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Lord Renfrew of Kaimsthorn: My Lords, it has been a very interesting debate and, indeed, a rather sad one. I am very grateful to all noble Lords who have spoken and to the Minister for her very courteous treatment. "More's the pity" were her words—I quote her with accuracy, I think. That is the position that we have reached in university funding.

The noble Baroness, Lady Blackstone, did not suggest very many solutions but said that it was not easy to engage the great British public in the matter of
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university pay. To my regret, I think that that was the position of my noble friend on the Front Bench. If I felt that he had a clear plan up his sleeve to remedy university funding when the present Opposition are in power, then I would have been much more encouraged by that position.

I also listened very carefully to the noble Baroness, Lady Sharp. In her speech in Committee on the amendment which had the same intention, she said that she was with it in spirit but did not feel that it was in the right place in the Bill. That was when it was associated with the Arts and Humanities Research Council. So I was disappointed to sense today that she was less with the amendment in spirit than she had been, and I did not altogether understand the difference.

I used and withdrew the word "complacency" in a previous discussion on this amendment, but I want to reintroduce it into this discussion in the light of the debate we have just had. I have not heard one individual offer any hope of improvement except, perhaps, the noble Baroness, Lady Blackstone, who said that more money is coming into universities, so why do they not spend it in this way? I will study with great interest the salary trajectory within the university which is so fortunate as to have the noble Baroness as a future vice-chancellor. I predict that she will find it difficult to increase academic salaries substantially when most commentators on the Bill agree that the top-up fees will bring in sufficient funding to go about halfway towards covering current university deficits. I shall be very interested to learn how they are supposed to offer a significant enhancement in academic salaries.

The comments which impressed me the least—to say that I was irritated would be a discourtesy to noble Lords—were those of the noble Lord, Lord Corbett. He said that since universities were not public bodies, we should not give attention in this form to their problems. It is perfectly true that universities are independent bodies and many of us wish that they were much more independent than they are. But one of the defects of the present Bill, it has been argued, is that the top-up fees are capped. I do not wish to enter into that argument; I simply remind noble Lords that if universities wish to spend more money on academic salaries, they would not have the means. My noble friend Lady Carnegy made the point very well: as more than half of the funding coming into universities goes on academic salaries, if the shortfall is of the order of 45 per cent over 20 years, how would they do this without increased funding from public sources?

The Minister's speech was entirely moderate and constructive, but I think that she used the word "regulate" at some point. Certainly, the noble Lord, Lord Corbett, seemed to imply that the proposed review body would be interfering with the independence of universities. I simply cannot believe that to be the case.

I think that this is a sufficiently significant amendment because this is a matter of deep concern in the universities. I noted with interest that Universities
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UK made no comment on this amendment, although it has on many earlier ones, and that, I hope, will be noticed in the country at large.

If noble Lords support me, I intend to test the opinion of the House. It is an occasion to stand up and be counted. I shall be interested to see how many noble Lords in my party are content to follow the Government's line. I shall be interested to see how many Liberal Democrats follow the line advocated by the noble Baroness, Lady Sharp. Although I am not hopeful of carrying the amendment, it is of sufficient importance that the country and universities at large should be able to see how Members of this House have voted and, therefore, I would like to test the opinion of the House.

On Question, Whether the said amendment (No. 3) shall be agreed to?

Their Lordships divided: Contents, 57; Not-Contents, 122.

Division No. 1


Alton of Liverpool, L.
Ampthill, L.
Avebury, L.
Bagri, L.
Bramall, L.
Bridges, L.
Brittan of Spennithorne, L.
Brooke of Sutton Mandeville, L.
Campbell-Savours, L.
Carnegy of Lour, B.
Chadlington, L.
Cox, B.
Deedes, L.
Denham, L.
Dundee, E.
Eden of Winton, L.
Elles, B.
Feldman, L.
Fowler, L.
Howe of Aberavon, L.
Howe of Idlicote, B.
Hurd of Westwell, L.
Jopling, L.
Kilclooney, L.
Kimball, L.
Mackay of Clashfern, L.
Mar, C.
Marsh, L.
Molyneaux of Killead, L.
Monson, L.
Morgan, L.
Mowbray and Stourton, L.
Naseby, L.
Norton of Louth, L. [Teller]
O'Neill of Bengarve, B.
Park of Monmouth, B.
Parkinson, L.
Patten, L.
Perry of Southwark, B.
Prior, L.
Prys-Davies, L.
Quinton, L.
Quirk, L.
Renfrew of Kaimsthorn, L. [Teller]
Renton of Mount Harry, L.
Simon of Glaisdale, L.
Slim, V.
Tugendhat, L.
Ullswater, V.
Wakeham, L.
Walpole, L.
Walton of Detchant, L.
Warnock, B.
Weatherill, L.
Williamson of Horton, L.
Wilson of Tillyorn, L.
Wolfson, L.


Ahmed, L.
Alli, L.
Amos, B. (Lord President of the Council)
Andrews, B.
Archer of Sandwell, L.
Armstrong of Ilminster, L.
Ashton of Upholland, B.
Bach, L.
Bassam of Brighton, L.
Bhatia, L.
Billingham, B.
Blackstone, B.
Blackwell, L.
Borrie, L.
Boston of Faversham, L.
Brooke of Alverthorpe, L.
Brookman, L.
Burlison, L.
Carter, L.
Chandos, V.
Chester, Bp.
Christopher, L.
Clarke of Hampstead, L.
Clinton-Davis, L.
Cohen of Pimlico, B.
Corbett of Castle Vale, L.
Craig of Radley, L.
Crawley, B.
David, B.
Davies of Coity, L.
Davies of Oldham, L. [Teller]
Dean of Thornton-le-Fylde, B.
Dearing, L.
Desai, L.
Dixon, L.
Donoughue, L.
Drayson, L.
Dubs, L.
Elder, L.
Evans of Parkside, L.
Evans of Temple Guiting, L.
Farrington of Ribbleton, B.
Filkin, L.
Finlay of Llandaff, B.
Fitt, L.
Fyfe of Fairfield, L.
Gale, B.
Gavron, L.
Gibson of Market Rasen, B.
Gilbert, L.
Golding, B.
Goldsmith, L.
Gordon of Strathblane, L.
Goudie, B.
Gould of Potternewton, B.
Graham of Edmonton, L.
Grocott, L. [Teller]
Harris of Haringey, L.
Hayman, B.
Hilton of Eggardon, B.
Hogg of Cumbernauld, L.
Hollis of Heigham, B.
Howarth of Breckland, B.
Howells of St. Davids, B.
Howie of Troon, L.
Hoyle, L.
Hughes of Woodside, L.
Hunt of Kings Heath, L.
Irvine of Lairg, L.
Jones, L.
Kirkhill, L.
Layard, L.
Lea of Crondall, L.
Lipsey, L.
Lockwood, B.
Macdonald of Tradeston, L.
McIntosh of Haringey, L.
McIntosh of Hudnall, B.
MacKenzie of Culkein, L.
Mason of Barnsley, L.
Massey of Darwen, B.
Merlyn-Rees, L.
Mitchell, L.
Morgan of Huyton, B.
Morris of Manchester, L.
Nicol, B.
Ouseley, L.
Palmer, L.
Parekh, L.
Patel of Blackburn, L.
Paul, L.
Pendry, L.
Peston, L.
Pitkeathley, B.
Plant of Highfield, L.
Ponsonby of Shulbrede, L.
Puttnam, L.
Radice, L.
Randall of St. Budeaux, L.
Rendell of Babergh, B.
Richard, L.
Rooker, L.
Sawyer, L.
Scotland of Asthal, B.
Sheldon, L.
Simon, V.
Stone of Blackheath, L.
Sutherland of Houndwood, L.
Temple-Morris, L.
Thornton, B.
Tomlinson, L.
Triesman, L.
Turnberg, L.
Turner of Camden, B.
Vinson, L.
Warwick of Undercliffe, B.
Watson of Invergowrie, L.
Whitty, L.
Williams of Elvel, L.
Winston, L.
Woolmer of Leeds, L.
Young of Old Scone, B.

Resolved in the negative, and amendment disagreed to accordingly.

8 Jun 2004 : Column 173

[Amendment No. 4 not moved.]

Clause 23 [Condition to be imposed by English funding bodies]:

Baroness Sharp of Guildford moved Amendment No. 5:

The noble Baroness said: My Lords, in moving the amendment, I shall speak to Amendments Nos. 6, 9 to 13, 16 and 31. This set of amendments replicates those that I tabled in Committee and seeks to eliminate from the Bill any mention of fees, whether higher or basic amounts of fees. I have spoken already at length at Second Reading and in Committee about why we as a party object to the policy of charging fees to students and
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would prefer a system which provided the education element of higher education free of charge. I do not propose to repeat the arguments that I made on those two occasions, which have not found much favour in your Lordships' House. In making the arguments, I have been called ingenuous and accused of living in cloud-cuckoo-land. I reject both accusations.

We make much in this country of the importance of democracy and of the democratic machinery of our government. I remind your Lordships that an important element in democracy is the existence of an opposition, which can present and argue for alternatives. This House, to a very much greater degree than the other place, has accepted the line taken by this Bill that there is no alternative—that the only way in which to raise the extra resources that the universities need is to charge fees of the students. My argument has been that there is an alternative.

Our proposals, unlike those of the Conservatives, have been fully worked out and fully costed and, if implemented, would put more resources into the hands of the universities more quickly than the Government's proposals. OK, we propose to fund our proposals from taxation, by imposing a higher, 50 per cent band of tax on the very rich. I take the mood of the House, which is to reject any notion of such a tax. In doing so, however, let me remind your Lordships that you are in effect going to levy a tax.

What is being proposed is a form of graduate tax, and those who will pay it will be young graduates. For those young graduates whose salaries rise very rapidly from the present average of £20,000 up to £70,000, or the £80,000 starting salary with the lawyers to which the noble Lord, Lord Tugendhat, referred, paying back a debt of something like £20,000 or £30,000 may be insignificant. However, for the many whose salaries rarely go above the £30,000 or £35,000 mark, it will last for a very long time. Those who choose to go into careers in the public or voluntary services in which incomes rise slowly will often find that they are paying that graduate tax for the best part of 20 or 25 years, and sometimes even longer. That means that, on top of their income tax and their national insurance payments, a 9 per cent rate of tax is being charged—so the marginal rate of tax is 42 per cent, which is higher than we are asking millionaires to pay on their income. For those young graduates, debts will hang around for a very long time and will bite deeply into their monthly pay packets. Why should we impose on them that higher rate of tax?

However, I see that I make very little headway in persuading your Lordships that there is a better way than that proposed. One of our main objections to the current proposals is that they put so little into university coffers. It is extraordinary that rather less than £1 billion is being put into university coffers, at a cost to the Exchequer of at least £1.5 billion a year.

I rest my case on it being the job of the Opposition to present alternatives. In this case, as in so many, it is not the case that there are no alternatives; there are many alternatives, and we have presented your
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Lordships with one of them, but Parliament has chosen so far not to explore this alternative. I beg to move.

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