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Earl Russell: The Minister has tried very hard indeed. I thank her warmly for that. But the gulf between us is still extremely wide. She tells us that in the additional money she has offered the condemned man a hearty breakfast. I tell her that I am afraid it is only a continental breakfast. She really does not have any idea--indeed, the Government as a whole do not have any idea--how severe the shortage of funding actually is in relation to the job we are asked to do. If she understood that, she would not be talking about "efficiency gains".

I grant that it is smaller than it might otherwise have been, and I am thankful for being allowed that small mercy. It is a bit like the mercy of Polyphemus to Odysseus of being allowed to be the last to be devoured. But we really cannot carry on like this. The Minister says that if we do not want to charge top-up fees, what is the fuss about? I do not want to run my car on alcohol, though I believe technically it may be done. But that is contingent on my being able to obtain a supply of petrol. Were I to run out of petrol in the middle of the desert and find that the local garage could not sell me any, I might well attempt to run my car on alcohol. It would not prove that I wished to do so. If I reserve a power to do so, it proves only that I do not trust the garages in the desert.

That is very much the way I feel about government funding. I do not trust, and I believe most of my colleagues do not trust, the Government to fund universities to a level which makes it possible for us to do our job at all. Though the Minister is right that I and many of my colleagues want admission to remain free and by merit only, we cannot do that unless the Government do their part also. That is not under the university's control. We do not know whether the Government will do it.

The Minister says that we should also consider the interests of the student. Of course we do. We on these Benches are deeply aware of the force of that point, myself not least. But the interest of the student is two-fold. It is in having only a manageable amount to pay, and in receiving value for money for what he or she will be paying. When students are being asked to pay for higher education, they are entitled to be sure

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that what they are getting deserves the name of higher education. That is now very much in doubt. If things get any worse, it becomes impossible.

We are not yet within shouting distance of each other. I do not want to begin shouting at this time of the night. I shall withdraw my Motion to oppose the Question that Clause 18 stand part of the Bill. But I hope that when we return at Report stage, it may be possible to begin a dialogue. It is just about our last chance.

Clause 18, as amended, agreed to.

Lord Tope moved Amendment no. 114:


After Clause 18, insert the following new clause--

Tuition fees: payment by students

(" . In exercising any powers under this Part of this Act, the Secretary of State shall ensure that fees in respect of tuition for any course of higher or further education at a publicly-funded institution shall only be payable by the student concerned where a grant in the same amount has been made available for that purpose to that student.").

The noble Lord said: It is unfortunate in the extreme that we come to the first amendment which is clearly and specifically about tuition fees at some time after midnight on the last night of the parliamentary week; an issue which is perhaps of the greatest concern to the greatest number of people, many of whom were listening to this earlier in the day.

My noble friend, Baroness Maddock, promised your Lordships that I would explain in full the Liberal Democrat proposals for student funding rather than deal with it piecemeal as we moved successive amendments. I could explain that it is a coherent package, but your Lordships may be relieved to know that I do not intend to do that at ten minutes past midnight on the last night of the parliamentary week.

All I want to do at this stage is to say that the Liberal Democrats remain unequivocally opposed to tuition fees. Our first objective is to remove the provision for tuition fees from the Bill. However, if tuition fees are to be charged, and we feel that they should not be--and that is the purpose of this amendment--we will expect the Government to pay the student the equivalent sum, thus removing any additional cost to the student or their parents.

One of the effects of this will be that through that method the universities will receive a little more money than they currently receive through the LEA system. If all else fails--and this is a last resort--we will be seeking to ensure that all revenue from fees is hypothecated back to higher education and not to the tertiary sector as a whole.

I do not intend to pursue this further at this time of night. I know that the Minister needs no reassurance from me that we will pursue it most vigorously at Report stage whatever time of day or night we reach that point. I beg to move.

Lord Whitty: My Lords, despite the lateness of the hour one has to admire the ambition of the Liberal Benches. This clause, as drafted, would not only prevent the introduction of tuition fees but also, in effect, extend

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free education to a whole range of people who have never previously had it. There are objections to that both on grounds of principle and cost. It would extend it to everybody not only in higher education but also in further education, irrespective of the course they are on, irrespective of income and, as it stands, irrespective of whether they live here or abroad. The objections in principle are clear. It would benefit far more greatly those of higher income than the lower income groups we are attempting to attract into universities.

The objections on cost are colossal. Even if we extended the same funding arrangements that used to exist it would cost an additional £4 billion per year. If we add on the increased participation since then and the additional categories of students that would be covered by this clause, we are talking of a minimum of £6 billion, probably more--the equivalent of at least a 3p increase in taxation. The next line in my notes says, "The only other option would be fewer resources for higher education". But unfortunately there is not £6 billion of state resources to take out of higher education.

This is not a feasible amendment. A nice world though it may portray, it is not feasible in terms of cost; but nor is it sensible in terms of equity. The noble Lord says he will return to this matter. I trust a slightly less ambitious amendment may come before us, but even so I regret that we would have to object, and oppose the principle that this amendment seeks to introduce.

Lord Tope: My Lords, I am grateful to the noble Lord for his reply and his clearly more limited ambitions than the Liberal Democrats have for education. I prefaced all my remarks by making it clear that we prefer that neither this amendment, nor any similar amendment, was necessary because we oppose tuition fees, and that will remain our first objective. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

12.15 a.m.

Baroness Blatch moved Amendment No. 115:


After Clause 18, insert the following new clause--

Receipt and disposal of fees

(" .--(1) The governing body of a relevant higher education institution shall be entitled to receive, and to dispose of as it sees fit, the full amount of any fees or grants in respect of fees payable to it in respect of tuition by or on behalf of any student.
This subsection is without prejudice to any arrangements under which the governing body proposes, with the consent of the Higher Education Funding Council, to pay the whole or part of any fees or grants in respect of fees to any connected institution, as defined in section 65(3B) of the 1992 Act.
(2) In this section, "relevant higher education institution" means an institution providing courses of higher education, where "higher education" has the same meaning as in the Education Reform Act 1988.").

The noble Baroness said: I shall be brief, but I feel as strongly about this amendment as the noble Lord, Lord Tope, felt about the previous amendment. There are two forms of saving to the Government. First, there is to be a 75-25 split between those partners who pay tuition fees--75 per cent. state and 25 per cent. student.

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I also understand that, with the abolition of the maintenance grant, there is to be a considerable saving to the Government. I should be grateful if the noble Baroness could put a figure on that.

If the average cost of tuition for students in this country, which is wholly met at the moment by the state, albeit that it goes round in a convoluted way through the LEA, is to remain at the same level, the money charged to students, which is equal to 25 per cent. of the average cost, is additional money. If it is to be a 75-25 split, it is not additional money. It would be very helpful at some stage to get a proper clarification of that.

The purpose of the amendment is to ensure that income raised from fees from students, and the families of students, moving into higher education should reside exclusively in higher education. It should be received by higher education and used for higher education. In a number of the answers we have had in previous debates and at earlier stages of the Bill the noble Baroness has coupled further education with higher education in terms of the spending of income raised. I would not want to argue with the noble Baroness's aspiration that if more money can be found it should be spent in further education. Indeed, I have been a great supporter of further education. It is the rung in the ladder that is very important in terms of young people making their way into the world of work and, indeed, making their way into the world of higher education. But if the money for higher education is to be raised from students and their families, unless it is spent in higher education it is a tax on those students, raising money to be spent elsewhere. That would be quite wrong.

At some point I should like clarification as to whether the money raised by tuition fees is additional; and if it is additional, it means that 100 per cent. of the cost of tuition will continue to be met by the state and the 25 per cent. contribution will be additional to that. How much money will be raised from maintenance? Where will it accrue? Will it accrue to the Treasury or will it accrue to the DfEE? The figure will be some billions of pounds and it will accrue somewhere in Whitehall. It would be helpful to know where and for what purpose it will be spent. I beg to move.


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