HL Deb 05 December 1984 vol 457 cc1336-43

4.23 p.m.

The Earl of Swinton

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

"On 12th November I announced changes to the student awards system involving the abolition of the minimum award, increased contributions from parents in the middle and upper reaches of the income scale and the extension of contributions, for those most able to pay, up to the maximum of the designated tuition fee of £520.

"The resources released by these measures were intended in part to meet increases in the already substantial bill for student awards—about £700 million in 1984–85—and in part to provide additional money for science.

"Our system of student support—amongst the most generous in the world—has long been based on the sharing of responsibility by the Government, the student's family and where appropriate the student himself. When resources are limited it is, I believe, right for those parents who can afford to do so to carry a larger share of the costs of their children's higher education, in order to release money for urgent needs elsewhere, particularly for science.

"I recognise the concern expressed in this House and elsewhere that the increase in parental contribution that was proposed was too sharp and the notice given too short to enable parents to make such a substantial adjustment in their financial affairs. I believe also that parents will want to know where they stand in relation to the next academic year.

"I should therefore tell the House that it remains the Government's intention, subject to the decision of Parliament, to abolish the minimum award and to increase the level of parental contributions to maintenance for those in the middle and upper reaches of the income scale. I have however decided to withdraw the proposal that parents should make a contribution to tuition fees. My right honourable friend the Secretary of State for Scotland has decided similarly. The cost of this concession in England and Wales in 1985–86 is £21 million. In order to find this extra sum, I have been through my recently announced expenditure programme again and I have been able to find £11 million savings towards it. These savings will require:

First, a reduction of £6 million in the addition to the equipment grant for universities in 1985–86. This means that universities will get £4 million for this purpose in that year instead of the £10 million that I announced earlier. I intend however that the selective scheme, with the agreement of the UGC, should now be extended to cover the three years to 1987–88: £7 million will be available in each of the two later years.

Second, a reduction of £3 million—from £14 million to £11 million—in the amount which I had told the Chairman of the Advisory Board for the Research Councils was a planned addition for science in 1985–86.

A number of smaller economies amounting to £2 million. This will mean among other examples a smaller increase than already announced for the PICKUP programme; and less for educational research, adult education and the microelectronics programme.

"The remaining £10 million needed in 1985–86 will, exceptionally, be found by an addition of that amount to the public expenditure planning total.

"The Government propose to consider—and consult widely about—whether a radical change in the student support system, which might include loans, should be made so as better to meet the needs of students and their families whilst safeguarding the interests of the taxpayer.

"I believe that these proposals meet the two main concerns of the House: first, that the increase in parental contribution was too sharp and too sudden; and secondly, that the system of student support in the longer term should be reviewed."

My Lords, that concludes the Statement.

Baroness David

My Lords, I thank the Minister for repeating that Statement, which must have been as humiliating for the Secretary of State to have to make as it was foolish and politically unwise to announce such major changes with no prior consultation. We are of course pleased that the principle of tuition fees being paid by the Government is to remain as it has been since 1977, when my noble friend Lord Mulley was Secretary of State. We can only hope that the parents will pay up and that the students will not be penalised. No doubt the better-off parents will be aware of the covenants and will perhaps be able to get some money back from the tax man in that way.

As I asked for a review of the whole grants and awards system last week at Question Time, I am naturally pleased that there is to be a review, but I should like to ask just what this entails and what will be the terms of reference. Will the review merely mean consulting a few bodies such as the Committee of Vice-Chancellors and Principals and the Committee of Directors of Polytechnics, or will it be the wide-ranging review that is so very necessary? Will the review take in discretionary awards, and will the awards cover a wider number of courses than at present? Will there be a Green Paper or a consultative document?

It is a great pity that the Secretary of State did not fight the Treasury for the amount of money, £21 million, that he is going to lose by not having contributions from parents for fees. It is a disaster for science and scientific research that the money promised only three weeks ago (the £9 million, I think it is) should now be withdrawn. The debate in your Lordships' House on 21st November, with many eminent scientists taking part, made clear how starved of funds is scientific research in this country. Sir Keith himself said in his press notice released only last Thursday: Too many of our university laboratories are full of equipment that belongs in museums of industrial archaeology. Too many of the most promising research projects, the ideas of the brightest and best of our young scientists, have to be turned down because of shortage of funds". I ask whether it is still too late to go back to the Treasury and try to get money from that source or, indeed, from the Contingency Fund so that scientific research does not have to suffer.

4.30 p.m.

Lord Kilmarnock

My Lords, we on these Benches would also like to thank the noble Earl for repeating the Statement made by his right honourable friend in another place. We are glad that the Secretary of State has recognised that his proposals were made completely without adequate notice. We are also glad that he has withdrawn the proposal to charge parents for tuition; this would have represented a serious attack on the Robbins principle and looked like the thin end of the wedge to privatisation of higher education, which would not be in the interests of the country.

However, we cannot accept his method of finding £11 million of the £21 million that he needs. We welcomed his offer only a short time ago of a further £24 million for scientific research, but it was always wrong to finance this by slashing student grants. Why should a relatively small body of students and/or their parents pay for basic research which is vital to the economy and, in the case of medical research, to the health of the country as a whole?

Therefore, we deplore his decision to find the money he needs by reducing the equipment grant to the universities from £10 million to £4 million in 1985–86. This seems to us to be folly. We also deplore the proposal to reduce by £3 million the amount the Secretary of State had pledged to the chairman of the Advisory Board for the Research Councils. It is quite wrong that the research councils should have to help to bail him out of this egregious error. Would the noble Earl not also bear in mind that, when the Telecom shares were put on sale to the public, if an extra 5p had been added to the asking price, there would be plenty of money to pay for these things?

Rather than again depleting the science budget, I think that the Secretary of State should take the whole of his £21 million from the Contingency Reserve. It is dangerous folly not to give scientific research the equipment and funds it must have. We also deplore his decision to nibble away at adult education, which is already practically starving to death. This sort of robbing Peter to pay Paul when both are in dire straits simply will not do.

Finally, we give a guarded welcome to the Government's proposal to consult on a radical change in the student support system. Can the noble Earl assure us that this will be a genuine inquiry with a proper consultation period? Will he bear in mind the drawbacks of a loan system, which I have already represented to him in terms of administrative cost and the low recovery rate in the USA? In view of the defects of the parental contribution system, and, indeed, of the discretionary awards system by local authorities, will he undertake that the Government's inquiry will look at the whole system of grants and awards to those at 16 plus, whether in secondary schools, further or higher education? Is this not the right way to go about it?

The Earl of Swinton

My Lords, I am grateful to both the noble Baroness, Lady David, and the noble Lord, Lord Kilmarnock, for the somewhat muted welcome that they have given at least to part of the Statement. I am delighted that we are all in agreement on tuition fees, anyway. I was also very grateful to the noble Baroness, Lady David, for drawing attention, once again, to the possibility of parents using covenants as a form of easing their burden over student grants. I think that we would all agree that the more publicity that can be given to this, the better.

Both the noble Baroness and the noble Lord asked about the terms of the review. These have not yet been decided upon. Obviously, all the points will be borne in mind. In fact, the forthcoming Green Paper will contain a section on student support; so there will be plenty of scope for consultation.

They both also launched an attack on the reduction to the science budget—which, I am sure, we all regret. But I think I should point out that, although the grant to the UGC has been reduced, it is going to be extended for another year; so that in fact from the previous total of £20 million, there will now be £18 million going there. Also, as has been pointed out, the grant to the research councils has been reduced from £14 million to £11 million. But, again, I think I should point out that these were in fact additional sums in the first place and therefore cannot be cuts as such.

Lord Mulley

My Lords, as the Secretary of State who was responsible—and it was not the late Lord Robbins—for separating tuition fees from maintenance, I may say that I did so for two reasons. First, I did not want to have a distinction between home and overseas fees, and I am very sorry that my successors of both parties went away from that principle; and, secondly, so many wealthy parents were not giving their children the money to pay the fees at the beginning of the financial year of the university. This caused immense anxiety and doubts as to whether they would be in a position to take up their places. Therefore, I am extremely glad that the principle of not asking parents to contribute to tuition fees has been maintained.

But, in my view, the ragbag of economies which has been put together to pay for it is Treasury activity at its worst. Even under the enlightened guardianship of the Treasury of my noble friend Lord Barnett, I was obliged, as Education Secretary, to point out that I was not prepared to accept the advice at low level which the Treasury gave. For example, they wanted me to have one size of desk from the age of 5 to the age of 18, or something of that sort. I was obliged to tell them—and I hope the noble Earl will suggest to his right honourable friend that he does the same—that if they had been right in living memory about anything I should have taken a good deal more interest in the advice in great detail that they were going to offer.

It is a scandal that scientific research and the research councils are having to be cut in the way that is now proposed. All Governments are responsible for this. Unless in the computer age in our government accounting we draw a distinction between capital and revenue, between investment and current expenditure, this country will get into worse and worse difficulties. What is proposed in terms of equipment for the universities and the research councils surely must be an investment of a different character entirely from normal government expenditure.

The Earl of Swinton

My Lords, I would agree with the noble Lord, Lord Mulley, in endorsing the only thing that I think we are all in agreement about. I think I really must defend the Treasury a bit.

Noble Lords


The Earl of Swinton

Well, my Lords, they have to have a champion somewhere. They have agreed to meet £10 million—which is nearly half the extra cost. I must also, again, point out to the noble Lord, Lord Mulley, that to talk about a cut in the research councils' budget, when they are getting an extra £11 million, is not right. I cannot agree that that is a cut.

Lord Shackleton

My Lords, how can the noble Earl, who heard the whole of last week's debate on the research councils, say that this is not a cut? When is a cut not a cut? And what is, "defending the Treasury a bit"?

The Earl of Swinton

My Lords, if you get £11 million extra—and I should not mind if somebody gave me £11 million—I would not say that that was a cut.

Lord Shackleton

My Lords, it was £14 million.

Lord Elwyn-Jones

My Lords, can the noble Earl say where the reduction of £6 million in the equipment grant for universities is to fall? Will this hit the scientific research departments? What is going to be affected? Instead of an extra £10 million, there is going to be £4 million. It is a very substantial reduction in what was contemplated and confidently expected; and on behalf of many noble Lords here concerned with the state of the finances of the universities, I would say that this is a matter of very grave concern.

The Earl of Swinton

My Lords, if I remember correctly, this is going to be used for laboratory equipment. In fact, it is going to be £4 million in the first year and £7 million in the subsequent two years; so that it is going to be £18 million in total.

Lord Rochester

My Lords, is it not particularly deplorable, in addition to the point already made by several noble Lords about the research councils, that at a time when a sub-committee of your Lordships' Select Committee on Research and Development is considering what more can be done to advance the cause of education and training for new technologies, we now hear that there are to be reductions in the grant given to educational research, to adult education and to the micro-electronics programme?

The Earl of Swinton

Yes, there will be reductions, my Lords.

Baroness Lockwood

My Lords, does not the Minister think he is being rather complacent when he says that this is not a cut to the research councils—particularly in view of the statement by the chairman of the Advisory Board for the Research Councils, published by the DES only this morning, and when they have already indicated ways in which the money could have been spent?

May I further ask whether he has any idea how the cuts are going to affect the PICKUP programme, the MEP programme and adult education, to which he has referred? Only a few months ago in this House we had a debate on further education and, as a result of that debate, it was pretty clear that the service was already under-funded. We also made reference to continuing education. It seems as if the PICKUP programme is the Government's main plank in the continuing education programme, but now we are told there is to be a cut here. Can the Minister explain this dichotomy in Government policy?

The Earl of Swinton

My Lords, I think the noble Baroness has made a very valid point. As I tried to explain, the research councils were told they were going to get an extra £14 million and they have now been told they are going to get an extra £11 million. That is £3 million less than they thought they were going to get, but it is still extra money. However, the noble Baroness is absolutely right about the £2 million reduction to the PICKUP programme and educational research, adult education and the micro-electronics programme. However, I am afraid I have no details as to how that is going to be spread. I will have to write to the noble Baroness about that.

Lord Taylor of Blackburn

My Lords, may I make a further plea, repeating what has been said earlier, that there should be the widest possible consultation before anything is done to student grants again, and that a Green Paper or a White Paper should be issued so that many people can bring forward their views as to how things should go in the future? The Government should not spring it on people, as has been done during the last week.

The Earl of Swinton

My Lords, I do not think I can give a commitment as such, but there is going to be a Green Paper in the New Year. In it there will be a chapter on student grants and I think that this will probably provide for the consultations which the noble Lord requires.

Baroness White

My Lords, can the noble Earl pick up the point that was made very forcefully during the debate on the research councils? Here I would echo what the noble Lord, Lord Shackleton, has just said. The noble Earl listened to that debate, I trust, and heard the "devastating analysis", as it is called in today's Guardian, of the way in which the Government were treating the research effort of this country, even with the sums which are now being somewhat reduced. Does he not recall that we drew his attention to the fact that the chairman of the Advisory Board for the Research Councils, Sir David Phillips, had indicated that unless the Government kept their basic endowment of research and development in this country at a steady state, within the decade we should be spending in real terms 25 per cent. less? This arises from the under-funding for our research efforts in relation to both equipment and salaries, which has been going on annually and cumulatively, and to which I do not think the noble Earl has made any reference this afternoon.

The Earl of Swinton

My Lords, I remember extremely well that very interesting debate, which I think was introduced by the noble Lord, Lord Sherfield. Yes, I feel extremely sorry about this, and I know that my right honourable friend does, too. As I say, they are getting an extra £11 million. Of course, they want more money—but, again, who does not?

Lord Beswick

My Lords, does not the noble Earl think that in this there is something that we ought to be absolutely ashamed about? Is it not a matter for national shame that this year, when we have made the biggest sale ever of public assets—something like £3,000 million pounds worth of our capital has been sold, a once-and-for-all sale—and have had this enormous influx into the Treasury, they have to cut £3 million off research and development?

The Earl of Swinton

My Lords, I seem to be repeating this over and over again, but it is not a cut. It is £3 million less extra money than they thought they were going to receive. They will still receive £11 million extra money.

Lord Sherfield

My Lords, is it not a cut on what was promised two weeks ago?

A noble Lord

It is still not a cut.

The Earl of Swinton

Yes, my Lords, I suppose it is, technically. But if somebody offered me £14 million and then said, "I'm very sorry—it is only going to be £11 million", I should still be jolly glad to receive it.

Lord Diamond

My Lords, is not the switch from a single completely unacceptable decision to a series of completely unacceptable decisions evidence of the unfitness of this Government to govern?

The Earl of Swinton

No, my Lords.