HL Deb 30 March 1983 vol 440 cc1571-7

3.43 p.m.

The Earl of Swinton

My Lords, with the leave of the House, I shall now repeat a statement being made in another place by my right honourable friend the Secretary of State for Education and Science. The statement is as follows:

"I should like to make a statement about awards to overseas students.

"On 16th December last the House of Lords ruled on the meaning of 'ordinary residence' in relation to the entitlement of students from overseas to mandatory awards. The main effect is that students who were in this country during the three years before their period of higher education, essentially for the purpose of taking a lower-level course of education, may have been eligible for a mandatory award, subject to a means test on their parents' income. They were not so eligible under the 'real home' test which formed the basis of the previous advice to local authorities by this and the previous Administration.

"The cost to the taxpayers and ratepayers of this ruling could be substantial. Much of the benefit will go to students from overseas who have come here with no expectation of receiving support from British public funds. The Government's policy is to support selected students and countries under the aid programme and the programme announced by my right honourable friend the Foreign and Commonwealth Secretary on 8th February. Other overseas students are welcome but are expected to pay their own way.

"There will be no retrospective legislation. But the Government have decided to restore the position on mandatory awards to that which successive Governments thought and intended it to be. I have today laid before Parliament amendments to the 1982 Awards Regulations which will come into force tomorrow. Their effect will be that local authorities in England and Wales will not be obliged to make new awards after today to overseas students who have been resident here wholly or mainly for the purposes of education. I am also today issuing guidance to local authorities. My right honourable friend the Secretary of State for Scotland is making similar arrangements.

"Our intention on fees for overseas students for 1983–84 onwards is to retain the differential arrangements which have in fact existed for many years. I shall make a further announcement as soon as possible as to how this should be done.

"Local authorities in England and Wales receive 90 per cent. Exchequer grant on their expenditure on mandatory awards, which in Scotland are paid direct by my right honourable friend the Secretary of State. Universities and other institutions in Great Britain directly funded by the Exchequer will be compensated for any unavoidable loss of fee income."

My Lords, that concludes my right honourable friend's statement.

Baroness David

My Lords, I should like to thank the Minister for repeating that statement. The fact that the Secretary of State has had to make such a statement today is because of the crisis which the Government caused when they decided to charge full cost fees. That is when students found themselves in real difficulty. The shock of the Scarman judgment has jolted the Government into action, though it has taken four months since the judgment for a statement to be made, and many people have been waiting for that.

There was, of course, plenty of warning about the problems and difficulties that were likely to arise. Early in 1980 the then Secretary of State, Mr. Mark Carlisle, told the Select Committee on Education, Science and the Arts that the meaning of "ordinary residence" would be for the courts to decide. The chairman of the Select Committee, Mr. Christopher Price, warned that it could take two or three years before the decision would be taken and, indeed, it was nearly that length of time.

On 25th January this year, the Under-Secretary of State, Mr. William Waldegrave, said in another place that a statement would be made shortly on the action to be taken as a result of the Scarman judgment. That was two months ago. We learn from the statement that there is to be further delay. In paragraph 5 it says about fees: I shall make a further announcement as soon as possible as to how this should be done"— that is, how the differential arrangements will be retained. Can the Minister tell us when that further announcement will be made, and will it be the case that there will be no retrospective legislation applying hereto? May I ask for clarification on the sentence in paragraph 4 which says, of the regulations that are coming into force tomorrow, Their effect will be that local authorities in England and Wales will not be obliged to make new awards after today to overseas students who have been resident here wholly or mainly for the purposes of education". Does this mean that anyone intending to take up permanent residence, even if he has not been here for three years, will be entitled to a mandatory award? Are only those exclusively here for education to be excluded?

I want to know what will be the effect on immigrants. Students who benefited from the Scarman judgment were all immigrants. If we return to the status quo, will immigrants suffer? Will there be a difference between real overseas students and immigrants? In the last paragraph, the statement says: Universities and other institutions in Great Britain directly funded by the Exchequer will be compensated for any avoidable loss of fee income". May I ask what will be the position of the local authorities? Will the polytechnics and the colleges of higher education get compensation in the same way?

I want to make a last point about the delay that has been going on and, it seems, will still be going on for a further time. There has been and remains much difficulty and a great deal of confusion in local education authorities, in institutions and among the students themselves. Indeed there has been hardship for students. Can the Minister say when the whole situation, which so badly needs tidying up, will be cleared up so that those institutions and those students know exactly where they stand?

Lord Gladwyn

My Lords, we, too, should like to thank the Minister for making this Statement. I would venture to associate myself with the various questions which have just been put by the noble Baroness. For my part, I would simply say on behalf of those on these Benches that this is rather typical of the, on the whole, rather ungenerous attitude towards overseas students that has been consistently manifested by the present Government. I see the noble Baroness nodding her head. I suppose it is not much good protesting on this particular decision, which, on the whole, was probably expected by most of the people involved, unfortunately. The real question is what is going to happen in the future.

Here I should like to repeat the question put by the noble Baroness. What is going to be the exact effect of the statement: Our intention on fees for overseas students … is to retain the differential arrangements which have in fact existed for many years", which is perhaps not unexpected, and that they are going to make a further announcement as soon as possible? Will that announcement be made before Parliament reassembles or, as I should hope, after we come back on 11th April, when there would be an opportunity for us to discuss whatever the proposals are? I suspect that they may be as equally ungenerous as the proposals up to now, but I hope not.

The Earl of Swinton

My Lords, I should like to thank the noble Baroness, Lady David, and the noble Lord, Lord Gladwyn, for listening to this Statement. I am rather surprised by the attitude which the noble Baroness took about this. The advice to local authorities on the interpretation of ordinary residence which the House of Lords rejected was in fact given in 1978 by the previous Administration. I did not expect the fairly violent and virulent attack on the Government which I received, because I have no doubt it represented the best advice available at the time. But it was, and could only be, advice. Only the courts can provide an authoritative view of the law. This the House of Lords has now done, overturning along the way not only the department's advice of 1978 but also the views of lower courts in the same cases. I do not think there is anything for either the department or for this Government to apologise about.

Baroness David

My Lords, what I was criticising the Government for was putting up the fees; making the fees full-cost fees. That is what caused the crisis.

The Earl of Swinton

My Lords, I should have thought that parents who could afford to send their children to Eton or Harrow could probably well afford to pay the full prices of further education in this country. We must bear in mind that, mainly, it is children of this type that we are talking about. We are talking about pupils from abroad—I see the noble Baroness, Lady Jeger, shaking her head, but, yes, this is what this is about. This is about the parents of children who have decided to send their children to be educated privately in this country, mainly, and have then decided that, because of this, they are entitled to get mandatory awards for their children. The fact that they can afford to send their children to school here must mean that they can afford to pay their fees, and the small amount of money that we can afford should go to those who are in greatest need.

The noble Baroness, Lady David, made a lot about the time and the delay. I said that this was on 16th December. There has been a lot of legal advice needed and asked for as a result of their Lordships' judgment on this case, and this has obviously taken time. The noble Baroness asked me about immigrants. The great majority of those benefiting from the judgment are overseas students who have come to this country quite specifically to take advantage of our education system. We see no reason why any such people who wish to do so should be able, of their own volition, to obtain the substantial benefits we provide for our own students. Those selected overseas students we wish to help stay in this country we support in other ways. Others who will continue to benefit from the House of Lords judgment do not fall into the same category, and these will mainly be children of overseas diplomats and businessmen working in this country who have brought their families with them. I should have thought that immigrants would probably have been covered by that.

A lot was made by both the noble Baroness and the noble Lord about the question of fees. There is little that I can add to that. They are quite a different matter from mandatory grants, and are different in law. Both the noble Baroness and the noble Lord, I am afraid, will have to wait for the further announcement promised in the Statement.

Lord Kilmarnock

My Lords, we on this Bench would like to thank the noble Earl for repeating this Statement. Could he tell us whether he has any evidence of the numbers of students who were previously benefiting from mandatory awards on the basis which it is now proposed to terminate? I should have thought that most students would have been here on annual Home Office permits, which would not have qualified them as ordinary residents. However, if the Government consider that they have plugged a loophole here and are saving some money, I should like to ask whether they will now consider using the money they have saved for showing greater generosity towards the students from poorer countries.

One of our quarrels with the Government Statement of 8th February was the extreme selectivity of arrangements for students from the Commonwealth and certain countries. We were very concerned that there was very little in the Statement for students from the poorer developing countries. If the Government are saving some money on the one hand, could the noble Earl give us an undertaking that they will look at the needs of students from poorer countries?

The Earl of Swinton

My Lords, I fear that my repetition of my right honourable friend's Statement must have been incomprehensible or badly put, because the one thing that this judgment is not doing is saving us money. It is costing us a lot of money, because until the judgment it was considered that students who came over here for school and A-level courses were not ordinarily resident in this country, and therefore they were not entitled to the mandatory grants. Now we find, because of the House of Lords judgment, that there may be considerable—and I say "considerable"; I do not know the details of figures—claims for money that they should have been paid at the time. I fear there is not going to be anything in the kitty to distribute. It is going to be a question of trying to find something in the kitty to pay for these students.

Lord Mackie of Benshie

My Lords, the Government say in the Statement that their policy is to support selected students and countries. The Government cannot moan about being criticised. Anyone who has gone about the world knows the enormous harm that their previous cuts did, particularly in one case that I know well from my connection with Dundee University. A lot of Malaysian students used to go there, and they were indignant and actually took statutory measures to hit back at Britain with regard to trade. Is Malaysia included in the list of selected countries, and does the noble Earl hope that they will be able to put right the harm the Government undoubtedly did in that case?

The Earl of Swinton

My Lords, I am afraid I cannot answer that. This is quite different. We had a long debate on this, and my noble friend Lord Belstead answered for the Government. This is a completely different set of circumstances. This is to do with people living abroad who choose to send their children for education in this country. This really is very wide of the Statement.

Lord Mackie of Benshie

My Lords, it says in the Statement that the Government's policy is to give aid to selected students and selected countries. It appears to me entirely reasonable that I should ask whether a certain country from the Commonwealth is included.

The Earl of Swinton

My Lords, I shall have to write to the noble Lord with the answer.

Lord Beloff

My Lords, I must declare an interest in asking my question since the forensic eloquence which persuaded the Lords, in their judicial capacity, to deliver the judgment now to be reversed by administrative action was the eloquence of my elder son. Having attended the judgment in that case it does not seem to me quite fair, or useful, to say that this primarily affects, although no doubt it does to some extent, a number of wealthy persons who send their children to expensive boarding schools and who are not much affected by the change. As I remember, those who brought the case had been studying at institutions of further education, or at polytechnics, or in other places, in order to prepare themselves better for entry into university.

It may well be that this judgment of the House of Lords came as a great surprise to the Department of Education and Science, just as they were very surprised to find that they were governed by the EEC rules in respect of European students. What seems to come out of this is that the Department of Education and Science is not very fortunate in the legal advice available to it. As I understand it, the House of Lords redefined "ordinary residence", a phrase which appears in many Acts of Parliament having nothing to do with mandatory grants or, indeed, with education. Do the Government now purport, as it were, to withdraw education from the purview of this judgment, or will they do something to try to bring the law into general operation? I ask that because I believe the Minister will find that it also affects the availability of the National Health Service to certain classes of people.

The Earl of Swinton

My Lords, if the Department of Education and Science had had my noble friend's son acting for them, they might have received better advice at the time, but perhaps he was not qualified then. The Government are coming in for some stick from various parts of the House this afternoon. We are being fair and are living up to our commitment by saying we were wrong and must pay up. There is no question of introducing retrospective legislation, which would have been the dirty way to have dealt with the matter. It is a state of affairs about which both this and the previous Government were wrong, and I admit they were wrong. The judgment has been unfortunate, and the object here is to stop this state of affairs arising in the future.

Baroness Hornsby-Smith

My Lords, which Commonwealth or foreign Governments give reciprocal opportunities of this type for United Kingdom students in their countries? If my noble friend cannot answer that off-the-cuff, will he let me know?

The Earl of Swinton

I will let me noble friend know, my Lords.

Baroness David

My Lords, the noble Lord, Lord Gladwyn, and I both asked when the further announcement would be made about the fees. I also asked whether the polytechnics and the colleges would get compensation for loss of income in the same way as the universities. I went on to ask whether the fourth paragraph of the Statement meant that anyone intending to take up permanent residence, even if they had not been here for three years, would be entitled to an award.

The Earl of Swinton

I apologise to the noble Baroness, my Lords, but she asked me a lot of questions in a short space of time and I did not note them all. I thought I had answered the question about the timing of the further announcement on fees. It is that I do not know and cannot tell her. As for the polytechnics, some polytechnics and other institutions providing AFE may face claims for the reimbursement of fees paid in 1982–83 by students previously classified as overseas students. It is not my right honourable friend's present intention to revise pooling allocations within the quantum, but he will be ready to consider representations. I shall have to write to the noble Baroness about her third question.