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Clause 19, page 14, line 30, at end insert--

("(f) determining the priority as between deductions falling to be made by virtue of paragraph (a)(i) and deductions falling to be made, from emoluments payable to borrowers, by virtue of other enactments (whenever passed).").

Clause 19, page 14, line 30, at end insert--

("(5A) In subsection (5)--
(a) "employers" means persons who make payments of, or on account of, income assessable to income tax under Schedule E, and
(b) "the Taxes Acts" has the same meaning as in the Taxes Management Act 1970.").

Lord Whitty: My Lords, I beg to move that the House do agree with the Commons in their Amendments Nos. 51 to 63.

Moved, That the House do agree with the Commons in their Amendments Nos. 51 to 63.--(Lord Whitty.)

On Question, Motion agreed to.



Clause 19, page 14, leave out lines 31 to 49.

Baroness Blackstone: My Lords, I beg to move that the House do agree with the Commons in their Amendment No. 64.

Moved, That the House do agree with the Commons in their Amendment No. 64.--(Baroness Blackstone.)



That this House do disagree with the Commons in their Amendment No. 64 but propose the following amendment in lieu--


Page 14, line 31, leave out subsections (6) and (7) and insert--

("( ) The Secretary of State shall ensure that, in any regulations made under this section in relation to any eligible student for any prescribed purpose for any academic year--
(a) the maximum amount of any loan made available to that student is no greater than half the prescribed cost of maintenance for such a student for that purpose for that year, and
(b) provision continues to be made for maintenance grants to be payable to such a student, subject to--
(i) a maximum amount of half the prescribed cost of maintenance, and
(ii) assessment of any contributions applicable in his case.").

Baroness Blatch rose to move, That the House do disagree with the Commons in their Amendment No. 64, but do propose Amendment No. 64B in lieu thereof.

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The noble Baroness said: My Lords, the Government, somewhat artfully, linked two issues in one amendment. This House had completely separate debates. They are completely separate issues. One is to do with maintenance and the other is to do with equal treatment throughout the United Kingdom and is related to tuition fees. By linking the two together we have had to burn quite a lot of midnight oil during the course of the week to be advised on how to deal with them technically. We have been successful. Therefore I shall be speaking to the maintenance section of Amendment No. 64.

I invite the House to ask the Government a second time to reconsider their proposals on student finance. The grounds on which I take this very serious step are justice and fairness. Put simply, the Government have introduced proposals which will result in students from lower income families leaving college and/or university with a greater burden of debt than students from more affluent families. There can be no justification whatever for such unfairness.

The Government say in defence of such unfairness that the tuition fees are means tested and that some students will not be required to pay them at all. That argument was put by Ministers both in this House and in another place, and even by the Prime Minister himself. It misses completely the point about student finance. As far as the student is concerned, he or she will have to borrow for tuition fees, where that is appropriate, and for the maintenance grant. For students from low income families the maintenance grant is by far the greater sum. So students from low income families must borrow the whole of their maintenance costs and students from more affluent families are asked to borrow only half.

At no time during debates in this House or in the other place, has a single Minister, including the Prime Minister himself, produced a credible defence for such an injustice to students from low income families.

The response of the Government to the Dearing Committee was issued ahead of the publication of that report; it was leaked in detail the weekend before its publication. Therefore, the Government had made up their mind. It was a Treasury-led decision, and certainly Mr. Brown was in the driving seat at that time. For the purposes of my amendment I should like to refer the Government to paragraphs 103 and 108 of the report:

    "103. The widespread view in evidence was that an additional contribution from graduates should be sought by converting the existing support for student living costs from 50:50 grants and loans ... We [the Dearing Committee] looked carefully at this option".

    "108. We would be particularly reluctant to see any reduction in public subsidies being concentrated on students from the poorest families and even more reluctant to see the funding released by this, and more, being used to increase the subsidies for others".

The Government have been extremely reluctant to guarantee that moneys raised and/or saved at the expense of higher education students will benefit higher education in particular in real terms; that is, not simply held by the higher education institutions, which we understand will be the case, but that such moneys should not displace funds from the state. That has not been agreed. Any moneys raised at the expense of higher

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education students and spent on any other part of the education service, even on further education, represents a tax on those students. To place greater financial burden on students from low income families in this way is unfair and unjust. I call upon this House to invite the other place to think about this yet again. I beg to move.

Moved, That the House do disagree with the Commons in their Amendment No. 64, but do propose Amendment No. 64B in lieu thereof.--(Baroness Blatch.)

4.30 p.m.

Baroness Blackstone: My Lords, it may be helpful if I speak straightaway and set out the Government's position. With the leave of the House, I should be grateful for the opportunity to speak again at the end of the debate to respond to any further points that are made. I have listened very carefully to the arguments put forward by the noble Baroness, Lady Blatch. She starts from the position that there should be equal access to higher education for students from all backgrounds, in particular those from lower income groups. That is a position to which the Government are absolutely committed. Indeed, our proposals are built on the principle that access to higher education should not depend upon ability to pay. Moreover, we have announced a range of measures that specifically target support for those students who need the most help. I shall say more about that later.

The noble Baroness seeks to make capital out of the fact that our proposals for student support are different from the preferred option of the Dearing Committee. I am not ashamed to acknowledge that they are different even though they arise from the same objective as securing access and equity. On a number of occasions during earlier debates on the Bill I have spoken about the thinking behind the proposals and why they differ from the preferred option of the Dearing Committee. In particular, I have explained that we believe it is right to provide support in the form of grants for fees to those who need them rather than require all students to pay those fees. I have also explained how this, combined with our system of income-contingent loans, will ensure that the largest public subsidies go to students from the poorest backgrounds. I pointed out that our proposals would generate considerably more resources for reinvestment in further and higher education than the previous government were prepared to put into them.

I could go on. However, rather than engage in a narrow debate about comparative funding options I should like to return to the real issue of how best to secure participation in high quality higher education by students from all socio-economic backgrounds, particularly those groups that are currently under-represented. In doing so, I hope that we can at least agree upon the facts rather than engage in speculation. There is a wealth of evidence to show that participation by lower social groups in higher education remains poor but that, crucially, this cannot be put down to finance. The reasons why students enter higher

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education are much more diverse and complex than that. I believe that to suggest otherwise does students from low income backgrounds a great disservice.

The facts indicate, nevertheless, that there is one fundamental factor which determines whether young people are likely to enter higher education. Quite simply, they are more likely to go to university if they have the school qualifications that universities demand. Yet survey after survey shows that students from lower income backgrounds either do not get the opportunity to study for those qualifications or are unsuccessful in exploiting them. It is in this respect that students from lower income backgrounds are disadvantaged and why they are not entering higher education in the numbers that we wish to see. We are determined to put that right and we shall do so by developing a school system aimed at securing progression for all who have the ability and by raising standards, expectations and achievements.

We have already brought forward measures in the School Standards and Framework Bill to promote excellence in schools. These measures will give students from lower income backgrounds the chance to get the grades that they need in order to enter a university. We hope that they will also help to create a learning culture in which higher education is not seen as the privilege of the better-off few. Although there are more important factors influencing access to and participation in higher education, I do not deny that student support has its part to play, but it would be helpful if we considered the facts about the impact of grants and loans on access.

Noble Lords opposite are unhappy that we propose to replace maintenance grants with a fair and progressive system of income-contingent loans. I might share their concerns if I thought that grants promoted access or loans hindered it. But, as I have pointed out already, in the five years before loans were introduced, when students still received support from grant alone, participation among students from lower income backgrounds rose by only two percentage points. Between 1990 and 1995--during which time loans were introduced and the proportion of support available through loans increased--the rise was much greater: it was over seven percentage points. This shows that students from less advantaged backgrounds were not deterred from entering higher education by the flawed loan scheme introduced in 1990. There is all the more reason to believe that they will not be put off by the much fairer loans that we shall make available.

Noble Lords opposite may wish to consider the latest figures which show that home applications for places in higher education this autumn from under 21 year-olds are nearly 1 per cent. up on last year. The position in respect of those aged 21 and over is also improving. Overall, home figures are about 2 per cent. down on 1997. This is hardly surprising given the increase in students entering in that year. Nor is there any evidence from the University and Colleges Admission Service (UCAS) that potential applicants from lower income families have been deterred by our proposals. On the contrary, application levels appear to be holding across all social classes. This suggests that students understand that the Government's proposals will give them access to the resources that they need and that they will not be

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expected to contribute more up front to the cost of their education than they would under the current system. Furthermore, it suggests that they recognise that the income-contingent loan repayment arrangements that we are introducing will be both fair and progressive. The level of repayments that graduates will be expected to make will be directly linked to their incomes. Graduates who earn less than £10,000 will repay nothing at all, and over time the total amount that graduates repay will be no more in real terms than they borrowed as students.

Members of your Lordships' House, in particular the noble Baroness, Lady Blatch, and Members of another place have suggested that the poorer students will end up with the largest debt. As I have sought to make clear on previous occasions, under the new arrangements less well-off students will get the most support towards their fees and living costs. The noble Baroness is laughing; I am not sure why. I cannot believe that any Member of your Lordships' House will take issue with that; it is a fact. No doubt noble Lords will argue that that is fair.

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