My Lords, it is a delight to follow the noble Lord, Lord Rees. I congratulate the noble Baroness, Lady Warwick, on securing this debate. When I was a very junior member of the union she used to run, we marched about with a very unsexy slogan, “Rectify the anomaly”. Only academics could have produced such a thing, but never mind. I do not think it was ever rectified. I was also the Minister who was universally execrated in 1981 for introducing fees for overseas students. We would have been in some trouble without those fees.
Let us congratulate the Government on some good first steps. The R&D protection is good, as are the long-term contracts in R&D, and I so much agreed with what the noble Lord, Lord Krebs, said. To add a sentence to his admirable speech, I say that universities can be thought of as the R&D department of the nation, not only in the sciences and applied sciences but in social sciences. We have very difficult problems to do with the increase in our non-working population
and the loss of productivity in the public sector, and these are social science issues that the universities can help with.
As for the unit of resource, it is no good at the moment standing in a queue and demanding more public money but, luckily, the universities have two other sources of funding where the Government can help or hinder. The first one relies on fees going up alongside inflation, and my noble friends have spoken well about that. It has sadly been hit by the NIC costs, so it will not be much of a gain for this year, if any gain at all. However, it must continue and we must explain to the students—as has been said by so many noble Lords—that this is not a cause of hardship for them; rather it is a sensible way of funding universities. That must surely continue in the years to come.
Secondly, there are overseas students. I strongly join with what was said by the noble Baroness, Lady Blackstone, and others. I used to lobby my noble friend Lord Johnson of Marylebone, who was an excellent Minister, about this matter—I never got anywhere. When I was chancellor of Reading University—an interest I should have declared, alongside being a governing body fellow of an Oxford college—we tried to get the overseas student figures taken out of the immigration totals and the crossfire of those battles. I urge the Government to apply their mind to that; it could be a really sensible thing to do, and then put out the welcome mat, as others have said.
I am a little sceptical of the soft-power argument that one used to hear—that we have taught all these people to be friendly towards the United Kingdom. My old mentor Lord Carrington told me once that the most difficult man he ever had to deal with was the late Mr Dom Mintoff of Malta, who was, of course, a Rhodes scholar at Oxford, so it does not always quite work like that. However, it is a wonderful source of income for our universities. It is an invisible export, if you like, on which we should capitalise—we should be putting out the welcome mat. I believe I am right in saying that there has been a 15% decline in visa applications this summer, compared to the one before, and that is a very alarming sign which needs to be reversed. I hope that the Government will heed the words of my noble friends, both excellent University Ministers, on that subject. There are these two funding streams that can help the universities in the medium term, in what is now becoming a near crisis, as so many have said. We have not got long to wait before that crisis begins to hit. The consequences will be seen over many years.
I will raise one other subject, that of regulation. The report has some very sensible things to say on what the Office for Students should do and how it should be focused. I suspect there will have to be amalgamations of universities in the coming year; there will be real difficulties for some, as my noble friend said. The Office for Students will have a big job and should focus its efforts on seeing, as a regulator, that these things are handled in a way which is sustainable for the sector.
The Higher Education (Freedom of Speech) Act is now on hold. I am always against centralisation; universities are separate institutions. I was nervous
about the establishment of this regulator—I was proved wrong—but I am also nervous about somebody called “the director of free speech” being established. There is something Orwellian about a director of free speech, is there not? That is not to say that there is no problem of closing of minds and of bullying by people in unacceptable ways. There is a real issue, yet I urge the Government to continue with the declaratory aspect of that Act but to look again at the tort, which will submerge the sector in lawyers if we are not careful.
A final and most unpopular thing of all, particularly to the Association of University Teachers, is that very many of our best academics are underpaid. If we are to compete with the United States in the top, we will have to recognise that—non-collegiate though it is—some of them have to be properly, internationally paid.
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