HC Deb 08 February 1983 vol 36 cc879-88 3.31 pm
The Secretary of State for Foreign and Commonwealth Affairs (Mr. Francis Pym)

With permission, Mr. Speaker, I wish to make a statement.

On 9 June 1982, in reply to my hon. Friend the Member for Stroud (Sir A. Kershaw), I set out the Government's initial response to the study by the Overseas Students Trust published on 6 June. I said then that the study represented, in the Government's view, a comprehensive and constructive contribution to the development of future policy on overseas students; and that we would seriously consider its recommendations, although I stressed the financial constraints.

The Government have now completed their consideration of the trust's recommendations and have taken into account the views of the many outside bodies interested in this field.

They have concluded that it is in the national interest, both in the short term and in the longer term, to provide more help to enable overseas students to come to this country for their further and higher education. The Government have therefore decided to increase their support for overseas students by £46 million over the next three years. This will involve an additional sum of £25 million from the contingency reserve and a reallocation of resources within the aid programme amounting to £21 million. This money will be used to finance a number of new measures involving provision for some 5,000 to 6,000 additional scholarships and awards each year.

The measures are as follows. First, the Government will enter into discussions with the Hong Kong Government about their proposals for a shared funding scheme which would have the effect of treating eligible Hong Kong university and polytechnic students as home students for fee purposes. The Government will be ready to consider arrangements to the same end for other dependent territories.

Secondly, additional awards will be provided for students from the Commonwealth under the Commonwealth scholarship and fellowship plan.

Thirdly, a new scheme of discretionary awards will be introduced. This will be selective and will have the object of attracting students who will not only benefit themselves but whose study and experience here will be of advantage to this country.

Fourthly, there will be some provision for Cyprus, which was singled out in the Overseas Students Trust's study as having a unique combination of claims for special consideration, and for Malaysia, which has traditionally sent the largest number of students to this country.

Fifthly, the Overseas Development Administration's bilateral technical co-operation programme will be expanded to provide additional awards.

Finally, there will be some limited additional provision to enable the British Council to assist the activities of British institutions in attracting fee-paying students from abroad and in strengthening academic links.

In addition to these measures, my right hon. Friend the Secretary of State for Education and Science is favourably inclined towards the trust's recommendation that institutions should have more flexibility over fixing their own fees for overseas students, provided no subsidy is involved. This is currently being examined in consultation with the University Grants Committee and local education authorities.

My right hon. Friend also hopes to broaden the scope of the overseas research students award scheme and to ensure that the full quota of awards is taken up.

The Government accept and will implement many of the other recommendations in the Overseas Students Trust's study concerning future policy towards overseas students but which do not involve additional public funding, such as spreading funds available for awards widely in order that more students may benefit.

A number of other recommendations in the Overseas Students Trust's study need further examination, for legal and practical reasons. I shall place in the Library of the House in the next few days a paper dealing with these aspects and setting out in greater detail the Government's response to the Overseas Students Trust's study, including the measures which I have outlined in this statement.

The Government believe that it is right and in our interests to encourage students from abroad. We have responded positively to the recommendations of the Overseas Students Trust. I know that this will be widely welcomed both in this House and elswhere.

Mr. Guy Barnett (Greenwich)

I should like to begin by thanking the right hon. Gentleman for his statement and to join him in what he said about the Overseas Students Trust's study. I should like also to express our thanks to Professor Peter Williams and the committee, who have produced a comprehensive and detailed report.

Would it not have been much better had such a report been available to the Government before they embarked on the disastrous and ill-considered policy of charging full-cost fees to non-British students? Even so, I think that the statement represents some small advance.

However, it seems odd to me that the right hon. Gentleman should have said in his statement that the Government have at last concluded what most hon. Members knew, that it is in the national interest, both in the short term and the long term, to provide more help to enable overseas students to come to this country. In the meantime, over three or four years, we have continued to anger our friends in the Commonwealth and have discriminated against them in an unforgiveable fashion.

The right hon. Gentleman mentioned Cyprus. A Cypriot student coming to Britain now to study medicine will pay the best part of £7,000 in tuition fees, whereas a student coming from neighbouring Greece pays £480. The right hon. Gentleman's statement says nothing to deal with that measure of discrimination which currently exists, often to the disadvantage of some of the poorest countries.

Does the right hon. Gentleman realise that, so long as this indefensible discrimination exists between our treatment of EC nationals and those of Commonwealth and other friendly countries, it is no answer merely to up the schemes that have been described, which will be operated by the Overseas Development Administration, the British Council and others? Is it not a fact that the £46 million to which the right hon. Gentleman referred means, first, a reallocation of aid money? From where in the aid budget will that money come?

Secondly, until an agreement is made with the Hong Kong Government about co-funding, has the right hon. Gentleman an estimate of what part of the £46 million has been set aside to provide for that Hong Kong agreement, and how much will be left for the other schemes that the right hon. Gentleman has described to us? What is the relationship between his statement and the press release issued by the Department of Education and Science last Friday, which referred to an increase of 6 per cent. next year for full-cost student fees?

Finally, the Opposition look forward to a fuller response. We have already waited six or seven months for the response that we now have, and it is the Labour party's intention to ensure that a proper response is given that will repair some of the damage that has been done to our political, cultural and commercial relationships with friendly countries.

Mr. Pym

I am sure that the hon. Gentleman will wish to study the details of the scheme in the paper to be placed in the Library in the next few days.

I remind the hon. Gentleman that when the Government came to power we faced excessive public expenditure and it was vital to cut it back. Reluctantly, therefore, we took a decision that affected overseas students' fees. That had to be done for the sake of the economy and in the national interest.

Some of the hon. Gentleman's comments about Cyprus are perfectly true. That country is in a special position for a number of reasons. It is a member of the Commonwealth, it has no university of its own, it has a large refugee population and there are British defence interests there. It is precisely because of the disadvantage at present experienced by Cyprus that I made it clear in my statement that we shall give that country additional assistance.

As for the relationships between EC and Commonwealth students, the House will know that the EC has regulations about students within the Community. We naturally provide for them and gain benefit from our students studying at universities in other Community countries. Nevertheless, one of the intentions outlined in my statement is to give particular assistance to the Commonwealth by increasing the number of fellowships and scholarships, enabling poorer countries of the Commonwealth to benefit from an extended part of the ODA programme and from the new discretionary award schemes. In those and other ways, we intend to assist the Commonwealth.

As I said in my statement, there is some re-allocation of resources within the aid budget, but the aid budget for 1983–84 and for later years has been expanded. We intend to achieve the results that we want by a re-allocation of £21 million, but there is an additional £25 million from the contingency reserve. On the allocation to the countries that I mentioned and to others, I ask the hon. Gentleman to await the paper that will shortly be placed in the library.

Sir Paul Bryan (Howden)

Is my right hon. Friend aware that the House is grateful for the Government's positive response to the Overseas Students Trust report? Is he aware that Hong Kong will also be grateful to know that its offer is being considered? Does he realise the importance of time in this, as many thousands of students will now be making plans for the coming academic year and will need to know very soon to what extent they will benefit from the new arrangements and whether they will be operative in time for the next academic year?

Mr. Pym

I am grateful for my hon. Friend's opening remarks. The Government are grateful for the proposal by the Hong Kong Government, which we took up immedately and shall pursue at once. We should like to see such schemes adopted in other dependent territories if their Governments suggest it.

My hon. Friend is entirely right about the urgency of this. I hope that the details will be available in the next few days. We shall proceed with the arrangements as quickly as possible. With regard to administration and so on, we shall be assisted by the British Council, which has an excellent record and knowledge in this area, so I believe that we shall be able to get things well organised in time for the next academic year.

Mr. David Steel (Roxburgh, Selkirk and Peebles)

I warmly welcome the right hon. Gentleman's constructive statement and hope that it will go some way towards undoing the severe political and economic damage caused by the Treasury and the Department of Education and Science in the past three years. Is the right hon. Gentleman aware that the long-term damage is far greater than the short-term financial savings to which he refers?

When will the Government make a policy decision about the House of Lords judgment on the eligibility of overseas students for domestic student allowances, which is causing great uncertainty in the universities and colleges?

Mr. Pym

I note the right hon. Gentleman's first remark. The number of overseas students coming to this country reached a peak in 1977 and was still well over 80,000 in 1978–79—infinitely more than there had been 10 years previously and at a cost that we then felt was excessive. The number has since fallen to about 55,000 for 1982–83—compared with 39,000 in 1971–72, to put the matter in perspective. I hope and believe that my announcement today will encourage an increase in the number on a very selective basis.

The House of Lords ruling is currently under active consideration by the Government. We are studying the practical effects and implications of that decision. My right hon. Friend the Secretary of State for Education and Science has the matter urgently in hand.

Mr. Phillip Whitehead (Derby, North)

The right hon. Gentleman said that the money would be used in part to help deserving students from Commonwealth countries generally and developing countries especially. How much money will be available for that purpose over and above the bilateral arrangements with the three states named in the statement? There cannot be very much if only £10 million per year of new Government money is to be provided.

Mr. Pym

I think that it would be helpful if the hon. Gentleman could study the details that will be published in a few days.

Mr. Robert Hughes (Aberdeen, North)

The Minister does not know the answer.

Sir Edward Gardner (South Fylde)

Is my right hon. Friend aware that his statement will be widely welcomed not only in the House but in this and in many otter countries? Is he aware that in the narrow but important sphere of the law many present-day leaders of Commonwealth countries and in the east and middle east owe their training to the Inns of Court? Is he aware that without improved facilities of the kind that he has announced future leaders will be trained behind the iron curtain?

Mr. Pym

I am very conscious of the points made by my hon. and learned Friend and of the value of the training that students have had. As a result of the new arrangements, 5,000 or 6,000 more students will have the benefit of scholarships and awards, which I believe will be of immense benefit not only to them and their countries but in many cases to this country, too.

Mr. Christopher Price (Lewisham, West)

Is the right hon. Gentleman aware that £10 million to £12 million per year is a niggardly response to the efforts of the Overseas Students Trust? He said that some help would be given to Cyprus. Is there any hope that it will in the same form as that given to Hong Kong, with the prospect of home student fees for students from Cyprus? Will he also tell us where the savings have been made in the ODA budget to make all this possible?

Mr. Pym

At present, the shared fees scheme is unique to Hong Kong and is not envisaged for Cyprus. The basis on which students from Cyprus come to this country will be very much in the hands of the universities and polytechnics concerned and of the British Council, which will help us to contribute to the cost of students from Cyprus who are currently so disadvantaged.

There will be only a small adjustment in the ODA budget in 1983–84 and a slightly larger adjustment in 1984–85 and later years. That will come out of money not so far allocated and out of the additional resources that the Government have made available for the aid programme.

Mr. Tom McNally (Stockport, South)

It is always nice to hear a Minister admit that the Government got things wrong, but does it not show an appalling lack of co-ordination between the various Departments as to where Britain's true interests lies?

Mr. Dennis Skinner (Bolsover)

You have got it wrong.

Mr. McNally

You think that foreigners start in Nottingham.

Mr. Skinner

No, I think that you have got it wrong.

Mr. Speaker

Order.

Mr. McNally

Has the right hon. Gentleman's announcement anything to offer to refugee students, an area in which this country has a justifiably proud record?

Mr. Pym

I do not accept that there has been any lack of co-ordination. First, total public expenditure was far too high. Secondly, there had been an enormous increase in the number of overseas students, at a vast cost that the Government felt we could not afford at that time. We have now proposed a scheme which I believe will be very helpful and positive in that it will provide for a further 5,000 or 6,000 scholarships and awards. There are no specific proposals for refugees, but they are in no sense excluded from the scheme.

Dr. Keith Hampson (Ripon)

Does my right hon. Friend agree that refugees already have home student status? Does he further agree that Hong Kong is a special case, bearing in mind its relationship with China, and that in recent years there has been a substantial drop in the numbers of Hong Kong students coming to this country? Does he also agree that the complaints of the Opposition are synthetic? When overseas student fees were first raised by that great liberal Socialist, Mr. Crossman, they received their highest boost under the then hon. Member for The Wrekin, who was the Minister responsible for higher education?

Mr. Pym

I bow to my hon. Friend's knowledge of the history of this matter. Hong Kong is a special case. The Hong Kong Government are proposing a fee-sharing scheme that will produce many students. The fact that they are paying for approximately half of the cost is a great help. It is a scheme that the Government would wish to see extended.

Mr. Andrew Faulds (Warley, East)

I welcome the right hon. Gentleman's statement as far as it goes. Apart from the limitations of the Prime Minister's comprehension and compassion, will he explain why the Government adopted their original benighted approach?

Mr. Pym

For the reasons that I have already explained this afternoon to the House.

Mr. Richard Luce (Shoreham)

Both my right hon. Friend and the Government have reviewed the overall national interest on this issue. As there is a welcome shift from the previous indiscriminate subsidies for overseas students to the identification of students warranting support in their national interests, will my right hon. Friend assure the House that the interdepartmental co-ordination group will remain in operation and advise on the progress of those policies and the identification of new areas that need support?

Mr. Pym

I am grateful for what my hon. Friend has said. As resources are limited, it is important that we use the resources allocated to this cause in the most economical way. The scholarship scheme provides the essence of the right approach to this subject.

If necessary, I shall call together at any time the interdepartmental co-ordination group that studied the Overseas Students Trust report so carefully. The Departments have worked closely together in producing the result that I announced this afternoon.

Mr. Eric Deakins (Waltham Forest)

Does not the right hon. Gentleman's statement mean that no account has been taken by the Government of the report on educational interchange published last year by the Commonwealth Secretariat? If not, will the right hon. Gentleman take on board its central recommendation that Commonwealth students should occupy a central position in our policy for overseas students?

Mr. Pym

We have taken into account all representations that we received from interested parties both inside and outside the United Kingdom, particularly in the Commonwealth. They stand to gain considerably from the announcement that I have made this afternoon.

Mr. John H. Osborn (Sheffield, Hallam)

Is it not a fact that students in Cyprus have been tempted to go to Moscow rather than to western countries? Will my right hon. Friend confirm that it is better for students to be on the overseas aid budget or on the trade budget than on the domestic education budget as we can get credit for that as part of our aid programme in future?

Mr. Pym

It is not the intention that the cost of those students and the money involved should fall on the education budget. It will come partly from the OAB Vote and partly from the Contingency Reserve. For accounting reasons, which I do not totally understand, it must be transferred to the Foreign Office diplomatic Vote. That is a technical detail that need not concern us.

Mr. Mark Hughes (Durham)

Does the right hon. Gentleman realise that the damage done to the British Council by the previous increases will take a very long time to correct? However welcome these improvements are, it will take many years to redress the balance of antipathy that the increases of the past three years have created.

Does the right hon. Gentleman also accept that in countries such as Cyprus these additions, however helpful, will be insufficient? I welcome the improvements, but will the right hon. Gentleman ensure that the administrative arrangements with the British Council are able to be implemented fully for the academic year 1983–84?

Mr. Pym

I have listened carefully to what the hon. Gentleman said and noted his thoughtful comment. My announcement this afternoon will bring about an improvement in the position, wherever one wishes to lay any blame, if there be blame to lay for what happened previously. I have explained the background to this problem.

The British Council does a splendid job. It is a major contributor to our relationships with many countries and in many other ways through technical co-operatiion and so forth. We shall rely on the British Council further to help in the process to which the hon. Gentleman drew attention.

Sir Kenneth Lewis (Rutland and Stamford)

Is my right hon. Friend aware that there have been considerable pressures from Conservative Members for this change? At last it has come. It is important in this matter to make the best use of the aid available. Can he assure the House that those who receive bursaries to come to this country actually need them? It must not be assumed that every overseas young person who wishes to come to learn in this country is without funds. Those who have funds should be able to pay and those who have not should get help.

Mr. Pym

I agree entirely with my hon. Friend. We wish to make sure that we put limited resources to the best possible use. An important element is selecting the right students who will not only benefit themselves and their countries but will mutually benefit Britain. We intend to take a great deal of trouble and care about that.

Mr. Clive Soley (Hammersmith, North)

I realise that this is a welcome, if limited, retreat from the Government's foolishly harsh attack on overseas students. If the Government had listened to the views of the Opposition a long time ago, the damage done to this country's reputation would not have occurred. There would not have been the response that we had from the Malaysian Government, there would not have been criticisms of the British Council, and places such as Hammersmith hospital would not have had their financial planning arrangements undermined by this stupid and irrational attack.

Mr. Pym

Without accepting in any way that the cause and effect of the hon. Gentleman's questions are related to each other, in so far as the statement contributes to the improved position, I am sure that the hon. Gentleman is right to welcome it.

Mr. Harry Greenway (Ealing, North)

In welcoming my right hon. Friend's statement, may I ask whether Commonwealth scholarships will be allocated on a population or needs basis per country or a combination of those factors? Within those countries, will there be scholastic competition or will it be a question of means-testing those who apply?

Mr. Pym

I cannot give an exact answer to that question. It must be done through discussions with the institutions involved, by consultation with the British Council and by selecting students who will gain the greatest benefit for themselves, their countries and Britain.

Mr. Tam Dalyell (West Lothian)

Does the Foreign Secretary dispute the calculation of my hon. Friend the Member for Derby, North (Mr. Whitehead) that in fact there is only £10 million of new money? On what basis of British national interest is it right to find £10 million of new money for overseas students annually, with all that that entails for our future commerce and trade, when next year £684 million is to be the defence factor alone for the Falklands?

Mr. Pym

We have already spent £65 million a year on this subject. If we divide the £46 million over three years, that is an increase of £15 million a year. The figure rises from £65 million to £80 million. That is an increase of more than 25 per cent. I hope that that is a considerable advance in the direction that the hon. Gentleman wishes to go.

Several Hon. Members

rose—

Mr. Speaker

Order. I will call those hon. Members who wish to speak. Will they ask one question? Otherwise, they will be preventing another hon. Member from being called.

Mr. Ian Wrigglesworth (Thornaby)

I welcome the Foreign Secretary's statement. Can he be more forthcoming about Hong Kong? Have the Government accepted the proposals for sharing fees put forward by the Hong Kong Government? If not, when does he expect to make an announcement on the Government's decision?

Mr. Pym

We are responding positively to the suggestion made by the Hong Kong Government.

Mr. Anthony Beaumont-Dark (Birmingham Selly Oak)

Is my right hon. Friend aware that many hon. Members are grateful to him and to his hon. Friend the Under-Secretary of State for Education and Science for reversing what many people believed was a most unsatisfactory policy? Education for overseas students is of tremendous importance to many people and to the future of this country as well as to their countries. Will my right hon. Friend find out whether anything can be done to help the unsatisfactory position in Malaysia where the Chinese-Malay students are being treated so unfairly?

Mr. Pym

I am grateful for my hon. Friend's remarks and for the assistance of my hon. Friend the Under-Secretary of State for Education and Science and my other right hon. and hon. Friends in the Government who have been extremely helpful in the solution of this problem. We must work out the precise details of the scheme, but our intention is to make it less difficult for Malaysia to send the many students that it has traditionally sent. It is, after all, an important Commonwealth country, and the fact that it has been hard hit by what has happened during the past three years justifies a change in policy now.

Mr. Allan Roberts (Bootle)

Is the right hon. Gentleman aware that the whole nation will be grateful if this defeat of the views of the Secretary of State for Education and Science has set a precedent?

Mr. Pym

I note the hon. Gentleman's intervention.

Mr. James Hill (Southampton, Test)

My right hon. Friend should be thanked for this most generous Government offer that many Conservative Members have advocated for overseas students, especially from the poorest country in the Commonwealth, Sri Lanka. Has he made sufficient preparation to accept between 5,000 and 6,000 students in universities, such as Southampton? Has adequate consultation been carried out and is September the date for the first students to arrive under the new scheme?

Mr. Pym

We are referring to the next academic year, but there has already been considerable consultation; and my right hon. Friend the Secretary of State for Education and Science is in touch with the University Grants Committee, the local education authorities and others who are interested in the matter.

Mr. Richard Alexander (Newark)

I share the general welcome for my right hon. Friend's statement. Is he aware that those of us who have served on parliamentary delegations abroad, especially to Commonwealth countries, were saddened by the hostile reaction to the statement by the previous Secretary of State? Is my right hon. Friend aware that it will mean a consequent lack of continuing good will towards Britain from the young people of those countries for many years to come?

Mr. Pym

I hope very much that, as a result of the scheme, relations will be improved, in the sense that the regrets that were expressed previously are no longer heard. I hope that, building on that, we can improve the position gradually over the years.

Mr. John Wilkinson (Ruislip-Northwood)

I especi-ally welcome what my right hon. Friend said about students from Malaysia. However, students from Singapore are equally deserving, and that country has not had strained relations with the United Kingdom. Will my right hon. Friend have close consultations with the Department of Education and Science and the University Grants Committee to try to ensure that Commonwealth students attend universities, such as Bradford, Brunel, Aston, Salford and others that have suffered especially from the recent cuts and have a technological bias that could be very valuable for the countries concerned?

Mr. Pym

As I have just said, my right hon. Friend is already consulting those authorities. This is a policy decision designed very much to benefit Commonwealth countries, and I am sure that that will be appreciated throughout the Commonwealth.

Mr. Guy Barnett

In view of the question of the hon. Member for Rutland and Stamford (Sir K. Lewis) about the operation and administration of scholarships as a means of trying to increase the number of students in Britain, will the right hon. Gentleman reconsider the decision that I understand has been taken to abolish the key post of chief education adviser in the Overseas Development Administration which will come to an end when the present occupant retires?

Mr. Pym

I note what the hon. Gentleman says. I do not know whether reconsideration is appropriate, but I shall certainly take on board what he has just said.

Mr. Neil Kinnock (Bedwellty)

On a point of order, Mr. Speaker. I wish to have your advice on what I believe is a point of order. We have just heard a statement in response to a publication by the Overseas Students Trust in June last year. In the intervening period there has been a much more important decision, with all due deference to the Overseas Students Trust, about the Government's responsibilities for overseas students within the law. That was the Law Lords' judgment on 16 December that overseas students who had been resident in Britain for more than three years should be regarded as being ordinarily resident and, therefore, entitled to home student status.

The Foreign Secretary said that consideration is being given to that matter in the Department of Education and Science, but as local education authorities, the students themselves and higher education institutions are now in a limbo of uncertainty and insecurity, and some of those students may be owed sums of up to £20,000, may I, through you, Mr. Speaker, ask that most urgent attention be given to this more important consideration that affects students from all parts of the globe, including the Commonwealth, not just those to whom the Government saw fit to respond in today's statement?

Mr. Pym

Further to that point of order, Mr. Speaker. The matter is being considered urgently, as I said in answer to a supplementary question. The full legal and financial implications cannot yet be fully assessed, but, as soon as they have been, an announcement will be made.