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The Lord Chancellor: My Lords, that is not something which has yet been contemplated. We will consider it. This is a White Paper with green edges and there is to be substantial consultation.

Lord Borrie: My Lords, I welcome the Statement and perhaps I might ask a question relating to the "wide coverage" of the public disclosure provisions in relation to government departments, local authorities, quangos and so forth. Some of us in this Chamber will have in mind certain discussions in relation to public authorities under the Human Rights Bill. One would therefore like to know whether the new arrangements will apply to those private bodies which have public functions such as the Press Complaints Commission, the Advertising Standards Authority and the Takeover Panel. They have important powers and if they did not exist as private self-regulatory bodies they would no doubt be statutory bodies. Members of the public may feel that they hold documents which are just as important as those held by quangos and government departments.

The Lord Chancellor: My Lords, when the Bill is published in due course, it will be accompanied by a list. The list can from time to time by order be altered. The broad answer is this. We have taken the general view that where functions are carried out under statute, whether by the public, private or voluntary sectors, freedom of information should provide a basic line of accountability. A wide variety of such functions are carried out by private companies; for example, running prisons, administering public sector superannuation schemes, collecting council tax, and so on. There will be other examples under the Deregulation and Contracting out Act. Those are the kind of organisations we have in mind. But these matters are

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ones which can be discussed in consultation. It can be positively put that a particular body ought or ought not to be on the list. When the Bill is published, it will be accompanied by a list.

Lord Teviot: My Lords, I have been associated with public records for more than a quarter of a century, but I am not aware that we are a closed country regarding information. A great deal of work has been done on this. There was the Grigg Commission of 1954 and then, after a curious debate I had on public records in 1977, the marvellous late Lord Elwyn-Jones instituted the Wilson Commission. Where other countries have employed freedom of information, they have done so not always to great advantage. In paragraph 6.5 of the White Paper the Government say that they are retaining the 30-year rule. But in paragraph 6.6 the White Paper says that more records will be released within 30 years. I view that with some alarm. I should be grateful if the noble and learned Lord could explain which records will be released within 30 years. Our Civil Service is undeniably the finest in the world and one would not want it to be inhibited by a whole lot of freedom of information.

The Lord Chancellor: My Lords, I am not sure I can be much more particular than paragraphs 6.5 and 6.6 of the White Paper to which the noble Lord has referred. Our commitment was to open up more government records, and earlier wherever possible. That we will do. We considered carefully and decided against a blanket change to the 30-year rule as such. That will remain the point at which material will be made available in the Public Record Office. I shall not take up time reading paragraphs 6.5 and 6.6 where we give our explanations. We are proposing to bring together in one system the arrangements for freedom of information for current papers and what have up to now been quite separate arrangements, as the noble Lord correctly said, for historic public records. We believe that far more material will in practice be releasable before the 30-year mark. I predict that the proposals in this area will be widely welcomed by historians, others and many in this House, including, I suspect, the noble Lord.

Lord Brooke of Alverthorpe: My Lords, one of the areas in which there has been a substantial growth of secrecy in recent years has been contracting out and the extension of contracting generally. The secrecy has been imposed by the addition of the tag "business--in confidence". I should be grateful if the noble and learned Lord could clarify whether this will be covered by the Bill.

The Lord Chancellor: My Lords, if the noble Lord reads the White Paper he will see that we are giving active thought to addressing particularly the contracts to which he refers. Through the medium of the bodies which are party to these contracts and which will be subject to the Bill, material under these contracts will be subject to the new freedom of information regime.

Baroness Thomas of Walliswood: My Lords, can the noble and learned Lord, whose Statement I very much

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welcome, tell us whether consideration will be given to the charges made at the Public Record Office, which I understand are 40p per sheet for photocopying? That seems an excessive amount. Is it likely that the legislation which follows the White Paper will require modification of the legislation which followed the Widdicombe Report, which exempted from the duty of publishing papers certain local government working parties and sub-committees which did not take decisions?

The Lord Chancellor: My Lords, as part of the exercise for preparing for the Bill, we will be considering a broad range of legislation, including that to which the noble Baroness has referred. It is quite remarkable how many statutes there are on the statute book with provisions that bear on these issues. I note what the noble Baroness has said about charges at the Public Record Office.

Teaching and Higher Education Bill [H.L.]

4.16 p.m.

The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, I beg to move that this Bill be now read a second time. The Bill we are debating today makes radical proposals which, seen together with measures introduced in another place, aim to drive up standards across the whole spectrum of education. The Bill will enhance the effectiveness and the standing of the teaching profession. It will secure fair funding in higher education and reform student support. It will ensure that employed young people can continue to learn.

The Government believe fully in the virtues of consultation. We have radical ideas and plans and the energy and commitment to make them a reality. But we do not believe that we have a monopoly of wisdom. The proposals before us today and in the School Standards and Framework Bill we have introduced in another place have been exposed to public comment through a massive exercise in consultation which has produced a big response. For example, almost 250 universities, colleges, local authorities and others responded to our consultations on the national inquiry into higher education and our own proposals. Just as importantly, we have heard from thousands of parents. We have listened very carefully to what people have had to say. There was clear support for our view that the further expansion of higher education cannot be afforded on the basis of current funding arrangements and future costs should be shared between those who benefit and that a new deal for teachers is long overdue.

Teachers are our greatest educational resource. Teachers, in particular, head teachers, are at the heart of our drive to raise standards. This Bill, and indeed the Government's wider policies, are intended to give them the tools they need to do the job and to do it well. This Government listen to teachers and we intend to work in partnership with them. The provisions set out in the first part of the Bill represent measures which they tell us will help them to do their job better.

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We all know that the strength and quality of the head teacher can be the deciding factor in a school's success or failure. As the chief inspector has said,

    "the weakest schools are invariably the victims of poor management and weak leadership. The converse is true in successful schools".

We are working to develop new training programmes for heads already in schools to raise the standards of all to those of the best. But we believe it is right to move now to ensure that all those coming new to school headship have the knowledge and skills in management and leadership they will need to lead their schools successfully from day one. Clause 12 will therefore enable the Secretary of State to require that all first-time heads should hold a professional headship qualification designated for that purpose.

Good management training is already available for teachers. We believe it is right, however, to look for a single national headship qualification to represent the common quality standard we should expect of all new heads. My right honourable friend the Secretary of State has already said--but let me place it on the record here--that, subject to further development and continued positive feedback from the current pilot, we expect the Teacher Training Agency's national professional qualification for headship to be the required headship qualification in due course.

As well as ensuring the quality of our new heads, we must also ensure the quality of all new teachers. We have already strengthened initial teacher training. We have launched a new core curriculum to underpin the skills which all new primary teachers must have mastered in the crucial areas of English and mathematics. We have set new standards which trainers must ensure that all student teachers have reached at the end of their training. We must, however, be certain that all training provision meets the standards we have laid down. There can be no excuse for complacency or for risking short-changing students; or indeed the pupils they may find themselves teaching. We must therefore ensure that all teacher training provision--both initial and in-service--is open to full and rigorous inspection by Ofsted so that any shortcomings can be identified and action taken.

As your Lordships may be aware, statutory provision already exists for Her Majesty's Chief Inspector to inspect teacher training, in the form of a letter of assignment made under the School Inspections Act 1996. Regrettably, those existing rights and duties have been questioned or challenged by a small minority of institutions who have sought to delay or question inspectors' access to undertake inspections. Clause 14, therefore, restates the existing statutory position on the face of primary legislation, reinforced by a statutory right of access at all reasonable times. This is not about providing an unfettered or unreasonable right of entry, and relates to inspecting teacher training courses only. There is no question of inspectors having a right of entry to higher education institutions to inspect other higher education. This Government fully recognise and respect the proper freedom and autonomy of institutions.

New teachers face a demanding challenge in taking control of their own class for the first time when they enter teaching. There may well be areas where they need

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additional support and guidance, or time to work with other, more experienced, teachers to fine-tune their skills. Even with this support, a limited number of new teachers may not prove able to deliver the consistent high quality performance on the job that we expect. Clause 13 provides for all newly qualified teachers to have satisfactorily completed an induction period (normally a year) as a condition to continued employment.

This Government are determined to restore pride and professionalism to the teaching profession. There has long been agreement that a key element in this is the establishment of a general teaching council. Clauses 1 to 11 give effect to our commitment to establish a GTC.

The council will offer teachers a clear professional voice, independent of government, but working with us to raise standards. For too long, teachers have had too little say in determining the shape and future of their profession. Now, for the first time, teachers will have a body advising government on the range of professional issues of concern to them: from recruitment and supply, through training and induction, to professional development. We expect the GTC to promote a positive image of teaching to help us to celebrate the best in teaching and to help inspire others to come and join this most demanding and rewarding of careers. The GTC will represent the highest professional standards and will be charged with establishing a register of those qualified to teach. An effective GTC will be an engine for change and a driving force in our new deal for teachers.

These are important proposals both for the teaching profession and as a key element in our wider programme for raising standards in schools. They build on the proposals in the Excellence in Schools White Paper which we published in July and the extensive and helpful consultations we have had since then. They complement the School Standards and Framework Bill we have introduced in another place.

I now move on to the higher education provisions within this Bill. There is a crisis in higher education funding. While student numbers have risen by 70 per cent. since 1989, funding per student has fallen by a quarter. Maintaining and, in time, increasing student numbers cannot be afforded on the basis of current funding arrangements. Moreover, pressures on funding are making it difficult to sustain the world renowned teaching and research capacity of our universities and colleges. Carrying on as we are is not an option.

Even the previous government recognised that something had to be done. In May last year, they appointed the national committee of inquiry under Sir Ron Dearing. We supported this. In our manifesto we said:

    "The costs of student maintenance should be repaid by graduates on an income-related basis, from the career success to which higher education has contributed".

We also made clear that we would await Dearing's recommendations before acting.

Much has already been achieved since Dearing reported in July. On the same day, we announced our intention to introduce contributions from students and

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their families towards tuition fees, but with important safeguards, in particular for those with lower incomes. We announced that loans would replace grants and that there would be special help for those facing particular hardship. We announced that loan repayments would be linked to graduate income. We also began a consultation period on those proposals in tandem with the consultation on Sir Ron Dearing's report. In September, we announced £165 million extra for students and universities in 1998-99 to improve standards and to make a start on increasing student numbers once again. This will ensure that for 1998-99 all the income raised from fees will be used for higher education.

We are also determined to improve participation in higher education. There is no evidence that loans deter access. Since the introduction of the current loan scheme in 1990, student numbers have increased considerably. In the first five years of the loan scheme, participation in higher education among students from lower income families increased by 69 per cent. compared with an increase of 27 per cent. among those from higher income families. Yet nearly 80 per cent. of those from the professional social group go to university, compared with just 17 per cent. from families with few or no skills. So we start from a very low base. September's extra money included a £36 million access package for part-time students and those facing particular hardship, and £4 million to enable an extra 1,000 students to participate through sub-degree programmes. Since then, we have announced an extra £83 million for further education, which plays a vital role in boosting access. And the Higher Education Funding Council has already been asked to take forward Dearing's recommendation that additional funding for places should be targeted at institutions which plan to improve access. To ensure that the public know of our proposals, we have sent out well over half a million leaflets and are running a free telephone helpline which has taken 22,000 calls. We have advertised in newspapers and on the radio. And my right honourable friend the Secretary of State has written to all second year A-level students.

The Bill before us today provides, in Clause 16, new powers for the Secretary of State to provide financial support by way of grant or loans to students on higher or further education courses. In particular, it provides for any increase in financial support for fees, and hence any increase in private contributions above the rate of inflation, to be subject to affirmative resolution in both Houses. This should offer the "rigorous public review" called for by the Dearing inquiry, without the additional bureaucracy of an independent committee.

It means further safeguards for students and their families as tuition fee contributions are introduced. By linking contributions to income, we will also ensure that the least well-off--some 30 per cent. where parental income is taken into account--will pay nothing towards their fees. A further third will pay only part of the fees. Only the remainder will pay the full £1,000 a year. At least three-quarters of the cost of tuition will continue to be met from public funds. Contributions towards tuition fees will not be a deterrent to less well-off families. They will not have to pay them.

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Our new arrangements will involve no higher contribution to fees and maintenance during the course of studies from any student or family. Students will be entitled to means-tested maintenance loans of at least £1,000 a year more as a result. In 1998-99 a student living away from home will be eligible for £2,735 in loans in a full year, and could be eligible for a grant in that year of £810. In addition, a discretionary hardship loan of £250 will be available for those who need it. Crucially, repayments under this new scheme will be on an income-contingent basis. Until, and unless, their gross income reaches £10,000 a year, graduates will repay nothing. For many graduates, it will mean lower monthly repayments spread over a longer period; and if a graduate's gross income drops below £10,000 a year, repayments will be suspended.

Clause 16 enables loan repayments to be collected with the assistance of the Inland Revenue, as recommended by Dearing. This will help to reduce the level of default and will offer graduates a more manageable system of repayment. But graduates should not equate their repayment with tax. Once it is repaid, that is it. Further details of the scheme are being worked out and will be announced.

There is one area relating to loans where I should tell the House now that the Government may be seeking an amendment to the Bill, and that is interest rates. We have absolutely no intention of introducing interest rates above the level of the RPI. However, because collections will be arranged through the Inland Revenue there are technical difficulties which will make it impossible to accrue interest from day to day, as provided for in the current loans legislation. We are currently considering how the interest arrangements should work in order to achieve our policy intention, and expect to bring forward an amendment to clarify this in due course.

Clause 16 also enables the Secretary of State to determine who should administer the student support arrangements. This is a task currently performed by the local education authorities and the Student Loans Company. We are presently working closely with their representatives to sort out the details of the arrangements and hope to make an announcement shortly. Our aim is to make the student support system more efficient and cost-effective in providing a service to students and universities.

Through Clauses 16 and 17 of this Bill we seek to discontinue discretionary awards made under Sections 1(6) and 2 of the Education Act 1962 and allow for new arrangements. Local education authorities will be fully involved in the development of future arrangements.

Clause 17 provides for discontinuing mandatory and discretionary awards and the current system of student loans. It also provides for transitional student support arrangements to enable existing students to complete their courses under the same arrangements which applied when they started.

Clause 18 of the Bill gives the Secretary of State a reserve power to control top-up fees. This power is not an attack on academic freedom or university autonomy. It does not give the Secretary of State power to set

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university fees. It simply ensures that tuition will continue to be free for students from lower-income families and that parents will be expected to contribute no more than under present arrangements. Universities will retain all their essential freedoms, including the freedom to set fees for various categories of students. In the interests of equity and in return for the £3.5 billion in annual grant from the taxpayer, this legislation is intended only to limit the fees that institutions charge home and EU full-time undergraduates and PGCE students.

I know that there is concern that this or some other government might use the power sought in Clause 18 to control fee levels for other students for whom no financial support will be available, such as the generality of part-timers and postgraduates and even for overseas students. Let me make quite clear from the outset that that is not our intention. I repeat that we do not intend to set universities' fee levels for such students. My officials have had a discussion today with the Committee of Vice-Chancellors and Principals in response to a letter from the committee expressing its concern about the scope of the clause. Let me assure the House that we have already taken a close look at the current drafting of the clause, and we are prepared to clarify it through an appropriate amendment at Committee stage with a view to ensuring that our intentions are quite clear.

But let me leave your Lordships in no doubt either that top-up fees play no part in our plans. We hope we never have to use this power. But it is necessary for us to have it in reserve to reassure students and their parents that we are determined that access to higher education is on the basis of academic merit, not ability to pay. This is a pledge we cannot and will not break.

Clause 19 provides for the higher education funding councils to give funding to higher education institutions for them to distribute to connected institutions.

Clause 20 defines key terms used in the Bill relating to higher and further education, and Clauses 21 and 22 implement the Government's policy in this area in relation to Scotland.

I turn now to Part III of the Bill, which underpins our commitment that all young people should be encouraged to get the skills and qualifications they need for their future. Clauses 23 and 24 provide that 16 and 17 year-olds in a job will be entitled to appropriate time to pursue approved qualifications in the workplace, at college or with a private training provider. This measure is a vital part of our "Investing in Young People" strategy, which will tackle the problem of underachievement among 16 to 19 year-olds. Currently only 45 per cent. of our 16 year-olds achieve level 2 qualifications--that is, five good GCSEs, an Intermediate GNVQ or an NVQ level 2--the essential foundation for lifelong "employability". Even by the age of 19 only 70 per cent. have these qualifications. This is a waste of talent that cannot be allowed to continue.

Our long-term aim is that all young people who are able to should achieve NVQ level 2 or equivalent to equip them for the world of work and as a starting point for continued learning. Part III of the Bill tackles the

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problem of the group of young people who, having underachieved at school, leave at 16 and 17 to get a job. Some employers will train them, develop them and offer good career opportunities. The Government appreciate the vision of those employers who already provide excellent training opportunities for their young employees. But for other young people their formal education or training ends the day they leave school. This is bad for them, bad for business and bad for society.

Clauses 23 and 24 of the Bill will insert new sections into the Employment Rights Act 1996. Those aged 16 or 17 who are not in full-time secondary or further education and who have not achieved a certain standard in their education or training will be entitled to take paid time off during working hours to study or train for a qualification which will help them towards achieving that standard. Interpretation of the new entitlement will be both sensible and flexible. In particular, I want to make clear that the phrase "time off"--which is required to enable young people to access this new right--does not necessarily mean time away from the workplace. The Bill does not accord greater status to any particular route. Study or training can indeed be undertaken in the workplace whether actually on the job or elsewhere on site, but it can also take place in a college, with an approved training provider or through open or distance learning. The time that a young person can have will be what is reasonable in all the circumstances, with account taken of the requirements of the course or training as well as the circumstances of the employer's business. We shall continue to consult and discuss with employers and all the other key partners to build on what is already happening and share existing good practice.

In summary, our principal intentions in bringing forward the Bill are threefold. First, we want to improve the future chances of young people who are in work. Secondly, we want to construct student support arrangements that will take us into the next century and put in place higher education of which we can all be proud which is properly funded and in which the damage done by the previous government is put to rights. We want to expand the system and widen access and opportunity. To do that it is right that young people who benefit from our world-class system make a contribution. Thirdly, we want and are determined to see the highest possible standards in our teaching profession. It is still a strong and great profession. We shall make it stronger and greater still--a profession which young people are proud to join.

Moved, That the Bill be now read a second time.--(Baroness Blackstone.)

4.43 p.m.

Baroness Young: My Lords, I begin by thanking the noble Baroness, Lady Blackstone, for introducing the Bill. I agree with her that it is an important measure. I also extend my very best wishes to the noble Baroness, Lady Rendell of Babergh, on her maiden speech to which all noble Lords look forward.

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The Bill covers six significant areas of education and training. Much in the Bill is left to future regulations, and we shall need to probe the Government's intention as to those especially as it is understood that most will be by negative resolution. That said, we support large parts of the legislation, particularly the establishment of a general teaching council for England and Wales. We welcome and believe in the principle of self-regulation and the establishment of a professional body for teachers. It is an important acknowledgement of the central and overriding importance of the part that teachers play in the education system. They need and deserve our support. We need a profession of high standard and status. We wish to see an organisation that is equivalent to the General Medical Council or the Law Society.

We also support the development of a special qualification for head teachers. I agree with the noble Baroness that the quality of the head is a good measure of the success of the school. We are all aware of the great responsibility that heads carry today and their changed and enhanced role. They have the responsibility for delivery of the national curriculum in a world of league tables and the financial management of schools and for staff and relations with governors and parents. We live in an age which daily grows more litigious. Often it is the head who must bear the brunt of this. No one can doubt the value and importance of training for the job.

We support, too, the more technical proposals that require newly-qualified teachers to complete an induction period successfully before qualified teacher status is confirmed. We all know about--and wish we had an answer to--the problem of bad teachers. We hope that this particular proposal will help. We support the power to give chief inspectors in England, Wales and Scotland the power to inspect initial and in-service teacher training. Both these proposals encourage high standards which we all want to see and with which we all agree.

Turning to Part II of the Bill, I cannot say the same. I assume that it is meant to be a response to the Dearing Report. I am bound to say to the Government that in the university world today the proposals have caused an unprecedented degree of anger and dismay. Those who teach in the universities are appalled in particular by Clause 18 and the impact on those who study of tuition fees and the ending of maintenance grants.

I turn to the general teaching council. Although we welcome it in principle there are areas we wish to examine further. We are strongly supported by the NAHT and others in saying that the general teaching council should have more than an advisory role both to admit teachers and, more importantly, to debar them. This power is essential to its effectiveness and particularly in respect of how it is perceived by the outside world. The same is true of its advisory powers on competence, teacher conduct and medical fitness. Curiously enough, there is no definition in the Bill of its purpose or function. The noble Lord, Lord Northbourne, who is unable to stay to the end of the debate and therefore cannot take part, has drawn my attention to this important omission. Surely, the purpose

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must be to enhance and maintain educational standards in the interests of pupils. Nor is there any mention of the disabled, yet those who are disabled or who have special educational requirements have needs that teachers must meet. Nor, curiously enough, is there a single mention of a pupil. Of its composition, we see a list in Clause 1(4). But who are the general public? Is this a modern statement of that important man or woman on the Clapham omnibus? Should not the council include employers, other than employers of teachers, industry representatives and parents? What about the independent sector? I welcome the desire of the Government to build bridges between the two sectors and believe that teachers must be free to move between each sector of the education service. Others will speak of the general teaching council in Scotland, and I hope that we can learn from their experience. One matter that seems clear is that its members should be elected in their individual right and not as representatives of trade unions.

I turn next to head teachers. I have long supported the idea of a course for head teachers and those who wish to become heads. Here I declare an interest as Chancellor of the University of Greenwich which has started a course, the National Professional Qualification for Headship (NPQH), developed by the Teacher Training Authority for teachers preparing for headship. The qualification is based on an agreed set of national standards for heads covering key areas: the development of the school; learning and teaching; people and resources; and efficiency and effectiveness. That started in November and I very much hope that it will prove to be of real value.

Of course, we want to ask questions. Should the course be compulsory? Who should be able to go on it? I understand that the latest figures for those going on courses indicate that there are more applicants from secondary than primary schools, yet there are far more primary schools and their needs are very great. There is also concern about its date of introduction and how it will start. Heads have warned me that it is still difficult to recruit heads to schools. We do not want to make it more difficult.

I come now to Clause 23. We all support the principle that everyone should have education and training up to the highest level of the individual's ability. How that is carried out will vary. But there are dangers in the proposals. On the Government's own estimate, the cost is believed to be between £60 million and £130 million for employers. That is hardly an incentive, particularly for small firms from where most of the new jobs will come, to take on young people. We would not want more young people to be unemployed as a result of what is proposed: that would be contrary to the suggestion made in the clause. We need to look at the matter closely.

I turn now to Part II and higher education. I am sorry to have to say it, but much of the Government's higher education policy this summer has been not far short of a fiasco. I find Clause 18 astonishing. I am pleased to hear from the Minister that the Government are considering an amendment to it. Many of us taking part in today's debate will remember clearly the Education

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Act 1992. I see the noble Baroness, Lady David, and the noble Lord, Lord Peston, to name just two. There were long debates on academic freedom, and quite rightly so. Indeed, I believe that the Minister took a somewhat different view when Master of Birkbeck College. Yet we have these draconian powers for the Secretary of State. It will be interesting to see how many noble Lords who spoke at such length, and who berated the previous government, stand on the same principles now. We shall see.

I am glad that the CVCP has been to the DfEE. In its brief it states:

    "The Bill grants the Secretary of State unprecedented and far-reaching powers which go beyond what is necessary to rule out 'top up' fees".

Further it states:

    "The Bill exempts all of clause 18 from the checks and balances contained in the 1992 Act".

One must ask why. We have not had a convincing answer.

Academic freedom is fundamental to university life and thought. The arrangements after the 1992 Act strike the right balance between the independence of the universities and the proper powers of the funding councils and the Secretary of State in respect of funding. The Bill permits the Secretary of State to impose requirements on individual universities with regard to particular courses. I am glad to hear--if I understood correctly--that powers which might have prevented universities making normal charges for things such as field courses and laboratories are to be excluded. All that introduces uncertainty and makes academic planning more difficult.

What is worse, powers to control the funding of universities will be exercised by ministerial discretion under Section 68 of the 1992 Act and will be challengeable, if at all, by judicial review in the courts. It represents an extreme example of unaccountable executive control. I understand that the vice-chancellors of Oxford and Cambridge believe that as their particular circumstances are radically different, because of the differentiation between the universities and the colleges, the Bill may be hybrid and are considering a legal challenge in the European Court. What a state of affairs to have arrived at. Nothing in the Dearing Report presaged that, and we shall return to it all in Committee.

The imposition of the £1,000 tuition fee, and the ending of maintenance grants, compound the difficulty. We have already had the problems of the gap year, and the real anxieties of the Scottish universities, with the most incredible decisions about discrimination against students from England, Wales and Northern Ireland. I shall make my position clear. We on this side of the House support, in general, the Dearing Report recommendations, although we believe firmly that the money raised from the fees should go to the universities and should not be clawed back by the Government. That of course is not what the Government are proposing. To me, it is incredible that they should propose tuition fees at all.

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I remind myself that no less a person than the Prime Minister said on 14th April:

    "Labour has no plans to introduce tuition fees for higher education.".

The Secretary of State for Foreign Affairs on 24th April said:

    "We are quite clear that tuition costs must be met by the state".

No wonder supporters of the Labour Party are demoralised, following immediately on the heels of the debacle over lone parents in another place yesterday. The proposal comes from a party which asked for trust: just six months ago it won the election to a large extent on that pledge. We now of course see that there is a new meaning to the word "trust". One might almost call it "blind trust" even if it is not on an off-shore island like Guernsey but in the UK.

Coupled with the ending of the maintenance grant, the effect on poorer students will be serious. All except the very rich will end up with large debts. I understand that recruitment for next year is already down. I have heard figures varying from 7 per cent. to 16 per cent. Perhaps the Government will tell us the figure. If it is down at all, that is counter to everything that the Government have said and what the Minister said today about education being at the heart of government policy. I remind Members on the Labour Benches that the great rise in the number of students, the rise in the staying-on rates at school, and the tremendous achievements in education that there were under the Conservative government are matters of which we on this side of the House are proud and they are fortunate to have inherited.

The tuition fees and maintenance will affect students. As I said, I am Chancellor of Greenwich University where many students are poor and come from the ethnic minorities. They will not find it easy. When we return to the Bill in Committee, I shall have figures to show that matters are not as straightforward as they have been put before us. I understand that the gross income for a family identified as poor is £35,000 per year for the husband and wife. Today, that is not a large income from which to pay anything for tuition. There are other issues. The BMA has expressed particular concern about medical students. I hope that we shall not look at the letter from the Secretary of State, Mr. Blunkett, to all sixth formers, which implies that universities might be able to help financially and suggests that they might without difficulty arrange to have the fees paid monthly, although, as we all know, that would add a considerable administrative burden.

There are many speakers so I shall conclude. There is a great deal to which we will need to return at later stages of the Bill. We shall want to have a detailed look at the general teaching council and the head teachers' courses. We shall make a number of constructive proposals. I hope that the Government will think again about Clause 18--I was glad to hear what the Minister said on that point--and sections of Part II. We shall table amendments on those points. We believe that Clause 18, in particular, is important. We hope that there will be genuine second thoughts. It would be a pity if

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the good and valuable parts of the Bill were to be spoilt by taking what is one of the most fundamental principles of the academic world--academic freedom--and disposing of it in this cavalier manner.

4.59 p.m.

Lord Tope: My Lords, I, too, start by thanking the Minister for her full and good explanation of the Bill and its various provisions, for such an early indication that the Government are listening to the representations made to them and may be a little flexible in improving some parts of the Bill. When I heard that there were to be not one but two education Bills, and that one of them was to start in your Lordships' House, I had mixed feelings. Having now had a chance to look at the Bill, I am pleased that this Bill is starting in your Lordships' House. The Bill is good in some parts but bad in others and it contains a mass of enabling legislation. It will benefit greatly from the calm and informed consideration of your Lordships; a consideration which--dare I say?--it may not receive to the same extent in the other place.

I look forward to being able to clarify the Government's intentions in respect of a number of provisions. We must consider continuously where it is appropriate to place greater safeguards on the face of the Bill in order to ensure that some of those intentions cannot later be misused by successive governments.

We must make much needed improvements to a number of clauses. I am sure that the Minister will listen to all the points which are made, but I confess to being less sure that the Government are willing to respond flexibly to them. However, I hope that they will do so because the Bill is greatly in need of improvement in many respects. I shall refer to a few of them today.

I wish to thank the many organisations which during the past few days have provided us with excellent briefing material. It is a measure of the interest in the Bill outside your Lordships' House, and that is hardly surprising. The briefing material has raised many useful and important points. I shall not be able to cover all of them today but I am sure, too, that we shall return to them at later stages. I am sure that other noble Lords will raise many of the points.

The Bill contains a mass of enabling legislation. Therefore, it is difficult to give an unqualified welcome to any of its provisions without a better understanding of the Government's intentions. However, I wish to begin on a positive note and give as positive a welcome as possible to some of the provisions. We on these Benches have long called for qualifications for entrant head teachers and we strongly support that proposal. However, as the noble Baroness, Lady Young, mentioned, we have concerns about access to training for such qualifications and the fact that there are more registrations from secondary schools than from the more numerous primary schools. We are concerned about the equally important elements of training for existing head teachers. Those are proper concerns, but we welcome the provisions relating to qualifications for head teachers.

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We also welcome the proposal to introduce an induction period for newly qualified teachers, a provision for which we have been calling for a long time. I had intended to ask the Minister whether the induction period would be one year, but I heard her say in opening that that would normally be the case. Perhaps in reply the noble Lord, Lord Whitty, will tell the House the circumstances in which he envisages that that might not be the case. My noble friend Lady Maddock will speak on that matter in greater depth and with greater knowledge and experience than I have.

Another aspect of the Bill to which we give an unqualified welcome is the provision for time off from work for 16 and 17 year-olds. My party has been calling for that for many years.

I expected and would have wished to give an unqualified welcome to the provisions for a general teaching council. Only a few months ago I argued from these Benches for the establishment of such a council. Indeed, I recall moving an amendment to give effect to that proposal in the final education Bill of the previous government. I also recall that the amendment was strongly resisted by that government on the ground that there was no case for a council. Therefore, I must in passing welcome the astonishing conversion of the Opposition to the establishment of a general teaching council. The time has long past since teachers should have had their professionalism recognised by the establishment of an independent professional body with a high reputation. That is why I expected to be welcoming the provisions in the Bill.

However, I am concerned because, so far as one can understand the Government's intentions, that will not be the case. We fear that according to the proposals in the Bill, the general teaching council will be Mr. Blunkett's poodle. Worse than that, it will be a toothless poodle which has had its teeth drawn by the terms of the Bill. The Bill is littered with phrases such as "the Secretary of State may". We on these Benches wish to see more of the phrase "the council may". We believe that the teaching council should be responsible for its own composition. We shall be interested to hear whether the Government envisage the membership comprising a majority of teachers. Their intention is unclear.

We believe that to a large extent the teaching council should be independently funded through teachers' subscriptions. If teachers are not to feel resentful at having to pay subscriptions they must believe that they are subscribing to a worthwhile body which properly represents their professional interests. We believe that the council should elect its own chair and appoint its own chief officer. It must be responsible for the register of teachers and not only for the administration. It must be responsible for devising a code of professional conduct and it must have powers of disbarment on the grounds of incompetence or misconduct. It is not enough for it to offer advice to the Secretary of State. Many other crucial issues affecting the profession are entirely proper for the consideration of a general teaching council: for example, the curriculum, the examination system and not least the funding of education in this country.

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There is also a shortfall in the scope of powers in the English GTC compared with the GTC for Wales. Perhaps the Minister will comment on that. For instance, the Welsh GTC, as set out in Clause 7, can promote recruitment to the teaching profession and continuing professional development for teachers. Liberal Democrats remain strongly committed to that. Furthermore, the Welsh GTC is allowed to give advice, to organise conferences and lectures and to arrange for the publication of material in any form. The English GTC has none of those powers, and in our view it should have. I suspect that one of the reasons for the difference may be connected with the future of the Welsh teacher training agency. Perhaps that will be clarified.

Whatever the reasons, we believe that the English GTC should have those powers and we shall be interested to hear what the Minister sees as the future relationship between the GTC and the teacher training agency. Above all, the GTC must be independent with real powers and not just another quango beholden to the Secretary of State. That is what we fear from the limited descriptions in the Bill.

I turn to the more vexed subject of tuition fees. First, I must make it clear that the Liberal Democrats remain implacably opposed to the charging of tuition fees. We believe that it breaches a vital principle and that tuition should be free. Under the present arrangements, I see the charge not so much as a fee but as a tax. As a local authority leader who lived through the community charge, which was not a charge for services but was avowedly a tax, I see little difference in principle between that and the tuition fee. I suspect that it might more appropriately be called "the student poll tax".

The Government claim that no student will be worse off under the new arrangements. However, I venture to suggest that they are not living in the real world in so far as concerns the current arrangements. The present grant plus loan does not cover the reasonable expenses of many students, who are forced to top up with loans from commercial banks. I have previously declared an interest as the parent of two owners--if that is the right word--of student loans. Others make ends meet by working during the university terms: for example, stacking supermarket shelves and so on.

Just as many parents in reality have not made a parental contribution, whether wilfully or through lack of funds, it is bound to be an additional disincentive to young people embarking on higher education. We may well argue, and continue to argue, about the extent to which applications have fallen this year. We can argue about the figures but it is a fact that those applications have fallen; and that is not surprising. One of the reasons for that fall must be the disincentive of the £1,000 tuition fee.

I suspect that another reason is a lack of understanding and lack of clarity in relation to exactly what the arrangements are to be. If tuition fees are to be introduced, and we remain opposed to them, I urge the Government to provide clarification of the administrative arrangements to local education

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authorities, universities and, above all, to the students themselves. If it must happen, the sooner that is done the better.

Reference has been made already to the anomaly--and that is perhaps too kind a word--with regard to Scotland whereby a student from Northumbria pays £4,000 for his tuition in Scotland whereas the student from Umbria pays only £3,000, to quote an example from an earlier debate in which I participated. In your Lordships' House on a number of occasions we have asked not only whether that is fair, which demonstrably it is not, but whether it is legal. We have yet to have a clear answer.

I remain puzzled and confused as to why it is considered necessary for medical students to pay for year four but apparently not for years five and six. I hasten to add that we do not believe that they should be paying for any of those but I should still be interested to hear from the Minister why the Government believe that it is appropriate to pay to year four but not to years five and six.

I turn to the equally vexed question of top-up fees. It must follow logically that if we are opposed to tuition fees then so we are opposed also to top-up fees. I am grateful to the Minister for saying in her opening remarks that the Government have no intention of allowing top-up fees. I was extremely pleased to hear from the CVCP that,

    "No universities have plans to introduce so-called top up fees".

We believe that universities should not be allowed to do so but we share the concerns of the CVCP and many others about the nature and scope of measures in the Bill and especially Clause 18. The noble Baroness, Lady Young, spoke extremely eloquently and forcefully about those and I could not better that. However, I share those concerns and shall wish to join in expressing those concerns.

I join the noble Baroness, Lady Young, also in expressing gratitude to the Minister for indicating that the Government will be introducing amendments to Clause 18 in Committee. We shall look at those amendments very carefully and with considerable interest. But it is still likely to leave much to be desired.

The Bill includes wide-ranging reserve powers which extend significantly the Secretary of State's powers to attach conditions to the funding of universities. Those unprecedented and far-reaching powers go far beyond what is necessary to rule out top-up fees. Indeed, shortly before coming into the Chamber, I was handed a letter from a person at university who referred to them, probably rightly, as,

    "outrageous powers of intrusion. They seem to us an absolutely unwarranted increase in state powers".

The Minister reassured us that that is not the Government's intention and of course we accept wholeheartedly that assurance. But it may be that it is not as difficult to contemplate now as it might have been yesterday that we may not always have the same government. We may not always have the same benevolent Ministers here. I can see looks of shock and horror on the faces of noble Lords on the Benches

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opposite, but that is a possibility. It is always a good test of any proposed legislation to imagine what it would be like in the hands of a government less inclined to smile at those references and more inclined to make use of such powers in ways which may not have been intended when they were introduced but nevertheless are permitted by the legislation.

The Government plan to override hard-won safeguards to the relationship between the funding councils, the universities and the Minister contained in the Further and Higher Education Act 1992. Those safeguards are essential to maintain the necessary checks and balances in those relationships. Under Clause 18, it is now technically possible, if not the intention, for the Secretary of State to interfere with fees charged at a particular university for a particular course. If he chose, he could price a particular course out of the market. I accept that that is not the intention, but that is the danger that we are concerned about in the phrasing of this particular legislation. We shall seek to deal with that in Committee.

I conclude by saying that we are anxious also about the clauses legalising the inspection by Ofsted of universities as PGCE course providers. That may be seen as an infringement of academic freedom, and understandably so. Provided that Ofsted is inspecting only the vocational training element of such courses, we feel that that may be appropriate but we shall need to examine that in much more detail.

In summary, the Liberal Democrat approach to this Bill is to promote our belief in the independence and professionalism of teachers, whether they be in schools, colleges or universities. We wish to see that enshrined in the arrangements for the general teaching council which trusts teachers to behave professionally and responsibly; in arrangements for teacher qualifications which teachers themselves approve; and in plans to assist the funding of universities which do not take away from those institutions their important freedoms.

The Government need to make a certain leap of faith in those matters. Under the previous administration, we had a culture which was sometimes one of hatred, ridicule and contempt for teachers. That has led to a massive walk-out in which huge numbers of talented and experienced teachers have taken early retirement or found other things to do. We have no doubt on these Benches that unless the Government can make that leap of faith to trust the profession, that haemorrhage will continue.

There is much work to do on this Bill but do it we must to ensure that it leaves us in a better condition than it has arrived here today.

5.18 p.m.

The Lord Bishop of Ripon: My Lords, I look forward to the many contributions to be made to this afternoon's debate in your Lordships' House and in particular to the speech of the noble Baroness, Lady Rendell of Babergh. I thank the Minister for her very clear introduction to the Bill.

I speak as chairman of the Church of England Board of Education and as chair of the Churches Joint Education Policy Committee, representing the

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educational interests of all churches. I welcome the broad outlines of the Bill. Before commenting on it, I thank the Government for the way in which they have responded to the concerns of the Churches in the matter of school structures. In particular, the Churches have warmly welcomed the Government's decision to change the categories into which schools will be placed. Instead of the former categories of aided, foundation and community, we now have new categories of voluntary, foundation and community. That change came about after much negotiation and, indeed, after some media reporting. With the other changes which have been incorporated, the Churches are largely satisfied with the proposed legislation. There are still some issues to be debated but we have much more satisfactory proposals than had seemed probable at an earlier stage. All of that is for debate when the school standards Bill reaches your Lordships' House.

Concern for structures should not be allowed to draw attention away from the chief concern of government in education; namely, to raise standards. The Churches share that concern. Probably the chief element in the raising of standards is the numbers and calibre of the teaching profession. Recent figures on teacher recruitment give cause for concern, indeed alarm. Without a good calibre of entrants into the ranks of teachers, and without sufficient numbers, quality education cannot be delivered. That is true for Church schools, many of which are already delivering excellent provision. Our concern is not only for Church schools but for all schools--the total educational scene. The raising of morale is key in the attraction of good candidates for people are not likely to consider a career in a profession where morale is low. In targeting education, and more particularly teachers, as the cause of society's woes--which, in my view is a totally false analysis--society has not helped the teaching profession.

The proposal for a general teaching council will go some way towards raising the perception of teachers as a professional group and of teaching as a career worthy of consideration by men and women of calibre. I salute teachers, many of whom are working in circumstances of great difficulty and are demonstrating commitment and ability. We look for ways of swelling their ranks, not diminishing them as is happening at present. I therefore support the general thrust of the Bill's proposals for such a council.

However, I am concerned that the Bill makes no mention of Church representation in the constitution of the council. Indeed, one third of all schools in England are Church foundations and one quarter of all pupils in the primary and secondary sectors are educated in them. The Church contribution to educational provision is a massive one and there is a strong case for this to be reflected in the constitution of the council. Both my predecessor, Bishop Michael Adie, and I have been involved in the preparations for the council and have been supportive of its establishment. I look for a proper recognition of the role of the Churches in its constitution.

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Like other noble Lords who have spoken before me, I looked in vain for any power by the council to remove teachers from the register. Clause 2(4) gives powers only to make recommendations to the Secretary of State. I should also like to know what the relationship will be between the council and the Teacher Training Agency. Will the agency retain responsibility for the training and professional development of teachers? These comments, and those made by my predecessors in today's debate, raise the question of whether the GTC goes far enough or whether the profession should be pressing for a Royal College of teachers incorporated by charter.

The proposal to require heads to possess a professional head teachers' qualification is clearly right. The Church colleges of higher education are already involved in training and assessment leading to such a qualification and look forward to continuing that provision. However, there are some practical issues which will need to be determined. For example, how long a period will there be before that requirement is mandatory? Too swift an implementation may cause difficulties for the appointment of heads in the immediate future. Moreover, as has already been mentioned, there is a difficulty about the release of teachers to undertake work for such a qualification. It is not easy, especially at primary level, for schools to provide cover for the purpose. I believe that to be one of the reasons for the differentiation of take-up between primary and secondary teachers. I welcome the provision for a satisfactory induction period for teachers. With the noble Lord, Lord Tope, I hope that that period will be a mandatory year.

The Bill also makes provision for inspection by Ofsted of institutions delivering initial and in-service teacher training. A major provider of that delivery is the Church colleges of higher education, within which one-third of primary teachers and one-fifth of all teachers are trained. Clearly the principle of inspection is right, but there are concerns about the sweeping powers which Clause 14 gives to the chief inspector. Clause 14(5) gives him the right of entry to premises of such an institution and the right to inspect and take copies of any records and other documents.

We have had an assurance from the Minister that, in relation to that right of entry, the power will only be used for such parts of the institution as relate to teacher training. I would be grateful for an assurance that that will also cover the part of the Bill relating to inspection, and the copying of records and other documents. In both cases it would seem to me that a sentence on the face of the Bill would give the protection which is needed.

On the matter of higher education and further education financing I wish to say little, except that it is essential that any money from tuition fees is directed into the higher education and further education sectors. The latter sector, one of great importance and often overlooked, is even more underfunded than the higher education sector. Additional funding is desperately needed. I would find it a little difficult to follow the noble Lord, Lord Tope, down the road of comparison with the poll tax. It would seem to me to be clear that

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that comparison cannot be maintained in two respects. First, it does not apply to all graduates; and, secondly, it does not apply in all circumstances.

Nevertheless, the question of whether fees and loans will restrict access is clearly a key one. It is not only a matter of affordability; it is also a matter of attitude towards loans. Perhaps I may give your Lordships one instance: we need to discover the attitude of members of the Asian community towards the taking out of loans. Clearly, proper monitoring will have to take place in order to ensure that access is in fact being widened to include proper proportions from all parts of our society and not being narrowed.

Despite the concerns and apprehensions which I have expressed over particular provisions in the Bill, I welcome its general thrust. Those of us involved in the Church-founded delivery, both of teacher training and of primary and secondary education, look forward to working in partnership to ensure, maintain and improve the standards of excellence which our society needs and our young people deserve.

5.26 p.m.

Baroness Rendell of Babergh: My Lords, I should like to begin by expressing my appreciation of the welcome extended to me on my introduction into your Lordships' House and my gratitude for the kindness and much-needed guidance which helped me through my initial awe and apprehension. An instance of that kindness happened the day after my introduction, an occasion of some ceremonial and of great moment to me. One of my noble friends leant across and whispered to me, "The body is in the library". That reference was, of course, directed to what I do for a living. It put me at my ease and lightened the atmosphere for me. It was both gracious and timely.

However, on a more serious note, the body must be in the library, or rather the living must be, if we are to achieve a society of educated and fulfilled people. The first writing known was marks on clay tablets made 6,000 years ago. The first recorded instance in Western literature of reading silently to oneself was made a millennium and a half ago in Augustine's description of Ambrose with his book. "When he read", said Augustine, "his eyes scanned the page and his heart sought out the meaning but his voice was silent and his tongue was still".

A century has passed since Britain proclaimed itself literate--the first nation to do so. Today, roughly one in seven adults is semi-literate or illiterate. He or she can read a headline in a newspaper but not the small print on a guarantee or policy, the bottom line in more ways than one. More than one-third of all 11 year-olds fall short of the expected reading standard for their age group. I know one of them. He is now an excellent driver of heavy goods vehicles, but his reading skills are minimal. One of the motives for the Government's literacy strategy is that 80 per cent. of 11 year-olds should reach that standard by the year 2002. Here I must declare an interest for I have written many books, some

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of them indeed incorporating bodies in libraries or less salubrious places. If I am spared, I hope to write many more.

The year 1998-99 will be the year of reading--its object is to take a giant step forward and achieve no less than a transformation in the way that people regard books and reading. April 23rd, Shakespeare's birthday, will be World Book Day and it is hoped that the launch of the year of reading will be held at Shakespeare's Globe. The whole community will be involved: publishers, booksellers, business and industry, authors, myself included, young people's role models from sport and the media, as well as teachers and teacher trainers. Encouragement to read will be directed at everyone and every child in school will be given a voucher to help with the purchase of reading matter.

Those children who will be 11 in 2002 are six now and in need--particularly if their parents are ill equipped to initiate them--of special attention from teachers. In line with what my noble friend the Minister said just now, there must be no repetition of what happened last week when two institutions were found to be responsible for allowing incompetent students to become qualified primary school teachers. That is especially pertinent as the competence they failed to demonstrate was in the teaching of reading.

Reading may be the most important skill we are taught and the most vital we are taught to teach, for learning to read is a rite of passage out of ignorance and dependency. Illiteracy or a poor level of literacy breeds shame and low self-esteem and is one of the elements in social exclusion. With certain rare exceptions, all education begins with learning to read. The Government's ideal, as we know, is education, education, education. I have written many books, but it is not my books for which I now put in a plea but for non-fiction and works of reference--those which I dread to see surviving only on the shelves of learned libraries.

It is good that every child in school should have a computer. We live in an age of technology and a computer is a wonderful thing. I have used one myself for 12 years. One of the goals of the literacy crusade is that children should be able to read computer screens. But the wonders of the Internet and other information sources should not be allowed to take the place of the dictionary, the encyclopaedia and the thesaurus. I have a god-daughter aged 16 who is currently studying for her A-levels. I asked her preference, expecting an answer in favour of technology, knowing her to be highly computer literate and having called her in for help with such problems as invalid parameters and disappearing text. To my surprise she came down in favour of the book. There is no comparison in her view between bright but arid windows and icons and words on paper where the eye may linger at will or be distracted by just as fascinating new knowledge further down or over the page. Let us have computers by all means but books too, and books not as curiosities from a former age.

To be literate is to begin a process of turning the soul's eye towards the light. Someone has said that all the troubles of the world would cease if everyone stayed

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at home and shut themselves up in their rooms. I amend that and say that many of the world's troubles would be eased if people stayed at home more often and read a book.

5.33 p.m.

Lord Baker of Dorking: My Lords, on behalf of all Members of the House I congratulate the noble Baroness on her splendid and eloquent maiden speech which was a wonderful exposition of the importance of the written word and the book as one of the central pillars of any civilization.

The noble Baroness has written many books. I have read some of them but I cannot say that I have read all of them because her output is prodigious. She also has a pseudonym. I have reviewed some of her books and I am glad to say that they were favourable reviews. It is one of the pleasures of this House that people such as the noble Baroness are appointed to be Members of it. It is one of the ironic twists of fate that two of our leading detective novelists are both in this House on alternate sides. It is immensely encouraging to know that the capacity to deceive right up to the last chapter is not a prerogative of one party. The noble Baroness states in her curriculum vitae that she is a firm socialist. I am sure that will be a measure of support to some Members on her side of the House.

This Bill is an interesting and important Bill but it is also a difficult Bill to interpret. I speak as someone who has laboured in the vineyard of education legislation. Parts of this Bill are dense and those that are not dense are obscure. I would hope that on the very day when the noble and learned Lord the Lord Chancellor and the Government have announced a policy of freedom of information, the Government might help the deliberation of the Bill in this House by placing in the Library of the House of Lords their Notes on Clauses. I am not asking for the sentences at the bottom which refer to the "line to take"; I am asking for the explanation of the clauses so that we could at least know what the Government intend on some of these clauses, even if they know that themselves.

I want to speak mainly about higher education, but I shall refer first to the General Teaching Council. I have always believed that teaching is one of the noblest professions in our country. Several members of my family have been teachers over several decades. The great majority of teachers in our country have the highest professional standards. If they can be enhanced, solidified or codified in some way by this council, that can do no harm. However, I must add that at the end of the day I suspect it will not do much good either. However, I hope I may lay one uncontroversial view upon the table. If one is to codify, as it were, the standards of the teaching profession, then, just like GPs, the Law Society--earlier I think I saw the noble Lord, Lord Peston, nod when the Law Society was mentioned, and I see that he is nodding now--and the Bar Council, teachers may be encouraged to have the same professional standard; namely, to deny themselves the withdrawal of their labour. Nothing so demeans their

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professional status than a teacher threatening to strike. I have said that that is an uncontroversial matter and I am sure that Ministers will consider it.

I turn now to the funding of higher education. This Bill is important but I believe that it could be damaging. There are two principles which govern the funding of higher education. The first is that the student should contribute something towards it because the student who benefits from higher education and obtains a degree will start work much higher up the ladder. Most of them are likely to earn much higher salaries than people who have not benefited from higher education. Why should those people whose taxes support the students, and who will never benefit from higher education themselves, pay while the students who are the beneficiaries of higher education do not? The second principle is that the funding of higher education should be shared between three groups in society: students, the state and students' families, if they can afford it.

Those two principles are now accepted by the Government. They were not accepted in 1988 when I introduced student loans. They were only reluctantly accepted in 1992 but now the Government not only accept the principles but have built upon them. However, there are certain implications here. If one is to increase costs for the student, one must ensure that it is not a deterrent to those students who cannot afford the costs. I believe that the best way of dealing with that would be to retain the system of grants coupled with access funds. The Government wish to go another way. They propose means tested tuition fees. If I may say so, I think that will involve them in much trouble. I believe that decision was rather a knee-jerk reaction in the giddy month of May and I suspect that they will come to regret it. However, that is the way they are going.

The Minister who is to reply to the debate may explain the position of European students as regards means-tested fees. That is quite a difficult area. Are we to means test students from Rome and France who study at our universities? That question has not arisen before but it is one of the considerations if we are to have means-tested fees. I am delighted that the loans will now be recovered by the Inland Revenue. As the noble Baroness knows, I explained in the debate last week that I was not successful in persuading the Inland Revenue to do that. It was a pity that I could not persuade the then Chancellor of the Exchequer to do that. I congratulate the noble Baroness on her eloquence, or I congratulate someone on his or her eloquence, in persuading the Chancellor to do that as it is by far the easiest way to collect the loans. I warmly welcome that step, but that is where my welcome ends.

I believe that tuition fees should go directly back into higher education. The surest way to do that is to ensure that the fees levied by the universities and colleges remain with those colleges. Why should those fees go back into the general kitty and not necessarily the kitty of the funding councils? Those fees can be lost in the general pool of Treasury expenditure. Unless the fees remain with the institutions, there can be no guarantee.

Why do I say that? I say that because when I introduced student loans and per capita funding for the universities, I always had in mind that one day the

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system would evolve and develop so that funding councils would not be needed. The system would be self regulatory through per capita funding and fees, with access funds for those students who could not afford the fees. I believe that that would be the best system for higher education in our country. We are moving closer towards it. Per capita funding was a beginning. Loans took the matter a little further. Tuition fees take it a little further. In, say, five or 10 years' time, I hope that we shall attain that situation.

If the individual institutions are allowed to keep the tuition fees, it means that in 1998-99 the institutions will be able to keep £150 million, which goes some way towards bridging the Dearing gap of £360 million shortfall in funding in that year. In the next year the institutions would raise £250 million. In 2000-2001, they would raise £400 million. As the Bill is debated and the argument becomes more widely known, I hope that we shall be able to amend the Bill in that regard.

As regards top up fees, I regret that the Government have taken the line that they have in Clause 18. It is a rather absurd ideological bar. I can see why they have done so. The Government felt that the introduction of tuition fees was a step far enough; they could not go further. However, they wished to put some constraint upon the universities and colleges in the charging of fees. I believe that that is to be regretted. I favour the discretion as to the level of fees being left with the universities, colleges, or even the heads of department. If the institutions can attract sufficient numbers of students, and as long as there are guarantees of access funds and grants to ensure that poor but able students are not denied entry, that would be a much better system.

I believe that the limitations in Clause 18 which deny universities and colleges the right to charge top-up fees offends against natural justice. For all I know, they might offend against their ancient charters and ancient rights. I remember the difficulty when I sought to end academic tenure. It took many years because of the ancient rights of the institutions. I hope that those ancient rights of the institutions may be strong enough to resist this provision.

I hope that the draconian powers of Clause 18 will be modified. The Minister stated that she had a meeting today with the Committee of Vice-Chancellors. The noble Baroness promised some amendments. I am sure that many amendments will be put forward. Clause 18 shifts the balance of legislation since the 1988 and 1992 Acts back to give the Minister and her successors power. In my view it is too much power--power over the funding council by means of direction. I believe that there is a genuine threat to academic freedom in these matters. I do not think that that is the right way to go forward. I believe that these parts of the Bill are shabby, shaming and insulting to our universities. I hope that not only will the Government have second thoughts about them, but that this House will insist that they have second thoughts about them.

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5.44 p.m.

Lord Annan: My Lords, I wish to concentrate on the second part of the Bill. I thought it was a little rich of the noble Baroness, Lady Young, to denounce the Government with such force on the question of universities. Since 1981, universities have been under continuous attack by the Conservative Party. Conservative governments treated them with contempt and did much to discredit them in the eyes of the public. Today the universities are at the bottom of the pile of the present Government's priorities. It is inevitable. I can hardly blame the Government for that. Universities have had to realise that the Government put before their needs the needs of nursery schools, the reduction in the size of classes in primary schools, the expenditure on improving literacy and numeracy throughout the state system, and further education. I welcome Part III of the Bill. It is absolutely vital if we are to translate education into productivity. As a result of those priorities, universities will receive only one eighth of what the Dearing Committee said was the irreducible minimum.

Meanwhile, university staff have seen the salaries of teachers in the schools rise since 1985 by 30 per cent. when their own salaries rose by 10 per cent. They have been forced to teach five times as many students as they did in 1980 and have been given no extra money to reward what the ignorant marketeers who confuse higher education with business call an increase in productivity. And on top of that Conservative governments imposed a pyramid of bureaucracy about which I shall speak later.

Nevertheless, I want to congratulate the Government on a number of points. Clearly the principle of the Bill is right. The noble Lord, Lord Baker, made the point. For a number of years now sensible men and women have accepted that graduates earn on average more than non-graduates. Those who benefit from higher education should contribute more to it financially. I remember the senior tutor of my college at Cambridge arguing in the early 1950s that public schoolboys were being deterred from applying for Cambridge because they did not qualify for a grant. The Anderson Committee was set up. It altered all that, recommending that grants should be paid to everyone. That sort of thinking made the costs of higher education ruinously high. Now all students must in theory pay. But I hope that the noble Lord, Lord Glenamara--I am sorry he is not in his place today--will accept that the Minister has made it clear that the really poor student from a really poor family will pay nothing towards his tuition fees. It is more difficult for those students who are not exactly poor but nevertheless not well off and who will have to pay. In fact it is estimated that only one third of students will pay the full tuition fee of £1,000 a year. I wish to ask one question. Can the Government confirm that medical students will not have to pay tuition fees for the last three years of their time in medical school?

Like the noble Lord, Lord Baker, I congratulate the Government on having defeated the Inland Revenue. It must have been an heroic and bloody battle. For years the Inland Revenue opposed any scheme that meant that repayment of loans could be collected through the

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operation of income tax. I am delighted to see, too, that the Government have set a perfectly realistic figure of £10,000 a year beyond which the repayment of loans will be obligatory. It is a much fairer scheme than the one set up by the previous government.

The noble Baroness is under attack about Clause 18. I agree with those who have questioned the clause. What has happened is the usual thing. It happened under the Bill of the noble Lord, Lord Baker. The usual thing is that the civil servants seize the opportunity of a new Bill to cut back the independence of universities. They will now be able to interfere with the cost of examinations and field courses. Naturally the noble Baroness denies that this will happen. But the civil servants always want to be able to have the powers to do those things. I know that this issue will be debated in Committee, and I think it is right that it should be.

The Government Chief Whip advised me that I should not speak in the debate initiated by the noble Lord, Lord Beloff on Oxford and Cambridge fees when I told him that I could not stay to the end of the debate as I had an inescapable function to attend at the University of London. I shall not speak further about that attempt to bully Cross-Benchers who have a rather different role in this House from that of those who accept a party whip and who, when they are younger, are very often in positions where they have inevitable obligations, entered into months before, and therefore cannot attend to the end of a debate. For the 32 years that I have been in this House I have never known a time when a genuine apology was not acceptable.

The rumours are that the department has already decided that the payment of college fees at Oxbridge should be stopped. I recognise that other universities are licking their chops in the hope of getting their fingers into that pot of gold. I also see that the department has begun to realise that changing the present system will not be all that easy. You cannot cut off part of a don's salary and his expectations at a stroke. If the Government do so, they will be sued for breach of contract. That was a lesson learnt in 1981. Moreover, if the Oxbridge differential goes, the two universities will be able to claim quite a considerable number of senior lectureships--that is a post current in all civic universities but rightly unknown in the college fee economy of Oxbridge. If you abolish college fees, you will be forced on grounds of common equity to grant parity of grade, especially since senior lecturers command the salaries of readers and salary is a reward for good teaching. Will the Minister, in replying, confirm that Oxbridge will not be treated worse than other universities if, in fact, college fees go?

I hope that the Government will not attach too great weight, when they consider the matter, to the argument that the ancient universities do not admit a sufficient proportion of students from state schools. Until the direct grant and grammar schools changed their status at the time the state system became comprehensive, they were in no way bad. They took well over 60 per cent. from the state system. However, when comprehensive education became current throughout the state system, they faced a difficult problem.

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My own college, King's, admits 80 per cent. of its undergraduates from the state system. It can be done. It requires a great deal of hard work and very intensive teaching. There was no lack of, or drop in, quality. For five years running, King's came top of the colleges league table in the final year of the tripos. I admit that other colleges at Cambridge--I say nothing about Oxford--began rather late in the day to try and increase their intake of state sixth formers. But anyone who attended the seminar on the issue that took place last week will hardly doubt that they are in earnest and doing all that they can. They are up against a problem; namely, the prejudice of head teachers, and indeed of sixth form teachers, in state schools who have decided that Oxbridge is not the place for their pupils. They imagine that Oxbridge still resembles Evelyn Waugh's marvellous description in the first chapter of Decline and Fall. It really has changed since those days.

Perhaps I may tease the noble Lord, Lord Desai, for just one moment. The noble Lord had some rather harsh things to say about Oxbridge in the recent debate. However, he did not reveal that half the students at the LSE come from abroad, and only a quarter from state schools. That is much below the Oxbridge figure.

What can the Government do to help universities? We should prefer not to have the extra charge for tuition fees. But there are endless demands on government in the education sector, to say nothing of the welfare and social security sector. Granted that the money cannot be found, unless of course there is an increase in direct taxation, what can the noble Baroness and her colleagues do to help universities? There is one thing that could be done--and a hoarse cheer would come from the universities, even though their financial plight and the salaries of dons are so deplorable, if it happened. The Government could get off their backs, wind up the quality assessment agency, abolish the funding councils--the DfEE practically does the job now--and stop trying to micro-manage the universities. The noble Lord, Lord Baker, made a very good point. What is a research assessment exercise for? Surely the research councils are more competent to judge where the money should go. All I am asking is that the Government simply follow the policy set out by the noble Baroness, Lady Jay, on the National Health Service; namely, thin down the bureaucracy and, if possible, in many areas, abolish it.

I can guess what those in the department will say. They will throw up their hands in dismay and say, "Doesn't he know that the universities must be made accountable?" Accountable? The books and accounts of the universities have always been open to inspection. Only in one case has there ever been a scandal in the university sector--in University College, Cardiff, many years ago. To protest that universities must be accountable was the kind of offal that Conservative governments used to shovel onto our plates and ask us to eat. I ask the Minister: when was there last an outcry about the disgracefully low standard of teaching in the universities? When was there an outcry about the feebleness of British research? Was it at the time when Britain regularly featured in the Nobel Prize list? We do not win so many Nobel Prizes today. The Minister

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knows as well as I do that the number of a don's publications is not as significant as their quality. And how does the higher education statistical agency assess quality? Yes, indeed, there was a need to monitor and improve the level of teaching in the schools. But when was there a similar furore about university standards? The noble Baroness knows perfectly well that there never was such an outcry. She has been the head of a London college--and a great one--and I am sure that she deplored what Conservative governments were doing during all those years when the Labour Party was in opposition. What they were doing was master-minding a decline in every part of higher education except in numbers.

Yet that, I suspect, is the line that the Government may be forced to take. Because the Conservatives have lowered standards and made the life of the dons a misery by intrusive, unnecessary form-filling, and because such form-filling has led to chicanery and taking petty advantages of the system, dons have been turned into the equivalent of tax avoiders. Because of that, power has shifted from the dons, who teach and research, to the administrators, who try to put unreasonable and time-wasting government diktats into effect. An inquisition was imposed upon the universities. Enter the inquisition; exit loyalty.

The quality management teams excite derision from both dons and businessmen on councils. Their inspectors demand that every course be comparable to every other course in all universities. Managers complain when students fail in their exams. Why? Because, if they are sent down, their fees will be lost. In 1994-95, the drop-out rate in British universities had risen to 20 per cent. Is it any wonder when the staff- student ratio has risen to 1:20?

We need to continue to expand higher education, but I implore the Government not to force universities immediately to take more students. During all my years in universities, I have spoken up for more students to be admitted and have denounced the Kingsley Amises who said, "More means worse". Now I say festina lente, hasten slowly; do not worsen staff-student ratios still further. You will not get an educated workforce if you do; you will get a workforce which waves a piece of parchment as evidence that it has been through the mill. British universities will become no different from the universities on the Continent where students never meet their teachers.

Do not forget that in France, Germany and America there are elite institutions. We too have elite institutions: University College London, Imperial College, the LSE, Edinburgh, Manchester, Birmingham, Bristol, Sussex, Essex--oh yes, and Oxford and Cambridge. Remember that it is the direct impact of the don, the teacher, upon the student's mind that educates a student. How can a don find time these days to make that impact personally on even a handful of his students when he is so badgered and blackguarded by the bureaucracy? I know that I owe absolutely everything to my teachers. They made me want to learn and, if I got above myself, they told me how much more I had to learn. They taught me not merely about books; they taught me about life. I owe a

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debt to my teachers that I can never repay, to those who taught me to think more clearly, to feel more deeply, to hope and to put my trust in life.

6.2 p.m.

Lord Plant of Highfield: My Lords, perhaps I may be the first from these Benches to congratulate my noble friend Lady Rendell on her splendid maiden speech.

My speech will concentrate on those aspects of the Bill which deal with higher education. Before I embark upon that discussion, perhaps I may say how much I welcome the proposals in Parts I and III of the Bill. Part I will go a long way towards restoring the professionalism of teachers and the sense of pride in the teaching profession which is vital for the recruitment of good quality graduates as future teachers. Part III will help with the development of employability skills, which are absolutely critical to economic performance.

Since I shall concentrate on the higher education sections of the Bill, I should declare an interest. I am Master of St. Catherine's College at the University of Oxford and Pro Chancellor of Southampton University.

After a good deal of heart-searching, I should like to offer my support to the new regime in respect of student payment of the £1,000 tuition fee. As the Dearing Report makes clear, and as everyone involved in universities knows, universities face a real funding crisis. Given the expansion of the sector, the Government's attitude towards constraints on taxation and their own entirely defensible priorities for funding from taxation in education, I do not see that there is any real alternative to charging undergraduates for part of their tuition fees, subject, as is proposed in the Bill, to the ability eventually to pay through an appropriate level of salary. It is true that higher education is in a broad sense a public good and central to the development of employability skills, high level skills of all kinds and competitiveness in the economy, as the Dearing Report makes clear, and therefore should be generously supported out of taxation. Nevertheless a degree produces private benefits for the person taking it in terms of projected higher salary levels. The Government's proposals make the repayment dependent on that higher salary being earned.

I realise that many noble Lords will be concerned about access, as I am. On this issue I say just two things. First, there is not much point in extending access to something which is bound to decline in quality if the funding regime remains as it is. Those of us who teach in universities are aware of the extraordinary pressure that the rapid and inexorable decline in the unit of resource has produced in universities. If we are to encourage more participation and wider access to universities and to university teaching, which maintains their quality, the funding must be found. I believe that the only realistic way of finding that funding is through a system such as that proposed by the Government.

Secondly, for good or ill, attitudes towards debt have changed over the past 20 years or so, particularly when debt can be seen as an investment in one's own career and financial prospects. I came from a family with a very modest income. My parents were extremely averse

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to debt, to the extent that my father never took out a mortgage. I can imagine that, had I been faced with a large debt when I went to university in 1963, I would probably not have gone. I might have become a deck-hand learner, as virtually everyone else did in my class at a school near Grimsby docks, although I think I am fortunate, given my lack of physical co-ordination, that I chose a different career. I might well have not gone to university in those circumstances, against the background of that culture. I believe that attitudes towards indebtedness have now changed. With the idea of investing in a career which is likely to produce differentially higher rewards, I believe that there is now a case for changing the basis of funding in the way now proposed by the Government. I shall support the Government's proposals, although that will not make me very popular with the undergraduates at my college.

Having said that, however, I believe that prospective students will only want to incur debt--or, preferably, invest in relation to their future--for high quality courses and high quality provision: that is to say, forms of provision and of teaching which are seen as high quality not just by the student, important though that is, but also by prospective employers. The Government's proposals should drive up standards of teaching and may have a stark message for some courses in some universities. I, and, I am sure, many other noble Lords who have been involved in external examining over the years, believe that that is probably all to the good. The myth that all courses are the same and of the same quality and therefore should be funded at the same level seems to me precisely that: a myth. One is faced with a highly differentiated product. If students have to pay a flat tuition fee for what is a highly differentiated product, some of the products which are not up to it will suffer as a result, and I believe that that is a very good thing.

It is vital that, if we go ahead with this set of proposals, the money raised through the £1,000 charge should go back to the universities. The whole argument against top-up fees is that we now have in hand a solution to the problem of funding. If the £1,000 a year charge is the solution to the problem of funding and we do not need top-up fees, it is essential that that money should go back to the universities. That is also essential for the moral and political justification of the charge. While I do not accept the analogy with the poll tax made by the noble Lord, Lord Tope, I believe that he had a point about its being more like a tax rather than a charge if it goes into a general pot. Given that the justification for this charge is that it will help to meet the funding problems of universities and relates to the services and benefits the students receive from universities, it is right and proper that the money should go back to the universities. If it does not, the funding problem will not be solved and the pressure for top-up fees will re-emerge. It is therefore vital that there is a clear, transparent link between charging the fee and solving the financial problems of universities.

If there is one area where I am concerned about the impact of the charge--and I draw it to my noble friend's attention, not in any sense for an answer today, but for reflection--it is in relation to the recruitment of UK

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graduate students. If someone has spent three or four years studying for a first degree and incurred a large debt as a result of that, there is a strong disincentive for that person to go on and do graduate work. That graduate work may be important for the individual concerned or for the country at large; but the point I want to emphasise is that it could be critical for the financial viability of some areas of some universities. If the accumulation of debt deters recruitment of graduates, we will find that universities with large graduate schools that see a drop off in UK graduate recruitment experience severe difficulties.

I want to spend a moment--no more--registering a concern as to whether the Dearing Report and the Government's response to it deal effectively with the global role that many universities and some departments in even more universities play. The funding of universities is not like the funding of hospitals or other parts of the education system. There is a global academic market place--I do not like the phrase in this context--in which universities operate in terms of recruitment of staff, the publication of research, co-operation between researchers and so forth. Dearing did a splendid job in terms of looking at the requirements of the higher education system within the United Kingdom. I am not sure that the report properly addressed the questions as to how universities have to compete in that global context and fund themselves to be able to do so. Unless the money from the charge comes back to the universities, those universities competing in that global context will put on pressure for top-up fees.

I return to my point. Essentially, the charge is a legitimate charge, but it must be linked to solving the funding crisis, otherwise the top-up fee pressure will recur. I would very much regret that, but it will come back, particularly from those institutions that have to compete in the world market.

A lot has been said regarding the draconian powers the Government are proposing to take in relation to the set of fees in the clauses in the Bill. I am worried about some of those and would like those fears to be allayed, as no doubt they will be, through various amendments proposed at the Committee stage. I have three specific worries and can flag them now, though I shall not dwell on them.

I assume from my noble friend's opening remarks that the position of overseas students is clear, though it is not clear in the Bill. Secondly, in relation to the position of funding and benefaction, the Government legitimately want to see a fair funding environment and a level playing field of funding. Fair enough. But while there are what someone once called capitalist acts between consenting adults, people will offer benefactions and investments to universities. They are bound to create differences in the playing field, whether we like it or not. I am assuming that nothing in the Bill will change the present practice of not thinking that moneys raised from fund raising will be set off against block grant calculations.

Thirdly, we need more of a definition than the Bill contains as to what a fee is, particularly in relation to board and lodging. I am assuming--it seems pretty

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obvious from the Bill--that board and lodging is not included. It does not say that and I shall be grateful for some clarification on that point.

This is an important Bill for the future of universities. I support the general thrust of what the Government are trying to do but I want the link between what they are doing and the solving of the funding crisis to be made absolutely transparent.

6.16 p.m.

Earl Russell: My Lords, the noble Baroness, Lady Rendell, wearing another hat, has on many occasions given me great pleasure. She is also responsible, if she will forgive me for saying so, for writing which is sometimes too good to give pleasure. Along with St. Augustine, to whom she referred, she made me think as hard as anybody about the nature of evil, among other things. She has shown today that both those skills are ones of which your Lordships' House will be able to take advantage--I hope on many occasions.

Before discussing the Bill I must declare an interest as Professor of History at King's College. My college is very much concerned by some of the contents of this Bill; in particular by the contents of Clauses 14 and 18. I hope that it will be in part reassured by what the Minister said about the contents of an amendment to Clause 17, though it will naturally be anxious to see the content of that amendment. However, I must say reassured "in part".

We are under a great temptation today, which we have not always resisted, to twit each other for things we did before the experience of changing places. Since the general election I have had many occasions to reflect on the work of Sir Lewis Namier, who, if I may summarise him extremely crudely, said that although one group of people called themselves Whigs and another called themselves Tories, the values of government were always those of what he called the "court and treasury party"--the Robin Butlers, Richard Bransons and Ron Dearings of their day--and the values of the opposition were always those of what he called the "country party". That seems to me to be still true. But when we reflect upon it we must decide how we handle that information.

Governments--this Government are no exception--are always tempted to argue that the values of government are necessarily right because of superior knowledge. They talk of tough decisions. But talking of a tough decision does not tell us which way we ought to make it.

It is true that over the centuries people at large have not realised what things cost. Therefore, when that is the point at issue, there is a tendency for governments to be right. In that context, when the Minister says that we cannot continue as we are, I hear her. On the other hand, government are not always right; they have an interest of their own which may be opposed to that of the community as a whole. In particular, government breed three ugly sisters: secrecy, cost cutting and control. I join with what my noble friend Lord Lester of Herne Hill said about the pleasure with which he heard the

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assault today by the noble and learned Lord the Lord Chancellor on the first of those three ugly sisters; but the other two are alive and well on ministerial Benches. Where they are concerned, I think there is a real reason for having doubts about the Bill.

When I consider what should have been in a higher education Bill, there are two things which I think desperately need to be tackled. One is to reverse the cut in unit costs per student given to universities. The Minister gave a figure of 25 per cent. for that. The CVCP gives a figure of 40 per cent. I have no doubt that this depends on the method of calculation and that we shall talk more about it. These cuts have been justified in the name of efficiency. Anyone who tries to use the lifts in my college will feel sarcastic about the notion of efficiency. They are made by a firm called Platt Schindiler. The lifts which are out of order are known as Platt Schindiler's list. We are told that by the year 2000, 79 per cent. of universities are expected to be in deficit. That is not just a matter of lifts. It is a matter of libraries, of equipment and of rain coming in through the roof. Those things are serious.

The other aspect which desperately needs to be reversed is the cut in the level of student support, which is some 20 per cent. below the minimum subsistence level. As recently as yesterday I was listening to two students whose work is becoming seriously run-down because, as a result of the amount of time they have to spend earning money during term, they simply do not have the energy to do the work that is needed. Customers in London shops in December are not always the most courteous of people. There is nothing about reversing those things at all.

Obviously, something needs to be done. I recall an exchange I had with the noble Earl, Lord Caithness, during the proceedings in 1990 on the Education (Student Loans) Bill. He said to me: "I hope the noble Earl understands that there is a limit to what the public purse can afford". I said: "Of course I do, but I hope the noble Earl understands that the country cannot have more students than it can afford".

The previous government, in the last part of their existence, put a cap on expansion. I wonder whether that is a more sensible approach than the one the present Government are adopting; and if they are determined to go on with expansion, whether they might consider channelling more of it into open and distance learning. They might remember Tawney's law: the more people have any qualification, the less it is worth and the more people want it.

The next aspect that concerns me--and mention of the Education (Student Loans) Bill brings it back to mind--is the way in which the Bill is drafted. It is a skeleton Bill; and I would add skeletons to the Cornish Litany:

    "From ghoulies and ghosties and long-leggety beasties And things that go bump in the night, Good Lord, deliver us!".

Let us have a look at Clause 18(4), which I hope may be the one on which the Minister's amendment will purchase:

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    "A condition under this subsection shall require the governing body of any such institution to secure that the fees payable to the institution by any specified class of persons in respect of any specified matters in connection with their attending courses of any specified description are equal to the prescribed amount".

As Serjeant Buzfuz said in Bardell v. Pickwick, "Gentlemen, what does this mean?". I appreciate the offer of the amendment, but what is wrong is the method of legislation. This is void for uncertainty. One simply cannot know what Ministers may do under this provision. While it is now clear that this House may vote against a regulation, it is a blunt instrument. What is usually needed is amendment. As my noble friend Lord Tordoff once put it, one cannot amend regulations; that is the nature of the beast. So we simply do not know what we are getting.

I share the misgivings which have been expressed about Clause 14 and so does the department of education in my own college. Plutarch tells the story of a painter who painted a picture of a woman which he showed to a cobbler. The cobbler said, "You've got the shoe wrong". So he altered it. The cobbler then said, "You've got her face wrong". He said, "No, I won't alter that".

I heard what the noble Baroness says about the restrictions of the scope of this clause. I am interested. But the Secretary of State said at the beginning of the Government's term of office that he intends to change from the centre the way reading is taught. That was in the Secretary of State's article in the Daily Mirror in the first week of the Government. I have it at home. I can produce the words if needed. It made my blood run cold. It was quoted again last week by Professor Pring at a conference at the Institute of Education. When the Government are thinking in those terms, can they make the distinction between practice and academic research which any defence of academic freedom demands? I doubt it. I understand the argument that there must be inspection. Why do we not consider the possibility that the general teaching council can do it?

I share my party's objection to tuition fees. When I arrived in the United States in 1979 I read an article by Russell Baker in the New York Times. To those who are not familiar with him, he is the equivalent of Miles Kington and Rory Bremner rolled into one. He was describing a father attending his son's graduation ceremony and bursting into tears on the spot at hearing that his son wanted to go to graduate school. I decided then that I did not want us to go down that road. I have not changed my mind.

I shall deal only with two points about tuition fees. One is hypothecation. I heard the noble Baroness's assurances, but assurances are not proof against the Treasury. They are not proof against successor Parliaments. In 1436 another place for the first time voted an income tax. The other place was so afraid that it might be done again that it resolved that it should not be entered in the records for fear it might be taken for a precedent. To the fury of historians, it was not entered in the records.

The other point that concerns me is parental consent. These fees are chargeable on the parent, but the parent does not always consent. I recall a pupil who did not

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get his maintenance contribution paid because his parents were putting all the money into his sister's independent school fees. He ended up working himself to exhaustion. He set fire to his flat, burnt all his notes and had to go down. I recall another person, a neighbour of mine, from an Indian family whose father is not prepared to have her live away from home, so she spends four hours a day commuting to university. Think of the financial power used to reinforce that kind of authority.

We also heard in the pensions debate on 15th October that people are likely to be expected to make much bigger contributions than hitherto to their personal pensions. That and the obligation to pay tuition fees are--I shall not say contradictory--potentially divergent. That point requires some thought.

My particular objections are concentrated on Clause 18. Universities are not nationalised industries. They are private corporations. As part of academic freedom one must decide what is necessary for a degree. That means it must be free to the university to decide what it costs, for academic reasons and also for market reasons. In any sensible market there is a negotiation between a buyer who knows how much he can pay and a seller who knows how much that money will buy. Presumably, both of them will budge a little if the alternative is no sale. But although the Treasury does not seem to realise it, there is such a thing as a true cost below which the job cannot be done at all. If one considers the safety of cut-price airlines, one may perhaps be reminded of that point.

As regards the power to charge top-up fees, no university that I know wishes to do so. I echo what the noble Baroness said about the clause itself. She said, "We do not want to use this power, but we need the reserve power". We feel that quite as strongly as the noble Baroness does, because as long as we have that power it is something which is part of the negotiation in the public spending round, as last year's public spending settlement illustrates very clearly indeed. If that goes, the Treasury controls both the buyer's and the seller's side of the equation.

I appreciate that the noble Baroness is technically right that the university is still free to set its own level, but that is only so if it is prepared to go out of the state sector altogether. It may well be that certain universities will feel that they need to take that road because they can no longer supply quality education, competitive in an international market, at the rate which the Treasury is prepared to pay. In my view that would be a disaster. But closing the doors finally of institutions, some of which are older than Parliament itself, would also be a disaster. If Clause 18 remains in the Bill one or other of those disasters will happen.

6.31 p.m.

Lord Walton of Detchant: My Lords, in general terms there are many features of this Bill which are welcome, but I have reservations about specific points of detail which I now hope to explain.

As many of your Lordships are aware, from 1990 I have chaired the Hamlyn Foundation National Commission on Education. We published our first

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report, Learning to Succeed, in 1993. Many features of this Bill are in accord with our recommendations. We strongly recommended that a general teaching council for England and Wales should be created, particularly in view of the perceived success of the council already in existence in Scotland. This Bill proposes two councils, one for England and one for Wales. I am delighted that this long-overdue development is to become a reality.

I was myself president of the General Medical Council from 1982 to 1989. The Medical Act, which first established that council in 1858, has been extensively modified on many occasions, even within the past few years, to give that body increasing powers over education, registration, conduct, regulation and professional performance of registered medical practitioners. I have no doubt that the creation of two new general teaching councils will do much to counter the current malaise in some sections of the teaching profession and to enhance its status and responsibility in the public eye.

I also played a part in assisting the passage through your Lordships' House of Bills for the statutory regulation of osteopaths and chiropractors. I am pleased to see that the General Osteopathic and Chiropractic Councils are now in being and are assuming their specific responsibilities. Professional self-regulation is a cornerstone of a learned and civilised society, as the noble and learned Lord, Lord Hailsham, said some years ago. It is timely that the teaching profession should now, like so many others, be so regulated.

The clauses in this Bill relating to the registration of teachers, to the definition of a qualified teacher, those which deal with the appointment and training of head teachers and the authority which such councils should have over standards of teaching, of conduct, training, career development, performance, management and of recruitment to the profession, are all of fundamental importance, as is the responsibility which the councils will have relating to medical fitness to teach.

Your Lordships may also be aware of discussions led by the noble Viscount, Lord Caldecote, about the establishment of a college of teachers, a complementary body concerned with academic development rather than with regulation.

My concerns about the proposed framework set out in this Bill relate to the fact that so much is to be prescribed by regulation. The constitution of the council, including the crucial issue of the number of lay members not themselves in the teaching profession, and the question as to whether all teachers, as defined in the Education Reform Act 1988, will be eligible for registration must be clarified.

But the extensive authority vested in the Secretary of State is a matter of great concern. The medical, dental, nursing, osteopathic and chiropractic Acts are much more specific in relation to sensitive issues such as constitution and membership and the council's authority over training, conduct, health and performance, as well as registration. And as a point of principle, these bodies are each answerable not to a Secretary of State, but to

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the Privy Council, which must approve rules, constitution and electoral schemes. The right of appeal against suspension or erasure from the register rests with the judicial committee of that body.

I must therefore ask the Minister whether this first and welcome step towards the creation of two general teaching councils will leave these important issues to be dealt with under regulations approved by the Secretary of State, or whether it is envisaged that further primary legislation, comparable to that already in existence in relation to other professions, is intended to follow. Much discussion is inevitable before even the first set of regulations on constitution are framed as this is a very large profession. Issues relating to the magnitude of the initial financial subvention from government to enable the two councils to be established, but also relating to the annual registration fee, remain to be resolved.

Perhaps my principal concern, on which I hope the noble Baroness can reassure me, relates to the massive powers vested in the Secretary of State. It is vital that the powers of such regulatory bodies should never be subject to modification by political whim when governments change.

Perhaps I may now turn to issues of higher and further education, with again an expression of general welcome coupled with anxiety over points of detail. In an ideal world, if government finance were infinite, I believe that all education, through primary, secondary, higher and further education as well as continuing education throughout life, should be free and provided from the public purse. This country has had a proud record of paying fees to higher education institutions from public funds and has also, for many years, provided generous maintenance grants to students from lower income families.

However, when the National Commission on Education examined unit costs in dollars per annum in higher education in several countries, the figures for 1988 were: France, 3,780; Germany, 5,085; the UK, 7,960; Japan, 2,504; USA, 4,301; and Sweden, 6,334. Only the Netherlands, at 9,542, was more generous than the UK, and the OECD average was 5,534. Analysis revealed that the large size of the UK subvention was largely the result of student maintenance grants and fees. After the most earnest and careful consideration, therefore, accepting that in the past few years we have seen a major expansion in higher education, with upwards of 30 per cent. of young people now participating, we reluctantly concluded that this country could no longer afford to maintain existing levels of fee payment and student maintenance support. We therefore proposed, and Dearing in a sense accepted, that each student should be required to pay a flat-rate contribution of £1,000 per annum towards university fees which must, we recommended, be credited to the funds of the individual universities, but that in addition maintenance grants should be slowly phased out and replaced by loans.

We also recommended that the contribution to fees should be included in such loans, but we were very unhappy with the existing loans system introduced by the previous government and, as I said in your

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Lordships' House last week when debating the Education (Student Loans) Bill, it was our firm recommendation that, instead of repayments having to be made at regular intervals over five years, it would be much better if repayments could be made through the tax or national insurance system. We did not propose a life-time graduate tax on the Australian model, but suggested that once an individual's income after graduation had reached a certain threshold a surcharge should be applied through PAYE until the loan was paid off. However, there must be an agreement that the clock would stop if the individual's income fell below the threshold or he or she were temporarily unemployed, for whatever reason.

The previous government told us that the tax system was not intended for debt collection, and when I asked a supplementary question in your Lordships' House recently the noble Lord, Lord Whitty, gave me the same answer. Happily, the Government have had a sensible change of heart in that in Clause 16, as we have heard, provision is to be made for repayment through the PAYE system. May I ask the Minister to clarify what special arrangements are proposed to assist students from low-income families as well as those such as medical, dental and architectural students on five and six-year courses, who may face an intolerable burden of debt?

The proposal that the loan system should be extended into the further education sector is also welcome. It is an area of growing importance and effectiveness in training our workforce to meet the demands of a learning society. It is a sector in which fee payment has generally been the rule and upon which the country's future prosperity and economic viability depends.

I was also pleased to note that, as the national commission recommended, young people who enter employment after leaving school should be allowed time away from work, or in work, for further education in order to acquire the skills which today's employers increasingly demand. Through credit accumulation and transfer, they will be enabled to work towards the acquisition of one of the many higher qualifications through the NVQ system, but the interests of employers, and especially of small and medium-sized enterprises, must be protected.

To return to higher education, I must, like others, express my personal concern about Clause 18, which specifically precludes any higher or further education institution from charging what are colloquially referred to as "top-up fees". Such a blanket ban could have a potentially serious effect on the future of some of our most successful higher education institutions. Over the past 10 to 15 years we have seen a gradual erosion of the unit of resource in higher education, now in real terms reduced by about 40 per cent.; staff:student ratios have deteriorated; universities have had increasing difficulty in maintaining high quality teaching and, above all, research, and they have found it difficult to keep pace with industrial competitors overseas, particularly in science, because of their inability to replace ageing equipment or to buy new equipment at the cutting edge of technology. The UK has a proud record of inward investment in science because of the

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perceived strength of the UK science base in our universities. We also have an outstanding reputation in medical research, a field in which today's development in basic laboratory science often brings tomorrow's practical development in patient care.

However, inquiries carried out by your Lordships' Select Committee on Science and Technology have demonstrated that clinical academic medicine, upon which the future of such research crucially depends, is now in a parlous state with more than 50 clinical chairs vacant for lack of suitable applicants. Funding constraint is only one factor but, for a variety of reasons, clinical academics have found that the time available for teaching and research has been gravely eroded. The medical schools have found it exceptionally difficult to maintain a credible research identity, as witnessed by their relative lack of success, particularly in the undergraduate schools, in the last research assessment exercise.

The noble Lord, Lord Annan, referred to the question of Oxbridge college fees. I was unfortunately unable to speak in the debate introduced recently in your Lordships' House by the noble Lord, Lord Beloff, as I was undertaking a professional commitment overseas. Having spent much of my professional life in clinical academic medicine in the University of Newcastle upon Tyne, I was then somewhat sceptical about the value of the Oxbridge college fee but, after moving to Oxford as Warden of Green College in 1983, I became progressively more convinced of its importance. There has been much loose press comment suggesting that Oxbridge fees cost £35 million. That is inaccurate, as the grants from the Higher Education Funding Council to Oxford and Cambridge are approximately 90 per cent. per capita of those to other universities which provide the sporting, cultural, catering and other facilities which in Oxbridge are provided by the colleges. Admittedly, if one adds the college fee, the figure approaches 110 per cent. Nevertheless, the actual additional cost of the fees is £17 million, not £35 million. Graduate colleges such as Green College, which have no access to the endowments of the richer colleges, would be damaged almost beyond survival if the college fee were withdrawn.

For very many reasons, UK universities are suffering financially, as are their seriously underpaid and undervalued teaching staff. If the Bill goes ahead, it is vital that some of the money saved by phasing out student maintenance grants, and certainly all of that resulting from the fee contribution, must be available to those higher education institutions if they are to preserve the intellectual achievements and research influence which have been so much a feature of British higher education. If restriction of public finance for higher and further education is to be the order of the day, it would be foolish--indeed, potentially devastating--to prevent universities by statute from ever, even as a last resort, charging additional fees which could themselves be covered by additional loans.

I must conclude with a personal and provisional apology. Since I became a Member of your Lordships' House eight years ago, I have been fully aware of the convention that if one puts down one's name to speak

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in a debate one must stay throughout. I have always endeavoured to comply with that convention and I heard the statement from the noble Lord the Chairman of Committees last week on this very topic. My apology is provisional because I may be able to stay, but the other thing that I have learnt in eight years is that one is never able to predict with any degree of confidence when a debate will begin and, even less, when it is likely to end. I am faced late tonight with a train journey to Oxford and a 20-mile drive to my home in Burford. I must be in Oxford tomorrow to attend the funeral of Lord Dainton, representing the Cross-Bench Peers. Hence I trust that the House will, in these exceptional circumstances, accept my apology if I have to leave before the end of the debate. I believe that it would be unfortunate if one was compelled in such circumstances to withdraw one's name from the list of speakers, thus effectively being disenfranchised from speaking on topics of great importance.

6.48 p.m.

Lord Desai: My Lords, I should like first to congratulate my noble friend Lady Rendell of Babergh on her superb maiden speech, which I hope made us all feel that we shall want to hear her again and again. I hope that the body is not in the Library--and that it is often here, and speaking.

I must declare an interest. Like the noble Earl, Lord Russell, I am a university teacher. Indeed, having entered primary school at the age of six, I have never left the education sector. I have never done a job outside it and my only job in this country has been at the London School of Economics. So, some of my remarks will come from the heart. It has been said that teaching is a noble profession. It must be, because it is so badly paid. If it were not a noble profession no one would want to enter it.

Much to the surprise of my noble friend on the Front Bench, I support the Bill. When I was a student in India there was no free higher education. It was a very poor country with very poor people but we all paid and went to college. There were lots of colleges, some good and some bad. These colleges had different fees. There was some element of subsidy but by and large it was not free. From India I went to the United States. I could not come here. Although in the halcyon days of 1961 the fees were low, there were no scholarships. Therefore, I went to the United States where I obtained a full scholarship. The United States also has a very diverse system with different fees. There is very little federal support of higher education but a good deal of access. Access in the United States has been much higher than in this country until very recently. Access has nothing to do with the level of fees; it is to do with the quality of secondary school education, access to capital markets, the ability to earn money and the ability of institutions to charge different fees. For example, one can have a Harvard that charges very high fees and there may be ordinary two-year colleges.

One of the great problems of the British higher education system in which I have toiled for 32 years is that it imposes excessive uniformity. Because of that

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one must treat all universities as if they are the same. One then gets into funding problems because as universities come on stream one must pretend that they are alike and provide similar courses. Once one has a uniform system one must have inspecting bodies that tell one that courses must be alike if they are to get public money.

I very much enjoyed the radical speech of the noble Lord, Lord Annan. I wish that I lived in a world where he ruled. I served in a university while he ruled as Vice-Chancellor of London. His was a very good speech. What we have now is an anomalous state funding system that cannot deal with quantity. As it deals with quantity so it lets go of quality. Academic freedom in this country ended in about 1981. For the first 15 years of my life here as a teacher I did not have to worry about money in relation to my students, research and so on. In about 1980 or 1981 there was a drastic change in the funding of foreign students. The LSE suffered a 37 per cent. cut in total revenue. It had to go out and recruit. In answer to the rather teasing question posed by the noble Lord, we do not have endowments. We were not founded by Henry VIII. We have to get out there and make our living.

A good deal has been said about £4,000 being the average higher education fee and that students should be asked to pay one quarter of it. I do not believe that the cost of higher education is £4,000 but £8,000. That is what a foreign student pays. A non-EU student coming to a British university pays more than £8,000. Not all of them come from rich countries; many come from very poor countries. They subsidise the students from rich countries. Foreign students from Malaysia, Singapore, Hong Kong, India or wherever pay £8,500 to maintain free higher education in this country. Thank God I did not go to a British university, despite what the noble Lord, Lord Beloff, said to me the other day.

I see equity in a much wider context than the narrow confines of 18 year-olds going into full time university education as the only people who are entitled to free higher education. Part-timers and mature students are not so entitled. Therefore, free higher education does not exist in this country. If one is to defend that freedom one must be quite clear as to how limited it is. It is almost a privilege that we are defending.

When I hear about welfare dependency it is interesting that it is always stoutly defended for the middle classes whereas for the poor it is always attacked. Mortgage interest relief and higher education are always defended. When it comes to higher education parents who send their children to private schools get on their hind legs and say that they cannot possibly be asked to pay it when they have just spent £15,000 sending their little brats to private schools. They say that they should be entitled to free higher education.

However, I do not believe that in an ideal world parents' income is a very good criterion to judge poverty or otherwise. Students should pay against their future income. In terms of future income, there are many fewer inequalities of students in terms of parents' income than would be the case in an ideal world. But we do not live in an ideal world. Since 1988 the nominal value of a

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unit of resource--I speak only of "nominal" because when we get down to real people we begin to play games with statistics, and I can play that game too--has gone down from £7,000 to £4,000 per student. That is a big resource gap. That gap will not be closed in a short time. Therefore, the Government are to be congratulated on having tackled the first part of the problem. We are on our way back by having agreed that some people at some time should pay for some part of their education--a quarter of the unit of resource, which is one eighth of what it really costs to give quality education to students.

As many noble Lords have said, one welcomes the fact that there is now a proper system of collecting repayments. The Inland Revenue will collect them. I have been in favour of tuition fees since about 1987, if not for ever. In 1987 my colleagues at the London School of Economics, Dr. Barr, Mr. Crawford and Mr. Barnes, published studies which showed that one could finance higher education by an income-contingent loan system which, unlike a mortgage, could be financed by 1p in the pound on the National Insurance contribution. Over a cohort of students, not individually, the debt would be paid back. But that is much too complex economics to convince the Treasury. The Treasury will have to be educated again and again that cash flow is different from income, but at least a beginning has been made. Having got this far in a very nice way, one should concentrate on discussing the principles of classification of income from loans that the Government will receive. One hears the complicated stories about the way in which the Government will account for the income from higher education. The Education and Employment Committee of another place in its third report has considered this issue. That committee explored the idea that to reclassify the income from loans and taking it off the Government's accounts in such a way that it does not go into the PSBR will somehow release resources. There is here a paradox. A grant-maintained school can borrow against its assets and spend the money but it does not go into the PSBR. A university is not a public body. If a university goes bankrupt the Secretary of State for Education does not have the responsibility to bail it out. He may or may not do it, but he does not have that statutory responsibility, unlike the responsibility of the Secretary of State for Health in relation to a health trust.

Although we are not considered to be part of the public sector we are still bound by rules which apply to public sector borrowing. That is an anomaly. If these loans were given by universities as private bodies--if universities had an arrangement with the banks to give loans--and they could recover those loans somehow through the Inland Revenue system, the monies would come back to the universities and we would not have all this palaver of the Treasury telling them that they cannot do this or that.

The treatment of higher education loans presents a problem. Should they be treated as capital spending? If they are treated as capital spending one can borrow against them, according to the economic golden rule which was rightly adopted by my right honourable

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friend the Chancellor. According to the golden rule, one can have capital spending. After the Bill we shall need to think about the treatment of higher education loans.

We have reached a stage, but there are further stages ahead. We should not stop here, because the tremendous resource deficit which has built up over the past 10 years cannot be eliminated in one bite. We shall have to explore other avenues of increasing contributions from the students, or the Government, towards higher education. The Dearing Report suggests that the matter be revisited after five years. That suggestion should be taken seriously by my noble friend the Minister. In 2002 we should have another hard look at how far we have improved the funding of higher education. Of course, if the funding improves before then, I shall welcome that. The Bill is a good and sensible first step. There is still some distance to go, but I welcome the Bill immensely.

7.2 p.m.

Lord Pilkington of Oxenford: My Lords, I shall begin by underlining the worry about the Bill expressed by other noble Lords. It is that so much of the detail will be known only when the regulations are seen. At the moment we are faced with generalities. The noble Earl, Lord Russell, was kind when he talked about a skeleton. The Bill reminds me more of one of the photographs one sees of an archaeological discovery, where the skeletons of those who once existed are visible only as shadows in the sand. In the Bill we are dealing with shadows in the sand. We do not know whether they are sinister or beneficent.

So many powers are reserved in the Bill to the Secretary of State that, in contrast, the dictatorial Statute of Proclamations of Henry VIII looks almost like an amateur effort at control. However, let us cast the runes and look in the sand to see what we can dig out.

I agree that, in principle, the general teaching council can be welcomed. It is good that the teaching profession should have a body designed to foster and develop the highest professional standards. Here again, the devil is in the detail. Whether the council is successful will depend upon its membership and powers. Unless the Minister wants to face a horde of amendments-- I endorse the comments of my noble friend Lord Baker--we should see more detail.

As a former teacher for 34 years, let me say what a teacher will face with such a council. A wide range of views exists within the teaching profession as to what constitutes the highest standard. In that, the teaching profession differs from medicine and the law. Noble Lords will be aware that at present there are disputes as to the best way to teach reading. There are arguments as to the value of whole-class teaching--whether to teach in groups. My daughter who has begun teaching faces that problem at the moment. My own subject, history, was beset by controversy during the 30-odd years that I taught it. The battles I describe are as nothing compared to the battles I experienced. We teachers are, I fear, members of a fragmented and at times disputatious profession. So the powers, membership and style of the new council will have to be handled with care.

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Although we can give a general welcome to the Bill, the fact that it contains no detail is a flaw. I cannot join noble Lords on the Liberal Democrat Benches and say that it is marvellous just because it is called a general teaching council.

The same vagueness is apparent in Clause 12 which sets out the plan for a professional qualification for head teachers. That is a good idea. But whether the qualification will be good or bad will depend upon how it is arranged. A head teacher's role is diverse. I survived as a head teacher for 17 years, possibly more by good luck than good management.

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