Higher Education

HL Deb 11 December 1985 vol 469 cc251-88

5.38 p.m.

Baroness Seear rose to call attention to the economic, social and cultural consequences of Government policy towards higher education; and to move for Papers.

The noble Baroness said: My Lords, anyone who has worked, as I have done, for a number of years in the higher education system will, I think, agree that all is not entirely well with higher education in this country, be it in the universities or in the polytechnics. Not surprisingly, there is room for improvement. It is perfectly true that some teachers do not see their students very often. It is true that some lecturers do not entirely enthrall the students who attend to hear them. It is also true that some dissertations do not get finished, and many of them would better never have been started. I recall the kind of would-be writer of dissertations who used to come up to me and say, "I wish to do research. Can you suggest a subject?"

It is not on people such as this that public money allocated to higher education should be spent. To this extent I agree that there the Government have some grounds for criticism. It is right and proper that the universities and the polytechnics and all the different aspects of higher education should examine what they are doing, should consider whether the way in which they are conducting their affairs and the kind of courses and teaching they are putting on and the way they spend the money allocated to them is appropriate for today and tomorrow and for the the furtherance of the purposes for which they exist.

But having gone along with the Government that far, I find it extraordinarily difficult to find out what policy the Government really have in relation to higher education. They say in their Green Paper that the higher education system should be making an effective contribution to the development of the economy. Of course they are right in recommending and in recognising that there is a contribution to be made to the economy by the higher education sector. If they could not see it for any other reason, it would surely be obvious because of the very much larger number of people in the countries of our successful competitors who do in fact receive higher education. We are still very low down the league in the proportion of people in this country who receive higher education. Those countries are markedly successful. I am not saying that it is a direct consequence, but at least it gives one food for thought that they spend more and have more of their people involved in higher education than we.

Naturally the Government want the higher education system to contribute. But what do they do to encourage that contribution? They cut resources. This is an extraordinary way in which to encourage progress in higher education. The Government can say—indeed they have said—that because of the change in the birth-rate about 20 years ago there would be falling numbers wishing to enter the tertiary sector in all areas. But that is as though what we are doing now is adequate. The falling numbers present a wonderful opportunity to repair the defects from which we have suffered until now, in particular to make it easier for large numbers of women who at present are not represented adequately in the higher education system to get into it; and also for large numbers of people from working-class families who in this country, in sharp contrast with other countries, have not penetrated to the extent that was hoped with the reform of the education system into the area of higher education. There can be little doubt that the economy suffers because women of real capacity and people from families not familiar with higher education fail to have the advantages that that system can offer. This is the chance to take advantage of that.

Then the Government say that, although they are cutting their resources, industry should be prepared to make up the difference; that there is money in industry and that industry can be tapped to finance the higher education system. I suppose most of us would agree that there is a case—and a good case—for a closer relationship between industry and universities and polytechnics in, for example, the development of research projects and perhaps in the financing of fellowships and studentships. A good deal has been done. There have been very considerable changes in this area in the past decade, but more could be done. Surely we should be extremely cautious before we rely too much on the financing of university work through grants and industry.

Naturally industry on the whole will want to finance the work which is of most immediate interest to it. Some very far-sighted organisations will also finance basic research but it is not to be expected that that is likely to develop on a very large scale. It cannot be said too often that although you can economise on basic research for a short period of time and you can live for a period of time on the capital that you have invested in basic research from which come the ideas—not always, I would be the first to agree—seized upon in this country for development, those ideas have come from the basic research that has been done. For a while you can economise on it, but not for long. If you fail adequately to finance basic research you are drying up the source from which the real contribution to industry from the universities can be made, and that source will cease to be there. The Government cannot back out of financing the developments they should be wanting and rely on finance coming from elsewhere.

They also say that parents should contribute more. May I ask the Government to look again at the reduction they have already made in the financing of people from middle-income groups and above? I agree that there are some people in the country who are so well off that they can afford fully to finance their children through higher education, but they are a very small proportion. I sadly have no doubt that where middle-income families and those slightly above that level have a son and a daughter both of whom are of an age to enter into higher education, and they are being expected to contribute very substantially to the cost of financing them, for all the advances that have been made in women's lib it will be the sons who get the money rather than the daughters, although it is perfectly possible that the daughters have the greater ability. Again, by relying too heavily on the financing from families we shall be cutting off people who can make that contribution to industry and to the development of the economy which the Government say they are particularly anxious to see and with which we would all agree.

Perhaps I may say in parenthesis that if the Government really want industry to contribute to financing it is perhaps rather a pity that they have discouraged by their change in the tax system those companies which have been doing something to help their employees who are financing their children through higher education. I declare an interest here because I am involved in a scheme of this kind. The cuts seem to be directly in opposition to what the Government say they want—the greater contribution that higher education can make to the development of the economy.

A second doctrine put forward by the Government is that we want more engineers, technologists and technicians. I have bored the House before with my family background in engineering. I am not in the least prejudiced against the engineer—on the contrary, they are the salt of the earth, and so on—but the patronising way in which the Government in their White Paper dispose of arts subjects requires some comment. They admit in one paragraph that art students can make a contribution to the economy. Otherwise they seem to be seen as a luxury to be indulged in only when the technologists have earned the money to pay for it. I would remind your Lordships' House that when Rolls-Royce went broke the entire board of Rolls-Royce was made up of engineers. I am not saying that Rolls-Royce would have done better with art graduates; I am saying that they could not have done very much worse, as they went broke.

I also remind your Lordships that there are some very distinguished leaders of the economy and of activities related to the economy who have come out of the arts graduate sector. I mention Christopher Hogg of Courtaulds, who I believe was a history graduate; and in the Government's own service there is Geoffrey Holland, who cannot be described as anything other than entrepreneurial—the Government's favourite word—and who I believe is a modern language graduate.

But what does industry need? Not all industries are engineering or technological. There is a great deal of wealth-creating and production work going on in which, it is true, people have to understand how to use modern technology, but they certainly do not all need to be technologists. We need marketing men. We need people who are good with negotiations. We need people who are good at industrial relations. Are these people necessarily best found among the ranks of the technologists? We need people who can speak foreign languages. Goodness knows, we are famous for our ignorance of foreign languages, although we are trying to sell right across the world. We need people who have subtlety in the use of words. Is that adequately dealt with in the training that is given to our engineers and technologists?

Once I had a graduate student who had been trained in the sciences. He produced for me a piece of written work and I said to him, "I have a feeling that you know more about this subject than you have put on paper". He replied—and your Lordships must understand that students speak rather peremptorily to their tutors these days—"You must appreciate that I have done only four pieces of written work since I was 14". It looked like it. After one year of wrestling to get it together, his written work was a little better. As a preparation for someone who is to go into a managerial position in industry, a facility with words, both spoken and written, has much to recommend it. But I suggest that one is more likely to find such a facility more among arts graduates than among scientist and technologists. Let me add however that of course we want more scientists and technologists; not for one moment am I denying that.

The Government make another unexpected requirement of the universities in the White Paper. They say that the universities should encourage the entrepreneurial spirit. That word is being a little hard worked by the Government at the present time. Personally, I have never found students to be lacking in the entrepreneurial spirit. I lived at very close hand to the student riots at the LSE in 1967. There may have been all sorts of things wrong with those riots but the rioters did not lack enterprise. They showed it in a whole variety of ways.

What may be wrong—and here I agree with the Government—is that enterprise is inadequately directed to the wealth-creating sector. That is a cultural problem that runs right throughout our society. The enterprising spirit which a great many universities show has not in the past been inadequately directed to that end. Universities could contribute more but so could society as a whole. From where has come the extraordinary tradition that it is perfectly right and proper, respectable and socially acceptable to work in the City in merchant banks and at Lloyd's but not to enter manufacturing industry?

However, one cannot put the blame for that at the door of the universities. The fact of the matter is that today we need in industry people working for the economy as a whole, who can develop new ideas and challenge the way we do things at the present time. We need people who have a great deal of knowledge about one subject but who are also very broad-based in their knowledge. We need, in the old phrase of Jowett, people who know everything about something and something about everything. That requires depth and breadth. There is no way that people can acquire both depth and breadth unless one gives them time to study, time to move around between different subjects, time and space to develop their ideas and themselves. We need people who are informed, who are rational, and who are non-conformist. That requires the space and time to develop the range of subjects to be studied that the good universities can give.

In my last minute let me say this. I have conceded the Government's case that the universities should be making a better contribution to the economy. But that is not only what universities are about. We want people who will ask the question "Why?" in all sections of our society; in our political system, in our social system, and in our cultural life. We need people who will challenge things as they are—not from a basis of ignorance but from a basis of information. We need people who have the intellectual vigour, the character and the courage to pursue the answers to those questions. My Lords I beg to move for Papers.

5.54 p.m.

Lord Annan

My Lords, I am sure we are all very grateful to the noble Baroness for introducing this Motion, and I agree with a very great deal of what she has said. If one cuts any system by 17 per cent. in three years and then announces that one is going to cut it at the rate of 2 per cent. regularly each year from then on, then one is bound to get a worse system, however efficiently universities or education as a whole are managed.

How efficiently are universities managed? I do not mean by that to question the efficiency of the university staff. The recent Jarratt investigation showed that universities are very well administered and that the char ladies do absolutely splendid work. But if one were to ask how efficient is the system of universities or higher education then one would get a very different answer. It is appallingly mismanaged for the simple reason that no person or government device for managing the system exists.

These days the Secretary of State gets a terrible reception in the universities. One can hear the dons muttering about him and the Government: "Solitudinem faciunt pacem appelebant." Or rather they would mutter it if they knew Latin. It is not what Sir Keith Joseph does that is so distressing. It is distressing that he is powerless to do otherwise. The only sanction he has to get universities to change their ways is to apply financial sanctions to the system. His advisers, the University Grants Committee, are in very much the same position because the chairman of that committee, if he really adopted radical procedures, would find that his committee would not back him. Why would they not back him? For the simple reason that most of them are men or women who hold posts in universities.

It is the same in the universities themselves. For generations the body in a university that makes the decisions has been the senate; a vast body of between 50 and 200 academic staff and a few students. It is the most perfect example in this country of worker control. But when the budget begins to be cut, worker control proves to be hopelessly ineffective.

For years now every government have been nudging and hinting at the universities to cut expenditure. The first man to do so was the noble and learned Lord the Lord Chancellor when he was Secretary of State. When I was Provost of King's I remember being lobbied to vote against him being given an honorary degree at Cambridge because he had refused to accept the recommendations of the University Grants Committee on finance. I refused to do so, and I am glad to say so did all the dons at Cambridge refuse to do so. The Secretary of State received his honorary degree, thus showing the superior wisdom of the dons at Cambridge to those, at a later date, at Oxford.

Mrs. Shirley Williams was the next person to try. When she was Minister of State she put 13 points to the universities and the universities rubbished them. And so a war of attrition began between the universities and Government. It was a war on the part of Government and indeed other agencies to make universities change their ways. A few days ago I attended one of the most depressing conferences it has ever been my lot to attend. It was organised by the vice-chancellors' committee to publicise how valuable are the universities. Beforehand, I looked up the proceedings of a conference I had attended exactly 20 years ago, in 1965. Sure enough, the same old topics were on the agenda: the need to broaden the sixth form curriculum, the need to broaden undergraduate courses, the need to rationalise small subjects, the need to make our engineers literate and our historians numerate; the need to gear university research and teaching to industry.

I shall not say that there has been no progress but there has been very little. We still have highly specialised sixth forms because universities insist upon them. We still have largely single-subject honour degrees. Very little rationalisation of small subjects has taken place. The reason for that is not sheer bloody mindedness; it is because the system of governance is out of date.

I ask your Lordships to consider the 1981 restructuring exercise. Because university staff had tenure to the retiring age it cost £238 million to reduce staff. Three thousand staff had to be cut. How many were in fact able to cash in on the extremely favourable early retirement terms? A total of 4,400. The universities allowed their best engineers, technologists and computer science people to leave with their golden handshakes, regardless of whether that was in the national interest. Profound research by the sociologist Professor Laurie Taylor has revealed that in the universities, the restructuring exercise was called "the gravy train".

Is it any wonder that Sir Keith Joseph is determined not to let that happen again and is submitting a Bill to bring tenure in universities to an end? If the universities had come up in concert with an alternative scheme—say, for tenure from 35 to 60—and if they had shown, which they did not, during the restructuring exercise that they would sack inefficient staff, then I might be willing to oppose the forthcoming Bill. But not they. They cannot do so because there is no possibility of getting agreement to take really unpleasant decisions. Can your Lordships conceive the massed dons of Oxford and Cambridge voting for anything which really harmed their own interests? If one were to ask about that form of government, a more grotesque form of government could not be imagined. It is Athenian democracy; the slaves being the administrative, technical and manual worker staff who have no votes, with the probability that on many issues Pericles will be voted down and Cleon will triumph.

If we are to meet the challenge that the noble Lord, Lord Aldington, and the Select Committee put to us recently in this House we must reform the governance of higher education. We cannot continue to have polytechnics teaching liberal arts subjects. We could have them teaching how to write English, how to speak foreign languages, how to sift a thousand pages of complex documents and produce a précis with recommendations for action. We can no longer afford to have an audio-visual centre at a college in London which has three staff and which teaches nobody. We cannot have all universities treated as if they were all equal. They are not, and everyone knows it. There ought to be differences between them in salaries as well as in conditions of work.

What happened 25 years ago at the time of the Robbins Report was this. We rightly expanded higher education. We wrongly made it all Rolls-Royce education, from student grants to research facilities. I consider myself as very much to blame—as much to blame as anyone. For example, I wanted university students to be vocationally trained engineers doing a sandwich course in which university teaching and experience in industry is blended in the same course. So I advocated that the colleges of advanced technology should be upgraded to universities. That was done. All it did was to add millions of pounds to public expenditure without adding a single student. However, I do not apologise for wanting to have more and better trained students. It is because the Government are restricting the numbers of students coming into the system that I am opposed to their policy as it stands.

I am sure that the noble Lord, Lord Butterworth, who was a member of the Jarratt Committee, will speak about making universities more managerially responsible far better than I can; but I must tell him that I am most pessimistic about the degree to which universities will respond to the report of that committee. What we have seen in the past few years is the reluctance ever to take bold decisions. The decision is always to cut across the board with equal misery for all, rather than to uproot whole subjects in order that the remaining subjects can flourish. That is just as true of the research councils as it is the universities. The Medical Research Council will not harden its heart and close whole units in order that its really elite institutions and units can work unimpaired. As a result, we see some of the finest centres of medical research—such as the Postgraduate Medical School which is going—each year getting weaker and weaker.

The chairman of the University Grants Committee, being a mathematician, is now working out a scheme for giving each university so many points for teaching and so many for research. I think that is disastrous. Sir Edward Parkes got it right when he increased the all round allocation for engineering and then slashed two universities—Salford and Aston. So badly hurt were they that the vice-chancellors of those universities did absolutely splendid work to save them from disaster and transformed them into first class institutions in their own rank.

The moral I draw today is this. If our institutions of higher education are going to make the contribution which they ought to make in the 1980s, there must be a change in their governance; otherwise the Secretary of State will find himself in the same powerless position as he is now in trying to change things for the better. We have a genius in this nation for protecting cultural institutions from day-to-day political interference. We have it in broadcasting. Equally, we could have it in universities. I think that probably the only way is to have a Royal Commission, but I am not dogmatic about that.

I make my apologies to the noble Earl, as I have to the noble Baroness, Lady Seear, that owing to an engagement which I cannot avoid I shall miss the end of the debate. I conclude by again saying how grateful I am and apologising to the House for an intemperate speech. For 20 years I have been making temperate speeches about universities so I thought the time had come to change. I applaud what the noble Baroness said about higher education as a whole and the cultural things which we all want to retain and improve, whatever our views.

6.6 p.m.

Baroness Lockwood

My Lords, I too am grateful to the noble Baroness for introducing this debate today. I want to concentrate largely on continuing education, but to pick up one or two of the points that the noble Baroness, Lady Seear, made, particularly in reference to women.

On at least three occasions in the past few weeks in this House we have debated, in different contexts, Britain's industrial and technological performance. Inevitably, in those debates the role of education has been an important element. I think there has been widespread agreement that education contains one of the keys to a sound economic and industrial base. There has also been agreement that education and re-education, training and re-training are essential if we are to compete in the world. Therefore, there is agreement on the need to widen continuing education.

Continuing education has become an in-word much used in speeches and papers, but regrettably it is much less used in our education system. I have a particular interest in the subject as president of Birkbeck College. Birkbeck concentrates almost entirely on part-time courses for mature students who seek to take a degree for the first time, a second degree in a new subject, a top-up post-graduate qualification, or a short course. It is an appropriate model, I should have thought, for the kind of development that should be taking place in all our universities.

At a time when demand for this kind of education is growing one would expect extra resources to be made available; but not so. Birkbeck, like other colleges and universities, has suffered from cuts in terms of real funding, has had its share of early retirements with consequent temporary reappointments, and is competing in the market place with other academic institutions to sell its research and other expertise.

There appears to be a dichotomy in the whole field of continuing education. According to the Green Paper, the Government agree with the UGC and NAB that the provision of continuing education should be one of the principal parts of higher education work, but apparently the Government do not believe that it is their responsibility to fund it. For its part, the UGC set up a committee to examine continuing education and this committee produced a very comprehensive and valuable report.

So far, it appears that the UGC has not adopted the report or acted on its many recommendations. For example, in all the communications that have been passing to and fro between the UGC and the universities, there has been no mention of priorities backed by incentives of additional funding for continuing education. In contrast, as the noble Lord, Lord Annan, has mentioned, the UGC has made it clear that its policy is for differential funding of research. The universities have quickly taken up that message, and there is widespread activity throughout the universities with a view to trying to obtain high calibre research contracts carrying extra funding.

Let me be clear: I have no complaint about the universities seeking to maintain their research base. On the contrary, I support completely those who point with great concern to the erosion of research funding. But what I do complain of is that no similar message with financial implications has been sent out on continuing education. There is no point in just talking about it and telling universities that they should be providing updated courses, if extra resources are not available.

In a recent speech the chairman of the UK Science Parks Association said: Sadly, we are moving towards a time when a Professor is first and foremost a marketing man". At this point I shall not take up the quotation by referring to marketing men only and not women. Of course the universities must interface with industry and commerce and with the social environment, but we must be careful that too much effort is not put into the selling end at the expense of teaching, which is surely one main purpose of the universities. If continuing education is to be a principal part of higher education, then a clear message and clearer policy guidance must come from the UGC, which must be backed by adequate financial support from the Government.

I have no doubt that the Minister will respond by saying that the Government has introduced "pick-up". This is true and it is quite a useful experience in terms of PR and in introducing pump-priming projects; but it is on a very small scale. With a budget of around £3 million a year and a staff of 16 in England and Wales as a whole, it can have no more than a slight catalytic effect on industry and on the educational institutions. We need much greater commitment than this by all concerned.

I also happen to have some connection with Bradford University, which is currently undertaking a comparative study of continuing education in Europe. The preliminary findings of this study suggest that much more is being done in these countries, particularly in West Germany, where the growth rate in continuing education has been something like 300 per cent. in the past decade compared with 60 per cent. in this country. Moreover, the balance between the contributors is different. Of the amounts spent on continuing education and updating—that is, on post-initial qualifications—the figures in the United Kingdom—bearing in mind that we start from a smaller base line—are: public educational service provision amounts to 10 per cent. and employer and private training provision amounts to 90 per cent. In West Germany the figures are: public educational service provision, 25 per cent; employers and private trainers, 75 per cent. In West Germany the public provision is shared by the federal and lander governments, and at both levels there is a greater commitment than we have in this country in terms of money and back-up legislation. Indeed, some of the lander provide a statutory right to study leave, for example.

This is a comparatively new situation for West Germany, too. There is nothing in their fundamental philosophical approach to education which would suggest why they should be so far ahead of us. In fact, their universities, like ours, were protective of academic standards and freedoms. It is by a deliberate effort of will that they have been able to make continuing education a part of mainstream activity, unlike in this country where it is still an optional extra to be taken up, perhaps, by the departments of management studies, or those who have a little slack or a special interest in continuing education. We must exert the same degree of determination, and the Government must facilitate this action by more funding.

I turn to the progress of women in higher education, which is closely linked with continuing education. The Green Paper refers to an increase in the number of part-time students. Like the overall projections for student numbers in the future, based on the "Y" variant, it is probably an understatement of demand. It is incomprehensible that the Government should not be using the interim between the present peak of 18-year-olds and the next peak, which will probably be some time in the early part of the 20th century, to widen and restructure access to higher education.

A restructuring of access would be particularly valuable to women. The potential growth in numbers of women participating in higher education, as the noble Baroness has said, is considerable. Yet women's position in the education system is still vulnerable to change: for example, variation in parental contributions, as the noble Baroness has mentioned; and the switch to science and technology is reported to have affected a greater percentage of women than men. So a careful look at the needs of women is required and it is important for those needs to be built into the structure of education.

Some measures could be of a temporary nature until the changes of approach in the school system work their way through to university and polytechnic entrance. But because of their central role within the family, it is likely that women will continue to take a break both in education and in employment. Therefore, the development of modular and credit systems with topping-up courses would suit the needs of many women. Such a pattern would fit in well with a growing system of continuing education and would meet the needs of the country and of industry.

6.13 p.m.

Baroness Carnegy of Lour

My Lords, I, too, must thank the noble Baroness for introducing this debate and indeed for giving the noble Lord, Lord Annan, the opportunity to make what I thought was a remarkable and forthright speech—as was the speech made by the noble Baroness, Lady Lockwood.

This evening we heard from the noble Baroness a spirited attack on the effect of the Government's policy on higher education. Indeed, I thought that the noble Baroness seemed to imply that the Government undervalued higher education to such an extent that deliberately or by default they were doing great damage to higher education and thereby to the country. No noble Lord will deny that higher education is crucial in the ways that the noble Baroness outlined and in many more. But in discussing the effect of government policy I ask her with the greatest respect whether perhaps she does not protest too much. She says that the Government should pay more of the fees for middle income families, but I would ask her: need the fees be so high?

No one will deny that the past few years have brought problems to those who work in the sector and that coping with them has been, and for some still is, an entirely new and consequently traumatic experience. Until recently, after all, the higher education sector has been a comparatively comfortable place in which to work—satisfying, stimulating, for most people secure, with a remarkable degree of freedom to do one's own thing and little pressure to analyse its cost-effectiveness or the cost-effectiveness of one's institution.

As the noble Lord, Lord Annan, said, we hear a good deal of muttering among university staff. I suggest that the changes now being required of those who work in higher education, great though they may be, are no greater or more difficult to achieve than the changes being demanded of countless others elsewhere in the nation's workforce; nor is the higher education system necessarily going to be less fit for its job because it is leaner. In one respect at least it is having it easier than other sectors, because for all sorts of reasons the changes have come to it later and so could be anticipated.

None of that means that the problems have not been considerable. Big reductions in staffing were inevitable in many institutions. With the built-in protection from redundancy for lecturers—and the noble Lord, Lord Annan, talked about this in the universities—it has been fixed-term contract people who have gone, clerical and other non-teaching back-up people. It has been the teaching posts held by those willing to retire or to leave that have been frozen. All too often chance has dictated that the more skilled people left; those who might have been spared stayed. And the posts that were frozen were not the ones that the institution would have selected. In that and other respects it has not always been possible to conduct the shake-out in the manner most beneficial to the customers. But was that the Government's fault; and was every place lost to students the Government's fault and entirely unconnected with institutional and staffing inflexibility?

That having been said, increasingly the world of higher education—and I do not mean just university education—having seen and understood the need for change, is responding with considerable energy and searching eagerly for ways to meet the customers' new needs and for new sources of funding. We have been told that the expression "entrepreneurial" is being over-used, but I am bound to say that if the Open University is anything to go by—and I am a member of its council—entrepreneurial and marketing skills are blossoming in higher education like roses in June, and I do not believe at all that that is undermining the teaching capability.

I believe that the noble Baroness protests too much. A lot that is very new and very good is happening in higher education. But I would submit that there is still a long way to go, and I would agree with the noble Baroness, Lady Lockwood, that we have to move furthest of all in the vital area of continuing education.

At the beginning of Chapter 4 of their Green Paper the Government state firmly that opportunities for education should be available throughout life for career purposes and for personal fulfilment; that the need increases with technical change; and that the provision of continuing education should be one of the principal parts of higher education's work. But is the Government's role simply to state the need and pay for some pump-priming experimentation and research?

The noble Baroness, Lady Lockwood, talked about finance for continuing education. I shall not deal with that because I believe that my noble friend Lord Butterworth has it in mind so to do. I suggest that the Government now have to be much more explicit and to initiate a strong campaign of publicity and persuasion—a continuing education equivalent of the Manpower Service Commission's adult training strategy. I suggest that we need speeches, publications, broadcasts, emphasis by the University Grants Committee and work by advisory bodies, pointing out to institutions how they can and must increasingly put energy into that side of things, pointing out to local authorities what they can do, and pointing out to employers the importance for them of vocational continuing education.

The Green Paper states that more universities could be involved in continuing education. One could add that there is probably new scope here in one way or another for every higher education institution in the land. In this campaign institutions must surely be encouraged to co-operate very much more than they do at the moment; and the customers must be encouraged to see continuing education not just as provision by individual institutions but as a network of opportunity, some institutions doing one thing, some another.

The Green Paper rejects the idea of an over-arching body to make higher education co-ordination easier. The Scottish Tertiary Education Advisory Council in its report published two days ago proposes such a body for Scotland. I believe that both may be right. Scotland's circumstances are different; but, be that as it may, co-ordination across the whole country is nevertheless vital.

That is underlined by the fact that the new work patterns and the new technology make open learning an imperative and distance learning more and more important. Open learning is not genuinely open if institutions operate it in isolation. Distance learning techniques lend themselves ideally to co-operation. A number of institutions already have experience to share, but we are fortunate in this country to have among our higher education institutions the Open University which the Green Paper acknowledges as possessing an international reputation in distance and open learning techniques and a record of innovation in that field.

The Open University must be at the heart of the co-operation among institutions. No higher education institution in this country need spend time and energy re-inventing the wheel. A huge range of experience is available and the Open University is ready and able to help any institution adapt it for its own use.

I believe that we should be enormously positive about where we are in higher education. Things are changing, and they have to change much more radically than is yet accepted. But I am sure that if the Government will give that lead—will raise the profile of the whole subject and help institutions, the public, the customers and industry to understand where the possibilities lie—we shall get there and we shall get there with surprising speed.

6.30 p.m.

The Lord Bishop of Ely

My Lords, I speak as someone much of whose life has been spent professionally in education at different levels and significantly at the higher education level and as someone whose work as a bishop for 12 years has not only put him in the chair of diocesan education committees but brings him also into constant touch with universities and places of higher education. I speak with an awareness of the Government's hope as expressed in the Better Schools White Paper for a greater proportion of school leavers moving into higher education in some form. I am conscious of the pressures from bodies such as the Council for the Accreditation of Teacher Education and from such documents as the Lindop Report for higher standards within the higher education system itself. I am conscious that these things cost money.

I am conscious of the argument for the switch in the national interest towards more and better provision in the areas of science and technology which are more expensive to implement. So we are looking for, and committed to, an efficient higher education system. But the National Advisory Body for Public Sector Higher Education, the NAB as we know it, now advises us in a recent paper that on the basis of projected Government funding announced for 1987, the public sector will be forced to shed at least 16,000, possibly 18,000, student places. I quote directly the comment of the National Advisory Body in its recent paper: What is now at issue is a reduction in access in consequence of a cut in resources: it does not stem from a reduction in student demand or a reduction in the needs of industry, commerce, the professions and the public services for highly qualified manpower.". The National Advisory Body has estimated that the projected cuts in intake are the equivalent of the total entry to four or five polytechnics or to eight or nine of the larger colleges of higher education. The number of courses that would have to be closed, mainly in the arts and humanities, would be likely to be in the region, we are advised, of 900.

Your Lordships would expect me to express concern from these Benches for a particular interest of the Church, the Church colleges. It would seem to be inevitable, if those figures are right, that among the eight or nine local centres to go would be at least one or two Church colleges. The Churches have welcomed the Government's declared view expressed in the Green Paper and in the Prime Minister's recent letter to the Bishop of London that the Church colleges have a particular character whose contribution to the flexible pattern of higher education is of continuing importance. But the Churches would ask the Government to consider whether, by their funding policies, the Government might inadvertently be undermining, and quite fatally, their own declared intention in the matter.

One is concerned not only for the Church colleges. Concern for them is only an instance of the Church's commitment to the cause of education at that level. There is wider concern among churchmen for what are seen as dangers facing the higher education system. I indicate briefly areas of concern. Is there a feeling among the economists influencing Government policy that highter education is not yet producing a good enough return? That is a question that comes to mind from reading the present Green Paper. How does one judge that return? To what degree is it to be a judgment based on measurables? The cultural benefits of higher education and the preservation of the stock of knowledge receive mention in the Green Paper. They receive mention as, other social benefits derived from higher education which are not directly associated with the education of highly qualified manpower and research.". Such items, the Green Paper concludes, are not amenable to measurement with any pretensions of objectivity but it is important that their existence should always be kept in mind.". It has seemed to some that the Green Paper could have kept them better in mind in the body of that paper.

I take a second point of concern—the suggested policy revealed in the Green Paper of segregating arts provision, for the most part, I think the phrase is, from technology by restricting arts provison to the universities. That seems to some educationists a recipe for cultural disaster.

Thirdly—a daring reference perhaps after the speech of the noble Lord, Lord Annan—three weeks ago, The Times Higher Educational Supplement gave it as its opinion in a leading article that the gap between what universities need and what the present Government are prepared to provide is now virtually unbridgeable. I observe—I have to say this—the genuine concern that regularly comes to me from the close contacts that I have with university teachers. I would not like it thought that the Churches are concerned only about the possible loss of Church colleges. We are talking also of the social impact, of the closure of perhaps eight or nine sources of local community enrichment and vitality. I might perhaps be allowed to stress that concept of community enrichment as someone who serves a diocese that not only contains the university of Cambridge but which also covers the county of Cambridgeshire, the pioneer of the village college concept. We are talking of long-term national assets in education when I express concern.

6.36 p.m.

Lord McGregor of Durris

My Lords, the education system is a filter through which children pass on their way to the labour market. No country would survive for long if it were to neglect that fact, but, as others have said in the debate, feeding the labour market is not the only function of education. A country needs citizens as well as workers—citizens capable of bringing a critical and informed eye to the assessment of the policies and promises of politicians. An electorate in a stable democracy must have learnt its letters. But a mature society demands more than competent workers and informed voters. It must equip citizens with the means of access to the cultural heritage not only of their own country but of the civilisation of which they are a part.

We ought to provide the young and, as the noble Baroness, Lady Lockwood, pointed out so effectively, adults as well, on a continuing basis, with what they need and what indeed used to be called a liberal education. An education that fails in any of these particulars does not deserve to be called an education. A reader of the Government's paper on the development of higher education into the 1990s will gain no confidence that this is the view of the Government.

What little I have to say will concern universities. They feel themselves beseiged, and indeed they are. Their real income has been reduced by some 17 per cent. in the last few years. They are required to reduce their expenditure by 2 per cent. a year in the future because the Government reckon that we are too poor a country to afford more. I hope that the noble Lord the Minister will reflect a little on the experience of Scotland in the eighteenth century, then a very poor country indeed compared to England. The Scots invested in people through education, especially higher education. They had twice as many universities as had the English at that time. One result was that trained Scots brains and Scottish science made the English Industrial Revolution, with some help, be it said, from cheap Irish labour.

I do not believe that the need for economies in public expenditure necessarily ought to point in the direction of reductions in public expenditure on education, as the noble Lord, Lord Annan, seemed to accept. When listening to the noble Baroness, Lady Carnegy of Lour, I doubted whether Adam Smith, for example, spent much of his time measuring his cost effectiveness.

My chief criticism of the Government's policy towards universities during the last six years or so is that there is no policy—a comment with which the noble Baroness, Lady Seear, rightly began her speech. Assuming that it was right to cut expenditure sharply in 1979, what were the Government's aims for the role of universities? Without a definition of purpose it is impossible to answer such relevant questions as: should there be cuts across the board; or, should a small number of universities be closed or merged with others? Do the Government wish to create an Ivy League? I do not suggest that any such policies would have been desirable; but they certainly should have been discussed and ought to be being discussed now. It may be that any clear policy would have been better than the aimless drift into penury that we have been experiencing. Instead of policy we have had a series of ad hoc expedients in the form of this or that inquiry into efficiency or academic excellence. The most recent is concerned with selectivity in funding; a pointer perhaps towards an Ivy League. As I understand it, this inquiry asks 28 questions and requires universities to give a profile which takes account of 37 subject areas. I am told that the weight of the first batches of answers received by the University Grants Committee already exceeds the weight of its chairman. In the last few years universities have been plagued with this kind of inquiry and with reams of paper. It strikes me that there is perhaps scope for an intervention by the noble Lord, Lord Young.

In the war of attrition, to which the noble Lord, Lord Annan, has referred, small matters reveal large attitudes. I may give one small example of what I have in mind. For the last 18 months or so the Committee of Vice-Chancellors and Principals—and I derive no knowledge from that body, only from public statements—has been concerned to get a statement of policy from the Government in respect of the salaries of clinical academic teachers in medical schools. It has been the practice that these salaries move in step with those of consultants in the National Health Service, for obvious reasons. In the last round of NHS salary increases in April the Government made no move to provide the universities with the means of making up the difference between the 6 per cent. that the consultants were getting and the 3 per cent. which they had available to pay for the clinical academic teachers. As I understand it, they have been persistently attempting to obtain an answer from the Government as to whether or not there is any intention of paying. There was a recent correspondence in The Times from the vice-chancellor of the University of Edinburgh and then from the vice-chancellor of the University of London setting out the matter and saying in plain terms that the Government's refusal to meet the salary increase, or indeed to say whether they were going to meet it in the future, was making policy making for the universities in this small area absolutely impossible and putting them in an intolerable position.

I mention this small instance because it reveals an attitude of mind on the part of government which is not only conducive to inefficiency in the operations of universities but is also ill-mannered. This is no way for a government or a Secretary of State to treat serious people doing important work. It is indeed true, as the noble Lord, Lord Annan, said, that there is urgent need for reforms in the governance of universities which stem in part from the need for reform in the relations between government and universities and the attitude of government towards the universities.

The noble Baroness, Lady Seear, mentioned some defects of universities. I do not wish to be thought to have a superstitious veneration for the virtues of universities. They have not only the defects that the noble Baroness mentioned, but many others as well. I wish to mention one in closing. For 20 years there has been a succession of instances in which university students occasionally have shouted down speakers. I know that sometimes they are not the students of the university concerned but rent-a-mobs brought in for the purposes. There was a recent occasion when a Home Office Minister suffered that experience. I went to a university which, under its crest, carried the motto, They say, what say they, let them say". Circumstances in which university vice-chancellors, both individually and as a body, have in many instances failed to denounce that kind of behaviour reflect the worst defect that we have seen in our universities for many a long time. But, that said, they are part of a great tradition and they are part of a tradition that present lack of money is eroding.

6.50 p.m.

Lord Butterworth

My Lords, I have had two recent opportunities of seeing one sector of higher education—namely, the universities—from particular viewpoints. First, as a member of the Jarratt Committee for Efficiency Studies in Universities, and then as deputy chairman of the Committee on the Review of the University Grants Committee under the chairmanship of Lord Croham. That committee is in the middle of taking evidence. I thought it might be helpful if I were to look this afternoon at the problems of higher education, and particularly universities, from the point of view of the Jarratt Committee. In doing so I should like to stress throughout that I think our concern here should be with higher education as a whole and by no means exclusively with the condition of universities.

The noble Lord, Lord Annan, seemed to imply two things about the Jarratt Committee—first, that it was only concerned with the administrative outskirts of universities, and, secondly, that in some way the universities were in bad shape and not able to look after themselves. I should therefore like to quote to your Lordships a conclusion that was reached by the Jarratt Committee when it found that universities were making outstanding contributions to our national life. They say that their, three-year degree courses are shorter than those of any other developed country and their wastage rate is low". The universities, carry out the greater part of the pure research in the United Kingdom and much of the applied research on which future scientific and technological development depends. In consequence they provide most of the country's pure and applied research workers in science, engineering, medicine and other fields and they underpin in culture and the arts the quality of national life. The committee went on to make certain recommendations about how the governance of universities could be improved in order that those important goods should be satisfactorily delivered. The difference between myself and the noble Lord, Lord Annan, is that he seemed to think that the universities could not deliver the right system of governance, and I should prefer to wait and see what happens as a result of the Jarratt Committee recommendations.

Broadly, the recommendations were that each university should review its organisation to develop a rolling academic and institutional plan, and that the Government should provide the broad policy guidelines within which such a plan could be evolved. In the future planning, the single biggest factor is the expected fall in student demand which will occur between 1990 and 1996 because of the fall in the number of 18 and 19 year-olds. It is a fall of 14 per cent., or somewhere between 70,000 to 75,000 student places.

Now how is that problem to be dealt with? Assume for the moment that a cautious decision is taken and that the number of places in higher education in the 1990s is reduced not by 75,000 but by, let us say, two-thirds—50,000. The first question that arises is how that reduction of 50,000 places will be divided between the two sectors; between the universities and the public sector. No doubt students and parents would press for less severe cuts in the universities. The protection of science and technology and certain other national needs, such as the training of primary school teachers, would argue in favour of the public sector.

Therefore, for this evening's purpose let us assume that the 50,000 reduction is equally split between the two sectors. First, no doubt attempts will be made by the UGC and the NAB to divide that reduction among all the existing institutions, but 50,000 places is the equivalent of 12 complete institutions of average size—six universities and six polytechnics or other institutions in the public sector. There are of course arguments that if the reduction is to be so severe then whole institutions should be taken out of the system rather than that every institution in the system should be weakened.

As the noble Lord, Lord Annan, explained, the UGC is reorganising its method of allocating grant, and at the moment, and until the grant for 1986–87 is published in May, no university knows what is the shape of its financial future. But in the meantime it is the UGC which has advised the universities to plan on the hypothesis that there will be a fall in income of 2 per cent. a year in every year up to 1990.

If we are going to produce efficient plans in higher education, the universities and other institutions need to know, after the fall of 17 per cent. that they have already suffered between 1981 and 1983, whether there is really going to be a reduction of income of 2 per cent. in each of the four years between now and 1990. Moreover, if there are to be reductions, are they to be a contribution to any shrinkage which may be contemplated after 1990 because of the fall in the 18 year-olds? These are the fundamental parameters which the institutions need in order to make their plans.

I should like to take one example to show how it works out in practice. It is the example which was selected by the noble Baroness, Lady Lockwood—continuing education. The need for continuing education is now so great and so urgent that it could well prove to be the most important educational development in this generation. Training our existing workforce to keep pace with the rate of technological change; training for leisure; training for pleasure; training to foster and improve, the cultural and economic wellbeing of society.

Most institutions in higher education want to be more involved. The universities are at the moment limited because they are over-committed with the full-time degrees which will certainly be needed until the 1990s. But most universities wish to be more involved with more mature students, with more part-time degrees, with courses leading to other qualifications, and with short courses of retraining not leading to any qualification at all. For instance, the engineers say that their text books need to be completely rewritten once every five years, so great is the rate of technological change; that is to say, they need to be rewritten eight times during an average man's working life. Engineers and technicians therefore need refresher courses at the very least two or three times during a working span.

At present the financing of continuing education rests upon the principle that while particular and pump-priming grants will be made available, the primary responsibility for financing continuing education rests with the employer and the employee. Many courses can be so financed. The institutions in higher education, the universities and the polytechnics, will collaborate with industry, commerce and the trade unions to see that that is brought about. But the need is now urgent, our prosperity depends upon it and frequently the courses so badly needed lie outside the narrow ambit of employer and employee. The general efficiency of continuing education as a whole must become a national responsibility.

What is needed is the launching as soon as possible of an ambitious programme of continuing education and then this can be taken over and permanently financed by the spare capacity when it occurs in the 1990s. But we cannot wait until the 1990s to launch the programe. It may need special financial help immediately so that it can be launched as soon as possible.

Jarrat criticised the universities for not planning ahead and implied that the less one knows about the future the more important is a forward plan. However, long-term planning will be more effective if it can be produced within broad, strategic guidelines which will narrow the effect of some of the problems to which I have endeavoured to draw attention this afternoon.

7.03 p.m.

Lord Irving of Dartford

My Lords, in the debate last week on the report of your Lordships Select Committee on the European communities on overseas trade I spoke of the way in which British exporters were being disadvantaged by the failure of our Government to support British industry as well as the governments of our competitors. I also mentioned that among other things, we were not providing comparable research, education and training systems. Tonight we are inquiring into the consequences of such failure. Our policy for research has been described as a recipe for national decline. The Advisory Board for Research Councils said in June this year: In some universities, the well-funded laboratory no longer exists; and throughout the university system it has become very difficult indeed for even the most outstanding research scientists to secure research opportunities". In another place the Select Committee on Education, Science and the Arts has recently pointed to the fact that the United Kingdom is now planning for a further 10 per cent. real cut in the science budget for 1985, when all our major competitors are increasing their national investment in research. Research in the universities has been forced to become excessively dependent upon insecure and sub-professionally paid contract staffs.

Cuts in research funding and real salary levels are now fuelling a new brain drain towards the United States in particular. I have a feeling that star wars will add to the process and indeed accelerate it. United Kingdom universities are finding increasing difficulty in filling chairs with candidates of sufficient quality and United Kingdom research finds it hard to attract and retain the best scholars. The United Kingdom already devotes fewer of its national resources than its principal competitors to the public funding of civil research. Our public funding is excessively concentrated into military research and areas in which industrial spin offs are few.

Between 1980–81 and 1984–85 more than 30,000 well qualified youngsters, who in the past would have gained university places, have been turned away. Despite the continuing increase in students with two or more A-levels seeking admission, British universities are forced to accept fewer students. The Government have seriously under-estimated the future demand for places at United Kingdom universities. Factors such as the steady increase in the numbers of women wishing to enter university and the many demands from mature students, from working class students and from some ethnic minorities will outweigh the effect of the decline of 18 year-olds in the population.

Britain is almost bottom of the international league in the proportion of students in higher education. An OECD survey in 1981 placed it 13th out of 15 countries below Italy, Yugoslavia, Norway and Spain. The Government have recently called on higher education to contribute more towards the performance of the economy. They express concern that our competitors are now producing more qualified scientists, engineers, technologists and technicians than in the United Kingdom. Yet just recently and prior to this view being expressed, cuts of 2 per cent. per annum in university funding for the next five years were announced.

More graduates are required to meet the needs of new industries and changing society. Specific skills are needed to meet the demands of the new technological industries, of commerce and of the professions. Graduates are also needed who understand foreign languages and societies and who can teach and resolve the social and economic problems of Britain's future. Britain also needs graduates with less specific intellectual skills, who are also needed by industry and the services in which Britain excels. The CBI and the Association of University Teachers together join in rejecting the excessively vocational basis of currrent government policy for higher education. This serious situation has come about because the funding of the United Kingdom universities has been cut by 10 per cent. in real terms since 1980–81 and has fallen per head of student by more than 25 per cent. since 1970.

Cuts in funding have led to losses of one in seven of academic staff. The planned cuts for the future will mean further staff losses: the University Grants Committee estimates that for each percentage cut in funds, 1 per cent. of the university staff must be axed. These cuts in staffing threaten the quality of university education. Since 1979 staff/student ratios in the university system have deteriorated by 6 per cent. in the arts and humanities, by more than 11 per cent. in the sciences and by a staggering 19 per cent. in the clinical sciences. Cuts in university funding also damage the economies of the regions in which the institutions are located.

The Prime Minister has broken her promise made during the 1983 election to guarantee level funding for universities. Level funding would be relatively cheap in terms of public expenditure. Excluding the deficits of the past it would currently cost only £30 million; as has been said, that is the cost of a medium-sized university or about 100 ft. of the Falklands Airport.

The consequences have been a collapse of morale in our universities because of low salaries and poor promotion prospects. The lack of research studentships means that universities find it hard to recruit top talent. Three in five of the 11,000 university research staff have less than a year of their short-term contracts to run.

Britain's economy during the next 10 years will be hindered by an acute shortage of trained and well-qualified graduates making it very difficult for us to match the achievements of our competitors whose industry is backed by research, education and training systems more related to their needs than ours.

Should the Government believe that this is special pleading—the thing the Chancellor accused manufacturing industry and the Select Committee on Overseas Trade of doing—I ask them to refer to the joint statement by the University Grants Committee and the National Advisory Body for National Authority Higher Education which read: The United Kingdom has a university system of outstanding quality. The universities provide the bulk of the country's science and engineering graduates and research workers, as well as qualified graduates for medicine, law, architecture and numerous other professions. Any policy that diminished the role and status of the universities would damage many aspects of our educational, cultural and industrial life. But it went on: The (University Grants) Committee's aim in July 1981 was to minimise the damage caused by the cuts imposed by the Government. But those cuts were so severe that great harm has still been done. Your Lordships have to remember that it is the University Grants Committee talking in this way. Academic planning has been disrupted, morale has been impaired, thousands of young people have been denied a university education, confidence in the Government has been shaken and will be difficult to restore. Expenditure has been reduced as Government required, but the university system left by the cuts is not ideal for meeting the nation's needs". It is not a pleasing or encouraging prospect for the future of this country.

7.10 p.m.

Lord Gladwyn

My Lords, I propose to confine my remarks to an aspect of higher education in which I happen to retain an interest; that is the desirability of providing profitable educational facilities in this country for as large a number as possible of students from overseas.

Whatever the reasons for the introduction of the full cost fees in 1980—and I myself have always maintained that a reduction in numbers could have been accomplished in other and less brutal ways—the effect on the number of overseas students has been as dramatic as it has been deplorable, the number falling from 83,000 in 1979–80 to no more than 53,000 in 1984–85. It is true that in the higher education sector the drop was only from 57,500 to 48,000. However, in polytechnics and other institutions enrolment continues to decline, with the exception of a very small increase in the number of university post-graduates. I think that is correct.

What is even more significant and serious is that this great drop was almost entirely accounted for by a 40 per cent. decline in the number of students from the so-called developing or poorer countries. This fell from 70,300 to only 43,000. Moreover, the fall in the numbers of Commonwealth students—and we know the value that the Government now attach to the Commonwealth generally—was proportionately only slightly less than this, coming down from 43,000 to 27,000. I need hardly add to this tale of woe the fact that the fourth report of the Standing Committee on Commonwealth Student Mobility confirms that general student mobility in the Commonwealth also continues to decline, and this in spite of the importance attaching to this factor, recently recognised by all Commonwealth governments, including Her Majesty's Government themselves.

Let me here quote from the conclusions of the Nassau Communiqué from Commonwealth leaders. Paragraph 14 of the section on "Commonwealth Functional Co-operation" applies. It reads as follows: Heads of Government expressed appreciation of the work of the Commonwealth Standing Committee on Student Mobility; asked it to keep the situation under review; and invited all Commonwealth governments to give the closest consideration to its constructive proposals. Particularly encouraged by the potential for collaboration in higher education through distance education and the use of new technologies, they request the Secretary-General to explore the scope for new Commonwealth initiatives in the field of open learning". I wonder whether the Government can tell us whether they are taking the initiative in the furtherance of such schemes and whether we are likely to see any of them emerge as practical proposals in the relatively near future.

What I suggest it all comes down to is this. If the Government favour a policy which will substantially redress both the overall decline in Commonwealth student mobility and the impact of full-cost fees on the whole developing world, then there must be serious consideration of a broadening of the current award schemes. The most recent figures on student enrolments show that the present system currently operates in favour of rich private scholars; students from the European community; sponsored scholars from the wealthier Commonwealth countries, and scholars from the very limited number of countries favoured by the country support schemes. While appreciating the reasons for these last schemes—that is to say, historical links, special relationship, underdeveloped tertiary education systems, traditions of sending a high proportion of scholars to the United Kingdom and so on—all these reasons must surely apply also to a number of other Commonwealth countries not singled out for support. Selective support may consequently create as much diplomatic damage as it was intended to redress.

A number of realistic, specific and well-considered proposals for broadening the basis of support to Commonwealth and developing countries have been submitted to the Government by the Commonwealth Secretariat, by the Council for Education in the Commonwealth, by the United Kingdom Council for Overseas Student Affairs, and others with expertise in these matters. They include recommendations that serious consideration should be given to concessionary fees for all scholars on Commonwealth, international or national awards; a concessionary fee for all Commonwealth post-graduate students; a concessionary fee for students of academic merit from the poorest developing Commonwealth countries, or a concessionary fee perhaps based on GNP or means test.

Even if the Government are committed to a policy of full-cost fees and no return to the so-called "indiscriminate subsidy", I suggest that it is shortsighted and counter-productive not to consider concessions of this kind, which would cost less than the current subsidy to EC students. In this context, it is important to note that in 1983–84 the income to the universities from full-cost paying overseas students was over £90 million; in other words, over six times the value of the famous Pym package of 1980 for one year alone.

It may be that the Government will say, "Oh dear, but all such proposals, however sensible, and, in the long run profitable, may well immediately cost us a few million pounds". So no doubt they would. However, if immediate cash is the only consideration in the Government's mind, how about in any case devoting to these excellent schemes all or most of the £6½ million that the Government will save next year as a result of their recent retreat or exit from UNESCO? This is a question to which I hope the noble Lord will respond.

In the two minutes available, I should like to make a very few remarks of a general nature. I suggest that the Government can hardly deny that 80 per cent. of the overseas students paying full-cost fees in Britain are not funded by the British Government, and that they represent a valuable source of additional income to the higher educational system. Nor, I think, can the Government ignore the fact that these purely economic considerations are to a great extent determining recruitment overseas; changes in the geographic origins of the overseas student population; and changes in institutional policy on the whole question of the admission of overseas students.

In spite of the fact that (unless I have been incorrectly informed) at least one university plans to take up to 30 per cent. of its students from overseas, neither the University Grants Committee, the National Advisory Body for Local Authority Higher Education nor the Government themselves, in their Green Paper, give any consideration to overseas students as an integral part of educational planning. A limited policy on scholarship awards is not a policy for overseas students. It is merely one small aspect of such a policy.

We do not yet have a policy for overseas students within an integrated higher educational system that includes an international dimension. The danger of this policy vacuum is that overseas students become fillers for courses that otherwise would not be sustainable, or become valued for their economic rather than their academic or developmental input into the system. A truly coherent, constructive policy on overseas students would include them in planning exercises, would consider issues such as the appropriate numbers of students in total at various levels within the tertiary system and their appropriate distribution throughout the system by geographical area, type of institution, level and subject of course.

In other words, the nature of the relationship between overseas students and their sponsors and the receiving institution has changed as a direct result of the Government's decision to introduce full-cost fees and to place institutions in the position where they are obliged to recoup their income loss from overseas students. The relationship is thus now a commercial one with massive financial implications for institutions, local authorities and sponsors. There are already sufficient indications of dissatisfaction at home and abroad, with questions being raised about value for money for the Government departments, UGC and NAB to begin considering and treating overseas students as a vital, important and valued integral part of our higher educational system, on educational, academic, ideological and developmental grounds, as well as for economic and trade-related reasons.

Perhaps in the last minute I may make this suggestion. What really seems to be needed is the creation here of something equivalent to the French Ministry of Culture which takes responsibility for France's place in the world, not merely in terms of overseas trade but in what they rightly conceive to be invisible exports. This would imply, of course, the appointment of a British Minister who could put the flow of students into this country in the context of our objectives in the world as a whole. I cannot enlarge on this now; there is no more time. But I look forward to hearing the Government's reaction to the various criticisms of the present system which I have ventured to put forward. I can hardly believe that even the Government can be wholly satisfied with the present situation, such as it is.

7.23 p.m.

Lord Kilmarnock

My Lords, I am sure that we are all grateful to my noble friend Lady Seear for giving us the opportunity for this debate. The noble Lord, Lord Annan, in his bracing speech, made a number of strictures on the governance of higher education. I see that he has a debate on this subject in the No Day Named list and we must hope that he gets a date for it so that we can discuss that further. Whatever the deficiencies to which he drew attention, the main deficiency in higher education is that there is not enough of it—as I think he recognised, too. There is not enough of it either to meet the Robbins axiom as re-stated by the UGC: Courses of higher education should be available for all who are able to benefit from them and who wish to do so or to meet the needs of the country. The root cause of this is that the Government for some strange reason presumably not unconnected with Treasury thinking, have decided that falling rolls in the school system mean automatically lower demand for higher education. Rubbing their hands, they have said to themselves: "This is great! At least the demographic factor is in our favour here, unlike in the health service; so let us snip this here and that there and we will have a slimmer, trimmer or more relevant higher education sector in the 1990s".

Those are words that I am putting into their mouths; but here are their own. In a very depressing paragraph in the Green Paper, in paragraph 1.13, they say: Adjustments in higher education are undoubtedly needed now. More will be required as a result of the decline in student numbers that is to be expected in the 1990s.". What a lugubrious expectation! It is small wonder that The Times Higher Educational Supplement wrote of: the shocking and chilling experience of reading a document displaying such palsied imagination". And is the demographic argument as simple as it sounds? Although 16-to-19 year-olds will decrease sharply over the next decade or so, I have seen no suggestion anywhere of the population as a whole being on anything other than a gently upward trend with the elderly and very elderly leading the way. It could therefore be just as convincingly argued that we need an even larger contingent of highly educated and skilled people to support this top-heavy population.

The odd thing is that this palsied imagination directly contradicts the Government's own hopes from its reforms in the schools. The UGC response to the Green Paper said in paragraph 11: We wonder why the Government should be so pessimistic about the chances of its own policies in relation to schools as to make no provision for this in its policies for higher education". And here is the present vice-chancellor of the University of London on 4th December in the Albert Hall, my noble friend Lord flowers: The Government seem incapable of enunciating a coherent policy for education. The nation faces the certainty of a future dominated by the high technologies, a future in which trained minds will be at a premium and this is recognised in all the countries with which we would like to compete and it is acted upon. Accordingly, our schools are being urged to interest more of their pupils in science and technology and to prepare more of them to enter higher education. So unsure are the Government of the success of their own policies that they are simultaneously planning for a reduction in the number of young entering higher education, responding to the trends of a birthrate years ago instead of to the imperative of economic recovery". Thus we are in the extraordinary position of a planned decline in university places when every other significant nation in the developed world is doing exactly the opposite. The international comparisons are instructive. If you look at the 18-to-19 year-olds in higher education, the current participation rates are as follows: Japan, 47 per cent.; the USA, 42 per cent.; West Germany, 26 per cent.; and the United Kingdom, 13.3 per cent. If you look at the percentage of the labour force with first degrees, you get the following: USA, 18 per cent.; Japan, 13 per cent.; West Germany, 10 per cent.; and the United Kingdom, 6 per cent. These figures speak for themselves and this is hardly encouraging in the most underskilled nation in Europe, as I think the noble Baroness, Lady Seear, has pointed out on a number of occasions. Indeed, her unemployment committee, on which I had the honour to serve, produced a picture of the United Kingdom as the "poor man of Europe", in educational and training terms. Although it was not possible to prove a link between that and high unemployment all the evidence points in that direction.

The next curiosity in the Government's attitude to higher education is the lip service that they pay to the importance of refresher courses and continuing education on which the noble Baroness, Lady Lockwood, spoke. In paragraph 4.9 they said: The Government is committed to the availability of higher education to mature students who are able to benefit from it". So, in one and the same breath—or at any rate, one and the same document—they in effect extend the Robbins' principle up the age scale while forecasting a decline in numbers in the 1990s. The logic of this is presumably that school leavers' applications to the universities will decline by more than the increase in demand by adults. Therefore, it can all be done at 2 per cent. less per annum in real terms. What a miserable vision! And is it so certain that there will be a falling demand? I doubt it. High unemployment has already led to more people staying on at school and if means-tested educational maintenance allowances were extended to all over 16 as we advocate, then that demand would show a steady increase.

After all, is this not a question of policy? If you want to freeze or squeeze people out of higher education on to the dole because that is cheaper, you can of course do so. But it is not a very enlightened policy and not one that is likely to give rise to the higher skilled, more self-confident and more successful society that we—at any rate on these Benches—should like to see.

What are the areas of most concern?—many of them have been mentioned this evening, and I just want to touch on subject balance. I think it is generally accepted that there should be some shift to science and technology. At the same time it is very important to keep in mind, as Sir Peter Swynnerton-Dyer said in response to the Green Paper in paragraph 16: The training of the mind provided by an arts course is highly valued by industry in its own right and, in this sense, the humanities generally are no less vocationally relevant than the sciences. Vocational relevance is not confined to courses preparing students for a limited number of specific kinds of employment.". This is backed up by the CBI who have recently advised Ministers that they will continue to need generalists and non-technical professionals. It is backed up also by Walter Goldsmith, who was the head of the Institute of Directors and is now a well-known management headhunter, who recently said: I think it would be a mistake for industry to look to the universities to produce specific job skills.". Are the Government really seized of this? In paragraphs 2.11 and 6.3, they appear to give it some recognition but it would be of great help to morale in the higher education world (which is a subject to which the noble Lord, Lord Irving of Dartford, referred) if the Secretary of State would dispel the view that he is witch-hunting arts and humanities courses. After all, what we are talking about is intellectual rigour. That is what the university is about and it comes in many forms, not necessarily science-based.

Next, do the Government accept the UGC's view that a significant increase in the number of places in science and technology can only be provided if the necessary resources are made available, which is not the case at present? Will they further accept that it is neither desirable nor feasible to fund these at the expense of the arts?

I think I detect a familiar pattern which this debate on higher education has helped to bring out: that is the failure of the Government to provide realistically for the achievement of their own policy objectives—I repeat, their own policy objectives—let alone any additional ones that we or anyone else may consider desirable. It happens in health and it appears to be happening to an even greater extent in higher education. This is a trend the Government really must reverse if they want results. The noble Baroness, Lady Seear, pointed to a confusion of Government purpose, and I agree with her on that.

Turning briefly to research, the prospect of the purchasing power of the Science Vote declining by 25 per cent. over the next 10 years, which is the ABRC's grim forecast, coupled with a reduction in research funding through the UGC, is really very hard to accept with equanimity. This is kicking both legs of the dual support system at one and the same time.

Another piece of depressing reading is the sector on finance in the Medical Research Council's annual report which was published only the other day, from which it emerges that the council can only provide funding for 55 per cent. of alpha quality grant applications. The remainder were categorised as "approved but not funded." This means a whacking 45 per cent. of first-class projects turned down in a field in which we lead the world. I find that unbelievable. No wonder there is a serious brain drain developing, as the noble Lord, Lord Irving, said. I should like to ask the noble Earl: will the Government at least give a commitment to the councils to make up the cost of nationally agreed pay awards which they have to bear but which are quite outside their control?

Finally, what so appals me about all this is the lack of vision, the lack of any appreciation of the enormous potentialities in higher education both for the individual and for the success of the nation. The noble Lord, Lord Butterworth, gave us something of a feeling of this in his eloquent demonstration of the urgency of continuing education. Of course, not everyone has vision. That is a fact of life, but after the traumas higher education has been through in the past few years, could not the Government at least guarantee genuinely level funding and allow the men of vision—for they do exist—to get on with the job?

7.33 p.m.

Lord McIntosh of Haringey

My Lords, I am doubly grateful to the noble Baroness, Lady Seear, for moving this Motion today. I am grateful of course on behalf of my noble friends for her having enabled the House to debate this important subject, but I am also personally grateful, as a tyro in these matters, for her extremely clear, lucid, vigorous and jargon-free exposition of the subject. As somebody who has been desperately trying to catch up after nearly 30 years away from academic life, I have become impressed by not only the volume of material which the education pundits are prepared to throw at those of us who speak on these matters but also the complexity of the thinking behind them and the language, unfortunately, which is used, together with the acronyms, which I have still 'not fully comprehended.

I must say, however, that I believe I have one educational distinction which no one else in this House has. I actually lectured on the British political system to the smallest university in the world, the Swedenborgian University in Urbana, Ohio, which, at the time when I lectured there in 1957 had seven full-time students and 11 part-time students. The university folded the next year, and I draw no conclusions from that.

However, in this new situation I cling to the disciplines in which I have spent my life—the disciplines of business. I try to find some analogies between education economics and education policy and the business world I am familiar with. I look at issues of supply and of demand, and I look to see whether there are management objectives in the education sector itself and whether the policies of government and of the higher education sector actually reflect those management objectives and whether they meet the needs of the customers, of the community and of the economy.

I find a great conflict of evidence about many of these matters and a great lack of clear objectives in some of them. We start by talking about demand for higher education. The crude figures are very clear. We have at present a figure of just under 14 per cent. of the relevant age groups participating in higher education. The Green Paper anticipates that by 1996 there will be a 15.5 per cent. participation. It does not seem to be a planned participation rate, but an interpretation of demographic events. There is no comparison with the fact that in the United States and Japan participation rates in higher education are at the level of 22 to 24 per cent., nor indeed with the point that the right honourable lady the Prime Minister when Secretary of State for Education said in 1972 that she looked forward to a participation rate of 22 per cent. There does not seem to be any appreciation in the Government statements that I have been reading that student numbers are in fact managed figures. They do not arise from any act of God; they come from the awareness of teachers and school students of the number of places available, the effect that has on expectations and the level of grants available. All those things will affect participation rates, and it is within the power of government, by changing the policies, to change the participation rates, if it is thought desirable to do so.

Again, we look at the population changes. Yes, it is true that there is likely to be a turn-down in the number of 18- to 19-year-olds but, conversely, with a relatively static population we are going to see a very considerable increase in the number of 30- to 60-year-olds—those who are in a position to benefit from continuing education, which was so eloquently referred to by my noble friend Lady Lockwood and by the noble Lord, Lord Butterworth. I shall come back to that, because the experience of the Open University—perhaps the biggest innovator in continuing education in the last 20 years—has been that in those age groups there is no shortage of new applicants for higher education. Their experience was that the average number of new applicants from 1976 to 1979 was 32,000 per year; from 1980 to 1983 it was 38,000 per year, and in the last two years it has been of the order of 40,000 a year. The number of rejections, including rejections of those wishing to study science and technology, is increasing all the time. It is up to 24,000 this year and is likely to be 30,000 next year, on those figures. If we have that pent-up demand—a demand which I do not think anybody fully appreciated when the Open University started—surely the words of the noble Lord, Lord Butterworth, must be taken very seriously by the Government in thinking about provision for continuing education and rethinking the dismissive, cursory—even derisory—words on that subject in the Green Paper.

My noble friend Lord Irving referred to the whole question of access to higher education by groups which are unrepresented at present—those going to state schools, those with working-class backgrounds, women, the disabled, ethnic minorities, and so on. That is all evidence that the pent-up demand of those who are capable of benefiting from higher education is enormously greater than would be supposed by the rather crude and even controversial demographic projections which are the basis of the White Paper.

I now turn to provision of higher education. Many of your Lordships have expressed views on this more clearly than I can. I do not need to repeat the arguments which have been put. After the cuts which have taken place in the last five years a number of noble Lords have referred to the proposed cuts of 2 per cent. per year in real terms in universities between now and the end of the decade, which means, in effect, killing off one university a year. In the public sector the situation is even more serious. The right reverend Prelate the Bishop of Ely referred to the fact that a continuation of existing policies could lead to the death of four or five entire polytechnics over the next few years or 600 to 900 courses.

It is not good enough—if I may say so to the noble Lord, Lord Annan, who I see is not in his place—to say that there is a lack of management in the universities and in the higher education sector, which is preventing a rational response to the reduction of resources. In fact, in the public sector a clear distinction is made between protected and unprotected programmes—12 protected and seven unprotected—and if the projections that are being made by the National Advisory Board are true, the unprotected courses are likely to suffer cuts of up to nearly 60 per cent in their funding.

In continuing education, where the demand is, as we have seen, almost limitless, the Government are proposing to rely more and more on fees and on contributions from students and employers. At the same time they are cutting down on the Workers' Educational Association, they are cutting down on university extra-mural departments, they are cutting down on a whole range of existing tried and proved provision of continuing education. It is no wonder that Maurice Shock, the chairman of the Committee of Vice-Chancellors and Principals, refers to the situation of universities now as being a lingering and terminal illness.

What does this mean in terms of management objectives? Are we adequately asking ourselves: what do we need of higher education? How do we set these objectives? It seems as though the Government's view is that it is just a question of value for money. If we look at the definitions of what access to higher education should be over the years, and look at the Robbins' definition, which the noble Lord, Lord Kilmarnock, quoted, I must say that I am appalled by the decline that there has been since then.

The UGC referred to, all who can benefit from these courses and who wish to do so". The Goverment have put a gloss on that. The Government now say, all who have the intellectual competence, motivation and maturity to benefit from higher education, provided that ability to benefit is stringently tested and is sufficient to justify the costs". I can see officials putting on word after word to limit any sort of real commitment by the Government to the expansion of higher education. You can see the way in which a formula of that sort is built up, with caution upon caution and reservation upon reservation. That is not the way in which we should be approaching our policy on higher education.

I suggest and the Labour Party suggests, and will be suggesting in a document to be published early in the New Year, that we have an opportunity here to create a partnership between Government and the higher education world. The partnership would consist of a commitment by the Government, a Labour Government, to continue the funding—not just level funding—to meet the needs of the higher education sector for research and teaching. In return, I suggest, the higher education sector must take a very cool look indeed at its ability to meet the demands which will be made upon it by students and by society.

They have to look at the issue of qualifications. The Open University has shown very clearly that there are thousands upon thousands of mature students, and probably of younger students as well, who are capable of benefiting from higher education without having had any of the classical qualifications of A levels. But I am not going to get into the debate about preparation for school.

I suggest that the higher education sector needs to take a much harder look at credit transfer. The Open University pioneered credit transfer for Open University courses particularly successfully in a number of polytechnics, but with very much less success in the universities. This is an area where the flexibility which students demand must be met by the ability to choose courses wherever they are most relevant and most appropriate. I suggest—and this follows from something I said earlier—that there ought to be positive attempts to deal with the discrimination against all those groups who are underrepresented in higher education. I suggest that there ought to be much more flexibility in the structure of the higher education system. There is an example in Lancashire at the moment in the co-operation between Nelson and Colne College, Lancaster University and the Lancashire Polytechnic. That is a good example of what can be done to increase the availability of the whole spectrum of higher education.

Above all, I believe that the time has come to act on policies to increase entitlement—not just availability of continuing education through life, but entitlement to higher education through life. That is a commitment which the Labour Party made before the last election and gladly repeats now—that everybody should have an entitlement in the course of his or her working life to access to whatever form of higher education is suited to his or her needs and to the demands of technical change. The noble Baroness, Lady Seear, referred to the situation we have in front of us as a wonderful opportunity. I agree entirely with what she says. I very much fear that the present policies of the Government will not take advantage of that wonderful opportunity.

7.47 p.m.

The Earl of Swinton

My Lords, I should like to thank the noble Baroness, Lady Seear, for giving this House its first opportunity to debate higher education policy since the publication in May of the Government's Green Paper The Development of Higher Education into the 1990s. I can say that most sincerely. My predecessor at this Dispatch Box, my noble friend Lord Elton, said to the noble Lord, Lord Harris of Greenwich, that he felt he had to say that, but I really should like to say it most sincerely, because this debate will give us a chance to clear up quite a lot of the misunderstandings that have arisen during the afternoon about the Government's policies.

I am also grateful to the noble Baroness for the terms of her Motion, because they help us to focus on the positive and forward-looking nature of the Government's present policies for higher education and on the consideration they are giving to the promised further statement of policy on higher eduction in the light of responses to the Green Paper. So, before attempting to comment on some of the specific points that have been made in the course of this evening's debate, I shall try briefly to give your Lordships my assessment of the economic, social and cultural consequences of Government policy towards higher education. I start with the economic consequences.

I am no economist. When your Lordships will allow me, I am a simple farmer, but I am quite certain that my noble friend Lady Carnegy of Lour would be the first to agree that in order to make money out of farming at the moment you must not be too simple and you have to be something of an economist. So I am fully able to recognise the pressures on public expenditure created by an ageing population, high public expectations, poor economic performance and the present level of unemployment.

The Government's strategy is to restructure and revitalise the economy so that we can once again become fully competitive in world markets. Against that background, we have to seek the maximum possible economy in public expenditure and we therefore believe it reasonable to ask higher education to increase efficiency and to make economies. At the same time, we recognise the vital contribution that higher education makes to our national life in terms of the conduct of research and the education and training of the highly qualified manpower vital to the functioning of the economy. The needs of the economy therefore pull in both directions, and the Government's policies are designed to get the balance right between them. The economic consequences of doing so will be wholly beneficial. That is why the Government's policies for higher education focus particularly on the needs of the economy.

Both the noble Lord, Lord Annan, and the noble Lord, Lord Irving of Dartford, mentioned the debate of the noble Lord, Lord Aldington, last week on overseas trade, and I think that anybody who listened to that debate, or read the report of it, will have got that message loud and clear. I thought that the speech of the noble Lord, Lord Annan, although he himself described it as intemperate—I am not sure whether it was the noble Lord, Lord Kilmarnock, who described it as abrasive or bracing—

Lord Kilmarnock

Bracing, my Lords.

The Earl of Swinton

My Lords, I am sure that is more like it. I would say that it was a good and very brave speech. I certainly did not get the same impression as the noble Lord, Lord Kilmarnock, that the noble Lord, Lord Annan, was slating the Government. If he was slating anybody, I thought the noble Lord was rather tending to slate some of his colleagues among the vice-chancellors, but perhaps I had better read it in the morning to make sure.

We are focusing very much on the needs of the economy. That is why, following the success of the Information Technology Programme, the Government last year launched the Engineering and Technology Programme, which will provide, at a cost of £65 million over the first four years, about 5,000 additional places in industrially relevant disciplines. That is why the Government are promoting more generally a shift of emphasis in higher education towards the scientific, technological and vocationally relevant. That is why the Government are providing an extra £34 million over four years to equip some of our best universities to the highest standards. That is why an extra £15 million has been added to the science budget for the year 1986–87, news which I am sure will cheer up the noble Lord, Lord Irving of Dartford. What this demonstrates is that the present Government, while seeking economy, efficiency and value for money throughout the public sector, are at the same time prepared to recognise the need for specific injections of extra funds to achieve particular purposes of benefit to society and the economy.

Similarly, the Government recognise that the needs of the economy for qualified manpower will not vary with the size of the 18 year-old population. Both the noble Baroness, Lady Seear, and the noble Lord, Lord Kilmarnock, spoke about falling numbers in higher education. I think that in this case they have both got the wrong end of the stick. The proportion of young people entering higher education has grown from 12.4 per cent. in 1979 to 13.7 per cent. last year, despite the much higher population from which that entry is drawn, and is expected to increase to at least 15.5 per cent. over the next decade. I say "at least" because I entirely accept that these are matters of policy as well as demand, as indeed the noble Lord, Lord McIntosh, has pointed out. Our policy is for review in the light of these projections and further evidence.

I stress that we expect, too, to provide for the increase in demand for mature students. Even before allowing for the effects of the Engineering and Technology Programme, we expect the output of science graduates to increase by 30 per cent. over the present decade, the output of engineering graduates to increase by more than 40 per cent., and the output of electrical and electronic engineering graduates in particular to increase by more than 60 per cent.

But we are not complacent. We know that much of the growth to which I have referred is the result of the present peak in the 18-year-old population and the consequent demand for higher education, and we know that that population is to fall by more than 30 per cent. between now and the end of the next decade. No falling off in student numbers is expected in the present decade, but whatever may actually happen to student numbers in the future we must ensure that higher education is able to deliver a workforce capable of responding and adapting to the needs of the economy into the first quarter of the next century.

This is where the thrust of our school and higher education policies come together, and why it is so important that avenues of choice should not be closed off at an early age. As well as the stimulus which we hope the Government's policies for better schools will provide to encourage more young people to qualify for and to enter further and higher education, including we hope more young women, we are already embarked on special surveys to give us more information about the aims and aspirations of school and college leavers to allow us the better to consider the future level of provision for higher education.

In all of this the Government are actively concerned to promote the interest of the economy, and we are similarly encouraging a much closer relationship between higher education and industry and, in particular, a greater recognition of the importance of continuing and in-career education which is vital to the continued vitality and relevance of the work-force. Yes, my Lords, I shall indeed refer to the Government's PICKUP programme, with respect to the noble Baroness, Lady Lockwood. This in particular is helping to create a new awareness of needs and responsibilities in this area and already has many achievements to its credit. It is certainly more than a catalyst, as the noble Baroness says. It is a major step forward in an area in which little has existed before, and we are hoping to build upon it. It is particularly important, however, that employers should play a full part in the funding of retraining, too.

I hope I have said enough to demonstrate that the Government's policies towards higher education are focused very specifically on the needs of the economy and that their economic consequences are likely to be wholly beneficial. The same is true of the social and cultural consequences of our policies. First, a healthy economy is a necessary pre-condition of social and cultural development. Developments in the social services or in cultural provision, whether financed privately or publicly, have to be paid for, and it is only the revitalisation of the economy that can make them possible.

It has been alleged that the Government's proper concern to ensure that higher education is reasonably aligned to meet the needs of the economy, and in particular its greater emphasis on science, technology and vocational education generally, demonstrates a new barbarism, a disregard for cultural values, and a failure to recognise the quality of the intellectual training that can be provided by courses in the humanities and social studies. But the scale of the shift that the Government are proposing has to be seen, first, against the background of current claims from employers that they are unable to recruit sufficient qualified manpower in areas of industrial growth; and, secondly, against the uncertain prospects for the next decade when total demand for higher education may be expected to fall. In the universities at present about 47 per cent. and in the public sector of higher education about 60 per cent. of all students are engaged in non-science related courses.

I recognise that many of these are vocational in other ways, but the particular need is for higher education to produce more whose qualifications are scientific and technological. Given these proportions, to propose, as we have done, a modest shift into the area of science and technology does not seem to me to constitute the new barbarism, or even the slightest threat to the humanities and social studies. This has been mentioned by many speakers tonight. I shall not mention them all by name. Perhaps to allay their doubts even more than that, I should like to make two short quotations from a speech by my right honourable friend the Secretary of State to the Committee of Vice-Chancellors and Principals at Leicester University on 26th September this year. I quote: But to argue that as a society we could benefit from greater scientific literacy is not in any way to undervalue the arts and the humanities. I cannot understand why the modest shift that I have in mind is thought to imply this. I made my position on the arts and humanities clear in my speech to the British Academy last July when I recognised that scholarship in the humanities 'helps to shape the framework for ideas, purposes and institutions within which we live. Such scholarship helps to set the moral and social framework within which economically useful studies and the harvest of those studies can function. Such scholarship thereby enriches, or at least potentially enriches, our existence'. I acknowledged then it was precisely because the benefits flowing from the humanities in raising the understanding and improving the framework within which man lives are not immediately encashable in the market place that it is particularly appropriate that the Government should use the taxpayers' money to support scholarship in the humanities". Again, I quote another sentence later in the speech of my right honourable friend: But I am also passionately concerned for the future of the humanities. I need no instruction in the importance of both the humanities and the sciences to the education of our people and to the cultural side of our national life. I want our universities to continue to be respected for their excellence throughout the world". Of course the humanities provide a rigorous intellectual training. But there is nothing wrong in insisting that training in science and engineering can provide just as rigorous an intellectual training. There is no reason why a really good, well-thought-out degree in engineering rooted in scientific principle and related to current industrial practice should not provide as good a preparation for a high flying career outside as well as inside the immediate area of specialisation as a degree of medieval literature, classics, philosophy or anthropology. Such a degree might actually provide a more relevant and useful preparation for working life. To say so is not to undervalue the humanities either in terms of their intellectual rigour or their intrinsic merit; the flourishing of humane scholarship both marks and helps to create the kind of society and civilisation in which we all wish to live.

I think I have pointed out that no one is more committed to that proposition than my right honourable friend, and I know that he personally was delighted that the Government's expenditure plans announced last month provide for the British Academy to be able to award each year about 25 fellowships in the humanities and social studies in order to provide more opportunities for outstanding scholars in these fields. This is another example of the Government ackowledging the reduction in opportunities for young scholars and, in the face of a clear and well-articulated case, making specific provision to help to ameliorate the situation.

I shall turn now to some of the specific points made in the debate. I was very grateful to my noble friend Lady Carnegy of Lour for mentioning the Open University. It is a concept that I personally support very much. The university has two programmes of courses. There is the undergraduate programme leading to a degree qualification, which is substantially supported from public funds, and the continuing education programme that provides short courses, often related to updating needs, which aims to be self-financing. It sounds to me from the speech that my noble friend made that it is enterprising—I had better not use the word which I know the noble Baroness, Lady Seear, would not like me to use.

One point that concerned me tonight was raised in the speech made by the right reverend Prelate the Bishop of Ely. It was mentioned also by the noble Lord, Lord McIntosh. It relates to future access to higher education, particularly in polytechnics. The figures that the right reverend Prelate and the noble Lord quoted for the possible loss of places in the public sector came from a discussion paper prepared for a study group of the National Advisory Body. I can assure them both that those discussions are at a very early stage. Funding for the public sector of higher education in 1987–88 will not be decided until next autumn. However, I can say that the maintaining of opportunities for access to higher education remains one of the Government's highest priorities in education. I hope that will give comfort both to the right reverend Prelate and to the noble Lord.

Many noble Lords—I can think of the noble Lords, Lord Annan and Lord McGregor of Durris, and my noble friend Lord Butterworth—spoke about the UGC's suggestion that support was to be reduced by 2 per cent. per year in real terms until 1990. That is the UGC's planning hypothesis for its current review and it provides a margin in case inflation is higher than expected and for the committee to retain a central reserve to promote restructuring and other initiatives. The Government's expenditure plans envisage small cash increases in grants to universities in the next few years. The effect in real tems will depend on the rate of inflation, but a reasonable expectation might be that universities will need to make savings of just over 1 per cent. in each of the next two years and rather less in 1988–89.

The noble Lord, Lord McGregor of Durris, accused my right honourable friend of rudeness in the way that he has dealt with the request from the Committee of Vice-Chancellors and Principals for additional funding for the pay of clinical academics. This is not rudeness and I cannot prejudge his reply tonight but I can say that, although the Government are fully seized of the closer interrelationship between the work of clinical academics and doctors and dentists in NHS teaching hospitals, we do not yet know what gap there will be to be bridged between clinical and non-clinical academics if the settlement is to be implemented, because as yet there has been no settlement for non-clinical academics. My right honourable friend is waiting for these points to be considered before he writes to the committee. Certainly no rudeness is involved.

I was very grateful to my noble friend Lord Butterworth for reminding the House about the report of the Jarratt Committee, of which he was a member. He stressed how important it was that the Government should give the best indication of long-term policies for education that they can; I accept that. But experience has shown that for the whole of the public sector it is not practicable to give funding indications for longer than the period covered by each successive public expenditure White Paper. The Government expect their underlying policies to continue beyond that period and it is on that basis that the University Grants Committee has embarked upon its current planning exercise, in which it hopes to agree with each university an academic plan to the end of the decade, including student number indications, of the kind recommended by the Jarratt Committee. I cannot accept the criticism of the noble Lord, Lord McGregor of Durris, of that necessary planning process.

Several noble Lords mentioned international comparisons and that our figures were lower than practically anywhere else. Because of more open access, higher drop-out rates and longer courses, many other developed countries have proportionately more students in higher education than Britain. But surely the best like-for-like comparision is in the output of graduates and diplomates. On that measure, Britain is roughly on a par with West Germany, ahead of the rest of Europe, but some way below Japan and the United States of America. Britain's system of student support is still one of the most generous in the world.

The noble Lord, Lord Gladwyn, asked about overseas students. Since the war, this country has tried to do more in the world than can be justified by its economic performance. The realisation of that and adjustment to painful economic realities led to the abandonment progressively by successive governments of a general subsidy for all overseas students. The Government are instead funding a programme of targeted support schemes costing more than £70 million a year. We believe that that is the right policy. The noble Lord did not mention that we are currently supporting 65,000 more home students than we were in 1979. That places very real pressures on our capacity to support overseas students. However, I agree with the noble Lord that we must keep the balance of various support schemes under review. I understand that such a process is under way at present. I see that my time is up. I hope that what I have said has convinced noble Lords that the Government are not so evil in this area as some of your Lordships may perhaps have felt. I hope too that I have demonstrated that the Government have the liveliest awareness of the need to co-ordinate the economic, social and cultural objectives of their policies in higher education and will have those concerns very much in mind in the formulation of the further statement of the Government's policies that has been promised in the Green Paper.

Lord Gladwyn

My Lords, before the noble Earl sits down—

The Earl of Swinton

My Lords, I cannot answer—I have no time left to do so.

Lord Gladwyn

My Lords, may I take it that the noble Earl will reply in writing to the various questions I put to him?

The Earl of Swinton

I certainly will, my Lords. I should apologise; I had a lot more to read out but my time was up. To be fair to the noble Baroness, Lady Seear, and to other noble Lords, I will of course reply in writing to any points which I have had to miss out.

8.6 p.m.

Baroness Seear

My Lords, at this late hour, and with another debate to come, I shall reply as briefly as I can. First, I must thank all noble Lords who have taken part. I am very glad that it was possible to have this debate. A number of very important points have been raised; particularly points that I myself did not raise in the time allowed to me. One was the importance of continuing education, emphasised first by the noble Baroness, Lady Lockwood, and then taken up by speaker after speaker.

There was also the point raised by my noble friend Lord Gladwyn, to which he received no satisfactory reply, concerning overseas students. The Government have consistently taken a line that refuses to recognise the real long-term value of having overseas students in this country as a great cultural advantage to other students. I speak as someone who comes from a college that had at one time students of 42 different nationalities. That was of very great benefit to all concerned. There is also the long-term advantage that when foreign students return home they become purchasers who recommend Britain as a place for the expenditure of their own countries' money.

However, such a line is typical of the Government's whole approach, which is to see the entire issue of higher education in the short term rather than the long term. They look in the short term for the kind of return on money they expend that they look for in respect of purely commercial matters—for immediate value for money.

I must add that I have nothing against the term "entrepreneurial". I am all for it in its proper place, but as applied to what the Government are doing in higher education it does not seem to be an appropriate expression.

I thank the noble Earl for so nicely reading his brief, even if he failed to answer many of the points that were raised. I would be the first to agree that his noble friend—

The Earl of Swinton

My Lords, I really think that the noble Baroness is being a little unkind. I was prepared to answer her noble friend Lord Gladwyn but I had to sit down because my time was up and I wanted the noble Baroness to have a chance to speak. Otherwise, I answered just about every question that was put to me.

Baroness Seear

My Lords, the noble Earl responded, but he gave no reply except that which we have heard over and over again when these issues have been raised.

Nobody would accuse the Minister's right honourable friend the Secretary of State of being other than someone who himself deeply understands—probably more so than most people in your Lordships' House—the value of art subjects and the study of art subjects. However, I feel that the interest of noble Lords in the Government party as a whole in these matters is well demonstrated by the attendance at this debate. On occasion there was no one sitting on the Government Benches except the noble Lord, Lord Butterworth, who criticised the Government, and there was the lone, loyal voice of the noble Baroness, Lady Carnegy. It now remains for me to thank all those who participated in the debate and to beg leave to withdraw the Motion.

Motion for Papers, by leave, withdrawn.