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Earl Russell: My Lords, will my noble friend look a little lower down the scale than contract researchers? The House will believe I have no objection to increasing the pay of university teachers, but does my noble friend agree that the financial shortage suffered by students is far more severe than any suffered by any university teacher? If I wanted to discuss a problem with students and it was necessary to do it over lunch, there was an expression of fear on their face even at the prospect of the ordinary student refectory until I said that of course I would pay for the lunch. This amounted to at least an extra 5 per cent pay cut. Is that right?

Baroness Sharp of Guildford: My Lords, I agree with my noble friend in that students have a rough time of it, particularly in London. There is no doubt that a deterioration in the quality of staffing is not in the students' interest.

In some cases there are, strangely enough, plenty of applicants and so what I call the Bain test is not always passed in this area. Another aspect is the influx of people from eastern Europe, southern Europe and Asia who are filling posts in our universities. Thank heavens they are, because in some cases we would not have filled the posts without them. It is a strange phenomenon that while we are shipping out some of our brightest and best, particularly to the United States, we are pulling in others. Sadly, not always do we fill posts with people of great distinction, although it is, to my mind, surprising how many people remain in the profession.

Chickens eventually come home to roost. My generation—those who were the post-Robbins expansion—are all retiring. My noble friend Lord Watson, who is not in his place, said that we need to recruit 42,000 new academics over the next eight years. It is extremely difficult to get British students to become research students in many of these areas. We are not renewing the seed corn. As is happening in mathematics and physics, we are not training enough people to teach the teachers. This is a dangerous situation; we do not have enough teachers in schools or universities. This has long been a problem and has been recognised. Dearing looked at it and said that we must have a detailed review of university pay. We had the Bett review, which discovered systematic discrimination against women and ethnic minorities in universities. There were some very bad employment practices. However, surprisingly little has been done, apart from the 3.5 per cent settlement this past year. The charts from the AUT show how flat the pay is.

What are the Government now proposing? One of the problems is that it is not clear how much new money is coming through for teaching. A round figure of 6 per cent a year and 19 per cent overall is lovely, but, as the noble Lord, Lord Oxburgh, said, it incorporates a great deal of money for scientific

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research. Precisely how much is coming through for teaching? The letter from HEFCE says that the 170 million that was given for 2002–03,

    "will be consolidated into institutions' core grants from 2004–05 and, in addition, I am making available an extra 50 million in 2004–05 and 117 million in 2005–06".

It is not clear how much money is coming through to the teaching profession. Is it a total over the next three years of 337 million? Given that we need about 100 million a year to make good an inflation increase in the region of 2.5 per cent, that will mean only a 1 per cent real increase in pay.

Are the THES figures on funding per student correct? They suggest a 0.1 per cent increase in 2003–04, a 0.2 per cent increase in 2004–05 and a 0.6 per cent increase in 2005–06.

The White Paper promises some money, but it is with strings attached. As the noble Baroness, Lady Warwick, said, it is not a bad idea to attach some strings. A lot of restructuring—"modernisation"—is needed in university management methods. Nevertheless, it is hard to criticise the universities too much for lack of performance. Money will become key in relation to performance. The performance of universities has been surprisingly good in the circumstances. The White Paper notes that the research performance is very strong. OECD surveys show that 96 per cent of students in Britain are satisfied with what they have got here. I have taken students from France and Germany who love the British system because they see much more of academics and others.

Sadly, chickens eventually come home to roost. There may be a long lag because people are captured with a PhD and locked into the profession, but eventually the problems are coming home to roost. The brightest and the best are not entering our university system. We are not renewing the seed corn. Unless something is done to reverse the situation and attract some of our best young people into our universities, although, as the noble Lord, Lord Quinton, said, we will not collapse completely, we will, as the noble Lord, Lord Brooke, said, slide, like Gadarene swine, into general mediocrity.

8.28 p.m.

Baroness Blatch: My Lords, I, too, thank my noble friend Lord Lamont for initiating this timely debate. I shall also follow him in confessional mode in a moment or two. I also declare an interest. It does not match the impressive qualifications of those who have spoken so far in the debate, but I am the mother of an academic. After achieving good A-levels and taking a gap year, he gained a first in chemistry with physics, then went on to do a doctorate. That was followed by two years' research at Tokyo University. Having returned from Japan, he is now working in a university and, at the age of 34, is earning 22,000 a year. That compares with his twin sister, who is a flight lieutenant in the air force, who has been earning since she left college at 21 and is earning a good deal more. I speak with some personal feeling in the debate.

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It saddens me deeply to be standing here debating the level of pay of university teachers. Almost four years after the Bett report so clearly spelt out the situation unfolding in our universities, the situation is serious and the Government have failed to address it.

The figures on university pay are shocking however one looks at them. In comparison with other jobs, university lecturers have fared badly. According to estimates in the Bett report, they were paid on average between 5 per cent and 30 per cent below equivalent jobs in the public sector. The pattern is even more exaggerated if one includes jobs in other sectors.

Research published last year by the National Association of Teachers in Further and Higher Education indicated that the level of pay in the United Kingdom is among the lowest in the developed world. In a league table measuring the average spending power of academics, the UK came out tenth out of fifteen, only marginally above Mexico. Canada positively puts us to shame, with academics earning the equivalent of 72,700 compared with a mere 21,800 in this country. Before the Minister himself says it, I shall—like my noble friends Lord Lamont and Lord Brooke—admit that lecturers' pay was in decline before the Government came to office in 1997. However, there has been the Dearing report, the Bett report, the introduction of tuition fees and an even greater expansion of student numbers as the 50 per cent target has been put in place. Still the issue of further and higher education pay has not been addressed.

The consequence of neglecting the cause of university lecturers will inevitably create difficulties in recruitment, retention and motivation. Low salaries will discourage those best qualified for the job from applying. That is especially the case in fields which require lengthy training and where significantly higher salaries can be earned in the private sector, such as science, business, information technology and professionals such as lawyers and accountants. However, this will over time force universities to recruit from a much smaller pool of candidates which will result in a poor standard of applicant. Equally damaging is the tendency to start new lecturers higher up the pay scales than would usually be deemed appropriate in order to attract good candidates to the job. That creates distortion in staff retention as those staff quickly progress to the top of their scales and can go no further.

It is too easy to see the role of university teachers as narrow, as those who inhabit the ivory towers of academe. How wrong that perception is. The work and the quality of university teaching and research impacts on every aspect of our lives and on the health, wealth and cultural well-being of our country. Since the publication of the Bett report, the Government's only response has been to deny that they were responsible, arguing that it is simply a matter for the universities themselves. Although there have recently been signs of greater funding, the increased number of students has more than absorbed any financial benefit. In fact, unit

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funding per student declined after 1997—I admit that it was declining before—and is now only fractionally greater than it was in 1997, six years ago.

As I understand it, universities will receive increases of 50 million in 2001–02, 110 million in 2002–03 and 170 million in 2003–04. I wonder whether the Minister can clarify—as the noble Baroness, Lady Sharp, asked—the promise that,

    "170 million will be consolidated into institutions' core grants from 2004–5".

Taking 2001 as the baseline, does that mean that the baseline in 2004 will have increased by 330 million and that, until any further increase is announced, that 330 million—not the 170 million, but the 330 million—will be consolidated? Will that level of expenditure be sustained at least in real terms? Will any fees for tuition be truly additional to that consolidated figure?

As the noble Lord, Lord Hannay, asked, how will higher education fare in the interregnum when fees cease to be paid up front and are paid back only much later? There will be almost a decade of difficulties. It would be helpful to know how that period is going to be bridged.

Action by the Government has perhaps been prompted by the target of having 50 per cent of 18 to 30-year-olds entering higher education by 2010. For that we shall need 22,000 extra university teachers in addition to the other 20,000 already referred to. What proportion of the 50 million, 110 million and 170 million will be absorbed by the intake of additional students entering as a result of the 50 per cent target, and what proportion would be expected to address the pay crisis? Interestingly—I believe that my noble friend Lord Lamont raised this point—what is the gap between male and female earnings in higher education, and what would be needed to bridge that gap?

We have just found out from the Government's White Paper that any increases in funding are expected to be met by increasing top-up fees that the students themselves must pay. The Government claim that students can afford it, for over the course of their lifetime their salaries will be 50 per cent greater than those without degrees. That certainly is not true if they decide to go into academia. For a recent graduate looking to continue in research or teaching at university will not only be burdened with a debt of 30,000 plus but will also face the promise of a salary considerably lower than what he or she could command elsewhere in the public sector, let alone in the private sector. Further, if the Government persist with the target of 50 per cent of students entering university, it will not be the case that postgraduate earnings will be that much greater than non-graduate earnings. The basis for evidence for graduate salaries being used by the Government is historic and does not reflect, or take into account, contemporary employment of graduates.

On top of that, to add insult to injury, the Government have created an access czar to meddle in the admissions policies of universities. Any compromise of standards is patronising. Social

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engineering entry into university is not the answer; improving education at school level is the key to preparing young people for entry into higher education. The brightest and most talented of our young people, irrespective of background, should enter higher education. Postcode, family history and blind prejudice against private and/or selective education should play no part.

Unless something changes, the future for academics will not be without serious challenge. They face additional workloads as a result of the slavish adherence to the 50 per cent target. Their level of pay, which was an issue six years ago when this Government came into office, is even worse in real terms today. They are now stripped of independence and academic freedom through interference from a Whitehall czar with powers to levy a fine—I use the words of the noble Baroness, Lady Ashton—dictating criteria above and beyond academic ability on which to base selection of students.

The passage in the White Paper on pay is troubling.

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