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Noble Lords: Question!

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Lord Howell of Guildford: How can that be reconciled with the apparent push to put on the agenda defence issues, the question of enhanced flexibility and co-operation and the charter of fundamental rights? How can it be reconciled with the view of Commissioner Verheugen that EU institutions are having heart failure? These are enormous issues. I do not believe that they should be suppressed.

Noble Lords: Speech!

Lord Howell of Guildford: It is time that the Government took a lead in debate instead of pretending that nothing very important is happening.

Baroness Scotland of Asthal: My Lords, I shall say as clearly as I can that the statements made by this Government in relation to the focus of the IGC remain true. We cannot account for others who may ill report that which is in fact happening. But we have kept it focused. The noble Lord will know that it is of incredible importance for us to be ready by 2002 for the prospect of enlargement. The issues to be dealt with by the IGC are to that end.

Of course additional matters will be discussed but that is what it will be--a discussion. There is no indication that we shall go outside that which I have told the House on other occasions or what I have said today.

Lord Roper: My Lords, the Minister will know of the interest on these Benches in the progress on defence, made last year at the Helsinki and Cologne summits. Will she confirm that the Council's legal advisers have ruled that there will be no need for any treaty amendments and that therefore that item need not feature on the IGC agenda?

Baroness Scotland of Asthal: My Lords, I believe that the noble Lord is right. There is a clear view that a treaty amendment is not necessary and, to the best of my knowledge and belief, it does not form part of the IGC.

Lord Pearson of Rannoch: My Lords, is it not true that the Government's own White Paper--

Noble Lords: Next Question!

Millennium Bridge

3 p.m.

Lord Luke asked Her Majesty's Government:

    Whether they would support the spending of additional lottery money to stabilise the Millennium Bridge.

Lord McIntosh of Haringey: My Lords, like all lottery distributors, the Millennium Commission is independent of government. The Millennium Commission has contributed just over £7 million to the

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construction of the bridge. While the project engineers work to solve the problem with the bridge, it seems pointless to speculate as to whether the Bridge Trust will seek further funding from the Millennium Commission. Any application for further funding from the Millennium Commission would be considered on its merits.

Lord Luke: My Lords, I thank the Minister for that Answer. If by chance more money is required, will it come from the taxpayer or directly from the lottery?

Lord McIntosh of Haringey: My Lords, I have already said that it would be pointless to speculate as to whether the Bridge Trust will seek further funding. If it did so, no doubt it would be from the Millennium Commission, as I said in my original Answer.

Baroness Trumpington: My Lords, if the people who constructed the bridge have made a mistake is it not up to them to pay?

Lord McIntosh of Haringey: My Lords, that may be a matter of debate and subsequently of legal opinion. However, it all depends on what the cause is found to be as a result of the engineering investigation.

Lord Mackay of Ardbrecknish: My Lords, when I fly in an aircraft I try to do so on one that has not been designed by an architect. Would it not have been more sensible if the bridge had been designed by a bridge engineer?

Lord McIntosh of Haringey: My Lords, the bridge design was based on a concept by a sculptor, Sir Anthony Caro, and not an architect. I do not believe that the noble Lord, Lord Mackay, would fly in an aircraft designed by a sculptor.

There are different views on these matters. I remember that during my childhood in Scotland I really enjoyed going on what we called a shoogly bridge. Some of us would enjoy going on a bridge which was not entirely static, but I can see that safety considerations might lead to a different opinion.

Lord Tordoff: My Lords, is it not preferable to have a bridge that wobbles rather than a bridge that is rigid and breaks?

Lord McIntosh of Haringey: My Lords, I rather think so. The evidence of the Tacoma Narrows bridge points to that.

The Lord Bishop of Southwark: My Lords, will the Minister ensure that when the bridge is reopened it is possible to travel from south to north of the river and not in the opposite direction? Those of us who live south of the river occasionally like to travel north, not least to debate in your Lordships' House.

Lord McIntosh of Haringey: My Lords, surely, the right reverend Prelate would want to have City persons joining his congregation at Southwark Cathedral.

Lord Davies of Oldham: My Lords, we recognise that it is the function of the Opposition to criticise, and

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we are used to their knocking copy about various aspects of the millennium development. However, is it not the case that future generations will delight in the bridge, the London Eye and the Dome?

Lord McIntosh of Haringey: My Lords, I believe that the bridge is wonderful. It is outstanding among the many wonderful structures being built in London and throughout the country this year. I believe that all will survive both physically and in our memories for a very long time to come.

Lord Brougham and Vaux: My Lords, I agree with the Minister that the bridge is attractive, but can he tell the House why the three millennium projects have all gone wrong? Is it something to do with 10 Downing Street?

Lord McIntosh of Haringey: My Lords, I am not sure to which three millennium projects the noble Lord is referring.

Lord Brougham and Vaux: My Lords, I was referring to the wheel, the Dome and the bridge.

Lord McIntosh of Haringey: My Lords, the noble Lord is just plain wrong. In any case, the London Eye is not a millennium project but a British Airways project.

Criminal Justice and Court Services Bill

3.4 p.m.

Brought from the Commons; read a first time, and to be printed.

Business of the House: Debate this Day

The Lord Privy Seal (Baroness Jay of Paddington): My Lords, I beg to move the Motion standing in my name on the Order Paper.

Moved, That the debate on the Motion in the name of the Lord Baker of Dorking set down for today shall be limited to five hours.--(Baroness Jay of Paddington.)

On Question, Motion agreed to.

Higher Education

3.5 p.m.

Lord Baker of Dorking rose to call attention to the state of higher education in the United Kingdom; and to move for Papers.

The noble Lord said: My Lords, I asked for the debate before the Chancellor of the Exchequer made his infamous remarks about Magdalen College, which happens to be the college I went to. Therefore, I shall turn to that matter later. I wanted to give your Lordships an opportunity to examine the crisis facing

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higher education in our country. "Crisis" is not an exaggeration. Nearly every academic one talks to admits that the quality of education in our universities is declining. They say that in private, but very few say it in public.

Mr Robert Stevens, the Master of Pembroke College, Oxford, and the Visiting Professor of Law at Yale University, wrote in the Financial Times only a few weeks ago that,

    "the quality of research and teaching in English universities is declining. This deterioration will gather pace unless funding, either public or private, is considerably enhanced".

That is not just one view from the ivory towers of Oxford. During the past two years, the Government have received three reports. The latest is the one commissioned earlier this year by the Committee of Vice-Chancellors and Principals, the Higher Education Funding Council and the SCP. They all say the same thing; that the quality of education in our universities is declining because of their inability to recruit and retain staff. They say that the infrastructure of our research base is deteriorating. They say that more than one-third of academics in this country are over the age of 50. Young graduates are not being attracted into the profession in the numbers that are required. For the fourth year running, the numbers applying to take a Doctor of Philosophy have declined.

All that comes from a Government who boast that they want to create a knowledge-based economy. The knowledge base is in the heart of our universities. When the Government use that phrase they demonstrate yet again that they are a Government of adjectives and not a Government of achievement.

The crisis is particularly acute as regards academic salaries. At present, 70 professorial posts are unfilled. Warwick, one of our elite universities, cannot appoint a Professor of Economics because no one of sufficient calibre has applied. During the past two years, one of our older universities advertised 13 professorial posts. It appointed six, but during the same time six resigned, amounting to a standstill.

Yesterday I spoke to Professor Peacock, the Waynfleet Professor of Metaphysical Philosophy at Oxford. Next month he is going to New York University. Professor Martin Davis, another Oxford philosopher, is going to Australia. Professor Higginbottom, also an Oxford Philosopher, is going to Southern California. That is what is happening in just one discipline--an important one but with no great numbers--at one university. So the brain drain is well under way--and it is one way only. It is almost impossible to attract scholars of international standing to this country. They like working here, they like the atmosphere, but they are not prepared to take the financial penalties that they would bear.

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The greatest difficulty in recruitment is in accountancy, engineering, computer-science, business, law, nursing and maths. In a careless reply in this House a few weeks ago, the noble Baroness dismissed this as,

    "small difficulties in some scientific areas".--[Official Report, 23/5/00; col. 632.]

The difficulty goes much wider than that. And it is not surprising that there is a difficulty. Since 1981, academic pay has risen in real terms by just 1 per cent compared with an increase in wages and salaries since then of our general society of 40 per cent. The increase among professionals is even higher. Therefore, there is a very real crisis in pay. A graduate lecturer's starting salary is £16,000 per annum. With a bit of luck, by the age of 28 he or she might be earning £24,000. That is a very poor reward and it is why so many of them are finding it extremely difficult to accept a career in education in this country.

When it comes to professors, the professorial minimum in this country is £38,000 a year. The standard salary for an Oxford professor is £41,893. The department of the noble Baroness has four special advisers: two of them are paid up to £46,000 a year and one is paid up to £61,000 a year. Therefore, the clear lead given by this Government is that spin doctors are more valuable than professors. That is unacceptable.

When great institutions decline, they do not decline precipitously; there is no precipice. They simply decline very slowly. Higher education in this country is now heading down that slope and I believe that the Government are doing very little to arrest the decline. In her wind-up speech tonight, the noble Baroness will point out that the Government have increased the funding of higher education up to the year 2002 by 11 per cent in real terms. That is simply not accepted by the university world.

When I became Secretary of State for Education in 1986, the average teaching expenditure per student in the universities was £8,500; it is now approximately £4,000. That is a real-terms cut. I believe that the proportion spent on higher education by this Government is disgraceful. I asked the Library to check with the noble Baroness's department the answers given by the Government in this House. Therefore, there should be some semblance of reality and truth in the figures that I give.

The proportion of GDP that the Government will spend on higher education this year is 1.12 per cent, including salaries. That is well below the OECD average; in fact, it is the lowest figure of any OECD country. America spends nearly three times as much on state education. The average spent during the 18 years of Conservative government was 1.22 per cent of GDP. The Government have spent 1.12 per cent this year; in the 18 years of Conservative government, the average was 1.22 per cent. Therefore, Gordon Brown is spending a lower proportion of our GDP on higher education than did Kenneth Clarke, Norman Lamont, Nigel Lawson and Geoffrey Howe. I do not know whether my noble friend Lord Lawson was so generous, but he should take some credit for that.

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In order to catch up with the Tory average of 1.22 per cent, the Government should increase expenditure this year--I am talking about the year 2000--by £800 million from £10.1 billion to £10.9 billion. That happens to be very close to the figure that the Committee of Vice-Chancellors and Principals is asking the Government for. The noble Baroness is currently engaged in discussions with the Chancellor of the Exchequer on the whole question of her expenditure programme. Unless she increases it by £800 million a year--that is standstill extra--she cannot talk of a real increase. That is the challenge that faces the Government.

This year some universities have experienced a real-terms cut in their budgets. Thames Valley has had a cut of 14 per cent; Sussex, 2 per cent; Oxford, 1 per cent; and Cambridge, 0.3 per cent--a bit of spite there! I had a look at Birkbeck College, which was headed by the noble Baroness. Its budget is approximately £20 million this year and it has received an increase of £250,000. That is a real-terms cut of 1.2 per cent. If I had inflicted that upon her when she was the head of Birkbeck College, she would have stormed into my office and accused me of being a mean-spirited, Thatcherite Tory (she can join the ranks!). I dare say that when staff in the senior common room of Birkbeck knew that Tessa was to be their Minister, they must have felt that Christmas was coming. However, she has not delivered the goods, and I believe that they would probably now agree with King Lear:

    "Ingratitude, thou marble-hearted fiend".

I believe that we need an entirely different approach; fortunately, not the one advocated by the Chancellor of the Exchequer. The Government seem to intervene only when cheap headlines are to be won. I believe that Gordon Brown's infamous attack on my old college is the only speech that he has made about higher education in the course of the past three years. I understand that Tony Smith, the President of the College, invited him to dinner in order to explain what Magdalen and Oxford were doing to widen participation. The first lesson from that episode is that if you invite the Chancellor to dinner, remember that he bites the hand that feeds!

Then the Chancellor said that Oxford was elite. Elite? Oxford elitism is nothing compared to the elitism of Harvard. Twenty-five per cent of the intake at Harvard every year is constituted of the families of old Harvard alumni. That is not the case in Oxford. It is a matter of old boys making sure that their sons and daughters go to Harvard. That is the elitism of which we are supposed to be guilty. Would the American Secretary, Larry Summers, attack Harvard, Yale, Princeton, MIT, Berkeley and Stamford as being elite? Would the socialist education Minister of France--a real socialist--attack Les Grandes Ecoles in Paris for being elite? It is an absurd position for the Chancellor to take. It was a capricious and malicious attack.

Subsequently in an article in The Times, Mr Brown said that we must learn from the US. Perhaps for a moment we should examine students' packages in the US. There are grants, loans and work. When assessing

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need, Harvard takes into account not the student's income, but his parents' income, the value of the parents' house and the value of the parents' pensions. That is the kind of system that the Chancellor is encouraging us to consider. When it comes to work, I believe that Laura Spence will understand that she must engage in a major fund-raising exercise. She will have to work at Harvard. Many of the students there work in the kitchens, cooking food for the richer students. That is an opportunity that would have been denied to Laura Spence if she had gone to Edinburgh or Manchester Universities.

Gordon Brown's aversion to Oxbridge has nothing to do with education; it has everything to do with politics. He obviously has difficulty with public school Oxford graduates, particularly if they live next door. When one considers the selection committees, not only at Oxford but at all the other universities, there is barely an old school tie among them today. The people who form the selection committees certainly cannot afford private education for their children because they are paid so poorly. Therefore, in fact the whole system is biased to pulling in more people from the state sector.

Gordon Brown's rocket has exploded in his own hand. I believe that he likes to watch football on television, in which case he knows about elites. The proudest and greatest elite in our country today is Manchester United. It is ruthlessly selective. Only the best are selected; second and third-rate people are rejected. Are noble Lords aware that there is not one player in that team who comes from the private sector of education? Worse still, there is not one player in any premier league club who comes from the private education sector. Young boys are being denied the chance to play for their country by this discrimination. The Chancellor must call in the chairman of every football club and demand that they have a player from the private sector of education. That might even improve English soccer. One never knows; there is a long way to go.

That analogy shows the absurdity of the Chancellor's position. He got his facts hopelessly mangled. Of the five students accepted at Magdalen, two came from state schools and three from ethnic minorities. Fifty-six per cent of the applications to Oxford come from state schools; 53 per cent are selected. Gordon Brown should focus upon the relative under-performance of state schools. Attacking elite universities before improving the performance of state schools is like attacking and taxing the motorist before public transport is improved.

Of course, I accept that there is a real difference in the life opportunities between youngsters who attend private schools and those who attend schools in the inner city estates. However, the answer is not to punish Oxbridge and private schools but to reform the state system so that it competes with the best of the private schools. The Vice-Principal of Aberdeen University expressed the matter pithily last week:

    "If kids come out of school with poor qualifications, there is not a lot universities can do about it".

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We also need a programme of positive access. I praise the work undertaken by Peter Lampl of the Sutton Trust and many of the colleges and universities whose staff have written to me in the past few days, all demonstrating their attempt to increase the number of young people who apply to university. The critical point is the numbers that apply. Many schools do not apply. That is where the weakness lies.

We should not overlook our success in higher education. In 1989, at the end of my time as Secretary of State, I set a target for participation in higher education, which, at that time, was running at 12 per cent. I said that by the end of the century we should get that figure up to 33 per cent--it is actually 35 per cent. Now the Government have set a further target of 50 per cent. I do not believe that that target can be reached unless there is a fundamental and radical change.

I have come to the conclusion that no government of any complexion--whether Conservative, Labour or a coalition--will ever provide the funds that are properly required for higher education in our country. Our universities are, in fact, a nationalised industry. They have all the characteristics and weaknesses of a nationalised industry. It is an under-funded mass system with national salary negotiations instead of regional and local salary negotiations; top-down regulation of student numbers and of courses in each university; incessant bureaucratic, trivial intervention, day-by-day, which the universities resent; and under-investment in libraries, laboratories and computer rooms.

Universities started as private institutions and they should become private institutions once again. They should become independent, free-standing bodies, totally in charge of their own affairs. That should be the object and I see one or two Members opposite who come from the university world nodding in agreement with me.

If some Members opposite find the word "privatisation" a little too hard to take, they should note that their Government, this very day, is removing all the schools in the city of Leeds from the public sector and handing them over to the management of the private sector. We need something as radical as that in the university world.

Universities should be responsible for the range of subjects that they provide; they should be demand led and not controlled by a quango; and they should be responsible for their own salary negotiations and their investment programmes. That is the American system which the Chancellor seems to admire. But how can we get there? It cannot be done overnight. Our system does not have the large American endowments which have been built up over decades and, in some cases, centuries.

However, we are slowly moving to a market position. The market will run ahead of us in this area. Earlier this year the Committee of Vice-Chancellors and Principals--the Chairman of which is in her place opposite--held a conference on borderless education,

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that is, students gaining qualifications and degrees from leading universities like Yale and MIT over the Internet. That is the pure market operating. For Britain it provides opportunities and threats.

The other area in which the market operates is in regard to overseas students. We have one of the highest levels of overseas students in the world: 71 per cent of the post-graduates at the London School of Economics, 50 per cent at Oxford, 40 per cent at Cambridge, 32 per cent at Nottingham and 26 per cent at Birmingham. Most of them pay full student fees.

Do noble Lords remember the opposition faced by Margaret Thatcher in 1981 when she introduced full charging for overseas students? That is the lifeline of every university in our country today. In regard to the LSE, if one adds in the number of undergraduates, 63 per cent of students now come from overseas. One has only to visit the Aldwych at any lunch time to see every nation, every race, every creed represented there. It is a united nations. So fees from overseas students are one of the building blocks for the future.

Another building block is per capita funding which I introduced in 1989. After per capita funding, which is the state contribution given for each student--so much if they study art, so much if they study science, so much for dentistry, so much for vets, so much for doctors, and so on--I envisaged that there would be loans, which I introduced, and then fees, but I did not have the boldness to introduce them in those days. Those are the various building blocks.

Another building block is access funds, which I introduced. That money is given by the state to individual universities to create scholarships for students who need them. That now runs at £45 million a year, which I do not believe is enough.

What more needs to be done? I believe that the Chancellor should make a gift to the universities of at least £1 billion as a capital endowment, dependent upon the size of the university. That is roughly the amount of money spent on the Dome. It could be taken out of the receipts from their mobile phone auctions, the results of the knowledge-based economy. They could take some of that money back and give it to the knowledge base. It should be a capital endowment to the universities that they could control themselves, with the interest being used for scholarships. That could be topped up by donations from companies and individuals. He should also extend the tax relief that he has given on the donation of shares to universities, which I recognise is attractive, and to personal donations--an extra tax bonus, as it were. That is Treasury income foregone, but it would act as a stimulus to create that necessary pool of endowment funding.

In a few days, I believe that the Russell Committee will report. That is a committee of the 18 leading research universities in our country headed by Sir Colin Campbell of Nottingham. I hope that they will be radical in their proposals. My advice would be, because their futures are all at stake, to follow John Milton's words,

    "Strike high and venture dangerously".

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Unless they do that, I do not believe that the radical changes that are necessary will be introduced. I am certain that we are moving to a system where universities should be able to charge fees; where significant scholarships are available--the maximum at Harvard is 60 per cent--and where students can repay them, through the tax system, after they have left college. Scotland may well show the way.

I believe that unless something along these lines is undertaken, the decline of our universities will continue. We must arrest that decline. We must start heading upwards. My Lords, I beg to move for Papers.

3.25 p.m.

Lord Bernstein of Craigwell: My Lords, I must thank the noble Lord, Lord Baker of Dorking, for giving me the opportunity to make my maiden speech, although his accomplished speech has made me even more apprehensive than I would have been in any case on this occasion.

As chairman of the Granada Group of companies for many years, I had thought that my experience of addressing shareholders at annual general meetings would have prepared me for anything, but I have to say that your Lordships, although fewer in number than our shareholders, are greater in gravitas, and, therefore, much more alarming.

I also take this opportunity to thank your Lordships and the officers and staff for their kindness in making me so welcome here. It is a great pleasure to be following in the footsteps of my uncle, the late Lord Bernstein of Leigh, in your Lordships' House.

Noble Lords who are due to speak today include those of great eminence in the university system. I am unable, in any way, to match their experience and learning, but I have spent many years in the world of visual arts, including being on the boards of a number of public galleries. Today I want to speak of the place of the colleges of art in the higher education system.

When there are so many challenges facing our universities, this may seem to be raising a matter of less than central importance, but in many ways the arts define the kind of society in which we live. My noble friend Lady Blackstone, in a debate in this House last year, said that,

    "the arts provide their own justification by what they do for us all".

Many people share that view.

Last month the new Museum of Modern Art, Tate Modern, opened to great acclaim. On the Cup Final weekend in May, 78,000 people went to Wembley and over 80,000 to the Tate Modern.

In our sophisticated world, the arts play an increasingly vital part, not least in economic terms. The turnover of the creative industries in this country is £60 billion a year and is growing at twice the rate of the economy as a whole. I was going to say that these industries need a firm foundation which has been provided by the colleges of art, but after the comments made on Sir Anthony Caro's role in the Millennium Bridge, I should rephrase that. However,

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in Sir Anthony's defence I should say that an eminent firm of consulting engineers was also employed in building the bridge.

The colleges of art have been extremely successful and have been the envy of the world. In large part, that is due to Sir William Coldstream's report of the 1960s, which made two vital recommendations: first, that teachers should be artists and not academics; and, secondly, that successful and practising artists should teach students part-time. It is the one-to-one tuition by artists that has made the reputation of our art colleges. However, in recent years there have been a lot of changes. Many colleges are now part of the university system and others have adopted the university ethos. This provides students with many pluses, not least the opportunity of a broader education, but--and it is a big "but"--the process carries with it its own dangers.

Colleges of art are becoming more and more influenced by universities in their entrance qualifications, methods of teaching and evaluation of work. For example, most art students now need to study a broad range of subjects for which credits are given towards their degree. One is bound to ask: does this detract from the concentration, even obsession, that is the mark of a successful artist? And one-to-one tuition, which is essential to the teaching of art, is under attack because it is more costly than the largely lecture-based teaching of academic subjects. Finally, the research assessment exercise, which is tuned to test academic research, is much less able to evaluate practical work.

I believe that the disciplines and methods that are appropriate for academic work are less so for the work of art students. Most successful artists would never have flourished in a university environment. Although a collection of A-levels of the highest grade may be essential for the study of medicine, that certainly is not so for the study of art. Many artists are dyslexic; many come from the most unlikely backgrounds, with little academic success; and many would never dream of applying to study an academic discipline.

One of Queen Victoria's daughters, Princess Louise, decided that she wanted to study at the art college which is now the Royal College of Art. The Queen wrote a letter to her, saying:

    "You must beware of artists my dear. They mix with all classes of society and are therefore dangerous".

I am not sure that they are dangerous. But artists are different. That is my theme today. I am of course well aware of the importance of academic standards and methods, and of the attractions of a university education. I only suggest that art students do not always fit comfortably in that system. I suggest that we should not take for granted the success of our colleges of art.

Thirty years after the Coldstream report, perhaps it is time to look again at the teaching of art in the higher education system to ensure that the colleges of art will be as successful in the future as they have been in the past.

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3.32 p.m.

Lord Jenkins of Hillhead: My Lords, it is a great pleasure for me to congratulate the noble Lord, Lord Bernstein of Craigwell. He comes from a family which has rendered great services to the arts and he has pre-eminently done that himself. I thought that he slightly underestimated his university qualifications. He was educated at one very distinguished university and has been associated with the administration of another two. I thought that he used that background to speak to us with a mixture of authority and charm. We congratulate him and look forward very much to hearing him in the future.

This afternoon the noble Lord, Lord Baker, made a powerful speech, as he did in a debate on universities in December which I initiated. In that previous debate I endeavoured to transcend my role as Chancellor of Oxford--which I must of course declare--and to discuss the universities well beyond Oxford or even Oxbridge. Today my time is much less. We have also had the Chancellor of the Exchequer's little blitzkrieg on Oxford. I must therefore keep my sights narrower today.

The Chancellor's attack resembled a blitzkrieg in being an act of sudden, unprovoked aggression. But it was incomparably less well-prepared and accurately carried out than the original blitzkrieg of 60 years ago this spring. The target was singularly ill chosen. It would be difficult to think of any group of academics to whom the designation "old school tie, old boy network" was less appropriate than the medical entrance examiners of Magdalen.

The historical event which I think Mr Brown's enterprise more followed was the Cultural Revolution in China, which was designed not to achieve any practical result but just to stir things up for political purposes, to spread unease and to create damage, which took a lot of repairing. Mr Brown's diatribe was born of prejudice out of ignorance. Nearly every fact he adduced was false. I only hope that he is better briefed when dealing with Treasury matters. But I think that he must be, otherwise the economy would be in a worse state than it has been over the past three years. But as a former occupant of his office, I advise him to stick more to his last, and not to try to do too many other Ministers' jobs for them.

Then we had the noble Baroness the Leader of the House in Washington. I of course gave her notice that I intended to refer to her this afternoon but she apparently has priorities other than this House. Her speech in Washington was not wise, although I do not think that it justified the vicious press attacks which have been made upon her, and which I do not endorse. I think it was unwise: first, because it is a mistake to mingle a commemorative occasion in America--I know those dinners well--with a controversial speech designed for political consumption at home; secondly, because her point about the best American universities was ill founded. She said about admissions policy, "You've done it at Harvard and Yale. We should do it at Oxford and Cambridge".

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I have a great admiration for those American universities and for some aspects of their admissions policy. But I will wager the noble Baroness any money she likes that the gap between the tiny percentage--a little over one per cent--of American children who are educated at the equivalent of our fully independent schools--I am not talking about parochial schools because they are not at all equivalent--and the percentage who still get in to Harvard and indeed Yale is substantially--very substantially--greater than the gap at Oxford or Cambridge.

The noble Baroness has also been attacked about her own school. I will not join the argument about the status of Blackheath, but I know that I went to a still more ordinary grammar school, and that did not prevent my being elected on a very wide poll Chancellor of Oxford 13 years ago. That is wholly incompatible with the "old school tie" spectre at Oxford which so haunts Mr Brown.

I also feel some sympathy with the noble Baroness about the schools of her children. My children followed almost exactly the same pattern. But one lesson, if I may say so, is not to throw stones out of glasshouses. She has recently been in danger of carrying that to an extreme order, equivalent to hurling boulders out of crystal palaces.

The other lesson is not to treat education as primarily a matter of social engineering. At higher levels it is a matter of excellence, and of fair access to excellence certainly. At Oxford we recognise that we have some way further to go. Our ability to do that depends on a lot of good applicants being forthcoming from state schools. I very much doubt whether Mr Brown has helped in that direction.

We want to cover this extra piece of ground, and we are making strenuous efforts to do so. But there are two contingent dangers. First, it would be quite wrong to say that a candidate, however good he or she may be, should be excluded because he or she comes from too privileged a school. Children mostly do not choose their own school, and in any event I doubt whether such an approach could stand up under the Human Rights Act. Secondly, there must be no question of governments, or agents of government, deciding which individuals should or should not be admitted to particular universities. There is already too much government interference, far more than in the much-praised Harvard and Yale.

Finally, might the Government not consider whether in the recent flurry of ministerial pronouncements there is some contradiction between their elevating admissions to Oxford as a key battle ground and at the same time expressing the view that great efforts are to be made to keep those who do get in out of the most important public service jobs?

3.39 p.m.

Baroness Young: My Lords, I should like to add my congratulations to the noble Lord, Lord Bernstein, on his most interesting and excellent maiden speech and say how much I appreciated his point about the value and importance of one-to-one teaching and tuition.

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I should like also to congratulate my noble friend Lord Baker of Dorking on introducing this debate. As he said, the issue of higher education was very important when he tabled his Motion. It is now at the top of the political agenda, following the extraordinary and intemperate attack on the University of Oxford by the Chancellor of the Exchequer in a speech full of inaccuracies, as the noble Lord, Lord Jenkins of Hillhead, pointed out. It is difficult not to believe that the Chancellor's remarks were designed to draw attention away from the Government's evident failures on other political matters, such as the National Health Service and education in schools. In any event, it was utterly disgraceful to use in this way a young girl--a sixth-former--who was about to start her A-level examinations. Not only did he succeed in offending the University of Oxford but, by implication, the University of Edinburgh, which has one of the oldest and most renowned medical schools--quite as good as the medical school at Nottingham.

In the time allowed I can make only two points, but I should like to take up those issues raised by my noble friend Lord Baker. To a large extent, the prosperity of our country depends on having some universities that are of world class, not only for their academic excellence but also for the science-based industries linked to them, which are in the forefront of technological development and ring a number of university cities. The university world is a competitive one. Students who can do so go where they think the courses are best; some already choose Harvard or Yale, MIT or Stanford, to name but a few. Equally, dons will go where the facilities for their work are the best. In those circumstances, universities--this is particularly so in the case of Oxford--will not lower their standards of admission, and should not in any event be ashamed to aim to be elite. We surely do not want third-rate institutions of any kind.

Universities will always look for the best students, whatever their background. Immense efforts are being made by Oxford. The university gave up its entrance examination because maintained schools said that they could not teach to it. The University of Oxford and, I suspect, others are willing to consider the American system of intelligence tests. Some such tests are being piloted. That leaves the interview, which is bound to be difficult when there are more applicants than places. As for the ratio of independent to maintained school pupils, it must be noted that one-third of independent school pupils achieve three A grades at A-level, which is a far higher proportion than those in maintained schools. That should say something about maintained schools and the need to raise the standards of education there.

That leads to my second point. Everyone who cares about education wants to see equality of opportunity. There should not be any waste of the talents of our people. Indeed, in the 1960s a higher proportion of maintained school pupils went to Oxford, with an approximate split of 60 per cent to 40 per cent. But in the universities generally--I speak as a former Chancellor of the University of Greenwich--we are

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succeeding well in life-long learning. It is a pleasure that 50 per cent of students are women and that increasing numbers of ethnic minorities go to university. The latest OECD figures show that the United Kingdom has now overtaken the United States in the number of young people who get degrees.

All that said, it is essential that maintained school pupils should apply for places at Oxford and Cambridge. Great efforts are made to encourage them to do so. Pupils are invited to the universities to see what they are like. Students visit schools to say what their experience is. But, I regret to say--I believe it to be true--that there are still some teachers who actually discourage their pupils from applying, saying that Oxbridge and other universities are "not for them". Frequently, colleges approach schools and schools do not respond. The first lesson to come out of this is that one cannot deal with people who do not apply. In my view, schools should work to raise standards and expectations. They should train their pupils for interviews; for every job will require an interview, whether it is a tough one for a university place or for a 16 year-old who leaves school at the earliest possible opportunity to go to work, say, in a local supermarket.

To conclude, I agree very much with my noble friend Lord Baker that Oxbridge and a number of universities--perhaps all--should now seriously consider becoming independent. There is already a real danger of universities not being able to recruit. We have heard from my noble friend that it is very difficult to recruit economists, lawyers and those in computing. It is very difficult indeed to staff the new business schools. When we consider that a professor earns around £40,000 a year--less than the starting pay of a solicitor and, dare I say, very considerably less than that of a Member of Parliament or (as we have heard) a special adviser--is it likely that we shall succeed in recruiting those who are most in demand in society?

What is really needed is a good deal more money to keep up the standards of excellence. As we have discovered over so many other issues in our economic and political life, if we are to keep up the standards of excellence but the state cannot or will not provide enough money the only alternative is to privatise. We need to face up to that as a country, not only for the financial independence of the universities but the maintenance of their excellence and, essentially, their academic independence.

3.46 p.m.

Baroness Walmsley: My Lords, I am most grateful to the noble Lord, Lord Baker of Dorking, for giving me this opportunity to speak for the first time in your Lordships' House on a matter which is close to my heart--equal access to higher education for all students.

Since I was first introduced to this House three weeks ago, I have been treated with the utmost kindness and friendliness by noble Lords and Baronesses from all Benches, for which I am most grateful. I am not renowned for my sense of direction and therefore have more cause than most to be grateful

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to the wonderful staff, who have guided me through the geography and procedures of this historic place with unfailing patience, good humour and courtesy.

The subject of this debate is the state of higher education. The quality of any product is, to a great extent, affected by the quality of the raw material. Therefore, it is hardly surprising that our leading universities compete avidly with each other for the best raw material--the students applying for admission. It is to this process that I intend to address my remarks.

We have heard much about what the universities are doing to level the playing field between state and independent pupils of similar ability. However, I should like to take one step back and look at what schools are doing. During my years as a biology teacher I helped many young people through the process of applying for admission to university. It was a very difficult time for them. Although I do not recall ever having a pupil bring me an apple, I will always remember one particular sixth-former who once brought me, by way of thanks, a rabbit which he had shot that morning on his father's farm.

I vividly remember the interview for my own place in the botany department at Liverpool University. It was a terrifying experience. The interviewer peered at me through his spectacles and said, "Miss Watson, we are going to stretch you in all directions". I have felt somewhat the same since entering your Lordships' House, although the stretching may have as much to do with the delicious offerings of the Refreshment Department as the intellectual stimulation of the debates.

There has been much discussion on why it is that so many well-qualified young people from state schools either do not apply to our top universities or fall at the hurdle of the interview. Despite the evidence that they have the intellectual ability to benefit from a place at these institutions, many of them are not admitted, in the view of some interviewers, because they do not project themselves as well as students from independent schools. Why is that, when they possess equally fine exam results in many cases?I believe that the answer is that, although schools teach the three Rs, some of them do not pay sufficient attention to the two Cs--confidence and communication.

Those of your Lordships who have recently been in contact with young people of 17 and 18 may not have perceived them to be lacking in confidence or the ability to communicate. However, this may have been in an informal situation. The whole of society has become less formal in recent years; even classrooms are not the formal environment I remember from my own school days. The consequence is that if a young person who has not been used to coping with such pressure is put into the formal and stressful environment of an interview, the picture is often very different. They become unable to project to a set of strangers the qualities which they undoubtedly possess.

The leading universities have their pick of a plentiful supply of young people with three As at A-level. They separate them one from another at the interview, by

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judging their personal qualities. Young people are not supermarket trolleys, stuffed with packets of GCSEs and cartons of A-levels. Like every supermarket trolley I have ever encountered, they have personalities and minds of their own, and the leading universities know this only too well.

We are failing many able young people from state schools if we are not helping them to develop the self-confidence and communication skills which they need to show the interviewers who they really are in the short time available. It is the person the universities are looking for, not just a stack of exam certificates.

How, then, can we improve this situation?

First of all, we can give young people from state schools confidence in the system by urging the elite universities to publicise with all their energy their commitment to recruiting the most able students from all backgrounds.

Secondly, I believe that schools can do more to develop students' confidence in themselves. Where, for example, are the debating societies, which used to thrive among sixth forms? I believe they exist more in the independent sector than in state schools. The English Speaking Union's School Mace debating competition, chaired by my noble friend Lord Watson of Richmond, attracts fewer than 10 per cent of all secondary schools. Although three-quarters of the schools entering are now from the state sector, the percentage of individual pupils entering from the independent sector is still disproportionately high. This excellent competition gives opportunities for the stars of the school debating societies to shine in a national arena, but they are not likely to enter such a prestigious external forum if they are not accustomed to debating in schools.

I hope that your Lordships will agree with me that debating is not only great fun, but is very good for young people. It helps them to marshal their arguments and express them coherently. It encourages them to think about how best to communicate their ideas; and, after the initial terror of standing up in front of their peers and making a speech, it gives them confidence. They find, as I am doing today, that it is not so bad after all. After a while, they even come to enjoy it.

Therefore, I welcome the similar views expressed recently by the Secretary of State for Education and Employment, and encourage more state schools to find time in their busy schedules to run debating societies. Perhaps then in future fewer able three As students will fall at the last fence of the interview for lack of the two Cs. Then we may have to make room on the Benches of this place for more able young debaters and look to our laurels.

3.53 p.m.

Lord Bragg: My Lords, it gives me very great pleasure to congratulate the noble Baroness, Lady Walmsley, on that graceful and confident maiden speech. Her wide experience in the Liberal Party at all levels and her special skills honed as a public relations consultant stood her, and I am sure will stand your

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Lordships' House, in good stead. I agree completely with what the noble Baroness said about debating societies. I also congratulate my noble friend Lord Bernstein of Craigwell on his maiden speech.

A mere six days ago I had the honour to be installed as Chancellor of Leeds University, so I am well aware that my knowledge of the subject of this debate, when compared with the accumulated experience and wisdom of so many of your Lordships, is, as yet, slight. But I hope that first, inevitably broad, views may also have their place, and it is in that spirit that I offer two impressions and a conclusion to the debate so timely called by the noble Lord, Lord Baker.

First, I am astounded by the success of our universities, as exemplified by Leeds. In the national malaise of carping and among the commonwealth of monotonously complaining commentators, the young people of Britain are paraded as yobs or slobs, drugged or drones, and always miles behind everybody else. In Leeds, and I am sure elsewhere, there is among them optimism, determination, flair and delight in intelligence. Yes, there are financial and structural difficulties which need attention, but the positive side, which struck me first of all, is palpable.

To a newcomer like myself it was like being taken down to the engine rooms by Rudyard Kipling in McAndrew's Hymn. Universities today are the engines which drive the state. Our universities have relatively recently taken on the several and strenuous trials involved in the Herculean task--cliches often speak true--of transforming our society. Universities have been asked to conduct a monumental expansion and to maintain, even improve, standards, to raise their sights in research, to take on global competition, to feed industry with ideas, and to steer steady on the fundamental integrity of scholarship. It is a bold and noble enterprise, and Leeds is doing this. So, I am sure, are others. It is a wonderful success story and should occasionally be sung as such.

My second impression in no way contradicts the first, but it flows from it. All this energy of growth has been provided by men and women whose dedication has been undervalued and under-rewarded. Many of your Lordships know that better than I, so I shall take one example only. The pay of lecturers is 30 per cent down--30 per cent at least-- when set against that of comparable professions. That is both unjust and dangerous. So far, I am told, the universities are holding the line--but just.

In some departments--ironically, often those most central to our future growth as a new technology nation--recruitment is already extremely difficult. In all departments, serious and level-headed members of staff--across the disciplines--express deep concern that if remedy is not found soon a system stretched to exemplary efficiency will simply begin to snap. Supply, though in many ways admirable, is struggling to keep up with justified demand.

Any new "efficiency gain"--that is, a cut in core funding--will surely cause the final trumpets to begin to sound outside some of the walls of academia. Even a 1 per cent "efficiency gain" at Leeds is £2.5 million,

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and as 60 per cent of the budget goes on staff this would be the loss of a lot of jobs. Core funding is just that, and to neglect or, worse, diminish it is a risk not worth taking.

The universities have done us proud, but success needs to be nurtured, and present success, I am told, conceals, without doubt, imminent crisis--the word is widely used--unless real help is forthcoming.

These are my two first impressions. The conclusion is simple. We live in a world which will be governed in every possible sense by intellectual properties. In this country we have a magnificent resource. It is the mind, in all its ramifications, which will control the future, and if we wish to play a full and prosperous part we must--as I am sure the present Government will--cultivate that cerebral garden with all the forces we can summon up.

3.59 p.m.

Baroness Perry of Southwark: My Lords, I am grateful to my noble friend Lord Baker of Dorking for giving us the opportunity to debate higher education, as it has been one of the worst areas of government failure in the past three years. The country enjoyed seven years of unparalleled expansion of higher education during the John Major government, when the numbers of young people going forward into higher education doubled, with a consequent huge rise in those staying on in school past the age of 16, and the proportion of school-leavers going forward into higher education almost tripled. Under the present Government, we now have a decline in applications, most sharply among mature students.

The Government's fine words about increasing access are the exact opposite of reality. The removal of the maintenance grant and the introduction of fees has meant that access to higher education is now infinitely more difficult for the poorest students as well as for older students who already have heavy financial commitments. The maintenance grant was means tested and therefore only the poorer students were eligible, and it is they who have been most disadvantaged by this Government's actions.

Meanwhile, the much publicised 11 per cent additional funding, which no doubt the Minister will rehearse to us when she speaks, has not helped the core funding of universities, which have actually suffered an annual drop in funding year on year under the present Government. Temporary boosts in hardship funds for students or in capital building programmes--which is where the increases are calculated--while not unwelcome, do nothing to help universities to continue to provide high quality education for their students. But in the long term, even more damaging is this Government's attempt to bring all universities on to a uniform single funding level, presumably from some idealistic belief that uniformity is an inherently good idea.

In the brief time available to me I wish to make an impassioned defence of diversity. We have today a diverse student body representing a wide range of social and educational backgrounds, as well as a wide

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range of ability and motivation. It also encompasses a wide age range, demonstrating the flexible system of lifelong learning which must be the higher education system of any civilised country. I can only hope that our country's system will continue to make provision which allows people to enter higher education, on a full-time basis if that is right for them, at any age which their life chances and personal motivation dictate. But the attack on opportunities for mature students puts that aspiration gravely at risk.

Equally obviously, the demands of the complex, diverse and rapidly changing economy argue for a very diverse higher education system, not one in which uniformity produces a population of graduates formed from the same mould. A modern economy needs the wide range of vocational courses which the new universities provide so well. Their four-year vocational degrees, developed to a high standard of both vocational relevance and academic understanding, have been a feature of our higher education system of which we should be proud. It is my hope that their reputation and standing, and the justifiable pride of their graduates in their hard-won degrees, will not be damaged by the Government's extraordinary proposal for a two-year vocational degree (an idea which I hope will be quickly buried).

We should be proud of our world-class vocational higher education. The previous government's granting of university title to the former polytechnics was a sign of their commitment to parity of esteem between vocational and academic education, and attracted interest and approval around the world. Many of the new universities have developed world-class vocational degrees, often in close collaboration with local employers, as well as professionally and industrially relevant applied research. As a country we should be proud of this element in our higher education system, allied as it is to open access, appealing often to mature students with strong vocational commitment.

Our higher education system must also continue to support the academically elite institutions which provide for the brightest of young people, many of whom will be studying for non-vocational degrees, taught by world-class academics whose own research is such a rich source of wealth creation for this nation. World-class research universities are an essential ingredient of a successful economy, as other speakers have said. If we lose our international edge in pure research, we lose our international edge in the global economy.

Diversity of provision would be deplorable if either the new universities or the older traditional universities were unsuccessful in the mission they pursue, or if they were by their nature closed to students qualified to seek access to the kind of provision they make. That, however, is not the case. Universities such as the LSE, Imperial, Warwick, Bath, York, Oxford and Cambridge, not only compete successfully in the global market of world-class research activity, but have also triumphed in their close relationships with industry and their ability to

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attract industrial investment for their research. More than half their students come from an ordinary comprehensive school, and if the comprehensive schools improve their examination performance, that proportion will increase--unless, of course, the high-achieving students from comprehensive schools are deterred from applying by ill-chosen advice from their teachers, or even more ill-chosen comments by leading politicians.

We should be working towards a system which embraces and celebrates the diversity of our higher education institutions, not one which brings them all into a single model, ill fitted both for the needs of students and the needs of society. The absurdities of league tables, which apply the same input and output measurements to all universities, are only some of the factors which mitigate against diversity. Ranking universities by the A-level points of their entrants only punishes those with open access. When the league tables of pure research assessment are published, they condemn as failures those universities which serve their local communities by applied, collaborative research. If league tables of state school entrants are to be published, we shall punish those universities which apply only the higher standards of A-level performance to their entrants.

Such a system is indefensible. Before we go any further down the road which destroys the best of all that has been built up in recent decades, we must stop and rethink the system of funding, measuring and evaluating our universities and the students within them.

4.5 p.m.

Lord Haskel: My Lords, I too congratulate the noble Lord, Lord Baker, on moving this Motion. I was quite touched by his faith in the markets to solve our higher education problems. Markets allocate resources; they do not solve problems. People solve problems.

I do not want to enter into the argument about access. I want to speak about outcome: the flow of people from higher education into the world of work and employment. In the old days that transition was easy. People going into higher education came from families and backgrounds that enabled them to form a fairly clear idea of what they were going to do after university, and they expected to do it for the rest of their lives.

With the expansion of higher education, students come from all kinds of conventional and unconventional backgrounds. They can be the first generation to go into higher education; they may be the first generation with English as a first language, and they expect many changes in the work that they do and the organisations for which they work. They know that their skills and knowledge will be obsolete in a few years' time and yet those will be their most valuable assets.

Employers' needs are also changing. They look for talented people everywhere, not only in Oxbridge. So, welcome to the knowledge economy referred to by the

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noble Lord, Lord Baker; welcome to an economic landscape that seems to be in continuous turmoil, where new areas of economic potential constantly arise, and endless competition means that we have to be continuously resourceful, and the new economy is changing all the rules.

Fortunately, there is a bridge between the world of higher education and that of work. It is a bridge that prepares graduates to manage their own personal development, to adapt to the change and to make effective transitions. That bridge is the Higher Education Graduate Careers Service. No longer can a modern careers service in higher education be about giving final-year students a one-hour careers guidance interview shortly before they leave. The careers service too has to move into the knowledge economy.

Last Friday my noble friend the Minister announced a review of the current state of higher education careers services and how standards could be raised. I welcome that. I believe that the providers and users of the service welcome it. I know that Mr Martin Thorne, president of the Association of Graduate Careers Advisory Services, also welcomes the review. We all welcome it because it emphasises how important the service is.

Careers people are serious and dedicated men and women, and as good practitioners they welcome outside reviews from time to time. It helps to take stock of progress, institute changes and prepare for the future. Yet the service has made changes in recent years both in what it does and in how it does it. I hope that the review will assess those changes. The careers guidance profession, like all good professions, seeks to raise its standards. It is doing that in conjunction with the Quality Assurance Agency for Higher Education.

Careers advisers also help graduates to develop the so-called "soft skills" of networking, openness to change and adaptability; in other words, to take control of their own careers. They also seek to promote self-employment and professional development. They provide opportunities for graduates to work in small and medium-sized companies--companies which, in the past, would never have considered employing a graduate. The service now also tries to make provision for students with special guidance needs; for example, the disabled, ethnic minorities, older graduates, international students and even the artists referred to by my noble friend Lord Bernstein in his excellent maiden speech. Of course, these changes will not be equally implemented throughout the country, but when the review team comes across a lack of progress I hope that it will not just put it down to the poor professionalism of the local service. I hope that the team will probe more deeply. There could be other causes, such as lack of support of other managers in the institution, lack of support from the higher education funding bodies or lack of support from policy-makers. Vice-chancellors and principals in particular can be very influential in the successful participation of the careers service within their institutions.

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We now have almost one-third of our young people going into higher education, and our target is to increase that percentage to a half. This will still leave us behind many of our competitors, but the lack of numbers can be made up by a good careers advisory service that works strategically to encourage graduates not only into blue chip businesses and organisations, but also into new businesses; that is to say, businesses and organisations that have never previously taken graduates.

4.11 p.m.

Lord Dearing: My Lords, perhaps I may join in the congratulations expressed to the two maiden speakers on their demonstration of relevant knowledge and performance in the two CCs, which is enviable. I declare an interest as the chancellor of the University of Nottingham, not a party to the Russell group's liberations nevertheless. I shall deal with three issues--access, quality and research.

First, access is a major issue. I do not have in mind the universities of Oxford and Cambridge here. I am very conscious of the inverse correlation between social class and access to universities and, therefore, to the kind of "ticket to ride for life": if you are born into social class 1, it is three to one on that you will go into higher education; if social class 5, the reciprocal of that. We must deal with that situation.

The Government are taking relevant measures. I agree with the noble Baroness, Lady Perry, about maintenance grants; but that is the past. The Government are doing many things that I welcome. I heard the Minister for lifelong learning say that there are more measures to be expected from the Government this autumn in the spending announcements. That is good. However, the battle for better access is not to be fought when youngsters are 17 or 18. It must be fought in our primary schools. It is a national scandal that we have 7 million adults who, we are told, cannot find a plumber in the Yellow Pages, such is their lack of skills in their national language and in basic arithmetic. That is where the battle must be fought. That is our prime national cause. David Blunkett is right to put his job on the line to achieve the levels of performance that will give people an enfranchisement for life--access.

Secondly, I turn to quality. The noble Lord, Lord Baker, is absolutely right. We have a prime national asset and it has done great things in achieving that welcome twofold or threefold increase in participation--that also applies to mature students. But quality cannot be taken for granted. Although no promises have been given by the Minister, I notice that she does not rule out the possibility that salaries will be one of the issues to be addressed during the coming spending review. You cannot exploit--I hope that I may use that word--people indefinitely and expect our universities to continue to be world class. They will not. Salaries must be addressed, whether it is for young researchers or the "profs", which my committee found to be two areas of particular concern. There is also a problem concerning manual workers in the universities.

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My third issue--I am seeking to be very brief--is research. I speak for the university interest, but I speak foremost for the national interest. We have only one future if we are to succeed economically; namely, in knowledge-based, research-based industry and commerce. It is the only viable strategy for a nation like ours. My committee found that our universities ranked second in research only to the United States. They are research efficient, as no other nation. That is very good. However, in terms of how "second" we are, there is an enormous gap with the US. Funding per capita for research in the United States, whether in industry or in higher education, is twice that of the United Kingdom. We do not compare awfully well with some other members of the European Community. Sweden is a particular example. It has rightly adopted the policy of an economy based upon high technology and research.

When my committee was carrying out its work, we found a genuine crisis about the research capability of the universities. Again, we have been exploiting the past and our people. Through not renewing infrastructure, we were getting a worn-down, worn-out research capability; and there was a crisis that needed to be dealt with. There were responses to the situation. Two charitable foundations went into action with the Government and a scheme was introduced for renewing infrastructure.

However, I remain concerned that there is risk that the research councils will not be providing the funding for indirect costs that are an essential part of funding research. If I remember rightly, my committee recommended that the proportion to be allocated for overheads by the research councils should be increased from 45 per cent to 60 per cent. I have not heard that this has happened. Indeed, I doubt whether we went far enough. I remember that we concluded that it should be increased to 60 per cent-- compared with a maximum of 65 per cent recommended by the Cooper Brothers--but that it should be increased by up to 100 per cent, if that were necessary in particular cases. We must not cheat ourselves and the universities by pretending that we are increasing the volume of research unless we are funding the indirect cost. We must not run down the infrastructure again.

I am also concerned about volume. If we are to pursue a policy of knowledge-based, research-based industry and commerce, we must be world class. I do not mean in every university and certainly not in every subject in every university. But we must invest more in our research output. I have seen the CVCP document which, if I remember rightly, asks for an extra £1.35 billion over four years. I do not believe that it asks for enough--and I was not put up to say that either! There is such an immense national interest here that should be advanced, as well as safeguarded.

In this research expenditure, I am also concerned that we should build bridges between the universities and industry and commerce. It is no good doing research in the ivory tower only; there must be spin off. Therefore, I wish to encourage the Government in a scheme that they introduced to promote partnership in

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research with industry. I welcome the initiative of the noble Lord, Lord Baker, in introducing this debate. We have much to do.

4.18 p.m.

Baroness James of Holland Park: My Lords, I, too, am grateful to my noble friend Lord Baker of Dorking for initiating this important debate, although I feel that I may be ill qualified to take part. I have had no higher education and left school at the age of 16. In this, I am sure that I am not alone in your Lordships' House. However, I had the great advantage of being educated at one of the old local authority high schools--an education that was liberal, humane, disciplined, intellectually stimulating and which was concerned with good manners and civilised conduct, as well as with learning. I know myself to have been fortunate.

Inevitably, of course, there are references in this debate to what has become known as the Laura Spence affair. Indeed, it was a scandal, although hardly in the sense that the Chancellor of the Exchequer intended. We have to assume that rational men intend the natural results of their actions. This means that the Chancellor, to propitiate those members of his party who require regular skirmishes of the class war to satisfy their passion for social indignation, and perhaps in pursuit of some private ambition, deliberately insulted one of the world's greatest universities, slandered a distinguished academic and, perhaps most serious of all, put back, perhaps for years, the patient work of Oxford in persuading young people from the state system that Oxford welcomes them and that they can be happy there.

What I find particularly depressing about this affair is the clear message it sends of government animus towards Oxford. It is useless for Ministers to declare that this is not so; their deeds speak louder than words. I find this animus curious. When I am in Oxford common rooms I never feel that I am in a bastion of conservatism.

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