise, they would not have stated in this paragraph that they intend to do this in primary legislation. What it shows is that the decision to introduce this measure was taken in very great haste after the appearance of Dearing. It was within a matter of hours rather than days, if my memory serves me right.

It looks like a case of legislating rather in haste. I wonder whether, if the Government had delayed the Bill even as little as a couple of weeks, they might have found time to solve that difficulty, and whether they may yet do so before the Bill completes its passage through both Chambers. If the Minister remembers the torrid time that she had last August, she might appreciate that in this area people can be easily alarmed. Were they to put into the primary legislation the

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provision for which we are asking, some of that alarm would be stilled. I should have thought that that would have been in their interest, as it is in ours, the students, and, as I believe, in the country's. I beg to move.

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