Lords inflict defeats as the Bill struggles on

The Government faced humiliating defeats in the House of Lords this week over its plans to introduce top-up fees as peers forced key concessions on the Higher Education Bill.

At the Bill's report stage in the Lords, peers voted for amendments that would:

• Ensure that students sitting degree courses lasting more than the three years, such as medicine and engineering, are not charged top-up fees beyond the three years
• Ensure that students who decide to take a gap year in 2005 and defer entry to university to the 2006 start of the top-up fee regime do not have to pay top-up fees
• Ensure that the Government or any future Government is prevented from clawing back the extra income generated by top-up fees to reduce public funding for universities.

The Bill, which will be subject to further amendment in a second day of the report stage next week and in its third reading in the Lords later this month, will now have to go back to the House of Commons.

Although the Government, which has a massive Commons majority, is likely to strongly resist the Lord's changes, the amendments are sure to spark a fresh debate over the Government's top-up fees policy.

The amendment ensuring that no fees are charged for any academic year beyond the first three of a first degree was carried by 17 votes - 156 votes to 139.

Supporting the amendment, brought jointly by the Conservative and Liberal Democrat frontbenches, Lord Skelmersdale said the Government's plans would deter potential medical students, who would face debts of more than Pounds 64,000 after a five-year course.

But the Government's education spokesperson, Lord Triesman, said: "I should leave noble Lords under no illusion that the Government could find extra funding to make up (the) loss in funding (if the amendment were carried)."

Fees of up to £3,000 a year would be lost from about 8,600 medical students for two years, and the waiver would also apply to about 7,000 architecture students on four-year courses, and 4,000 veterinary students - amounting to about £60 million a year.

The plans to waive top-up fees for students who take a gap year in 2005 were carried by just 11 votes - 143 to 132.

Supporting the amendment, tabled by Tory and Lib Dem frontbenches, Liberal Democrat frontbench spokeswoman Baroness Sharpe said that up to 100,000 extra students could rush to apply to university in 2005 - partly as a result of a race to beat the top-up fee regime.

For the Government, Baroness Ashton said that there would be no rush in 2005 as students recognised the benefits of the new regime and warned that the motion would destroy the whole point of the variability of top-up fees: to give universities the discretion to decide what to charge.

The Government was also defeated by just ten votes (88 to 98) on the issue of "additionality" - ensuring that extra fees income could not be used to erode public funding - despite pleas from Baroness Ashton that "primary legislation is not the right place for a financial commitment of this nature".

The Government defeated a move by Lord Renfrew (by 122 votes to 57) to set up an academic salaries review body as part of the Bill, but conceded voluntarily to pressure to ensure that academic staff, like students, will no longer be subject to the jurisdiction of university visitors - the quasi-judicial arbiters of complaints.

The key debate on the powers of the Office for Fair Access will take place next week.