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Lord Forsyth of Drumlean: My Lords, the noble Baroness suggested that she did not have support, but I have some sympathy for many of the points that she makes, and for her amendment. Indeed, the previous debate illustrated clearly the scale and extent of the problem and the lack of a remedy in the Bill. The provisions on fees in the Bill, with all the difficulties and hardships which they will cause to students who have to repay the fees over the course of their working lives, do not actually represent good value for money for the taxpayer. The cost of that whole machinery exceeds the revenues by at least £200 million.

I am at one with the noble Baroness in opposing the Bill's remedy on fees, but I cannot quite bring myself to support her amendment, because it leaves the other aspect of the Bill in place—the provisions which leave the universities subject to the OFFA regime and the provisions for access agreements. However, I do not want to repeat the arguments that we had earlier. Perhaps the noble Baroness can be persuaded to consider withdrawing her amendment and coming back at a later stage, focusing on the issue of fees alone. That issue is separate from the issue of access agreements and the role of OFFA, which we on these Benches find deeply repugnant.

Baroness Ashton of Upholland: My Lords, first, I should tell the noble Baroness that I consider her to be a lady of great principle. I do not endorse any of the comments that might have been made about her in your Lordships' House. I believe that she comes to your Lordships' House with a position. Although I do not believe that position is workable, for reasons that I gave at great length in Committee and which I shall reflect on briefly now, I accept that it is a position.

The noble Baroness has made it clear that the position that she would wish to see is to raise more resources for universities through the general taxation of a particular group of people. Noble Lords will have heard me say already that the difficulty with that arises when one considers the number of things that any government wish to achieve in the course of their lifetime, in terms of the range of needs in our society.

I spoke before about the differences in funding levels available to those who pursue higher education and the benefits that accrue to those individuals, compared to the amount of money that we spend on primary or nursery schools to support our younger children. As noble Lords have said on many occasions, that is where the work needs to happen—to support young people into higher academic achievement, if that is appropriate to them. That is a position that noble Lords have understood; they have understood, too, the importance in the Bill of the money being available to institutions for them to spend as they see fit. In the light of the previous debate, given the passion with which the noble Lord, Lord Renfrew, spoke about academic salaries, I believe that that is an important part of it, too.
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5 p.m.

We have a balance before your Lordships' House between recognising the role of the taxpayer and the role of the state in higher education. We have not debated the importance of looking to alumni, business or other support for universities much in this House. Critically, those who benefit from higher education do so not just because of their academic abilities and the rewards that that may bring them, or just because of the higher salaries that they may acquire, but because of what we know about graduates' mental and physical health. They are more likely to take part in our democracy and are more likely to be fulfilled, if I may describe it that way. Those are also important benefits.

I do not wish to take more of your Lordships' time but I tell the noble Lord, Lord Forsyth, that when we are debating these issues it is important that we are clear about his party's position and that he brings that into the debate. That is important in looking at the way forward.

Lord Forsyth of Drumlean: My Lords, I am sorry that the noble Baroness is unaware of our position. It is that if the Bill will give universities revenues of £900 million and the cost to the taxpayer is £1.1 billion, would it not be more sensible to give the £1.1 billion to the universities?

Baroness Ashton of Upholland: My Lords, I take that as a commitment from the noble Lord that he intends to give the universities an additional £1.1 billion. I am not sure that I can.

I believe that the way in which we have put together—

Lord Forsyth of Drumlean: My Lords, this is getting like the House of Commons. If the noble Baroness thinks that £1.1 billion is enough to deal with the size of the problem, then I rest my case that the Government's response to that problem in the Bill is inadequate.

Baroness Ashton of Upholland: My Lords, I was alluding to the issues that have been raised by the noble Lord's right honourable friend, Mr Letwin, and where he is saying that his priorities would lie in education. That is a perfectly reasonable stance but not one from which universities would benefit. It is important that when we look at the way forward we are clear about the options available in your Lordships' House, to the Government and to the relevant institutions about what is on the table. Those are important issues to have before us. The noble Baroness should not press her amendment. The Bill recognises the need to ensure that funding comes in to the institutions, to the universities. We recognise that those who benefit should contribute to it. On that basis, she should withdraw her amendment.

Baroness Sharp of Guildford: My Lords, I am grateful to the Minister for her sympathetic response on this issue. We have explored these issues on previous occasions and the answer that I have received is the one that I expected. It is important not to base
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too much hope that financing universities may come from the third leg, as it is called—from industry. I have worked on the economics of research and development for a long time. How little the industrial sector has chipped in to research and development has been continuingly and extraordinarily disappointing. The same applies in the funding of university endowments and so forth. We had a debate the other day sponsored by the noble Lord, Lord Joffe, in which he pointed out that charitable giving in this country has gone down by 25 per cent over the past 10 years. We should not put too much hope in that source. The main stream of funding has to come from the Government.

As I pointed out earlier, in effect the Government are taxing young graduates in order to put more money into universities. This may be the right way to do it but we do not think that it is. I shall withdraw the amendment as I think it might be sensible for the noble Lord, Lord Forsyth, and me to get together to see what we might be able to come up with. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 6 not moved.]

Lord Skelmersdale moved Amendment No. 7:

"( ) to ensure that, in respect of any qualifying course, no qualifying fees are charged to any eligible student for any academic year beyond the first three years of a first degree course."

The noble Lord said: My Lords, all the amendments in this group aim to achieve the same end, namely that those students who are studying courses that are longer than three years should not have to pay any fees for the fourth or further years or, in the case of the amendments of my noble friend Lord Renfrew, any subsequent years after the first three. In other words, his amendments have the same effect as Amendment No. 7.

Our Amendment No. 7 will ensure that the governing body of the relevant institutions under Clause 23(1) will not be able to charge fees beyond the basic rate for any qualifying course beyond the first three years of a first degree course. Meanwhile, my noble friend's amendments will ensure that fees may be charged but that the Secretary of State will foot the Bill. I cannot imagine what the Treasury would have to say about that idea, but the Minister will doubtless enlighten us in due course. We had a long debate in Committee on this issue and I do not want to take too much of the House's time reiterating what I said then, so I shall try to summarise the main concerns.

In the cases of doctors, veterinary surgeons, architects and a few other professions, courses at university extend for more than three years. The British Medical Association has calculated that the measures contained in the Bill could lead to a medical student in London incurring a maximum debt of just over £64,000. It also claims that the Government have not produced any figures to disprove this and argue that a student in a family with a residual income of
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£20,000 will be committing himself to 91 per cent more debt by choosing to study medicine instead of the more normal three-year degree. The increased levels of debt that medical students will incur will inevitably cause some students to think twice about studying medicine, regardless of their social backgrounds.

Laboratory-based subjects such as medicine are among the most expensive courses, with teaching costs per student at around £10,500 a year. Medical colleges are therefore likely to charge the maximum fee of £3,000. The BMA is concerned that the Bill's proposals on the package of fees and finance will be a disincentive to increasing the number of doctors in this country, something that the Department of Health, quite rightly, has as a major policy. As it stands, the Bill, once enacted, will mean that the Department of Health is operating with one hand tied behind its back. It will be looking at this arrangement again, but only after—I repeat, after—the Bill is passed, to assess whether it will pay the full amount of the increased fees, the £3,000, for the fifth and sixth years of training for trainee medics and dentists. That is hardly joined-up governance. Has the Department for Education and Skills any plans to help medics and dentists meet the full increased fees if the DoH decides that it cannot fund the full amount?

Nurses will be similarly affected. According to the DfES, nursing students and other allied health professionals, such as physiotherapists, currently have their fees paid by the NHS, which buys up places contractually from the universities. Will this continue? If so, this amendment would enable the NHS to put the money it would have provided for the fees for the fourth year into other, much needed, aspects of the NHS. If not, the effect will be an inevitable decrease in the membership of professions supplementary to medicine.

Future architects, not being in the public sector, will be badly off too. They have to study for five years and then do two years in practice before passing their professional exams. I calculate that the average debt per student will be at least £57,000. The debt of £30,000 for one of my noble friend's research assistants, to which I referred in Committee, is just about half of what she would be encumbered with once the Bill is enacted. Future veterinary scientists will be in much the same boat.

These very real concerns should all be considered in line with the "gateway to the professions" review announced by the Secretary of State at Second Reading in another place. This too will begin only after the Bill is passed. It will assess the impact of variable fees on such professions and will further consider the matter. In Committee, Ministers failed to indicate how long the review would take. Are they now in a position to inform the House of that?

This amendment is needed to ensure that all higher education students are treated fairly and that these particular students are on a par with those on other undergraduate courses. The Government must not wait for what would have to be up to seven years for a medic, vet or architect to complete fully his or her
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training before a full and proper assessment can be made of the detrimental effect or otherwise of variable fees. I beg to move.

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