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Mr. James Wallace (Orkney and Shetland): The Minister suggested that, if the issue were the £2 million that it would cost to allow English, Welsh and Northern Ireland students to study a four-year honours course at a Scottish university, therefore providing comparability, that would be a different argument. If the House accepts the Government motion, and the other place were then to vote for an amendment that would restrict it to the change that cost £2 million, what would the Government's attitude be?

Mr. Wilson: I think that I was entitled to draw it to the attention of the House that that is not what the amendment says. Anyone who is going to vote for the amendment had better understand what it says. Hypothesising about what the Lords might do is not particularly productive.

It is important to get this clear on the record: I did not say that it would be a different argument. I said that it would be an interesting debate; but it is not the one that we are having, because we are debating the amendments before us. The case for the Scottish £2 million, if you like, is founded on an educational argument as well as a financial one, which is, quite simply, that there is not a neatly interlocking set of school qualifications from England and the other parts of the United Kingdom which fit into the four-year honours degree system in Scotland. That is an educational argument; it is an argument recognised by Dearing; and it is the argument on which we found our case tonight.

Mr. Desmond Swayne (New Forest, West): The Minister implies that the Scottish first-year course is little more than a remedial year to bring Scottish highers students up to A-level standard. That is an outrageous argument.

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Mr. Wilson: If it were a remedial year, the hon. Gentleman could probably benefit from it. Perhaps the hon. Gentleman should be left to his own devices, as I said no such thing. I quoted the secretary of the Committee of Scottish Higher Education Principals saying that the first year of a course in England could not be regarded as higher education. He was referring to England, not Scotland. I said nothing remotely resembling what the hon. Gentleman has attributed to me. The cost is significant, but the principle is equally important.

I now turn to the European dimension. Given my history on the issue, I found it surprising to have to explain to some unlikely people what devolution and subsidiarity are about and the consequences that flow from having different systems in respect of health, education and so on in different parts of the United Kingdom. Long before political devolution, Scotland has had a distinctive and different education system. In other parts of Europe, there are variations between Lander, regions and provinces, and it is clear that differences can develop within states on the basis of devolved government and administration. The simple principle that, in my view, rightly operates within the European Union is that, if citizens of other EU countries come to a part of a fellow member state--be it a region or a devolved territory--they benefit from whatever system applies within that area. However, for exactly the reasons that I have explained, EU law does not provide that internal concessions must be granted throughout the state.

Mr. Tim Boswell (Daventry): On the basis of equity, will the Minister advise the House of the position of a German national who has a parental home in or whose normal place of residence is in England in relation to attendance at a Scottish university? Will he be expected to pay the extra year's tuition fees; if so, can the Minister explain to the House whether he should be treated on the same basis as an English student?

Mr. Wilson: We have all had such constituency cases at one time or another. They have to be dealt with according to their individual circumstances. It would depend on how long the individual had been resident in England and a range of other circumstances. I encounter such cases fairly frequently, as I am sure my ministerial colleagues do in England. If the hon. Gentleman wishes to draw a specific case to their attention, I am sure that my ministerial colleagues will be pleased to give him an answer.

Although the European position sounds anomalous, it is not. It applies throughout the European Union. It is the product of a union of states within which there are various forms of government and different legislatures.

Mr. Beggs: I am grateful to the Minister for giving way to me again.

The Minister will be aware that, today, the New Northern Ireland Assembly has had its first meeting; arising from it will be cross-border bodies, and much co-operation is expected. Nevertheless, there will be discrimination between students from Northern Ireland and from the Irish Republic should they be studying at Scottish universities. There will also be the council of the isles; should it make a representation to the Minister

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asking for equity of treatment for students from all regions within the United Kingdom, would he accept and honour such a recommendation?

Mr. Wilson: I shall not prejudge what the council of the isles might discuss. However, before anyone recommends the system in the Republic of Ireland, they should check on the availability of student grants to the great majority of students. They should also check on the availability of student loans, which do not exist at all there. As a result, the majority of students within the Republic of Ireland have access to neither grants nor loans from the state, and that is not a desirable system for Scotland or Northern Ireland to copy.

Mrs. Angela Browning (Tiverton and Honiton): Will the Minister clarify the means-testing of the fee for students from other parts of the European Union? What mechanisms has he arranged with other member states and what are the administrative costs likely to be?

Mr. Wilson: Those students do not have access to maintenance grants or loans.

Mrs. Browning: I am asking about fees.

Mr. Wilson: If I misunderstood the hon. Lady's point, I shall deal with it later.

The spectre of hordes of European Union students coming in while the English are deprived is held up as the great problem. Students from the rest of the European Union will not benefit from the subsidised maintenance loans which will be available to students from England, Wales, Northern Ireland and Scotland.

Mr. Willetts rose--

Mr. Wilson: I shall not give way because I am coming to a conclusion.

The idea that European Union students will flock to Scottish universities in place of UK students is absurd. In 1995-96, there were just 350 other EU students in the fourth year of a Scottish course. This year there has been a 17 per cent. fall on last year's number of EU applicants, which is greater than the percentage fall in the overall number of applicants. The EU treaty requires member states not to discriminate on the ground of nationality against nationals of other member states on matters in the scope of the treaty, but it does not require each member state to treat all its nationals in the same way. That is what devolution and subsidiarity are about. I find it odd that the principles should be attacked by people who otherwise support them.

I do not want to detain the House further. This is an interesting debate, but it is peripheral to the main issues.

Mr. Wallace: There are two motions for debate. The second says:

That specifically relates to English, Welsh and Northern Ireland students attending Scottish higher education institutions. The Minister said that that might be a

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different debate, but it is relevant to the amendments. What will be the Government's policy if there is a separate vote on that motion?

Mr. Wilson: I may be dreaming, but I think that I answered that question five minutes ago. I said that it was a different debate, but the same principle. We have made it clear from the start that we oppose extending the provision to students from the rest of the United Kingdom, not primarily--or not entirely--on financial grounds. There is an educational argument. We believe that it is not right to extend that benefit to students who have chosen a degree course in Scotland against the many other options open to them. We do not believe that it will have any impact on the number of English students in Scottish universities. I reiterate the point that, if any Scottish university is worried about not having enough students from England, it need only take a few students from less well-off backgrounds. That will keep the numbers and the quality up.

Mr. Beggs: Will the Minister give way?

Mr. Wilson: No. I have given way twice to the hon. Gentleman.

We are debating a peripheral aspect of the Bill. The Bill is about getting more money into higher education, putting £140 million extra a year into Scottish higher and further education alone. That is a big aim. The quality of our education system depends on it. If we are frustrated or diverted from our aim, it will not be this House that pays the penalty, but the students of the next generation, the research base of the Scottish universities and, in particular, those universities that depend on the widest possible range of students and the widest range of access to their ranks. For all those reasons, I ask my hon. Friends and Opposition Members who think about the issues to vote to overturn the Lords amendments. As we would expect from the House of Lords, the amendments are in the interests of an elite and do not address the needs of higher education.

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