HL Deb 03 March 1998 vol 586 cc1090-2

2.48 p.m.

Lord Dean of Beswick

asked Her Majesty's Government:

Whether recent financial difficulties in certain Far Eastern countries may reduce the number of students from those countries who undertake further education in the UK, and whether this may in turn cause financial difficulties for some UK universities and other higher education establishments.

The Minister of State, Department for Education and Employment (Baroness Blackstone)

My Lords, it is difficult to predict exactly what the impact of the various currency collapses in South-East Asia will be on the numbers of students coming to the UK, though there is clearly cause for concern. The Government applaud the substantial efforts made by higher education institutions to alleviate the hardship of many of the students affected, enabling them to continue to study here. The Higher Education Funding Council for England is looking at the potential effects on individual universities and higher education colleges and will offer advice to any who might need it.

Lord Dean of Beswick

My Lords, I am grateful to my noble friend the Minister for that reply. However, is she aware that I have received some information from the Council of Vice-Chancellors and Principals which indicates that, if there were a total withdrawal of those students, the amount of money lost would be as high as £300 million? Further, another £300 million could be lost that these students normally spend while they are over here. These are serious figures. Will the Minister do her best to make sure that the Government keep this situation under review and take any action that may be required?

Baroness Blackstone

My Lords, I can confirm that my noble friend's figures are quite correct. It is estimated that about £300 million comes to universities direct from the fees paid by students from these countries. They probably inject approximately another £300 million indirectly into the UK economy. They constitute about 11 per cent. of the total number of overseas students. The Government are closely monitoring this matter and are working with the British Council to establish exactly what the extent of the problem may be next year and what can be done about it. Meanwhile the Government very much applaud the efforts of higher education institutions in helping existing overseas students from this region to deal with any hardship.

Lord Quirk

My Lords, does not the Minister agree that the 50,000 students from the region, the greatest number of whom are from Malaysia and Hong Kong, who come to this country annually are an important resource not only to higher education which benefits, as the Minister said, by £300 million a year—Imperial College receives £9 million a year out of that—but also to British industry as a whole, largely because of the networking that students get involved in during their years here'? Would it not be a good idea and in their interests for British firms which have major involvement in the region to set up bursaries for as long as the emergency continues so that we can maintain this flow of students to this country?

Baroness Blackstone

My Lords, the Government regard overseas students in our universities as an important asset and one that we want to maintain. It is, of course, up to companies of the kind that the noble Lord, Lord Quirk, describes to decide whether they want to develop sponsorships or scholarships of this kind. I believe that some already do. The Government would very much welcome more of them establishing programmes of this kind. Meanwhile the Government, through the Chevening scholarship scheme, the Commonwealth scholarship scheme, and scholarships run by the British Council, offer awards to a substantial number of overseas students, including large numbers from this region.

Lord Beloff

My Lords, does the Minister agree that there is a particular problem, not so much with the Far East as a whole, but with regard to Malaysia? I have information that the number of Malaysian students coming to this country is falling rapidly. Does not this suggest that we made a mistake when we classed Commonwealth students as general overseas students while European students pay lesser fees? Would not the simplest thing be to treat Malaysians as honorary Europeans from the point of view of fees?

Baroness Blackstone

My Lords, the decision to change the fees paid by overseas students was made by the previous government some years ago. The noble Lord, Lord Beloff, is absolutely right that the fall in the number of students from this region is especially pronounced in Malaysia where there has been a drop in applications this year of about 25 per cent. I am, however, glad to say that for most of the other countries the number of applications is holding up, although, of course, applications may not necessarily result in entrants to our universities later this year. As regards treating Malaysian students as Europeans, I am not sure that Malaysian students would welcome that.

Lord Monkswell

My Lords, a figure of £300 million of revenue that universities may lose has been mentioned. Can my noble friend advise the House what proportion that is of total university revenue income?

Baroness Blackstone

My Lords, there is no suggestion that all of the £300 million that students from this region are paying in fees will be lost. That is the total sum they are currently paying. The Government and the universities hope that applications will continue to be submitted and that the eventual fall will be relatively small. As I just said, I am glad to say that the number of applications from most of the countries in the region is holding up. The £300 million is a tiny percentage of the total income of our universities.

Baroness Blatch

My Lords, does not the noble Baroness agree that the problem of losing students from the South-East Asian countries is compounded by the overall decline in applications of home students? Therefore the problems for universities are much greater. Will the noble Baroness confirm, or deny, that the £165 million extra that will be allocated to higher education in 1998–99 is permanent year on year funding that is additional to the base funding for higher education?

Baroness Blackstone

My Lords, the second part of the noble Baroness's question does not seem to bear much relation to what is on the Order Paper. The £165 million extra funding that has been found by the Government for next year arises directly from the changes in the funding of students that the Government are introducing. I cannot say what will happen in years after that because of the comprehensive spending review.

Lord Thomson of Monifieth

My Lords, will the Minister take some comfort from the fact that I seem to recall that over 30 years there have been recurrent occasions when everyone has prophesied woe as regards students coming from the Far East to this country—sometimes that was the result of the policies of the government of the day and now the fall in numbers is the result of financial circumstances in the Far East—but in each case there has been an extraordinary resilience on the part of the students, the political fears have proved unfounded and the attractions of British higher education have remained supreme?

Baroness Blackstone

My Lords, I entirely agree with everything that the noble Lord. Lord Thomson of Monifieth, has just said.