Higher Education

HC Deb 29 July 1982 vol 28 cc1323-53 10.44 pm

Mr. Ted Graham (Edmonton)

I have pleasure in introducing this debate. Some hon. Members may know that I am interested in education, but I do not profess to be a specialist in the subject. However, in order to speak on the subject one does not need to be such a specialist. One must first be a caring constituency Member. Another qualification is that I am a father with two sons and a wife who is a teacher and who was a mature student. In my constituency I have several units of higher education. Finally, I believe that I have the privilege of being the only Member of Parliament to be awarded a Bachelor of Arts degree by the Open University.

My anxiety concerns the future not only of education but of the nation. Conservative Members constantly refer to the seed-corn of the nation, particularly when talking about small businesses, and how that appears to be neglected and not given a fair crack of the whip. If we are to talk about seed-corn and the need to nourish it we must apply those arguments to education and opportunity. If we do not, children, teachers and administrators will be seriously affected.

During the debate my hon. Friends and I will be asking several questions. I am delighted to see that the Under-Secretary of State is in the Chamber. I know that he follows these matters closely and that he has left a good first impression of his care and concern for the future welfare and well-being of the Open University.

I begin with the events of July 1981 when a substantial shock was given to the higher education world by the decisions of the University Grants Committee and the advice, guidance or instructions—whichever word one prefers—that it gave to a range of universities. They were immediately plunged, as one or two people were moved to say, into devolving a strategy for survival. Many people in the higher education world saw the announcements in that light.

The impact of the announcements on Oxford, Cambridge, Durham, Bath and York universities was light compared with the effect on the universities of Salford, Keele, Bradford and Stirling. Some of those universities were docked by more than 30 per cent. of the money they had previously assumed and could have used. Phrases such as "We are bleeding to death" were used. Bristol university, which the Minister will know better than I, was requested to cut its budget by 15 per cent. Translated into logistics that meant that to maintain an adequate staff to student ratio the university was being invited to operate with a cut of 5 per cent. in the student body.

Those are the realities of higher education and the impact of Government policies. The Minister is familiar with the collective views of the Committee of Vice-chancellors and Principals, because in November last year Albert Sloman, its chairman, wrote a letter to the Minister which is now a matter of record. On behalf of the vice-chancellors he wrote: We believe the Government's current policy towards the universities to be profoundly mistaken and highly damaging. It is a policy which will seriously impair the quality of the work of our universities and jeopardise the very distinctive contribution which they make within our system of higher education. It is a policy which will involve the loss of some 10,000 places for new home students in each of the next two or three years, the very years when the number of qualified school leavers reaches its peak, there is a reduction in opportunity for young people willing and able to go to university of something like one in seven. It is a policy which, in our view, is likely to save little or no money in the short run since the savings on recurrent grants have to be set off against the cost of compensating staff for dismissal. If so, the damage to the standards both of university teaching and research, in some cases irreparable, and the sharp reduction in opportunity to those born in 1963 or after will, in terms of public expenditure, have been all for nothing. The Minister will be able to set the same facts in a different context which is not so sensational, but the writer of the letter is no slouch. He tries to moderate his language and makes a case which is designed, not to inflame, but to impress.

The vice-chancellors recognised that not only would there be 20,000 fewer students in the universities as a direct result of Government policies but that there would be 4,000 or 5,000 redundancies in universities staff.

The letter continues: We are, in comparison with our industrial competitors, a sadly under-educated and under-trained society … These are the reasons why we consider the Government's long-term policy for our universities to be fundamentally wrong. Mr. Sloman is entitled to make his assessment of the consequences of Government policy, just as the Government are entitled to put in motion a policy which they believe carries out their economic and education policies.

We want to consider the impact of those policies, not merely in July 1982 but in July 1983 and July 1984. The cuts in cash and in other terms must have satisfied some end, but for the life of me I cannot understand how they make sense. We do not think that they make sense in the national interest. They do not make sense in terms of saving money when one considers the cost of redundancies. They do not make sense in terms of research and maintaining our high standards of education.

Education is now expenditure-led. Finance, not the quality of education, is now the dominating factor. A cash limits policy is now being operated. That reverses the policy operated in the Robbins era of 10 or 12 years ago when one could see a secure climate in which higher education could be planned and when there were long-range policies. They have been replaced by a year-by-year expenditure consideration. How should universities tackle planning in a period of unpredictable budget reductions? The Minister will be unable to tell us what financial picture will face the universities this time next year or the year after that. I am sure that he recognises that at this level of education it is necessary for there to be some certainty about the income that will be provided. It is clear that planning has been abandoned. When that happens, we degenerate into resource deployment or withdrawal.

One of the chief qualities of academic leadership is the recognition and encouragement of the qualities in others. The key to that is an ability to react quickly to changing circumstances, new opportunities and new ideas and to be able to think fast on one's feet. The university world has learnt to cultivate those traits and they are certainly needed now.

The funding of the Open University is somewhat different from the funding of traditional universities. Over the past two years the Government have seen fit to interfere with the OU's funding; and that has been observed with dismay by the OU's council. The OU has not escaped the economies and the Government's strictures. I pay tribute to the valiant efforts of the staff at all levels. They are determined that the university shall survive. They are dedicated people. Many of them have worked for the OU for many years and they have seen a life's work put at risk.

The character of the Open University is unique. It is called "Open" because it is open to all. In 1972 the percentage of the student body in skilled trades, manual work, commerce and transport was 16.1 per cent. By 1981 it had risen to 23.3 per cent. Those engaged in shop and personal services increased from 4.4 per cent. to 6.3 per cent. The percentage of studying from their homes was 11 per cent. and it increased to 16.7 per cent. Those whose vocation was in education reduced from 30.2 per cent. to 16.4 per cent.

The Open University has often been called the university of the second chance. The first chance passes many people by because they are in the Services, engaged in bringing up a family, involved in a family business or looking after their career. Many of them are studying before they even begin their day's work. Many of them are snatching an hour or two during the day's work. When I obtained my degree, someone asked me "How did you study?" I replied "I did my studying on the Victoria line". I spent about 40 minutes twice a day travelling up and down the Victoria line. At the end of a week I was able to study for about six or seven hours. That is the sort of device that OU students cheerfully apply to make up their education.

There is a great difference in support for the Open University student and the normal university student. No question can be raised about a difference in the quality of the awards. The Open University awards are comparable at least in academic excellence and acceptability to the awards made in other universities. The cost of study at the Open University for a one-year course, when I took it in 1971–72, was £20. That increased to £120 a year in 1981. That increase is due partly to inflation and partly to Government policies.

To obtain a degree of six credits, the total cost to the student in 1982 will be £1,273. The 1981 figure was £1,107. That is an annual increase of 15 per cent. When one takes reimbursements into account, the cost of obtaining a degree has been increased by 22 per cent. Conservative Members argue that, if something is worth obtaining, it is worth studying and paying for and that, after all, the students get the benefit of a degree that may give them a better job or more satisfaction. But the lot of the Open University student, who is always studying part-time, is difficult.

Recently the Open University undertook a survey; and I shall inform the House of some of the observations. Of the students who were asked whether they found difficulty in paying fees, 50 per cent. said that either it was quite difficult or a severe hardship. Of the students who replied in that way, 56 per cent. were women and 44 per cent. were men. Significantly, among the lower income groups hardship as a factor in their thinking was related to income. Of those whose income was less than £5,000 a year, 74 per cent. said that to continue studying at the present level of fees was a hardship. Of those who earned between £5,000 and £8,000 a year, 60 per cent. said that it was a hardship; and of those with an income of £8,000 or over, only 38 per cent. said that it was a hardship.

The Minister should take on board another significant fact, which is that there is evidence that many more courses offered this year are being declined by potential students. Can the Minister answer the following questions? When can he tell the House about his expectations of Open University fees for 1983? Can he provide an early assurance that, if any fee increase is imposed, the rate of increase will be no greater than inflation? Helpful responses would be of great value not only to the university but to the students.

The survey also showed that only 30 per cent. of the students obtained help with their tuition fees from local authorities. That means that 70 per cent. of students receive no assistance. For summer school fees, 58 per cent. receive some outside help, but 42 per cent. receive no assistance. In other words, 42 per cent. get no assistance towards an annual cost of £200 or £300 a year. It is significant, in this political debate, that the percentage of students who had assistance towards their summer school was 76 per cent. in 1978, in 1980 it was 65 per cent., and in 1981 it was down to 58 per cent.

Another significant factor is that 18 per cent. of the people in the survey said that they would decline to take on courses of which one element was a summer school, because the cost of the summer school would be a material factor. The Minister, who is a caring Minister in this respect, ought to take fully on board whether we are now, by fiscal measures, distorting the true concept of the Open University.

Mr. Reg Race (Wood Green)

Before my hon. Friend moves off that point, will he draw the Minister's attention to the fact that there is a great discrepancy between the practices of different local education authorities in supporting students with assistance for their fees? There is a particular discrepancy between Conservative-controlled local authorities, such as Bromley, which do not give any assistance to students in their locality, and bodies, such as the Inner London Education Authority, which do. Could the Minister not do something about this and talk to his friends in his party?

Mr. Graham

I am sure that the Minister is aware not only that there are discrepancies but that, by and large, the picture presented by my hon. Friend is correct. I am not familiar with the political complexion of the councils that are generous, except that we know that as a general rule, when it comes to the question of education expenditure and discretionary grants, it is sad but true that the grant money that local authorities, even when they wish to be generous, have made available to them by the Governments and the rate support policy is becoming less and less.

I know that hon. Members on both sides of the House will be wanting to pay some attention to the level of grants. The Minister must defend the cut in the maintenance grant given to students through their course. The figures that I have show that in 1962 the maintenance grant was £335 in London, and in 1982 it is £1,900. However, if the £335 were uprated for inflation, the £1,900 should be £2,095.

Students in 1982 are having to study with £195 less than students in 1962. Elsewhere than London the figure was £320 in 1962 and in 1982 it is £1,595, when it ought to be £2,000. Students outside London are having to survive on a grant which in cash terms is £405 less. Can the Minister confirm those figures, because they are his figures, which he gave in answer to a written question a little time ago?

If the Minister does not wish to answer in cash terms, would he confirm another point? Taking 1979–80 as 100 per cent., when the grant was £1,245, by 1981–82 it had declined to 96 per cent. and in 1982–83 it has declined to 90 per cent. Over a period of three years—since the change in Government—students have had a reduction to only 90 per cent. of the grant of three years ago. There is the effect of inflation, but there is also the effect of Government policy.

The Minister must be aware of the devastating effect on education as a whole, and on non-mandatory students in particular, of the decline in the moneys available for discretionary awards. The Minister will also know of the HMI's report on discretionary grants. An HMI report on the effects on the education service in England of local authority expenditure policies for the financial year 1980–81 said, under the heading "Discretionary Grants": Just under half of the authorities are showing a decrease in expenditure on discretionary grants. Six authorities have increased expenditure, three from the lower level baseline group. In the remainder, funding is unchanged. Economies are made in different ways". It then goes on to list the ways in which economies are made.

The NUS has provided information about discretionary grants, and says: Cutbacks in local authority finance have affected all services but discretionary award budgets have proved to be particularly vulnerable". Bedfordshire county council has just decided not to award any discretionary grants for students in 1982–83. Birmingham city council is about to make huge cuts in its provision. This comes after several years of decline, during which Ministers have made few attempts to assess the extent of provision or to propose any remedies. I hope that the Minister will comment on this situation, and tell us what he does to assist local authorities which want to provide discretionary grants but which cannot do so because the money is not available.

In higher education there is a knock-on effect. The students who are frozen out of universities are told to take a course at a polytechnic or college. The students who had intended to take a course at the polytechnic or college and find their places taken by the university students, are told to study part-time and become a semi-skilled worker. So it goes on. In the end, the only significant statistic is the number of people who would be in some form of adult education but who are now in the dole queue.

Recently we have seen staggering figures of the impact of Government policies on university courses. I am told that 250 university courses have been dropped in arts and sciences this year—at Salford 20 courses, at Aston 10 courses, and at Bradford 20 courses.

My hon. Friend the Member for Wood Green (Mr. Race) will be interested to know about maintenance grants at Tottenham Polytechnic. The grant is £1,595, of which £940 is allocated for accommodation and meals, but at Tottenham accommodation and meals cost £1,320. So a consideralbe part of the grant is eaten up in that way.

It is ludicrous that the Government have increased grants by only 4 per cent. It means that students with parents on the average national wage will get £65 less from the Government, but the parents will pay £125 more towards the grant. Since 1978, grants have increased by 39 per cent., while the retail price index has gone up by 51 per cent.

The Secretary of State has given local education authorities their marching orders. In the wake of the latest savage cuts in Government support, he has washed his hands of the agony that he and his colleagues have imposed on hard-working councillors and worried parents by telling them how to do the impossible.

In reply to a planted question issued yesterday, the Secretary of State said: It will be for local authorities themselves to determine the balance of their expenditure between services, taking account of Government policies. I look to them to do their utmost to contain their pay and other costs and to manage their resources efficiently. I hope that they will then be able, without compulsory redundancies among teachers on any large scale, to avoid any substantial worsening in the present pupil-teacher ratio as the school population declines; to maintain the provision of books; to meet the growing demand from 16 to 19-year-olds; and to contract higher education in an orderly way."—[Official Report, 28 July 1982; Vol. 28, c. 506.] That is to treat local government with contempt. It is a recipe for continuing and escalating educational disillusion and despair. It will fuel the view among educationists, students and a growing proportion of the electorate, that the Government have relegated the education of our future generations way down on their list of priorities. I invite the Minister to refute that charge.

11.16 pm

Mr. Gwilym Roberts (Cannock)

I shall not delay the House for more than a few minutes at this late hour. In those few minutes I should like to emphasise the arguments that have been put forward so ably by my hon. Friend the Member for Edmonton (Mr. Graham).

I want to concentrate entirely on student grants, the main item that we are discussing in the debate. The low level of student grants and the cuts have a serious impact on the students and their families, on the universities, on the polytechnics and the various colleges, and on the economy.

Although there is little doubt that the cuts imposed in recent years have enormously worsened the level of student grants, we on the Opposition Benches cannot be smug. The sad fact is that student grants started at far too low a level. That is the key point. My hon. Friend talks about a 10 per cent. reduction since 1962. If one took the statistics at three or four yearly intervals over that period, one would, sad to say, find similar reductions in student grants.

Clearly, the level of student grants is too low, and that has been worsened by the astounding 4 per cent. offer for the current year. Although the statistics of recent years show a 10 per cent. reduction in students' real standard of living, the effect of that 4 per cent. figure—I am sure that the Under-Secretary would agree—is that at the end of this period the effective reduction in the standard of living of the great mass of students will be about 20 per cent.

However badly the past Labour Government treated the student population, there is no doubt that matters have been made worse by the present Government. The result is that students do not devote themselves to their courses but try desperately to find an odd bit of work here or there. I mean "try", because these days they may occasionally be exploited, but in the main the work just is not there. That real problem affects the whole nature of the student body.

The impact on the students is substantial. Numerous instances can be cited in which the performance of students has suffered because of the pressure of their continually having to think about meeting the cost of living. Students just cannot operate. Many of us speak from experience, although conditions formerly were much better than they are now. A student cannot work effectively under such conditions.

There is ample evidence that many students give up their courses purely because of such pressure. It is not only the student but often his family who suffers. The National Union of Students has said that some of the parental contributions are fictitious. That may be true for a few students. However, on the whole it is not that the contribution is fictitious but that most parents have to scrape the bottom of the barrel and make enormous sacrifices to keep their children at college. The problems have been greatly increased by that 4 per cent.

That is the general problem. There is a worse aspect. My hon. Friend the Member for Edmonton mentioned discretionary grants. I shall not discuss the Open University, as my hon. Friend is far more expert than I on that subject. However, there is a general problem with discretionary grants. I am sure that my hon. Friends will agree that there should be no such thing as discretionary grants. Once a student has the qualifications, and is accepted for any course, most of my hon. Friends and I believe that he should be entitled to a full grant to pursue it.

Mr. Graham

Perhaps I might read an extract from a letter that was sent to the Open University. It states: I would very much like to see the end of the discretionary grants, with all part-time degree courses receiving mandatory grants which is the case, as you know, if students are on full-time courses. Full-time students are a far greater cost to the country since they require maintenance as well as the payment of fees". My hon. Friend might be interested to know that that letter was written by the Under-Secretary of State for Education, the hon. Member for Brent, North (Dr. Boyson).

Mr. Roberts

The Under-Secretary no doubt displays wisdom from time to time. Many Opposition Members believe that there should be no such thing as a discretionary grant and that a student who qualifies should have a grant to meet the cost of the course and of his maintenance. Often, many unemployed people—both young and old—would willingly take up full-time education if it were not for the fact that no money would be made available to them. The problem is now worse because of the extremely high level of unemployment.

There is no doubt that the number of discretionary grants has fallen steadily. The National Union of Students has also provided me with a paper. I do not believe everything that the NUS tells me, but it cites several authorities, including Bedfordshire, in which the number of discretionary grants has fallen by about 40 per cent. in the past three years. As has been suggested, the damage has been much greater in Tory-controlled authorities than in Labour-controlled authorities.

The number of discretionary grants awarded by many local authorities has fallen by about 40 per cent. That has had a devastating effect on many courses. The peculiar thing is that the Government claim frequently that they believe in revitalising the economy by providing all the new management techniques and the scientific know-how required. Many of the courses—diplomas in management techniques, and so on—depend upon discretionary grants. The Government are sabotaging their own case. The only courses that do not rely on discretionary grants are the first degree and HND full-time courses.

The Government are undermining their policy by reducing the number of discretionary grants for courses that are necessary for the revitalisation of the economy. The Government cannot pass the buck and say that the reduction is being made by the local authorities. One of the worst features of the Government's policy is that they get the local authorities to do their dirty work. The Government may say that the actual reduction in grants has been a tiny percentage only—no doubt the Under-Secretary will tell us later—but they are squeezing the pips out of the local authorities and the discretionary grants are vanishing overnight.

That is a position that cannot be allowed to continue. One of the greatest indictments of all Governments—Labour and Tory alike—in post-war years is that the proportion of children from broadly working-class families who attend university has been falling over many years. As my hon. Friend the Member for Edmonton said, the number of students and the level of training is less than that of most of our world-wide industrial competitors. We cannot allow our industrial competitors to be better trained than we are.

Equality of education is a fiction because there is no money available to allow the majority of people in the community to benefit from higher education. Whatever previous Governments may have done, the present Government have a responsibility to increase substantially student grants and make them more widely available, if they believe in educational equality and the revitalisation of the economy.

11.28 pm

Mr. Robert Rhodes James (Cambridge)

rose—

Mr. Phillip Whitehead (Derby, North)

If the hon. Member for Cambridge (Mr. Rhodes James) can contain himself, he will find that in the House we are counted by number, as in the good book, and not necessarily by subject. I hope that the hon. Member for Cambridge, like the other fellows of All Souls here tonight on the Government Benches, will give me the courtesy of a hearing.

We are having this debate because we think that it is crucial that the public should appreciate the Government's forcible restructuring of education. I congratulate my hon. Friends the Members for Edmonton (Mr. Graham) and Cannock (Mr. Roberts) who have spoken with characteristic clarity and passion. My wife is a graduate of the Open University and whenever my hon. Friend the Member for Edmonton speaks about discretionary grants and of those who have come to higher education late in life the House hears the authentic voice of experience which counts for more than the glib clichés that so often distort our debates.

The background to the debate is simple. It is of a cut in student numbers and in expenditure on higher education between 1981–82 and 1984–85. As the Under-Secretary came late in the day to the Department and sits at the right hand of the Secretary of State, he should tell us whether he can with equanimity contemplate the figures that I am discussing. Let me give him a few.

Although expenditure on higher education overall will rise in cash terms from £2.75 billion in 1981–82 to £3.1 billion in 1984–85, in fact it represents a drop in resources of about 10 per cent. in real terms. The number of teaching posts in the sector as a whole will be reduced by over 10,000, or one is six of the overall total of people teaching in higher education. By 1984–85 there will be at least 30,000 fewer undergraduate and postgraduate students than in the academic year that we have just completed. The annual undergraduate intake will have been reduced by 18,000. The projection for universities such as Salford is that they should be taking in two years' time one-third fewer students than they are at present; and still they are asked to be viable institutions. They are not told that they must adjust the unit of result and take more students with the same level of academic staff; they are told that there must be an absolute reduction in both numbers and expenditure.

Most crucially, if we are considering opportunities for students, the position is that the age participation ratio will have fallen from 12.9 per cent. to just over 11 per cent. One in eight students will be excluded who would have been included in higher education in this academic year but for the cuts.

The Secretary of State was in the Cabinet when the then Government introduced the framework for expansion White Paper a decade ago. It stated that we should realise the constraints on public expenditure but looked forward to an age participation ratio of 22 per cent. by 1981. We cannot say that that was in the mad days of Barber and the right hon. Member for Sidcup (Mr. Heath). The then Secretary of State for Education and Science was none other than the present Prime Minister, although I have heard her say on television and in other places that the document was never meant to be a framework for expansion. But that is what it said.

Although we do not have a White Paper so courageously entitled, we now have a framework for contraction, and it is that that we are discussing. As I have tried to show, the contraction will strike savagely at the prospects of many young people who have believed throughout their formative years that at the point of entry into higher education they would have the necessary currency and qualifications. To frustrate them at that point is one of the cruellest contricks of any post-war Government.

The number of 18-year-olds will peak in 1983–84. It has been rising by about 3 per cent. a year. Even in the 1990s the figure will be only 5 per cent. less than in the peak year, yet we are saying that there will be fewer opportunities and places and less money. That is not a policy that we want any humane or enlightened Government in this country to adopt.

Mr. Neil Kinnock (Bedwellty)

No other Government are doing it.

Mr. Whitehead

That is the point. If we were complacently contemplating our record in education and reskilling the vast majority of our young population so that they were better fitted for the complexities of the world of the 1980s and 1990s, perhaps there would be philosophical justification for entering into that argument. I fail to see it. Our record in many of those significant areas is worse than that of our predominant European and North American competitors.

There will be fewer university students. There will be fewer polytechnic students. In the last academic year there were 5,000 fewer university places. What happened? Anticipating the trend that was imposed on them by the Government, students went to the polytechnics. In many cases the application levels for the polytechnics rose above the level of places, even at the projections for last year. In some cases there was a disproportionate effect on the universities. However, I do not believe that that will happen in the coming year.

There is now a body called the national advisory body, presided over by Mr. Christopher Ball of Keble college and the Under-Secretary of State. They are now saying not that there will be a worsening of the staff-student ratio or a diminution of the unit of resource but that in absolute overall terms they want fewer places, fewer courses and fewer institutions in the public sector of higher education, beyond the decimation that has already been visited on the universities.

Mr. Christopher Ball is a candid man. He says more and is more open than Ministers. At the CLEA conference a couple of weeks ago he said: While some of the retrenchment can, no doubt, be achieved in some institutions by further reducing unit costs, a substantial part of it must be met by a reduction in the provision (by amputation, that is, rather than by further slow starvation), and—in some cases—this may mean the total withdrawal of pool funds from a number of institutions. It would be easy to share out the 10 per cent. cuts equally to all". It is easy for him to say that. It is not so easy when one is at the receiving end. He stated further: you wouldn't need a NAB to do that: it could be done across the desk in the DES. NAB is intended to—and it intends to—discriminate: that is, it will try to locate and define the 90 per cent. (or so) of the LAHE provision which is most valuable and recommend its preservation and protection at the expense of the remaining 10 per cent. The projections were being invited from the various institutions. He went on to say: we seriously expect to propose cuts of 100 per cent. in some cases. Therefore, we are contemplating not merely an overall fall in the number of university students but the depression downwards throughout the system through missed opportunities of people who will take their opportunities at other levels, thereby displacing others who will get fewer opportunities, while at the bottom there will be no opportunities.

In the public sector cuts are contemplated over and beyond what the public sector has already suffered. The public sector is not as adequate a publicist of misery as are the universities and the vice-chancellors. Now it will face at the minimum 10 per cent. cuts and the wholesale closure of some institutions. The Government are contemplating cuts, which will reduce the opportunities for a generation of potential student.

I say in all seriousness to the Under-Secretary precisely where that impact falls. It falls in all cases on the marginal students. Those of us who have discussed those questions with the new vice-chancellor of Salford university, Professor John Ashworth, are impressed with the case that he has made. Salford university is threatened with 44 per cent. cuts by the UGC. In such an institution a student may come forward with less than brilliant A-levels. However, he may come out of an institution such as Salford university with a good degree, good job prospects and wider horizons in life.

When the UGC went on its peregrinations that factor was not taken into account. Those considerations mattered less to the UGC than did the centres of excellence, given the traditional loyalities of the present members of the UGC.

Mr. Christopher Price (Lewisham, West)

Is not the trouble that those considerations were taken into account, but the formula that the UGC worked out to make the cut included the A-level grades of undergraduates? The result was exactly as my hon. Friend describes. The university that succeeds in lifting someone with three E grade A-levels to a first-class honours degree gets chopped, but the university that succeeds in lifting someone with three A grade A-levels to a first-class honours degree gets enhanced funding. There cannot be any sense in that.

Mr. Whitehead

My hon. Friend is correct. The concept that the UGC failed to grasp and which the Government, in their willingness to instruct the committee at that stage, omitted was what I call the concept of added value in higher education. There is added value in taking the student with three E grade A-levels and making of him more than might have been expected at the point of intake.

It is easy to turn Old Etonians into fellows of All Souls. Without disrespect to the Under-Secretary, we all know that such people arrive at university with certain advantages, which will be honed and polished while they are there. It is a different matter to enhance the value of the educational experience that the student at the margin receives.

It is because the institutions in the public sector and the university sector that were attempting to do that were disproportionately hammered by the UGC that I have lost all confidence in the committee, and I think that that is a widely held view among the Opposition.

The Under-Secretary said recentlty that the Government did not propose to instruct the UGC but would let it continue to go along its own way. That sits ill with the letter that the Secretary of State sent to the UGC a week or so ago. My hon. Friend the Member for Lewisham, West (Mr. Price), who is Chairman of the Select Committee on Education, Science and the Arts, has been involved in a frank and comradely dialogue with the chairman of the UGC for some months, and he may be able to tell us whether he regards the Secretary of State's communication as amounting to an instruction. As Private Eye would say, I think we should be told. We ought to know whether the UGC is to be allowed to continue to perpetrate the sort of errors that have marred its performance over the past year or whether there will be a measure of instruction.

As the Under-Secretary chairs the national advisory board, we ought to know how he proposes in that role—in loco Parkes, as it were—to avert in the public sector the errors that the UGC has committed.

The questions raised by my hon. Friends relate not so much to the overall cuts in student numbers, ferocious as those have been, as to the position of the individual student. We have to consider that impact. There is another sort of marginal student, in addition to the one to which I referred earlier.

A marginal student may get a place; he gets the currency that buys higher education, even when the rate of exchange is constantly being shifted against him by the Government, but finds that the number of discretionary grants by local authorities has been shaved, almost to zero in the case of some part-time courses.

A student may find that, in addition to all the other difficulties and disadvantages, the parental contribution is now such that he is receiving less from his LEA and his parents are being asked to provide more, at a time when costs have continued to rise, because of inflation and other reasons.

I am glad that the Secretary of State has returned at this stage, because he has been asked about the student grant. He makes frequent appearances, which are eagerly awaited, before the Select Committee, when he tells us in his jovial way that, while more may not necessarily mean worse, fewer probably means better, and he makes other similar statements. When the right hon. Gentleman was asked about the student grant and whether we were now discussing the students' position and their hardships in terms of public expenditure considerations or the welfare of the students, he said in April that it was possible that the students would suffer substantial real hardship and that it was not easy to find a part-time job. I am glad that the right hon. Gentleman has discovered that. He also said that the students should try part-time earnings … or loans or stinting or a combination of these three". The Secretary of State must be cured of that Chatterton complex. Starving in garrets is not much of an answer to give to the student population in the immediate future. We have not done a service to the students by telling them that their increase should be of the order of 4 per cent., wildly out of line with the fees that they have to pay, the costs of residence, tuition and so on, and way behind the allocations that even this Government have made in their recalculation of such matters as supplementary benefit. How can it be right to tell students, in the position that they are in, that the increase that they receive will be only of that order and so far out of line with the other calculations that have been made?

I do not believe that the Government retain any credit or credibility with the student body as a whole as a result of the way in which they have operated. Indeed, for a party that at least flirted with the idea that the means test and the parental contribution might be abolished, their main achievement has been to bring the parents of a further 20,000 students into the category of making the parental contribution. We all know of the shortfall, which may be 50 per cent. or 60 per cent. or more, in the paying over of that contribution by parents.

I want to end as I began, by referring to the White Paper "A Framework for Expansion". In the next few years we should be looking at expansion, asking ourselves not how we can keep people out of the universities, polytechnics and colleges but how we can encourage more and different people to come in, taking different routes, moving at different paces; how we can encourage them to do that during the period of their schooling; how we might pay them the kind of educational maintenance allowances from the age of 16 to 18 that will encourage them to stay on at school and be part of a wider intake into higher education in the future. We should be examining every possible way of increasing the age participation ratio, not diminishing it.

Therefore, I end by asking the Under-Secretary two or three questions. I am sorry that I have to put them to him, because I know that he is not responsible for these policies. In such distinguished company I would not talk about organ grinders and monkeys, but we should not be talking to the first violin when the conductor is here.

Mr. Kinnock

The composer.

Mr. Whitehead

We all know what happens when a composer conducts his own piece.

The Secretary of State should be replying to the debate, because these are his policies. He will be mute throughout, and the Under-Secretary will have to reply. That is their problem.

My first question is this. The Secretary of State said in the presence of his hon. Friend that the Robbins principle was being reassessed; he recently told the Select Committee that it was not dead but sleeping. How is it being reassessed? What form of access to higher education shall we offer the student body beyond the years 1983–84? What lessons are we learning from the wholesale fiasco of the allocation of the finances in the university sector and most probably, in the public sector in the past two years? Is there now to be instruction to the UGC or is there not? Is there to be reform of the UGC or is there not? Are we to have public debate on and public criteria for the way in which the finances are given out? That is the essence of the debate—the role of the institution and the catastrophic impact it has had on the universities and student numbers in the past two years.

What would the Under-Secretary of State say to two categories of student? First, what would he say to the qualified student without a place who worked hard to get the necessary qualification at the age of 18 and who now finds the door slammed in his face? Secondly, what would he say to the student who has achieved a place but finds that he has inadequate means of support—other than the wise advice that he could try stinting—to go through the process of higher education? It is all very far from the world of All Souls—I do not mean that in any abusive sense.

Those of us who were the first generation in our families to go into the world of higher education believe that we have a definite responsibility. The Secretary of State took a rather different route from most Opposition Members. If he thinks about it for a moment, he will realise that that is true.

We need an effort of understanding and comprehension of the problems that are now being faced by people who are being shut out of the possibilities and potentialities of higher education who would have expected it, post Robbins, at any time in the last generation.

11.51 pm

Mr. Robert Rhodes James (Cambridge)

I sincerely apologise to the hon. Member for Derby, North (Mr. Whitehead) for not being here for the whole of his speech. I thank the hon. Member for Edmonton (Mr. Graham) for introducing the debate although, as he will understand, I do not agree with all that he said. It is a key issue, yet one of the most neglected subjects in all our debates. We all owe the hon. Member for Edmonton a considerable debt for raising the subject.

I should like to emphasise an aspect that has not been touched on—unless the hon. Member for Derby, North did so while I was briefly out of the Chamber. It is often forgotten that in higher education—I do not mean just universities, but all institutes of higher learning—we are providing, for admittedly a minority of people, the opportunity to acquire the love of learning for its own sake.

I become worried when some of my right hon. and hon. Members talk about higher education as though it is merely a provision for technical expertise. It is much more than that. That attitude makes it difficult to explain why we invest the sums we do in higher eduucation. We invest in brains and people for the future, and potentialities unknown.

I should like to draw attention to the report of the Overseas Students Trust, in which I was involved, and to the problem of overseas students. As the Member of Parliament for Cambridge I obviously have much to do with matters pertaining to students and grants. The House should be reminded that the Overseas Students Trust is financed entirely by business. Although it is not at all an academic organisation, it has come to the clear conclusion that Britain needs a real policy on overseas students.

The decision to charge full fees in 1980 was right but perhaps rather excessive.

Mr. Kinnock

Oh.

Mr. Rhodes James

I am trying to make a serious point. Perhaps the hon. Gentleman is not aware that before 1980, £150 million of British taxpayers' money was being spent indiscriminately on a series of grants for overseas students. That is not a decision that I could seriously have supported.

I spent 18 months on this, and what I and the Overseas Students Trust are suggesting is a policy that does not go to that extreme but tries to provide a serious policy for overseas students that will benefit not only developing countries but our own institutions and which the British taxpayer could support. That is exactly what the trust's report seeks to do.

Certain priorities and recommendations are set out in chapter 7 of the report. I add to them my personal view that we should concentrate, although not exclusively, on three categories: first, Commonwealth students; secondly, postgraduate and research students; and, thirdly, certain exceptions such as Cyprus and North America. Cyprus has no university of its own, so first degree courses should be made available here, and the North American connection, although it is often ignored, is a very strong link between this country and North America.

As I have emphasised before, the subject of overseas students involves certain unquantifiable factors. The value is not only to the students who come here from abroad but to our own students. Exposure to and understanding and knowledge of other cultures and experiences provides considerable additional value for our own students. That is unquantifiable, but I know from my own experience how important it is. The element of friendship and understanding, too, is unquantifiable but it is a matter of profound importance.

I agree with the hon. Member for Edmonton that higher education should not be considered in isolation. One of the great dangers is talking about universities and higher education generally as though it were a completely separate issue when, in fact, it is part of a much wider problem. I am increasingly worried that in the House and in the general debate about education we fail to understand that the present situation is unparalleled in that all the assumptions of the 1944 Act, which were quite right at the time, and many of the assumptions on which we have operated since then, are no longer really relevant to the society in which we now live—a society in which it will be very unusual for a person to remain in the same profession or specialty for the whole of his or her adult working life. That being so, we must surely review very carefully our understanding of what education really means.

Mr. Kinnock

I entirely agree about the need not simply to modernise but constantly to revise perceptions in education so that they serve the generation being educated.

I must disagree, however, with the hon. Gentleman's view that the 1944 Act did not involve eternal verities. Sections 41 to 43 of that Act provided for the supplementation of education, not on the basis of people having had some form of education before but for all who wanted it. All that has subsequently been absent is the availability of resources to allow people effectively to undertake it. Those resources are now being cut still further. Why does not the hon. Gentleman simply ask for more money instead of dodging piously round the subject as he seems to be doing?

Mr. Rhodes James

When the Labour Government were in office, the total education budget was less than £8 billion. This year it is nearly £14 billion. That is an increase of more than 50 per cent. One cannot seriously argue that that is a cut.

Mr. Kinnock

It is a massive cut.

Mr. Rhodes James

It is not a massive cut. The hon. Gentleman knows that I am not trying to make a party political speech. This is a deeply serious subject. I am simply saying that I agree with the hon. Member for Edmonton on discretionary grants. If we are to regard education as a life-long process in which retraining and re-education will be crucial, we must look very hard and seriously at some of the fundamental assumptions that dominate the education Acts.

I should hate this subject to become part of the political game. It is much too serious and important for that. I emphasise that the love of learning for its own sake, particularly by those who want to come from overseas, should never be lost sight of. If we do, we lose sight of the real glory of higher education.

12 midnight

Mr. Christopher Price (Lewisham, West)

I refer to the Overseas Students Trust report. It is a good report, but not particularly brave or radical. Its authors clearly cast it in sheer terror at what would happen if they asked for anything approaching what they really wanted. Therefore, it is drawn in modest terms.

This is an area where the Government must act. It is as much the responsibility of the Department of Foreign and Commonwealth Affairs as it is of the Department of Education and Science. By chopping £10 million from Malaysia we have certainly lost £200 million or £300 million worth of exports. I am sure that in historical terms the decision in May and June 1979 will be seen as the most lunatic decision in their own self-interest of any British Government since the Second World War. Another case that has been argued is that £2 million will enable us to make a "Euro-concession" for Cyprus.

When the Government changed to what they call full cost fees for overseas students the universities asked whether they could admit the students at marginal cost. The Government replied that the Treasury allowed them to only look at the full cost and that marginal cost was irrelevant. Two years later the Government produce a report halving the home student fee with the justification that they want to pitch that fee below the marginal cost of taking extra students. One year the Government say that marginal costs are irrelevant, but two years later say that they are important.

It will be instructive to see whether the Department of Education and Science has the slightest idea of the marginal cost. In March the Public Accounts took evidence from Sir James Hamilton and Dr. Edward Parkes. Sir James Hamilton was asked to state the marginal cost of a student at a university. After some "humming" and "umming" by Sir James, the Chairman of the Committee, my right hon. Friend the Member for Heywood and Royton (Mr. Barnett), said to him: So you are taking the marginal cost at around £2,000? Sir James Hamilton replied: That is my estimate. So, the permanent secretary at the Department of Education and Science thinks that the marginal cost of a student in our universities is £2,000.

The Chairman of the Committee then set to work on Dr. Parkes. He said: But if you are teaching extra students in the same building with the same number of lecturers. I cannot see where you get a £2,000 marginal cost. Dr. Parkes said: My figure is related to your assumption that if the situation was as you described it the marginal costs would be very small". According to Dr. Parkes the marginal cost is almost nothing, and according to Sir James Hamilton it is £2,000 a year. That is an illustration of the Department with which we must deal.

In that context I should like to consider the letter from the Secretary of State to Dr. Parkes. It is written by a Department which believes that marginal costs are £2,000 to the chairman of the UGC, who thinks that marginal costs are almost zero. I do not know whether we are discussing a dialogue of the deaf, but the document is worth examining. It reads: Dear Dr. Parkes, When I visited the Committee with Mr. Waldegrave on 29 April I said that I hoped to let you have shortly a letter which would offer some guidance about the Government's view". The letter then offers four-and-a-half pages of guidance in closely typed A4.

If the Department is to change the whole concept of its relationship with the UGC and offer guidance it cannot continue to answer questions by saying "This is a matter for the UGC." It cannot have it both ways. If the UGC is in charge, the Department must leave the UGC to do the job. If the UGC is to be given severe guidance, the Department must take responsibility.

I recently asked the Under-Secretary whether it could be of interest to the Department if it heard that a university was to make itself bankrupt. The answer was that that was a matter not for the Department but for the UGC. That might have been all right under the arm's-length policy operated before 14 July 1982, but after that date and the issue of the letter, such an answer should not have been made. I hope that the Minister will instruct his functionaries, such as are here and such as are asleep in their beds, that they should not issue such answers.

I return to the letter, some of which is superb "Nineteen Eighty Four—speak." Praising the UGC, it says: In planning for the lower level of funding proposed the Committee have rightly tried to strike a balance between protecting scholarship across the whole range of university subjects, and seeking to enhance the contribution which the universities make to commerce and industry and the production of wealth. If one tried to say that in any university one would be greeted with hollow laughs. The cuts make neither objective possible. Try this for size. The letter continues: It is essential that the universities should maintain and develop the capacity to respond positively and speedily in terms both of structure and staffing to changing national needs. What on earth does that mean? Universities have no money except for ongoing, historic expenditure. They have to reduce staff and yet the staff that they would desperately like to keep go, on redundancy terms recently announced by the Government, while the staff that they would like to go dig in and stay. The idea of trying positively and speedily to respond to changing national needs is just a joke. The Minister should ensure that his staff does not write such sentences. The letter continues: I endorse the reference in your letter to universities of 20 May to the vitality of the universities of being able to initiate and sustain new developments in teaching and research. We all endorse that. We would love to initiate new developments in teaching and research. I am sure that my hon. Friend the Member for Bedwellty (Mr. Kinnock) endorses that. The letter does not explain how it is remotely possible to do that given the present level of funding.

The letter refers to the biotechnology initiative that has taken place involving the UGC. A Select Committee report has been issued today on biotechnology and due respect is paid to the recent initiative. Four universities have received comparatively generous sums and 12 have received tiny one-research-assistant type sums. That has been done in a commendable effort to save research places in biotechnology.

I shall refer to another part of the letter. I am not blaming the Under-Secretary of State, but he should read these letters before he allows his Secretary of State to sign them. The next part is headed "Staffing". The paragraph states: Concern that the limited opportunities for recruitment of staff will deny the universities a sufficient supply of young able people to ensure the continuing vitality of teaching and research is widely shared. By whom? Does the Minister share that concern? If he does, what is he going to do? If he is honest about the level of resources that has been made available by the Government, will he stop being hypocritical and say that he shares the concern? He cannot have it both ways. The paragraph continues: I hope that the Committee will give particular attention to the present situation and to what might be done to secure improvements and will give me their views in due course. Having read that sentence I am sure that the committee would say "Thank you very much, Sir Keith. We have considered this and we need some more money. That is the only way in which we can secure improvements."

The crunch comes at the end of the letter under the heading "The longer term". This is where the letter becomes extremely heavy and a new policy is introduced. It states: In this connection you will be aware that I have both privately to you and the Committee and publicly before select committees expressed the view that it might be appropriate for Ministers to take more responsibility that they have hitherto for determining priorities affecting the broad character of the allocation of resources to the universities. Fair enough; if that is the policy, that is the policy. The paragraph continues: The Committee are of course uniquely placed to assess and advise on the needs and capacities of universities both in relation to education and to the research base. But the main thrust of policy for the universities must take due account of policy for higher education as a whole, and of national social and economic policies; and at this level there will be some strategic decisions for which it would be appropriate for Ministers to take explicit responsibility and answer to Parliament. If that is the new policy, and if Ministers are to take some explicit decisions and the UGC no longer has the responsibility of assessing how much money the universities need and reporting to the Minister, the whole relationship has changed. It is a different relationship and it means a committee of the Department of Education and Science.

The Minister must recognise that, in the letters, he has changed the relationship that has existed since 1919 between the Department and the UGC. It was clear in 1979 that the UGC said to the Government "We cannot finance the universities within the total that you have allowed us." It is well known that the entire committee was close to resignation. That might have been the more honest course, which would have allowed the Department to run the universities directly, as it has pleaded in evidence to the Select Committee that it wishes to do. It wished a broad steer, and this letter is the nearest thing to a broad steer that we have.

The letters were issued to the press, but they should have formed a statement to Parliament about the changed relationship between the Department and the universities. The historic role of the UGC has been to assess how much the universities need, to tell the Department and then to distribute the money. The Minister is now saying that the role is different. It is not to assess how much money the universities need but to assess how much they need within the Government's social and economic policies. Need is now defined in the Government's and not the UGC's terms.

The second thing that the Minister said as a result of the letter is that it is no longer up to the UGC to decide certain priorities. The Department is taking over the exercise of some responsibilities. If that is so—the Minister can contradict me if I am wrong—it is a change of policy of such overwhelming importance that it should not have been announced in two letters to Mr. Ball and Dr. Parkes but should have been announced in Parliament. I hope that the Minister will now make that statement.

12.17 am

Mr. Reg Race (Wood Green)

Tonight we have the opportunity to debate not only the Government's policy but the policy for higher education that they should pursue. The destructive tactics that the Government have employed to cut resources in higher education have done nothing for hundreds of thousands of working class youngsters who do not have access to higher education and who will not have access to it in future because the Government have no idea about future changes in policy that would open such opportunities to them.

In asking what policy the Government should follow on higher education, some principles suggest themselves. The first is one that the Government have abandoned—the old and good Robbins principle that places should be provided for those who need or wish them. The second principle that is of fundamental importance is that the system of higher and further education should attempt to increase the competence of those who perform many different jobs, both for the public good and for their private gain.

Thirdly and the most important objective of all, the access to higher and further education should be opened out to provide channels to individuals who have not gone through the normal method of acquisition of educational assets—in other words, those young people who have not obtained the requisite numbers of O and A-levels to enter higher and further education establishments as now conceived.

Fourthly, there should be a policy of increasing and improving the real level of the student grant to the students in further and higher education, particularly full-time students. The grant has been at a pitiful level ever since the 1960s and has declined in real terms over the past few years.

Lastly, in relation to what my hon. Friend the Member for Lewisham, West (Mr. Price) has just said, we should open out and democratise the whole system of planning in higher and further education to make it accountable to Parliament. We should end the farce of the UGC allegedly planning for the universities, and particularly for that part of the higher education sector that it is supposed to be responsible for. Everyone knows that it does not set the real policies, which are established on the ground floor in a particular university or institution, and it does not control the level of resources that are allocated to it by the Government. That opening out and democratising of the planning of the higher education system is long overdue.

Those principles are the cardinal ones that the Government ought to follow and are not because they have different priorities. Those priorities are summed up in the one phrase that they are interested only in restricting the numbers of students in higher education on the ground that educational expenditure must be controlled. There has been, in the speeches of the Secretary of State and other Ministers in his Department, no justification on educational grounds for the policies that they have pursued.

My hon. Friend the Member for Bedwellty (Mr. Kinnock) made great play in his speech to the House on 18 November last year of the way in which the Government are pursuing a policy that implies that more means worse. He was right to say that, because it is true. The Government should be ashamed of themselves for pursuing that policy.

That attack on the higher education sector is an attack on a number of key principles. It is an attack on the Robbins principle, which has been destroyed by the Government's action in chopping 20,000 places from the higher education sector over a period of three years. Secondly, it is an attack on the principle of equal opportunities for different classes and sorts of people. In particular, it is an attack on the provision for working-class people and an attack on the provision for women.

The third principle that is under attack from the Government is that of the educational funding provided by the local authorities. This point has been lost so far in our debates on higher and further education. The attack on local authority spending implies an attack on the provision in schools, but it also implies an attack on the level of provision in polytechnics and further education, and in the provision of mandatory and discretionary grants for students in the straightforward higher education sector.

Let us examine what local education authorities have been forced to do, or what they have chosen to do, because of the Government's policy. First, they have been forced to be extremely tight on their definitions of the courses and individuals eligible for mandatory grants. Constituents come to see me at this time of year to complain that their local education authorities have not given them a mandatory grant—sometimes for the second or third year running—when they feel that they are entitled to one. One of the consequences of the attack on local authority spending is that local education authorities are forced to make pernicious judgments on individuals which are wholly unjustifiable.

Let me give an example which was mentioned by the hon. Member for Cambridge (Mr. Rhodes James), who has now left the Chamber. It concerns Cypriots. These people have been resident in this country for some time, but many education authorities do not regard them as ordinarily resident, especially if they entered the United Kingdom in 1974, after the invasion of Cyprus, and have not been accorded the formal status of refugees. Many education authorities say that they are not ordinarily resident, and therefore they are not eligible for mandatory awards.

Another way in which local education authorities are forced to restrict the access of individuals to higher and further education is by defining the courses that can be undertaken by individuals over a certain age who wish to take a course which is eligible only for a discretionary grant. A number of local education authorities say, for example, that people over the age of 25 who are resident in their area can obtain discretionary grants only if they propose to undertake a course which is a straightforward course leading to a first degree in a university. Other courses at a polytechnic or further education college to change the level of training that a person has—to become, for example, a medical secretary—would involve a discretionary grant given by a local authority, and if that person is over the age of 25 the grant is often not given because discretionary grants are available only for courses in a university for a first degree.

The third way in which local education authorities have been forced to cut back because of the attitude of this Government and the Ministers at the Department of Education and Science is in funding to polytechnics. My education authority, the London borough of Haringey, works in conjunction with two other local education authorities, Enfield and Barnet, to fund the Middlesex polytechnic, where many cuts in services and jobs have been made. There have been cuts in services as a result of the polytechnic sacking a great many employees, cuts in services to students because of restrictions on purchases in the libraries, and also cuts in the courses. That is because the Labour-controlled borough of Haringey, which has protected its education spending, has not managed to persuade the Conservative-controlled boroughs of Enfield and Barnet to do anything other than comply with the Government's request, and cut education spending.

Thanks to the Ministers on the Front Bench tonight, the Middlesex polytechnic has had to cut drastically its services to students in the past and will have to do so in the future. That is a disgrace, because the Middlesex polytechnic and others like it provide an important service for people who are facing their second chance to obtain qualifications to better their lives and broaden their experience later than is normal in higher education and, on many occasions, working from a low academic base.

It is precisely those people—the young unemployed searching for an educational opportunity, the black people who are often discriminated against in the education system anyway and who look to education to better their chances, and women who wish to enter the labour market and who are discriminated against in the present education system, as we are all aware—who are being denied access to higher and further education by the Government in a way that no other Government since the war have done.

That completely undermines the Government's argument that they are putting forward a new education policy in higher education. They are not. They are simply cheese-paring and cutting and making local education authorities follow the dictates of the mafia in the Department of Education and Science. That means hardship for individuals and for local authorities and a reduction in the real level of provision in our society.

When we talk about the higher education sector, it is important to say that we are not simply interested in protecting institutions from the effects of public spending cuts; we are also interested in protecting individuals and groups of people in our society. Such cuts reduce an individual's self-esteem, future earning potential and competence to deal with a job or the bureaucracies that rule one's life. It also reduces a student's purchasing power.

To reduce the purchasing power of a student is deplorable because that purchasing power is low enough already. It certainly was when I was a student, and it is now. The real cuts that have been imposed are a disgrace, especially for those in the middle income brackets where the parental contribution is important but is often not made.

When I was at university many of my friends in that position did not get their parental contribution, either in whole or in part. I am sure that that is even more true today, given the decline in our economic performance, the rise in unemployment, and the cuts in real incomes that have affected many people over the past few years. To cut the real level of the student grant is a disgrace.

The education objectives of the Government are, first, to destroy educational opportunities for many and to protect them for the few. They are not really concerned about the level of educational qualifications and competence for a large group of people in society, only in perpetuating the performance of an elite. They are also interested in imposing, for the first time since 1944, a cash-led rather than a demand-driven system of higher education. They are picking on students and on education institutions because they believe that they will not fight back in a principled way on such issues.

The Government have, to some extent, been surprised by the way in which the Committee of Vice-Chancellors and Principals of United Kingdom Universities, the polytechnics and the students organisations have fought back. I assure the Minister that that fight will continue. We have an obligation to criticise the Government's actions and to point towards future Labour Party policy in this area. The principles that I expressed at the beginning of my speech are plain for all to see. Given the different state of our society—a point alluded to by the hon. Member for Cambridge—we now have an opportunity to alter access to our system of further and higher education and to make it less dependent on academic qualifications and on traditional methods of reaching university. We should restructure further and higher education along those lines.

We shall not see any such restructuring or positive action from a Government who have cut provision, who have failed to produce any reforms, and who have undermined the living standards of students. The Government's policies, attacked so forcefully by my hon. Friend the Member for Edmonton (Mr. Graham), have been shown up by the debate. I hope that our education institutions and students will take careful note of what has been said and will draw their own conclusions from what has been said tonight.

12.37 am

Sir Paul Bryan (Howden)

I apologise for not being in the Chamber at the beginning of the debate. I had planned to speak in debate No. 17 on overseas students, which will probably not now take place before dawn. I am therefore taking this opportunity to debate that subject.

Among the Conservative Party's commendable policies when it took office was a policy to cut Government expenditure. Every Department had to make its contribution to the savings, with the exception of favoured areas such as defence, the police and so on. When it came to the turn of education to make its contribution it was decided to cut down on the money spent in support of overseas students. However that decision may seem now, if it had been carried out carefully and in a discriminatory manner, it would not have been entirely unreasonable.

Between 1970 and 1978 the number of overseas students increased by 150 per cent. Their composition showed that there had been no selection. Many thousands of Iranian students were subsidised although they did not need such help. The money could have been spent more effectively on many of our Commonwealth students who are not only worthy of higher education, but certainly need the money. Carefully selected savings might have been justified, but, instead, the Government imposed full-cost fees, accompanied by the withdrawal of grants to institutions for all overseas students. At the time the alleged saving was about £100 million, or £170 million at 1982 prices. We could debate all night whether that actual saving was made. Whatever the national savings the cost in terms of foreign relations and trade has been horrifying.

In the past 20 years no action has embittered relations with our friends abroad as much as this. As the hon. Member for Lewisham, West (Mr. Price) said, one has only to go to Malaya to discover what they feel and what action they have taken. They have been so offended that they are turning their trade away from us. Cyprus, which depended on this country for its university education, is deeply hurt. Hong Kong, which I know well, is undoubtedly offended by what has happened. There has been a sharp fall in the number of Hong Kong students seeking education here. They are now going to other countries, and that tendency will accelerate over the years if we do not do something.

I give credit to the Under-Secretary and the Government for recognising that a great blunder has been made. They have realised that, whatever we decide to do, we cannot just return to the status quo. Before a new policy is decided upon, a tremendous amount of thought must be given to which national groups might benefit the most, which we want to subsidise, and benefit our trade and foreign relations. Such matters must be studied. There is a vast amount of work to be done.

In this regard we are incredibly lucky to have had the report of the Overseas Students Trust. I congratulate my hon. Friend the Member for Cambridge (Mr. Rhodes James) on the work that he put into it. For the Government to have been served up with that massive document is a wonderful start to the production of a new policy. I welcome the report as a basis, not just for an immediate policy but an enduring one, for overseas students' fees that subsequent Governments can continue and develop.

I like the report's recommendation that students from British dependent territories should pay the home level of fees, thus removing the anomaly by which a student from Hong Kong or the Falkland Islands can be asked to pay up to 12 times as much for a course as a student from the European Economic Community. The Overseas Students Trust views the problem as multidimensional, and I welcome that attitude. The problem falls to be dealt with by three Departments—Education, the Foreign Office and Trade. I believe that it is more a foreign affairs problem than anything else. I understand that the joint committee studying the problem is led by the Foreign Office. I am glad to hear that, because that is from where the lead should come.

The multidimensional aspect of the problem does not only affect British trade, industry and diplomacy but the amount of money spent by foreign students on British goods, the academic stimulus that they engender and the international dimension that they add to life in British universities.

In its study the Overseas Students Trust stated: Dependent territories surely have the strongest claim of all to preferential status since British political control implies reciprocal obligations towards their inhabitants … for the inhabitants of the dependencies the rate of fee charged to their students is as much a question of rights, status and obligations as of expense. I underline that in respect of Hong Kong.

It seems possible that some cost-sharing arrangement can be worked out with the wealthier dependent territories if any preferential treatment were to be accorded them. I believe that it is possible to come to an agreement with the Hong Kong Government by which they subscribe towards the cost of a scheme which should consist of students from Hong Kong or the dependent territories being regarded as British students for the purpose of fees.

Mr. Kinnock

I am broadly in strong agreement with what the hon. Gentleman says. How can anyone disagree with the benevolent views expressed by the trust? But if the provision for youngsters from the dependent territories was as successful as the hon. Gentleman and the hon. Member for Cambridge (Mr. Rhodes James) would wish, and the British taxpayer had to fund it to the tune of £150 million a year, would his attitude to its efficacy and desirability change?

Sir Paul Bryan

I do not avoid the question by calling it hypothetical. But even if the Government could not see their way to spend any more money over the next one, two or three years, we still want to get a new policy under way and get our priorities right. Something can be done, but until one knows the financial position one cannot say exactly what.

Again I underline the fact that there are Governments such as that of Hong Kong who so much value the facility that they would be willing to contribute. That should be investigated. The Prime Minister is about to visit China and Hong Kong. I do not doubt for a minute that she will meet requests on this subject from everyone whom she meets in Hong Kong.

The early-day motion on student fees has been signed by no fewer than 150 right hon. and hon. Members from all parts of the House. That shows that any steps that the Government wish to take will have the support of both sides of the House.

On 9 June my right hon. Friend the Secretary, of State for Foreign and Commonwealth Affairs told the House that the Government welcomed the Overseas Students Trust report and would further study the suggestions. I urge the Government to ensure that the process is completed as soon as possible.

12.47 am

The Under-Secretary of State for Education and Science (Mr. William Waldegrave)

We should all be grateful to the hon. Member for Edmonton (Mr. Graham) for giving us the chance to debate higher education. It is not a privilege that we have had recently.

Some of the most eloquent speakers whom we have had the privilege to hear have contributed to the debate, although we did not hear the hon. Member for Bedwellty (Mr. Kinnock) who is perhaps the most eloquent after- the leader of his party. But, curiously enough, the message was encapsulated in a smaller space, although with less eloquence, in the third word uttered by my daughter. The first was "cat", the second was "badger", as she had a toy badger that she liked, and the third was "more". I suspect that that is an early word of many children.

I started to make a note of the items for which we were asked for further major expenditure, but I ran out of space. We have been asked to make all discretionary awards mandatory, to fund part-timers, to replace the cuts and presumably restore the real increases in recurrent grant, to make a great expansion in adult education, presumably going back to the old system, and to allow for increases in the funding of overseas student fees. To be conservative, that would cost about £1 billion. To make such demands is the privilege of any Opposition I believe that all Oppositions behave in that way. However, I pay tribute to the hon. Member for Bedwellty because in the past he has been honest enough to say that it would be beyond reason to say that the cuts would be restored by an incoming Labour Government.

I was disappointed that the hon. Member for Wood Green (Mr. Race) did not expand on that point. Behind the phrases "democratisation", "open access" and so on there was a theory of higher education that could be offered as an alternative. If it had been, it would have added an extra dimension to the debate, but instead he said that he wanted more resources for every worthy objective.

Mr. Kinnock

I should like to help the Minister and also disabuse the hon. Member for Cambridge (Mr. Rhodes James). On the basis of the 1979 Labour Government White Paper on expenditure, compared with the actual expenditure now and taking into account exactly the same conditions of falling pupil rolls and so on, the Labour Government would have been spending, in real terms, at 1980 prices, £974 million on education more than the Government are spending. By 1982 prices it would have been £1,403 million. If the Minister has difficulty in finding funds, all he has to do is to prevail upon his hon. Friends to change monetarist policies, and the money is there.

Mr. Waldegrave

I do not want to so enrage the hon. Gentleman that he makes an eloquent speech in an intervention. I think that I would bet my last dollar on this. If the Labour Government under their then leader, the right hon. Member for Cardiff, South-East (Mr. Callaghan), had been returned at the last election, with the team of the right hon. Members for Leeds, East (Mr. Healey), and Heywood and Royton (Mr. Barnett) they would have been more formidable than their successors. There might have been a change to the plans in the White Paper when the Labour Government where faced with the reality confronting the Western world.

The Government have faced up to a number of difficult decisions on priorities. The origins lie far back, in the last Social Democratic Government of 1969, when the right hon. Member for Crosby (Mrs. Williams) made her famous 13 points, which she made as challenges to the higher education system. They were not taken up. As the former vice-chancellor of the University of Cambridge said, in the fact that the university system did not respond intelligently to those points lies many of the subsequent troubles.

Some specific points have been made. This has been such a wide-ranging debate on higher education that I am sure to miss out some. I hope that hon. Members will accept my assurance that we shall go through all the speeches carefully and take up the points that have been made.

The hon. Member for Edmonton referred to the Open University. I join with him in his tribute. The Open University has had some protection. When I have visited it, I have not heard so many complaints as the hon. Gentleman has reported. The move of BBC facilities there has been completed. There is a remarkable collection of capital facilities, unequalled anywhere in the world. It is impressive to see the stream of visitors from overseas.

If money were unlimited, one would like to do something for those part-time students, as for the many other part-time students in the system, not only at the Open University but the 350,000 others throughout the higher education system who are on short courses and part-time courses. However, we are up against severe resource restraints.

The hon. Gentleman reminded us of the Robbins principle. He asked whether the Government had abandoned it. It is not so much that the Government have abandoned it as that the Robbins assumption of 2½ per cent. real growth in the British economy, on the basis of which the report was written, has abandoned the Government. As a wise economist, Lord Robbins knew that there were resource implications in all that he said and he made assumptions about what resources would be available. Unfortunately, those resources have not been available.

Mr. Whitehead

Why does the hon. Gentleman, of all people, propose that resource restraints in higher education have to be accepted, constant and taken for granted when such assumptions are not made in other areas of Government expenditure, such as the police?

Mr. Waldegrave

There are large areas of public expenditure that are protected and where spending is being increased. One major such area is the training of young people, to which £1,000 million is to be devoted through the youth training scheme next year. If the most expensive part of the post-16 education system—the universities and higher education—makes some contribution to the establishment of that major training programme, that is not something of which to be ashamed.

The current age participation rate of 12.9 per cent. is comparably the highest in history, though that cannot disguise the fact that Government plans imply, as the overriding resource restraints force them to imply, a diminution. However, it would be fair to acknowledge that within resource restraints that have already been applied the local authority sector has shown that it must have contained considerable under-used resources.

I pay tribute to much of the work of the Middlesex Polytechnic, which I have visited. It has achieved outstanding quality in its microelectronics work, but in some areas it has higher unit costs than comparable institutions. I do not single it out for that, because, of course, there must be some institutions that are above the average. However, we have had to ask the local authority sector and polytechnics to stretch their resources, and they have done so and have shown that there was room to take in a considerable number of extra students. They have done that and I do not hear complaints that standards are under pressure.

In the universities, the alternative view was taken, which was that the unit of resource was so stretched already that we had to ask for a limitation of numbers, because otherwise the unit of resource would be stretched to such a point that research, the other great output of universities, would come under serious pressure.

The hon. Member for Cannock (Mr. Roberts) made an eloquent speech and drew attention to one of the relative failures of the British education system since the war when he pointed out that working-class participation in higher education has not increased as we all hoped that it would. The problem lies further back than the higher education system, because the proportion of working-class children presenting themselves for entry is pro rata with the numbers who get in. The task is to persuade them to stay on. There is something in the schools that is not working. Perhaps the simplest answer would be to pay education maintenance awards—another few hundred million pounds—but it is not fair to blame higher education for not having drawn in more working-class children. It is to do with the schools system and much more complicated cultural phenomena.

The hon. Member for Edmonton asked some specific questions about the Open University. I cannot assure him that the announcement of the fees will be made any earlier than it was last year. It will be made in the early autumn, after the Government's general public expenditure survey exercise has been completed. I cannot give the hon. Gentleman any guarantee yet about fee levels, but in terms of recurrent grant the Open University has been among the better treated universities.

Mr. Graham

My prime concern, and the main subject of this debate, is the effect of Government policies on students. There is a vast student body already beginning to wonder whether to carry on under the present terms and the increase, which we hope will be minimal. We say that it should not be above the level of inflation. If it is, in effect the Minister's decisions will diminish the number of people who can continue Open University courses.

Mr. Waldegrave

The hon. Gentleman is right: there is a narrow judgment to make between pressure on resources and the point where there is a serious effect on students. I pay tribute to those who, like the hon. Gentleman, have the dedication to finish those courses. The level of commitment is very high.

I also pay tribute to the new vice-chancellor, with his advisers and colleagues, for the direction in which he is taking the Open University in terms of short courses and continuing education in technical subjects. This is an exciting development, with industry coming in and in many cases jointly developing courses. This is entirely sensible and is of great interest for the future.

Many hon. Members have talked about the level of student grants. No one denies that the settlement for 1982–83 puts further pressure on students who are not rolling in money even if their parents contribute or even if they are on full grant. But the position is not as catastrophic as some describe it. I take the percentage terms, because the figures that I gave in the answer that the hon. Member for Edmonton quoted were on what has now turned out, I am happy to say, to be a slightly pessimistic inflation projection for this autumn. The projection was 10 per cent., and the figure looks like being of the order of 8.5 per cent., in which case the drop in the real value over the past 10 years will be 4.7 per cent. That is a serious drop, but it is not a catastrophe. For the London-based students the position is rather the reverse.

The National Union of Students and Opposition Members always take not 10 years ago but 20 years ago. Of course, at the end of a long period of Conservative Government the position was the best that it has ever been, and that is why 1962 is always taken. But I do not think that anyone said in 1972 that there was a catastrophe, and I do not think there will be catastrophe next year either.

Mr. Gwilym Roberts

To talk about percentages is meaningless. Four per cent. of £1,500 is £60; 17 per cent. of a judge's salary of £40,000 is £6,800. That is what we are talking about.

Mr. Waldegrave

I accept the point, but the point that I was trying to make, led down the path of percentages by the hon. Member for Edmonton, was that the situation was not all that different from what it was 10 years ago, and it was not catastrophe then.

All of us would have liked to be able to find the resources for this matter, as for many others, and in particular for raising the parental contribution threshold, which I think would have been the first priority for additional resources, but the outcome is not the catastrophe that it is sometimes described. The hon. Member for Wood Green fairly said that the students most under pressure were likely to be those in the lower to middle group, whose parents will not be able to contribute. That is among the highest priorities for the future.

Mr. Kinnock

We are getting a little tired of the constant repetition of the theme that the situation is not a catastrophe. That is little comfort to people who are subject to the fact that over recent years there has been a continuing, and now increasing, divergence between the real value of the income they can expect from various sources as students in higher education and the retail price index. They are getting poorer annually. At what point will the hon. Gentleman start to recognise the disincentive effect on students of becoming poorer?

Mr. Waldegrave

I am not sure that the hon. Gentleman makes the case best in terms of disincentive effects. With the other half of his argument he is pointing out that a greater number of applicants than ever are coming forward. I am not sure that he can have both legs of that argument, at least not in close juxtaposition with, perhaps, some time in between.

The hon. Member for Derby, North (Mr. Whitehead) took us briefly into the territory of the new National Advisory Body. I have often noticed that his reactions to it are rather hostile. I hope that he will ask the Chairman of the Select Committee, the hon. Member for Lewisham, West (Mr. Price), to take him out to lunch to persuade him into a slightly less hostile attitude. Perhaps Front Bench spokesmen must be asked to pay on such occasions. The Select Committee has understood the purpose that lies behind the body. I understand that the right hon. Member for Widnes (Mr. Oakes) whose earlier work formed a substantial foundation of the NAB, also sympathises with it. It is not designed to produce cuts. It is designed to produce a more coherent strategy. If, as we all hope, resources are increased once again, it will come into its own as a body that will ensure that increased resources are spent wisely, just as I hope that it will be able to limit damage in a period of retrenchment.

Mr. Whitehead

I am grateful to the hon. Gentleman for giving way. When a body that is not designed to produce cuts produces cuts, what do we call that? Design failure?

Mr. Waldegrave

It has been quite easy to make the hon. Member for Bedwellty laugh. It is always nice to see a man happy in his work. The hon. Member for Derby, North did not make a profound point. I do not think that he would have contributed a point of that level when we were discussing these matters in Yale last year.

It is a perfectly clear distinction to say that there is a body that is meant to apply, select and discriminate in the best use of resources, which is separate from the decisions about the totals. There is a resource function and there is a separate policy function that says what overall resources are available. Whether one is expanding or diminishing, I should have thought that a sensible mechanism for resource allocation is a part of good government.

Mr. Christopher Price

I fully admit that the Select Committee has welcomed the National Advisory Body as a slightly more coherent way of doing a rather catastrophic job. Is the hon. Gentleman implying that because it is not designed to make cuts, the Government are adhering to the policy—which has existed for some time—of even handedness between the universities and the public sector in any cuts that are made.

Mr. Waldegrave

As the hon. Gentleman knows, the Government's policy has been one of even-handedness. I hope that if we can align the UGC and the NAB together with the voluntary colleges—either in direct communication with the Department or aligned with the NAB—they ought to move away from a broad and crude formula to the application of resources where they are best needed. That may be across the whole higher education sector. As the hon. Gentleman knows, that may be some way in the future.

Perhaps now is the time to relieve the hon. Member for Lewisham, West of his fears. I am not sure whether they were fears or hopes of a major policy change, as represented by the 14 July letter. The matter was discussed at great length in the Select Committee. No profound change of policy is involved. As many hon. Members have regretted, we are now beyond the framework for the working of the UGC that was inherent in the adoption of Robbins. The UGC has not operated in a vacuum since 1963. It has been working within a broad framework that has been politically accepted first by the then Conservative Government and secondly by the Labour Government, who gave broad guidelines.

Previously, in the 1950s, there had been various occasions such as the development of the great "three sisters" of technology, when Ministers gave a clear spearhead to the system. The idea that, because of lack of resources and because we have moved into a different world, Robbins is no longer wholly relevant does not mean that the development of a new framework, which will be very much a co-operative venture—the letter offers some guidance but also seeks the UGC's opinions on important matters, so it must be a two-way operation—introduces into the university world anything wholly new.

Some areas will remain wholly with the UGC and the peer group judgments between institutions. I hope that the hon. Gentleman will accept that that is right. As I believe I said when the Select Committee last discussed this, we are moving slowly and exploring here.

Mr. Christopher Price

On many occasions in the past, under both Labour and Conservative Governments, the UGC has felt it to be its duty to tell the Government of the day that the global sum being offered was simply not enough and it felt that it had the right to make that argument. The final paragraph of the July 14 letter, referring to social and economic priorities, seems to suggest that the UGC no longer has that right or duty but must simply take the global sum as it stands and not argue with the Government about it. Can the Minister give any reassurances on that?

Mr. Waldegrave

I think that the hon. Gentleman will agree that the ultimate sovereignty of Parliament over, say, the overall size of the university system has never been in doubt. When the chairman of the UGC, Dr. Parkes, came to the Select Committee he said that of course the Government were within their rights to decide on a university system of whatever size they chose and could persuade their colleagues in the House to vote for, but they could not ask for the impossible and if they did, the UGC had a duty to point that out. The memorable phrase "disorder and diseconomy" resulted from the UGC's response to what it regarded as too rapid a cut.

I envisage exactly the same kind of role for the NAB and we have negotiated that this should be so. The chairman of the NAB will go to the Secretary of State if he feels that he is being asked to do something inherently self-contradictory or impossible.

I do not believe, however, that the UGC historically or the NAB now should set itself up as a rival to Parliament in determining the overall amount of national resources to be put into the system. The distinction between policy, which this House must arrogate to itself, and resource allocation and rational professional judgments is clear, and I think that hon. Members who pretend that it is not are doing so only for the purposes of debate.

No doubt I have missed out some of the specific points raised in relation to universities and polytechnics, but we shall read Hansard carefully and try to pick up any that I have missed.

We should, of course, like to provide more resources for discretionary grants. The fact that behaviour differs from one authority to another is in the nature of the animal because the awards are discretionary. In fact, we have done rather better in terms of the intention than we may have been given credit for. From 1980–81 to 1982–83 the amount of money allocated to local authorities for discretionary awards has increased by rather more than the rate of inflation. I recognise that local authorities are under great pressure in other respects and may not have chosen to spend the money on discretionary awards, but that is in the nature of devolved government.

Mr. John McWilliam (Blaydon)

Does the Minister accept that in areas such as Gateshead where a youth unemployment rate of more than 50 per cent. has arisen there will naturally be great pressure on discretionary grants, which will simply not be available?

Mr. Waldegrave

Of course, the pressure is natural, but the intention is that the resources should be there. Many authorities are showing others what can be done in proving that it is possible to maintain a decent level of discretionary awards.

I pay tribute to my hon. Friends the Members for Cambridge (Mr. Rhodes James) and Howden (Sir P. Bryan) for raising the separate and very important subject of overseas students which we might well not have reached if we had stuck to the original schedule.

My hon. Friend the Member for Cambridge outlined his priorities. He and my hon. Friend the Member for Howden welcomed the Overseas Students Trust report, as I do. It lays down the possibility of an enduring policy. There was an inherent instability in the old open-ended subsidy system, which was recognised by the Labour Government because they started to tinker with quotas, although they were not successful. They recognised that the 300 per cent. increase in the numbers between 1969 and 1979 was an open-ended commitment that the British taxpayer could not for ever pay for.

I accept my hon. Friend's criticism that it would have been better to have had policy guidelines laid down before the changes. The Overseas Students Trust's attempt to lay out a new policy framework was right. My hon. Friend is also right to say that, although the Foreign and Commonwealth Office is in the lead, specific contributions from other Departments need to be recognised in the decision-taking system that we set up.

The Department of Education and Science has a specific interest in bringing in first-rate students to this country. As my hon. Friend the Member for Cambridge said, it is of value to our students and university life to have the best international students here. We must match that interest with our resources.

There is also a trade interest that we should like other Departments to recognise. There are various Foreign and Commonwealth Office interests, in which they must take the lead. My hon. Friends outlined their priorities. We are now in the consultation period. We shall respond seriously and quickly. The inter-departmental official machinery was set up in advance of the report so that we shall not waste time and Ministers have been meeting to discuss the matter. I must warn my hon. Friends that resources are strained, but as the Overseas Students Trust said, considerable improvements can be made by the reallocation of existing resources.

I pay tribute to my hon. Friend the Member for Cambridge for his work on that report and in producing in a short time a major work that will be definitive in this area for many years to come.

Mr. Roland Moyle (Lewisham, East)

Have the Government conducted a study on how much money will be gained as a result of their new policy on student grants compared with the amount of income the country is losing as a result of the Malaysian policy, stimulated by the Government, of prohibiting British investment?

Mr. Waldegrave

The right hon. Gentleman will have read the previous publication of the Overseas Students Trust and will have studied the detailed work of Mark Blang on this point. It shows that it is much more difficult to prove a simple monetary gain than one might think. It is another case of an area of policy and clear priority into which we are putting money at the rate of £50 million or £60 million this year and where an exaggeration of claims does not help good policy-making.

We have covered a wide area. I have no doubt missed out some of the nuggets and contributions of hon. Members. I shall endeavour to reply to them by letter. I am grateful to the hon. Member for Edmonton for giving us an opportunity to canter around this territory again before our summer holidays.