Education (Fees and Awards) Bill

HC Deb 27 April 1983 vol 41 cc921-70

Order for Second Reading read.

7.27 pm

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

I beg to move, That the Bill be now read a Second time.

The Bill is an urgent measure, which is designed to restore the position of overseas students in two important respects to what it was understood to be before a ruling given in another place on 16 December last. There would be serious consequences for institutions and for public expenditure—and much uncertainty on the part of the students themselves—if the Government did not seek to have this legislation enacted before the next academic year begins in the autumn. Before turning to the detailed provisions of the Bill I shall explain the background that gives rise to the need for it.

Under Governments of both parties overseas students have been treated differently from home students in three particular ways. First, they have not been entitled to student grants — that is, to the "mandatory awards" providing help with fees and living costs that education authorities are obliged to give to most undergraduates. Second, they have not been eligible for a variety of other grants —"discretionary awards" — that may be paid to home students not eligible for mandatory awards by education authorities, research councils and others. Third, they have been charged higher fees than home students. Under the present Government their fees are expected to cover the full cost of their education, but previous Governments too have operated a differential fee system.

The distinction that successive Governments and other award-making bodies have made between home and overseas students for these purposes has been based on the concept of residence or "ordinary residence". Students were or were not eligible for particular benefits or rates of fee on the basis of whether they had or had not been resident or ordinarily resident here for a particular period —usually three years. In 1980 the Government brought the test of eligibility for home fees into line with that for mandatory awards, by adopting the criterion of ordinary residence for all purposes.

Until the Lords' judgment on 16 December last the test of where a student was ordinarily resident was generally taken to be that of where his real home was. Boys and girls who came here for a few years to go to school were believed not to become ordinarily resident if their home remained in another country. Many adults who came here temporarily as members of diplomatic missions or representing foreign firms retained their homes abroad and neither they nor their children were thought to be ordinarily resident here.

Last year, however, it was ruled in another place that the question to be asked to determine whether or not someone was ordinarily resident here was: Has the applicant shown that he has habitually and normally resided in the United Kingdom from choice and for a settled purpose throughout the prescribed period, apart from temporary or occasional absences? We are grateful to have this clarification, as it provides certainty in an area which had been increasingly open to doubt. But the ruling means that a student's ordinary residence alone is no longer a sufficient test to allow us to maintain previous policies towards different categories of students. We therefore need to change the letter of the rules so that, in the light of the authoritative interpretation of "ordinary residence", they continue to reflect a consistent spirit.

I should say a word about the position of present students. The Government intend that students who do not qualify for the home student rate of fee for 1983–84, and subsequent academic years, under the regulations to be made, if the House approves the Bill, should pay the overseas rate for those years even if they can claim in the light of the December ruling that they should have been regarded as ordinarily resident here in the current academic year or in earlier years.

A student's residential status at the beginning of the course does not determine his liability to fees for the whole course. I recognise that some students paying the overseas rate in the current academic year can claim to be ordinarily resident here in terms of the December ruling, but they come here in the expectation of having to pay the higher fee and are not therefore suffering as a result of the ruling. Such students should not assume that there is any general principle that imposes an obligation of liability on authorities or institutions to make any refund for fees previously paid even if the student concerned establishes an entitlement to an award for the year in question.

Circumstances will vary widely among students, institutions and authorities, and institutions will have to consider individual cases on the facts and in the light of their own legal advice.

Mr. Christopher Price (Lewisham, West)

When the Bill was announced, it was said that there was no intention to bring in retrospective legislation. The force of what the Minister has just said is either a determination to make the measure into de facto retrospective legislation in terms of certain years of a student's course or an interpretation by the Minister from the Dispatch Box of the law in the light of the Scarman judgment in the period between that judgment and any Royal Assent that would change the law. Which is it?

Mr. Waldegrave

It is a gloss on what we understand the rule will be after Royal Assent—not in the present period. There is no retrospection here. The relationship between the regimes for fees and mandatory awards is different. If we had asked—as some of my hon. Friends and others may believe that we should have asked because there was a moral case for so doing—to go right back and make it impossible for anyone in any circumstances to claim mandatory awards, that would certainly have been retrospective legislation. We decided not to do that, as I believe has been generally recognised. As I have said, the situation as between fees and mandatory awards, which will be discussed in a Statutory Instruments Committee tomorrow on the prayer, is different.

In adapting the rules, however, it is necessary to ensure that we do so within the provisions of the Race Relations Act 1976. I shall explain briefly how the relevant provisions of that Act bear on the present situation.

It has been the policy of successive Governments that all people who have demonstrated that they are properly settled here should be treated equally and enjoy equal access to benefits paid for from the public's rates and taxes, but it has also been accepted that it is unnecessary to bestow the same benefits on those not part of our community who come here for a limited and temporary purpose. The example that springs to mind in connection with students is that someone who comes here for a few years to attend an independent school or a further education college should not on that account alone gain the right to be treated as a home student if he should subsequently wish to go on to higher education here.

The Race Relations Act 1976, which was enacted under a Labour Administration, wisely recognised this situation. It thus contains provisions which allow actions that would be discriminatory to be treated as though they were not. One of those provisions—section 41—has been used, for example, to allow higher fees to be charged to overseas students in the circumstances that I have just described. Under section 41(1), acts done under statutory authority are not to be regarded as discriminatory. Under section 41(2), discrimination on the basis of nationality, ordinary residence or period of residence is permitted where such discrimination takes place in pursuance of arrangements made with ministerial approval or in order to comply with conditions imposed by Ministers. That provision allowed the Labour Administration in 1977, when the Race Relations Act came into force, to legitimate the discrimination implicit in the differential fees for overseas students that an earlier Labour Administration had first introduced in 1967.

I said earlier that overseas students are treated differently from home students in three ways. In relation to mandatory awards such treatment is covered by section 41(1). Because the rules of eligibility for mandatory awards are statutory, they are automatically exempted from the provisions of the Act. Those rules of eligibility have depended upon the test of ordinary residence, but because they are contained in regulations it has been possible to amend them without recourse to primary legislation. Those amendments are contained in the Education (Mandatory Awards) (Amendment) (No. 2) Regulations 1983, which were laid before the House on 30 March. The prayer against them in the names of the right hon. Member for Glasgow, Hillhead (Mr. Jenkins) and others is to be debated in a Statutory Instruments Committee tomorrow morning. The same principle applies to the postgraduate awards made under the State Awards Regulations 1978.

The two other ways in which overseas students have been treated differently have been covered by arrangements for the charging of differential fees and the adoption of particular rules of eligibility for discretionary awards made under section 41(2), which allows Ministers to legitimate discrimination related to ordinary residence. Such arrangements have been approved by my right hon. Friend and his predecessors since the Act came into force. They will, however, no longer serve because they depend on the test of ordinary residence, and the interpretation now given to that test in another place will not allow Secretaries of State under section 41(2) to retain the substance of the distinctions that Governments of both parties have intended to make. This is primarily because "ordinary residence" as now defined may include residence here for the purpose of receiving full-time education.

Sir Paul Bryan (Howden)

I do not think that my hon. Friend has yet said what ordinary residence means in terms of period. Is it three years?

Mr. Waldegrave

I apologise. The period is three years.

It is not possible under section 41(2) to approve arrangements which differentiate between those ordinarily resident here for different purposes. To take account of this new situation we have therefore decided to legislate to give statutory authority to the charging of higher fees to overseas students and to the adoption of limited rules of eligibility for discretionary awards, so that such practices will be brought within the scope of section 41(1) of the Race Relations Act. That is the purpose of the Bill.

The Bill creates two new regulation-making powers. Unlike most cases of the Executive taking regulation-making powers, this case will to some extent improve the accountability of the Executive to the House as the arrangements for exemption from the Race Relations Act that these regulations will replace have previously been made or approved by Ministers without reference to the House. There is not even a formal requirement that such arrangements should be notified to the House. That was the freedom of action that the Labour Administration gave themselves in these matters. From the point of view of the accountability of the Executive to Parliament, therefore, the present legislation may be regarded as a distinct advance. That consideration apart, however, I hope that the House will recognise that the urgency of this legislation and the need for consultation with the local authorities, research councils and others makes it desirable to proceed in this way if we are to have the necessary provisions in place in time for the coming academic year.

Clause 1 deals with fees. It allows the Secretary of State to make regulations requiring or authorising the charging of higher fees to those who, in convenient shorthand, I shall refer to as overseas students. The regulations will specify the nature of the connection with the United Kingdom that it is necessary for a student to have before he pays the home rate of fee. Although the detail of the regulations is still subject to consultation I can say that we have it in mind that the basic test should continue to be ordinary residence, with the meaning given to that term last year in another place. Exceptions will be specified to allow European Community students to be treated as home students for the purposes of fees and to exclude from treatment as home students those who have been in Britain only or mainly for the purpose of receiving full-time education.

Clause 2 similarly allows the Secretary of State to make regulations that will allow various bodies that make discretionary awards to students for education, training or research to adopt rules of eligibility for those awards that confine them to applicants with the specified connection with the United Kingdom. It is envisaged that the regulations will allow award-making bodies to make rules similar to those that now apply to mandatory awards, to exclude students who have been in Britain only or mainly for the purposes of full-time education.

Mr. Frank Hooley (Sheffield, Heeley)

I am not quite clear about the current academic year. If I understand the Minister correctly, all that he is talking about now will apply to 1983–84. Is the current academic year governed by the Scarman judgment?

Mr. Waldegrave

The circumstances of students who are in place in the current academic year will vary according to when they paid their fees and their relationship with their colleges. It is probably unwise for me to try to generalise about what the situation will be. If the hon. Gentleman will allow me, I must leave it at that.

Mr. Hooley

I am asking only whether the current academic year is governed by the Scarman judgment.

Mr. Waldegrave

The law between when Lord Scarman said what the law was and Royal Assent for the Bill is the law as Lord Scarman defined it. There is no question of that.

These are the bare bones of the Bill. We have already embarked on consultations about what the regulations made under it should contain and we shall, of course, take full account of the views that are expressed during consideration of the Bill here and in another place. We do, however, hope to have the Bill and the regulations in force in time to ensure that the statutory position is clear for the 1983–84 academic year. Until regulations are made, institutions and award-making bodies will have to act within the scope of ordinary residence as now defined in another place. They might otherwise render themselves liable to accusations of unlawful discrimination for acting outside the scope of the cover provided by the existing arrangements approved under section 41(2). They will be considerably inhibited and might, for example, be obliged to delay the offer of awards, which would cause considerable inconvenience to students and others.

Urgent action is also necessary because, if the present situation is allowed to continue into the next academic year, many students will receive an amazing windfall gain at the expense of the British taxpayer. Instead of paying overseas fees of from, say, £2,500 to more than £7,000 a year, they will have to pay only the home student undergraduate fee of £480. The cost could be more than £30 million a year in lost fee income alone. This is a quite unnecessary burden to have imposed on the taxpayer as the chance outcome of a legal ruling. The Government have never believed that British taxpayers should be asked to give an indiscriminate subsidy to all those from overseas who would like to come here to study. Our policy has been to end the general subsidy and to channel help to those whom a variety of national policy objectives and humanitarian reasons suggest that it would be helpful to help.

Mr. Neil Kinnock (Bedwellty)

I understand that the Bill, by secondary legislation, will provide for the continuation of the arrangement whereby EC students are home students. Is it not unfortunate to apply the word "indiscriminate" to those outside the EC who may come from poor backgrounds? I do not believe that any British taxpayers understood that, when they voted to remain in the Common Market, part of the obligation of membership would be to charge home student fees to people who are sometimes from extremely wealthy backgrounds.

Mr. Waldegrave

The trade in students in Europe is one from which Britain gains. The financing of higher education in Europe is largely done without a fee income to the institutions. It must be said that more British students go to Europe than European students come here. The matter has been discussed in the House. It was a reasonable piece of Europeanism by the Government.

Mr. Kenneth Carlisle (Lincoln)

While my hon. Friend is dealing with the cost to the taxpayer of not passing the Bill, will he clarify one point? I understood that it might cost £50 million to the Exchequer, £30 million being lost in fee income and £20 million being spent on extra grants.

Mr. Waldegrave

We are discussing only fees. It is estimated that about £30 million would be lost in fees next year. Moreover, that money would go primarily to those overseas students who are best off. If the House chooses to put another £30 million into the overseas students programme, I do not believe that it would choose to give it to that group of people.

The Bill represents a continuation of existing policy but allows us, for the first time, to have a clear statutory basis for distinguishing between home and overseas students. I reaffirm the importance that the Government attach to encouraging overseas students to study here and, where appropriate, being assisted to do so. That is why the Government decided, in the light of last year's study by an independent non-governmental body—the Overseas Students Trust—to increase the existing provision for assistance to overseas students—which is already worth about £40 million a year—by a new programme that would provide an extra £46 million during the first three years and would be worth up to £20 million a year when fully operational.

The programme will allow 5,000 extra students to be helped to come here each year. That is in addition to the nearly 15,000 students who already receive assistance under various existing aid programmes. That is a significant response to the needs and aspirations of people overseas who would like to study here.

Mr. Hooley

The Minister should not say that there will be an extra £46 million, as £21 million of it is the allocation within the existing vote. It is an extra £25 million and it is spread over three years.

Mr. Waldegrave

I hope that I have made it clear that it is spread over three years. An extra £46 million over three years will be directed towards overseas students. I believe that the House welcomes that priority that the Government have set.

The arrangements that are being made for the allocation of those funds will allow them to be targeted precisely to serve the needs of specific groups and countries that we wish to help. The money will be part of a co-ordinated programme rather than a haphazard and indiscriminate subsidy to all corners. Details of the new provision were given in the statement of my right hon. Friend the Foreign Secretary on 8 February and in the document "A Policy for Overseas Students" which he deposited in the Library of the House two days later.

I hope that I have said enough to demonstrate that the Government's policy towards overseas students has proper regard both for the legitimate concerns of the taxpayer about the danger of indiscriminate subsidy and for the needs and aspirations of potential students whom we wish to help and encourage as part of our selective support programmes which, as we all recognise, are in the national interest as well as in the interests of those who receive assistance. This Bill will enable that policy to continue on an even keel, and I commend it to the House.

7.48 pm

Mr. Phillip Whitehead (Derby, North)

The Under-Secretary of State has masked, in his usual diffident manner, what he describes as the bare bones of the Bill. Bare bones indeed, and a "Barebone's Parliament" this has been. I hope that we shall examine this skeletal provision at some length both now and in Committee. We acknowledge the problems.

Mr. A. J. Beith (Berwick-upon-Tweed)

The hon. Gentleman should take into account the June election that we keep being promised.

Mr. Whitehead

It cannot come a day too soon for me. However, with the prospect of an imminent election, this complex problem becomes urgent and, with that in mind, the Opposition will not take a fractious view of it. We shall have an inquiring attitude and shall subject the Bill to patient scrutiny.

It may be necessary to tell a slightly different tale from that outlined by the Under-Secretary of State. The late Aneurin Bevan used to say, "Tell me your truth and I will tell you mine." The Government are in this mess largely because of the decisions of 1979 and 1980 which widened the gap between the fees paid by home students and overseas students who pay full-cost fees — that is a misnomer because universities do not charge the full cost but only the cost that the market will bear. The problem became acute for those who believed that they were in a marginal area and could claim home student status. Under two Secretaries of State there has been a policy for almost total drift, and I shall quote evidence of that in a moment.

A tale—it may be apocryphal, as are all the best stories about the Secretary of State—was retold by Mr. Simon Hoggart. The Secretary of State was seen leaping into a taxi in Brighton after a party conference, beating on the partition and saying to the driver, "Tell me where I am going. Tell me where I am going." The Secretary of State can correct me if that is not the true story. However, like many apocryphal stories, it goes to the heart of the matter. On this matter the Government have been saying, "Tell us where we should go." They asked that question of the courts, but the courts told them to go in a direction in which they did not wish to go, which is why this Bill has been introduced.

The root of the problem is the progressive discrimination against overseas students in the payment of fees and granting of awards that has developed during the years and that, as overseas student numbers grew, reached a crescendo in 1979–80. By using the emollient phrase, "Governments of both parties", the Under-Secretary of State sought what succour he could from the fact that there were developments in that direction under the Labour Government when the right hon. Member for Crosby (Mrs. Williams) and, later, others held the office of Secretary of State for Education and Science.

However, the imposition of full-cost fees in November 1979 marked the sharp end of that process. It was announced then that the subsidy, as it was called—outside the overseas aid fund—to all overseas students would end. We know the cost of that policy. It was described by The Times Higher Education Supplement at the time as a mixture of crude financial expediency and dogma". Even after attempts to get back on course and to put right some of the damage caused, the overall policy is still, and is seen to be here and abroad, "a disaster". Those are not my words but those of Professor Randolph Quirk speaking on this matter at Cumberland Lodge last week.

The consequence has been a massive reduction in the number of overseas students in further education. Institutions have been squeezed between home fees and the volatile market that they must tap for overseas students from countries or families that can pay the going rate, whatever it may be. That policy was condemned by the Overseas Student Trust. The Government are now taking what comfort they can from introducing some of the recommendations of the trust, but I echo the words of my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) that the policy has not thrown much new money at the problem. It has recycled some money, and the Secretary of State said in evidence to the Select Committee recently that not much of that money, if any, came from the education budget. The money comes from other departments, as happens so often when the Department of Education and Science must acquiesce in someone else's initiatives. The policy was condemned by foreign Governments at the Melbourne Commonwealth summit by the Association of Commonwealth Universities and others, which called for the introduction in Britain of fees substantially below full cost, as defined by the Government. We all know, and I have seen in my constituency, the impact of the full-cost fees policy.

The anomalies of the policy were mentioned in an intervention by my hon. Friend the Member for Bedwelty (Mr. Kinnock). If he is believed to be a partisan witness on this matter, may I tell the House that the "Secretary of State for Southend"—the hon. Member for Southend, East (Mr. Taylor)— intervened during Question Time recently to ask why a student in Britain from French Guyana pays fees of only £400, but a student taking the same course who came from what used to be British Guyana and is now the Republic of Guyana pays more than 10 times that sum. Those injustices have made the dilemma that we face today even more acute.

I hope that I shall have the opportunity, with the leave of the House, to reply to the debate because I wish to talk further about retrospection when we have considered more carefully what the Under-Secretary of State said. Suffice it to say now that, having heard what he said, there is some retrospection in this legislation. The hon. Gentleman spoke of "casting a gloss" on interpretations of the Government's response to the Scarman judgment. However, the way in which the Bill sets out the fees policy seems to show some retrospection, which will be very unfair to students who have been here during the period between the introduction of the full-cost fees policy and the Scarman decision and any subsequent legislation.

With soaring full-cost fees, it was abundantly clear that ordinary residence had become crucial for many students and potential students some years ago. The Select Committee on Education, Science and Arts—I am glad to see that the chairman of that Committee is here—

Mr. Christopher Price

There are three members of the Select Committee here.

Mr. Whitehead

I am glad that the members of the Select Committee, who were unanimous in their recommendations on this matter, are here to draw attention to what was said by the former Secretary of State, the right hon. and learned Member for Runcorn (Mr. Carlisle), in 1980. A Department circular on ordinary residence published then quoted that great legal authority Mr. Justice Karminski, who has now been laid aside or perhaps replaced by a greater legal authority in the shape of the Secretary of State. The Karminski judgment and other matters that were drawn to the attention of local education authorities by the Department did not stand up as an all-embracing definition of "ordinary residence". However, the Under-Secretary of State for Education and Science who was then responsible for such matters, said in 1980 that after 1 September 1980 students starting new courses would be classified as home students only if they had been ordinarily resident for three years prior to the start of their course. It is not possible to give a definitive definition of the term 'ordinarily resident' since the question of whether a person is ordinarily resident in a particular place could involve a wide variety 'of factors. In simple terms"— he said in his layman's language— it can be said that a person is 'ordinarily resident' in a place if his home is there. That definition was picked up by the Select Committee, which on several occasions warned the Secretary of State that we needed a new definition of "ordinary residence". On each occasion, and in response to the interim report, the Department told the Select Committee that further advice would be offered as necessary, taking into account cases recently determined in the courts. There was a further response on this issue at the end of the year when the Select Committee said: We reiterate our former recommendation with greater urgency". However, no response came from the Department of Education and Science, which waited upon the courts.

It has taken two and half years for the courts to reach a decision. I understand that the Department has been thrown into some confusion by the Scarman ruling, which among other things, picked up a piece of onerous legislation in which the interpretations of residence were so defined that they might distinguish between categories of person of immigrant origin. That showed that the Immigration Act 1971 used "ordinary residence" to denote something very much less than the right of abode or settlement. It showed that ordinary residence could be seen to have a normal role and could be normal residence in Britain without being acceptance for settlement. Lord Scarman concluded that the applicant had to show that he had habitually and normally resided in the United Kingdom from choice and for a settled purpose throughout the prescribed period, apart from temporary or occasional absences … An authority is not required to determine his 'real home', whatever that means". I take the Scarman ruling to be the ultimate response, as settled in the courts and, I hope, accepted on both sides of the House, to the definition of "ordinary residence". That is not where the home is or was, and it is not where the predominant home is. It is the place where, for the preceding period of years, the person has been. I take it that the Government accept the Scarman definition and do not intend retrospectively to change it. I accept that they have been thrown into disarray by it and further delayed, as we understand, while they have weighed the chances of getting away with retrospective legislation. The Under-Secretary of State shakes his head unconvincingly, but that is the only explanation that I can offer on the Department's behalf. Those who have been waiting at the door of the Department over the past four months — universities, colleges, CLEA, the LEAs and individuals—have been told that there is no advice for them and that consultations are still taking place.

At the end of the Session before the Easter recess the Secretary of State pronounced on the regulations that had been laid, which provided for the repayment in some circumstances, as I understand it, of mandatory awards to persons who had failed in their claims to local education authorities for such awards.

We now have an attempt to return not to the status quo ante but to the law as we all thought it to be. This is being done in an attempt to get away with telling these students, irrespective of when they came here, that their fees will not be paid. I understood the Under-Secretary of State to say that they came to Britain not expecting their fees to be paid. I remind him that many of them came here thinking that they would not have to pay the sort of fees that were subsequently levied. I shall be interested to hear what he intends to say to the students—there are quite a number of them—who arrived here well before the switch to full-cost fees, who went through the three years of residence and who have since been in courses of higher education, for which they are now, I assume, to receive back their awards, or to receive for the first time a mandatory award to cover the years under the statutory instrument that is to be debated tomorrow. As I understand it, they are not to receive anything by way of fees. Is that the position?

Mr. Waldegrave

It will depend on the specific case and the relationship established between the college and the individual in a particular case. It must be for the college and the individual concerned to examine all the circumstances of the case. But fees are not in the same position as awards, as I am sure the hon. Gentleman is aware. If a student is given a mandatory award for part of a course, he is given it for the whole of the course. The position over fees is not the same.

Mr. Whitehead

I cannot say that I have been greatly enlightened by that answer. It assumes an area of discretion for the institutions concerned which it seems that they will not have when the Bill is enacted. The Bill seeks to confer great powers upon the Secretary of State and the Department over an area of local government. I do not believe that there is the discretion to which the hon. Gentleman has referred.

Mr. Waldegrave

I did not mean to suggest that the interpretation of the law will be a matter for the discretion of the colleges, but facts of particular cases may be. Awards and fees are different. Under statute, a mandatory award for any part of a course is an award for the whole of the course.

Mr. Whitehead

This is an issue to which we shall have to return. The dilemma in which many overseas students have found themselves over the past few months will be made worse by what they will read in the Official Report tomorrow morning. I hope that we can clear up the matter before the debate ends.

Mr. Hooley

Another category of students has had its expectations dashed. I refer to the students who were here for three years up to 1983–84, who certainly expected to have to pay the full fees until they heard the Scarman judgment. Having heard that judgment, they expected that it would be honoured, but it now seems that that will not happen.

Mr. Whitehead

I entirely agree. If we are to consider the impact of the Bill case by case, we shall have to examine the draft regulations as well as the Bill. The Bill is bringing the fee arrangements into line with the mandatory award arrangements, except that both sets of arrangements will be different.

What will be the result of this enabling Bill? It is not possible now to have a satisfactory debate on this very short measure, which is, in effect, a two-clause Bill. We must know something about the regulations that it foreshadows. This is a clear example of the need for real scrutiny to take place in Committee with the draft statutory instrument before the Committee, irrespective of whether the Bill is considered by a Special Standing Committee that has the opportunity to hear witnesses. The effectiveness of our consideration of the Bill in Committee will depend on our getting the draft regulations and being able to examine them as thoroughly as if they were schedules to the Bill.

If there has been no debate within the Department on retrospection over the past four and a half months, I hope that the Under-Secretary of State will tell us when he replies what the Department was discussing. Why was there no consultation? There has been hardly any consultation since the Bill was published a few days ago. I appreciate that there is the need for haste because of delays that have not been of the making of the House. Responsibility for the delays lies with the Department. We know that CLEA approached the Department in January and asked for advice. It drew attention to many of the problems to which my hon. Friend the Member for Heeley has referred. It stressed that students in many institutions would be placed in an impossible position because they would not know, and their institutions would not know, what sort of fees they would be charged and what awards they might receive. In other words, they would not know the conditions of their continued periods of study. Those representations were being made three or four months ago and there has been no consultation.

Overseas students who believed that they would benefit from the Scarman judgment were led along in that belief by the way in which the press, without sensationalising the issue, covered Lord Scarman's obiter. Newspaper reports were akin to "Law Lords' £20,000 Christmas gift for students." Anyone who read those reports at the end of last year had to sweat for five months on that form of coverage with nothing from the Department but an embarrassed silence. Local authorities consider, with some reason, that the regulations and the Bill discriminate against them. Universities and direct grant institutions will be recompensed for their loss of income but no such undertaking has been given to the local authorities. In the course of the debate, I trust that those undertakings will be given to the local authorities. Once again, local authorities must reflect that this bare bones Bill removes further powers from them, which are assumed by central Government under clause 1(3)(b) and (c).

As a result of the Under-Secretary of State's asides and interventions, I am interested to know what powers of compulsion the Bill is intended to provide over local education authorities or educational institutions. What exceptions do the Government have in mind in the Bill? There is a specific reference to exceptions. Will the exceptions further widen the definition of non-home students either now or in the future because the Government are alarmed that there are too many students, or are they making future provision for further categories of exemption from full cost fees?

What will be the position of recently arrived bona fide immigrants under the Bill and regulations? Currently, many immigrants who have waited for five or 10 years, or sometimes even longer, in the quota queue for settlement in Britain, then have to wait for financial support for a further three year period. The Government have the opportunity to be generous. Under the new definition of ordinary residence, such people will be in a different category. They will not be people who are in Britain purely or largely—the Bill is ambiguous on this matter—for the purposes of study. They will be here to settle. If that is the case, the Government could be generous. The total immigration quota each year is no more than 23,000, of which a tiny category would present themselves for education. Those are people whom we should and could help, if the Government take a generous interpretation of the Scarrnan judgment, by saying: "If Scarman is to be used properly, it should be used to help those most in need and not as a means of giving an unsolicited and unexpected gift to rich people who arrive here — who went through public school — with the intention later of qualifying for home student status I accept the aside made by the Under-Secretary on that subject.

A blanket payment would be made to people who have attended some form of education in this country prior to higher education, which would not necessarily be desirable. Immigrants who come to this country for settlement are not in that category and suffer an unconscionable delay before consideration for home student status.

Assurances were sought for several other special categories in the House on 30 March, and have subsequently been sought in representations to the Department. These are people currently engaged in full-time study, who arrived in Britain as political refugees or who have not sought political asylum but who have for one reason or another special permission from the Government because of the political position in their own countries. If the term of residence of those people goes to three years or beyond, will they be considered as home students or will that period of residence, which was in a sense enforced, be counted as education, wholly or in part and therefore exclude them from home student fees?

What is the position of returning residents who have been out of the United Kingdom for a long time who find that they may be in difficulties because of new interpretations the law? What will be the position of students transferring from one course to another, when they took up a course between 1979 and March 1983, who now receive a mandatory award under the regulations—if they claim it — but are moving on to a period of further study? Will they continue to be given home student status or will they not have that status for any further period of study upon which they embark after 30 March?

The Opposition wish to be informed whether the research councils will be restricted in their powers to make discretionary awards under clause 23. Traditionally they never have been, although they have kept in line with other award-making bodies. There is a power under the Bill further to restrict such councils to a degree which has not previously happened.

The Under-Secretary has talked about the eligibility of students with a specified connection to the United Kingdom, and what can be described in "convenient shorthand" as overseas students. That is not good enough. One man's convenient shorthand is another man's obfuscation. The problem with a definition of overseas students is that it is so diaphanous that it is extremely hard to see whether there is—it is hoped the legislation will give it— a correct and all-embracing definition of an overseas student. I wish the Under-Secretary, when he replies, correctly to answer the question — unlike the Prime Minister yesterday. What is an overseas student? The Opposition wish to hear that definition given to the House now and then build upon it in Committee.

The post-Scarman period could have been an opportunity for generosity by the Department of Education and Science, to diminish the heavy charges levied on overseas students. Whatever its precise interpretation of the Scarman judgment, it could then diminish those anomalies and injustices that led to the pressure, which in turn went to the courts and resulted in the Scarman judgment. There could have been an opportunity to build on the positive aspects of the Scarman judgment and to get a workable definition of "overseas students" which has not yet come from the Government. It could still be an opportunity to extend to immigrants — in terms of the new definition of residence which the authorities are beginning to enforce—the opportunity for home student status and to widen the category that is exempt from full-cost fees and follow the comparatively modest FCO initiative in these matters.

When the Secretary of State and his officials are faced with the possibility of taking initiatives, they tend, first of all, to count the cost and then count the ideological cost. When those two are added together, all too often a niggardly attitude develops. That attitude has occurred in all areas where the Department of Education and Science ought to relate to other Government Departments. Little response has come from the DES to repair some of the damage to overseas students which the Foreign and Commonwealth Office had to do. We have seen areas of activity for young people in this country taken out of the hands of the DES and the initiatives, such as they were, coming from the Department of Employment—

Mr. Kinnock

And industry.

Mr. Whitehead

Will the Secretary of State take the initiative and show some generosity? When he had that opportunity in the past he usually turned it down. If I were giving a teacher's progress report on the Secretary of State I think I would say that he has pretty much messed things up. In the words of the old report by the craft lecturer, "Give him the job and he will finish the tools."

That has been one of the problems of the Secretary of State throughout his period in office. I trust that further consideration of this important matter will not merely be left to the House but will include a detailed Committee stage. I hope that there will be a fresh approach and more generous thinking following a general election.

8.19 pm

Sir William van Straubenzee (Wokingham)

I feel sure that I speak for the whole House when I thank the hon. Member for Derby, North (Mr. Whitehead) for quite one of the nicest jokes that I have heard for a very long time. Even if the rest of his speech is not remembered, that will be. Perhaps I could give an end of term report on his speech. I mean it in the nicest possible way when I say that it was a very skilful contribution — as the hon. Gentleman's contributions usually are—and was made by a parliamentary cat walking on eggshells.

Unlike most Opposition spokesmen, the hon. Gentleman did not at any point outline the Opposition's approach to the Bill. On such occasions, the Opposition spokesman invariably says, at least towards the end of his speech, that the Opposition will vote against, or in favour of, the Bill. However, I listened to the hon. Gentleman's speech carefully. We went through the pluses and the minuses, but there was no intimation of the Opposition's attitude to the Bill. That is rather curious.

Mr. Kinnock

rose—

Sir William van Straubenzee

Does the hon. Gentleman want to come clucking to the rescue of his chick?

Mr. Kinnock

I distinctly recall that the hon. Member for Wokingham (Sir W. van Straubenzee) was in the Chamber at the beginning of the speech made by my hon. Friend the Member for Derby, North (Mr. Whitehead). I am sure that he enjoyed it as much as I did. I did not time it precisely, but my hon. Friend, between the second and third minutes of his speech, told the House precisely what the Opposition intended to do about the Bill. We shall not vote against it tonight, because we recognise that there are various considerations, but we shall give it careful consideration in Committee. If that is not a direct and specific approach, I do not know what is.

Sir William van Straubenzee

In that case, we shall have to look at Hansard carefully. I do not know about my right hon. and hon. Friends, but I did not hear that sentiment being expressly stated. However, I am sure that we have been greatly helped by the remarks of the hon. Member for Bedwellty (Mr. Kinnock).

I had also expected to hear a fairly clear statement of policy on the principal issue. If elected, would a future Labour Government restore home student fees to "overseas students", as we understand that phrase? It is all very well to talk of lack of generosity. However, it would be not only helpful but appropriate to have a clear statement of the Opposition's policy. The difficulty did not begin in 1979. In 1967, I spoke from the same Dispatch Box as the hon. Member for Derby, North has spoken from tonight. That was when the difficulties began. The then Labour Government distinguished between home and overseas students. As hon. Members know, it is very rare that I get anything right, but for once I think that I got things right. I pointed out that that was a key moment. The measure was piloted through the House by one of the nicest Members of Parliament to have served in the House, the former right hon. Member for Caernarvon, Mr. Goronwy Roberts as he then was. He became increasingly uncomfortable about it, because he recognised what he was doing.

We must firmly nail the idea that this affair started in 1979. The record shows that, doubtless under pressure from successive Treasuries, successive Governments have increased the fees charged to overseas students. I accept that it happened to be a Tory Government that finally charged fullcost fees, but I assert—although I can never prove it—that if the Tory Government had not done it, a Labour Government would have done it.

Mr. Christopher Price

You will remember, Mr. Deputy Speaker, as well as I do, the speech made by the hon. Member for Wokingham (Sir W. van Straubenzee) from the Opposition Benches. At the time I was sitting on the PPS Bench, behind the late Mr. Crosland and Lord Goronwy-Roberts. I am sure that the hon. Gentleman will accept that he was even less specific about the Conservative party's policy than he would have us believe my hon. Friend the Member for Derby, North (Mr. Whitehead) has been about the Labour party's policy.

Sir William van Straubenzee

There was a substantial reason for that. I was only the minor, junior spokesman. That point was dealt with by those who led at the time. I am afraid that the name of the hon. Member involved has slipped my memory temporarily. The record shows that that point was rightly dealt with by the Opposition's principal spokesman at the time.

The present Opposition have no jurisdiction in this matter. In a society such as ours, the judicial decisions of the other place are exceedingly important. They must be observed. In its judicial capacity, the other place has ruled.

Mr. Hooley

I have much sympathy with the hon. Gentleman's earlier point, because, for the first time in my parliamentary life, I voted against a three-line Whip on that issue in 1967. The decision in 1967 was a serious error of judgment. However, the hon. Gentleman cannot claim that the Labour Government's actions bore any resemblance to the subsequent actions of the Conservative party. If he does, he will have to explain why the worldwide fury that greeted the actions of this Government was not in any way replicated between 1967 and 1979.

Sir William van Straubenzee

The hon. Gentleman has surely forgotten something. I believe that the largest percentage increase ever made in fees for overseas students was imposed by a Labour Government. I should like to look up the figures, but I think that the hon. Gentleman will find that to be so. Of course, there were violent protests every time Governments took such action. The truth is that both the major parties are in this together. The country having embarked upon that course, there was a good reason to restructure the way in which we finance our support for overseas students. I was keen to do that more than 10 years ago. It is a strength, not a weakness, that a substantial amount of the money comes from other sources. We have wisely been reminded of the Government's response to the important report from the Overseas Students Trust, the £46 million available over a period and of the 5,000 or 6,000 additional students thereby brought to Britain. However, the point is that they have not been brought here indiscriminately. It should be done, not indiscriminately, regardless of country and background and the rest, but in a more fair and discerning way than it was done before.

Mr. Kinnock

Is not the hon. Gentleman unhappy with his general attitude, which we respect, of agreement with the criteria announced by the Secretary of State for Foreign and Commonwealth Affairs, that the estimated 5,000 or 6,000 students should serve British interests in coming to Britain for their higher education?

Sir William van Straubenzee

It is not a bad thing when operating an overseas aid programme to have due and proper consideration for British interests. British interests are world-wide, which gives a wide definition to "interests". We should not wish to narrowly interpret it, as the French do, as the House knows.

I am sure that my experience is not exclusive to me. We are representatives and not delegates, and have to argue the case with those who send us here—properly so in a democracy. The cause of the overseas student is a minority cause among the electorate, which has to be argued, explained and fought for. If those who send us here think that the money that they provide is used indiscriminately, regardless of British interests, our case for securing the necessary finance is weakened. In a democracy, securing finance is a large part of what we do.

I profoundly believe, as the House knows, that we have nothing short of a moral duty to share some of our educational wealth with students from countries much less fortunate than ourselves. However, I have always been conscious of a deep duty to the British taxpayer, who provides the money and expects us to spend it on a rational and not an indiscriminate basis.

Mr. Martin Flannery (Sheffield, Hillsborough)

I share the hon. Gentleman's dilemma in not knowing what my colleagues will do. My hon. Friend the Member for Derby, North (Mr. Whitehead) did not make our position clear. He said that we would not vote against the Bill—I wish that we were to do so — and that we should pursue the Bill in a spirit of inquiry. However, I cannot understand the hon. Gentleman's point about arguing for giving this money to overseas students. His implication is that hitherto the case was not accepted by the British people and we now therefore have to cut the money. Will he kindly prove to us that the British people were in an uproar against foreign students and that as a result of that we have had to cut the money we give them? Is it not the case that, as there are cuts across the board being enforced by the Cabinet and the Prime Minister, we are cutting these grants and losing much sympathy throughout the world because we seem to be victimising the poorest overseas students, whose culture was helping us in many ways?

Sir William van Straubenzee

I did not expect to find myself grateful for the powerful support of the hon. Gentleman, but I am grateful for his support for my initial contention. I am sorry that he has sent a shot across the bows of his Front Bench.

As to the hon. Gentleman's second point, I am making a simple assertion, which has applied over a number of years and has nothing to do with what may or may not have happened in 1979. The case for making places available in our institutions of education, particularly those of higher education, for overseas students is one that has constantly been fought for, pleaded and discussed. It is not one—I cannot prove this but I believe it—of which the vast majority of our constituents warmly approve. However, our constituents are susceptible to leadership, and leadership is a requirement of being a Member of Parliament. Therefore, these things must be done rationally and not indiscriminately.

Mr. Whitehead

Why does the hon. Gentleman have such a curiously distant view of the electorate? What would he say to those of my constituents who find their jobs and livelihood in the railway workshops in Derby imperilled because orders from Malaysia have been cancelled to show that country's disapproval of the Government's full cost fees policy? Does he not see that many British people make both the moral and practical judgment on this issue which would support those hon. Members who have throughout condemned the full cost fees policy?

Sir William van Straubenzee

I should point at once to the enormously improved relationship between Britain and Malaysia and to the substantial number of students who continue to come here to places such as UWIST in Cardiff where the number of Malaysian students continued to increase even during that period. I should go on to point to the large number of students at sub-degree level. We often overlook the massive contribution that is made, particularly by the further education sector, in assisting students at sub-degree level.

Mr. Whitehead

It has been cut in half.

Sir William van Straubenzee

It is still massive, and, incidentally, the private sector plays a major role here. I should also point to the foreign policy and commercial interests that follow.

I took the hon. Gentleman's intervention to mean that he believes that we should go back to pre-1967 so that all foreign students are put on an equal basis.

Mr. Whitehead

No.

Sir William van Straubenzee

I should be grateful if the hon. Gentleman would be much more explicit than he has been in saying precisely what he would like to do in replying to the debate.

I want finally to raise a technical point that has always been a hobby horse of mine. It is simply to say how often successive Governments run into problems because of difficulties with the law. One can think, particularly in the Department of Education and Science, of problems that confronted the last Labour Government and which have certainly also dogged this Government. I have often felt that government is much too narrow in the sources from which it takes its legal advice. Successive Governments would have avoided considerable difficulties if it had been part of Government practice to take advice from the wide number of people who are available on a confidential basis to the ordinary person, and certainly to the Government, rather than confine themselves only to those who are in Government service. I make no criticism of the individuals concerned— to do so would be unfair and unreasonable. I make the point as one of principle. One day I hope that we shall see Governments, preferably of all colours, shopping around for legal advice.

Having said that, the Government are right — although I understand the point about the grey area which can be explored in Committee— to accept the judgment of another place in its judicial capacity without retrospection but to say what the ordinary man believed the law to be and that it was right and proper to make the law conform with that understanding. That is why I shall vote for the Bill tonight.

8.39 pm

Mr. A. J. Beith (Berwick-upon-Tweed)

I begin with a complaint about the way in which the Government have brought the Bill before us. It is a short Bill, I readily admit, but it is complex in its implications and effects on many people in whom many organisations take a proper and careful interest. The Bill has not had the usual full week and two weekends' consideration. It was printed last Thursday and it has been brought before the House today. That is not the proper way to proceed. The long-standing convention in the House is that a Bill is available for two weekends and the intervening week before Second Reading. Only strong overriding emergency circumstances should change that.

The Government may say that the measure is urgent because local authorities and institutions need to know what is to happen. The way to solve that problem is not to deal with the Bill in haste, but to have presented it earlier. The result may be a longer Committee stage, because insufficient consultation has taken place before Second Reading, but the Government will not have saved those involved any time at all. I criticise strongly the breach of the two-weekend practice. It is a breach of a valuable precedent, which the House should guard jealously.

The Government's policy on overseas students involves a history of mistakes and decisions which have been very damaging to our country's interests. I need look no further for a simple and eloquent testimony to that than the first report from the Industry and Trade Committee which sums up the situation well. The Committee members went to the far east to consider trade issues, but they said: The single issue most frequently raised, both in South East Asia and in Hong Kong, was not a normal trade matter at all, but one which we are in no doubt has trade implications far beyond normal tariff or non-tariff barriers: it was the issue of the UK's changed policy on the fees of overseas students. The London Chamber of Commerce and Industry and many others … stressed the long-term trade benefits to the UK of training foreign students in UK educational establishments … They argued forcibly that the effect of the present Government's increase in students' fees 'whatever the rights or wrongs of the argument may be … [had] been the loss of considerable amounts of business and may well have created a political climate, notably in Malaysia, to our disadvantage over the years ahead, far outweighing the money saved'. Both parties were represented on that Committee and Government Members were in the majority. The Committee also said that the policy was "inept". It said that it was contrary to the UK's best interests. I agree with the aside by the hon. Member for Wokingham (Sir W. van Straubenzee) that the concept of British interests, as most of us hope that we understand it, is wide enough to embrace objectives for overseas students policy which go far beyond what the Government have done and is different from that which is implicit in the Government's decision to charge fees for overseas students.

The damage is considerable and I fear that some of it is irreversible. That is because of the general psychological impact of a decision which is so inimical to the poor in the Commonwealth. They feel kicked in the teeth. When that happens, relations are not easily restored if the person who delivers the kick in the teeth returns some months later and says that he is prepared, under certain conditions, to contribute to the cost of a set of new dentures to replace the gap that he has created. The effects of such a cataclysmic decision cannot be easily redressed even by a near-total reversal of policy.

The Government's statement and the commitments involved are not enough to restore the good feeling that existed between Britain and so many of our Commonwealth partners.

A secondary type of damage is created by the new patterns which students, their families and Governments in the Commonwealth and Third world have had to establish in the interim so that students had somewhere to go while they waited to see whether the British Government would change their policy. Some students have gone to other countries and established new patterns of higher education with other providers, including some in eastern Europe. It will be difficult to repair that damage. The precise implications of the Bill may be limited, but we must view it against that background.

Amendments are necessary to pave the way to an acceptable overseas students policy. The Bill's main weakness is its vagueness and the provisions that it leaves out. Many issues are left to regulations. In practice that means that statutory instruments subject to the negative procedure are to be used. It means that the Government will come before the House with a set of regulations which define much more clearly the real issues about which we are all concerned. Hon. Members will not be able to amend those regulations. If they find that one category is omitted, they will not be able to have that category included. If they find that a definition is faulty, they will not be able to have it modified. More than that, they may not be able to secure a debate on the issue on the Floor of the House and they certainly will not be able to secure a Division.

Mr. Waldegrave

Does the hon. Gentleman agree that, under the previous Government, supported for a time by the Liberal party, even that capacity was not available to the House? I do not remember the Liberal party raising the issue of the exemptions given under the Race Relations Act 1976, which is how the matter has been dealt with before, which gave the House no status whatsoever. I do not remember that being said.

Mr. Beith

The Minister must know that, during my time in the House, I have been a constant critic of the negative procedure which prevents us from doing anything to regulations and orders. The Minister is right to say that features in the Bill, because they differ from the Race Relations Act, will bring certain matters before the House which would not have been brought before it, but bringing matters before the House in this way is little more than a nominal procedure. I regard the negative procedure as affording the House no more than an opportunity to criticise Ministers, very often only in Committee and not on the Floor of the House.

My main criticism of the negative procedure is not that many of these debates are taken in Committee. My criticism is that, at the end of the day, there is no means by which Members can secure a Division. Let us consider the position of an hon. Member who is critical of some features of regulations. His first problem is that, even if he could vote against them, he might not wish to vote against the good features of the regulations in order to deal with one bad point. The regulations might contain five categories of students to whom he thinks special provision should be extended but omit one category. If a Division was available to him, he would be able only to vote against all five for the sake of the one, because there is no way of amending the regulations.

Under the negative procedure, if the matter goes into Committee, there is no Division at all. The only Division that can take place in Committee is on the proposal that the Committee has considered the statutory instrument. As hon. Members know, even if the Division goes against the Government, it is still faithfully reported to the House that the statutory instrument has been considered by the Committee. There is no Di vision on the Floor of the House and therefore there is no means of challenge. It is therefore an inadequate procedure by which to deal with an issue as fundamental to the individual as whether he will be able to get a course of higher education, particularly when the issue involved is the definition of categories of students. That is why, when an opportunity presents itself, I will want to change that part of the Bill so that the statutory instruments are subject to an affirmative procedure.

I am also led to argue that much more could have been included in the Bill itself, so that we could assess here and now whether the range is adequate, and amendments could be made. In many situations the Government accept and welcome redefinitions of categories which have proved during discussion in the House not to have been adequately worked out at the beginning. We cannot do that with the procedures offered to us. Unless, as the hon. Member for Derby, North (Mr. Whitehead) suggested, we have the regulations with us in Committee and can go through them in immense detail, we will have no chance effectively to influence those crucial decisions.

Clause 1 refers to a student's connection with the United Kingdom. A number of groups could make a strong claim for having the nature of their connection spelt out in the Bill rather than afterwards. One such group, about which the Government disagree with Opposition Members, is students from British dependent territories. As a firm supporter of British membership of the European Community, I still find it indefensible that a student from what is in effect a French dependent territory is charged a fraction of the cost of a student from a comparable British dependent territory. There is also a comparison between French overseas territories and British Commonwealth countries, but the comparison between British dependent territories and comparable parts of the French overseas departments is even more striking. The Government must think again about the small dependent territories, which still have a relatively close relationship with this country and in most of which there is no alternative provision for higher education.

Mr. Christopher Price

The Falkland Islands.

Mr. Beith

The Chairman of the Select Committee mentions the Falkland Islands. That is an obvious case. It is noticeable that the Government gave citizenship to the Falkland islanders only in the aftermath of the fight for the very freedom of those inhabitants.

There are refugees under the United Nations convention, those granted asylum and those awaiting, a decision on asylum, all of whom we should consider more carefully. There are people granted exceptional leave to remain in the United Kingdom. In recent years, Poles, Afghans, Ugandans and Iranians have for special reasons been granted rights to remain in the United Kingdom. Their lives have been disrupted, but in almost all cases they do not have the means to proceed through higher education at high cost, even though they have a good case for doing so.

There are also children of diplomats, returning residents, children of expatriate Britons in the public service, the services and commercial and other work overseas, whose connection with the United Kingdom is clear, although it is not necessarily embraced in the Bill. Once again, that should be spelt out more clearly.

There are those who have proved their connection with the United Kingdom by virtue of being permanently resident for non-education purposes for three years. There are recently arrived immigrants— for example, from the Indian subcontinent. There is a special problem in that regard which the Government must consider. The quota queue on the Indian subcontinent is extremely long. If someone has waited seven years to come here, why must he wait a further three years to qualify for admission to higher education when it will be clear by that time that he wishes to take up permanent residence in the United Kingdom? It is an unreasonable imposition if the effective qualifying period is as long as that.

Clause 1(2) allows for different provision for different cases or purposes". That is an intriguing phrase which could cover a multitude of Government sins or herald a sensible approach to overseas student fees. I agree with those hon. Members who have argued that, if limited resources are available, we may have to be discriminatory in the way that they are allocated to overseas students so that we assist most of all poor students from poor countries, students whose links with the United Kingdom it is particularly desirable to foster, and students from countries towards whose development Britain feels a special responsibility. There are a number of categories for which we should do more, and we should use the clause for that purpose.

So far the evidence is not encouraging, and we need a more positive commitment from the Government. They still seem to be taking half a step back from the disastrous position that they adopted over their earlier decision on full-cost fees.

Clause 1(3) and (4) have a different impact in that they relate to charges made to overseas students for things such as halls of residence. Those provisions appear to buttress the iniquitous manner in which overseas students are treated in some halls of residence in some public sector institutions of higher education. A recent National Union of Students survey shows that many differential charges are imposed on overseas students for their residence costs in public sector institutions, ranging from 17 per cent. at Hatfield polytechnic to an astonishing 181 per cent. at Portsmouth polytechnic. I suppose that that is an outcome of the impossible budget-balancing exercise in which many polytechnics hve become involved in an attempt to maintain their residential facilities. These provisions will add another tier of discrimination which in some cases is particularly heavy.

We are talking about an absolute level of charges that is often very high. There is no agreed formula for calculating the charges, which include elements for utilities, porterage and maintenance. They vary greatly between institutions and are another element in cost discrimination against overseas students in which the Government should take a more careful interest. I am worried that these provisions will simply buttress that practice.

Clause 2 has a different effect. It relates to discretionary awards, and little is likely to be said about that provision because I know of few local authorities which are granting discretionary awards to overseas students, or indeed to anybody else; discretionary awards are scarcely available to home students, including for a wide range of important courses, so the effect of clause 2 will be negligible. It is probably legitimising the present position in which most local authorities say, with even more speed and expedition to overseas students than they say to home students, "There is no money in the kitty. There are no discretionary grants available." But the broad provisions of the clause are still subject to some of the same criticisms which I applied to clause 1.

I agree with the Under-Secretary that not to pass the Bill would be to ensure that the limited additional assistance involved— he spoke of £ 30 million— might go to a group who include many of the les needy and less deserving overseas students— those, for example, who have been able to afford to establish a period of residence here by attending fee-paying educational institutions, whether public schools or private sector colleges of various kinds. I make no criticism of them for doing that. Indeed, it was a sensible decision for many of them to take, coming, as many of them do, from wealthier families in the wealthier countries from which students come here.

Bearing that in mind, the assistance that we have available needs to be channelled to other groups than some of them, and therefore I do not dissent from the need to introduce legislation dealing with these issues. But I criticise some of the detail of it and I share the criticism of what we may call the element of retrospection— or at least the impact of the Bill— on those who have already entered on courses with an assumption — which has certainly existed since Scarman— that the fees would not be grotesquely high and, in many cases, an assumption, dating from before the Government's change of policy, that they could complete higher education in this country at reasonable cost.

Both of those assumptions would be completely knocked away if the Government were to apply, as they seem to intend to do, the provisions of the Bill to those already entered on courses. The Bill should apply to those beginning courses in the forthcoming academic year and not to those who have already entered on them. I would support attempts during the proceedings on the Bill to confine it in that way.

Some aspects of the Bill could be used to make more intelligible the policy of this country towards overseas students. It is a policy of tremendous importance which the public understand better than the Government give them credit for. Many people have reason to know how much former students who studied here have contributed to the long-term good of Britain and the countries to which they returned. There is widespread understanding that it is valuable for British students to be educated alongside those from other countries, and there is far wider public understanding of the value of overseas students, particularly from poorer countries, in our institutions than Ministers recognise.

Further changes of policy to get back to a more sensible approach, one which would do Britain long-term good, would be more widely supported than the Government recognise. It is an approach which my hon. Friends and I take and we shall seek to use the Bill to further that objective.

8.59 pm

Mr. Tim Brinton (Gravesend)

Back in 1980 there were inevitable signs that this debate would be taking place about now. I cite as my evidence for saying that the interim report of the Select Committee on Education, which was laid before the House on 16 April 1980. That looked into the funding and organisation of courses, in particular the question of an interim report on overseas students' fees being made.

It was clear in that report, to which I subscribed, in paragraph 45 and ensuing footnotes, that the definition of "ordinary residence" was in a state of considerable muddle. Our report said: In approving the new arrangements for overseas students in January 1980 in pursuance of Section 41(2) of the Race Relations Act 1976 the Secretary of State amended the definition of an overseas student in such a way that some applicants who would have qualified for 'home student' status for fee purposes will no longer do so. The new definition for the purpose of these arrangements— and hence for the policy of charging full-cost fees — is ' … any person who has not been ordinarily resident in the United Kingdom, the Channel Islands or the Isle of Man throughout the period of three years immediately preceding the date that his course is, or was, due to begin'. That was one shot at it. The footnote contains another with which I shall not detain the House but which makes life more complicated.

The next paragraph of the report states: Asked if he thought that further guidance was likely to be given to institutions on the meaning of 'ordinary residence', Mr. Thompson of the DES said 'I do not think so. This is a matter which has to be settled ultimately through the courts and that administrative advice is not in point. There was a clear forecast that at some stage, thanks to the Government's policy on overseas students, which I fully support, the matter had to be placed before the courts. That is why, after the Scarman decision has been made and deliberated upon, we are considering the new Bill.

The problem of overseas students coincides with many other debates in the House concerning the problem of subsidy. I personally believe that while Governments must support those who cannot support themselves in education or in any other matter, subsidy now distorts and falsifies. This is a prime example. The hard-pressed taxpayers and ratepayers believe that the money that they have contributed to the education of people in this country should be used for them. However, a portion is spent at the Department of Education and Science on overseas students. The diversion made by the Government for some of that money to come out of the budget for the Foreign and Commonwealth Office makes sense. I wish that the Department of Education and Science had nothing more to do with the financing of overseas students. That is a different responsibility in the context of government. To avoid distortion, it is correct to say that the full fee is the normal fee. Then one can create scholarships and bursaries for those who need them and need to come to this country. Those are the steps that the Government seem to be taking. They are going in the right direction.

My hon. Friend the Member for Wokingham (Sir W. van Straubenzee) said that we are not the only Government who have raised overseas student fees. In the report from which I quoted there is a table that shows that, during the period of office of the Labour Government, overseas students in the year from 1976–77 to 1977–78 almost doubled. Postgraduate fees rose from £595 to £ 1,080 and undergraduate fees rose from £ 595 to £ 825. That is an example of how in this matter the Government are not necessarily the baddies and the Opposition the goodies who wish to lavish money on overseas students.

I believe that at heart, as my hon. Friend the Member for Wokingham said, the people have to be persuaded that their money is being spent wisely. It is not, as the hon. Member for Berwick-upon-Tweed (Mr. Beith) suggested, something that they fully understand. I fully support our making a contribution to world education and gaining in our trade by fostering students in the universities and colleges in this country, but we should do so sensibly and economically because, at the end of the day, we are aiming at spending prudently the great contributions by our taxpayers and ratepayers. I look forward to supporting the passage of the Bill.

9.4 pm

Mr. Christopher Price (Lewisham, West)

I must begin with a complaint about the pace at which the Bill has been brought in. The hon. Member for Berwick-upon-Tweed (Mr. Beith) has also complained, as I did at business question time last Thursday. It is a House point, but it is a strong convention, which few Governments ever breach, that except in a real emergency which happens one day and requires legislation within the week. Opposition and Back Bench Members who wish to comment on a Bill should have a full week and two weekends between publication and Second Reading.

On this occasion, as I shall now show, there was no such emergency. When I complained at business question time I received such a gracious apology from the Leader of the House— one might almost call it a grovelling apology — that it is hardly fair to complain further. Nevertheless, the fact that the Government dithered for nearly three years and then rushed in a Bill against all the conventions is yet one more example of the procrastination and incompetence of their approach to the question of overseas student fees.

I fully accept that the problems of overseas student fees did not begin in 1979–80. They began long before that. Indeed, as it is now ancient: history, perhaps I can tell the story of how as Parliamentary Private Secretary to the late Mr. Crosland I was given an inspired written question to put down two days before Christmas eve 1966 [HoN. MEMBERS: "Shocking!"]. That never happens now, of course. That ensured that the argument took place in 1967. My hon. Friend the Member for Derby, North (Mr. Whitehead) is right. There was indeed an argument. Had I not been bound by the Trappist vows of a Parliamentary Private Secretary I might have said something quite different. Certainly there was argument. Labour Members voted against their own Government and a number of Conservative Members refused to vote with their party because they felt that it was hypocritical to oppose a measure that they knew perfectly well a Conservative Government would have introduced equally rapidly. A comparatively small differential was created at that time, the pressure coming from the Treasury rather than from the Department of Education and Science, and I now regret that it happened.

I also agree that the present Government were not the first to rely on the ludicrous legal judgment of Stransky — Stransky. It was first relied upon by the right hon. Member for Crosby (Mrs. Williams) when she was Secretary of State— no doubt on the advice of the legal luminaries who advise the Department of Education and Science and whose track record has not been the best of the various Departments over the years. One recalls the Enfield grammar school case, in which Patrick Gordon Walker was not particularly well advised as to what he should do. There was then the Tameside case which produced a House of Lords judgment and now the Stransky— Stransky case has been litigated as far as the Seaman judgment in the House of Lords. For some extraordinary reason which I do not understand, the Department of Education and Science seems to be somewhat accident prone in legal matters.

The Secretary of State for Education and Science (Sir Keith Joseph)

The hon. Gentleman is perfectly entitled to criticise Ministers to his heart's content. It is Ministers who take decisions. They receive advice, but they must decide what advice to accept.

Mr. Price

I shall stick to the conventions. The problem that has run throughout this issue has been the attempt to use a definition— "ordinary residence"— for a purpose for which it was never intended. The paradox is that, in tax law, the Inland Revenue has tried for the past 50 years to make the largest possible number of people that it can lay its hands on ordinarily resident in Britain to maximise the tax intake. Suddenly, the Department of Education and Science tries to make as few people as possible ordinarily resident, also so that the Exchequer can benefit.

The use of the concept of ordinary residence for those completely opposite purposes was bound at some time to come up against its present problem. I am pleased that we had someone of the legal status of Lord Scarman to reverse the weasel judgments in the lower courts under which both Lord Denning and the lower courts were willing to go along with the Karminski judgment of the "real home". They were going along with the administrative convenience of the Government rather than with the real meaning of the words in the English language.

I am glad that Lord Scarman said that one could be ordinarily resident because one likes the flowers and that the reason for one's being ordinarily resident has nothing to do with the stamp on one's passport. At last we have got some clarity in the issue.

I am about to criticise Ministers, but not the present Secretary of State just yet. I am amazed at the mistake which the right hon. and learned Member for Runcorn (Mr. Carlisle) made. He has a great deal of legal experience but, by relying on the Karminski judgment in 1980 to go over to full cost fees, he made a sea change. There can be no doubt that that was a ministerial mistake.

The hon. Member for Gravesend (Mr. Brinton) quoted from the Select Committee report. I shall mention a civil servant, partly because he is retired. He is called Mr. Alan Thompson. Most civil servants in the Department of Education and Science seem to be called Thompson these days. He gave evidence to the Select Committee. When asked whether he thought institutions needed any further guidance about the meaning of "ordinary residence", he said: I do not think so. This is a matter which has to be settled ultimately through the courts and that administrative advice is not in point. Time and again we have told Ministers, both in the Select Committee report and elsewhere, that saying that something must be settled in the courts necessarily means that there will be a two or three-year delay in the ordinary course of events. It is impossible to get away from that, as it is the extent of legal delay. By using the courts instead of legislation to solve this problem, for three years overseas students simply did not know where they stood. It is all very well for the Minister to say that those students came here expecting to pay overseas student fees. They came here without a clue about what was happening because the Government could not make up their mind and said that the courts should settle the matter. They did not know how much they had to pay until Lord Scarman settled it. Many of them visited my surgeries, and I told them to wait for a decision from the Lords, who are much more intelligent than the Appeal Court judges, and that is was most unfair.

Perhaps I may give an explanation of the delay from 1980 until 1982. The Government have been willing to legislate on many other matters, and it is most uncharacteristic for Governments to say that the courts should settle a matter. I believe that the reason was the British Nationality Act 1981. The increase in overseas student fees was strongly connected with that repressive Act. The Government wished to pass the immigrant legislation, with its rule about living here for 10 years, which was directly aimed at excluding from British citizenship children born here to overseas students. The Government wished to get the Act through the House before they legislated on this matter. The result was that thousands — no one has managed to work out the number— of overseas students who had come here with great difficulty and who genuinely wished to study at our institutions, did not know where they stood. On that point the Government are guilty of unreasonable procrastination and, ultimately, incompetence.

There was then a second, extraordinary, delay. The Government must have known that the Scarman judgment would take the line that it did. The Law Lords could have done only two things— they could have stuck by the Karminski judgment on the real home, or they could have made a much more generous judgment, as Lord Scarman did. Why did the Government wait from December until 30 March before introducing this Bill? I have no explanation for that, except for the one offered by my hon. Friend the Member for Derby, North— that a furious argument was continuing about whether to include some straight retrospective legislation. Instead, the Government decided to include some fuzzy retrospective legislation. The opening paragraphs of the Minister's speech tonight did not convince me that there was no element of retrospective legislation in the Bill. I do not necessarily complain about that, because I defended retrospective legislation from time to time when the Labour party was in power. I am not a complete purist who says that legislation must never be retrospective.

Mr. Bob Cryer (Keighley)

In the Clay Cross councillors case, Conservative Members were the purists who said that there must never be retrospective legislation. They called it the slippery slope towards Fascism. There has been a curious change of attitude now that they are in government.

Mr. Price

That is an excellent point. All political parties have such curious changes of attitude once they are in government. I shall need a great deal of convincing in Committee that this is not a retrospective measure but rather, as the Minister put it, a gloss on preceding legislation.

Mr. Beith

Does the hon. Gentleman have the same difficulty that I have experienced in squaring what the Government say about fees and awards with the background of the Bill? It was stated in the circular that was sent to local authorities that the Government accepted that it would not be right to seek to deprive students already on courses, and others who had completed their courses, of the benefits which the judgment has shown they have always been entitled to receive.

Mr. Price

We have had an ex cathedra statement from the Under-Secretary of State that fees and awards are utterly different. That statement will be probed in Committee to ascertain how utterly different they are.

Overseas students add things up and try to ascertain whether they can afford to remain here as students. If they cannot afford to do so, they return home. It will come as a great surprise to many overseas students when they are told that in principle fees and awards are different.

The Scarman judgment came as a great relief to many students who were thinking that they could afford to stay on no longer because of the high level of fees that they were being charged and the lack of maintenance awards. They had three months of phoney peace, as it were, while the Government hesitated. They are now being told that they can have their awards but will be deprived of the right to a home student fee which Lord Scarman appeared to give them. This is another issue that will have to be probed in Committee. Having had some experience of these matters, it is not nearly so self-evident to me as it is to the Minister that fees and awards are so different.

Mr. Hooley

They are different in one respect because whereas a fee is intractable once set, an overseas student can, in effect, modify the cost of living for himself.

Mr. Price

Had that assertion been put the other way round, I should have seen some logic in it. However, we have the Minister's gloss, and that will be subject to scrutiny.

The Government are in chaos, but not only because of incompetence and procrastination. The chaos stems from the disastrous and unnecessary concession that the Prime Minister, as I understand it, gave to EC students. It appears that there was a straight swap with the Germans so that we could get German support for our stand on the EC budget after the Dublin summit. That story has often been printed and it has never been denied. I shall continue to believe it until it is categorically denied.

When the concession was made to the Europeans, it was never thought that it would produce too many anomalies. It led to the specious argument that there would be roughly a straight swap with EC students coming to the United Kingdom and United Kingdom students going to the EC. It was said that we should do a deal on that basis. There was no justification for so doing and the United Kingdom was not compelled to make the deal under any EC regulation. It seems that we entered into the deal to please some of our friends in Europe as part of a package deal. I am not wholly against that approach, but it has had some fascinating consequences from which it will be difficult to escape.

Within the EC is France, which has an attitude to Third world countries that are connected with it that is quite different from the one that we adopt. As a result, we have given an amazing array of French dependent territories a concession that I am sure we never intended to make. By making the concession, we gave another £ 1.5 million to quite wealthy European students, when everyone agrees that it would have been far better to have made that sum available to more deserving students from the Third world.

If the number of EC students admitted to British universities and colleges in the previous September is monitored, the extraordinary result arises that the universities and colleges do not want EC students any more because they do not drag a big hefty overseas student fee with them. The universities and colleges are more prepared to take students from Canada, the United States, or anywhere else for that matter. They are prepared to accept students not because they are appropriate for the course or because they have the appropriate qualifications in competition with British students but simply because the students, by attending that university, drag a whopping £ 3,000, £ 5,000 or £ 7,000 fee behind them. That distorts not just the academic but the moral nature of the institution.

Mr. Whitehead

Those distortions are far worse and more sinister for home students than the alleged distortions of subsidy stated by the hon. Member for Gravesend (Mr. Brinton).

Mr. Price

I thoroughly agree. The hon. Member for Wokingham (Sir W. van Straubenzee) said that our constituents, bearing in mind the election, might not be especially interested in overseas student fees. My constituents, who cannot get their children into university because the University Grants Committee, under orders from the Government, has put an absolute limit on the numbers of students in certain universities, are not at all pleased. They know that those universities can take as many overseas students, on top of their home quota as they want. My constituents are interested but not very pleased about that state of affairs.

The Labour Government's effort to solve the problem by quotas instead of money did not work properly because it was not planned sufficiently carefully by the right hon. Member for Crosby (Mrs. Williams).

Mr. Cryer

Some civil servants probably sabotaged it.

Mr. Price

In principle, quotas are the right way to deal with the problem rather than to allow the power of the overseas purse to fix the number of overseas students attending institutions. Little by little, home students will be pushed out, although they should have a prior right to attend educational institutions.

Mr. Waldegrave

There is no question of overseas full-fee-paying students pushing out home students, as the hon. Gentleman well knows. Quite outside the UGC quota, some universities have a net income from their overseas students that helps with the overheads and strengthens the institutions for home students.

Mr. Price

I appreciate that that is the Government's line. If I were standing at the Dispatch Box that is the line I would be purveying. If the Under-Secretary had listened carefully to some of the speeches by Professor Ralph Dahrendorf on this issue and knew the deep cynicism with which he went to the United States to whip up students for his one-year diploma course, while accepting that they were not up to the standard of other home students at the Lodon School of Economics, I do not think he would take that line. The overseas students must have desks, and classrooms to sit in. Although in brute financial terms they might strengthen institutions, the truth is that if this state of affairs continues at the present level the effect will be to squeeze out home students.

Mr. Kinnock

Is it not a logical and widely understood extension of the Minister's case that by discouraging overseas students from coming to British institutions, the Government are weakening the institutions for home students? Has not that been one of our main arguments against the full cost fee system?

Mr. Price

I certainly agree. The objection to the present system is that it distorts the institutions and courses. In addition, it prevents universities and other bodies from sticking to academic criteria and they find themselves distorted by other criteria. The Government now seem to have adopted a policy of allowing EC students and students from Hong Kong to pay home student fees. Perhaps students from Cyprus will win home student fees one day, I do not know. There seems to be a policy of selecting countries because of trade, or because they are in danger of becoming Communist. As a sort of reward, their students are given home student status. So far that status has been extended only to the Falkland Islands and Hong Kong but, once the thin end of the wedge is in, it can be shoved in further and further, and other countries will then qualify for the privilege. I hope that the Government will think carefully about the problem, because it represents one more distortion in the system.

The Minister frequently mentioned students who came to Britain thinking that they had to pay full-cost fees. He constantly referred to overseas students. One of my constituents, Anthony Nnonelyu, is a first year student of architecture at a London polytechnic. His case is in the grey area. He has been in Britain since the age of 10 and has been to a London comprehensive without paying any fees. However, for the past 10 years the Home Office has argued with me about the status of his mother, who happens now to be the head of a single-parent family. She says that she is a student, but the Home Office says that she is not a student any more. It is about to throw his mother, and the rest of his little brothers and sisters, out of Britain and to send them back to Nigeria after many years here.

Mr. Cryer

That shows Tory concern for the family.

Mr. Price

It is a scandal. However, the Home Office has graciously said that as Anthony has reached the age of 18, he might be allowed overseas student status — although he has been a home student for 10 years— because his mother has no right to stay here any more. Is someone in that position a home or overseas student? This week, I have been arguing with the Home Office, because Anthony was asked to go on a field trip to France next week. Today, the Home Office told me that as his status was not settled, it could not give any guarantee that he would be allowed to return to Britain if he went to France with the rest of his class.

Mr. Cryer

Scandalous.

Mr. Price

I checked with Lunar house in Croydon to make sure that it was not just the Minister's private office that said that. However I was told that he should not go on any field trips until his status had been settled. I tell that little story only because it gives the lie to the bland assertion that there are overseas and home students. In London, hundreds and hundreds of students still do not know— even with the Bill— whether they are home or overseas students. If someone like Anthony comes to Britain, and his mother's status is in question, is it deemed that he has come to Britain solely for educational purposes or that he has come to be with his family? There are hundreds of similar issues that need to be sorted out. However, they will not be resolved if the Government adopt the simplistic view that students fall into one category or the other.

Thousands of students about whom we are talking— I am sorry to have to remind the Minister of this— are real people, with real worries. These are not just financial worries. They are worries that extend to the fact that if they suddenly lose their student status because they cannot afford to keep up the overseas fee, they are then subject to visits from the police because they are no longer students and no longer legally here, and they are in danger of being thrown out of the country. Often, male students have dependent families and are worried about their wives and children.

At the end of his speech, the Minister spoke of using the convenient shorthand phrase "overseas students". That is not convenient shorthand but a hopelessly inconvenient phrase. The Minister said that the Bill had to be brought in in a hurry to clear up a problem. I got the impression from his speech that the Bill as it stands, even with the regulations that we must see in Committee go into it, clears up nothing. If the Minister wants to push through the Committee stage quickly so that we can get our general election over and come back in a new Parliament with the Bill passed into law, he will have to do very much better in Committee in addressing the students' predicament than he has in the Second Reading debate.

9.37 pm

Mr. John Watson (Skipton)

The hon. Member for Derby, North (Mr. Whitehead) referred to this as being a "Barebone's Parliament." On the odd occasions that I am successful in catching your eye, Mr. Deputy Speaker, that is normally the case. Some hon. Members have a reputation that is such that when their name appears on the monitor, they have the ability to empty the Tea Room of enthusiasts who wish to hear the pearls that they have to offer. Normally when I rise, I seem to have the opposite effect and people develop a sudden interest in what the Tea Room lady has to say. I see that my hon. Friend the Member for Lincoln (Mr. Carlisle) is setting a good example. I understand that the tea is good this evening.

When I was first elected I was advised that one should never rise to make a speech unless one possessed considerable powers of intellectual analysis or considerable originality of thought, or could crack a few jokes. I have tried to follow that dictum over the past four years, which has caused some people to wonder why it is I get to my feet at all. Whenever I try to pretend to intellectual ability or originality of thought, it seems to strike some colleagues as a tolerably good joke, and I can get away with the odd speech once a month.

That is not the reason why I am speaking tonight. I am speaking tonight because I think that this is a predominantly good Bill that has been unfairly criticised. My other reason is the old parliamentary dictum that if one asks a nasty question on Tuesday, one gets wheeled in to make a nice speech on Wednesday.

Some unfair allegations have been made against the Bill. The first is that it is retrospective. I cannot see how that can be said, in all fairness. There is no mention that awards already paid should be clawed back and no serious mention that fees charged in the past should be reinvoiced and charged to the greater sum. To describe this legislation as retrospective it is necessary to say that fees charged in the future may be higher and awards paid in the future may be lower than some people have half expected them to be between December 1982 and April 1983. Only by that extremely narrow and rather artificial definition can the Bill be presented as retrospective.

By that definition, how does one judge the Greater London council rates, which have this month gone up substantially, in spite of the fact that the fearless leader of the Greater London council said in December last year that he hoped that the rise would be kept to a minimum? They are on all fours.

I have heard it suggested that the regulations that follow the Bill should be retrospective, and that is why the Minister was right to say that we must avoid any element of retrospection. There is a simple and clear reason for that. Why do overseas students come here in the first place? Partly, I submit, to benefit from our education establishments, but partly also because they perceive Britain to be a free country which can set a civilised example to the rest of the world. That freedom is based in no small part upon the concept that we call the separation of powers— the idea that it is the job of the judiciary to interpret the will of Parliament and that Parliament will respect that interpretation. The moment that Parliament tells the judiciary that it does not like that decision and not only shall we change the law but we shall change the law back to square one so that the ruling will come as an irrelevance is the moment when retrospective legislation begins, albeit slightly, to erode the standards of civilisation that cause some overseas students to come here in the first place.

The second criticism, which has not been clear so much as implied throughout the debate, is that perhaps it might be wrong in principle to introduce this legislation. Speaking on behalf of the Liberal party, the hon. Member for Berwick-upon-Tweed (Mr. Beith) said that he appreciated the need for legislation and that he could support it, at least in principle. That was not quite so clear from the speech of the hon. Member for Derby, North. I hope that when he replies to the debate he will answer this simple question. Suppose that, following the Scarman judgment last December, the Government had done nothing. Suppose that the Government had said, "Oh dear, that is a pity. We did not expect that judgment but it has come and we shall have to live with it. We shall not propose any legislation as a result." Would a Bill of this kind have formed part of the next Labour party manifesto? If the hon. Gentleman answered that question in his opening speech, I cannot have been listening sufficiently closely because I confess that it eluded me.

Mr. Whitehead

The hon. Gentleman asks a rhetorical question. I can put him out of his agony now. If he reads the Official Report he will see that I accepted, given the situation in which the Government now find themselves and the comparative urgency following the Scarman judgment, that the Bill is necessary. But I would not, as the Irishman said when asked for directions, ever have got to this place in the first instance.

Mr. Watson

I am grateful to the hon. Gentleman for that clarification. My question was not rhetorical. I wanted an answer and I am grateful to him for giving me one.

I shall take this opportunity to raise a constituency problem. I ask no forgiveness for doing that because it is a problem of general rather than specific concern. A constituent of mine, who lives in Skipton, works for the Overseas Development Administration. Between 1967 and 1980 he was based in Uganda. Between 1980 and 1982 he was based in Kenya. In the middle of last year his son gained admission to Cambridge university. At that time, the family had had their home in Skipton for some years. The son gained admission to Cambridge university but in June last year he was not resident in Skipton. Therefore, when his eligibility for an award came to be judged, it was not the education authority of north Yorkshire that had to make the decision because the money came from some Government fund, nor was it the Department of Education and Science; the decision was made by Cambridge shire county council. It decided that because my constituent's father had been working in Uganda between 1967 and 1980 his job with the ODA was not temporary but permanent. Therefore, he found himself disqualified under the three-year rule and initially my constituent's son did not receive an award. Subsequently, Cambridgeshire county council changed its mind— I can only put it that way— and the problem seemed to go away.

There were several elements of that case which left me with a deep uncertainty about the manner in which the system works at the moment. First, the decision on the award was taken, not by north Yorkshire county council where my constituent lives, or by the Government who ultimately have to pay the money, but by Cambridgeshire county council, because that is where the university is based. Secondly, elected Cambridgeshire councillors had to sit in judgment and decide whether my constituent from 200 miles away was working permanently or temporarily when he was in Uganda. Thirdly, on the basis of somewhat slender evidence, they decided that he was based there permanently and was therefore excluded on the basis of the three-year rule.

Fourthly, faced with almost identical facts other county councillors and education authorities in other parts of Britain have come to dramatically different conclusions. Fifthly, the means used to communicate the decision to my constituent was so inefficient and inadequate that his son had already started university and personally paid the fees before he received the bad news that he was not entitled to an award.

There must be scope for clarifying the guidance to local authorities in such cases, which I am sure are general rather than specific and typical rather than isolated. We are looking forward to the Minister's response with eager anticipation and I hope that he can clarify the position.

9.47 pm

Mr. Frank Hooley (Sheffield, Heeley)

The Government are reaping the fruits of their folly in introducing full cost overseas student fees. At one time, one of the glories of the academic world was that it regarded itself as international and did not take much account of national frontiers. At one time a student could go to Oxford, Paris, Bologna or Prague universities and be part of the fraternity. He did not have to take account of whether he was German, Czech or English. The move towards discrimination between overseas students and home students which, as the hon. Member for Wokingham (Sir W. van Straubenzee) said, was a disastrous innovation by a former Government, is creating more and more complications and will continue to do so.

The full folly is the sheer idiocy of so-called full cost fees and trying to treat education as if it were a commodity in the market place like margarine rather than something with a special social and cultural value which must be preserved.

The Government have committed the same folly over home students. They thought that they could chance their arm and push up fees from £ 400 to £ 900, but their decision kicked back at them. The Government discovered that they were making a serious mistake and had to cut fees from £ 900 to £ 480.

If Governments treat students in that way, the kickback will come from all directions. I suspect that this is only the beginning of a long line of emergency Bills, patching, mending and cobbling because of the idiocy of the original policy.

It is extraordinary to note that instead of the United Kingdom being proud that our universities, polytechnics and colleges are so highly regarded, so famous and have such a magnificent reputation around the world— which indeed they have — we should want to introduce hindrances, obstacles and difficulties for students from all over the world who want to take advantage of our great education facilities. Other countries do not do that. Britain is unique in going for the concept of full cost fees. I know of no other country that has indulged in this idiotic and counter-productive policy. It is landing us in more and more difficulties internally, and they will continue.

Most overseas students would have been prepared to make do and mend, to get along and to pay their way with fees of £ 200, £ 300 or £ 400, but when the Government imposed fees of £ 2,000 or £ 3,000 the stakes became enormously high and, as a consequence, the litigation arose. The litigation has not gone the way that the Government expected and they do not like it. The Government's behaviour towards overseas students has been arrogant, high-handed, xenophobic and grossly discriminatory.

I use the word "discriminatory" deliberately, because the Government have given rich students from some of the richest countries in the world — Germany, Holland, France, Italy and Belgium— the opportunity to study here for the same fees as home students, while the poorest students in the world, from villages in Tanzania, Malawi, Bangladesh and Ghana, are being screwed for every penny and every shilling that can be taken from their pockets in a ruthless, savage and unscrupulous manner as a consequence, they are staying away. The Government have carried out this policy without consultation with the organisations that could have advised them better. Almost every organisation concerned with Commonwealth and overseas students has complained bitterly about the lack of serious consultation by the Government on the complex of issues that arises from this massive jump in oveseas students fees.

Since the Government came to office overseas students have been kicked around from pillar to post. Fees and charges have risen enormously. The Government have sought to impose health charges. The consequence is that the overseas student world is becoming disillusioned with education in Britain. The figures are startling. Obviously the Europeans, against whom there is no discrimination, are not worried and still come. I am told that the overseas student intake at the university of Sheffield is down to one fifth of its former level. About 80 per cent. of the overseas students who a few years ago might reasonably have been expected to come to the highly distinguished university which I had the pleasure to serve for 14 years before coming to the House, no longer come. The figures will fall. As the intake goes down, the multiplier effect goes into reverse.

The figures nationally are nearly as disastrous. It is estimated that, in 1978, 700 undergraduate students came to this country from the poorest countries. By December 1981, the number had fallen to 474. On public sector non-advanced courses— I am discussing countries whose per capita income is about £ 200, or $ 300, a year— the number of students in 1978 was 1,568. By 1981 the number had slumped to 607— cut to about a third. The 1981 figures are not the end of the story and I expect that the 1982 figures are as low or lower. On public sector advanced courses, there were 2,200 students in 1978. In 1981 the figure had slumped to 1,300— about a 40 per cent. fall. That is the trend from the poorest countries in the world.

A similar trend occurs in countries which, though poor, are better off than the others I have mentioned. There, the number of university undergraduates has declined from 8,664 to about 7,000. In the public non-advanced sector — largely the further education colleges— the figure has slumped from more than 10,000 to under 4,000, yet it is in that sector that much valuable training for developing countries can be given. The developing countries do not necessarily want postgraduate students in philosophy. Rather, they want students who are trained in the engineering, electronics and similar practical and vocational courses which are given par excellence by the further education colleges.

Although the slump has not been so sharp in public sector advanced courses, the figure has fallen from nearly 11,000 to 8,300. That is the impact of the Government's policy on the number of overseas students, and the damage to our standing and reputation has been enormous.

The hon. Member for Wokingham suggested that not much damage had been done, that countries such as Malaysia were still sending many students here and that there was nothing to worry about. But it was Malaysia that kicked back and started to worry the Government. It was when Malaysia kicked the Tory Government where they are sensitive— in their business pocket— that they began to wake up to the folly of the policy on which they had embarked. When Malaysia began to take over British business interests and told British business men that it would not trade with them if its students were treated in this fashion, the Foreign Office suddenly began to take on board the idiocy of what the Secretary of State for Education and Science and his colleagues were doing. As a result, after some anguish and puzzling about what to do, the Foreign Secretary came forward with his scheme to get extra money from the Treasury.

Sir William van Straubenzee

I simply made the point— I think that the hon. Gentleman will find that I am right— that the number of students enrolled from Malaysia at the University of Wales Institute of Science and Technology increased throughout the period.

Mr. Hooley

The number of students may have increased at one institution — I cannot dispute that without looking at the figures— but the fact remains that it was the sharp reaction of Malaysia among others that induced the Foreign Office suddenly to look at this problem with new urgency and to decide that something had to be done. If the hon. Gentleman's argument is correct, he must explain why Malaysia was one of the three countries singled out for special treatment with the £25 million political patronage money that the Foreign Office had at its disposal for overseas students.

The modification of policy that the Foreign Office has rushed in to repair the damamge done by the Department of Education and Science will not bring back the students who have gone for good to the United States, Canada and other English-speaking and non-English-speaking countries. The trend is now established. These countries are fed up with the shenanigans of the Department of Education and Science. I do not suppose that legislation of this sort will satisfy them. As my hon. Friend the Member for Lewisham, West (Mr. Price) has said, all the grey areas, ambiguities and uncertainties about this legislation will cause more dismay, alarm and concern to overseas students rather than reassure them.

I shall try to explain what the Bill will seek to do when we see what the regulations are. The Minister will correct me if I have it wrong, which would not surprise me in view of the sketchy outline of the Bill we have had and the fact that we do not have the regulations. My impression is that a student who has put in three years' ordinary residence by the Scarman definition before 1 September 1982—

10 pm

Ordered, That, at this day's sitting, the Education (Fees and Awards) Bill may be proceeded with, though opposed, until any hour. — [Mr. Major.]

Question again proposed.

Mr. Hooley

A student who has put in three years' ordinary residence according to the Scarman definition before 1 September 1982 must be given a mandatory award for 1982–83 if he is otherwise qualified. That is, if he has the three years and is otherwise qualified, he must have the award for 1982–83. I am not sure whether the award will be for the length of his course or just for one year. That is a feature that could land us in further litigation because if the Government say, "Under the Scarman judgment he can have it for one year but not subsequently", all sorts of litigation will arise as to whether what is called a mandatory award is for a course or for a bit of a course, and we shall find ourselves with many more jolly bits of legislation to consider late at night.

Mr. Waldegrave

I can put the hon. Gentleman out of his agony on that straight away. I have said twice that mandatory awards are given by statute for the whole of the course.

Mr. Hooley

That is a help. As I understand it, if the student has had his ordinary residence as per Scarman for three years before 1 September 1982, he must be given a mandatory award for 1982–83 and the remainder of his course if he is otherwise qualified, in accordance with the other regulations. Similarly, a student who has put in three years' ordinary residence according to the Scarman judgment before 1 September 1981 must be given a mandatory award for 1981–82 and the rest of his course. Likewise, a student who has put in three years' ordinary residence as per Scarman before 1 September 1980 must be given a mandatory award for 1980–81 and the remainder of his course. I believe there is a limitation going back to 1979. While I am not certain of that. I assume there is some limitation.

I assume also— again, this was not clear from what the Minister said— that a student who has put in three years' ordinary residence before 31 March 1983, when the new regulation came out, would qualify for a mandatory award for 1983–84 and subsequently, unless that is to be regarded as cancelled out by this measure. I am not clear of that and it would be useful to have some clarification.

Mr. Cryer

Would my hon. Friend agree that a difficulty under which the House is labouring is that we are dealing with a Bill which is of a sketchy nature which gives virtually unfettered powers to the Secretary of State to produce regulations? Would he further agree that the regulations should be part of the primary legislation, or at least should be produced for the Committee stage? 'The likelihood is that they will not be produced and it will be left to the Secretary of State's powers to produce them subsequently.

Mr. Hooley

That is a serious difficulty and it was rehearsed by my hon. Friend the Member for Derby, North (Mr. Whitehead). Without the regulations it is difficult to see where we are going. I should have thought that the Minister could at least have produced an outline along the lines I suggested, subject to the ultimate production of the detailed regulations. There may be problems with the regulations because I do not know how quickly the Minister thinks he can lay them. I believe that there must be a period of sitting days during which the House can consider them or vote to annul them. He will therefore come perilously close to the new Session unless he gels a move on, and, again, that will not enhance the reputation of this country in its dealings with overseas students.

We are plunging deeper into trouble because of our discriminatory fees policy, which no other country in the world practises. We should stop discrimination in fees between home and overseas students. We should restore to the great academic institutions of this country the freedom that they once enjoyed to exercise their own good sense and wisdom in balancing educational needs, and their responsibilities to our students, which they have never neglected — given the resources — against I he undoubted value of admitting overseas students from other countries, partly in response to the dire need of the poorest countries for that service and partly to sustain a long and distinguished international academic tradition, which was once a splendid feature of Europe and which has now been badly damaged by the Government's folly.

10.6 pm

Mr. Kenneth Carlisle (Lincoln)

I support the Bill because it backs two basic principles. The first is that any change in the law should be a considered change and meant by the Government rather than arising by chance. As we know, the ruling of the other place in December means that the law is no longer what was intended by Parliament because it allows many more overseas students to claim ordinary residence in the United Kingdom. Parliament never intended that. The scope of the law has been extended by interpretation. It is right in principle to put the situation back to what it was before the December judgment. I do not believe that the House can feel that that is unreasonable. Because of that principle alone, the Bill deserves all-party support. In supporting the Bill we have to remember that under all Governments overseas students have been treated differently from home students.

The second basic principle that sustains the Bill is that Parliament should approve expenditure. We should understand that above all in the House; yet the very judgment of the other place could cost the taxpayer an extra £ 50 million. I understand that it could cost £ 20 million more in grants, and in addition we shall lose £ 30 million in lost fee income. Even today such a sum is not to be sniffed at, despite all the inflation of the past years. It is right that, if such an extra sum is to be spent, it should be done after a vote in the House rather than through judgments in the courts. Therefore, it can be argued that the Bill only reaffirms the House's control over expenditure. On that second count it is hard to fault the Bill.

However, the Bill is narrow. As many hon. Members have stated, we should take a generous approach to overseas students. Historically, we have welcomed them in this country, we have good links with the Commonwealth and, above all, as a trading nation, we need to forge future links that will give us our markets and provide us with a welcome in other countries. Overseas students help towards the quality and breadth of our universities. It is right, therefore, that we should seek to continue the traditional generous and outward-looking nature of our policy towards overseas students. We should pursue a policy of enlightened self-interest.

It is easy for the hon. Member for Sheffield, Heeley (Mr. Hooley) to say that we should not worry about the cost. The Government had a specific duty to make this country live within its means for the first time, so they had to hold back on Government expenditure in the difficult conditions after 1979. That was a central aim and duty of the Government. One can therefore understand the pressures for cuts in overseas aid which then existed.

No one can dispute that it was right to cut down the grants and aid that were being given to the wealthiest of overseas students. At the same time, however, we continued our aid to overseas students through our aid programme.

Mr. Whitehead

Will the hon. Gentleman give way?

Mr. Carlisle

I hope that the hon. Gentleman will forgive me if I do not give way, because time is getting on.

Now that Government expenditure is at last under control, we can have a more generous policy. For that reason, I welcome the Government's change of heart in February when an additional £ 20 million per year was given to provide scholarships for overseas students. The number catered for each year was thus increased substantially from about 9,000 to about 15,000. That is the correct way to increase expenditure. That was a specific judgment made by the Government and supported by the House. It was a careful decision and not one thrust upon the Government by the courts. For that reason, I support it.

I hope and believe that the Government will continue the trend towards a more generous policy for overseas students, but for the reasons of principle that I have stated I support the Bill.

10.11 pm

Mr. Bob Cryer (Keighley)

The hon. Member for Lincoln (Mr. Carlisle) said that Government expenditure was under control. Does he think that the cost of the dole queue, largely created by the Government, will remain at £ 17 billion? If the Government's present economic policies are maintained, it will increase. The hon. Gentleman seems to have forgotten the massive expenditure represented by the dole queue.

Mr. Hooley

And Trident.

Mr. Cryer

The hon. Member for Lincoln said that the Bill was a reaffirmation of Parliament's original intention, but the Library research document gives a very different picture.

The Act of 1962, which started all this, was then interpreted not by Parliament but by DES administration memorandum 14/67. When local authorities began to change the DES interpretation, the DES in circular ACL 1/78 accepted the changed interpretation in practice. The then Secretary of State referred back not to some parliamentary view but to Stransky v. Stransky as an authority that should be accepted. In other words, the Secretary of State in an administrative memorandum referred to a court decision, so the notion that the Bill somehow re-establishes a parliamentary supremacy over the courts which prevailed prior to the House of Lords decision in December 1982 is simply not true.

Mr. Christopher Price

Ministers referred not just to Stransky v. Stransky but to MacRae v. MacRae 1949 and to the Australian case of Clarke v. The Insurance Office of Australia Limited 1965. On such a tenuous basis do the Government make our law.

Mr. Cryer

Indeed, they referred not even to a string of statutory instruments but to a string of court decisions.

Mr. Christopher Price

In Australia.

Mr. Cryer

Yes. I reaffirm my strong reservations about the notion of differential fees. As my hon. Friend the Member for Sheffield, Heeley (Mr. Hooley) said, they diminish the status of academic enterprise and create difficulties, which I shall describe when I have heard what the Under-Secretary of State has to say.

Mr. Waldegrave

I did not want to interrupt the double act of the hon. Members for Keighley (Mr. Cryer) and for Lewisham, West (Mr. Price). As a result of the speed of that double act, the House may not have realised that the atrocities to which the hon. Member for Keighley referred were those conducted by the Government of which I believe he was a member for a while. My hon. Friend the Member for Lincoln (Mr. Carlisle) is right to say that this measure introduces more parliamentary control than would result by leaving the matter to the administrative procedures that were followed before.

Mr. Cryer

I am not one of those people who believe that because something happened between 1974 and 1979 it is true for all time. Indeed, I was a member of the Labour Government for two years, but that does not mean that everything that that Government did should be absolved from criticism. I happen to believe that it was a damned sight better Government than this one and I also recall that unemployment in Keighley then was 4. 5 per cent. whereas it has increased to more than 14 per cent. under the Tories. Moreover, during the 1979 general election campaign, the Tory candidate tried to claim that unemployment had reached the astronomical height of 7 per cent. under Labour. Of course there are things about which the Labour Government can be criticised—this is one—but that does not mean that there were not a host of other issues on which the Government acted correctly. The British people benefited far more from that Government than from the economic whirlwind that this Government have introduced.

The Government say that part of their reason for introducing this legislation is the need to save a bit of money because of difficulties with public expenditure. They do not apply that criterion to farmers who get almost £2 billion a year in subsidy. There is not a peep out of any Tory Member about that, certainly not out of members of the Tory Cabinet, many of whom coincidentally have farms.

I shall now return to the narrow issue which we are considering. The Minister diverted me. The full-cost fees policy is against our interests. I do not say that on the philosophical ground that we should benefit humanity, but on the narrow view of the possible advantage to commerce and industry. If people are encouraged to come to Britain for education, it is likely that they will look to Britain more readily when placing commercial orders in the future.

As the Minister kindly referred to my membership of the Labour Government for two years, perhaps I should mention that I met a head of a power supply operation in a former Commonwealth country who had been educated and trained in Britain. He had been on a sandwich apprentice course with GEC. It struck me that he had a predilection to buy from Britain as he had been trained here and was familiar with the technology that we produce. That is right.

Quite apart from that narrow commercial advantage, there must also be a philosophical sympathy. No doubt during the next general election campaign the Government will talk about the influence of the Soviet Union being under beds in Britain. They will defend American foreign policy which contains Communist expansion hither and thither, yet, by their policies, the Government are pushing students from other countries into the arms of the Soviet Union and its supporters, which provide educational facilities. Perhaps those countries' philosophies dictate that they should encourage students to be trained there or perhaps they want to have a political advantage and influence. Whatever the reason, the poorest nations are more likely to send students to Communist countries, despite the recent additional expenditure through the Foreign and Commonwealth Office to provide another 5,000 to 6,000 places in our education system.

Many of the poorer nations have had difficulties. Recently Zimbabwe, which is very poor, had to bring home some of its students in the United Kingdom because it could not afford to keep them here, although the Government claim that they gave that country sufficient money to enable those students who had already embarked on courses to remain here. That claim is not borne out in practice,.

The Bill is a churlish measure, and although the cost has been estimated at between £30 million and £46 million, that pales into insignificance beside the £2 billion subsidy to farmers and the £10 billion that Trident will cost. The annual cost of even partial support for overseas students so that the full-cost fees are reduced to a more reasonable level could be met with some change out of the cost of stationing cruise missiles in the United Kingdom — although the Government continually claim that we are getting them at a rock bottom price.

I do not like legislation that gives the Secretary of State power to introduce regulations by the negative procedure. There are some fetters on his power, and the Minister will no doubt confirm that the Bill cannot be interpreted as retrospective legislation and that all the statutory instruments produced under the legislation will have no retrospective element. The. Bill uses phrases such as This section applies to any award". Statutory instruments will not apply to awards already in existence, but only to awards that would have been made but for the legislation authorising the statutory instrument. It is not good for the Chamber to give unfettered powers to a Minister to make regulations. If the regulations are in hand, there is no reason why they should not be included in the primary legislation, with power to amend. However, the regulations are not before us. The primary legislation is simple and gives wide enabling powers to the Secretary of State. We should be cautious about that procedure.

The Bill must be considered and agreed to, but the statutory instruments that the Minister will produce need not be considered. They are subject to the negative procedure, and we all know how difficult it is in practice to debate a prayer. A prayer will be debated on another relevant instrument in Committee, but it has taken years for the Government to accept that if a statutory instrument is defeated in Committee it must be debated on the Floor of the House. Even that is not hard-and-fast constitutional practice, although it should be. For a prayer to be debated in the House, it must always be signed by a Member of the Opposition Front Bench. If it is not, the Government will not consider it. That is wrong. I should have thought that if six people signed a prayer the Government should allocate time to it.

In 1951, when there was a Labour Government with a small majority, Conservative Members suddenly became interested in praying against instruments because they were open-ended. Members could talk for as long as they wished to stop other Government business, but, following that abuse of the House, prayers were limited to one and a half hours. That seems to be reasonable if Members have the right to lay a prayer and to command some debating time. Unfortunately, Members do not have that right, and when a contentious issue arises—the Bill seeks to deal with a highly contentious and difficult matter, and I am sure that everyone admits that it is the product of a tortuous process—an affirmative instrument should be brought before the House so that there can be a debate and a vote.

The negative procedure is not appropriate in this instance, because the powers that we are being asked to give the Secretary of State are, in my opinion, far too wide and lack the necessary qualifications in the primary legislation. I did not want the Bill to be given a Second Reading without some criticism being placed on record of the wide powers that it contains for the Secretary of State in addition to the criticisms expressed by my hon. Friend the Member for Derby, North (Mr. Whitehead).

10.25 pm

Mr. Harry Greenway (Ealing, North)

At times I wondered where the hon. Member for Keighley (Mr. Cryer) was taking us, especially when he complained almost constantly about farmers receiving a £2 billion subsidy. Does the hon. Gentleman object to food prices having risen by less than 1 per cent. in the past year? Does he object to cheap food for the housewife? He talked about the cost of Trident and he seems not to remember that the Labour party's proposed programme would cost £30 billion to £40 billion a year. If that programme were implemented, it would mean an extra 12p on the standard rate of income tax and would lead to 5 million being unemployed. The hon. Gentleman always throws these figures about wildly, and I advise him to think a little more steadily about the other side of the coin. It would be a healthier approach if he balanced his remarks more carefully.

I have listened with respect to what has been a good debate. I have been concerned about the examples of individual overseas students who have experienced hardship. Instances of hardship among overseas students have arisen in my constituency, but I wish to consider the need for the Bill through the eyes of those who live, as it were, next door to such cases and who are home students, indigenous people who are unable to get discretionary awards and who hear the strident arguments that are always advanced on behalf of overseas students.

I feel keenly that overseas students should be accommodated in this country as far as is possible, but when I canvass the views of home students I find that they are keen on the Bill for three reasons. First, the Bill will close a loophole which, if left open, would change the intake of universities and Government policy by default, which would surely be wrong. Secondly, by closure of the loophole the Bill will prevent an enormous extra and unplanned financial burden from taking place on the British taxpayer; and it is reasonable to consider that. Thirdly, the Bill will prevent undue discrimination against some students.

The loophole that the Bill will close was opened by the test case in the House of Lords on the definition of "ordinary residence". With the new definition of the term, only those resident here for three years will be entitled to be treated as home students. Many of the students to whom I have spoken in my constituency have argued that any number of wealthy foreigners could abuse the system and achieve a university education on the cheap for their children by sending them to boarding school or college here for three years prior to their university application. This has happened a good deal and it has been mentioned in the debate. However, it is worth mentioning it again. There is a need for the Bill on the ground of abuse of the system alone.

The financial implications for the British taxpayer are horrendous. It has been estimated that the cost in grants will be about £20 million per annum and that over £30 million per annum is lost in fee income. This is because foreign students under both complexions of Government have been charged a higher fee than home students. A home student's undergraduate fee is £480 and a foreign student may pay anything from £2,500 to over £7,000. The financial loss and consequent burden on the British taxpayer would not stop at that point without the Bill. Many foreign students might have become eligible for a grant when they would normally never have expected to receive one. Such grants could only be discretionary and would necessarily be limited in number. Presumably, the entitlement of overseas students would deplete the pool of places for British candidates.

The obvious unfairness resulting to home students would be hard to square with the young in my constituency, who are striving hard to gain university places. In saying that, I am arguing not against help for overseas students but against an indiscriminate subsidy for all overseas students, regardless of their families' means. On humanitarian grounds, it is important that students who are refugees, who are given political asylum or who are from EC countries are liable only for the home rate of tuition fee.

I welcome the £3 million annual subsidy that is available under the overseas research students award scheme for 1,500 scholarships. Those students must be of high academic merit.

I have argued long and hard for an increase in Britain's aid programme to the Third world. Aid in the form of university education in Britain is at its most profitable in the long term, not only because some of the best students return home to put their utmost into developing their countries but because, as the greatest democracy in the world, Britain may have legitimate hopes that the traditions of our democracy may be exported as well.

The extra £46 million that was announced in February by my right hon. Friend the Secretary of State for Foreign and Commonwealth Affairs as being available during the next three years to foreign students showed that the Government were not guilty of massacring the funding for needy overseas students. I stated that fact when my right hon. Friend the Foreign and Commonwealth Secretary announced that that money was being made available. The money is substantially for needy students. An additional 5,000 to 6,000 scholarships and awards will be available each year to them.

The method of funding of overseas students has changed. Formerly, overseas students were subsidised from part of the recurrent grant. That subsidy has been removed and overseas students who are not in receipt of special scholarships or under the aegis of the aid programme are expected to cover the full cost of their education. That is only right and just at a time when the number of home and EC students is probably being reduced.

Without the Bill, I would feel unable to justify my party's position on the funding of overseas students, because the policy would be changed by default, which is unacceptable and unsatisfactory. If the 5,000 to 6,000 extra scholarships a year go to new entrants, the total number of overseas students may well be up next year on the 1979–80 figure.

As a nation, we must make a real effort to give meaning and value to our young people's lives. Although some have been disappointed by their failure to gain a university place, we must not lose their talents. To that end, the Government funded scheme for the unemployed wishing to pursue a university education through the Open University is a contribution. That point has been overlooked in the debate. Another way of ensuring that our young people hold their heads up high is to close the loophole created in the other place and to see the Bill through, so that they do not see the university place or discretionary grant that they coveted going to a foreign student by default.

10.35 pm

Mr. Peter Griffiths (Portsmouth, North)

My qualification for intervening at this late stage is that for several years before 1979 I was the admissions tutor in one of the main departments of Portsmouth polytechnic and dealt on a day-to-day basis with the problems that have been discussed tonight.

Access to further education generally is fraught with all sorts of anomalies. The difference between mandatory and discretionary awards often seems arbitrary. The difference between the policies of one county and another in granting discretionary awards sometimes seems arbitrary. The parental contribution has sometines seemed unfair. In the best of all possible worlds we would get rid of such anomalies and offer free access to higher education for all, as the hon. Member for Sheffield, Heeley (Mr. Hooley) suggested. However, in the real world of limitation and of many more applications than places on courses in our universities, polytechnics and colleges of education, there must be an element of selection. That being so, it should be made on the basis suggested in the Bill and in the arrangements developed over the years rather than on the basis of those introduced by the right hon. Member for Crosby (Mrs. Williams) when she was Secretary of State. Her arrangements imposed on people such as me the almost impossible task of setting quotas of overseas and home students. As a result, we often had to select students according to their country of origin rather than on their academic ability.

I greatly resent the point made by the hon. Member for Lewisham, West (Mr. Price). He suggested that students were admitted to courses because they brought funds to Britain rather than because of their academic ability. As there are many non-academic qualifications for entry to all courses in higher education, that is not possible. The sweeping statement that we are bringing in many overseas students just to bolster the coffers does not fit well with the comments of the hon. Member for Bedwellty (Mr. Kinnock). He suggested that the full-cost fee system deprived our colleges of further education of the advantages of large numbers of overseas students.

Mr. Kinnock

The hon. Gentleman does not understand the economics of his own party. There has been a lack of resources in higher education because of the full-cost fee system, which has driven away students who would otherwise have gained access. As a result, institutions have to scour the world to invite students—whom they otherwise would not have invited, on academic grounds—to go to their institutions. By such means, universities can gain some finance by selling themselves as educational Hiltons, thus relieving the Government and conforming with their monetarist policies. The points made by my hon. Friend the Member for Lewisham, West (Mr. Price) and by me are perfectly compatible.

Mr. Griffiths

Those points may have a certain compatibility, but they are based on the assumption that students are necessarily wealthy because they come from wealthy countries or are poor because they come from poor countries. I have known many extremely wealthy students from Third world countries and many poor students from EC countries and North America. That sort of blanket statement is, therefore, most unhelpful. I do not wish to labour these points at this late stage in the evening.

If the Bill were not passed, the Government would be committed to spending sums that have been variously suggested as between £30 million and £50 million on providing for overseas students, however the money is to be divided, courses at the same fee as that charged to home students. I should like to see all students on an equal basis. That is a worthy cause. However, we think—this was clearly implied in the speech of the hon. Member for Derby, North (Mr. Whitehead)—that that is not the top priority for spending that money. If we had that sum, it could be spent on various aspects of education, such as getting rid of anomalies in access to higher education. For that reason, much of the criticism of the Bill has been shadow boxing because we know that the Bill is essential to maintain a system. Neither side of the House would be prepared to spend that amount of money on removing the full cost fee for overseas students.

10.42 pm

Mr. Whitehead

By leave of the House, Mr. Deputy Speaker.

I would point out to the hon. Member for Portsmouth, North (Mr. Griffiths) that nobody has said that it is not necessary to have a Bill—the criticisms are about this Bill. The criticisms have been fairly and forcefully expressed from the Opposition Benches, and to a degree that I hope will persuade the Secretary of State and the Minister that in Committee we shall not be fractious, but we shall scrutinise the Bill carefully. I said this at the outset, but it seems to have been forgotten. There are things about the Bill about which we feel most unhappy.

I am glad to be able to make a few comments on the speeches made tonight. I am always glad to start with the hon. Member for Wokingham (Sir W. van Straubenzee), who spoke with his customary eloquence. He is a Norman Hunter on ice—one is so struck by the elegant facade with which he approaches that one misses the boot until it has almost struck home. I am prepared to spell out to the hon. Gentleman Labour party policy which will be implemented shortly after the general election. [HoN. MEMBERS: "Oh!"] That was a feeble cry of dissent from the Conservative Benches. I shall comment on the hon. Gentleman's part in 1967, because there are curious parallels between what was said then and what has been said tonight, and with some of the criticisms of the Bill and its timing.

The Labour party's policy is in the excellent publication which I can recommend to the hon. Gentleman, on education after 18. I shall not bore the House with the whole section on education, but I shall give the final paragraph on page 20 for his further elucidation. We say that our priority is for a substantial expansion of the student sponsorship schemes of the ODA, and go on: Preference should be given to entrants whose country of origin has a low GNP and students from low income families. I accept that there are the differences within countries and between students, as the hon. Member for Portsmouth has said, but we have to make that distinction in going out to look where the need is greatest. The document continues: Our highest priority must be poor students from poor countries. The ODA, in collaboration with reputable nongovernmental organisations such as Amnesty, Oxfam and Christian Aid, should also offer scholarships to students in Third World countries whose governments may refuse to sponsor them… Reciprocal exchange schemes should also be expanded All other overseas students (with the present exception of those from EEC countries) will continue to pay fees but"— this is the point, and it is here that there is a major difference and argument between us— the fees should be set at levels which properly reflect marginal costs and which are related to comparable fees elsewhere. It is in those two areas that the problem is now at its most acute. I say in all seriousness to the hon. Gentleman that when he considers our practice now compared with that of some of our European partners and other countries such as the Soviet Union, he will see that the disincentive in the current fees, which do not reflect marginal costs and are extremely onerous for overseas students, is an area that must be tackled quickly. It is one of the factors that have made the problem so acute.

In his interesting speech, the hon. Member for Berwick-upon-Tweed (Mr. Beith) referred, among other things, to the representations that we have all had from the National Union of Students about hall fees and the extraordinary burden which those fees now place on overseas students, in contradistinction to home students. They are counted in with the fees those students have to pay in their institutions, yet they carry many overheads of the institutions that are not reflected in the residential cost, for example, that is charged to home students. It is in such areas — the distinction betweeen home and overseas students, the fees charged to them and the widening of the gap—that I am led to believe that we are have probably now reached almost the end of the process whereby the home student's fee is seen as anything more than an actuarial convenience for the Government of the day. We cannot go on pretending that it represents a fee at all.

Although I was not a Member in 1967, I accept what was said and, had I been here, I would have echoed the criticisms that were made of the late Mr. Crosland's statement. The hon. Member for Wokingham made three criticisms of the introduction of that legislation. First, he said that it had been introduced in a great hurry. There had been a statement the day before the recess. Surprise, surprise. I seem to remember that that is what happened on 30 March. Secondly, he said that there had not been adequate consultations and that the vice-chancellors and the local authorities had been unable to see the Minsiter. Thirdly, he said that the new rules appeared to be hastily drafted and were open to criticisms that might have been avoided had they come forward after more consideration.

All those criticisms apply to this legislation, and they could be, and indeed were, made by Labour Members. I wonder whether the spirit of Christmas past, revived by the hon. Gentleman today, will enthuse his actions in accepting that criticisms can be made of the manner in which this legislation has been brought forward.

If the hon. Gentleman believes that we are doing terribly well in non-advanced further education, he should look at the figures and the record set out by my hon. Friend the Member for Sheffield, Hooley—[HoN. MEMBERS: "Heeley."] Hooley and Heeley have been so indistinguishable in my mind for so many years that now that the link is to be broken I can say that if my hon. Friend were never to make another speech in the House he would be remembered by the one that he made tonight. He spoke today as a United Nations man; as someone who cares about what we do for the rest of the world. He spoke for the world as a community in terms that will simply not be understood by some Conservative Members. I shall remember his speech with affection and warmth.

The record of student numbers in non-advanced further education in the past three years is not a good one. For some reason, the hon. Member for Wokingham is seized of the number of Malaysian students swarming over UWIST. I seem to recollect that at Question Time three or four months ago, his hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) asked about the falling number of Malaysians at Lancaster university. I went recently to Manchester polytechnic, not so far from there, where there had long been links with Malaysia. The main complaint was the enormous damage done not merely to studies at that institution but to relationships with Malaysia. That argument has been dealt with, so I shall not labour it.

I am glad that the Liberal party accepts with us that the negative procedure is not a proper way to discuss such regulations. It is farcical to believe that such matters can be dealt with in one and a half hours in Committee, followed by a procedural vote, when so many lives are affected. I hope that the draft regulations will be made available for scrutiny.

The hon. Member for Gravesend (Mr. Brinton) talked about the Select Committee's interim report and said, curiously, that we were distorting what happens in the universities and colleges. That was picked up by my hon. Friend the Member for Lewisham, West (Mr. Price). Some of our institutions of learning have to tout abroad for students who are acknowledged to be below our normal academic standards, when the standards are being raised for British students. That causes resentment among home students beyond that described by the hon. Member for Ealing, North (Mr. Greenway).

Hon. Members should see what is happening at the Gabbitas-Thring educational trust, the agency which is taking a 10 per cent. share of student fees. Public money goes to that agency for touting in the advanced countries for rich students who do not necessarily have the correct qualifications and who could almost certainly receive higher education in their own countries. Poor students are the subject of discrimination.

I could not understand the hon. Member for Lincoln (Mr. Carlisle) when he talked about living within our means and expressed other worthy sentiments. He said that it was right to cut back because we were discriminating against the wealthy. How on earth does he work that out? Gabbitas-Thring is in business in a big way recruiting the wealthiest students, so how can that be called discrimination against the wealthy? In the last few years the discrimination has been against the poorest.

The definition of "ordinary resident" has been mentioned. Those who read the report of our proceedings will be left in confusion about the meaning of the phrase in the Bill not having such connection with the United Kingdom or any part of it as may be specified in the regulations". What will the regulations contain? What should a "connection with the United Kingdom" be?

Will we say to people of foreign origin, "If you have been here for many years and did not have a thought in your mind to undertake higher education, you can apply for an award, but if you did have, wholly or in part, the aspiration to education, by heaven, you will not receive an award of any description."?

Mr. Hooley

Might not the position be that if a person prepares himself in no way for education he will qualify for an award, but that if he prepares himself he will be disqualified?

Mr. Whitehead

That thinking would commend itself to the Tory party. I do not believe that that is a sound educational principle and I am sure that it would not be supported outside.

We are told that people in Ealing and elsewhere are standing around talking of nothing else but the dreadful discrimination they may suffer if we do something for overseas students. The hon. Member for Ealing, North should be more concerned about the huge gulf between home and overseas students. We were told that we cannot do anything about that. We were told by the hon. Member for Ealing, North that we must accept the wide gulf between the two, but the wider the gulf becomes, the greater the sense of unfairness.

The sense of unfairness works both ways. It works on the home student, if he feels that the enormous fees for overseas students are to be alleviated. The sense of unfairness works equally on those who have to pay the fees. If there is no attempt to ameliorate the general position of those paying overseas fees, we shall reach the same position as we have with the death grant: every year the Government say that it is harder to do anything about it, because the burden is growing all the time.

Mr. Greenway

There is nothing notional about the constituents who complained to me about their difficulties in obtaining grants, compared with the generosity with which the Opposition appear to want indiscriminately to invite to this country large numbers of students from all over the world.

Mr. Kinnock

That is a notional front argument.

Mr. Whitehead

I will not pursue that too far.

If the constituents of the hon. Member for Ealing, North complain to him that there are not enough discretionary awards and that discretionary awards might go, as a result of the Lords ruling and if the Bill were other than it is, to overseas students, he could say to them, "Hang on for a minute fellows — who got rid of discretionary awards? Why are there no discretionary awards for home students? You cannot blame that on overseas students. Blame it on the Government's policies and on the fact that the clammy hands of the Department of the Environment and the now febrile and wizened paws of the Department of Education and Science have left the area of discretionary awards almost untenanted." That is what the hon. Gentleman should say to his constituents. If he does not, they will be left in error on these matters.

We understand why the Government are scuttling from one section of the Race Relations Act 1976 to another. They cannot now use section 41(2), because they must not differentiate among those in the country for different purposes. They are setting out a new purpose. They are saying that, if there is any educational intent on the part of those who come here, that is a reason to disqualify them from educational support. They must do that now under section 41(1) of the Act. They are doing so in circumstances which leave two major points of principle between us. First, nothing is being done in general for overseas students, given the fact that the fees they pay, the so-called full cost fees, have escalated as far as they have. Secondly, they are not offering the people specifically covered by the Bill any genuine interpretation of what an overseas student now is. I do not believe that the Under-Secretary of State, who is highly intelligent and responsive, knows what an overseas student is. He knows that there is a shorthand term for it—but a squiggle is not a policy, nor an interpretation.

If we hear nothing else from the Under-Secretary, I hope that we hear what an overseas student is.

11.58 pm

Mr. Waldegrave

With the leave of the House, Mr. Deputy Speaker. This has been a wide-ranging debate. We have dealt with Trident., farming and the propriety or otherwise of the negative procedure. Our Bill is more limited than that. It does not even deal with mandatory awards. They are dealt with under a different procedure. Nor does it deal with the level of fees. The argument whether it would be right to put fees at a long-run or short-run marginal cost level is conducted in the Overseas Students Trust report by the proponents and opponents of its recommendations. There is nothing in the Bill about the level of fees.

This is a Bill to take powers. I think that the hon. Member for Derby, North (Mr. Whitehead) and the hon. Member for Berwick-on-Tweed (Mr. Beith) accept that the powers will be needed. They give room for Government to follow different policies, and that is reasonable.

My hon. Friend the Member for Wokingham (Sir W. van Straubenzee), as usual, made one of the most powerful speeches, and managed to prick the humbug that surrounds some of the Opposition's remarks. Their argument in an attempt to counter the charge that they introduced the original discrimination is rather like the ancient joke about the unwanted baby— it did not matter if it was very small. They introduced the principle in 1967 and all Governments since then have maintained it.

I also agree strongly with my hon. Friend that in terms of future policy we are now in a strong position. It is in no way a criticism of the Department of Education and Science that decisions affecting national interests of varying kinds, including aid and humanitarian interests, are not within the capacity of the DES to take. Those are for the Departments of State that have responsibility for such matters. Under the leadership of the Foreign Office, we can now have a properly structured and targeted policy that, improves the situation.

Labour Members will say, as they do of every expenditure policy, that we must increase the expenditure by some factorial amount. That is their right while in prolonged opposition.

The hon. Members for Derby, North, Lewisham, West (Mr. Price) and some of my hon. Friends mentioned a number of the categories that could be helped under various changes of policy. We shall doubtless explore some of those categories in Committee. The hon. Member for Derby, North mentioned immigrants, and my hon. Friend the Member for Skipton (Mr. Watson) quoted an expatriate case. I can give no assurance that this year we shall make policy changes. Our stated intention is to restore the situation to what we thought it was. These are legitimate suggestions and proposals about which we shall argue in Committee and other forums.

I was asked once and for all to settle the definition of an overseas student. The whole purpose of the Bill and its regulations is to settle that definition. It will not be finally settled until the regulations are passed. The Bill provides the power to attach that definition, and that is what we shall explore in Committee.

Mr. Whitehead

In that case the hon. Gentleman can help me further now. Will the draft regulations be placed before the Committee?

Mr. Waldegrave

I can give no assurance that we shall have the draft regulations. The Committee will certainly have in front of it the principles that lie behind them. I can give the assurance that any consultative papers offered to those with whom we are consulting—as we shall be doing while the Committee is sitting—will also be put before the Committee.

The shape of the definition is clear from the Government's intentions. It will be related to three years' ordinary residence, excluding those here principally for educational purposes.

Mr. Kinnock

The hon. Gentleman will recognise that in Committee, in the manner of this Court of Parliament, we shall be taking a precise decision on what is an overseas student. While the hon. Gentleman is trustworthy and honourable, it is not enough to provide us with the shape of the definition, which will not be excused by being a little shape. Consequently, we shall have to insist on the wording of the proposed law so that we can refer to it and examine it.

Mr. Waldegrave

I cannot give the hon. Gentleman the assurance of having the draft regulation before the Committee, but I note what he says.

The debate ranged widely over the whole area of overseas students policy and took in a number of criticisms of the Foreign Secretary's scheme and of other schemes. Sone of the points, which were not germane to the Bill, I can lay to rest. The hon. Member for Berwick-upon-Tweed made some play with the different status of the dependent territories of France and of this country. The Foreign Secretary has made it clear that there will be the scheme for Hong Kong and that the other dependent territories will have home fee status.

Several hon. Members listed a number of changes in the law that they would like to see, and they will be legitimate arguments that we shall have in the years ahead. I repeat that our clear intention is to put the law back to what we thought it was and not, at present, to make large numbers of further concessions.

The hon. Member for Derby, North said sadly that the Government always seemed to start by counting the cost. I make no apology for that. It is right that those who stand here, backed distantly by the tremendous powers of taxation, should count the cost before charging into different areas of expenditure. This is indeed an area where we must take the electorate with us. We are kidding ourselves if we believe that the electorate understood the nature of the open-ended subsidy that existed for overseas students. Indeed, I do not think that some hon. Members fully understood it. I do not believe that any Government came to the House — say, in 1969 — and said, "We intend to multiply the number of overseas students by 300 per cent. over the next 10 years".

The numbers of university applicants from overseas are creeping up again, which I welcome, and the numbers who will be here after the full-cost fee policy has come through will probably be at about the levels they were in the mid-1970s. I do not remember the then Labour Government saying that we had far too few overseas students here in the mid-1970s. On the contrary, they were enmeshed in the most incomprehensible schemes—of quotas and so on—to try to control even those numbers. So there has been a touch of humbug in some of the comments.

Mr. Hooley

If the so-called open-ended subsidy is such an appalling phenomenon, why does every other country happily tolerate it?

Mr. Waldegrave

The hon. Gentleman is too optimistic about the intentions of other countries. Though other countries do not exercise control by fees, virtually every other country has some measure of control, some by using immigration procedures, an area in which we have never got involved in terms of students. The Australians do it by charging for student visas. There is a whole range of controls. The fact that other countries do not do it by fee control does no mean that no control is exercised by them.

My hon. Friend the Member for Skipton perhaps answered more clearly than I did the question why the Bill does not involve retrospection. There is no question of retrospection. The Government are taking no action in relation to the current year. Whether or not students are entitled to a refund of feees depends on the law as it stands. Students should not assume that they have any entitlement to a refund. Whatever the press have said, the Government have said nothing to encourage students to think that they have such an entitlement.

My hon. Friend the Member for Skipton was right to say that the Bill may result in some people's expectations being disappointed, but it would be nonsense to say that those expectations were in some sense retrospectively removed. It is in the nature of expectations that they are often disappointed, but there is no retrospection.

We shall return to many of the detailed points in Committee, particularly the detailed definition of what is going into the regulations. However, I welcome the fact that, although different parties with different policies on the matter criticise the contents of the Government's policy, we have not heard serious criticism of the need to take the powers to amend the policy, in whichever way various parties want. The Bill is brought before the House with the grudging approval of other parties—I will not put it higher than that. There is all-party support. There will be much legitimate argument about the way in which the powers that are taken in the Bill are used in future. Therefore, I commend the Bill to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 42 (Committal of Bills).