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Earl Russell: My Lords, are not both those perspectives correct, which is why the Bill is mistaken?
Lord Forsyth of Drumlean: My Lords, the noble Earl is absolutely right, which is why I said in my opening remarks that this matter is at the heart of the Bill. Listening to the noble Baroness, Lady Warwick, who represents Universities UK and the Labour Benches in these matters, it struck me as extraordinary that this was the consequence of a Faustian deal made by the universities. From now on they will be told that, "There is a limit to how much money we can provide publicly. You will have to find more money from the students themselves".
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My noble friend's amendment is welcome and I support it, but I am concerned at the way in which the debate about the funding of higher education has been skewed—undermining the notion that there is a public good in people taking longer courses that are not only valuable in themselves but that many of them produce an economic contribution to our country. We now have the Treasury and the universities as unholy allies, because the Government, which was elected on a platform of "Education, education, education", are refusing to meet their obligations. So I welcome my noble friend's amendment from a slightly different perspective.
Baroness Sharp of Guildford: My Lords, I entirely endorse the remarks made by the noble Lord, Lord Forsyth. This matter is, indeed, a Faustian deal. He said the Government were elected on a platform of "Education, education, education". They were also elected in 2001 on an explicit platform of "We will not impose top-up fees". The central problem that now confronts the Government arises from their own doing.
The noble Lord, Lord Renfrew, asked whether the Liberal Democrat Benches would support the amendment. He is right. We have always argued that the fees should be paid by the central Exchequer and we were prepared to waive taxes to increase the revenues of the Exchequer to fund the universities properly. We have a fully funded and worked-out plan to that effect, which is viable. As I have argued on previous occasions, it is an alternative that the Government have not allowed to be discussed.
Lord Dearing: My Lords, when he introduced his amendment the noble Lord, Lord Renfrew, said that he was concerned to alleviate an "unfortunate consequence"—more recently an "outrageous consequence". It should have come as no surprise, given that on the first day of Report on 8 June, when the noble Lord, Lord Triesman, replied (column 181 of Hansard) he warned us that there would be no extra money to fill the funding gap. It was an unfortunate consequence, but it was not one that we were not forewarned about before we chose to vote.
I was among those who voted against the amendment. I confess that I did not know what the bill would be—although I guessed that it would be considerable—but it had not crossed my mind that it was £180 million. That concerns me.
Lord Forsyth of Drumlean: My Lords, I am grateful to the noble Lord, but he his talking as if the matter was an inevitable consequence. This problem only arises as a result of the Bill, which he has consistently supported. It is a little odd and inconsistent for him just to accept the Government's position, given what has been said in respect of other groups, such as part-timers, by other people who have taken a similar view.
Lord Dearing: My Lords, I was not arguing about the merits of the figure, I was saying that it should not
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have come as a surprise, because we were forewarned by the Government that there would not be funding. That is a fact that can be cross-checked in Hansard.
The second reason that I voted against the original amendment was that I did not accept the principle that anyone who took more than three years should not make a contribution beyond three years—partly because the student going to university is not only concerned to gain a degree but to benefit from the experience of higher education. If a student is there for four years there are benefits, other than career benefits, that come from those four years.
Lord Dearing: My Lords, noble Lords may disagree but it is a fact that people benefit from the experience of higher education in addition to obtaining a degree.
There is the matter of the £180 million. I voted against that amendment. I was very much in favour of avoiding any pre-emption or opportunism by the Chancellor in taking some of that £180 million, or, more accurately, the money that comes from fees, to reduce Exchequer contributions. But here the noble Lord is arguing that there should be a pre-emption of Exchequer resources to fill the funding gap that arises from the amendment.
I want to raise two points. First, I do not think that the proposal would be effective because there would be nothing to stop the Chancellor taking out of the funding some other element that the higher education institutions were hoping to obtain. After all, the bid by Universities UK on behalf of the sector was about £8.7 billion for the three years. A great deal is being required but the money is simply not available to meet everything. Therefore, I do not think that the proposal would be effective.
However, if it were effective, I should not like the principle that the Chancellor, in deciding how he was to use the money that he was prepared to make available for education, should be able to pre-empt that £180 million, regardless of the claims of other sectors in higher education. Perhaps I may advance the cause of those who have special educational needs or advocate the cause of those who come from disadvantaged communities.
Earl Russell: My Lords, if the noble Lord, Lord Dearing, is correct in saying that the money is simply not there, why are we trying to educate more students than there is the money for?
Lord Dearing: My Lords, that is one reason why I believe the Government are right to seek a contribution from students, as that would enable that to happen.
(5)I shall continue briefly. We have, and I think the noble Lord, Lord Forsyth, has been leading us into, a repeat of the Second Reading debate on the basic principles. I am saying that the Chancellor should not make financial allocations other than on the basis of
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what is most to the national advantage—that is, on behalf of all the people of this country at all levels. In taking that decision, he must think about, for example, the very early years, children with special educational needs and lifelong learning. He must consider a range of issues in principle. First, I do not believe that the proposal would be effective and, secondly, it is wrong in principle.
Baroness Carnegy of Lour: My Lords, when we discussed this matter on the previous occasion, I suggested that the Minister should look at what was happening north of the Border. The same Chancellor, the Member of Parliament for Dunfermline, is funding the Scottish Parliament so that it can pay fees over the basic length of a degree course in Scotland, which is four years. That is how the courses are funded.
I do not think that on this issue the Scottish Executive thought, "Here's a pot of money and we must fit into it", in the way that the noble Baroness, Lady Warwick, and the noble Lord, Lord Dearing, seem to think must happen. That is not how it works. This is a government policy to charge fees, which will be paid back after graduation. The question is whether medical education, architectural education and so on matter enough to ensure that students are not put off going into those areas. The system has worked in Scotland. Medical education in, for example, Dundee University is flourishing, but students there pay for only four years of their course; the rest is paid for by the Scottish Executive, and the same Chancellor has agreed to that.
Therefore, I think that it is wrong for us to defend the Government on the issue of a pot of money. They can talk like that if they wish and try to make us realistic. Everyone has to be realistic. But if a government have a policy, they must fund it and they must find the money from somewhere else. That has happened in Scotland; why should it not happen here?
My noble friend is right to move the amendment. I believe that we were wrong to agree to the amendment on the previous occasion without the necessary funding being available. I said that the Minister should look to Scotland to see how it was done. We understood perfectly what we were doing but it was necessary to have this additional amendment. We now have it and I hope that the Government will agree to it.
Baroness Ashton of Upholland: My Lords, I recognise the passion with which noble Lords have spoken on this issue. I must correct something that the noble Lord, Lord Forsyth, said. He said that the problem arose only as a result of the Bill. In fact, the amendment would prevent all fees. That includes not only an increase in fees; it removes the prospect of the additional income and also the income that higher education institutions receive today. Therefore, it is a different matter, and I would argue that it does not only arise from the Bill because, in that context, we take away all fees for higher education institutions.
It might make the noble Lord, Lord Renfrew, smile to hear me say that the amendment is defective because Amendment No. 2 was not agreed to. Amendment No. 15 refers to Section 27(1)(d), which does not exist.
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I shall resist the temptation to go down the route of discussing the whole principle behind the Bill because I feel that I have already discussed that at great length. I recognise what the noble Baroness, Lady Sharp, said regarding the option that she put before your Lordships of additional taxation in order to fulfil the promise to universities. I have argued—I hope coherently—the case for saying that the purpose of government is to make rational choices with the money available. I have also argued that universities are important to us but that we need to think creatively about funding all the important aspects of our lives.
I have noted, too, the Conservative Party's latest proposal concerning endowments. From the figures that I have been given, I understand that £38 billion would be required to be invested in order to raise the necessary money. However, I do not want to go down that route now because I think that we debated that issue at great length. The Bill before the House is what we as a government believe is the best way forward for higher education, putting responsibilities where responsibilities should lie. I believe that that is very important.
I do not accept the argument that students are deterred. Because of the support that we have put in place in the Bill, we believe that students will be able to make the right kind of choices in relation to the courses that they take up, and they can benefit in making those choices. We are very keen to see students do that in the right context. That is important.
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