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Earl Russell: My Lords, perhaps the noble Baroness would clarify one matter because I think she may have slightly misphrased what she said. She said that the

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amendments call on the state to bear the full costs of higher education. She is not suggesting, is she, that the tuition fee has ever been likely to do that?

Baroness Blackstone: My Lords, no. The full costs of higher education of course include the grant paid through the HEFCE. But that is already covered by the Government.

Those who stand to increase their earning power still further would have their expensive courses paid for them by taxpayers some of whom, on average, earn less than they do. Where is the fairness in that?

The noble Earl gave the House a little anecdote about graduate students in the United States. But these amendments would also amount to a licence for those who were so inclined to become perpetual students at the undergraduate level, taking one course of higher education after another, never having to pay any fees and borrowing money for living expenses which they may never have to pay back. Again, where is the fairness in that?

I should say to the noble Earl that graduate students are supported in this country, unlike in the United States, by a national system of postgraduate awards through the research councils as well as by the system that we are discussing today for undergraduates. Therefore, it is a very different system.

We believe that it is only right and fair that the investment of the nation should be balanced by the commitment of the individual. I am very grateful to the noble Lord, Lord Baker, for his support on that matter. The alternative approach underlying the amendments of subsidising all those who enter or re-enter higher education, regardless of their families' income, would mean a heavier burden on all taxpayers.

I remind the House of the Dearing Committee's figures for the longer-term funding requirement of universities. Depending on the scale and pace of the growth in student numbers, the committee put the figure at up to £2 billion. The effect of these amendments would be that all that cost would fall on the taxpayer. I wonder whether my noble friend Lord Glenamara really thinks it is right to ask taxpayers to cover the full cost of tuition for all students regardless of their income or their parents' income. As my noble friend Lord Desai said, 75 per cent. of the costs of tuition will still be borne by the taxpayer, and I am grateful for what he said about that being the right balance.

Taken together with other amendments proposed by the noble Lord, Lord Tope, these amendments would also allow universities and colleges to charge as much as they liked in fees. In essence, they would amount to giving higher education institutions a blank cheque from the Government. While we readily accept that universities and colleges have been facing a financial crisis left by the previous government--and our reform of the funding arrangements for higher education are designed to address that crisis--no government can write universities a blank cheque. We are duty bound to the taxpayer to ensure that public funds are spent efficiently and provide value for money.

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If these amendments were carried, the only real way in which the Government could keep the higher education budget under control would be to impose strict limits on the numbers of students that universities and colleges could recruit. That would mean returning to a system where only a privileged handful could benefit from higher education. The country would find itself increasingly without the higher level of skills, knowledge and understanding that we need to compete in the 21st century. We should rapidly fall behind other countries which are equipping more and more of their workforce with higher education qualifications. The social benefits of widening participation would also be lost.

I remind noble Lords who support the amendments that government reforms are intended to address the serious funding problems facing higher education in a realistic and forward-looking way, to which the noble Lord, Lord Quirk, referred. The Government have said on countless occasions now that their intention is that both further and higher education should benefit from those changes. The noble Baroness, Lady Perry, suggested that some £90 million was going to further education.

Baroness Perry of Southwark: My Lords, I believe that the figure of £19 million was given in Hansard.

Baroness Blackstone: My Lords, I am obviously getting deaf. The actual figure is £16 million. But the funding package for universities for next year will be greater than we expect to be raised from the introduction of tuition fees. Therefore, it is a reasonably good deal for the universities. The Government have been able to provide them with additional funding over and above that which will be raised from tuition fees. The FE sector provides various access courses and courses at sub-degree level which help students to go on to a degree course and enter university. It is important that we should ensure that there is adequate funding also for those courses.

The Dearing Committee recognised that further improvement and expansion of higher education could not be afforded on the basis of current funding arrangements. Our new funding arrangements, which will generate savings of more than £1 billion, as I have mentioned already, by 2015-16 will make it possible to move forward into the 21st century with a revitalised higher education system. I repeat that the vast majority of vice-chancellors have welcomed this new package.

To return to a narrower system with lower levels of participation will really serve no one's interests. It will not serve the interests of students, either young students seeking to acquire the skills and experience needed to start off on their careers or mature students seeking to update and improve their skills and to maintain and enhance their employability. It will not serve the interests of universities from which, as I said, there has been widespread support for the Government's determination to act decisively to address their funding problems. And it will not serve the interests of the country in an increasingly competitive world.

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I am extremely sad that my noble friend Lord Glenamara feels unable to support the Government on this occasion. I wish I could persuade him to do otherwise, but I fear that I have failed already in the past and I shall probably fail this afternoon. But my noble friend said that all tuition is and has always been free. As the noble Baroness, Lady Blatch, said just now, that is not the case with respect to full-time undergraduates. There was a long period when a contribution from parents was expected towards those tuition fees.

But even today, before the new arrangements were introduced, I remind my noble friend and others who have spoken in favour of the amendments that further education students already pay towards their tuition costs. On the whole, those are far, far less privileged people than those who go to university. I also have to remind my noble friend, and others, that one-third of all students now study part time. They, too, have always paid, and are still paying, a contribution towards their tuition costs. For the most part, they, too, are very much less privileged than many of those who are full-time undergraduates in our universities.

However, I understand the concerns of my noble friend Lord Glenamara, and others, about those students from lower-income families who may genuinely be unable to afford the fees. That is why, in building on the proposals of the Dearing Committee, we have provided safeguards, in line with our commitment to secure access to higher education, which will ensure that higher education continues to be free for the least well-off.

I turn now to means testing. I should tell the noble Lord, Lord Baker--indeed, I am sure he knows this very well--that we already means test. Therefore, I am afraid that we will not be providing welfare to work for large numbers of local education authority bureaucrats. People are already working on the means testing for the current arrangements. There will be a very small additional central unit which will take on the task of means testing a small number of EU students.

Our arrangements for means-tested support with tuition fees, backed up with a reserve power to control top-up fees, will ensure that the one dependent student in three who enters full-time higher education from a lower-income family will still receive free tuition. A further one in three from middle-income families will contribute less than the full fee which may be charged.

I am most puzzled by something said by the noble Lord, Lord Tope. For example, how, in these circumstances, can the charging of tuition fees be a poll tax? As I understand the usual meaning of that term, a poll tax is a tax on individuals regardless of their financial circumstances. Let us not forget that a significant proportion of students entering higher education will actually have been to independent schools where the fee charged is several times higher than the contribution that we are proposing. Moreover, according to an opinion poll commissioned by the CVCP last autumn, over 80 per cent. of parents are now prepared to contribute to their children's tuition. That same poll found that 69 per cent. of adults agreed that students and parents should foot some of the bill for

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higher education, compared with only 38 per cent. in 1991. That illustrates the shift of opinion which has taken place.

Perhaps I may point out to the noble Lord, Lord Tope, and the noble Baroness, Lady Maddock, that only around one in three dependent students--that is, those from higher income families--will have to pay the full fee. Even then, they can expect, on average, to have three-quarters of the real cost of their course paid by the state through funding council grant to universities.

I am aware of concerns about the position of students whose parents are unwilling to help them, although I must point out that the figure quoted by the noble Earl, Lord Russell, does not in any way corroborate figures that I have seen. Indeed, I would want to know how the survey was undertaken, what the nature of the question was, and whether the figure of 43 per cent. related to a total refusal to pay any part of the cost or just a small proportion of it.

Perhaps I may remind the House that many parents are already expected to make a contribution. There is no reason why parents should refuse to help their children in the future because, as my noble friend Lady Lockwood, said, they will not be expected to contribute any more than they do under the current system. The noble Baroness, Lady Maddock, suggested that it will be more difficult for parents and gave the House some examples. However, she is quite wrong in that respect. She appears to have totally misunderstood the arrangements which are being introduced. Moreover, on a more detailed point, perhaps I may mention the fact that the number of children whom parents have at university at any one time is of course taken into account when assessing the contribution that parents have to make. I am a little surprised that the noble Baroness is unaware of that fact.

I should like now to deal with a point raised by a number of speakers in the debate; namely, the impact of the new arrangements on applications. The noble Baroness, Lady Blatch, said that applications were down all over the country. That is not true. As my noble friend Lady Lockwood said, there are many universities where applications have increased rather than decreased. Of course, there are some universities where the number of applications is down. Indeed, there are very big variations as regards the apparent impact. I have another point to make to the noble Baroness, Lady Maddock. I believe that she started to say that overall applications had fallen by 18 per cent. I think that the noble Baroness then corrected herself and said that that figure only applied to mature students. I give way to the noble Baroness.

5 p.m.

Baroness Maddock: My Lords, I thank the Minister. Perhaps I may now confirm what I meant. That was indeed what I intended to say and I apologise to the House. I was thinking about students over the age of 25.

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I believe the figures in that respect have decreased by 18 per cent. to 22 per cent. That is the group of students about whom we are most concerned.

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