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Lord Forsyth of Drumlean: My Lords, I rise briefly to support the noble Lord, Lord Phillips. He has made the case eloquently. I have only one point to add: we have been here before. An amendment on additionality was passed by this House on the previous occasion when fees were introduced. It went to another place and Ministers said, "Don't worry. It isn't necessary. Don't bind our
 
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hands", or words to that effect. They said that fees would be additional income. We do not need to look in the crystal ball; we can read the book. The assurances were given previously, with the effect that the money was clawed back. I know that the Minister will say that that was because the Tories were planning their reviews, but the money was clawed back. The assurances that were given were not honoured. I hope that the Minister has listened to the detailed words spoken in debates in the House and will accept the amendment.

Baroness Sharp of Guildford: My Lords, my name is not attached to the amendment, but I make it clear that that was because we felt, as the noble Lord, Lord Phillips, said, that it was an advantage to reflect the views of the four corners of the House. The amendment is tabled with the full blessing of the Liberal Democrat Front Bench.

Lord Dearing: My Lords, during the debate, we have, with some compassion, reflected on the financial obligations that we are asking young graduates to accept at a time when they will be entering the world with a hugely inflated level of house prices. We owe it to them to give them complete assurance that the money that they are being asked to provide will go for the benefit of higher education. We must owe that to them and see them right.

I shall refer briefly to both amendments. I welcome the changes that have been made to the drafting of Amendment No. 21 since it was first tabled. I shall add just one comment, which applies also to Amendment No. 22. Unless we have a precise definition of "teaching", we have nothing against which we can hold the Government to account. I hope that in its further refinement it might be explicitly related to teaching.

I am prepared to accept and support either amendment. If there were any indication from the Government that one had a basis for acceptance, I would rapidly move towards it.

Baroness Warwick of Undercliffe: My Lords, as I said in Committee, this issue brings us to the very heart of the Bill. If the additional funding for which the Bill provides through variable fees is offset by reductions in public funding, we shall be no closer to solving the financial crisis in university funding.

As other noble Lords have said, the noble Lord, Lord Phillips, deserves great credit for his perseverance on this issue. At each stage of the Bill, he has brought forward a proposal for ensuring that fees are truly additional and he has overcome each obstacle placed in his path.

Like my noble friend Lord Dearing, I argued in Committee that it was essential to find an agreed definition of the unit of public funding per student. The various definitions of that unit have led to disputes every year about the level of funding. I am pleased to tell your Lordships that, since then, discussions have
 
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begun between Universities UK and the Government on a common definition, which will be published annually. I hope that this will underpin the debate on university finance in the future. If public funding is reduced, there will be no statistical arguments for the Government to hide behind.

The Minister, the right honourable Alan Johnson, wrote to me yesterday outlining how this might be taken forward by his department and the Higher Education Funding Council. However, the amendment tabled by the noble Lord, Lord Phillips, binds the Government even tighter and I will therefore support it should he choose to press it to a vote.

Perhaps, like the noble Lord, Lord Dearing, I may comment on the amendment tabled by the noble Baroness, Lady O'Neill. It has the same merit in that it seeks to ensure that fees are truly additional and that student places are fully funded. However, I have a major concern in that in suggesting cuts in student numbers the amendment does not state exactly how they may be determined or managed. Obviously, universities would have great concerns about that. It is a complex issue and I am not sure it could be solved through primary legislation. I would therefore have difficulty supporting the amendment, but it raises issues that the Government must address.

Lord Rix: My Lords, as Chancellor of the University of East London, I trust that the additional funds which students will be providing for their own education are used to enable vice-chancellors to support general student experience and not to enable the other chancellor—the Chancellor of the Exchequer—to support general state expenditure.

Baroness O'Neill of Bengarve: My Lords, I rise only to support most warmly the amendment tabled by the noble Lord, Lord Phillips. I have checked that there is no pre-emption, but I shall not speak to my amendments as they have been degrouped.

Baroness Howe of Idlicote: My Lords, sadly, I did not have the opportunity of hearing what everyone said in Committee because I was out of the country, but I have of course read it. I support both amendments and have added my name to that tabled by my noble friend Lady O'Neill.

Those of us who support the Bill, despite some grave reservations, do so in the full realisation that the proposed top-up variable fees will not immediately bring in sufficient resources to provide the equipment and salaries discussed earlier today which will enable UK universities once again to compete at world-class level. However, it will be a start in giving universities far greater independence and freedom in how they raise and spend their own resources. But clearly that belief would be gravely undermined if the Government—any government, and we have heard of previous scenarios—reduce their current share of university funding in real terms year on year.
 
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As the noble Lord, Lord Phillips, said, the Government have committed themselves to doing no such thing. Therefore, what possible objection could there be to putting this important provision on the face of the Bill?

Lord Sutherland of Houndwood: My Lords I, too, congratulate the noble Lord, Lord Phillips, on the subtlety of the amendment. It is important that an amendment of this kind—I would happily support this one or that tabled by my noble friend Lady O'Neill—is included in the Bill. The reason is that the Bill is significantly drafted to provide additional funds to universities and the record is clear; the money can begin to be sidelined. The fear is that without a guarantee of this kind it would be.

Baroness Blackstone: My Lords, I wish to raise one issue. The noble Lord, Lord Forsyth, is having a conversation, but my point relates to what he said earlier when. We have had this little spat before. He still refuses to accept what I said, but I am going to repeat it.

It is not true that the Government clawed back the additional funding that came from fee income last time round, when the scheme was introduced. The Government provided substantial additional public funding from the taxpayer to go to universities, in addition to the money that was earned by the universities from the introduction of fees. Indeed, the Government were able to reduce the efficiency savings required by the Treasury from 6.5 per cent, which was the position when the noble Lord's party was in government, to the 2 per cent recommended by the noble Lord, Lord Dearing, in his report. That represented a substantial amount of additional public funding. Moreover, for a short period, the Government were able to provide an increase in the unit of resource. Regrettably, that did not last. However, it is not accurate to say that the previous Labour Government clawed back the money provided from the additional fee income.

I would not want anyone to decide how they voted on this amendment on the basis of what the noble Lord said, because it was not entirely accurate. I hope that he and the House will accept that.

Lord Campbell-Savours: My Lords, in the light of the honesty expressed in the statement made by my noble friend, I see every reason why the Government would want this amendment to be included in the Bill. Therefore, if there is a Division, I shall certainly support it.

Lord Winston: My Lords, I, too, shall listen extremely carefully to what the Minister says. However, like so many noble Lords who spoke at Second Reading, I feel that it is very important that the Government maintain the commitment. The universities, as we have heard constantly throughout the day, are very short of money, and this is a minimum requirement to ensure that the legislation is acceptable.
 
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