HC Deb 13 March 1978 vol 946 cc182-94

Motion made, and Question proposed, That this House do now adjourn.— [Mr. Harper.]

10.58 p.m.

Mr. Anthony Kershaw (Stroud)

I wish to call the attention of the House to the treatment which overseas students in this country are receiving. I shall argue that the policy of Her Majesty's Government towards them is unjust, even illegal, and that the consequences are hurtful to the students and harmful to the interests of the United Kingdom.

In fact, it is difficult to know what the policy of Her Mejesty's Government is, because they have not at any time spelt out the basis of their approach. In 1976, the Secretary of State announced various increases in fees, the result of which is that overseas undergraduates pay £650 compared with £500 for home students, and graduates £850 compared with £750 for home graduates.

However, in November 1976 the Secretary of State said that it was her intention, in due course, to remove the fee differential. Even if this is a rather a hollow promise, because fee levels effectively apply almost solely to overseas students since the vast majority of home students have their fees paid by public funds, nothing has yet been done towards fulfilling that promise. The Minister of State last July was only able to say that increases for the coming year would be made to take account of inflation.

We have had inspired Press leaks which indicate that future policy will be towards positive discrimination in which rich students from richer countries will be charged very much higher fees, calculated to produce £120 million in a year, which will be used to subsidise poor students from poorer countries. I ask how it will be possible to determine the real income of students, how it will be possible to make it compatible with the free entry to universities of students other than those nominated by their home Governments. That is something I cannot understand.

How are the countries to be nominated? As someone pertinently asked, are we now to refuse education investment into the United Kingdom from the United States in projects such as those from the Brookings Institute?

How do we stand with regard to the EEC? Are we to continue to charge high fees and to keep on raising them against other countries—against countries such as Germany and France, who receive a far larger number of British students than we take from them and who charge nothing or almost nothing? If those countries retaliate, what will be the effect on our students wishing to go abroad? Has that been considered?

Is the conduct of the Government in this regard compatible with membership of the EEC? The only thing that the Government have done to mitigate hardship is to replace the widely used overseas students fees award scheme with the fee support schemes for postgraduates only. This has proved totally inadequate. The burden of easing hardship has been shuffled off on to local authorities, who are inappropriate for the job, and upon universities and polytechnics, who have struggled to help but without the slightest assistance from Government, except the so-called £1 million divided between universities and the State sector, which was not additional real money but was what would otherwise have been cut. What is certain is that the Government wish to limit the number of overseas students.

The public expenditure White Paper of January 1978 shows the decline in the number of overseas students anticipated, from 52,000 this year to 44,000 in 1981–82, in higher educational establishments, and from 28,000 to 22,000 in non-advanced institutions. Why have these figures not been made public by the Department responsible and justified by argument? Why do we learn of them from a Treasury table? I shall tell the Minister why this is so. These instructions about quotas come from the notorious and largely incomprehensible Circular 8/77. This circular not only imposes quotas but authorises differential tuition fees, local education hostel charges and admission charges. It encourages reclassification of certain categories of immigrant students so that they may be charged higher fees. The circular apparently includes in the quota students who are wholly paid for by their own Government, imposing no charges on the British taxpayer and bringing in investment earnings.

For example, 1,500 Nigerian students are due here in September, bringing in £7 million a year. But they are to be part of the quota, apparently, a quota presumably designed to limit our costs. In fact, they are a profit.

The reason why the Department of Education and Science will not explain its circular and give guidance to LEAs and others is that, paradoxically, it acts not in the name of common sense but for fear of offending against the Government's Race Relations Act, which was designed to prevent, not promote, discrimination.

I call upon Her Majesty's Government, who so recently worked themselves up into a phoney lather about immigration and race, to withdraw Circular 8/77, which I say is morally and legally offensive. There sit the racists tonight—in the Department of Education and Science.

The harassment of overseas students is becoming a scandal. Their hours of attendance are checked. They are forbidden to apply for continuation courses until their examination results are through, by which time they may well be too late to apply for the next course.

The Inner London Education Authority, that creature of this Government, fined two London polytechnics £50,000 for accidentally exceeding their quota of overseas students, though I understand that one has now been let off paying that amount. Referring to this shameful incident and to the whole matter, The Times Higher Education Supplement wrote: Either they' —that is, the polytechnics— must work an unworkable racist quota, and thus perhaps fall foul of the law. Or they can refuse to work it and be fined. In short, overseas students in this country are being treated not as honoured guests but shabbily, as if every one of them was a potential illegal immigrant. This curmudgeonly attitude is directly contrary to the short-term and long-term interests of the United Kingdom.

In the long term, the kind of reception and treatment which students receive here will have an important influence on those who, in later years, will be prominent in the counsels of their countries. Our industrial, cultural and political influence in the world will to some extent depend upon what they have thought of us.

In the short term, the Treasury calculations of the costs of overseas students are manifest nonsense. These calculations appear to take no account of the money which students spend while they are here. The calculations depend upon the total costs of an institution being divided by the number of students to give a cost per head, ignoring that the buildings, the professors and the other overheads would still be there even if not one overseas student came. It is very arguable that, far from there being an expense, there is a net profit from overseas students.

Certainly, the calculations take no account whatever of the academic value to us, especially of post-graduates. Great institutions such as the London School of Economics would be lamed and crippled if their numbers of foreign students were drastically curtailed. It is not only a matter of academic benefits. The material benefits of post-graduate research can be demonstrated to have brought much benefit to us, notably, perhaps, in medicine.

No British student, so far as I have been able to ascertain, has been excluded from a course by too many foreigners. On the contrary—many courses from which British students take benefit could not be kept going without the foreign entry. But even if it were to happen that British students replaced foreign ones, that would bring not savings but extra expense, for we should be substituting subsidised British for fee-paying foreigners. The Government's argument is economic nonsense, founded upon a false premise and wholly against the interests of this country.

What is to be done? The first thing is to decide who in the end is responsible for policy. At least eight Departments, starting with the Department of Education and Science, the Foreign and Commonwealth Office, the Ministry of Overseas Development and the Home Office, have different and conflicting interests and responsibilities in this matter. Someone must be found to take overall charge if the drift is to be stopped.

It is natural to look to the Secretary of State for Education and Science to do this, but she has been a great disappointment. When she came to office she was widely regarded as a person in whom people of differing opinions could place confidence. When she leaves office, as shortly she will, she will be remembered as the best receiver of delegations in the business. Everyone goes away satisfied, but after a bit everyone notices that nothing happens.

The Secretary of State gives the lie to the old saying There is no smoke without fire". With her, there is nothing but smoke. There is no fire of action, no flame of determination, and apparently no influence in the Cabinet. However, some Department must take the lead, whether the DES or another Department.

My second suggestion is that, as there are so many conflicting influences, a commission of all those professional, academic and voluntary bodies directly interested, perhaps with the right to summon civil servants, should be set up to give advice. Such a body would provide a focal point where the interests of the universities, of educationists generally and perhaps also of this House and of the Government Departments concerned could be thrashed out. The Minister would benefit as a result.

Certain it is that at present Government policy is obscure, unfair and contrary to the interests of this country.

11.12 p.m.

Mr. Gerry Fowler (The Wrekin)

I think that the hon. Member for Stroud (Mr. Kershaw) knows that I share many of his views, though not his view about who created the recent lather about immigration and race relations. On that matter the hon. Gentleman was singularly absurd and he damaged his own case. He should have a word with his right hon. Friend the Member for Finchley (Mrs. Thatcher).

I want briefly to make two simple points. First, does my hon. Friend the Minister agree that in the long run we must carefully examine the question of what proportion of the income of higher education institutions should come from fees? The position in the second half of the 1980s, with a declining 18-year-old age group, will be very different from that of the early and mid-1960s, in the immediate post-Robbins period, a period of great expansion, when it was arguable, as in Robbins, that 20 per cent, was about the right proportion. It may not be in the latter part of the 1980s. Will the Government consider that while there is still good time to do so?

Secondly, will the Government examine the policy of certain education authorities, notably ILEA, which are not exactly consonant in terms of the quotas they impose—I put the matter mildly—with Government policy? They may sometimes appear to be unduly restrictive and damaging both to good overseas relations and the interests of higher education institutions.

I am sure that my hon. Friend will be able to make at least some sympathetic noises on both those points.

11.13 p.m.

The Minister of State, Department of Education and Science (Mr. Gordon Oakes)

I am well aware of the deep interest of the hon. Member for Stroud (Mr. Kershaw) in overseas students. It is an interst that I share. But I listened with some amazement to some of the things the hon. Gentleman said tonight, not only about immigration policy—a matter that he accused the Labour Party of raising—but about public expenditure, because it is largely from the Conservative Benches that the complaints about public expenditure come.

To satisfy the hon. Gentleman, I should like to begin with a positive statement of the Government's attitude to overseas students and our basic approach. Over recent years there has been the growth of a suggestion that we do not welcome the presence of these students. The hon. Gentleman tended to suggest that the Government were opposed to overseas students. Let me make it absolutely clear that these students, who come in their thousands to our universities, polytechnics and other establishments of further education to take advantage of a wide range of courses at different academic levels, are certainly welcome.

It is a long tradition of academic institutions generally and of the United Kingdom in particular to admit students in this way, and successive Governments, including the present one, have watched the numbers go up each year. So let there be no mistake about it; we do not seek to go back on that tradition. What we are doing is to decide where it is right to draw the balance in terms of numbers and total costs involved—which, I may say, are considerable—and to seek a fairer, more rational policy in this regard for the future.

Let me, however, begin with the immediate issue of fee levels. Even the previously announced revision, which took effect last year, which was necessary as part of our reduction of public expenditure, and which applied to home students also—indeed for many of them the increase was much greater than for overseas students. It still means that only between 20 per cent, and 25 per cent, of the total costs of the education provided is met by way of fees. At one time there was a prospect of further considerable increases for 1978–79. But as long ago as last summer I told the House of the Government's hopes that fees would not have to be increased for 1978–79 in real terms. I am happy that we have been able to recommend just that. In Circular 2/78, which was issued in January this year to local education authorities—a similar document was sent to the universities—my right hon. Friend was able to recommend that no further increases be made above current levels beyond what was needed to maintain the existing rates at constant prices, which meant an increase of just under 9 per cent. Thus, while I am very willing to discuss the wider issues involved, I felt it right to point out at the outset that criticism of our latest adjustment does seem misplaced. We had to recommend that kind of small adjustment because without it fees would have been reduced in real terms. For economic reasons, that was not a practical proposition. But we have kept faith and done no more than this.

I understand that the hon. Gentleman is opposed to the existence of the fee differential for overseas students, and he may wish to see it abolished on this occasion. Indeed, I wonder why he did not wish to see it abolished at any time since its introduction in 1967, when the hon. Gentleman himself, though not in my Department, was a distinguished member of the previous Government, in the Foreign Office, where he would have been in a very strong position to advocate that very policy. But that was not done.

Successive Governments have tried to count the cost of such a concession and have not been able to give it the necessary priority against other concessions that might be needed, for instance to the vast numbers of home students who pay their own fees—for let it not be thought that all students, or even all those on full-time advanced courses, qualify for mandatory grants.

Let me tell the hon. Gentleman and the House of the costs to public expenditure of abolishing the differential. We estimate that it would cost approximately £12 million a year just to abolish the differential for overseas students. If, as the latest NUS proposal suggests, we abolished all tuition fees, the costs would be £50 million a year for home students and £60 million a year for others, making a total of about £110 million in all.

I ask the hon. Gentleman to be careful, whether he talks about all students or whether he merely talks about overseas students. He represents a party which tells this House that the Government spend too much. He is saying that his party would reduce public expenditure, although it would spend more on the police, defence and many other matters, indeed, the hon. Gentleman is saying that even though the cost would be £12 million, he would spend more money on overseas students by abolishing the differential, which, unfortunately—I repeat that—this Government have had to retain.

Although the Government are considering alternative ways of supporting overseas students, the differential has not been as unreasonable as some have suggested. We welcome overseas students here, but I do not think we should treat them more favourably than home students. Home students themselves, or their parents, do contribute to the cost of providing education through United Kingdom rates and taxes, while overseas students do not, so a differential charge for overseas students does help to even things up.

Moreover, the fee paid by overseas students has to be considered alongside the cost of provision. The hon. Member was given figures in reply to his Question in the House on 14th February on the cost of providing higher education or technical training for an overseas student for a year. These figures were on the low side, because they did not include debt charges or capital costs but even then, for example, the gross average institutional recurrent cost for an overseas student OH a university course was nearly £2,500. The actual cost of some courses, say, medical or veterinary, could be double that, so the current differential of £100 for postgraduates and £150 for undergraduates is by no means disproportionate.

Let me also deal with the other arm of Government policy to which the hon. Member referred, which is often charged against us, namely, that of limiting total overseas student numbers. It would be as well to remember the reasons for this. It was, of course, part of the whole fees package announced in 1976 and designed to start producing public expenditure savings in 1977–78. I will not go over that ground again.

Lest it be thought that our sole purpose is to reduce the number of overseas students to some wholly restrictive number, well below that of our traditional response, let me remind the House that the figure for which we are aiming, namely, the level reached in 1975–76, is 72,000. Let us compare that figure with those before. In 1970–71, we had a total of 32,000. Did the hon. Member think that too low, and did he say so at the time? To go up from 32,000 to more than double that figure in just five years is to me a massive increase. How far indeed could we keep on increasing at that rate? If the hon. Member now thinks 72,000 too low a figure what number would he suggest?

My hon. Friend the Member for The Wrekin (Mr. Fowler) mentioned another aspect which tends to be overlooked. We are planning ahead on the use of resources up to 1990. We all know that these resources are not unlimited, and if we control them for home students it is only right that we control them also for overseas students. If we did not, the number of overseas students could well continue to rise, and a number of home students might well be deprived of places as a result. My right hon. Friend could not view such a prospect with equanimity. It is thus a question of balance—of admitting the number of overseas students that we can afford within the resources.

My hon. Friend talked about the late 1980s. Outside the House I made a speech about the extension of the university programme. My immediate problem as a Minister is not the late 1980s but the run-up from now until 1982 with the increasing number of 18-year-olds available to go to university.

To any institutions which complain of the difficulty of complying with this policy, I can only say that the policy has been public knowledge since November 1976. Institutions were asked to begin to curb their intakes for 1977–78 as long ago as January 1977. If they now have problems in getting down to their limits for 1978–79 this can only be due to a large extent to a failure to heed earlier advice that the Department gave. In other words, the holding operation should have begun with the intake of September 1977, so that any remaining reduction next September would have been a more manageable step.

I am aware that some overseas students—and home students—face hardship as a result of the 1977–78 fee increase. However, many overseas students are supported under the Government aid programme or by their own Governments or by other sponsors. Moreover, a further 600 post graduate students get help with fees under the ODM's fee support scheme.

I have dwelt, I think justifiably, on the massive assistance by way of subsidy that we give overseas students. But we need still to consider very seriously whether we are using the resources that are available for the support of overseas students to the best advantage—both for them and for us. On this point I find myself in agreement with the hon. Member.

Let us not be too pious about this. Our motives in providing financial assistance for students from other countries are not entirely disinterested. There are, of course, deeper issues involved here; issues which have their origin in earlier colonial exploitation and which call for measures to avoid the whirlwind which otherwise we might well reap. But without delving into what some might dismiss as obscure moral issues—I myself would certainly not dismiss them—we can point to more concrete and current spin-offs.

There is no doubt that many an overseas student who acquires his technological skill in our educational institutions will, when he attains a position of influence in his own country, as many of them do, turns instinctively to a British product and expertise. This is a hard fact, even if it is one that is difficult to quantify. It is thus to our economic advantage to provide support for such overseas students. But this is less than half the story. By all means let our mercenary instincts play their proper role; but let our moral duty here be paramount. I have said that the resources at our disposal are limited, and that we must consider how best they can be deployed. Given this, there is no doubt in my mind that we must devote the greater part of these limited resources to the support of those students who are most in need.

The present system in no way measures up to this requirement. Apart from those who attend special tailor-made courses charged at full economic cost, every overseas student who comes here on his own or his Government's initiative, whether he comes from the oil-richest sheikdom or the most destitute African republic—let us recall that many poor come from rich countries just as rich come from poor countries—receives a subsidy up to 70 per cent, or more, even when he pays the differential fee. This surely does not make sense.

The hon. Gentleman will be aware that we are giving very serious consideration to this matter. As I have indicated, we have to bear in mind the economic advantages that stem from the presence of overseas students in our institutions. We have also to bear in mind our obligations to our European partners in the EEC. But, above all, we must so arrange matters that the bulk of the available resources are channelled to those overseas students and to those countries that are the most deserving, and most in need, of help.

I do not take the comparison made with some European universities. Indeed, fees tend to be cheaper at some of those universities, but so is the standard of tuition. They have nothing like the system of student support and the ratio exists in our universities. I wish the hon. Gentleman had compared some of the costs in America and Canada with our costs and had not merely taken the overcrowded universities of our European partners.

Thus, I would not for a moment claim that our policy on overseas students is perfect. That is why we have embarked on the longer-term study to which I have referred. Nevertheless the position we have already reached is surely impressive. We have many thousands of students here at present and we are devoting well over £100 million per annum to their education. That is not a bad record for any country—

The Question having been proposed after Ten o'clock and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.

Adjourned at twenty-eight minutes past Eleven o'clock.