Higher Education (Basic Amount) (England) Regulations 2010

My Lords, the human tendency since time immemorial is for us often to take things for granted. I do not think that we stand back and appreciate enough how excellent the higher education sector in this country is. We always punch above our weight. The benchmark for excellence in higher education is the United States, yet as a country six times smaller, we consistently produce four or five of the top 10 universities in the world, the others being American. Again, I do not think it is highlighted enough that the United States spends as a proportion of GDP nearly three times as much on higher education as we do, almost 3 per cent versus 1.1 per cent. What is more, government expenditure in the United States is 1.2 per cent of GDP, higher than our combined expenditure on higher education, both public and private. There is no question but that we need to increase overall expenditure on higher education. The ideal situation is when we get to the same place as the United States, where two-thirds of the provision is private and one-third comes from government. The two-thirds provision should come from student fees, benefaction, endowments, scholarships and sponsorships. In this light, my noble friend Lord Browne was asked how we could improve higher education. So much of his report is good and there are many excellent suggestions, but instead of moving towards what I have just outlined, the cat was let out of the bag in the last sentence of his report. It states: "““These measures create the potential to allow the numbers of student places to increase by 10% and enhance support for living costs while still allowing public spending reductions to be made””." Here we are, on the one hand with the Government actually proposing to cut teaching support by 80 per cent to try to save £3 billion over four years, and on the other hand by almost tripling tuition fees in one go in 2012. We all know that the finances in this country are in a dire position. We all know that cuts need to be made, and we all know that public expenditure is far too high as a proportion of our GDP. But to get out of this predicament, we do not necessarily just have to make cuts; we also have to grow as an economy, and to do this we need the elements of our economy that are our unique selling proposition—our core competences—and there is no better example than our higher education sector. There are cuts and there is carpet bombing. We need to be selective and to cut effectively by pinpointing. There are big-ticket items where billions can be saved, such as inefficiencies and administrative savings in the NHS. It is possible that tens of billions could be saved. The Department for Work and Pensions budget is nearly £200 billion. That is where big savings can be made. But to try and save £3 billion in an area where we are the best of the best in the world, and in such a blunt way, does not make sense. This is combined with an immigration cap. Every day I hear from businesses that say that they are hurting because of the immigration cap. I hear every day from our higher education sector, where 10 per cent of our academics are foreign and where it is estimated that foreign students bring up to £8 billion of direct and indirect income into this country. We must learn that when the United States clamped down on immigration, it lost out; we benefitted. We have competition—10 EU countries spend more on higher education as a percentage of GDP than we do. The higher education sector has been hit from both sides. If the Government were proposing to maintain their spending on higher education and to raise tuition fees, that would be another case altogether; but the Government are trying to have their cake and eat it too, and this has caused a great deal of grief and upset across the country. None of us approves of the violence that is taking place in the protests—it does not help anyone’s cause—but the vast majority of the country sympathise with those students who will have to suddenly pay up to three times more for their higher education. The impression is, I understand, that the cuts in the CSR budget are a fait accompli—that is it; they are irreversible; we cannot change them. What would we say if tomorrow, suddenly, we had to pay three times the amount for our petrol or for our rent? Noble Lords should consider how hard it will be for students who have no tradition of university in their families to convince their families that it is right for them to move to a future guaranteed with debt. Are we really encouraging our nation to have young people moving forward to live their lives with a noose of debt tied around their necks for 30 years? We need to increase fees, but to do it so drastically and all in one go is too much. We need to move towards the American model of a more balanced approach to higher education funding, which puts more power in the hands of the students to create a world market, but we need to do so gradually; we need to phase it in over a period of years—whether that be three years or five years. The way we are going, it is inevitable that some of our universities will break away from government funding altogether and become completely private, as many American universities are. However, again, this move will happen gradually and will be carefully considered. This is all being rushed through. As the noble Lord, Lord Triesman, said, we have not had the chance to consider and debate White Papers—and haste makes waste. It is only a few years since we moved to a system where £3,000 fees and loans were put in place—in fact, there are some medical students who have not yet completed their five-year courses through that system. Most of us here have benefited from free higher education in this country. The concept of students paying fees and taking on loans was a step change; however, what is now proposed is a step too far. We should increase in small steps and build towards where the report of my noble friend Lord Browne recommends we should go. As has been pointed out, this is especially so when our country and our economy are in a fragile situation, where global uncertainty still abounds. This is not a time for sledgehammers; it is a time to nurture, care for and protect our country’s most competitive advantage, not destabilise and disrupt it. Quite frankly, in the bigger picture we are being penny wise and pound foolish. Over the past decade our higher education industry has moved in the right direction of benefaction, with Cambridge University raising more than £1 billion and with Oxford following suit. With other universities trying to raise their own income streams—Thames Valley University, where I was chancellor for five years, has appointed a director of development—we are moving in the right direction, but we need to time to nurture it. Fifty years ago, 5 per cent of school leavers in this country went to university; today it is 45 per cent. What the Government are trying to do now has opened up a whole host of questions. People are questioning the purpose of higher education, the use of our degrees and the quality of our institutions. They are asking why the majority of people who do not go to university should pay for those who go to university—why we should subsidise them. These debates have gone on and will go on for ever, but the bottom line is that higher education is a crucial part of the foundation of our economy which benefits not only those who go to university but the whole of society and the whole of the country. As a country we do not have large tracts of land or large natural resources like Canada, Australia, Russia and the United States; all we have is our people, our brains and our capability. These are driven by our high-class, world-beating higher education institutions and I beg the Government not to throw the baby out with the bath-water. As the Browne report states, higher education institutions safeguard knowledge, catalyse innovation and strengthen civil society; they bridge the past and future and the local and global. In my Motion I am saying that, yes, tuition fees need to be increased if we are to maintain and improve higher education in this country; however, that is not what is happening, because these multi-fold fee increases are there to compensate for drastic cuts in government funding for higher education. If we are to have increased fees, surely they could be phased in over a period of years and not in the blunt and cruel way of bringing them all in at once in 2012. In its 2010 spending review the Treasury rightly states that our higher education institutions are the jewel in our crown. I welcome many of the elements of what the Government are proposing—the ring-fencing of research and science; the inclusion of part-time students; helping and encouraging lifelong learning and learning at all ages; the increasing of the income threshold to £21,000 before loans have to be repaid—but, in the rest of the G20 countries only one other country, Italy, is cutting its higher education budget, and that, too, by 19 per cent by 2012. The coalition Government talk about their three tenements—freedom, fairness and responsibility. With their hands on their heart, can they truly say that to treat our wonderful higher education institutions, academics and students in this way is fair? I implore the Government to listen, to show compassion, to be just and to be fair.