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Baroness Blatch: I am grateful to the Minister for giving way. She might be relieved to know that I agree with almost everything she said; certainly the case she is putting for secondary legislation. However, the previous legislation provided for the extent to which loans should go. The 50-50 arrangement was codified and agreed by both Houses of Parliament on the insistence of the noble Baroness. Would it not have been possible to provide in this Bill for the introduction of tuition fees and the abolition of the maintenance grant and introduce all secondary legislation thereafter? If that is the case, I agree with the Minister. She is saying that regulation-making powers are not open ended. I am afraid that they are. If they allow the Government to dispense with the 50-50 arrangement and for the introduction of tuition fees they are very open ended indeed.

Baroness Blackstone: I accept that the 1990 Act provided for a 50-50 arrangement. I am aware of that and remember our debates. However, the suggestion was then made that progress in moving towards 50 per cent. loans would be longer than was the case because the Government, of which she was a Member, wished to have the flexibility to make the changes in terms of the proportion of student support by either loan or grant as they wished. I remind her that they left that open and moved faster towards 50 per cent. loans than they stated at the time. As regards this Bill, it is important that we understand the proposal clearly. We have set it out and we announced it in Parliament when the Dearing Committee reported. It is a manifesto commitment to abolish maintenance grants. We could not have made the position clearer.

Baroness Blatch: This is a serious point. Manifestos do not substitute for the sovereign power of Parliament. It is for Parliament to determine whether tuition fees are introduced. It is for Parliament to decide whether the 50-50 loans agreements should be broken to make way for the abolition of grants. All we are saying is that we should be given an opportunity at this stage to discuss the primary legislation and to use a vote, rather than dealing with issues in secondary legislation when this House debates them but does not vote against them.

Baroness Blackstone: I am sorry, but I have difficulty in understanding the noble Baroness's point. She has tabled a later amendment on the matter. It would be helpful if we could confine our discussions to the amendments in the groupings. When we reach the

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relevant amendments, I shall listen carefully to what she says about whether it is right to abolish maintenance grants.

What is being proposed in Clause 16 is nothing new. The current system of enabling legislation and annual regulations has worked well for 35 years without any of my right honourable friends' predecessors abusing the powers in the way the noble Earl fears. Any such abuse would in any case be open to legal challenge on the grounds of unreasonableness.

I should add that we have already included one key safeguard in Clause 16; a provision which would in practice require any increase in the level of contributions to fees above the rate of inflation to be subject to affirmative resolution. That answers a point made earlier by the noble Baroness, Lady Blatch. As I indicated at Second Reading, we also hope to amend the Bill to limit the rates of interest which can be charged on loans. I am not convinced that any further safeguards are necessary.

Concerns have been expressed that we do not yet know exactly what will be included in the regulations. It is not possible to produce draft regulations at the present time because some of the fine detail--for example, on how the new collections mechanism will work--is still under consideration. Nor would one normally expect to see draft regulations at this early stage in the Bill's passage through Parliament. However, the Government have made their intentions very clear, not least in the progress report which was placed in the Library at the end of last week.

The noble Earl addressed his comments to a number of specific points. Perhaps I may take a little time to deal with them. He asked what provision we intended to make in regulations made under Clause 16(2)(a), which will determine who is an eligible student. We have made clear that we intend to retain the present criteria for deciding which students will receive support. This will mean that full-time undergraduate students on designated higher education courses, plus students on part-time and postgraduate courses of initial teacher training, will normally be entitled to receive grants towards the cost of their tuition and loans for maintenance. I am afraid, therefore, that cab drivers doing "the knowledge" will not be eligible. Clause 16 would enable us to extend this support to students in further education or to the generality of part-time or postgraduate students, but we have no current plans to do so. Such students will, however, continue to be eligible for support towards the costs of their study on a discretionary basis.

The eligibility criteria for student loans and for support for fees under the existing arrangements are currently set out in annual regulations and summarised in the progress report, to which I referred earlier. While we have no plans to change the criteria for the 1998-99 academic year it is likely, as I have already indicated, that changes will be needed over time to take account of changes in the system of post-compulsory education. In a dynamic environment, it is important that the Government are able to respond flexibly to changing demands. The power to deal with issues relating to eligibility in regulations will enable us and future administrations to do so.

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The noble Earl asked about the power to set maximum levels of support available to students under Clause 16(2)(b). The maximum amounts of grant and level to which students are entitled are currently set out in annual regulations. We are proposing no change in this respect. I am sure the Committee will agree that it is entirely sensible to make such provision in secondary legislation, given that the amounts will be adjusted routinely each year to take account, for example, of inflation. We have made clear, however, that the value of maintenance loans will be broadly equivalent in real terms to that of the current student support package. As I have mentioned, provisions elsewhere in the Bill will place limits on increases in the amount of grant which is payable towards fees; and by extension to the level of contribution which individuals and their families are expected to make.

The noble Earl asked about the provisions in Clauses 16(2)(e) and (f). These provisions give the Secretary of State the specific power to set out in regulations the terms and conditions attaching to grants. There is nothing sinister about these powers, which broadly mirror powers in the existing legislation. Indeed, our intention is to impose terms and conditions which are broadly the same as those applied to mandatory awards currently. We need in particular to be able to ensure that grant continues to be paid only for as long as a student is attending an eligible course. So we need to be able to prevent the payment of further instalments where a student has dropped out of, or been required to leave, his or her course. We may also wish to provide for grants paid to help with living costs--for example, to students with dependants--to be repaid, in full or in part, in circumstances such as these. It is clearly right to protect taxpayers' money in this way.

5 p.m.

Earl Russell: I seek a small amount of clarification. I accept what the Minister is saying but I am interested in what sort of terms and conditions could be imposed. Does that relate only to eligibility as a student and to repayment, or could that clause be used to impose other terms and conditions upon grants? Is there any restriction as to type?

Baroness Blackstone: I believe that the terms and conditions element is largely related to the issues which the noble Earl has just raised. However, I cannot predict what may happen under regulations in five or 10 years' time. That is the whole point of having some flexibility. I hope that the noble Earl will accept that.

The noble Earl asked about the power to specify in regulations under Clause 16(2)(g) the terms and conditions attaching to loans. That power is clearly essential: one cannot make a loan without specifying the terms on which it is made. Clause 16(3) describes in more detail the kinds of terms and conditions we have in mind; for example, interest rates, repayment terms and deferment and cancellation arrangements. In addition there will be various more technical points. For example, we will want to be able to require borrowers to inform the Student Loans Company if they leave their course early, or if they change their address.

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We have made clear our intentions in relation to the terms on which the new loans will be made. Students are aware of those. The key terms--for example, in relation to interest rates and repayment terms--have been widely publicised. Further details are included in the progress report on the new arrangements to which I referred earlier. That report also explains that a working group involving officials from my department, the Inland Revenue and the Student Loans Company has been set up to consider the fine detail of the new arrangements and that further details will be published in due course.

We believe that it is entirely appropriate for provisions of this kind to be set out in regulations, rather than on the face of the Bill. As I explained earlier, there will be a great deal of technical detail and we will need the flexibility to respond to changes in circumstances--for example, future changes in the way the tax system operates. On one key point--interest rates--it remains our intention to clarify the position on the face of the Bill. But with this one exception I am clear that the only sensible way of setting out the detailed terms and conditions attaching to grants and loans is to do so in regulations. That is, of course, the case under the current arrangements. I hope that the noble Earl will withdraw his amendment.

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