Student leaders have accused the Labour Party of betraying them after the abstention of the Opposition front bench in Monday's Lords debate on the restoration of benefit. Only eight Labour peers voted for the motion.
Labour peer Lord Morris of Castle Morris, speaking in the debate, explained that Labour peers were reserving their votes for motions with a chance of success: "If there is no serious gun, while welcoming the expression of opinion, we see no point in firing off blank shots." The motion was lost by 48 votes.
In the course of the debate, which was prompted by Lord Addington's call for the restoration of the right to housing benefit and income support for students during the long vacation, the Student Loans Company came in for bitter criticism.
Conservative peer Lord Beloff accused the company of "monstrous incompetence" and said: "Looking at the record of the Student Loans Company makes me think that Lambeth Borough Council is a model of business efficiency."
David Jones, president of Aberdeen University's students' representative council, said: "This is a devastating blow. This was the best chance in years of improving students' lives, and it has been defeated by a Labour Party which seems to have abandoned its commitment to helping those in need."
Stephen Magee, president of Edinburgh University's students' association, said: "We had expected opposition from the Government, but for Labour to fail to support this motion seriously calls into question their commitment to higher education."
* One in seven students is considering dropping out of university because of financial hardship, according to a survey by Edinburgh University students' association. The Edinburgh survey of 1,450 students, carried out last October, found that summer rents have risen by more than 40 per cent in four years, while more than 32 per cent of students could not find work over the summer vacation. The average student debt is Pounds 1,523.
Stephen Magee, students' association president, said: "The results of the survey show that student hardship has increased dramatically since the withdrawal of benefits and the introduction of loans. The restoration of benefits is therefore essential if the Government is truly to commit itself to the principle of equal access to higher education for all."
Other Scottish surveys show that 15 per cent of St Andrews University students are considering dropping out because of hardship, while 40 per cent of Glasgow University students have part-time jobs during term.
A student hardship survey at City University, London has revealed that one in five undergraduates is working during term-time and has debts of Pounds 1,000 or more.