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Baroness Ashton of Upholland: My Lords, for students who receive the 1,100, in the context of their family income, the position will remain the same. Students who come from a family with a total income of 10,000 or less will receive an additional grant of 1,000.

Lord Forsyth of Drumlean: My Lords, to cut through the spin, would it be a fair summary of the Minister's new policy that the hard-working classes in this country whose children are now 14 or younger can expect them to be saddled with large debts in return for their tuition at university? Universities will be entitled to raise that money on the basis that a regulator will make it harder for such children to get into universities in the first place. Is not that a disgrace?

Baroness Ashton of Upholland: My Lords, that is not the Government's position. We recognise fully that the programme we set out today will lead to university graduates having to pay back an increasing amount if a university chooses to put up fees on a particular course or throughout the institution. Universities must make that decision on the basis of several factors.

We know from talking to many people about the issue that one of the key factors is finding the money upfront. At present, students' parents or the students themselves must do that. That situation will go. Instead, there will be a loan that students can pay back at a suitable point in their career. That will be demonstrated to be an important move.

The purpose of the regulator is to ensure that universities are working to develop access and widen participation in higher education. I congratulate all universities that do that. As a nation, we need such development if we are to have the thriving economic base that we want. Universities must continue that work and must be supported in doing so by the regulator. That is the purpose behind the Government's strategy.

Baroness Warwick of Undercliffe: My Lords, I am pleased by my noble friend's recognition of the success of UK universities. I declare an interest as chief executive of Universities UK. We are also pleased at the specific amounts of new money that the Government have agreed to make available for higher education. I am relieved that the Government have dropped proposals for withdrawing research degree-awarding powers.

Can my noble friend reassure me that it is the Government's intention that teaching in higher education institutions should continue to be offered in a context informed by research and that new centres of research will still be able to flourish?

Baroness Ashton of Upholland: My Lords, I am happy to confirm that for my noble friend. We must

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recognise that teaching is of paramount importance in what a university offers. But we must also recognise that research is fundamental. What we are looking for in our university structure is for different universities to recognise their skills and build on them.

I am sure that my noble friend and Universities UK will examine closely our proposals on research. We are considering how to develop research so that universities providing innovative research at the cutting edge move forward—whatever their basis in the current assessment—and are supported in doing so. We also want universities to work together in what I might call a cluster to develop the expertise that enables them to compete internationally.

Lord Roberts of Conwy: My Lords, I note from page 75 of the White Paper that the regulator will have the power,

    "to withdraw approval for variable fees or impose financial penalties".

Does that mean that the regulator must approve a proposal for variable fees?

Does the document apply to universities in Wales? I understood that higher education was a devolved matter.

Baroness Ashton of Upholland: My Lords, what the noble Lord read out about our proposals in respect of the regulator is correct. However, what it means is that part of the decision on whether a university can put up its fees will be whether it has satisfied the regulator on access. Many universities are already considering the issue, so it is not a hardship for many of them. We are keen to ensure that any increase in fees goes hand-in-hand with universities developing their relationships with schools and examining their admissions arrangements.

In Wales, discussions continue. There have been press reports that we have devolved student support to Wales; they are incorrect. We are having discussions with our colleagues in Wales on how the systems might work closely together. I am happy to keep the noble Lord informed about those discussions.

Lord Morris of Aberavon: My Lords, I declare an interest as Chancellor of the University of Glamorgan. Have the additional costs of a postgraduate professional qualification—such as for law students—been taken into account in the debt that is envisaged?

Baroness Ashton of Upholland: My Lords, the individual student will have his or her debt calculated on the basis of the kind of degree, the fees and the maintenance allowance, which, as noble Lords will know, is different in London from elsewhere. We have considered different examples of what the debt might be. An individual student will have it calculated in that way, and there is no overall debt figure that will apply to students studying a particular course for a particular period. Family circumstances will vary.

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There may be examples in the White Paper. I am happy to lay in the Library examples of individual cases, which may help noble Lords to grapple with the issues.

Baroness Perry of Southwark: My Lords, can the Minister explain how the reform of the postcode premium will relate to mature students, who form one half of the student population? The new criteria include not only parental income but the performance of a student's school—which seems a bit irrelevant for a 35 year-old—and the level of their parents' education. That seems very odd.

Baroness Ashton of Upholland: My Lords, I cannot answer the first part of the noble Baroness's question, as I do not have that information. I shall write to her. I apologise.

In examining the factors that determine whether a young person goes to university, we have tried to isolate the most critical factors. Noble Lords will not be surprised that one of those factors is the level of education of the parents. Many families in this country have no history or tradition of university education and, therefore, no expectation that their child or children may attend a university. That is well understood, and we wish to bear it in mind for those students. In households for which university is part and parcel of life, going to university will be talked about. In other households, it is often simply not a subject for discussion. Unless the schools and universities talk to such students, they may not aspire to university, even though they are capable of going. That is particularly true in areas in which the schools do not encourage that aspiration.

There are well-documented cases. Noble Lords will know of anecdotes and other evidence that demonstrate how important it is to ensure that students raise their aspirations and recognise university as something that is for them.

House of Lords Reform

4.18 p.m.

Debate resumed on the Motion that this House takes note of the first report from the Joint Committee on House of Lords Reform.

Baroness Jay of Paddington: My Lords, it is a privilege to open the second day of this important debate. I follow noble Lords who spoke yesterday and congratulate the Joint Committee on its excellent report. It has reinvigorated the reform process.

I particularly welcome the degree of cross-party consensus, which the report emphasises. As the opening paragraph says, it is now possible to speak of,

    "broad agreement on the roles, functions and powers of a reformed second chamber".

There is also broad agreement about the creation of a statutory appointments commission and the future sitting rights of the remaining hereditary Peers.

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Overall, the explicit common aim is to increase the representativeness of the second House. We have certainly moved a long way since 1998.

I know that we have heard that my noble and learned friend the Lord Chancellor, who will reply to the debate this evening, thinks that only a genius can resolve the current, apparently intractable reform issues. However, I hope that my noble and learned friend, as one who struggled with me through many days of debate on some of the points that now appear to be commonly accepted, will agree, in his winding up speech, that the Joint Committee has helpfully formalised and crystallised a basis of positive consensus. Above all, the report has broken the log jam.

The fulcrum of disagreement is now how to achieve a more representative second Chamber. Here, too, it seems that the parameters of debate have shifted recently quite a long way. I am sure that noble Lords of the Official Opposition will forgive me if I do not explore the reasons for the change in their party leadership's stance. Having listened to and read yesterday's debate in this House, the policy does not appear to be widely supported by Conservative Members here.

I am more concerned with apparent changes in the views of Labour Members of Parliament. I shall give an example. When the Labour Party was preparing to submit evidence to the Royal Commission, chaired by the noble Lord, Lord Wakeham, it was agreed, following nationwide consultation, that the primacy of another place required that there be no possibility of a challenge to the elected Members of the House of Commons by an elected second Chamber. Once the Wakeham commission had reported and raised the idea of the hybrid House, the possibility of some elected Members was discussed in policy forums and in 2000 at the Labour Party conference. A figure of about one-third elected Members was generally accepted, although I acknowledge that this small number was not agreed by my noble friend Lord Richard and other party colleagues.

However, the 2000 conference position became the basis for the Government's general election manifesto in 2001. The manifesto spoke of,

    "effectively implementing the Wakeham conclusions and maintaining the primacy of the House of Commons".

Apparently, a significant number of Labour Members of Parliament no longer support that position. As my noble friend Lord Richard said yesterday, the game has changed.

If the game has changed and it becomes the settled and consistent majority view of my right honourable and honourable friends in another place that only a,

    "wholly or substantially elected second chamber",

satisfies their understanding of a "representative body", ultimately, as on many other issues, I would accept the decision of the popularly elected House. However, I hope that the present mood may be diluted—or may even pass—and that Commons' Members will reassess the dangers to their supremacy

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and the impact on the constitutional balance if in future they were to be powerfully challenged by another wholly or predominantly elected Chamber.

Personally, I stand by the Government's 2001 manifesto commitment on the next stage of reform. How does the report help advance that commitment? We have before us seven options for the future composition of the Chamber. At first glance it seems an almost indigestible choice. I am sure that my noble friend Lord Carter is happy that he was a member of the recommending committee rather than the Chief Whip trying to facilitate the process of choice.

Nearly all noble Lords who spoke yesterday declared their voting intentions. So let me say at the outset that my personal first preference is for Option 5; that is, 60 per cent appointed Members and 40 per cent elected Members. I remain convinced by the arguments of the Wakeham commission that there is great value in a critical mass of authoritative, expert nominated Members, a point well illustrated yesterday by the noble and learned Lord, Lord Howe, and other speakers.

On the other hand, I have been persuaded that in the 21st century some elected Members will give a future second Chamber greater legitimacy and help to achieve better representation in particular categories. I am certain that the appointed Members should be selected by an independent statutory appointments commission, as proposed by the Wakeham commission, by the Government's election manifesto, and by the Joint Committee.

I also agree with the committee's report that all Members should serve for a limited term. The committee proposes a tenure of some 12 years without giving explicit arguments for this particular period of time. Personally, I prefer 10 years as an adequate term to indicate independence and to generate experience, but I do not regard this as a significant difference from the committee's position.

I am, however, concerned that there are what I see as regrettable gaps in some of the committee's proposals which undermine our ability to make a completely informed choice now, or in the near future. From my perspective the most important omissions are the questions of how to achieve a workable size of the new House; questions of cost; questions of how any elected Members should reach the House; and whether they, or any nominated Members, would have a link with the peerage. I recognise that all those problems are acknowledged in the report and will, apparently, be the topics of future committee work. My concern is that if we are to make a guiding, if not necessarily a final, choice on composition in two weeks' time, it will be more difficult to do so without having the results of some of that work before us.

I turn to some of the omissions that I regret, in no particular order of importance. I have long argued that the character and nature of the second Chamber would be changed at a stroke if membership were decoupled from the peerage. In my view, the award of a life peerage should continue to be a high honour, but should not automatically confer a seat in Parliament.

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During the passage of the 1999 House of Lords Act we discussed at some length whether ML was a suitable designation for appointed Members to this House. Indeed, the noble Earl, Lord Ferrers, who I am delighted to see in his place, has continued charmingly to chide me about the Government's decision to vote against that proposal at that time on the basis that it was irrelevant to that particular Bill.

Now the time has come when we can all cheerfully join hands and agree that all should be MLs. It would be particularly anomalous, and no doubt constitutionally improper, if anyone elected to serve on an external franchise was elected to a peerage.

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