Overseas Students: Policy

HL Deb 25 November 1987 vol 490 cc692-724

9.13 p.m.

Lord Hunter of Newington rose to ask Her Majesty's Government what is their response to the publication by the Overseas Students Trust of The Next Steps—Overseas Student Policy into the 90s.

The noble Lord said: My Lords, first, I express my thanks to the Government for finding time to make it possible for me to put the Question standing on the Order Paper. In 1979 the Department of Education and Science, searching for ways to meet its share of public expenditure, took steps to save £100 million by requiring students from outside Europe to pay full costs. The money was DES money and part of the education budget. Was the Foreign and Commonwealth Office consulted? Did the Cabinet approve of this? Or was the decision an entirely departmental one?

Quite suddenly, as a consequence, the whole issue became of major importance. By 1983 the campaign against the cuts attracted the interest and support of the noble Lord, Lord Pym, when he was Foreign Secretary. He proposed what came to be called the "Pym package". It was additional expenditure of £46 million over three years, but I suspect that the new interdepartmental liaison committees which came about were even more important for the future.

The committee that prepared this report has been considering the situation and it is in the educational aspects that the most significant reappraisal has taken place. The events of 1979 led to a dramatic drop in students from overseas which coincided with a general reduction in university funding. This paradoxically increased the importance of sources other than UGC grants, including student fees.

Though the numbers and income have improved the concern remains that a new group of students is coming—those who can pay. There was a sharp difference between the attitudes of the Department of Trade and Industry to the matter and the Foreign and Commonwealth Office. The latter co-operated, the DTI did not, even with students directly concerned with industry in their own programmes.

We must give some consideration to the financial aspects of this matter. It is pure fantasy, as some academics argue, that institutes of higher education have a prerogative to admit an unlimited number of students and then impose on government the duty to pay for the number so admitted without differentiation between home and overseas students. It is true that institutions would like to treat all students in the same way as far as fees are concerned, but their power to do so is circumscribed by financial dependence on governments which in practice allocate grants on the basis that the universities will charge differential fees.

This is the practice in the Commonwealth, but the United Kingdom is the only country in the Commonwealth which charges full-cost fees to overseas students and then ameliorates the effect by making awards to special categories of them. Australia has not gone quite so far. They have quotas for overseas students by institution and by course and they impose charges, which fall short of the full costs, upon those within the quota.

There are two main objections to a policy of full-cost fees as a means of limiting educational exchange. First, it discriminates against private students who, although academically good, cannot pay the full costs and fail to get an award. The system in fact does not produce the best mix for educational purposes. The second objection is based on the erroneous assumption that students are nothing more than consumers of an educational product.

There is another area where Britain has gone further than any other Commonwealth country. By 1982 Britain completed the withdrawal from universities of that part of the grant previously attributed to overseas students. To make things more difficult the grant for home students is now being steadily cut. A deplorable inconsistency in the United Kingdom's policy is the rejection of quotas as a means of regulating the flow of overseas students, but using quotas for controlling the number of home students.

The attitude of sending countries both within and outwith the Commonwealth is important. They naturally critically examine the relevance of some courses for overseas students and the predominantly one-way movement of students to the major receiving countries. Most accept as inevitable some measure of differentiation in fees and charges between home and overseas students. Indeed many practise differentiation themselves. But they are strongly opposed to full-cost fees which they regard as exploiting the students and damaging to their own development plans and prospects.

Without question they regard education as the key to their development, and to that end they are spending a huge proportion of their budgets on all phases of education. Many of them have now reached the point where the expansion of primary and secondary schools is producing candidates for tertiary education at a rate which is beyond their ability to accommodate in the shortterm, even though they are also devoting a large proportion of their resources to the expansion of the tertiary sector.

Therefore, their need for places in overseas universities is both urgent and extensive, and they regard the introduction of full-cost fees by Britain, and the rapid increase of fees in other Commonwealth countries, as untimely and ill-judged. They consider it unfair that preference is given to European Community students, and in the circumstances overseas countries within and without the Commonwealth feel that they have no option but to seek value for money elsewhere. They are finding that in India, the United States, the Soviet bloc countries and substantially in Japan. That is not to mention Belgium, France and West Germany, which are members of the European Community.

What is the current government policy on these matters? Basically, it is that, first, Britain welcomes overseas students for a variety of reasons. Secondly, in general their education should not be subsidised by the British taxpayer. Thirdly, carefully targeted support should be made available to selected students in accordance with national priorities.

The main conclusions of this report on overseas students suggests that there have been two major developments since the "Pym package" in 1983. The first is the appreciation that overseas students are a £1 billion industry. They state that there is a strong case for the DTI to fund related schemes to help British exports. This is the major proposal of the committee. There is also, they argue, a good case for the Department of Employment helping to fund the British Council. Other noble Lords will discuss that matter in more detail.

The second major development has taken place in British institutions of higher education. The cash benefit which the payers of full-cost fees provide is of great importance to impecunious institutions. But they also recognise the academic and research contributions to their institutions that good-quality overseas visitors make.

The authors of this report hold the view that the main weakness of Britain's present position on overseas students is that she abandoned general subsidy with very little re-analysis or re-development of existing targeted schemes. The result is a lop-sided system, heavily weighted towards programmes that neglect all trade and educational targets. The proposals in this import report are designed to correct these deficiencies. For example, one important proposal is to expand the British Council Education Counselling Service. That would cost £2 million.

In the last decade the reception and treatment of overseas students has improved but there is still room for further improvement. Success in this field means so much for the future; their future and ours.

In fact, the departmental system had begun to fail, and a new flexible government response was required involving several departments which had its beginnings in the inter-departmental liaison committees. As the Manpower Services Commission has shown in the industrial field, education and research is no longer the province of one government department.

9.24 p.m.

Lord Elibank

My Lords, I should like to thank the noble Lord, Lord Hunter of Newington, for introducing a debate on what I conceive to be a very important subject. I believe that its importance is not widely recognised by the British public, who probably see it as a rather marginal issue and not nearly as exciting as the discussion on theories and policies on education which fill the media today.

As this excellent report makes clear, the support of overseas students has wide ramifications for our policies, not only in education but in culture, diplomacy and economics. It is of the greatest importance that we give the right measure of support to them. As the noble Lord, Lord Hunter, has made clear, in the modern debate the starting point is 1979 when there was a dramatic change in government policy resulting in a drop in students from approximately 88,000 in 1979 to 56,000 in 1984; a drop of 36 per cent.

That also coincided of course with a change in policy and an attempt by the Government, which I fully support, to target their support for selected students in line with what are conceived to be our national objectives. In most third world countries that is not insuperably difficult, because for the most part there exists in those countries an elite (if that is the right word), certainly a select group of young people who, by reason of parentage, wealth or access to secondary education are destined to be their natural leaders. It is to them that we look for an appreciation of our educational system and our national objectives and to them that we target such support as we can offer.

I find it helpful to consider the impact of that change of policy on countries, for the most part in Latin America, with which I am familiar, having lived and worked there. One of those countries is Venezuela, and it has two outstanding characteristics. First of all it has a large supply of indigenous crude oil and is one of the wealthiest states per capita in South America. Secondly—and this is unparalleled in recent times—it has a record of democratic stability in that government and opposition have changed at the right constitutional time with the minimum of turbulence for nearly the past 40 years. I should have thought that Venezuela was just the kind of country in which it would be wise to invest government funds in the selection of suitable students to attend our educational establishments.

In fact when one looks at the figures produced by the trust one sees that the number of students from Venezuela dropped from 775 in 1979 to a mere 109 in 1984. Looking at the Argentine, which is another country with which I am familiar, one sees that we have a long tradition of trade and of cultural exchange with that country which has arisen partly because there is a large Anglo-Argentine population in the Argentine to whom English is, if not the first language, the equal first language and who have long looked to Britain for cultural and trade links. There has also been the unhappy experience of the Falklands war. One might have hoped that one of the ways of ameliorating the difficult relations between Britain and the Argentine would have been an ample introduction of overseas students from that country to the United Kingdom. In fact the numbers have fallen from 99 in 1979 to 18 in 1984.

Lastly, there is Brazil, which I suppose for us is beyond all question the most important and most powerful country in Latin America; again the numbers drop from 540 in 1979 to 370 in 1984. It appears from the text of this study that only 1.5 per cent. of overseas students come from Latin America compared with nearly 50 per cent. from Asia. I respectfully submit that that is an unhappy balance between the respective continents.

When considering policies of this kind I think it is helpful to note what our commercial and political rivals are doing, which is a point touched upon by the noble Lord, Lord Hunter. Appendix D of the report contains a table which sets out the figures for other countries, figures which I think were assembled by UNESCO. Those figures show that in 1984 the United States had approximately 342,000 students, France had 133,000, West Germany had 72,000 and the United Kingdom had 48,000. There are differences in wealth and prosperity between Britain and some of the countries that I have cited, but it seems to me to be some measure of criticism of us that the French think it worth while to take in nearly three times as many and the West Germans nearly twice as many students as we do.

The last point that I should like to make, and again this was touched on by the noble Lord, Lord Hunter, and it also appears in Appendix C of this report, concerns the net foreign exchange earnings which we receive by way of students coming to this country.

The report assesses the gains from those in the public and private sector together with their expenses necessary for living accommodation, and also auxiliary expenses which they spend on pleasure, or indeed on their families. With a generous measure of rounding up this comes to a figure of £1 billion. This is a very notable figure by almost any standards. One is led to the conclusion that the modest investment by the Government, or the taxpayer, will be repaid ten-fold by the moneys that these students, and their families, will bring into this country. Therefore, if viewed in that light—if for no other reason—it is plain good business.

I suggest to your Lordships that if you consider the national objectives—cultural, political and educational, which are again set out in this report—a pound of the taxpayers' money spent on overseas students can hardly be bettered under any other heading of governmental expenditure. Indeed, it is the best possible investment of our money, viewed long term and viewed against broad national objectives. If this is so, I suggest that the very modest and cautious proposals contained in this report of an increase in government spending of £25 million is quite inadequate.

9.32 p.m.

Lord Peston

My Lords, I should like to speak briefly, concentrating on one or two educational and economic aspects in the report. First, I should like to say that I think it was right of the Government originally to question the support we gave to overseas students. Indeed, I see this as part of a general view of scrutiny of public expenditure. My view is that those of us who tend to favour public expenditure have a greater obligation to scrutinise its use, as opposed to those who think that it is money thrown away. Therefore, I do not object to the Government looking at this matter, as they did, and asking questions about it.

I think that what one does object to is what the Government then did, in particular the extreme way in which they acted at that time. If I may quote the relevant paragraph in this excellent report: Britain is not the only country to have revised her policy, nor is she alone in moving from general subsidy towards more targeted support which may serve the receiving country's interests more directly and at less expense. Where Britain is unique is in the precipitate, brusque way in which the full-cost fees decision was taken". It goes on to say that the result has been damaging to British interests. That seems to me to be entirely right. Indeed, perhaps I may say that one of the matters that worried me at the time was the wrong signal we were sending to the rest of the world. In a sense what we were saying was that we were such a failure as a country that we could not afford to welcome the foreign students at less than full cost fees; I hope that is not a signal that we shall continue to send.

As I have already said, the objection is not to the scrutiny or to asking questions; it is to what has been done. However, I think that bygones ought to be bygones. The basis of the report is to ask to where we can move forward and in what ways. I have to support the noble Lords, Lord Hunter and Lord Elibank, in emphasising, first, the enormous educational advantages we receive from overseas students. I see these in two ways. First of all, those of us in teaching universities or who have been students at universities have simply gained in terms of educational experience from the presence of students from other lands.

Speaking personally, when I went as a young man to the London School of Economics I am pretty sure that I had never met a foreign person in my life—or at least not many. I certainly had the typical young Left-winger's view of America—namely, I was very strongly anti-American. At the LSE I then for the first time in my life actually met some Americans. There were quite a lot of them and it turned out that they were genuine human beings, which had never occurred to me before. I was not to know then that I would end up in your Lordships' House.

But I cannot believe that the transformation of my view of Americans was altogether a bad thing. I then—which is true of any of us—became an overseas student and did my graduate work in the United States. I am quite certain that, even though my views may differ from those of the present American Administration, they would think that not only I and many others of us who went to the States gained but they had gained as well.

Let me add in connection with that that one must not mistake the nature of the game. The argument which I remember at the time was that people were saying that all these foreign students come to us but they go away and do not love us. They do not say thank you. But that is not the whole point. The point is that they may understand us better. In other words, we might at least hate each other on a more informed basis. Therefore I certainly hope that, in so far as there is a foreign policy aspect to this matter—and I dare not trespass into that area—it is not based on "Do they love us? If not, we do not want them".

The other question that one is always asked about this subject is: why are we so right in connection with our attitude to foreign students when everyone else has a different view? If having overseas students is such a bad thing, why does the Soviet bloc try to coax as many as it can get? Why do the Americans try to get as many as they can get? Do we not feel that Britain has a contribution both to the world and to herself by welcoming such people in?

I turn briefly to the economic side, but let me add that although the silver report produces a very powerful economic argument, I would not base policy on the economic side. In other words, even if it is demonstrable that we gain economically, I would still want to argue overwhelmingly that having overseas students benefits this country in the broader educational and cultural sense. But it seems to me that there are obvious economic gains which have already been made. It must be immensely to our advantage if more people in the world use English and regard English as a usable language. That must help exports. Indeed, more generally, I find it hard to believe that the long-run export potential of this country is not increased by having overseas students, who will, we hope, assuming that our education system is as good as we believe it is, rise to positions of power and importance.

In connection with that let me read a second extract from a most excellent letter in today's copy of The Times from the president of the Royal College of Physicians of Edinburgh. He wrote—and I hope your Lordships will bear with me if I give the full quotation— A recent visit to five countries in Asia in order to promote postgraduate exchange in medicine caused me despair and embarrassment at being British. Time and again I was asked: why is Britain turning away from those for whom it has provided educational opportunities for so long? My particular concern is the punitive fees which the University Grants Committee (on Government instruction) has recommended for postgraduate courses in medicine for the last six years: for 1987–88 it is 'not less than £8,960'. Many may not realise that Britain used to be the key country for postgraduate training in medicine, not only because of its traditionally high standards in medicine but also because we offered—and continue to—crucially important training in clinical skills as distinct from technology: in other words, how to be a good doctor". The point I would make is partly that we have an obligation to carry on with that work; but, secondly, that the likely demand for medical equipment and similar things which we produce in this country must be beneficial.

I turn lastly to one practical suggestion in particular in the report that I hope we would all support. The report mentions ORSAS and recommends that there should be what it calls a "son of ORSAS". It refers to a scheme which would take the form of: DES block grants to individual institutions channelled via the UGC and the NAB". The Overseas Students Trust was not to know that within the next few weeks the UGC and the NAB will be abolished but other institutions will take their place. The report states: These block grants would be used by the institution to make awards of variable amounts (the minimum they judged necessary to attract the desired student) to students of all types, other than research postgraduates". That seems to me to be an extremely good idea. The decentralising of that kind of system to the level of the institution seems to me to be admirable. My only additional comment to that, which I think the noble Lord, Lord Elibank, also mentioned, is that it seems to be somewhat too parsimonious. We should like to see a rather larger sum.

I say more generally that we need overseas students in any case because we need their money. A large number of our departments, including to some extent my own, are financed from the income that we earn from overseas students. However, I object to the limitations on what we can do. In a sense the other objection to full cost fees is that they are almost certainly not optimum. We shall probably end up with fewer students and less money than if we were free to choose the fees on a more finely tuned basis.

In sum I hope that on the basis of this report the Government will announce that they are at least willing to rethink their policies on these matters, to move to a more positive stance and to show much more subtlety in their approach to overseas students.

9.42 p.m.

Lord Bonham-Carter

My Lords, like the noble Lord, Lord Elibank, I should like to thank the noble Lord, Lord Hunter of Newington, for introducing this debate tonight. It is a highly necessary debate although it seems to me rather sad that we should have to have it. One of the troubles with this debate is that all the arguments in favour of behaving more generously towards overseas students seem to be self-evident. Therefore to repeat them seems to be redundant. These arguments are admirably set forth in the excellent report by the Overseas Students Trust. We should thank that trust. It deserves our unqualified congratulations.

I, like the noble Lord, Lord Peston, will rest my argument to some extent on what academics call in a somewhat patronising fashion anecdotal evidence. By that they mean evidence gained from one's own experience. That seems to me to be on the whole rather good evidence. I was an undergraduate at Balliol and a Harkness Fellow at the University of Chicago. For some years I was a governor of the LSE. Therefore I have some personal anecdotal experience of how much overseas students bring to academic institutions by their very presence. I also realise how profoundly influential it is at a relatively young age to spend some time working in a foreign university where the conventions are different, where the expectations are different and where one is a total stranger.

I was at the University of Chicago in 1947 at a time when the United States was finally trying to make up its mind as to what its role would be in the post-war world. To live in Chicago in that time, which then had the largest Polish population of any city in the world and which was still pretty isolationist, was to learn how remote Europe was from the United States of America. The United Kingdom was a far-away country of which they knew very little. Indeed, when one told them—after they discovered that one was English and not from Massachusetts or Florida—that one was going back, they looked at one with astonishment and some alarm that one was to return to that extraordinary place from which one had so luckily escaped. To travel over that huge country and experience both its variety and uniformity, as well as the whole educational experience, could only leave an imprint on one's mind, attitude and understanding of the world which can hardly be assessed in value.

The number of overseas undergraduates at Balliol—Seretse Khama was one at that time—and at the LSE were an essential component not only of the academic but of the social life of those admirable institutes of higher education. That personal experience was and is reinforced by considering the impact which Rhodes Scholars have had on the life of the United States, and not least on its political life. I rang up Rhodes House and oddly enough they have done no elementary research or follow-up on that subject.

However, the impact has obviously been considerable. For example, in 1947 when the whole posture of the United States in the world was being considered, one of the leading advocates of an interventionist role was, or was soon to be, chairman of the Senate Foreign Relations Committee. That was Senator Fulbright, after whom, appropriately enough, the Fulbright Scholarships are named. Dean Rusk was subsequently Secretary of State. Carl Albert, who was subsequently the Speaker of the House of Representatives, was also a Rhodes Scholar. There are today in the Senate five former Rhodes Scholars. General Rogers, until recently the head of NATO, was also a Rhodes Scholar. I suspect that if we looked at the German Rhodes Scholars we would find that their records in the last war were interesting. Von Trott, for example, was a Rhodes Scholar.

The impact of those Rhodes Scholars on American political life is something which we should not neglect. I admire the high-minded way in which the noble Lord, Lord Peston, says that he does not think that political influence should matter. However, I think it matters a bit. The debate which we are having tonight is closely related to a debate which we have not had but which I hope we shall have shortly on cultural diplomacy. Student diplomacy and cultural diplomacy are very much alike. In fact, they are part of the same thing. They are a powerful way of increasing international understanding and extending British influence. It is therefore not surprising to me that the noble Lord, Lord Pym, when he was in the Foreign and Commonwealth Office, produced the "Pym package".

As the noble Lord, Lord Hunter, indicated, it is extraordinary that the Department of Trade and Industry should have taken such a myopic and insular view of the importance of overseas students. I very much hope that the Minister will pass on to the department the adverse comments of the House on its past behaviour and encourage it to do better in the future.

If overseas students contribute to our universities and to our influence, as has been said, they also bring immediate short-term economic benefits, and in the long run I cannot believe that trade does not follow education. Certainly in my experience—which has been to some extent in the world of books, and particularly educational books which are in themselves influential—they reinforce trade links which can be established.

It strikes me that in 1979 the Government, in their rather doctrinaire way, instinctively shied away from encouraging overseas students in the same way that they shied away from assisting the arts and in the same way as they did not much like the idea of cultural diplomacy. Their reaction was to leave it to the market. We know that the market does not work in these areas. If there is an overseas students policy based entirely on market considerations there will be hardly any students from the developing world yet that is the area where it is most important that we should contribute.

I take some comfort from the fact that the recent announcement on the funding of the arts was such that we may believe that the Government are learning from experience. I can only hope that they will. As the noble Lord, Lord Peston, said, if they do not learn from our experience, they may perhaps learn from the example of our co-member countries in the European Community; namely, France and Germany. Japan also plans to have 100,000 students by the end of this century.

Finally, I should like to revert to the developing world. The number of students from the developing world has dropped by 30,000 since 1979 and from the Commonwealth by 18,000. It seems to me, as I have already said, that education is almost the most effective form of aid which we can offer those countries. How can they pull themselves up from where they are without educational skills which the developed world alone can provide? It seems to me a mean-spirited and short-sighted policy to cut down on this investment. It is also, I may add, one of the strongest bonds which cements the Commonwealth.

I share the sentiments expressed by the three noble Lords who have already spoken. I hope that the Government will look once more at their policy towards overseas students. If they cannot revert to something like the previous position, which is roughly speaking the position which the French and Germans now hold, then at least they can build on the Pym package and on the constructive and very modest lines recommended in this admirable report.

9.53 p.m.

Lord Seebohm

My Lords, I think that this is a very appropriate day on which to ask the Government the questions we are asking tonight. The report has not been out very long and I have read it with great interest. I believe that it is a very valuable document indeed. I was very relieved when I reached the last page to find that the financial requests and suggestions it makes are very modest. It is not an extravagant recommendation at all.

I entirely agree with what the noble Lord, Lord Peston, said that in 1979 it was time to review our policy for overseas students and what we were spending. The way in which it was done was disastrous. It caused an enormous amount of ill-feeling, which still exists and which I think was a very great tragedy.

I have reason to know about this because in 1979 I was chairman of London House for overseas students. For those who do not know what that is I shall briefly explain. It is a college-type residential establishment for overseas postgraduate students. It was originally started in the 1930s for Commonwealth students. It has rather changed its character over the years, as it had to. As far as possible it has tried to have a balance of various races. Its original charter included America as well as the Commonwealth. Since then we have included a certain number of people from the Common Market and we always have about 20 per cent. of British students. I think the mix is extremely good and extremely important. It has quite an amazing effect on the postgraduates who pass through it. All the countries that I have visited have formed their own associations of old boys and girls of London House who return regularly—many as very important people, professors and so on—if they want to brush up on a particular subject in their discipline.

In 1979 after the cut, the change in patterns at London House was quite dramatic. First, it was perfectly clear that the quality of people dropped considerably. To begin with it was only the rich who seemed to come, and most of the high-tech people from medicine and engineering, which is one of the strengths of that place, disappeared. They all seemed to flood to America. As to some places where we kept up the proportion, for example, Malaysia, it was not the Malaysians who came but the rich Chinese traders. The whole pattern seemed to change. We are never short of people because our waiting list at London House is enormous but there is no doubt that there was a change in the quality and type of people, which from my point of view was very sad.

Since that time things have improved. We are now receiving a few people from places like Malaysia, Hong King and India, who faded out for a time. However, we are still receiving many more applications from the richer countries, in particular, America, but not, unfortunately, from New Zealand or Australia, whose people used to come. The effect of losing those high-technology people does not need any underlining. That has already been stressed by other speakers, who referred in particular to the subject of the long-term financial advantages which this country will receive.

There is some good news. There are more students coming and returning to Britain. However, there is still some way to go before we reach the sort of numbers that we had before. Whether or not that is important, I am not sure. There has been an increase of about 13 per cent. in the last year or two compared with the 38 per cent. drop which took place in the year or two after 1979.

An important new development is the system of marketing overseas which is being carried out mainly through the British Council. This seems to be a very good development indeed. The British Council's effort is called the British Counselling Service Overseas. That provides a very positive image to other countries of education in Britain, and this service should be greatly expanded. It started in only three countries and now extends to six, which include Hong Kong, Singapore, Malaysia; there are plans to go to Brunei, Japan and Korea. This scheme is presently funded mainly by the universities and the polytechnics to the extent of about £500,000 per year. I hope that the Government will top this up when necessary because I believe that it should be spread into far more countries than the six that I have mentioned. Many other countries are competing with us very strongly in this sphere and most of the money comes from their governments.

The other side of the coin, which I think is extremely important, is that when these better students leave, they return home with a correct and favourable impression of Great Britain and its education system.

There is quite a lot being done in Great Britain, in particular by such bodies as the Overseas Trust, the Victoria League, London House and other voluntary bodies. However, I was extremely interested to see that recently there was a launch on, I believe, 17th of this month by the Hospitality for Overseas Students, HOST, which has been primed with about £50,000 a year for three years by the British Government, £10,000 a year from the Victoria League and £10,000 a year from the British Council. This is to provide hospitality, presumably to start over the coming season, for overseas students. I understand that already applications for about 2,500 students have been received and a great "number already placed. This is a very exciting development from the point of view of improving the opinion that these people will obtain of the United Kingdom. I am quite certain that, until now, far too many fell through the net.

The Victoria League started this scheme and it is encouraging that Sir Anthony Kershaw is to chair it. Mrs. Barnet who was the organiser of the Victoria League has agreed to take over the organisation of this co-ordinating body. It is a matter of interest that both the past chairman and present chairman of the Victoria League are in the Chamber tonight. That is the important point that I make—the way in which we treat students when they are here and the trouble we must take to see that they receive the right impression of this country and go back with the feeling that it is not such a bad place after all.

My final comment is that it might be a good idea, now that this hosting is going to be so important, to have a TV programme. I am sure that people will be very interested and that the response will be enormous. That is all I need say.

10.1 p.m.

The Earl of Limerick

My Lords, it is good that the Question put by the noble Lord, Lord Hunter, has given us the opportunity already this evening to hear five extremely well constructed speeches on this important topic. I greatly enjoyed listening to them and cannot disagree with a single word said.

Inevitably I shall be making some of the same points but I shall try to introduce a new slant. For this evening's purpose I assume that history started in 1979 with the full cost fees announcement. The shock waves went round the world, not on the principle but on the suddenness and the magnitude of the adjustment made. Of all decisions made at that time, somewhat in haste, I suppose that is the one that my noble friends now most regret: witness, first, the moderation of the subsequent increases and, secondly, the Pym package of 1983.

However, damage had certainly been done. On my subsequent visits to India, Thailand, Malaysia and Hong Kong the message was the same. It was one of sadness and, "How could you do this to us? How could you hazard the business and cultural links which we have both enjoyed?". I draw again on anecdotes, in regard to which I am much in agreement with the noble Lord, Lord Bonham-Carter. In the course of a seminar in Bombay in 1981 I was approached by a delightful Indian, who introduced himself as the president of the India-Cambridge Association. He was a man' who clearly wore a Union Jack next to his skin. He said that he had very few members joining his association just at a time when our political and business relations and the sentimental climate was more favourable than it had been since 1947 for getting closer.

The point he made was that his younger colleagues, presidents of the India-Harvard Association and the India-Yale Association, had plenty of members joining them. He found that sad. It was summarised in the words of the conclusion in the silver book: One approach"— that is, the national approach— [general subsidy] was abandoned before the alternative [selective, targeted support] had been analysed, prepared and put in place". Overseas students may or may not be a good thing per se. I would argue strongly, as others have done, that they are. They broaden our culture; they bring us to an understanding of problems faced overseas which are often much greater than our own; they encourage our own young people to travel. I too was an overseas student in the United States, in my case at secondary school level. I consider the cultural advantage that I now enjoy in being able to explain to my children what is happening on Channel 4 when they are playing this strange game of American football, to say nothing of basketball, baseball and ice hockey, to be real, if intangible.

It is however easy to recite instances from direct experience where the existence of a caucus of British-trained students is of direct benefit to the economy. For this, I believe we have to thank not only the educational establishments, the professors and the friends of those students, but also the landladies in Manchester and Cardiff, the pier attendants at Brighton, and others who go to make up the whole image of our country.

Again anecdotally, the best and incidentally the cleanest brotherhood—I almost said mafia—that I know is that of the Old Centralians, the engineers trained at Imperial College, London University. Whenever one Old Centralian wants something done he always knows another Old Centralian who is available to do it for him. This is a very natural way in which friends turn to friends, and they would not go outside that brotherhood unless they could not find what they wanted inside it.

I think that it is easy to miss two points in this regard. One is that the overseas students often come to us from countries where trained people are few, and their familiarity with our language, our standards and so on is therefore going to be unusually important. Secondly, they come from countries where responsibility is achieved at an early age. To put that in commercial terms, you are liable to get a quicker payoff for your educational investment.

The thrust of all the speeches has been that overseas education is in the motherhood category. It is a Good Thing. However, there is still a case for support, direct or indirect, from public funds. Here, one has to get rather commerical and to establish that to a significant degree trade does indeed follow the mortar board. Last night I was at the Middle Temple watching fascinated from the gallery as my son was one of 120 people being called to the Bar. Those boys and girls, many girls, came from almost any country you could think of. Their influence when they return home is going to be considerable.

It has been established in the silver book, and indeed in other studies, that we really are talking about a £1 billion industry. It does not need much addition to be confident of that figure. It generates a very measurable contribution to the balance of payments through direct spending and employment.

It has already been stated that in 1985 there were 56,000 overseas students in the publicly-financed sector of British further education. The point that has not been made is that this is about 10 per cent. of the total student population. Three-fifths of those were in universities, the remainder in polytechnics and colleges of further education. It is interesting to note what they were studying. Forty two per cent. were studying science and engineering and many of the remainder were following business and management courses. Those are subjects which clearly are directly relevant to our commerical relations. Apart from those 56,000 in the publicly-financed sector there were at the same date of counting in 1985 284,000 in private colleges. The great majority of those—more than 90 per cent.—were enrolled in one of the several hundred English language colleges. That again is a way to take advantage of one of our great national assets.

I shall turn to a somewhat different aspect—the commerical value to specific institutions. I should declare an interest as chairman of the governing body of the City of London Polytechnic. We, in common with most other advanced tertiary educational establishments, face some horrendous budgetary problems as we try to keep our courses going. We look at the prospects of attracting more overseas or specified students (those who do not come from the EC). For the current academic year, the standard fee for a full-time specified student is just over £4,000. Where is the downside? If we have more students, will that drive out our home students? At the margin possibly because of the way our institutions are funded.

Given that we are all struggling, there is some arithmetic which says, "Suppose that you are £2 million short of your budget, all you need to do is to attract 500 full-fee paying students at £4,000 a nod". That is beguiling, but it is deceptive. First, we must have regard to the institutes' educational policy and the priority that they must give to scarce resources. Secondly, such a policy will normally build up over the three-year currency of the courses. Thirdly, there must be an ability to offer attractive courses, and, fourthly and often the most critical point, especially with inner city institutions, there is great difficulty in providing suitable student accommodation.

There are then the marketing costs of the exercise. Marketing is done partly by direct promotion, partly by collective promotion (the good work of the educational counselling service of the British Council has been mentioned) and partly by a £75,000 grant from the Foreign and Commonwealth Office to the British Council to enhance its general information service.

Our market share is not impressive and it has been falling. About 1 million students study outside their own countries. Of them, we now have about 5.5 per cent. The numbers fell by 36 per cent. post-1979. What does that add up to? First, there is a need for a policy which must embrace the interests of the departments involved, notably the DTI, the DES, the Department of the Environment, the Foreign and Commonwealth Office and, one almost forgets but never should, the Treasury. Secondly, there is a need for funds to back the emergent strategy. Against the background of the £1 billion of direct benefit, and the unquantified but undoubtedly large stimulus to British exports, Martin Kenyon and his colleagues from the Overseas Students Trust begin to look like Warren Hastings—astonished at their own moderation. Their proposals in the silver book are costed at £25 million, of which the idea of a DTI trade-related scheme, which is of interest to me (awards to overseas students to help British exports), would cost a mere £10 million. In commercial terms, that might be seen as a cost-effective investment.

Britain's reputation in education stands high. We should be able to take the pick of the overseas students. Imagine in 10 years' time there might be a dozen or so economic Ministers, more than a handful of very successful entrepreneurs, and in 20 years' time perhaps a couple of well-disposed prime ministers or presidents, who had been students here.

The third point is this. Let us not always run to a government. We need more self-help organised by the educational institutions themselves. The education counselling service has had some success. Surely there is room for extending that to other countries. I was delighted to hear from the noble Lord, Lord Seebohm, that this is already in train. The British Council, with its experience and existing overseas network, is well equipped for this. However, given its funding problems it seems certain that some pump-priming will be needed as indeed is recommended in the OST report.

Competition in this trade is fierce. We are not the only English-speaking country, although we invented the subject, and we are certainly not the only one whose education system is internationally well regarded. While our student numbers were falling, numbers in other countries were growing rather rapidly. Many of those countries remain more active than we do in attracting overseas students. Their motives may vary but their policy is in good part predicated on the prospect of substantial foreign exchange earnings for their countries.

Finally, let us reflect on what other countries are doing. Australia has set up a number of trade missions in South-East Asia to explore the potential for marketing higher education as an export. Japan has decided to increase its overseas student population tenfold. Even then it would be only 100,000 by the end of the century. The United States has much the largest number of overseas students—340,000, over a third of the total. It is therefore by far the largest host country. The United States has 360 government-funded centres abroad to counsel prospective students, compared with the three (perhaps it is now more) education counselling service offices which are run by the British Council.

There is therefore much to do. There is much benefit to be gained by the country in following the well thought out recommendations of the OST. These are ridiculously cheap in relation to the medium-term benefits. Other countries perceive these advantages more clearly it seems than we do. Let us waste no more time in pursuing and overtaking them.

10.18 p.m.

Lord Thurlow

My Lords, this is a good moment to discuss this subject. It is a time of opportunity. We can now look back with the perspective of eight years. We have a pretty good idea of the situation now. The accent of the debate this evening, like the accent of this very constructive document before us, is positive. I therefore do not think that it is a time for wringing of hands. However, as the noble Lord, Lord Elibank, looked at the position in the South American territories, with which he is familiar, I have looked with interest and a measure of concern at the trend in the countries of which I have had direct experience.

I served for three or more years in each of six Commonweath countries. In the case of one of them the number of students went down by half between 1979 and 1984; in the case of New Zealand it fell by a third; in the case of Nigeria by two-fifths; in the cases of India and Canada by 14 per cent. In the case of Australia, which I do not know so well, it fell by half, and in the case of the last territory that I had the honour to govern it went down by one-third. These are disquieting figures. I assure your Lordships that they represent a reality of lost opportunities for the future.

However tonight let us be positive. In being positive we have this splendid set of recommendations. I should like to endorse what the noble Earl, Lord Limerick, said about the debt that we owe to the Overseas Students Trust. It is a quite extraordinary testimony to the effectiveness of a non-governmental organisation set up by private funds, and, in effect, doing a great deal of the work of the Government for them. In 25 years of total commitment the trust has amassed a tremendous experience. Its recommendations, as the press has said, are short on sensation but long on common sense. That report is moderate. It is a balanced report, nothing extreme, thoroughly researched after exhaustive discussion with all interested parties.

I for my part warmly endorse all the trust's recommendations. I should like to pinpoint three of them. The first, not a very colourful subject, is the question of statistics. It is rather a scandal that in this discussion we cannot command statistics that bring us nearer to the present than 1984. That is not good enough. The Department of Education and Science has a strong statistical department. Can the department take this statistical function under its wing and devote resources and expertise to seeing that we have an up-to-date statement of the figures within, let us say, a year?

My second point also is not a very glamorous one. It concerns the machinery in Whitehall for helping Ministers to evolve a coherent policy, synoptic and capable of dealing with change. I rather doubt whether the interdepartmental group set up some years ago and the very useful round table meetings that take place with non-governmental organisations are up to what is required to help Ministers to identify the initiatives that have to be taken as distinct from reactions to current events.

The third point that I want to mention is the central one that the noble Earl, Lord Limerick, spoke about and which concerns the biggest chunk of resources that are asked for—that is to say, the issue of trade-related targets. Like most of your Lordships I have in the past been disappointed by what has been described as the stone-deaf posture of the Department of Trade and Industry in relation to the whole subject of possible payoff from investment in education. I am sure it is short-sighted, and here is an opportunity for the department to reconsider its attitude.

From my own experience I know that when those who have become familiar with this country in various educational ways mature into positions of prominence in their own countries they constitute an enormous potential asset for ourselves, and I know that I am speaking to the converted in addressing the noble Lord who will answer for the Government.

It is impossible to quantify the results, but they are mainly indirect and intangible. Contacts are a necessary and indispensable part of international relations, and this is one of the means by which we can form the contacts that we require. I hope that the noble Lord the Secretary of State for Trade and Industry will take a personal interest in the recommendations of the Overseas Students Trust in relation to his own Vote.

Perhaps I may illustrate the value of contacts by a pregnant figure. Of the heads of state in the world in 1984 more than a third had studied in countries other than their own, and more had done so in this country rather than any other. Twenty-four countries had leaders educated in the United Kingdom. There is certainly no more valuable way of securing contracts or resisting unfair or corrupt competition than by being able to deal with a head of state. In conclusion, I should like to repeat my general support for the recommendations of the Overseas Students Trust, which are calculated to promote the interests of this country.

10.29 p.m.

Lord Hatch of Lusby

My Lords, I apologise to the House for not putting my name on the list. This was due solely to the fact that I did not know until today that I would be available this evening. However, I believe that a brief intervention from my personal experience may be of value to this debate.

The first overseas student whom I knew in this country was Jomo Kenyatta when he was at the University of London. The second was Seretse Khama, who has already been mentioned by the noble Lord, Lord Bonham-Carter. Then followed during the 1950s Julius Nyerere, who used to come to a seminar of mine at Edinburgh University, and Tom Mboya, who was brought to this country by the voluntary efforts of Arthur Creech Jones of the Workers' Travel Association. They were followed by Lee Kuan Yew and by Mwai Kibaki, now the Vice-President of Kenya. This was a tremendous contribution from the educational establishments of this country to the leadership of the world.

However, it was more than that. As my noble friend Lord Peston has pointed out, it brought to this country a great wealth of diverse cultures that were of immense value to us and to the professors and lecturers. In my academic experience, there has never been as exciting a time as in the first five or six years after the war, when so many ex-servicemen and women from the colonies were in our universities. In this House today we have an example of the value of overseas students to our culture and society in my noble friend Lord Pitt.

I should like to extract from my list two particular examples. Under the present scheme, Julius Nyerere, who did not go to school before the age of 11, would not have been able to come to a university in this country, and neither would Tom Mboya, because neither could have afforded to do so. I had sad experiences five years ago when I held a chair at the University of Zambia when, time after time, I recommended valuable students to universities in this country only to find that they went elsewhere simply because of the cost. They were offered better opportunities and it would not cost them so much to go to universities in other parts of the world.

I welcome the report but I believe that it is too modest. The investment that it suggests could be greatly increased and would be extremely cost-effective.

I should like to put two points to the Minister. The first relates to the reference in the report—though not extensive enough—to the importance of the character of the courses offered to overseas students. I should like to see a great deal more emphasis on matters such as development and opportunities for overseas students to come to this country to learn all the phases of development. I should put the greatest emphasis on agricultural development.

Secondly, it is of immense importance that this country should recognise that, in a situation such as that of South Africa, one thing we can do is to train those who will be in a position to give leadership and administration, and who will take part in the development of that society when it becomes a black majority society.

Ten years ago I was asked to review the Centre of Southern African Studies at the University of York. I proposed to them then, in the middle of the Rhodesian war, that one of the things they ought to be doing was to take students from Rhodesia—whether in exile or in Rhodesia—and train them for the jobs they would have to do when majority rule came into operation. That is still the position as regards South Africa.

I should like to remind the Minister that some months ago the Leader of the House assured me that at the last-but-one Commonwealth Conference Britain had pledged herself to make available funds for special training for South African students. I asked him later on if that would apply to the kind of work that is being done in York, Cambridge, Oxford and other universities and he assured me that it would. I hope that tonight the Minister will be able to say that, in addition to what is covered in this report, there will be government money, as was promised at the Commonwealth conference, for greater training for those who will have to bear the brunt of building the new South African society of the future.

10.35 p.m.

Baroness Seear

My Lords, I think that every speaker this evening has been somewhat anecdotal and has drawn on personal experience. I fear that I shall be no exception. In each of the 30 years that I taught at the London School of Economics I had in my group overseas students who undoubtedly made a very great contribution and who also had a very great effect on me. I can say that from all the aspects that we have discussed tonight—economic, political, social and educational—there is a tremendous value in having overseas students in this country.

In the short term, a number of them spend a great deal of money in this country—the sum of £1 billion has been mentioned. I once had a Kuwaiti student who brought with him his wife, two children, a nanny, a cook, a chauffeur and a car. What he disbursed in this country must have paid my salary for at least three years, if not more. There were others of the kind. I doubt whether Kuwait could run to many students like that at the moment, but it did happen and could happen again.

When the London School of Economics had to raise the money to build its magnificent new library, the late Lord Robbins—Lionel Robbins—went round the world twice visiting innumerable groups of old LSE alumni, who poured out money in order that the library could be erected. It would have been extremely difficult to get that library built but for that support, which came completely voluntarily and freely with no quid pro quo. Many other examples could be given, but the economic argument has been covered thoroughly in the debate this evening.

On the political side, I find myself almost entirely in agreement with the noble Lord, Lord Hatch, which is not perhaps my most usual experience. Surely there is nothing more useful that we can do at the moment than to further the education and training of people in South Africa. The time will come when black South Africans will have to play a far greater part in the political and economic government of that country and it is vital that they should receive now the education which will enable them to do it.

After all, it is to the great credit of this country that before we withdrew from our colonies we did our utmost to see that people there were trained to take over adequately. It has not been as adequate in some cases as we would have wished, but the effort was made and opportunities still exist.

We shall never fully resolve the argument about sanctions, but surely we can be absolutely in agreement—and this point has been made several times and been generally agreed—that more money spent on education and the opportunity to offer education in this country to South Africans are most effective ways politically to contribute.

When it comes to the other developing countries, again there is a very considerable job to be done. Of course, as the noble Lord, Lord Hatch, has pointed out, a great many of their students will not be able to come here if they have to pay fees of the kind that are being asked at the present time.

Perhaps I may mention one group of students from the developing countries who have not been referred to this evening; namely, women. It is extremely dangerous to educate the men of a country and not educate the women. Innumerable problems flow from doing that, as anybody who has been to any of those countries will know. If the men are educated well ahead and in quite a different way—and I am not making a feminist point; it is on a far broader basis—you educate your men away from the standards of culture and understanding of their women. Yet, with the sort of fees that we are charging, what chance is there that families, of the kind that we are talking about in countries as impoverished as the developing countries, could begin to think of paying this kind of money for the education of their daughters?

In this admirable report I cannot find—although I may have overlooked it—any reference to the number of women among the students coming from overseas countries. This is an extremely important point. It is a figure which, if it could be obtained, we would all like to have because there is an issue here of the highest importance. There is, also, as other speakers have said—but it comes home very strongly indeed if you teach students of mixed racial groups—the tremendous value not only to our own students but to other people in this country.

We know that we still have a big problem of race relations in this country, but this is partly because so many people have never had personal face-to-face relationships with people of a different culture or colour. It is when you get to know people on a personal basis, as students get to know one another—taking them to their own homes; beginning to know and like them as people and picking up friendships—that you break down these ridiculous stereotypes. However, perhaps these stereotypes are not quite so ridiculous, because if you have never had the opportunity to know people of a different culture you naturally develop in that direction and that stays with you until the opportunity of personal experience presents itself.

As the noble Lord, Lord Peston, said, he even came to like Americans, despite his built-in prejudices, when he had the opportunity—or was forced against his will—to meet them face to face. Surely, it can have nothing but a good effect on our own race relations problems if our students meet students from other countries and students of other colours and cultures and get to like them, as inevitably and invariably happens when we have a mixed group of students. I shall not say any more about that simply because so much has already been said.

This is a most excellent report, but there are just one or two points I should like to put to the Government, which I do not think are highlighted in it. First, although we recognise that it is improbable that the Government will return to the pre-1979 position, I wonder whether they would consider specially and separately the possibility of doing more for people who are coming for postgraduate courses of one kind or another, whether they be short courses or much longer, and more demanding, higher postgraduate courses. I ask this because I believe that there is a particular value in concentrating on postgraduate courses in a number of cases.

As many developing countries have reached the stage when they can have their own universities, there is a case for suggesting that in many instances it is a good thing for people to do their undergraduate work in the colleges and universities in their own countries but that subsequently they should go overseas to do their postgraduate work. They are therefore not separated from their own country at the undergraduate stage. Furthermore, it is unlikely that those countries will be able to develop the degree of specialisation that is required for really good postgraduate work. If we cannot go the whole way and offer wider opportunities at both the undergraduate and the graduate levels, could not the Government look again at the costs, or charges, to people who are doing postgraduate work?—which, by definition, means that they are getting a selective group of students who are ultimately the most likely to take leadership positions in their own countries.

On a rather different note, but one which I think is of considerable importance, I should like to ask the Government to look again at what seems to me to be an extraordinary economy that I understand they are making. I am told that when the Government are calculating the amount of money that a university is to have for furnishings, equipment and perhaps most important of all for libraries, the allocation is based on the number of students. But the Government, in estimating the number of students, exclude overseas students. If it is true—and I have it on good authority—that they exclude from this calculation (I hope that the Minister is listening) overseas students, who are paying something like £4,000 to £8,000 a year, it seems to me meanness beyond belief. It could not cost much to do the calculation based on accurate figures.

Only last night I met a woman overseas postgraduate student who has all the costs of being in London to do postgraduate studies. She said that when she goes to her head of department to ask for some additional equipment or additional information that she needs, she is told, "Sorry, but we have used up our money for this year. We cannot get it for you until next year". This is a cheeseparing and miserable way of doing things. She was quite good-tempered about it. I must say that I would not have been. She added that she might have to stay on for an additional year in order to finish her Ph.D., because, although she had paid considerable fees to do this study, she could not get what was required as the budget was exhausted when she asked for it. I hope that the noble Lord will look into those points.

10.46 p.m.

Baroness Ewart-Biggs

My Lords, I think the fact that so many people wished to speak in this debate, and also that nobody withdrew, shows how very much appreciated it is by the House. As many noble Lords have said, the intention of the report of the Overseas Students Trust is to bring more coherence to Britain's policy on overseas students, and I think the report has been praised by all those who have spoken so far.

What is good, as the noble Lord, Lord Bonham-Carter, said—which has been proved by other speakers—is that we all start from the same premise; namely, that overseas students are a good thing and that to have a comprehensive policy concerning them is of the greatest importance. But it is clear from the recommendations in the report that the trust does not feel that present government policy entirely reflects that priority, and it suggests some financial implications which would amount to £25 million, as well as the sources for raising that funding. All noble Lords have pointed to the modesty of those financial suggestions and I hope that the Minister will take note of that.

Many speakers have stressed the harm done not so much by the change in the policy of fee-paying in 1979 but by the brusque manner in which it was carried out. My noble friend Lord Hatch made a very cogent point when he suggested that students should receive training in perhaps agricultural development or desertification, and I quite agree with him, as I agree with the noble Baroness, Lady Seear, who drew attention to the fact that women in developing countries, who play a vital role in those countries, seem to be deprived of the opportunity of education in this country.

My noble friend Lord Peston emphasised the enormous educational advantge which we and our students gain from overseas students. This was borne out by the Director General of the British Council when he said: It is obvious that the academic health of institutions and departments depends on international scholarly interchange … There is … value, both academic and social, to British students from the presence among them of Commonwealth and foreign students. They help to impart that international dimension that all higher education should always have". He added: There is no more distressing sight than a clever but insular person. And the British score quite well at the game of international stereotypes. Only personal contact can provide some immunisation against this disease". I think that what he said had a certain value.

I wish very briefly to comment on three aspects of overseas student policies. I shall start with government funding policies. It is indeed these policies which significantly influence the pattern of access of overseas students to United Kingdom higher education. But it is here that it would appear that the Government have departed from their original intention, for in 1985 the Foreign Office Minister then in charge of overseas students said: We have a moral obligation to help the Third World countries and much of the debate over overseas students policy over the past fifteen or so years, both inside and outside of Government, has centred on how best to meet the demand for education and training from the developing countries without at the same time allowing a flood of students from the richer part of the world". Yet unfortunately government action on funding does not appear to have matched the stated policy on access, for between 1979 and 1984 there was as much as a 25 per cent. cut in the number of students coming from the poorest 50 countries of the world and a cut of 40 per cent. from all of the developing countries. On the other hand the proportion of total overseas students in the UK who came from all the OECD member countries has increased from 18.4 per cent. to 24.9 per cent. It would therefore seem that a part of the savings from the implementation of full cost fees should perhaps be put back to try to ameliorate some of the damage which has been done. The noble Lord, Lord Hunter of Newington, made that point very clearly.

I wish also to say something about recruitment. Prospective students want and need four things. They need appropriate courses, adequate support systems, adequate funding and appropriate accommodation. After all, they are consumers and they see what they are coming for as a package which has value for money.

But if institutions are going to attract suitably qualified overseas students they must not only meet those needs but tell prospective students about them. It is thought that UK institutions in general are not good at either. They live largely in ignorance of increasing international competition. Again this point has been made by previous speakers.

Indeed the chairman of the executive committee of UKCOSA made the following remark: Marketing skills for the recruitment of overseas students have developed swiftly since institutions became the victims of central government's cuts, but there has not been much rethinking of the responsibilities consequent upon a successful recruitment drive". He said that the priority was more to get the students in than to look after them, which came rather a long way afterwards. I think that universities and colleges must upgrade recruitment and support services if they are to succeed in maintaining and perhaps expanding their share of the world market in overseas students.

I wanted also to mention support services for overseas students. Here we do have a very distinct worry. The Overseas Students Trust concluded in its report that: the presence of overseas students at British institutions will only be mutually profitable in an educational sense if the students themselves are reasonably happy and well integrated into the total life and work of the institution". The noble Lord, Lord Seebohm, has given some important examples of work that is going on, notably that of HOST. I was very glad to hear of that, but what are the other most obvious pastoral needs of students? What should be done to avoid students getting into financial difficulties? That seems to be a very important point. One must accept that some overseas students will always need access to emergency funds. Perhaps a national fund administered by the DHSS or a non-governmental organisation is a possibility. On the other hand, it is always preferable to prevent financial difficulties arising in the first place. One way of doing that would be to provide guaranteed levels for the duration of each course rather than setting fee levels on an annual basis. That would remove one reason for financial difficulty.

My last point is a matter which has been left out of the report by the Overseas Students Trust. It is the problem of accommodation. It is as if the writers of the report did not recognise that there is a real problem for many students, particularly in such areas as the South-East, Oxford, Cambridge and Aberdeen. However, although the report does not include any research on accommodation, fortunately some research has been done by the London Conference on Overseas Students—of which I am now the chairman and which was previously chaired by my noble friend Lord Murray—which set up a working party last year on accommodation problems faced by overseas students in London. That revealed that provision of accommodation for students with families—who were often research students—was the most pressing current problem. Along with that, there were high rents and shortage of accommodation for single students in the large cities of the South-East.

European Community students fare best because they qualify for housing benefit in the same way our students do. But I understand that sometimes they do not receive it for about nine months and it may be too late for them to benefit from it. When one looks at the price of accommodation in London and other cities, it is quite horrifying. Prices range from—40 for a single room to £;80 for a one-bedroom flat and £120 for a two-bedroom flat. All the people to whom I have spoken who are concerned with accommodation for students have said exactly the same thing. I have spoken to King's College student services and to the National Union of Students and they point out that this is a very real problem.

The report last year by the London Conference on Overseas Students made some valuable suggestions. I shall not list them now because it is rather late. However, if consideration is given to further research on the matter, the report could be used as a basis for that work.

The last question that I wish to put to the Minister is one of which I have given him notice and which is again outside the report of the Overseas Students Trust. It concerns the policy towards the liability of overseas students for the poll tax. I understand from a letter from the Department of the Environment which was sent to me that overseas students will be required to pay 20 per cent. of whatever the full community charge in their area will be. I should like to know if that is correct and also what the policy will be concerning the dependants of such students. Will student wives be required to pay the poll tax? That will have an important effect on overseas students who come here, in that they will not only be paying for their fees and a high price for their accommodation but they will also be paying the poll tax. That may affect their feelings on the matter.

Finally, as regards English language establishments in Britain, it is estimated that as many as 400,000 foreigners come to Britain each year to learn English or to continue English studies undertaken in their home countries. The level of services provided by the English language teaching establishments is very different. The British Council currently recognises and inspects some 200 English language schools, of which 185 are members of the Association for Recognised English Language Teaching Establishments in Britain.

As I say, that imposes some control. Outside of that there are about 200 English language schools which are not members of that organisation. Although many of them do an excellent job, it is sad that a large number do not. It would be very good to think that there might be a system of inspection which would be run by the British Council and which would cover all the English language schools. It has been said already that our greatest national resource is our language.

We are most grateful for this report and for the opportunity of debating it. Let me just quote two lines from one of its conclusions: there is still much to be done if overseas students are to get adequate value from their time here and return home with a friendly and understanding attitude towards this country. If we fail in this then indeed much of the money will have been wasted". I think that is a very important point to make.

11.1 p.m.

Lord Glenarthur

My Lords, the Question of the noble Lord, Lord Hunter of Newington, has touched on a subject of great importance. I am glad to be able to give a general description of the Government's stance. I must stress at the outset, as the noble Baroness, Lady Ewart-Biggs, would wish me to do, that of course we welcome overseas students to this country. We do so for several reasons. First, we are making friends and influencing people for the future. Secondly, we wish students to return home with an informed and clearer understanding of Britain and British aims and attitudes as the noble Lord, Lord Seebohm, suggested. Thirdly, the experience that students gain here can help them to contribute more to their own countries on their return as well as benefiting them individually. They can also contribute new ideas, attitudes and experience to the academic and social contacts they make here.

There are other more tangible advantages such as those to which the noble Lord, Lord Peston, and my noble friend Lord Limerick referred. Large sums of money have been mentioned; some people have estimated that the figure is as high as £1 billion a year. That may be a slight exaggeration, but certainly the amount of money which is generated is considerable. Institutions are helped through fees.

The noble Lord, Lord Thurlow, made a point about statistics. Statistics are available up to 1986–87. Provisional figures are available in the spring of each year for the previous academic year. The final figures are available by December. Apparently we have to wait for the universities to send in the returns, and that is the reason for the delay.

A number of figures have been referred to this evening. There were in 1986 over 56,500 overseas students in public higher education institutions in this country. They came from 157 countries, including Eastern Europe, the developing world, the Commonwealth and our Western European friends and allies. Eighteen thousand received some kind of financial assistance from the Government during the course of the year. That is hardly a bad record by any standards. In 1980, we decided that an indiscriminate fee subsidy for all foreign students costing over £100 million a year was not a burden we could reasonably place on the British taxpayer. Instead, we now have a number of targeted scholarship schemes, costing about £90 million a year, under which the overseas students are selected for education and training in the United Kingdom. We are convinced that this is a more efficient and cost-effective system, benefiting both the taxpayer and the student. Of course plenty more students come who do not need a subsidy from us. It is certainly true, as the noble Lord, Lord Hunter of Newington, and my noble friend Lord Elibank suggested, that there was an initial dip in overseas student figures following the 1980 increase in fees. However, the numbers are more or less back at the original level and indeed are still rising.

The noble Lord, Lord Peston, referred to a letter in The Times about clinical university fees being too high. I understand the concern which lies behind that, but I remind him that universities are free to set their own fees but usually observe guidelines set annually by the University Grants Committee. Similarly, polytechnics and colleges are guided by the Council of Local Education Authorities.

The noble Baroness, Lady Seear, also referred to the question of postgraduate students in a rather different way. The vast majority of students under the aid programmes are postgraduate or at least are on post-experience in the provisional training courses. Those are the majority of government funded students—5,500 new awards each year. All students on the Commonwealth Scholarship and Fellowship Plan are postgraduates; that is 900 awards each year.

The noble Lord, Lord Hunter, suggested that the United Kingdom charges full cost fees and then ameliorates that. That is so, but it is entirely what targeting aims to do. The aim is to support those who are politically and commercially valuable to Britain and those potentially able to play an important role in the social and academic development of their own country. British policy is to help developing Commonwealth countries develop their own universities, to which £20 million was devoted last year under the aid programme, and to focus on the most economically useful students for selective help here.

As for the noble Lord's criticism of bias towards European Community students, suggesting that in some way they get a better deal, I think it is a fact that that is part of the United Kingdom's commitment as a member of the European Community. It is also on the basis of a reciprocal benefit; for example, UK students can study at no charge or pay a subsidy fee only in other European countries. The answer in a nutshell is that it is all wrapped up with EC policy, which affects us all.

My noble friend Lord Elibank made comparisons between ourselves, the French and Germans. It may well be that countries such as France allow access to foreign students on the basis of a blanket subsidy. We must look at the quality of the education offered. It is open to question whether foreign students in France benefit from the kind of focused support through tutorial help, special language coaching, hospitality and other support services which is available in Britain. In any case, our policy is to help those students who will, as I have said, play a key part in the future of their countries. I suggest it is more important to focus what is required rather than to scatter it about more widely.

The noble Lord, Lord Bonham-Carter, seemed to suggest that we do nothing for American students, or at least that we should do more. I remind him that we provide £750,000 per year for Marshall scholars and £26,000 a year for the Fulbright scholarship, which comes from the Department of Education and Science, and there is more.

As to the point that my noble friend Lord Limerick made about Australia, Japan and the United States marketing harder than the United Kingdom for overseas students, as far as Australia is concerned that is so, but there are quotas and full cost fees are charged, concentrating recruitment on Far Eastern students, as I understand it. So far as Japan is concerned, its figures have increased ten-fold but the base figure was very small. So far as the United States is concerned, that is an infinitely larger country with far more colleges and universities than we have and therefore many more places. The proportion of overseas students to home students in the United States is in fact lower than ours, though I understand that the numerical totals are higher.

We have heard tonight some eloquent words in support of the OST's report and recommendation for a total increase in funding by the Government of £25 million on behalf of overseas students. As my right honourable and learned friend the Foreign Secretary said in another place on 19th February this year, this OST report, to which we gave a general welcome, has to be considered by the interdepartmental group of officials on overseas student matters and by the round table meeting on overseas student affairs. Your Lordships will not be surprised to learn, therefore, that I cannot anticipate these deliberations and our response.

The IDG has studied the report in detail but the round table meeting was unfortunately postponed because of the general election and will not now be held until 16th December. My honourable friend the Under-Secretary of State for Education will chair the meeting and our formal response will be issued in the light of discussions at that meeting. I should emphasise that many of the report's recommendations were already in the process of being carried out when the report was published. Others had been made and rejected earlier and others are under consideration. Despite any encouragement I might have been given this evening, I hope your Lordships will understand that it would not be right for me to go further than that today.

A number of noble Lords were concerned that the DTI should do more in the way of trade-related schemes. The Department of Trade and Industry fully recognises the financial and commercial value of overseas students being trained in the United Kingdom. With that in mind, all companies winning contracts for which offers of aid and trade provision have been made are invited to fund a certain number of postgraduate places for overseas students. The DTI is also planning, through regional seminars, for greater interaction between companies and overseas students. Furthermore, the Foreign and Commonwealth Office's scholarships and awards scheme has several scholarships running which are jointly funded on a tripartite basis with industry and academic institutions. This year some 60 to 70 students will be here under such arrangemend is with 10 British companies and organisations and another nine are due to come into operation in the academic year 1988–89 for a further 30 to 40 students. More are under discussion. I can say that British industry is showing an admirable interest and we are more than ready to cope with further arrangements of that kind.

Lord Bonham-Carter

My Lords, can the Minister say how much money the DTI, not industry, is paying out from its budget?

Lord Glenarthur

My Lords, I cannot give the noble Lord that figure but I shall endeavour to ascertain what it is and advise him accordingly.

My noble friend Lord Elibank and the noble Lord, Lord Seebohm, referred to the promotion of British education abroad through the British Council and to its educational counselling service, which is now operating in three countries, advising intending students on courses and institutions. It is planning to expand into other countries. Virtually all British universities and polytechnics subscribe to this service. It is expected to be self-financing by 1989. We also have the educational promotion service, started last month, to perform the same function for colleges. We hope that it will expand successfully. Again, it is to be self-financing after three years.

The remit of the British Council is to promote cultural education and technical co-operation between Britain and other countries. Therefore, it is a legitimate call on council resources, which it recognises. The Government have provided pump-priming contributions. However, the British Council repeatedly assures us that services of the educational counselling service are intended to be self-funding.

My noble friend Lord Elibank suggested that we need to put more funds into Venezuela and the Argentine to help students from those countries. That may be the sort of contribution that companies such as Shell and others—perhaps it is better not to mention names—are able to help with on a jointly-funded basis with the FCO scholarship money. That may be a practical way to help. In fact, the fall in the numbers of students from South America cannot simply be attributed to the Government's policy on fees or on overseas students generally. There are other important factors, largely in the area of economic performance of some of the countries concerned, wrapped up with oil prices, and so on. Perhaps that is something which my noble friend could consider.

As to welfare, which I accept is an important point, it is clearly in the interests of all overseas students that they enjoy and benefit from their time in this country. Various independent research reports have made it clear that while finance is not a great concern to the students, welfare most certainly is. To that extent, I very much agree with the noble Baroness, Lady Ewart-Biggs, my noble friend Lord Limerick, and the noble Lord, Lord Seebohm.

The reports have shown that some overseas students complain of loneliness, isolation and even racism. It would be pointless and counter-productive to encourage them to come here and allow them to leave with less than happy memories. So I was grateful to the noble Lord, Lord Seebohm, for his comments about HOST. HOST will co-ordinate the attempts of independent bodies throughout Britain to arrange outings, home stays, Christmas celebrations, etc., for students, particularly during the holidays. They have received over 2,000 requests from all over the country for family accommodation hospitality this Christmas and are finding families with whom to match these. Many of the students are post-graduates and are not young, many are married and have left their families at home while they have come here to learn.

The noble Lord, Lord Hatch, cited examples of past leaders who were educated here. Who knows, there may well be many future great leaders being educated here at the moment. However, by carefully selecting promising people and fully funding them, We are very likely to hit the target. The Commonwealth Scholarship and Fellowship Plan is such an elite scheme for the most distinguished of scholars. Britain still provides half the awards offered globally; that is over 900 awards currently at a cost of over £9 million.

Both the noble Lord and the noble Baroness, Lady Seear, referred to the importance of training South Africans. In addition to the Nassau Fellowships and the fellowships offered for a number of years under the technical co-operation programme of the Overseas Development Administration, Britain has this year given 80 scholarships to bright young South Africans to come and study here as undergraduates. A further 80 are now being selected by the Educational Opportunities Committee in South Africa to arrive here in April 1988, and more groups will come in subsequent years. These groups are given special courses and special arrangements that take account of their difficult background. The noble Baroness, Lady Seear, referred to the question of women. I, too, noticed that the OST report appeared to ignore the question of women entirely. The Government are very conscious of the need to attract more women to study here. This is a priority under the aid programme. At the Commonwealth Education Ministers' Conference in Nairobi held in July this year my noble friend Lady Hooper, who represented Great Britain, was responsible for inserting a passage in the communique referring to the need for member-countries to nominate more women as Commonwealth scholars.

The noble Baroness asked me a particular point about library funds being based on the number of students, but excluding overseas students. I am afraid that I cannot give the noble Baroness an answer to that tonight; but I shall certainly find out and write to her.

The noble Baroness, Lady Ewart-Biggs, referred to the community charge. My right honourable friend the Secretary of State for the Environment has made it clear that full-time students in England and Wales will be liable to pay only 20 per cent. of the community charge. That follows the decision taken during the passage of the Abolition of Domestic Rates, etc. (Scotland) Bill—a Bill somewhat engraved upon my heart—that full-time students in Scotland will only be liable for payment of a similar percentage. I think that the noble Baroness might have to wait and see the fine print of the Bill when it finally emerges. I am afraid I cannot give her more information than that this evening. A number of other suggestions have been made which I shall study, and about which I shall, if necessary, correspond with your Lordships.

Few of us would dispute the fact that British education remains among the best in the world. Moreover, a British education is comparatively inexpensive when seen in the context of its quality. It is, however, concentrated, and this means that courses are not normally designed to allow students to earn during term time. The shorter vocational and training courses we offer are of similarly high reputation and similar intensity. If they are to benefit fully, students must concentrate on their studies. This goes as much for overseas students, of course, as for their home-grown counterparts. I have described the ways in which we are trying to make their lifestyle as congenial as possible. But, it is also up to colleges, polytechnics and universities to play their part in sustaining the welfare of overseas students.

The noble Lord, Lord Peston, seemed to imply that the number of overseas students should rise in the interests of the institutions which receive their fees. It is up to the institutions to decide what percentage of their student body they want to be from overseas. There is a point beyond which too much strain might be put on the educational and social facilities provided. Institutions must have a responsible recruitment policy and must provide suitable welfare and other facilities. Only in that way shall we ensure that the large investment we have made in bringing overseas students to this country and allowing them to enjoy the benefits of our educational system is fully realised.