ACADEMIC SALARIES REVIEW BOARD (Hansard, 10 May 2004)

HL Deb 10 May 2004 vol 661 cc28-45 28

§ (1) The Arts and Humanities Research Council shall set up an Academic Salaries Review Board ("the Board") whose purpose is to report to the Council and through the Council to the Secretary of State on the level of salaries of teachers and research staff in higher and further education institutions in the United Kingdom and to advise on issues of parity—

(a) by comparing the level of salaries of teachers and research staff in the arts and humanities with those in other disciplines, including the biological, economic, engineering, environmental, medical, physical and social sciences, and
(b) by comparing academic salaries with those of other professions and fields of employment as they were in 1945 and in successive decades up to the present.

§ (2) The members of the Board shall include one nominee appointed by each of the following—

(a) The Secretary of State;
(b) The Arts and Humanities Research Council;
(c) The Biotechnology and Biological Sciences Research Council;
(d) The Engineering and Physical Sciences Research Council;
(e) The Economic and Social Research Council;
(f) The Medical Research Council;
(g) The National Environment Research Council;
(h) The Particle Physics and Astronomy Research Council;
(i) The Royal Society;
(j) The British Academy;
(k) Universities UK;
(l) The Association of University Teachers.

§ (3) Members of the Board shall serve for a period of up to five years, and the chair of the Board shall be appointed by the Secretary of State.

§ (4) The annual report of the Board shall be included as an appendix to the report which the Arts and Humanities Research Council gives the Secretary of State on the performance of its functions after the end of each financial year.

§ (5) When the Secretary of State lays the annual report of the Council before each House of Parliament, as provided under section 4(3), he must accompany it with a statement indicating the measures which he may undertake in response to the advice of the Board."

§ The noble Lord said: With Amendment No. 8 we move away from the detail of the working of the Arts and Humanities Research Council, to which we shall no doubt return in Amendment No. 9. Like all noble Lords who have spoken, I welcome the upgrading of the status of the Arts and Humanities Research Board to that of a research council.

§ I have wondered how to address a matter which is not explicitly referred to in the Bill, but which is one of deep concern to all who have an interest in higher education. At this point I declare an interest of a different kind; namely, that I am remunerated as a professor, but that is not the point I seek to make. My point is one to which many noble Lords addressed themselves in their Second Reading speeches which is the issue of academic salaries. I ask myself, first, why there is no explicit mention of the issue in the Bill. As the matter is not addressed substantially in the Bill, it is very difficult to address in an amendment. The amendment could find a place, with a modification in 29 the wording, elsewhere in the Bill. I would be happy to consider that if the Minister felt that that were more appropriate.

§ Many noble Lords feel that one of the great problems, which is not directly addressed in the Bill and scarcely addressed even indirectly, is that of academic salaries. That means that there is nothing that an amendment to the Bill can do to rectify the situation on academic salaries, but it is one of the most substantial problems in our universities today. An important component of the decline of our universities, which I and other noble Lords believe is taking place, is the decline in the level of academic salaries in comparison with other professions. I believe that the matter should be highlighted and kept constantly under review.

§ That is why I believe that it is appropriate to propose that there should be an academic salaries review board which should report annually to the Secretary of State and the Secretary of State should be obliged to bring those comments before both Houses of Parliament annually, together with his observations on how he would seek to do something about the situation. I do not see how, by amendment, one can do more than that with the Bill, but I believe that that would be a useful step.

§ The amendment needs little explanation. I remind the Minister that it was her noble friend Lord Eatwell who drew comparison between the level of academic salaries and the level of ministerial salaries, including her own—very much to the detriment of academic salaries. The duty of setting up an academic salaries review board is here assigned to the Arts and Humanities Research Council simply for convenience. It could equally be set up as an independent entity and perhaps it should be. The main point is that it brings in a range of expertise and experience concerned with academic salaries and that it will report, as proposed, through the AHRC to the Secretary of State, who is obliged to lay it before Parliament, along with his comments.

§ My intention is not to argue for parity of salaries among and between academic institutions; I want to bring into scrutiny the way in which, over the years, professional—or non-manual salaries in general—have risen much more than academic ones. The National Association of Teachers in Further and Higher Education referred in their written evidence to the House of Commons Education and Skills Select Committee, as published in The Future of Higher Education to, the 45% relative decline in [academic] earnings compared to non-manual income over the last 20 years". I am reasonably confident that if one made the comparison over the past 30 years the decline would be more than 45 per cent. That is the problem to which the amendment seeks to draw attention in a systematic and, I hope, constructive way. I beg to move.

§ Lord Dearing
I am glad that the noble Lord has recognised in his address that if there is to be such a mechanism this is not the appropriate place. I suggest that a body concerned with research in the arts and 30 humanities is not constituted to assess, nor would it be entirely disinterested in assessing, the levels of salaries in those areas. In fact, we had a review of the whole situation through the Betts Committee after my report several years ago. There is absolutely no doubt at all that academic salaries have fallen well behind comparators. I endorse the kind of figure that the noble Lord indicated, but if that is so well known I am unsure that there is a need to set up a committee to declare again that academic salaries are far lower than comparators. We need the funding to do something about it. I believe that through this Bill we can explore new sources of funding so that the employers, with whom this responsibility resides, can do something about it.

§ Lord Morgan
I entirely endorse what the noble Lord, Lord Dearing, has said. However, the noble Lord is to be congratulated on raising the matter of academic salaries, which have been a scandal in public life for many decades. We have rehearsed the points in previous debates. The starting salaries are very low; the basic spine is very long; it takes a long time to receive a decent stipend; the people who enter academic life are commonly older, having done degrees; and women are likely to be in their late 20s, rather than mid-20s, and they have not been able to exert the kind of industrial muscle that others have.
So there is a real point, which is deeply worrying, that the extra funding that universities will have is liable rightly to go into academic directions to provide for bursaries, access and so on, and that university teachers therefore will not benefit. However, I absolutely agree that attaching it to a body for funding research in humanities does not seem to be appropriate. The determination of stipends and the fostering of research are quite different entities. In determining academic stipends, a whole range of considerations applies—the abilities of teachers and colleagues and the ability to innovate, other than, of course, the primacy given to research. I therefore hope that this issue can be dealt with in another place.

§ Lord Winston
Although I completely understand and congratulate the noble Lord, Lord Renfrew, on his sentiments, I cannot but agree entirely with the noble Lord, Lord Dearing, in this respect. This does not seem to be the right place for the amendment, nor do I believe that it would provide the clout to change matters at all within the universities. Moreover, the composition of this board would not seem to be adequate for its purposes. While that may seem to be special pleading—and I raised the issue at Second Reading—at present there is a major problem within the medical schools whereby there is no parity and an increasing gap between National Health Service salaries and academic salaries.
If one is to have representation, one would need to include representation from the Academy of Medical Sciences. I would argue that, as an important fancier of research in Britain, the Wellcome Trust should also be involved, as well as representation from the nursing and other caring professions, which should have a 31 major influence on the salary structure related to the academic aspects of caring in universities. Sadly, therefore, I do not believe that this is the place for this amendment, though I understand the reason for its introduction at this stage.

§ Baroness Lockwood
I congratulate the noble Lord, Lord Renfrew of Kaimsthorn, on his ingenuity in tabling this amendment. I am sure that my noble friend the Minister does not need any arguments from the Back Benches as to why she will not be able to accept the amendment. It is unfortunate that we have a Higher Education Bill that deals with the funding of higher education but does not contain any provisions for improving academic and related salaries. It has been said today, and was said at Second Reading, that it is a disgrace. It is only because of the dedication of the staff in the universities that they continue to produce the excellent, first class work that they do.
When the Minister responds to the amendment, will she indicate whether there are any plans in her department to deal with this particular problem? The noble Lord, Lord Dearing, referred to his report. At that time we had a comprehensive review of university salaries, but very little has happened since. It is time that some real action was taken to bring universities into line with other professions.

§ 4.15 p.m.

§ Lord Sutherland of Houndwood
I, too, appreciate the intention behind this amendment. I declare a former interest as someone who used to teach philosophy and discovered that philosophy was not very well rated in the marketplace but tended to be at the very lowest end of the salary scale in the university system. Nevertheless, I believe that this amendment is misplaced, for two reasons. First, we have here not even a baby Arts and Humanities Research Council, but an embryonic one. The prospect of it being redirected from its main objectives and effectively becoming the salaries review body, with a subcommittee that is the Arts and Humanities Research Council, is considerable, because that is what would get all the attention and publicity, and that distraction would annul the main point of this part of the Bill.
Nevertheless, will the Minister reassure us that if such a research council took the view, I believe quite properly, that the salary levels in this area of the academic world were so low that they imperilled the contribution made in Britain to this kind of research, it would be perfectly proper for such a research council to constitute a panel to review them and to make a public report, and that there would be no risk of it being told that it was ultra vires or that the Minister did not like it? Such an indication would reassure me immensely that the intention here, which is perfectly proper, can perhaps be realised within the existing proposals.

§ Lord Tugendhat
I support my noble friend Lord Renfrew in respect of both the spirit in which he has tabled his amendment and the flexibility that he 32 has shown in raising the issue. Unlike the noble Lord, who has had a distinguished career as an academic over many decades, I am very new to the world of academe. As a chancellor of a university rather than someone who works in one, I am in some respects perhaps somewhat semi-detached. I am proud to be the chancellor of the University of Bath.
For anyone who has earned his or her living in other fields of endeavour, the level of salaries in the universities is perfectly shocking: there is no other word for it. When I consider the quality of people whom I meet at the University of Bath or at Cambridge, to which I am also attached as chairman of the development committee of my old college, Caius, and compare it with the quality of people whom I meet in the financial sector or in other areas in which I have earned a living, it seems to me that the discrepancy between the quality of such people on the one hand and their remuneration on the other is blatant to a degree that one would not have believed possible.
As some Members of the Committee have said, it may be that this is not the ideal place in which to deal with the point raised by my noble friend Lord Renfrew, as he himself recognised. However, it seems to me to be symptomatic of the problem with which we are confronted that we can have a Higher Education Bill of this importance, including, in my view, a number of desirable and quite radical propositions, which makes no reference whatever to the question of remuneration. If in any other walk of life one tried to undertake serious and far-reaching reforms designed to improve the performance of the operation, the issue of remuneration would invariably be considered. That one can have a Bill of this kind, which makes no reference to academic salaries, seems to me to indicate the way in which they have fallen not only so far below the level at which they should be fixed but also so far outwith serious consideration.
I hope, therefore, that the amendment tabled by my noble friend will lever out of the Government a counter proposition. I hope that the Minister will feel able to express a view about where academic salaries will fit into the Government's overall approach to improving the status and performance of the universities. In response to what my noble friend has said about the amendment and what other Members of the Committee have said in opposition to it, perhaps the Minister will also indicate how she will confront the issues about which concern has been expressed. In that spirit, I very much hope that the Government will give serious consideration to my noble friend's amendment.

§ Baroness Warwick of Undercliffe
Noble Lords may know that as a former General Secretary of the Association of University Teachers as well as the chief executive of Universities UK, I feel passionately about academic salaries. Indeed, I feel passionately about salaries for academic-related and support staff as well.
There is no doubt that as the noble Lord, Lord Renfrew, said, along with just about every other noble Lord who has spoken, salaries for academic and support staff have fallen woefully behind those for 33 their comparators elsewhere. A university's key resource is its staff. Staff pay accounts for 58 per cent of universities' expenditure, and if they cannot pay their staff adequately, all our universities will struggle to recruit and retain the best and the brightest.
Universities have worked hard to make the initial academic careers of newly qualified researchers more secure. Noble Lords will know that the Universities and Colleges Employers' Association—the employers' association for the higher education sector—has just agreed a new pay framework for higher education with the seven trade unions, which will result in pay increases totalling at least 7.7 per cent by August 2004. However, calculations show that a total of £602 million of additional investment will be needed over the next spending review for human resources in England and Northern Ireland.
That said, the amendment, as others have said, is not really the answer to the problem. The Bill is an important step in the right direction, addressing the overall funding needs of universities. If there is also adequate public investment so that the fee income which the Bill will guarantee is indeed additional, as we have been assured is the case by the Secretary of State, then universities will be in a position to begin to reverse the relative decline of university salaries. I hope that the Minister might take the opportunity to confirm this in her reply.
Research staff in humanities departments will continue to be supported by funds other than those applied by the Arts and Humanities Research Council, which will fund research on a project basis. Researchers will be financed through the university's general resources from the Further Education Funding Council's funds and fees, not from research council grants. UCEA already provides a single employers' association for the higher education sector and a framework mechanism through which universities can negotiate pay for all their academic and support staff, taking account of the overall resources that can be made available for salaries.
Since, as other noble Lords have said, the amendment would radically extend the functions of the AHRC, giving it a role far greater than its funding responsibilities, I do not believe that it would be helpful to the research council's functioning, and consequently I cannot support it. However, like other noble Lords, I thank the noble Lord, Lord Renfrew, for providing the opportunity to debate this issue.

§ Lord Forsyth of Drumlean
I, too, congratulate my noble friend on his ingenuity in raising this matter. I do not think that the amendment is in the wrong place; I think it is perfectly legitimate for us to discuss the issue in this context. However, I think the noble Lord, Lord Sutherland, hit upon the kind of example which might tempt a Secretary of State to use his or her powers, which we discussed earlier, under Clause 3(3). If the research council were to set up the equivalent of a pay review body, I think that those in the Treasury would have a heart attack, and a direction would come from the Secretary of State. That is one of the reasons I still worry about the clause as it stands.
34 My noble friend is right to draw attention to the problem of academic salaries. There is no one in this House who does not feel strongly, indeed passionately, about it. However, the fact is that nothing will be done about it until the universities have the resources with which to pay people. The noble Baroness, Lady Warwick, talked passionately about her concerns, but she has supported a government who have seen the unit of resource fall in real terms. So all this talk about how we need to do more on academic pay is just hot air unless there is a way of increasing resources. Tearing up the Bill would save the taxpayer £200 million—it will cost £200 million more than it will raise in revenues from fees—which would be well spent, I suggest, on academic pay.
I do not think that the solution lies in having a salaries review board. All kinds of pay review bodies have come and gone with their recommendations and, ultimately, it is a political decision about the priorities of government. The reason that academic pay is so scandalously low is that the continual decline in the unit of resource for universities, coupled with expansion plans, which have seen lecturers have to teach smaller and smaller classes, has not been funded. It was not funded properly by the government of whom I was a member—I freely acknowledge that—and it is funded considerably less well by the present Government. That is why this continues to be an issue and the Bill does not in any way address it.
I congratulate my noble friend on raising this matter and drawing to our attention the fact that the Bill makes no progress in this direction. If he did not make this point, then I certainly shall: the Bill actually makes the problem worse by spending scarce resources on paying for the financing of a fees regime, which we will no doubt discuss when we come to Part 3 of the Bill.
I believe that pay among academics has actually fallen by about 40 per cent since 1980. In his speech on Second Reading, the noble Lord, Lord Winston, drew attention to something extraordinary—if you visit institutions overseas, again and again you see some of our brightest academics. Why are they there? Because they are able to pursue their research and teaching interests with a degree of freedom and because their salaries are considerably higher. What is needed is a much broader view about how to restore excellence and standards in our universities and find the very considerable resources that will be needed to achieve that.

§ Baroness Blackstone
I should like to declare an interest at this point, as I am both a visiting professor at the London School of Economics—unpaid—and the Vice-Chancellor designate of the University of Greenwich, where I will be paid.
I am a little worried about the tenor of this debate. Like others, I share the view that academic salaries have fallen far too much relative to many other similar professions. I admired what my noble friend Lord Eatwell said on Second Reading; it was a very interesting rhetorical gesture to suggest that the Minister was overpaid compared with academics. I want to cone in on the side of the Minister, since she is, in my view, not 35 terribly well paid, and not terribly well paid compared with a lot of senior people in management in universities. However, that is an aside.
My real concern is that although it is ingenious to introduce an amendment relating to the Arts and Humanities Research Council about academic pay, this really is not the right place to introduce an amendment for an academic review salary board, as I think the noble Lord, Lord Renfrew, admitted. I remind the noble Lord, Lord Forsyth, who I think has just admitted this, that it has been the view of not only this Government but previous governments that it is not really appropriate to set up a review body of this sort. I was, incidentally, extremely surprised to hear my noble friend Lord Sutherland—my old sparring partner in the University of London—suggest that the AHRC should be allowed to set up a committee to look at academic salaries among people who work in the arts and humanities. I think that that would be an inappropriate use of the time of members of that research board. They should be focused on the real issue of funding excellent scholarship and research in the fields for which they are responsible.
My main reason for being concerned about this debate is that a number of noble Lords have forgotten that this Bill will bring about a substantial amount of additional funding through fee income which will allow universities to pay higher salaries if they so choose. I make that point to my noble friend Lord Morgan.
In the spending review that followed the Betts Committee's report, some additional public money was ring fenced for academic salaries. I make that point to my noble friend Lady Lockwood. However, governments should not do that too often because it jeopardises the autonomy of universities.
It is up to universities—and to people like me in my next job—to ensure that at least some of any additional funding that comes through either as fee income or as proper public support for universities should be shared with academics who work so hard across our university system. They deserve to be paid better. I remind your Lordships that this House is normally very concerned about preserving the autonomy of universities, and, in the last resort, it is for them to decide what they pay their staff.

§ 4.30 p.m.

§ Lord Morgan
My noble friend makes some very fair points but does she not agree that the problem is immense? We are dealing with not a temporary irregularity in pay comparability but a backlog of 20 or 25 years. That is the problem of the new funding arrangements.

§ Lord Sutherland of Houndwood
I would like the Minister to respond to the point that I made, rather than the version of it given to her by my noble friend Lady Blackstone.
My point is that an arts and humanities research council may well properly say that the quality of research—and the quality of people whom we recruit 36 to research in these areas in the UK—is declining very sharply. One of the reasons may well be that the salaries in this area of the academic world are very bad. If that is so, I would have thought that it is a perfectly proper interest for a research council to have.
There is a precedent in this context. I was chairman of the postgraduate studentships committee in the arts and humanities, which was an earlier predecessor of what it is now hoped to bring to birth. At that stage we looked at postgraduate scholarships. They were evidently very low—lower than in some of the other areas—and we hitched ourselves up, firstly on the back of the Science Research Council, and above them, the Medical Research Council, and above them, the Wellcome Trust. It was a proper issue for us to discuss at that stage, and I hope that, in extreme situations, an analogy with that would be possible for such a research council.

§ Baroness Blackstone
There is absolutely no problem with the suggestion of noble Lord, Lord Sutherland, that the Arts and Humanities Research Council should comment on the position of researchers or more senior academics in teaching posts. This includes the numbers of good people coming forward and the possibility that this may be related to pay. When he spoke for the first time, I think he suggested that it would be reasonable—and that the Government should accept—that the AHRC should set up a special committee to look at salaries. That would not be a sensible use of its time, nor would it be appropriate for one research council alone to start doing this. The other research councils would then feel they had to follow, and that would be a distraction from their main task.

§ Baroness Sharp of Guildford
In my notes against this amendment I have written, "Support in spirit, but it's the wrong place". I therefore fall with the majority of noble Lords who have spoken in this debate: we are all very well aware of the erosion of academic salaries in real terms, and would like to see a solution to that issue.
The noble Lord, Lord Tugendhat, spoke about those coming from other walks of life. This morning I had a meeting with the Vice-Chancellor of Cambridge who, as many noble Lords know, has just come back from America. She said that she had not realised how drastically academic salaries had fallen in real terms in this country, and how difficult it was to recruit people—young people, in particular—to academic jobs these days. As we know, they have to face substantial house prices. If they wish to move to somewhere in the south-east of England it is very difficult for them.
We should be aware of this, and of the degree to which this erosion took place over a long period of years. Some Noble Lords may know that I was an active member of an organisation called Save British Science in the 1980s and early 1990s. When we talked about the problems that the erosion of academic salaries would create in the recruitment of new postgraduate students, we were called "moaning Minnies". If only something had been done then.
37 The noble Baroness, Lady Warwick, was the general secretary of the AUT at that time, and it fought for improvements in salaries. But on the other side of the table, the CVCP did not fight for real improvements in salaries as hard as it might have. That has continued over the years. As somebody who was at the coal face, I have seen vice-chancellors' salaries do very well thank you very much, as the noble Baroness, Lady Blackstone, said. It is a real problem.
If the Bill goes through I hope that it will create the funds, and that those will be directed towards increasing salaries. I share some of the doubts that the noble Lord, Lord Forsyth, has put forward on whether it is going to generate the funds. In net terms, the Exchequer is going to have to fork out a lot in order to generate these funds. In spirit we are very much with this amendment.

§ Lord Walton of Detchant
I will be brief. If your Lordships will forgive the medical analogy, it is true that the state of academic salaries has been a running sore which has continued to fester for decades. I am grateful to the noble Lord, Lord Renfrew, for raising this issue, but I agree with other Members of the Committee who have said that the function of a research council is not to be a salary negotiating body.
As the noble Lord, Lord Forsyth, said, the establishment of a salaries review body might well give the Secretary of State a heart attack. Part 4 of the Bill deals with student support. Is there not a case for having a new part 5 for staff support, in which the issue of a salaries review body to look at the state of academic salaries could be considered? I raise that in a purely speculative sense.

§ Lord Eatwell
Since my noble friend Baroness Blackstone referred to my contribution at Second Reading, I should clarify what I said. I did not say that the Minister was overpaid. I said that the salary of her post in 1980 corresponded to a middle-ranking to senior university lecturer at that time. Her salary now is £30,000 per year more than that person.
In summing up, the Minister said, "I think I earn my salary". I think that university lecturers earn her level of salary too. What has happened over this period is that for a variety of reasons university salaries have fallen dramatically behind.
However, I did not rise simply to clarify that point. We must be very careful about spending the money that we generate by this Bill over and over again on different things. That is what I have heard today.
I hope that the Minister will not claim that the fee income which will be generated from the fee proposals in the Bill will solve the problem of salaries, because it is not. I hope that the fee income generated in this Bill will be invested in excellence—excellence in teaching and excellence in research—and providing equipment for researchers in universities. The salaries problem is so serious that it requires an entirely separate endeavour. It requires to be considered in and of itself and not to be rolled up for us to be provided with the 38 excuse that somehow this money, which is being spent several times over, will help to solve the salary problem as well.

§ Lord Forsyth of Drumlean
I hesitate to rise again, but perhaps the Minister could deal with that point when she replies to what has turned out to be a wide-ranging debate. I noticed that the noble Baroness, Lady Blackstone, was attempting to spend the money on pay. She said that the additional funding of £900 million would help with pay, and that we had forgotten it. However, north of the Border there will be no increase in tuition fees, which means that if any of the money were to be spent on salaries it could not be spent in that way north of the Border.
Certainly, north of the Border, there is widespread concern among academic staff that, as the noble Baroness, Lady Blackstone, is predicting, some of the money will be used on pay and that there will be a salary gradient between Scotland and England. In that case, some of the most talented brains in the country— being Scottish—would move south towards the lure of extra cash, which would be extremely damaging to the universities.
The noble Lord, Lord Eatwell, made the point that there was a separate issue here—the problem of university salaries. The Bill will make that problem urgent. Will the Minister say, in responding to this cleverly worded amendment, whether the Government might commit themselves to addressing the problem? The integrity of the institutions north of the Border could well be damaged by being kept in the same position as those south of the Border, which have been damaged already by having insufficient funds to meet their salary needs.

§ Lord Brooke of Sutton Mandeville
I hesitate to interrupt the mutual and reactive cut and thrust of interventions between those who are taking part in this debate. I was in Ireland on parliamentary business at the time of Second Reading and therefore did not have the chance to visit the subject raised by my noble friend Lord Renfrew of Kaimsthorn, who has proposed his new clause as a probing amendment.
My noble friend's new clause is worded in such a way as to provide it with a locus in the Bill. The arrangement for settling these matters was different in the early 1980s, when I was parliamentary secretary to the late great Sir Keith Joseph and had to deal with the noble Baroness, Lady Warwick, when she represented the AUT. However, I had to respond, not statutorily but spontaneously, to a revisit by the Brookings Institute to its very comprehensive UK report of 1968. In it, the institute criticised engineering and scientific salaries in the UK, which it said were so distorted as to cause jobs of one discipline to be done by the other and vice versa, to the detriment of the national interest. In the early 1980s, it reported that no serious or significant change had occurred in the intervening 15 years since the first report.
My noble friend Lord Renfrew made it clear in his speech that there was an element of force feeding in his new clause. He should not be disturbed by the 39 comments made by other Members of the Committee. I wholly support the curiosity of the noble Baroness, Lady Lockwood, which my noble friend's new clause has provoked, about what the Government's general intentions are in these matters. It seems to me that the subject cannot be raised too often, so no harm whatever has been done by having this debate.
The noble Lord, Lord Sutherland, expressed anxiety about philosophy salaries, but I can give him one word of comfort. My late noble kinsman read philosophy at Balliol and was interested when his philosophy tutor, at the beginning of World War II, was made metals controller for the United Kingdom. He asked him what his qualifications were—to which his former tutor replied that his qualifications were unique and incidentally invaluable. First, as a philosopher, he was trained to ask questions, and the metal industry was one with a great many questions to be asked about it. Secondly, everybody else in the industry besides himself had an emotional involvement in one metal or another—whether wolfram or tungsten. His unique contribution was that he had no emotional involvement in any of them.
That anecdote seems neatly to underline the vicarious logic of my noble friend's new clause. I hope that his probe receives an encouraging reply.

§ 4.45 p.m.

§ Lord Desai
I am no longer actively employed. I am retired but, after 38 years of low pay, I have deep feelings about the matter. I joined the London School of Economics at £1,400 per annum plus a £60 London allowance. I dare say that someone who starts today is paid less in real terms than I was then. That is how tragic the situation is.
I want to say one thing about the noble Lord's proposal. The problem is the rigidity of the grid and the inflexibility of the way in which salaries are defined. If we have to keep the present regime, the least that he could do is to have on his board nobody except the Secretary of State and one American academic, who will tell the Secretary of State what pay is really like. Perhaps there could be a couple of people from the real world, as the noble Lord, Lord Tugendhat, said. We should not have chairmen of research bodies on the board—they do not know anything because they are equally low paid. There should be some outside people—not academics. Then they will find out how bad things are.

§ Lord Baker of Dorking
My noble friend Lord Renfrew has received several oblique compliments, in that everyone in the House feels that he has done the right thing, but not at the right moment. He has done the right thing by bringing to the attention of the House the agreement of the whole House that academic salaries have fallen dramatically over the past 30 years, under both Conservative and Labour governments.
Anyone who is involved in the academic world knows that there is a constant brain drain going on of those in British academia to America. Two of our 40 leading historians now work in American universities and there has been a drain of Oxford philosophers over the past three or four years. One could give many examples of the brain drain at all levels, from postgraduates onwards.
Having had responsibility in this area, it is my experience that no government of any complexion will give the universities the money that they need or deserve. Indeed, I see that on the list of priorities of the Conservative spokesman, Mr Letwin, universities do not feature. I do not believe that the money is going to come from any government. That is why I find the comments made by the noble Lord, Lord Eatwell, rather strange. He said that the free income, which is an essential part of the Bill, will be used on many things rather than salaries. Judging by the institutions with which I have talked, I believe that the first claim probably will be salaries. In that I agree with the noble Baroness, Lady Blackstone—the money will be used to stop the brain drain.
The noble Lord believes that the problem with salaries is so great that it requires a great deal of attention, but I do not know who is going to give it that attention. No government will come forward and give enormous sums of money to the universities to catch up for the past 30 or 40 years. It is unrealistic to believe that that would happen.
The fundamental part of this Bill will give universities an alternative source of income, in fees which over the years will build up and will give them an opportunity. Ultimately, one wants not a salary review body but freedom for the universities. That is the golden vision on the hill—that universities should be free to teach what they want, recruit whom they want and charge what they want for the services that they provide. This Bill is a hesitant step along that road. Until we get to that point—and it will take some years and perhaps a decade or two to overcome that deficiency—we have to start out along that road.

§ Baroness Ashton of Upholland
The issue of academic pay has quite rightly caused great debate in the Chamber. I am most grateful to all Members of the Committee who participated in it, and especially to the noble Lord, Lord Renfrew, for tabling the amendment.
I can assure my noble friend Lord Eatwell that when I said in my closing remarks that I thought I earned my money, I did not wish to suggest for one moment that academics or many other people involved in working life do not earn theirs. My privilege and pleasure is to stand before this Chamber, and I am overpaid for the privilege of so doing. I would not wish to suggest anything about anyone else in what was meant to be a moment of levity. That will teach me!
As Members of the Committee have said, academic salaries have increased by an average of only 20 per cent since 1980, while average earnings have increased by about 60 per cent and graduate earnings by even more. I recognise that the noble Lord, Lord Renfrew, in seeking to put the amendment within the remit of the Arts and Humanities Research Council, has done 41 so primarily to ensure that it falls within the scope of the Bill. I shall seek to address the issues of generality in the noble Lord's remarks, rather than the specifics relating to the Arts and Humanities Research Council. I believe that is what the noble Lord intended.
I can tell my noble friends Lord Sutherland and Lady Blackstone that, if the research council wished to consider this issue, it would not be ultra vires to do so. It could commission such a report. It would fit within its responsibilities to provide advice but it would have to relate specifically to the research council's responsibilities, that is the arts and humanities. But I agree with my noble friend that this is not the best focus for a research council, especially in the early stages. As noble Lords have indicated, salaries are the responsibility of individual institutions as employers. However, if the research council felt that it was an appropriate report to commission, because it was relevant to work that it was undertaking, it could do so. It is important that I say that immediately.
We recognise that there is much to be done to improve academic salaries but it is not for the Government to regulate them or to dictate what they should be. As my noble friend Lady Blackstone has indicated, we believe very strongly that educational institutions are independent, autonomous bodies that must have the power to manage their resources as they see fit As employers, they are responsible for determining the level of pay for their staff through negotiation with the staff and the relevant unions. I am sure that noble Lords would agree that, in principle, institutions are the best judges of how to deploy the resources made available to them.
However, as noble Lords have said, public funding levels indicate what institutions can pay their staff. I say to the noble Lord, Lord Tugendhat, that the fact that this is not specifically within the Bill does not mean that its importance is not recognised, nor that we do not wish to see this debate take place in your Lordships' House on this and other occasions. It is an important issue, but it is not one for legislation. Inevitably, in looking at issues around the White Paper on higher education, the Bill focuses only on issues where legislation is required.
Noble Lords will be aware that overall funding for higher education will reach £10 billion a year by 2006. We have provided a total of £330 million to improve institutions' human resource capabilities between 2001–02 and 2003–04. A further £167 million will be provided between 2004–05 and 2005–06 through the Rewarding and Developing Staff in Higher Education initiative. The intention of this funding is to help institutions recruit and retain staff by improving their human resource capabilities. As noble Lords will be aware from their involvement in universities, recruiting and keeping staff is an issue that often does not come down to pay alone. It is important that we support universities in all the ways in which they try to ensure that they have the right staff at the right level. However, the noble Lord, Lord Baker, with his knowledge and deep experience, is right about the issue of academic pay. We hope that, with the additional resources available to institutions, there will be opportunities to consider the 42 issue of academic pay because it is such an important factor in the quality of universities. The Office of Science and Technology and the research councils take this issue very seriously and they have mechanisms in place to respond to the requirements of their respective research communities.
As a direct response to the Roberts review of the supply of people with science, technology, engineering and mathematics skills,SET for Success, which has been discussed in your Lordships' House, action has been taken to encourage the best scientists at undergraduate level to continue their studies and to pursue careers in research and development in the UK. As noble Lords are aware, this has included increasing the PhD minimum stipend from £8,000 in 2002–03 to £12,000 by 2005–06 and creating 1,000 new academic fellowships to provide attractive routes into academia.
Noble Lords will also know that in further education we are planning an additional investment of £1.2 billion in 2005–06, a real terms increase of 19 per cent compared to 2002–03. In 2002–03 the total planned FE expenditure allocated to the Learning and Skills Council was £4.4 billion. This will rise to £5.6 billion in 2005–06.
I share the concerns of noble Lords about academic salaries. I have listened very carefully to all the comments that have been made by noble Lords today, but I do not believe that it is the Government's job to dictate the level at which they are set. Noble Lords will not be surprised to hear me say that monitoring academic salaries is not an appropriate role for the research council. Our proposals for higher education are intended to empower institutions to use their freedom to ensure that they flourish, doing what they do best. We do not wish to micromanage universities, rather we want to give them the support that they need.
The noble Lord, Lord Baker, spoke about a matter that has been raised on many occasions by noble Lords: the issue of the brain drain of UK academic staff to overseas institutions offering higher pay. Noble Lords have often indicated individual cases, which I am certain are correct, where individuals have been attracted to posts elsewhere. However, we have no evidence to suggest that this is a trend. Indeed, the evidence suggests that the UK is a net beneficiary of the increasing migration of science and engineering talent, which is the area about which we have information. However, as this is important, I can assure your Lordships that the Office of Science and Technology is looking at what further work can be done to obtain better evidence on this subject, not least in view of the comments that have been made by noble Lords about their experiences.
The noble Lord, Lord Forsyth, specifically spoke on the situation north of the Border in Scotland. The noble Lord has already indicated to me that this is an issue that is of particular importance to him. He will not be surprised to hear me say that it is the job of the Scottish Executive to determine fees in Scotland. Under the Barnett formula, they will have resources equivalent to those available in England to address the needs of higher education. The Scottish Executive have choices to make about what to do with that 43 resource and are in the middle of looking at a report. I gather that we will have some conclusions on it in June, no doubt in time to discuss it in your Lordships' House during the passage of this Bill.
It is the responsibility of the sector to monitor its own salary arrangements. Noble Lords referred to the Bett report, conducted by Sir Michael Bett. It has just finished its first full year and we look with interest to see where it will develop in future. My noble friend Lady Warwick of Undercliffe described in some detail how the 10 negotiating arrangements have been replaced by a national council and the importance of that change, so I shall not repeat it. We believe that we will be able to obtain better data on staffing in higher education through the Higher Education Statistics Agency. As noble Lords will know, it currently covers only academic staff working 25 per cent or more of a full-time equivalent. From 2003–04, this will be extended to all academic staff and will include non-academic staff for the first time so that the basis upon which information is available will improve. Sir Michael Bett's work is under way and should be given an opportunity to develop. The negotiating councils have come together into the national council and I believe that these are opportunities to address some of the concerns that have been raised. I argue that it is a better way of addressing the issues that have been raised than that suggested by the noble Lord's amendment.
It is absolutely true that the unit of resource in higher education is lower than it once was. The noble Lord, Lord Forsyth, will not be surprised to hear me say that between 1989 and 1997 it was cut by 36 per cent in real terms. But we are raising funding by 7 per cent in real terms between 2002–03 and 2005–06. I know that we will have the opportunity to debate all of these issues in more detail later, but I want to state categorically that we are committed to the funding of higher education. I say to my noble friend that, in terms of this being additional money, she need look no further than to the Chancellor's comments in his Budget Statement, which I shall be happy to supply to noble Lords to make that point absolutely clear. I look forward to any proposals that the noble Lord, Lord Forsyth, may wish to put forward in the course of our discussions about higher education funding to see what he might wish to offer to noble Lords and to the institutions represented here. I await his proposals with great interest.
All in all, I am grateful to the noble Lord, Lord Renfrew, for a very important debate. I understand and agree completely with the sentiments that have been expressed. It is right that academic salaries have slipped badly behind. It is the purpose of the Bill to try to gain additional resources for the sector. We recognise the importance of autonomy within institutions. Although I support the sentiments behind the amendment of the noble Lord, Lord Renfrew, I do not support it and on that basis I hope that the noble Lord will feel able to withdraw it.

§ 5 p.m.

§ Lord Winston
Before my noble friend sits down, she made the assertion that we may be a net beneficiary of the brain drain. I wonder whether that is true of the sciences. Will she undertake to publish metrics to demonstrate whether or not that is the case and where the evidence for that lies because it is a very important issue for British universities? Perhaps we could look at those figures in the full light of day.

§ Baroness Ashton of Upholland
The Roberts review concluded that while there is anecdotal evidence of top scientists being tempted to work abroad by better pay and conditions, there was insufficient evidence to suggest that the UK is suffering from a serious brain drain. Indeed, the report's conclusions were that we appeared to be a net beneficiary. However, as I indicated, not least because of the experience of many noble Lords, including my noble friend, work is under way at OST to consider what further work needs to be carried out to gather more substantial evidence to address the concerns that the noble Lord has indicated. If figures are available to be put in the public domain, I shall with pleasure ensure that that is done.

§ Lord Renfrew of Kaimsthorn
I am very grateful to noble Lords who have taken part in the debate. I am also grateful to the Minister for her sympathetic response. I meant to say earlier that I was grateful for her letter after my speech at Second Reading in which she made one or two relevant points.
If there is one point on which there is general agreement, it is that my amendment is in the wrong place. I see the truth of that point. Since tabling it, I have been advised by people competent to advise that I may have been over modest in seeking an umbrella, as it were; that is, in seeking to establish the Arts and Humanities Research Council as an umbrella body. I am advised that it may well be possible for me to set down such a proposal as a freestanding item rather in the manner which the noble Lord, Lord Walton of Detchant, suggested.
I shall not try to respond to every point that has been made. However, given that the amendment probably is in the wrong place, two general sentiments have been expressed. The first is that there is a serious problem which is not being adequately addressed. I felt that the second sentiment was present, for example, in the speech of the noble Lord, Lord Dearing. I thought that it contained an element of complacency, if I may be so bold as to say so, in the sense of saying, "We know this already. Do we need to say it again?" I am not at all happy with that position. Likewise, I am not happy with the position that I felt was expressed on behalf of Universities UK by the noble Baroness, Lady Warwick, who suggested that the matter is being addressed by the present Bill. I hate to disagree with my noble friend Lord Baker, but there was an element of that in his speech.
45 I do not believe that the position is being effectively addressed by the present Bill. As I understand it, in reality the money raised in top-up fees and so forth—some of it, of course, will be paid in other ways, for example, in bursaries to reduce the net income to universities—will cover about half of the recurrent deficit of many university budgets. That means that universities will probably be worse off in the near future than they are now. It is clear from what is happening at my university, Cambridge—I believe that this applies to many others—which is looking seriously at current deficits that a number of posts will be blocked when they become vacant. I do not know whether there will be obligatory redundancies. I hope that that will be avoided. I do not see any prospect in the present climate of academic salaries being significantly enhanced. I should be interested if anyone connected with the finances of the university world could speak to the contrary.
I am very grateful to my noble friend Lord Tugendhat for speaking as one who comes to the university world from outside, although he has a distinguished role in it as Chancellor of the University of Bath, and is astonished at the disparity between academic and other salaries. I very much take the point of the noble Lord, Lord Desai, that if there is to be such a board as I propose, it would do well to have some outside opinions on it. That point was very well made.
I do not consider that the problem is going away. I am not optimistic that an academic research board, even if properly set up and set up in the right place, would do very much about it, but if the Secretary of State were obliged to comment annually on the matter to both Houses of Parliament, it would at least give the matter some of the attention which it deserves. I shall read speeches with care and take further advice. I may seek the support of the noble Baroness, Lady Sharp, not only in the spirit but also in the letter on Report. In the mean while, I beg leave to withdraw the amendment.

§ Lord Dearing
Before the noble Lord sits down, may I dispel my complacency? I totally agreed about the facts; I said that what we wanted was action.

§ Lord Renfrew of Kaimsthorn
I accept that. I withdraw the word "complacency". I thank the noble Lord, Lord Dearing, for his intervention. I beg leave to withdraw the amendment.

§ Amendment, by leave, withdrawn.

§ Clause 7 agreed to.

§ Lord Triesman
I beg to move that the House be resumed. In moving this Motion, I suggest that the Committee stage begins again not before 10 minutes to six.
Moved accordingly, and, on Question, Motion agreed to.

§ House resumed.