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Lord Barnett: My Lords, before the noble Lord sits down, he will be aware that I always enjoy the noble Lord's bit of fun, particularly in a case where I have a great deal of sympathy with the point that he makes. However, he did not deal with why the other place rejected the amendment; namely that it involved a charge on public funds. I do not argue about the £27 million, £1 million or £2 million. But there is a major problem here. This is the third time that this matter is being considered. I am aware that the noble Lord has changed the amendment slightly, but basically he is rejecting the amendment of the elected Chamber and seeking to send it back. Is the noble Lord telling noble Lords that he is prepared to do that three times, four times or five times?

Lord Mackay of Ardbrecknish: My Lords, perhaps I may rehearse what has happened. This Bill started off in this place. The first time on which noble Lords voted on the issue and inserted an amendment into the Bill they were not disagreeing with the Commons. They may have been disagreeing with the Government, but that is a different matter. The Bill then went to the Commons, who sent it back to us. We sent it back to the other place. This is only the second time that we have disagreed with the Commons. As I would expect from a former Chief Secretary, the noble Lord reminds me that the Commons believe this to be about money and that that reason may be deemed to be sufficient. I have read out the letter from the NUS. I do not believe that it is the view of the NUS that it is sufficient or that the public regard it as sufficient. I believe that we should ask the Commons to think again.

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Moved, That the House do not insist on their Amendment No. 64D in lieu of Commons amendment No. 64, to which the Commons have disagreed for their reason numbered 64E, but do propose Amendment No. 64G in lieu of the words so left out of the Bill.-- (Lord Mackay of Ardbrecknish.)

Lord Steel of Aikwood: My Lords, normally when I rise to speak following the noble Lord, Lord Mackay of Ardbrecknish, it is strongly to disagree with him. Therefore, this is a very pleasant change. It takes my mind back to the time when he and I debated together as students at Scottish universities, no doubt paid for by the state. I see the noble Lord nodding in agreement. Certainly, it was paid for in my case. We had the good fortune to be students in the days when we were financed by the State, in my case for five and not four years. I was not a dilatory student but took two co-ordinated degrees. It is a pleasure to follow the comments of the noble Lord, Lord Mackay of Ardbrecknish. The fact that he has covered the ground so fully means that I can speak briefly.

I begin by dealing with the question raised by the noble Lord, Lord Barnett. My Amendment No. 123E is much more tightly drawn than the proposal previously rejected by the Commons, costing some £27 million. If the noble Lord looks at the Marshalled List he will see that my amendment is even more tightly drawn than his second amendment. My amendment refers specifically to the fourth year of study for first degree courses at Scottish universities. The estimated cost to public funds is £2 million, not £27 million, and does not come into effect until the year 2001. We are considering here a very modest amount of public expenditure to remove a glaring anomaly in the Bill which would arise if we rejected the proposal of the Commons without putting anything in its place.

Lord Barnett: My Lords, I thank the noble Lord for giving way. The amount of money involved in this case is irrelevant. The reason that has been given is that it involves a charge to public funds. That is the reason given by the other place, not that the cost is £27 million or £500,000.

Lord Steel of Aikwood: My Lords, I accept what the noble Lord has said, but surely the amount involved is relevant. It will be for the Commons to consider the matter if we send back a new proposal which is more limited. In considering that matter, the Commons will take into account the cost of the proposal contained in the Bill. That is my plea to the House this afternoon.

As the noble Lord, Lord Mackay, has said, when the proposal to introduce tuition fees was put forward, this particular anomaly had not been spotted. When the Scottish Office quite properly reached its decision to extend the payment of fees through to the fourth year and this anomaly was spotted, the reaction of the Government was one of ministerial bluster in both Houses. That has been the situation throughout. We have heard bogus arguments about how Scottish students tend to leave school in the fifth and not the sixth year. That is untrue. Unfortunately, we do not have

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any statistics but anecdotal evidence based on our particular experience shows that, like myself, most students who enter Scottish universities stay on for a sixth year at Scottish schools, just as students in England do. All the schools in Scotland, not just Fettes, at which students take O and A-levels instead of Scottish Highers--there are many of them--presumably will be allowed to send on their pupils, who will have their fees paid, whereas students who take exactly the same examinations in England, Wales and Northern Ireland will not.

That is an indefensible proposition. We on these Benches have been advised that on legal grounds it is so indefensible that, ironically, just as the House proposes to introduce into our legislation the European Convention on Human Rights it is possible that the first challenge against the Government will be on this very issue. Rather than spend money on legal fees defending this issue in the courts, the Government would be wise to incur the modest amount of public expenditure that is required to put right this anomaly.

The noble Lord, Lord Mackay, kindly spared us yet more of his family history. We all begin to feel part of his extended family in Italy. But he is right that the anomalies are so gross that a student from Cumbria will have to pay the £1,000 but a student from Umbria will not; a student from Birmingham will have to pay the £1,000 but a student from Barcelona will not; a student from Colchester will pay the £1,000 but a student from Cologne will not; and a student from Doncaster will pay £1,000 but a student from Dusseldorf will not. I could go on. The comparison that I particularly like is between the student from Rotherham who pays £1,000 and the student from Rotterdam who does not. But the most glaring anomaly is the one raised by the noble Lord; namely, that relating to the island of Ireland. How can we, at this fraught moment, be passing a Bill which suggests that students from Northern Ireland pay £1,000 whereas students from the south do not? It is an absurd proposition.

Perhaps I may quote a little further from the letter from the president of the NUS of Scotland to which the noble Lord, Lord Mackay, referred. I do so because I welcome the presence on the Government Front Bench of the noble Baroness, Lady Ramsay of Cartvale, who, when I first knew her, was president of the Scottish Union of Students. We all bowed down to her and we bow down to her again today. I hope that she will listen to what her successor in office says on this matter. He, referring to the students from Northern Ireland, states:

    "These students wish to study in Scotland for various and very genuine reasons. Most wish to study courses that are not offered by the few higher education institutions in Northern Ireland. Having to leave Northern Ireland to study, many students also stated that Scotland was nearer; that the Scottish education system was attractive; that they had family connections or other ties there; and were familiar with a wider Scottish culture over that of the rest of the UK. Their choice of study in Scotland, and not elsewhere in the UK, is now to have greater financial consequences for their parents, and is clouding a time for optimism with dilemma and doubt".

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I believe that he is right.

He concludes his letter by saying:

    "Students in Scotland greatly value the diversity of the student body. We seek to defend the equal choice of all students to benefit from Scottish higher education, and their residence in the UK remains an arbitrary distinction void of educational or moral ground".
I believe that to be the case. I know that the Government may try to advance the constitutional argument, and so I address it finally.

We are a revising Chamber. It is not up to us to overturn finally the views of the other place. We are a revising Chamber. What does that mean? It does not mean that we have to do whatever the Government wish, and certainly not when the Government command an overwhelming majority in the other place, and when on this issue there have been at least 30 abstentions on the government side in the other place, because of the great concern, especially among Scottish Members.

This proposal appeared nowhere in a manifesto. No one would write such an absurd manifesto. Therefore, it is reasonable that we ask for a modest rethink by the Government. I hope that they will accept my Motion No. 123D. If they do not, I intend to press it to a Division, because it is no part of our function to legislate nonsense, and certainly not when it is nonsense on stilts.

3.30 p.m.

Lord Shore of Stepney: My Lords, it would be incomplete if this chorus of complaint was not joined by at least one Labour voice. I am certain that what I have to say reflects the strong majority opinion of my colleagues on these Benches. I must say that I think also that what I am going to say will reflect the opinion of most of my colleagues in the other place, who, if they were allowed a free vote on the issue, would make quite clear their own feeling of repugnance at what is being proposed. I use the word "repugnance" deliberately.

The noble Lord, Lord Mackay, went straight to the heart of the matter, and deployed the strongest argument of all, which is that this is a matter of principle; it is a matter of discrimination. It is discrimination against our fellow countrymen. It is discrimination in the sense that while Scottish students, very properly, are being exempted in their fourth year from payment of fees, English students who go to Scottish universities are having to pay for the fourth year. Welsh students are having to pay; Northern Ireland students are having to pay.

On top of that, which is discrimination that to me is wholly unacceptable, we learn that the whole of the student population of our 14 neighbour states in the EU is to be exempt as well, while our own people, our own students, are to have this imposition placed upon them. My Lords, this is incredible! It is folly beyond all belief. It is not just discrimination; it is reverse discrimination. It is positive discrimination in favour of the 14 countries of the EU--a new dimension of positive discrimination, and positive discrimination against the people of our

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own land. Never will we accept this. I tell my right honourable friends now that they have to take this back, and they have to think about it again.

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