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House of Lords

Wednesday, 19th November 1997.

The House met at a quarter past two of the clock: The LORD CHANCELLOR on the Woolsack.

Prayers--Read by the Lord Bishop of Southwark.

Lord Smith of Clifton

Sir Trevor Arthur Smith, Knight, having been created Baron Smith of Clifton, of Mountsandel in the County of Londonderry, for life--Was, in his robes, introduced between the Lord Razzall and the Baroness Nicholson of Winterbourne.

Lord Watson of Invergowrie

Michael Goodall Watson, Esquire, having been created Baron Watson of Invergowrie, of Invergowrie in Perth and Kinross, for life--Was, in his robes, introduced between the Baroness Smith of Gilmorehill and the Baroness Ramsay of Cartvale.

Lord Thomas of Macclesfield

Terence James Thomas, Esquire, CBE, having been created Baron Thomas of Macclesfield, of Prestbury in the County of Cheshire, for life--Was, in his robes, introduced between the Lord Graham of Edmonton and the Lord Carter.

Higher Education Tuition Fees

2.49 p.m.

Baroness Williams of Crosby asked Her Majesty's Government:

    What consideration they have given to introducing a national system of scholarships based on merit to help meet the new fees for higher education.

Lord Whitty: My Lords, we have no plans to introduce a national scholarship scheme. Under our plans for funding higher education, students from lower income groups will continue to receive free tuition. This will help to ensure that access to higher education will be on the basis of academic merit rather than ability to pay. It will of course be open to individual institutions and others to consider whether to offer scholarships of various types.

Baroness Williams of Crosby: My Lords, I thank the Minister for that Answer. Is he aware that one in eight students are now dropping out of degree courses for reasons of poverty and that parental means testing for young people just above the poverty line is a major disincentive? Will he reconsider his Answer in view of the fact that in a country which also has fees and no proper maintenance arrangements, namely, the United States, 60 per cent. of young people have some form of scholarship, and many of those scholarships have been

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gained through national merit awards? Will he consider how we prevent children of real merit being forced out of higher education through their inability to pay for it?

Lord Whitty: My Lords, I am aware that the noble Baroness has written to my right honourable friend the Secretary of State about the position in America. She will receive a full assessment of that situation. However, at first sight it would appear that America is in a different position from ourselves. There is no national loan scheme in the sense that we have one; nor is there the grant scheme that we had previously. The average size of scholarship within the United States comprises a lower sum than the loan system would provide here. I repeat what other spokespeople for the party have said; namely, that students from low income groups will not have to pay fees. That accounts for about 30 per cent. of students. Therefore those from the lowest income groups should not face the problem of poverty that has been described.

Lord Glenamara: My Lords, will my noble friend say when we shall see the small print of this appalling scheme for which the Government have no mandate either electoral or party?

Lord Whitty: My Lords, I hesitate to cross swords with my noble friend. However, we were committed to looking at the mess left by the previous administration's loan scheme. It was a clear manifesto commitment resulting from the experience of thousands of students. We also had cross-party support for the establishment of the Dearing Committee, most of whose recommendations appear in our proposals. In due course a Bill will be presented in this House.

Baroness Blatch: My Lords, on 14th April, in the run-up to the election, the Prime Minister stated, and penned his name to an article saying, that he had no plans to introduce tuition fees for students' education. It would be helpful to know at what point that changed. Is the Minister comfortable, as we learn more details of the proposals for tuition fees, with the widening gap between Scotland and other parts of the United Kingdom and the disparate treatment of students north and south of the Border?

Lord Whitty: My Lords, we have had several Questions and a debate on the Scottish system arising from the fact that most degree courses in Scotland are for four rather than three years. Anomalies are necessarily created by that situation.

On tuition fees, having examined the proposals from the Dearing Committee we brought forward a package which is fairer to lower income groups than the system of loans which we inherited from the previous government; it is fairer too than the system that would have applied had we taken the straight Dearing recommendations.

Lord Davies of Oldham: My Lords, will my noble friend confirm that the purpose of the Government's proposals is to ensure that, contrary to what happened in the past, all students have adequate resources to sustain

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themselves in higher education, and that they will be asked to repay a limited loan over a lifetime?

Lord Whitty: Indeed, my Lords, that is precisely our objective. We are concerned that the welcome increase in higher education take-up over recent years has seen growth among the higher income groups at twice the rate of those in lower income groups. It is our intention to level up that position. The lowest income families will pay no tuition fees. A further one in three families will pay less than £1,000. It is important to say that no parent, no spouse, nor any student will have to pay a higher up-front contribution than has been the case under previous arrangements.

The loan will not start to be repaid until a level of income, triggered at £10,000, is reached, and will go up, recognising that graduates who achieve a qualification on average receive income 20 per cent. higher than those who do not.

Baroness Carnegy of Lour: My Lords, can the Government confirm a report in today's Scotsman newspaper that the income threshold for Scottish students below which they will not have to pay tuition fees will be lower than the threshold for English students? That may reflect the fact that the threshold for maintenance grants is lower in Scotland. However, in Scotland the costs of maintenance are probably lower on average. I suggest that that is not the case as regards tuition fees. If this chaos is to continue, is not the Question of the noble Baroness, Lady Williams, highly relevant?

Lord Whitty: My Lords, as we have debated on several occasions, the situation in Scotland is slightly different. For English schools the repayment threshold will be £10,000. The different balance between maintenance and fees in Scotland has to be taken into account in that system. As I said, we shall look at details of the American system. I do not believe that a national scholarship system, as proposed by the noble Baroness, Lady Williams, would resolve any of those anomalies.

Lord Wallace of Saltaire: My Lords, is the Minister aware that a number of higher education institutions have sketched out top-up schemes with a substantial redistributive element? If the Government are not prepared to use public redistributive taxation help for a student, will they at least relax the ceiling on fees and enable higher education institutions to undertake such a system themselves?

Lord Whitty: My Lords, no, because we believe that the net effect would be to increase the maldistribution of admissions in favour of higher income groups.

Lord Pilkington of Oxenford: My Lords, has the Minister considered the position of a student with a loan of £12,000 who begins work as a teacher in London earning £16,000? How can he sustain a rent or a mortgage? How do the Government envisage working

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class families, as mine was, preparing their children to carry that sort of burden?

Lord Whitty: My Lords, the repayment of such a teacher will be fairer, lower and over a longer timescale than under the scheme we inherited from the previous administration.

Lord Walton of Detchant: My Lords, if the principle of students paying a contribution towards their tuition fees and having to take out a loan to cover their maintenance during higher education is accepted, do the Government accept the proposal made by the National Commission on Education that once the threshold of income is reached the repayment should be through the tax or national insurance systems rather than by writing out a cheque?

Lord Whitty: My Lords, no. We have accepted the principle that the sum is a loan which should be dealt with separately and not integrated into the tax system.

Lord Carter: Next Question.

Baroness Williams of Crosby: My Lords, will the Minister, whom I respect--

Noble Lords: Order!

Baroness Williams of Crosby: The first issue is that of contributions.

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