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Earl Russell: The Minister sets me thinking when she talks about imposing means tests on an equal basis across the EU. As things stand at present, that will be affected by exchange rates. My noble friend Lord Avebury has asked me whether the means test will rest on the exchange rate at the time of application or the rate when the money is to be spent. There can be a considerable difference. Is the Minister here setting up a system which will not be viable--unless, as my noble friend suggests to me, we do it all in euros?

Baroness Blackstone: My understanding is that the Liberal Democrats are in favour of moving towards a more federal Europe and the introduction of the euro. If their wishes on this matter are granted, we shall not be faced with this problem for very long. Yes, of course, there are problems of detail about the exact date on which the exchange rate is set for this purpose. I cannot answer the question; the matter is still being looked into. In answer to the noble Baroness, Lady Blatch, I shall try to provide more information about how the scheme

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will work in this respect. I very much hope that my noble friends will be able to withdraw their amendments.

Baroness David: I should like to thank the noble Baroness, Lady Blatch, for her support as far as LEAs are concerned and other noble Lords and Baronesses who have spoken about these two amendments--even though the EU did rather take over. If we moved to a single currency fairly quickly, that would clearly be a great help in this respect.

I thank my noble friend for her reply. Once she had reassured my noble friend Lord Peston that LEAs would have plenty of notice of what would be expected of them, her answer to me was satisfactory. I thank her and withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 85 to 88 not moved.]

Lord Tope moved Amendment No. 90:

Page 11, line 35, at end insert--
("( ) For the purposes of subsection (2)(c), "circumstances" shall not include the income or other financial resources of the person's parents or spouse.").

The noble Lord said: I shall speak briefly in moving this amendment, partly so that we can make some progress this evening and partly because my noble friend Lady Maddock has some important things to say. In speaking briefly, I do not wish in any way to indicate that we regard the amendment as unimportant. On the contrary, it is fundamental to the Liberal Democrat approach to student funding.

We regard people who reach the age of 18 as independent adults, not as dependent children. That is a fundamental point and is the purpose of the amendment, which provides that in assessing these matters the income of a student's parents or spouse should not be taken into account.

In almost all other aspects of life people are regarded as adults once they reach the age of 18. They can vote, fight for their country and enter into contracts. But when it comes to going into higher education, they are still treated as dependent children. We know that many parents are generous in their support of their children while they are at university. Many are willing and able to be so; but that is not always the case. Many parents do not meet their contributions. However, that is not the point. The point is that a person who is 18 should be treated as an adult in his or her own right, and the system of student funding should recognise that. We wish to see the amendment put into the Bill as a fundamentally different way of approaching student funding, recognising people aged 18 as adults, as they are in other situations. I do not imagine that, in the perhaps unlikely event of an 18 year-old applying to a bank or a building society for a mortgage, he or she will be able to obtain a higher mortgage because of his or her parents' income. The same should apply in the education system. My noble friend Lady Maddock will add to the points I have made. With some passion, I beg to move the amendment.

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5.45 p.m.

Baroness Maddock: I rise to give my wholehearted support to my noble friend in the proposition that students should be treated as economically independent at the age of 18. There are three reasons why I believe this is a sensible proposition.

First, it would deal with the problem of assumed income, which is often not received by students from their parents. Figures show that almost one in three students do not receive the money that government and others assume they will receive from their parents.

Secondly, it would make it much simpler for students to deal with social security benefits. We heard earlier from the Minister that she is looking carefully into the interaction between this legislation and social security legislation.

Thirdly, it would deal with the muddled situation that exists today with regard to the age at which students become independent. Here I speak from personal experience. My elder daughter was in higher education for two years and decided to give up her course and go out to earn her living. She has now decided that she wishes to go back to university. She is 21 but is not considered independent, although she has been leading an independent life for two years. If she had gone on to work for another couple of years, she would be considered independent of her parents. It is difficult for students going in and out of courses. Students are not always sure what they want to do when they leave school and may choose a course which is not suitable for them, as my own daughter did. I believe the amendment would deal with some of the problems and anomalies that arise.

This proposal to ensure that students are considered independent at 18, together with our earlier proposal that part-time students should be treated the same as full-time students with regard to fees and our later proposal that all students should have their fees paid, would make the job of dealing with this legislation and the administration that will ensue much simpler, not only for the Government but also for local education authorities and higher education institutions.

For those reasons, I hope that the Minister will look favourably upon this amendment and give us some indication as to where the Government stand on whether, perhaps sometime in the future, they will look seriously at this proposal.

Lord Desai: I am in some difficulty here. I grant that people who are over the age of 18 are responsible for themselves and should be treated as such. However, in charging the education fee of £1,000 we have taken to means testing in relation to the resources of the parents. That is my understanding; but I may be wrong.

In an ideal world, peopled by economists and a few of their friends, one would only judge people in terms of their future income and not by their parents' income or anything else. Eligibility for the grants should be on the grounds of future income; therefore, all grants should be loans against future income and they should be collected by the Inland Revenue. That is in an ideal world, but we do not live in an ideal world.

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We cannot have an inconsistent treatment of students as between tuition fees and maintenance grants. That is the dilemma. Maintenance grants are actually consumption loans which are terrible things. One cannot say that for the consumption loans the students are going to be treated as adults, responsible for themselves, and all will qualify, more or less, and then say that when it comes to tuition fees they do not qualify because the parents are supposed to pay. In that case they would lose out both ways.

The world is not consistent and therefore we will have to live with this anomaly, that students cannot be treated as responsible adults as far as this Bill is concerned at the present time.

Lord Quirk: Is it not the case that after the passage of this Bill maintenance grants will not be paid; it will all be on the basis of loans? Therefore, it is possible to treat tuition fees and loans on precisely the same basis.

The amendment proposed by the noble Lord, Lord Tope, and the noble Baroness, Lady Maddock, stands and seems to me to be perfectly logical. The problem is that the justification for having (c) in here is to protect the poor, to ensure that the poorer student will get to university and, a fortiori, if one is going to protect the poor there has to be some way of unprotecting the unpoor, or, as one would have said until last week, some kind of affluence test.

The fact remains that the worst off under the present system is the student of the parent who is affluent but who either does not feel able, or simply refuses, to pay for the reasons that the child, who may be 20 or 21 years old, is an adult and they therefore say, "Why should I?"

We have a real dilemma here. I hope that the Minister will be able to clarify this. We are in the position, surely, where affluence will affect both the ability to pay tuition fees and the ability to get a loan.

Baroness Perry: I strongly support this amendment, most particularly the part of the amendment which refers not just to the student's parents but to their partner. Unfortunately--and I hesitate to say it in this male-dominated House--there are still many men who refuse to support their partners, despite the fact that their income has been taken into account in determining the amount of the £1,000 fee which the woman student has to pay. It does give enormous power to the man in question if he is able to say, "If you are nice to me, I might pay your £1,000 for you; if you are not, I will not." I feel it is quite distasteful to perpetuate a system in which the partner's income should be taken into account, particularly in the case of a woman, in determining the amount of the fees she has to pay.

Unfortunately, there are many women who themselves have limited or no resources and who therefore could be blackmailed in quite an unpleasant way, and who are, apparently, often blackmailed over the issue of the maintenance grant. That will be gone. Everyone will lose that and will get a loan. However, as

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far as the £1,000 fee is concerned, I very much hope that this amendment will be taken on board by the Government.

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