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House of Lords

Wednesday, 9 April 2014.

11 am

Prayers—read by the Lord Bishop of Bristol.

Japanese Knotweed


11.07 am

Asked by Baroness Sharples

To ask Her Majesty’s Government what progress is being made in eliminating Japanese knotweed from the United Kingdom.

The Parliamentary Under-Secretary of State, Department for Environment, Food and Rural Affairs (Lord De Mauley) (Con): My Lords, we are in the fourth year of the controlled release of the psyllid Aphalara itadori as a means of controlling Japanese knotweed. No non-target impacts have been observed by the monitoring programme but, as yet, the organism has had difficulty establishing self-sustaining populations. This year, therefore, we will conduct caged trials releasing larger numbers to establish higher population densities.

Baroness Sharples (Con): Will my noble friend agree to holding a publicity campaign so that this plant can be easily recognised, especially by landowners and, even more importantly, by people seeking to buy a house with land, because in some cases they are being refused a mortgage?

Lord De Mauley: My Lords, in returning regularly to this question, my noble friend is almost as persistent as the weed itself. I am not sure whether she is a hardy annual or a perennial. We need to spread public awareness of a number of non-native species including, of course, Japanese knotweed. The website nonnativespecies.org is our central point. Other awareness-raising measures include nearly 70 identification sheets, including one for Japanese knotweed, the Environment Agency’s PlantTracker mobile device app, which I recommend to your Lordships, non-native species local action groups, and the Be Plant Wise and Check, Clean Dry campaigns, which target aquatic security and non-native species more generally. Awareness-raising is a key focus of our current review of the GB strategy on invasive non-native species.

My noble friend mentioned mortgages. Two years ago, the Royal Institution of Chartered Surveyors and the Council of Mortgage Lenders agreed that a less draconian approach was needed.

Lord Dubs (Lab): My Lords, while we are awaiting the result of those trials—four years is a long time—can we not have some action for those people who have knotweed on their neighbours’ land? I have not got any on mine, but my neighbours have. Can we at least

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persuade local authorities—without legislation—to be more co-operative with local people? My local authority will not co-operate at all: it will give me no information and is quite unhelpful. I know that some are better than that. How about leaning on local authorities?

Lord De Mauley: That is a subject which I have been thinking about very carefully. It is quite interesting that the community protection notices under the new Anti-social Behaviour, Crime and Policing Act are potentially useful in this regard and we have to look carefully at them, as is the community trigger, which we should also look into.

Lord Greaves (LD): My Lords, I, too, congratulate the noble Baroness, Lady Sharples, on her persistence in this matter. It has been going on for as long as I have been in this House, which is probably too long now—or certainly too long for my own good, anyway. I would not, however, describe my noble friend as invasive or, to use the Royal Horticultural Society’s description of knotweed, as a real thug. Her question was: what progress is being made on getting rid of it? The answer is that there is none; it is getting more and more widespread. Is it not the case that the time has come when allowing this invasive, alien weed to grow on your land should be an offence?

Lord De Mauley: I should say to my noble friend that Aphalara itadoriis not planned to eradicate knotweed but is part of a programme on how to manage it. We have got to a stage where it is here—and we should acknowledge that fact—but we should manage it. There are other tools that can be used in this matter. In fact, when my noble friend Lady Sharples asked the same Question last year, she referred to the use of an herbicide which can be effective. My noble friend Lord Greaves referred to more pressure on landlords. It would be disproportionate, and possibly unfair, to impose very strong conditions on landowners because, apart from anything else, this weed can arrive on their land through no fault of their own. However, farmers receiving the single farm payment are required to take reasonable steps to prevent its spread.

Lord Clark of Windermere (Lab): The Minister is absolutely right to try to pursue this pernicious weed as much as possible but there is a belief that, in a restricted sense, persistent application of the herbicide to which he referred will actually be quite effective in killing it, in a limited state. Is there any way of doing some emergency research on those one or two herbicides and to try to publicise that? It would remove a lot of difficulties for many people who are trying to sell houses and clean up their land.

Lord De Mauley: It is a difficult one but the answer to that question is that the herbicide which the noble Lord and I are talking about is effective if used persistently, as he says, so I do not think that further research is needed. The question is the extent to which we want to spray around quite powerful pesticides. That is why I suggest to your Lordships that things such as biocontrol are also very valuable.

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Lord Elis-Thomas (PC): My Lords, the Minister will be well aware that invasive species of this kind are no respecters of boundaries, whether political or otherwise. Can he therefore assure the House that the UK Government will take a positive attitude towards the oncoming European Union regulations in these matters, which are being discussed in the European Union even at this moment?

Lord De Mauley: Yes, my Lords. Indeed, the regulation has now been approved by COREPER and the European Parliament’s environment committee. It has also now cleared the scrutiny committees of both the House of Commons and your Lordships’ House. I understand that the regulation will now be presented to the European Parliament’s plenary session on 16 April. If approved there, the regulation will be presented to the next suitable Council meeting and should then come into force on 1 January next year.

Lord Davies of Oldham (Lab): My Lords, can the Minister assure the House that he views this with a proper sense of urgency? A recent survey has said that there is not six square miles of land in this country which is not infected with this weed. In Swansea, they have calculated that they have 62,000 tonnes of it to get rid of. It is clear that this is a major problem. The effect upon Network Rail and the railway system is absolutely dramatic. We want the Minister to demonstrate a real sense of urgency on this issue.

Lord De Mauley: I am sorry if the noble Lord thinks that I am not. He is right about the effects. He specifically mentioned Network Rail, which is a member of the project consortium for the natural control of Japanese knotweed, and it is fully involved in our discussions about how the trial proceeds. It has been a major funder of the research and was among the instigators of the project. If it would meet with noble Lords’ approval, I would like to offer a briefing session to those who are interested on our approach generally to invasive non-native species.

NHS: Hospital Medication


11.15 am

Asked by Baroness Gale

To ask Her Majesty’s Government what procedures will be put in place to ensure that every patient newly admitted to hospital will have their medication regime reconciled within 24 hours of admission.

Baroness Jolly (LD): My Lords, timely medicine reconciliation on admission to hospital can help to prevent medication errors, such as omitted and delayed medicines, wrong dose or wrong formulation. NHS trusts in England should have their own policies and procedures in place for the safe and effective use of medicines, taking into account joint guidance from the National Institute for Health and Care Excellence and the National Patient Safety Agency, which is now subsumed into NHS England.

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Baroness Gale (Lab): I thank the Minister for her reply. In doing so, I declare an interest as I chair the APPG on Parkinson’s. Is she aware that people with Parkinson’s can take up to 30 tablets a day and that it is of vital importance that they have their medication on time every time? Does she agree that patients with Parkinson’s who are admitted to hospital should have the right to self-administration of their own medicine? That would put them in control and help to control their symptoms, and would certainly help staff. Will she take advice from Parkinson’s UK, which has great experience in this field, on how to train nurses to understand this task?

Baroness Jolly: The noble Baroness speaks from a position of much expertise as the chair of the APPG on Parkinson’s. It is really important that people with Parkinson’s disease get the medicines that they need when they need them, whether they are being cared for in their home, in a care home or in hospital. The NHS is working to improve services for people with Parkinson’s disease. This includes ensuring that staff are properly trained to support people with Parkinson’s and other neurological conditions.

Lord Walton of Detchant (CB): My Lords, does the Minister agree that the management of drug therapy for patients with parkinsonism may require exceptional skills? It is not a matter of taking tablets two or three times a day. The dosage and its timing must be tailored specifically according to the needs of the individual patient. If the timing of a particular dose is unduly delayed, this may result in what is called the on/off phenomenon, with a sharp return of disabling symptoms. It is therefore crucial that this matter be taken on board. Does the Minister believe that this issue, highlighted by the Question tabled by the noble Baroness, Lady Gale, is being properly handled in the NHS at present?

Baroness Jolly: I can tell the noble Lord that NICE guidance suggests that people with Parkinson’s disease should have their medicines given at the appropriate time, not on the ward round with the trolley of regular medication. Where it is absolutely appropriate and possible, this may mean allowing self-medication.

Baroness Manzoor (LD): My Lords, medication reconciliation is very important because it is a health and safety issue. Between 2003 and 2004, the National Patient Safety Agency declared that over 7,000 patients had been affected by an error with their medication. What are the Government doing to work closely with hospital pharmacies so that electronic records are shared between GPs and hospitals?

Baroness Jolly:NICE, the NPSA and the Royal Pharmaceutical Society have all identified the key role of pharmacists in medicines reconciliation. I am pleased to say that the majority of hospitals now have pharmacists on admission wards and doing daily ward rounds to ensure patients’ medicines are reconciled promptly. On the data point, I understand that NHS England is exploring the possibility of developing a business case for pharmacists to have access to the electronic summary care record. However, any work on this will need to be sequenced into the development timetable along with other priorities.

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Lord Patel (CB): When I was chairman of the National Patient Safety Agency, it produced the guidance that the noble Baroness mentioned. It identified the failure of reconciliation of medicines in acute admissions as a major patient safety issue. The failure rate in hospitals ranged from 10% reconciliation to 80% reconciliation. Those hospitals that achieved 80% reconciliation did so for one reason: pharmacists were involved. These are acute patients on multiple drugs. There is no other way except that those who know drugs and reconciliation are involved in the reconciliation of medicines on admission.

Baroness Jolly: The noble Lord is absolutely right. Pharmacists need to show leadership and expertise and to support all their colleagues to ensure that this happens appropriately.

Lord Harrison (Lab): Will the Minister report on this morning’s report on the use of nanotechnology to suppress the disfiguring tremors experienced by Parkinson’s sufferers? What progress can be made there, and what can the Government do to improve it?

Baroness Jolly: The noble Lord has me at a disadvantage because I have not seen the report to which he refers. I am sure that Parkinson’s UK is working with the research community to ensure that this is sorted out.

Lord Flight (Con): My Lords, are the Minister and the NHS aware of the new technologies which can deliver patients’ full medical records to a consultant’s iPad on the spot in a hospital? Is the NHS keenly pursuing those new technologies?

Baroness Jolly: Certainly those technologies exist. I have seen some of them in action, and they are really impressive. Local hospitals are responsible for their own IT systems, and some are very much further ahead than others, but I am sure others are aiming to catch up.

Baroness Wheeler (Lab):My Lords, the Minister referred to the guidance on the reconciliation of medicines drawn up by NICE and the National Patient Safety Agency in 2007. However, since the Government abolished the NPSA two years ago and transferred the work to NHS England, information about the agency’s work and how it is being carried out and taken forward is very hard to come by. Will the Minister reassure the House that monitoring, keeping the guidelines under review and updating them to ensure patient safety are priorities for NHS England and the Government?

Baroness Jolly: Patient safety is indeed critical. After Mid Staffs and the Francis report, safety, openness and accountability are key, along with the duty of candour. “Sign up to Safety” is to be announced later this week to ensure that efforts are reported. That will help local hospitals and care homes understand where mistakes are being made and make patients feel more comfortable by owning up to problems.

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Climate Change: Extreme Weather


11.23 am

Asked by Lord Judd

To ask Her Majesty’s Government what recent assessment they have made of the effects of climate change on the frequency of extreme weather events in the United Kingdom; and what action they propose to take as a result.

The Parliamentary Under-Secretary of State, Department of Energy and Climate Change (Baroness Verma) (Con): My Lords, summer heat waves and heavy rainfall events are expected to become more frequent in future. The Government are taking action through the national adaptation plan to develop UK climate resilience, through the Climate Change Act 2008 and the Energy Act 2013 to reduce domestic greenhouse gas emissions by 80% by 2050, and through international negotiations to mitigate climate change by reducing global emissions.

Lord Judd (Lab): While I thank the Minister for those observations about resilience, does she agree that the estimate is that over the next 20 years a further 250,000 homes will be at risk and that the cost of the damage is likely to be in excess of £3 billion? Can she assure us that the Government are galvanising action without delay and with all due priority to ensure that the programme is sufficient for the resilience necessary? Furthermore, does she agree that because of the threats within the United Kingdom coupled with the threats across the world—disease, hunger, migration and acute instability—there can be no further delay in galvanising the international community into making this absolutely central to all political activity?

Baroness Verma: The noble Lord is of course right. My right honourable friend the Minister Greg Barker is currently in New York, ensuring that negotiations at an international level are very much focused on going forward for 2015 and on the sort of commitments that we want from the international community. Closer to home, the noble Lord is of course aware that we have invested over the course of this Parliament over £3 billion in trying to respond to issues such as floods. We are now protecting 20,000 more houses over the 165,000 houses that were already protected through the measures that we have taken.

Lord Howell of Guildford (Con): My Lords, what my noble friend says about adaptation is welcome. Would she not agree that now may be the time to consider switching our colossal expenditure on attempted mitigation to adaptation to what is widely believed by many experts to be coming in the way of more extreme weather, in line with the recommendation of the Intergovernmental Panel on Climate Change’s working group? Would the Minister accept that our current mitigation efforts seem to be producing not a vast improvement in carbon emissions but, in fact, an increase in our carbon footprint, more burning of coal, increased fuel poverty, and the driving away of

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investment from this country to where power is cheaper, raising the prospect of blackouts and general environmental damage? Is it not becoming obvious that some change of direction in our climate and energy policy is overdue if we are to achieve our green goals?

Baroness Verma: My noble friend raises a range of very important issues. Of course, climate is measured in average conditions over the long term, but I agree with my noble friend that it is about both adaptation and mitigation. We cannot have one or the other; we have to have both. It is important that, going forward, we encourage not only ourselves but the international community and our partners to respond to the serious issues of increased carbon emissions.

Baroness Worthington (Lab): My Lords, it is absolutely clear that the evidence is now showing that climate change is manmade and that we must act. Would the noble Baroness agree with me that, on discovering a flood in a bathroom, you would not make your priority to turn your house into a swimming pool? You would turn the tap off. That is precisely what we need to do. It is regrettable that we have some prominent Members of the Benches opposite who do not seem to accept this logic. I hope that the noble Baroness will continue her spirited and consistent defence of action on climate change.

Baroness Verma: My Lords, we have been consistent on this side of the House that we need to address mitigation and adaptation.

Lord Teverson (LD): My Lords, the Minister has mentioned mitigation several times. So far as mitigation and the United Kingdom are concerned, is it not true that one of the most important things—and one of the most important pieces of legislation undertaken in recent years—is this Government’s Energy Act, which the Minister guided and pushed through this House? Is that not an example of how the Government have made sure that mitigation and the future problems of flooding and climate change are being tackled directly by the Government?

Baroness Verma: I am extremely grateful for my noble friend’s intervention and I agree with every word that he has said.

Lord Lawson of Blaby (Con): My Lords, is it not clear that my noble friend the Minister is completely mistaken in saying that it is not a question of mitigation or adaptation but both? There are competing claims on resources, and we have to decide which is our priority. Is it to decide single-handedly to decarbonise the world and thus, to no useful purpose, push up British energy prices, make fuel more expensive for British homes and litter the countryside with wind farms and solar panels? Is it not better instead to devote our resources to increasing our resilience to extreme weather events, whether or not the frequency of such events is marginally increased by global warming?

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Baroness Verma: As always, I am extremely grateful to my noble friend for his intervention. However, I am also grateful to him for allowing me to say that the UK has among the cheapest energy prices in Europe. I think my noble friends will agree that this is about measures that address the issues of today, but which also look forward to ensuring that we have a much better future.

Viscount Simon (Lab): My Lords, the noble Lord, Lord Judd, mentioned food in his supplementary question. In a programme some months ago on the BBC, it was stated that this country has the largest production and consumption of baked beans in the world. Can the noble Baroness say whether this affects the calculation of global warming by the Government as a result of the smelly emission resulting therefrom?

Baroness Verma: The noble Viscount’s question is so different. He raises a very important point, which is that we need to moderate our behaviour.

Housing: Discretionary Housing Payment


11.30 am

Asked by Lord McAvoy

To ask Her Majesty’s Government what assessment they have made of the level of discretionary housing payment available to local authorities.

The Parliamentary Under-Secretary of State, Department for Work and Pensions (Lord Freud) (Con): My Lords, the department has asked local authorities to provide details regarding their use of discretionary housing payments twice yearly. Details of how local authorities are using discretionary housing payments in the first half of the year were published on 20 December. Despite some people’s predictions, the vast majority of local authorities were managing within their budgets. In 2014-15, local authorities will receive a share of £165 million, which will ensure that they can offer ongoing support where appropriate.

Lord McAvoy (Lab): My Lords, despite assurances from the Minister, 47 councils spent 90% of their DHP budget by February. A third of the councils reported that a third of the applications were refused. Can the Minister tell the House whether he is aware of how many evictions there have been due to bedroom tax arrears? Does he know? Does he care?

Lord Freud: My Lords, the noble Lord used those figures as if they were his; I am sure that he would want to attribute them to another group called False Economy. They show that 85% of councils surveyed had spent less than 90% of their money with one month to go. However, in that particular report, which found that 11 councils had overspent, there were a lot of mistakes. The figures for four of them—Swindon, Haringey, Leeds and Middlesbrough—were simply wrong.

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Lord Best (CB): My Lords, has the Minister had a chance to see the Joseph Rowntree Foundation report released today, which provides a fairly definitive analysis of what has been going on with the so-called bedroom tax over the past six months? If he has, did he note that—sadly, from one perspective—savings were about £115 million less than had been hoped for during the course of this year? About 6% of people have moved home, but another 22% have been trying to move home but have not been able to downsize, because there is not accommodation for them. Although the Rowntree report from Professor Wilcox predicts that over £330 million will be saved this year, sadly, that is at a pretty great cost to both tenants and landlords.

Lord Freud: The savings that we are looking at—which are running on the Budget scoring at £490 million—are both observable and unobservable; in other words, from people moving or from people taking up jobs and coming off benefits. There are various figures around. The BBC last week talked of 6% of people moving in 11 months; the JRF report, which the noble Lord has just cited, talked about 6% in six months; a report a couple of months ago from Harry Phibbs, doing a similar job, found that 11% had come off benefits because they had gone into work. We will have proper returns on discretionary housing payments in May, and are working on getting a proper report on all of this.

Baroness Taylor of Bolton (Lab): Will the Minister answer the question posed by my noble friend about the number of evictions? Does he know the number, and does he care?

Lord Freud: My Lords, I am not sure of the exact number of evictions, but I do not think that there are very many at all, if any. Clearly it is a matter of great concern. I can let the noble Baroness know that the data from the Homes and Communities Agency, which are based on the 266 largest housing associations with more than 1,000 homes, show that the average arrears in the final quarter of last year—the third quarter of the financial year—fell to 3.9% from 4.1% in the previous quarter and that rent collection rates for the year stood at 99%.

Lord Flight (Con): The Minister will be aware that in central London and, in particular, the borough of Westminster—and I declare an interest as my wife is a councillor—there have been cases where very substantial housing benefit amounts have had to be paid particularly to house those categories that the local authority is obliged to house. Is there any system or intent to limit the amount of housing benefit that can be paid on an individual property?

Lord Freud: My Lords, my noble friend draws attention to the point that we have introduced a cap on the amount of housing benefit to stop the very large amounts that were paid on local housing allowance.

Baroness Sherlock (Lab): My Lords, 500,000 people are affected by the bedroom tax, most of them disabled. If the Minister wants some figures, two-thirds of tenants hit by the bedroom tax are currently in arrears and, of

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those, 40% have been issued with a notice seeking possession. This is a serious crisis, and I think that the Minister should acquaint himself with all the figures, including those on evictions.

The House knows that a Labour Government would abolish the bedroom tax. The Minister told the House on 12 December that,

“the interim review is due to be published in the spring of 2014. I will be most pleased to discuss the findings of that review with Members of the House, who I suspect will be keen to have that dialogue”.—[

Official Report

, 12/12/13; col. 907.]

I am very keen to have the dialogue. When does it start?

Lord Freud: The noble Baroness need not persuade me about the savings—she needs to persuade the OBR, which has scored down in the Budget £490 million. The noble Baroness talked about the fact that a Labour Government would abolish the spare room subsidy. We will produce an interim report later this year, as I said, and we will bring forward next year the full report on what has been happening with the bedroom tax, as you would call it.

Hereditary Peers By-Election


11.38 am

The Clerk of the Parliaments announced the result of the by-election to elect a Cross-Bench hereditary Peer in the place of Lord Moran in accordance with Standing Order 10.

Twenty-seven Lords completed valid ballot papers. A paper setting out the complete results is being made available in the Printed Paper Office. That paper gives the number of votes cast for each candidate. The successful candidate was Lord Cromwell.

Durham, Gateshead, Newcastle Upon Tyne, North Tyneside, Northumberland, South Tyneside and Sunderland Combined Authority Order 2014

Motion to Approve

Moved by Baroness Stowell of Beeston

11.38 am

That the draft order laid before the House on 13 March be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 April.

Motion agreed.

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County Court Remedies Regulations 2014

Motion to Approve

11.38 am

Moved by Lord Faulks

That the draft regulations laid before the House on 13 March be approved.

Relevant document: 24th Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 April.

Motion agreed.

Draft Public Bodies (Abolition of the Committee on Agricultural Valuation) Order 2014

Motion to Approve

11.39 am

Moved by Lord De Mauley

That the draft order laid before the House on 6 February be approved.

Relevant documents: 34th Report from the Secondary Legislation Scrutiny Committee, 22nd Report from the Joint Committee on Statutory Instruments, considered in Grand Committee on 7 April.

Motion agreed.

Higher Education

Motion to Take Note

11.39 am

Moved by Lord Ahmad of Wimbledon

That this House takes note of higher education in the United Kingdom.

Lord Ahmad of Wimbledon (Con): My Lords, more than half a century ago, a former Member of this House, Lord Robbins, published his seminal report on higher education. He and his colleagues, including the noble Lords, Lord Layard and Lord Moser, believed that going to university was inherently worth while. This belief remains true today, whether you study particle physics, history or nursing. Higher education is truly transformational.

Our current demographic pressures are less immediate than those facing Lord Robbins and his team in the 1960s, but the forces driving increased demand for higher education have not diminished. They have been at work for the past 50 years and they will continue. We all recognise that there is a huge demand for learning from individuals and, indeed, from employers who continue to demand graduate-level skills.

Governments across the world want to increase their number of students in higher education. No country says, “There are too many students”. Everywhere in the world, in developing and developed countries alike, they want more people to have a higher education. International competition is played out at a higher skills level, and we cannot fall behind.

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Our higher education system is renowned throughout the world. We regularly feature highly in the range of world university rankings, often coming just behind the United States as second in the world and, because of our impressive international reputation, our higher education system is a significant international export. However, while the UK has been cautiously increasing its student numbers in the past decade, other developed countries have been expanding at a much faster rate. Participation in tertiary education among young people up to the age of 20 increased by 14% in the UK between 2005 and 2011. However, it increased by 51% in Denmark, 35% in Germany, 29% in Austria, and 23% in the Netherlands, to name just a handful of the countries that have expanded their student numbers faster than we have.

When Lord Robbins reported in 1963, there were fewer than 200,000 British students in higher education. We now have 1.2 million British undergraduates. His view was that,

“courses of higher education should be available for all those who are qualified by ability and attainment to pursue them and who wish to do so”.

That principle is just as important today as it was then.

However, in 2009, when the noble Lord, Lord Browne, was commissioned to undertake his independent review on higher education funding and student finance, all political persuasions recognised that to continue to fund a world-class higher education sector during a time of significant economic downturn we would need to rebalance the costs of higher education between student and state.

The Government’s reforms to higher education were based on achieving a well funded sector which had a reliable stream of income to enable it to compete internationally and to drive up the quality of teaching. We have done just that. Indeed, the OECD said recently that we are,

“the first European country that established a sustainable approach to HE funding”.

By increasing the tuition fee cap but, importantly, subsidising tuition fees, students have a significant stake in their higher education. They are becoming more discerning consumers of their education, valuing their experience and demanding more quality learning.

Better information is central to the Government’s reforms. The key information set gives prospective students a range of data that they need to make meaningful comparisons on costs, courses and employability. The Government have plans to work with universities to extend it to make it even more useful and powerful, so we have made more information than ever before available to students and their parents while at the same time preserving the independence and autonomy of institutions. That is, indeed, a key feature of the landscape—government does not intervene in what is studied or how it is taught. However, good-quality teaching and an improved student experience are central to the reforms. Bold vice-chancellors—indeed, some are in your Lordships’ House today—are already changing the incentives to focus on good teaching within their institutions. Above all, our reforms have put students back at the heart of the system, where they belong.

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The good news is that, since our reforms, young people have not, as some have suggested, been put off applying to higher education institutions. The Government sent recent graduates into schools and colleges to explain how the new finance system works, and applications for higher education in 2014 have returned to pre-2012 levels. Many popular universities have been able to grow the number of places they offer to students. Data published by UCAS for entry in the 2014 cycle from applications up to the January main scheme deadline show that the application rate for English 18 year-olds has increased to the highest ever level, at 34.8%. This figure is even more impressive when seen in the context of the continued fall in the 18 year-old population in our country.

The rise in applications shows that young people understand that they do not have to pay upfront to go to university. They recognise that paying back as graduates through PAYE once they earn £21,000 or more is nothing like leaving university with a credit card debt. This matters. All the evidence shows that going to university is a truly life-changing experience, and it would have been a tragedy if young people had given up the dream of getting a higher education. Higher education truly empowers.

Application rates for those from disadvantaged backgrounds have continued to rise to a record level of 20.7%. The naysayers who said that an increase in tuition fees would deter disadvantaged students cannot argue with the facts before us. The trends are upwards and, in addition, there is a welcome rise in applications from mature students—an increase of 9% compared with the same point last year for the 35-and-over age group. Students and their families have come to understand that a degree remains one of the best routes to a good job and a rewarding career.

Perhaps I may offer a personal reflection for a moment as the son of a migrant who arrived in this country with only £5 to his name. One thing instilled in us as we were growing up was the value and empowering elements of education. No matter what education you have received, wherever you go in the world it is your personal asset. I personally realise the struggles that many make to ensure that they, and in turn their families, have opportunities for education.

Looking at the current figures, 87% of graduates are in now in employment as against 66% of non-graduates. However, we should not suggest that graduation guarantees a job. I remember in the early 1990s applying for my first job, and my experience is something that I have shared with others. I am not ashamed to admit that I received 63 rejections. However, I kept going and got a job. That showed that, despite the odds, perseverance is important. Apart from educational skills, that is an attribute that our universities up and down the country instil in students.

Increased supply appears to have been matched by continuing demand for graduate skills, so the graduate premium has broadly remained constant. It has regularly been estimated at well over £100,000 of extra lifetime earnings after tax. The latest independent research shows that male students with a degree can expect to boost their lifetime earnings by £165,000, and for female students it is an even more striking £250,000.

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Of course, the financial returns are not just personal. As my right honourable friend the Chancellor has made clear:

“Access to higher education is a basic tenet of economic success in the global race”.

It drives long-term growth and boosts productivity. Graduates fuel innovation. Research conducted by the National Institute of Economic and Social Research shows that around 20% of UK economic growth between 1982 and 2005 came as a direct result of increased graduate skills. A 1% increase in the share of the workforce with a university degree raises long-run productivity by between 0.2% and 0.5%. This suggests that at least one-third of the increase in UK labour productivity between 1994 and 2005 can be attributed to the rising number of people with a university degree.

I turn now briefly to the issue of student numbers and the related cap. This is the evidence base against which the Chancellor made his historic commitment in the Autumn Statement to expand student numbers. As noble Lords will recall, he announced that, in 2014-15 the Government would increase the number of places by 30,000, so that popular institutions could expand and grow further, and that by 2015-16 the Government would remove number controls for publicly funded universities.

Lord Purvis of Tweed (LD): I am most grateful to my noble friend for giving way. I am listening carefully to the Minister’s speech and am most impressed by it, but this is a debate about higher education in the United Kingdom; it is not about higher education in England and Wales. As someone who is resident in Scotland, and as a legislator in the Scottish Parliament who voted for a different structure for fees for students and for a different funding model, I wonder whether the Minister will be addressing some of the benefits for the whole of the United Kingdom of a distinct approach to higher education in parts of the United Kingdom.

Lord Ahmad of Wimbledon: I thank my noble friend for that intervention but as he is aware, that is a devolved matter and one for the Scottish Government. While I have been focusing on England and Wales, when we look at education overall, we talk to the Scottish Government in terms of the overall UK plc offering. I hope that, at the end of the year, we will have similar unified discussions on promoting the UK. I am sure that my noble friend agrees with my sentiments on that.

Turning to universities and removing the cap, as I was saying, universities can accept many more of the qualified people turned away each year. Only this morning, it was brought to my attention by my noble friend Lord Popat, who is sitting next to me on the Bench, that a student who fulfilled the criteria and had clearly qualified on all fronts, was unable to get a place because of the cap on numbers in a particular institution. We need to look at that seriously. We can afford to do this because our reforms have made a systematic change to the funding model. Our reforms rebalance support so that the contribution from graduates increases. However, the taxpayer still subsidises the overall cost of degrees by 50%. We think that it is fair for graduates to pay because there are such definitive private gains. The planned expansion brings new money to educate

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these students. The Treasury has provided £5.5 billion of student loan outlay as well as additional resource funding over the next five years. In tough times we are protecting science. We have ring-fenced our £4.7 billion annual science budget to give researchers the security they need to plan for the long term, and we have injected major new long-term investment into science capital so that our researchers remain at the cutting edge.

There is extra funding of £185 million over four years for teaching expensive subjects such as science, technology and engineering. This extra spending complements a recent £200 million investment in STEM teaching capital. Matched by equal investment from institutions, this will invest some £400 million in the creation and upgrading of teaching facilities. It will ensure that students receive high-quality teaching that fully equips them for the economy of the future. It will sustain and support an increase in the number of good-quality higher education STEM student places.

Our reforms have meant that we have been able to increase the cash going to universities, while avoiding upfront fees for students and managing the costs to the taxpayer. Our calculations show that, in the wake of our reforms, total overall university income in England—I apologise to my noble friend—from all sources has gone up considerably, from just under £23 billion in 2010-11 to nearly £24.3 billion in 2012-13. The sector is in good financial health. This all ties in with the picture we have from the Higher Education Statistics Agency’s latest higher education business community interaction survey. It is a picture of universities bringing in big revenue by working flexibly with business and the outside world. In 2012-13, they earned £1.2 billion from business research contracts, which is up on the year before.

However, noble Lords will realise that relationships now stretch well beyond this. I am sure that many noble Lords are part of this. Universities earned another £1.5 billion from a wide range of services, from consultancy and CPD courses to regeneration programmes and the use of equipment and facilities. Universities have become a major source of exciting new companies. In 2012-13, 150 new spin-out companies were set up to exploit research ideas born in UK higher education institutions. On top of that, more than 3,500 new start-up companies were established by staff and recent graduates. In total, the survey found that UK universities earned an impressive £3.6 billion in 2012-13 through business and community activities.

I look forward to hearing from all noble Lords who are contributing to this debate. Any new funding system drives a change in the behaviour of both students and institutions and, of course, we will need to monitor the overall affordability of the system. If necessary, we will take action to ensure that it remains sustainable in the long term. We are seeing a historic shift. We cannot predict precisely how our reforms will be viewed three decades from now but the reforms are intended to make our world-class system even stronger. This Government want to see more investment, greater diversity, less centralisation and a sector even more accountable to students and the taxpayer. We are confident that the difficult financial decisions we have

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had to make and continue to make are the right ones to ensure that we have a sustainable long-term future for higher education in our country. I beg to move.

11.56 am

Baroness Morris of Yardley (Lab): My Lords, I thank the Minister for bringing this debate to the House. There is a great deal of expertise across the Chamber and, given the breadth of the title of the debate, I am sure that we will explore a wide range of issues.

I start on a conciliatory note by joining the Minister in acknowledging the importance of this sector. Wherever you look in life, at whichever quarter of our society—whether it is our industry or competitiveness or whatever —universities play an important role. Certainly, as we become a greater globalised economy and its success depends on research and innovation, universities will have a greater role in what we do, not a lesser role.

We should take this opportunity to recognise some considerable successes. Sometimes we are not good at repeating what our successes are and I want to do that. In any league table, we regularly have a small number of universities in the international top 10. We should be very proud of that and the fact that we punch above our weight. We have excellent research. In terms of the proportion of publications compared to the size of the nation and the amount of our investment, we punch above our weight. Higher education gives us a strong export industry, with £10.7 billion of export earnings. Many of our international partnerships have been built on personal relationships which started when people from overseas came here to study. For many of us who are of that first generation of socially mobile people, we owe that to higher education.

There is a good news story to be told about higher education and the Minister endeavoured to tell it, but it is not quite as rosy as he would have us believe. I was waiting for the next 15 minutes of his speech, when he could have addressed some of the real problems affecting the higher education sector at the moment. There are considerable challenges and, although our research is good, our spending on research has dropped. It is now at a lower percentage than other OECD nations. The number of part-time students has fallen by more than 30% and, whatever the increase in the number of people going into higher education, we all know that social class plays too high a part in access to and attendance at university. As we have increased the numbers of people going to university, we have never narrowed the gap between the percentages of children from higher and lower socioeconomic backgrounds who go to university.

We also pay too little attention to the difference that is fast emerging between the percentage of males and the percentage of females, particularly school leavers, who attend higher education. Some 74% of males do not go into higher education, which is quite a frightening figure. The number of males applying for higher education is now lower than the number of women who attend. That is another characteristic which reflects the fact that we have not yet solved the problems of access.

What we did not hear about from the Minister, of course, is the fact that the new student funding system could actually end up being more expensive than the

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system it replaced. The only reason I draw attention to this is because universities are so important that any decline or structural difficulties need to be addressed, so I regret the fact that the Minister did not refer to those in his speech.

However, I want to address a completely different point. If we were having a debate about schools, we would be talking about how to create a diverse system. The word “diversity” has been at the top of the education agenda of both parties for two or three decades. We have had and still have a diverse system in higher education in many ways, but we seek to hide it, which is almost the opposite of what happens in schools. Let us reflect on the situation two or three decades ago before higher education was brought together into one structure. Its diverse missions were evident in its titles. We had the polytechnics, the institutes of technology, the colleges of education which had replaced the teacher training colleges, and we had very focused colleges of further education.

Without wanting to feel that I am getting really old by thinking that all the glory is in the past, there is a part of me that yearns for what was the situation when I was the head of the sixth form at an inner-city comprehensive school. For those students who wanted to take a vocational route into a vocational profession, the path was very clear, and it went something like this. They would go to college to do a BTEC, then on to a polytechnic to do an HND, and then they would convert it into a degree. There was a clarity of mission and of route that has somehow become muddied and hidden in the situation we have now. Although I do not want to argue the case for going back, and although I appreciate the benefits which the unified system has brought, I worry that what is happening in actual fact is that we will never get away from groupings. We have groupings within the unified higher education system today, but they do not give clarity about mission or send a message about a clear route through. What we have is self-styled and self-described university groupings which have resegmented the higher education system without giving it the clarity it used to have.

Let us look at my own career since I became a Member of your Lordships’ House. For three years I worked at the University of Sunderland. At the moment I am chair of the council at Goldsmiths and I am employed by the University of York; in saying this I have declared my interests as set out in the register. Over the years I have worked at a post-1992 university, I chair the council at what was a 1994 university—I know that the 1994 group has been abolished, but I am sure that something will take its place—and I work at a Russell group university. Those are the groupings that have replaced the titles we used to have. When I look at the three universities with which I have connections, I can see that every one of them excels at part of its mission. Sunderland University does the best of any institution I know of at civic leadership. Sunderland city would not have made the progress it has as a city in the north-east if it did not have its university with its widening participation, which is taken seriously. That is helping social mobility in one of the most deprived areas of the country. Goldsmiths regularly produces some of our nation’s finest artists and musicians and it is a university with an international record.

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York has an excellent reputation for research and regularly appears in the top 10 or 15 of any university league table. But although all three universities have an area of excellence, the perception of the groupings they are placed in defines them as institutions, and that risks hiding their strengths.

Whatever is the strength of a university or however much it might treasure that strength, it is the performance tables which actually define them. Two of the universities I have been connected with are penalised for their strengths. Sunderland University excels at widening participation but is penalised because one of the big ratings in the university league tables is the entry qualifications of the students it admits. Because it takes risks with children from poor backgrounds and second-time learners, and puts its reputation on the line, it is penalised in the rankings, despite its student satisfaction being well above 4. As for Goldsmiths, because it excels in art and music but does not do any STEM subjects, it is penalised by losing all its teaching grant.

The issue I want to raise today is that the shorthand for excellence has become self-defined by the sector and risks hiding much of the excellence that we actually have. I am really worried that we are in a situation now where not getting into what is defined as a top university is seen as a failure and those universities that are not considered a top university are not seen as contributing to the nation in the way that they have. However, in truth, the higher education system is more complex than that. Only 12 universities have more than half of their courses in the top 10. Let us just think about that: if you go to the University of Kent to study law, to Aberystwyth to study librarianship and information technology, to Manchester Metropolitan to study nursing, to Aston in Birmingham to study pharmacy or to the University of the West of England to study engineering, you have made the decision to go to a top 10 university for your course. However, not one of those universities has an overall ranking within the top 25, and some of them have an overall ranking outside the top 70. That matters, not because I want to pretend all universities are as good as each other or are all the same but because I want the opposite. The challenge I am putting out is that there should be greater rigour in defining excellence and it should not be just at university level.

The truth is that the self-styled university groupings have become shorthand for judging the best graduates, and it is that link that matters. Although the information is there on the website about strength in courses, employers and the wider world look to people who have gone to what is considered to be a top university and make the assumption that they are a top graduate. However, in many cases, that will not be the case. Perhaps theMinister will reflect on that and come back at the end of the debate to say how we can ensure that we have a higher education system that recognises, funds and assesses the hugely diverse nature of our higher education sector and that really does as much as it can to allow the sector’s many strengths to flourish and grow. Only in that way, and not by narrowing what we mean by a good university, will we be able to make sure that universities continue to play the important role that they have done since they came to our country.

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12.08 pm

Lord Storey (LD): My Lords, I am pleased to have this opportunity to debate such an important topic and congratulate my noble friend on securing this debate. I want to talk in the main about how important universities are becoming in developing innovation and in creating and supporting businesses, and how they are using their research capacity to do that. We have seen this accelerate enormously over the past few years, and universities have become an integral and important part of our economic growth.

As a topical example, only yesterday the Mayor of London launched Med City, a scheme aimed at strengthening links between hospitals, universities and businesses in the south-east’s golden triangle. Promising though this sounds—I would say that, wouldn’t I—I suggest we must focus attention on the truly innovative work being done right across the country, including Scotland. I want to highlight some of the work being done in the north-west of England. I need only look to my own city of Liverpool for an example of best practice. In 2006, a not-for-profit company, Liverpool Science Park, was established by Liverpool John Moores University—the original red-brick institution—and the city council. It is a flourishing science and innovation park which is currently home to more than 75 companies, including graduate start-ups, key commercial-facing facilities and a handful of business support companies. Liverpool Science Park has been leading the way in uniting the sector, the graduate talent pool and the local economies. Only last Thursday the local paper, the Liverpool Echo, reported on the increasingly large number of Liverpool city region students starting their own businesses as a result of the Liverpool Science Park.

I would also like to praise the work being done by John Moores’ Centre for Entrepreneurship and UnLtd. Their success story and their ethos must surely be shared as widely as possible across the sector. Indeed, students who cannot find traditional jobs upon graduation are increasingly being encouraged to start up their own businesses. Fortunately, this message is beginning to resonate. A report published last month by the Higher Education Statistics Agency, the Higher Education —Business and Community Interaction Survey, highlighted how more than 3,500 businesses were started by recent graduates last year, up from 2,357 five years ago. It is a result that we should all be proud of.

It is painfully clear how crucial graduate enterprise is to the success of the UK’s core cities and the wider economy. I hope that the Minister bears this in mind in his response. Let us not forget how daunting a prospect it is to set up and run a new business venture. We should also remember how some of the world’s best innovations and opportunities came from literally throwing ideas around with colleagues and collaborators —think Facebook, think Apple. This is where universities come in, bringing businesses together with other like-minded entrepreneurs, providing support and assistance, and helping to broker new relationships. Many universities host local economic growth hubs or business incubators to help small organisations and start-ups get off the ground. The result of this can be more jobs, more innovation and, crucially, more growth.

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Another example outside the north-west is the Brighton Fuse project, which brings together academics and entrepreneurs in the arts, humanities, design and digital sectors. They map and measure how they may best support one another. Similar schemes are starting to take shape right across the UK, and I hope the Minister will throw his support behind such projects.

However, the benefits that university research can offer the commercial sector have not always been as strong as they should be. The most recent comparative data on the performance of research institutions in Australia, Canada, the USA and the UK show that from a relatively weak position, the UK now leads on many indicators of commercialisation activity. In November 2012, Her Majesty’s Government announced a £60 million investment in UK universities to assist our most pioneering scientists and engineers to create successful businesses via research, helping to foster entrepreneurship and developing industrial collaboration.

The University of Bristol offers various schemes, such as the Proof of Principle awards, to encourage students and researchers to develop the commercial potential of research, explore markets, develop prototypes and take the first steps in generating impact businesses. Another of Bristol’s schemes is the Engagement Award, where researchers can receive up to £10,000 for developing and piloting new activities and approaches, establishing partnerships outside academia and providing training, skills and development.

This demonstrates that researchers and businesses can establish mutually beneficial relationships. The unique aspect of higher education is that the level of innovation can be constantly maintained as young people pursuing research vocations also fuel further research. I suggest that we should capitalise on this and create new links between university researchers and businesses. This would construct a sustainable method of creating more jobs, new opportunities and increased growth—a “win-win-win”, as they say.

I turn to another matter in our universities. While there is rightly an emphasis on increasing the proportion of women sitting on FTSE 100 company boards, there is sadly little being done by way of increasing the number of women involved in university leadership. Shamefully, only 14% of university vice-chancellors are women, whereas in business the proportion has climbed to 21% due to increased political pressure as well as pressure from businesses themselves; for example, via the work of the 30% Club. We are fortunate to have so many excellent women role models in this House, where we have a more equal balance of women on boards, positively influencing the culture of companies’ decision-making. Surely the same should apply to our universities and higher education institutions. Women need to feel confident, in that they have earned their position, that their views will be considered as equal to those of a man. They are not around to “make up the numbers”. An environment needs to be fostered where a macho style of leadership is eliminated and men and women are equally represented and valued. On how we go about this in the academic sector, in our universities, in the higher education sector, I would be interested to hear from the Minister or other noble Lords.

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I recently found out via a Written Answer from my noble friend the Minister that the numbers in higher education have increased dramatically in the past 10 years. Since 2003, for example, the number of doctorates has increased by nearly 50%, demonstrating a desire among young people to pursue research. The supply is there—we have an increasingly large pool of highly talented and enthusiastic graduates ready to work and ready to innovate. It is blindingly obvious that universities and colleges offering higher education courses are making an increasingly significant contribution to our recovering economy, both in terms of GDP contribution and jobs. The sector attracts significant investment from overseas —we must always remember that.

While it is right that we should think again about the target of 50% of young people attending university, focusing perhaps on a balance of college education, vocational training and apprenticeships, we cannot ignore the enormous benefits that a successful higher education sector provides, as we heard from my noble friend the Minister in his own personal experiences.

Our higher education sector also produces significant, non-economic benefits. They literally change lives by the opportunities and chances that they provide, especially for students from the lowest achieving schools and less well off backgrounds. I pay tribute to all those who work in this sector for their innovative work and for being a tremendous force for good right across the country, including Scotland.

12.17 pm

Lord Bilimoria (CB): My Lords, last Friday, Professor Venkatraman Ramakrishnan—known as “Venki”—the winner of the Nobel Prize in chemistry 2009, joint chair of the structural studies centre at the University of Cambridge and a fellow of Trinity College, received an award at the Asian Awards at the Grosvenor House Hotel for outstanding achievement in science and technology. In his acceptance speech, he said:

“I was very touched by the Prime Minister who gave us such a warm welcome address in a video message earlier this evening but I have to say, over the past 10 years, the level of xenophobia and anti- immigration rhetoric has been ramming up—visa laws are increasingly restrictive, so that’s hard for us senior scientists to attract the best talent! They do not see necessarily that actually Britain is really a wonderful place. I get offers regularly to go back to the U.S and I always decline, because I love working here. That perception has to be changed and can only come”,

from the Government changing their policies on immigration. There I end the quote from one of the world’s great scientists.

Foreign academics make up 30% of all the academics at our top universities, including Oxford and Cambridge, and foreign students are some of our most talented undergraduates and postgraduates. If people such as Professor Ramakrishnan are saying things like this, who knows how many future Nobel Prize winners are choosing not to take up a position at our universities?

I am an alumnus through executive education of the Harvard Business School. In January, I was present for a speech that the president of Harvard University, Professor Drew Gilpin Faust, gave to her university’s London alumni at the Guildhall. Professor Faust made

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it very clear that Harvard would make the best effort to attract the best students and academics from around the world. She said:

“The future we face together, the future we shape, will depend perhaps most of all on who we are and who we will be. Attracting and supporting the most promising students and faculty are crucial to all we aspire to do. When we think of what Harvard has meant to the world, we inevitably find ourselves focusing on people: the extraordinary individuals to define our identity and embody our aims”.

There you have it: the president of Harvard making it absolutely clear that her university will do whatever it takes to get the best academics and the best students, regardless of their social or economic background or their ability to pay. In July 2010, Nitin Nohria became the 10th dean of Harvard Business School. Nitin Nohria is an Indian who studied at the Indian Institute of Technology before going to the United States to study at MIT. In July, a fellow Indian academic, Rakesh Khurana, will take over as the new dean of Harvard College.

That is what we are competing against, and that is an example from just one university abroad. How easy it would be for us to lose our stars, such as Professor Venkatraman Ramakrishnan, when the likes of Harvard have an ethos such as that. The competition is not coming just from the United States. Canada is on an aggressive recruitment drive for international students. Australia and New Zealand are both attracting thousands of students from India, China, Korea and Japan to study in Sydney, Melbourne and Christchurch. Why are we not following their lead in trying to attract the best and brightest overseas students to our country?

The threat is not just from the Anglosphere. The French Government are moving to simplify the visa application process for international students. The ministry for education in France has just announced that it plans to double the number of Indian students at France’s universities by the end of the decade. Why do not our Government set a target to double the number of international students? Why do not they set a target of any sort to attract more international students, let alone from countries such as India?

The situation is not good. For the first time ever, our total student numbers are down. In a rush to reduce net migration to tens of thousands by the next election, the Government have succeeded in convincing some of the world’s most talented young minds that Britain does not want them. A report last week from the Higher Education Funding Council for England showed that international and EU student numbers decreased by 4,595 in 2012-13, the first such decline since 1985. That followed a survey from the National Union of Students in January showing that 51% of international students found the Government unwelcoming. In 2012-13, meanwhile, the number of Indian postgraduate students at Russell group universities declined by 18%. That is worrying news when the Department for Business said that education exports were worth £15 billion. That is wonderful news, but it makes the position all the more absurd when we are finally seeing signs of economic recovery.

Just today, we have heard that we are the fastest-growing economy in the developed world. If we want that to be sustainable, we need to invest in research and development.

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We spend a fraction of the OECD average on R&D funding. The Minister says that the Government have preserved their funding for research, but the

Times Higher Education Supplement

points out that, according to the Office for National Statistics, the UK spent 1.72% of GDP on R&D in 2012, down from 1.77% in 2011. Can the Minister confirm that?

At the moment, that places us in a miserable position in the EU 28 group. We are currently 12th, behind countries such as Slovenia, Estonia and the Czech Republic. Finland spends the highest proportion of its GDP on R&D at 3.55%, but even the EU average is 2.06%, and we are well below that. Investing just an extra 0.5% of GDP in science would make such a huge difference and should be a priority. That would give us the competitive edge for sustainable growth.

The fact is that our great universities—we have many—are succeeding despite, not because of government policy. The changes to student loans will come back to bite us. When the Government announced the changes to the system in 2010, they said that only a small number of universities would charge the new maximum of £9,000, tripled overnight from £3,000, and that the new system would create a more sustainable market-based environment in our universities, which would be better funded than ever. On all those measures, the scheme has failed. Only last month, the Government quietly announced that about 45% of university graduates will not earn enough or will not be able to repay their student loans. If the figure is only slightly out and reaches 48.6%, the Government’s own experts calculate that the Government will lose more money than they gained by increase in fees in England to £9,000 a year. Can the Minister confirm that?

The result of this is clear. Universities are no better off, students are worse off and the Government will end up having to pay even more to fund higher education than they did under the old system. The Government said in 2010 that the changes would allow for a free market of choices between courses and that competitive universities would prosper. There is no free market: almost all the universities are having to charge almost the maximum £9,000 for courses, when previously the Government said that only a minority would. The reason is that when the Government tripled the fees, they reduced the funding to universities and withdrew teaching funding almost entirely. Will the Minister concede that this was a big mistake? Can he tell us how many of the universities are charging near that £9,000 and what proportion of students are paying it? I am excluding the expensive courses, such as medical courses.

As I said in a debate that this House had on the Immigration Bill, the Government’s madcap immigration cap has harmed us. Over the past year, the number of Indian students has fallen by 25%. That is also partly because of the abolition of the two-year post-study work visa. Every time that I talk to foreign students they say, “If only we could have that ability to work for two years”. The current system is not easy when they have hardly any time to find a job. It is too difficult but that two-year post-study work visa really helped them to pay for their expensive education, gain some work experience and continue to build generation-long links with their countries. It did not help to have “Go Home”

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vans or the £3,000 bond, which were, thankfully, scrapped. These messages are sending out completely the wrong image: that this Government do not want international students. I wholeheartedly agree that the Government need to clamp down on illegal immigration and must continue to do so. However, that does not mean that we should harm the good immigration, particularly in our universities, which are desperately in need of academics and students.

Speaking recently, the chief executive of the Higher Education Funding Council for England, Professor Madeleine Atkins, said:

“International students enrich our universities and colleges—and our society—academically, culturally, and through their contribution to the economy. Supporting high-quality international education is a crucial part of ensuring that the UK continues to engage with, and benefit from, the increasingly interconnected world”.

The higher education sector is one of the jewels in the United Kingdom’s crown, as all of us who work within higher educationknow.I am privileged to be associated with a number of universities. I sit on three university business school boards: Cambridge, Birmingham and Cranfield. I also have appointments at Cambridge. I know that this tiny country, with less than 1% of the world’s population, has six of the top 20 universities in the world according to the latest QS rankings. There is higher attainment by ethnic minoritystudents than ever before and our universities will continue to dominate the international rankings, but these achievements have not been borne out by government policy, which is lagging behind. The Prime Minister is fond of referring to Britain as being in a global race for growth, trade and investment. Unfortunately, the juxtaposition between the Government’s economic and immigration policies more closely resembles a three-legged race.

I conclude that if we want to have a sustainable, competitive economy, yes, we need better school education and skills but our higher education is a crucial priority and must continue to be so. We must invest more in higher education as a proportion of GDP, from both public and private sources. We need to remove student immigration from the immigration figures. Can the Minister say whether the Government are going to do this? Our competitors do not include figures for student immigration within their immigration figures: the United States does not, nor does Canada or Australia. Can the Government also ensure that the two-year work permit is brought back in, so that students can work after they finish their studies, and that we invest more in R&D as a percentage of GDP than we currently do? Then we will stand a chance of competing in the global race.

12.29 pm

The Lord Bishop of Winchester: My Lords, I am grateful to the noble Lord, Lord Ahmad, for giving us the opportunity to debate this topic. The Church of England takes seriously its commitment to higher education. Many Bishops have a close involvement with the universities in their diocese, as visitor or chancellor or by sitting on the university council. Indeed, it would not surprise me if the right reverend Prelate the Bishop of Portsmouth said something about his commitment in his maiden speech later today. I gather that there is also one Bishop who is currently a student.

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As spokesperson for the Bishops on higher education I have a particular interest in this area, and I offer to your Lordships one understanding of what higher education is for, and particularly what the Anglican institutions can offer to the sector. It is important to invest in higher education as a public good whose purpose is to build up the common good.

Ten Anglican universities have emerged out of the Church of England investment in higher education over the past two centuries. Alongside these 10 there is another with an ecumenical foundation, Liverpool Hope University, which is where I was yesterday. Together with three other universities that have a Catholic foundation, they make up the Cathedrals Group. The majority of these universities were founded as teacher training colleges in the 19th century before the later rise of the red-brick universities. They were originally established to train teachers required for the many new Church of England schools. These colleges, as vocational institutions, began to develop their own faculties in the university disciplines connected with the subjects that the teachers would teach. With this growth, and with further diversification, many of these colleges became universities in their own right. With their historic foundation and unique ethos, they share with other older universities, and many recently established ones, the questions and challenges facing higher education today. What binds them together is a commitment to higher education as something that is a public good for the common good.

A number of significant factors are highlighted by those who brief in the higher education sector—for example, the economic contribution of universities, non-economic benefits, the expansion of higher education, university funding and international students. However, unless there is clarity about what higher education is for, the debate about its delivery is confused with its purpose. Put simply, at the highest level the value and purpose of higher education is as a public good for the common good. This perspective on higher education can be considered through three perspectives: generating creative graduates for a creative economy, offering formation for a context of social diversity, and an enabling environment for research and teaching.

First, it is clear that higher education is a key element in the wealth creation of our society. However, it is not so clear that universities should be assessed, in an instrumental fashion, in terms of the numbers of wealth creators they generate or how their contributions to an economy are directly attributable. Yet it is good to note that Universities UK has reported that the sector made a contribution of £73 billion to gross national productivity in 2011-12, and that this was a 24% increase on the previous evaluation in 2009. So it would be true to say that the contribution of a university, particularly to the local economy of its region, is an important aspect of what universities are for. The Million+ manifesto has suggested some strategic actions that could be taken to enhance the role of a university in the development of a local economy. Such initiatives would seem to chime well with the Government’s own commitment to developing major cities, and with their contribution to the GDP. One such city in my own diocese, Southampton, has seen a notable rise in

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its GDP. Not insignificant to that improvement is the role of Southampton University as a force in the region.

However, there is a certain obliquity to this goal of economic productivity. It is through aiming at something else that such a goal can best be achieved. For example, to encourage economic productivity it might be best to aim at creativity. It is creative people who contribute the most to the economy. This is because, as John Howkins has advocated, what we have today is indeed “the creative economy”. Today we need to encourage creativity, to enhance the intellectual freedom in which creativity takes place and to embrace the creative challenges that the market presents. A university can generate an environment to encourage such aptitudes in its students. It can unlock their latent talent, especially for those who have not traditionally accessed higher education. It is in this way that the university can contribute through the creativity of its graduates to the common good of the economy.

Corresponding to the challenge of making a creative economic contribution, with the spread of Anglican universities across the country, in Canterbury, Chester, Chichester, Cumbria, Gloucestershire, Lincoln, Liverpool, London, Lampeter, Plymouth, Winchester and York there is certainly a sense in which they are making a countrywide contribution to local economies. As a public good, these universities are contributing to national life by providing access to higher education for many who would not otherwise be able to develop their latent talent.

There is both a vocational perspective and creativity in the ethos of these universities. This includes what some would call a liberal arts world-view, both religious and secular. I was inspired yesterday by Cornerstone, Liverpool Hope University’s creative campus, in which its ethos of what is a public good and what the common good is for is expressed right in the heart of Everton.

Secondly, today’s societies require the kind of space in which there is the opportunity to have multidisciplinary engagement reflecting the globalisation of civilization. A university today needs to be able to offer a way of handling the multiversity of our pluralist societies and to include in its community those who have, in previous eras, been unable to participate in or access higher education.

Today no one individual, discipline or institution can hope to hold a total view. However, what can be encouraged is a form of intellectual inquiry that enables exchange between disciplines and between cultural perspectives and which therefore models new ways of living together in diversity. The value of higher education, its public good, includes the formation of students in a collegiality based on engaging with others and engaging with different kinds of knowledge through conversation.

The university, especially the university that is networked with others across the globe, is an essential space for enabling the conversation required between disciplines to help us face those global challenges that will diminish the common good: the unfettered power of economic change; the question of climate change and limited resources; and the disturbing forces of cultural differences. Reconciling and resolving differences will require societies that know how to negotiate.

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However, just when we need greater interaction between nations, and when higher education as a global public good is something many want and will pay for, the UK has made it difficult to study here. Universities are struggling with the limitations the new immigration legislation has placed on international students.

The Cathedrals Group of universities makes a significant contribution to the widening participating agenda. Not all noble Lords will agree with the target that 50% of young people should participate in higher education, but it is striking that we have nearly achieved that, with approximately 48% of 18 to 24 year-olds in each year group accepting a place at university. The Anglican universities have played their part in achieving this target and ensuring that young people from all backgrounds can participate in higher education.

Anybody who has spent time exploring the issues around widening participation will know that they are extremely complex. Nevertheless, many universities have found success can be linked to their commitment to develop the whole person by looking further than A-level grades at the admissions stage and exploring a deeper context that can illuminate the real potential of a candidate. From time to time, this might run contrary to the incentives of league tables, but it is completely in line with an optimistic vision of human potential and with higher education as a public good that is for the common good. However, it is a shocking fact that many students who take loans will graduate owing more than £50,000, with interest rates way beyond most market returns and a repayment scheme that will tax success, disincentivising social mobility.

Thirdly, there is a need for universities to promote a world-view for the civilisation of our societies that sees the intergenerational transfer of knowledge through teaching and inspiring the long-term commitment which academic research requires. This is more than a contribution to the economy or to social cohesion; this is about the development of a public good for the common good of civilisation and the flourishing of humanity. The separation of teaching and research universities will not help spread both the world-view of civilisation and its grounding in values of beauty, goodness and truth. Such a vision is deeply integrated in the Christian vision and mission, which inspired the medieval universities and contributed to the renewal of universities in the Enlightenment. This is not something that can be easily illustrated, but it is about a world-view of inquisitiveness and persistence, open to reality. Some discoveries, or applications of discoveries, require a capacity resourced by a world-view of ongoing exploration of this world and its meaning.

The world-view of the great medieval universities such as Oxford and Cambridge and those of the modern universities such as Berlin and London meant that they were such institutions. Universities such as these require investment for the common good by those who have responsibility for the common good. However, focusing research in just a few universities and in certain kinds of disciplines will undermine the very inquisitiveness and spread of research required. I am delighted that Liverpool Hope University has one of the best research centres on world Christianity.

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It might be a key resource for understanding today’s renewal of global religion and its impact on our societies.

The budget for HEFCE has been reduced. The implications are grave, especially for vulnerable communities. Funding for research has been ring-fenced, as has the allocation for funding-intensive subjects such as engineering and science. But this leaves the widening participation projects, such as Access to Learning, vulnerable to further cuts. There is need for public investment in universities, otherwise what is currently a public good will again become a private good, affordable to a few.

The Government’s intentions for higher education are a concern. There is a simplicity about lifting the cap on numbers and fees and allowing market forces to have their way, but if we wish to build on improvements in primary and secondary education we need to invest in the public good of higher education. There is a need for framework and a rationale for state support beyond free universities.

There may well be a reduction in higher education in the coming years, but let us not let that happen in a brutal fashion. We need universities who take seriously their public role, not just in contributing to the creative economy and social cohesion of globalised societies, but as institutions that also pursue, with academic rigour, new knowledge based in grounded research and good teaching. The privatisation and marketisation of the university may well solve some issues, but could raise many more problems. It is essential that national Governments remain committed to investing in tertiary education. Universities are essential public institutions: a public good for the common good.

12.42 pm

Lord Holmes of Richmond (Con): My Lords:

“A man who has never gone to school may steal from a freight car; but if he has a university education he may steal the whole railroad”.

Theodore Roosevelt knew of what he spoke. In saying that, he clearly demonstrated the benefit of higher education to the individual and to the entire nation. I thank my noble friend the Minister for initiating this incredibly significant debate.

Twenty years ago this summer, I graduated from the University of Cambridge. I was incredibly fortunate to win a place there. It was an extraordinary experience to be tutored, one to one, by some of the greatest minds in the world. To demonstrate the quality of that tuition, one of my ex-tutors will be speaking later in this debate.

To be part of that community at Cambridge—what an extraordinary opportunity that was. That institution has burned bright for centuries, not just across Britain but across the world, creating and motivating some of the world’s greatest scientists, writers, poets and engineers; a university which has created more Nobel Prize winners than almost anywhere else on the planet. Trinity College alone boasts 32 Nobel Prize winners: that is just one college of one university, part of our extraordinary higher education system.

It is also tremendous from a personal point of view to see that a previous vice-chancellor of Cambridge really pushed forward on sporting excellence alongside

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academic excellence. The two are not mutually exclusive. This did not limit sport only to rowing, rugby or cricket, and did not enable sportspeople to be only in the camp of rowing or land economy, but sat the two together and demonstrated through flexibility how you could have sporting and academic excellence alongside one another.

I will build on a lot of what the noble Lord, Lord Bilimoria, said about international students. This country should be saying, “We need, want and welcome international students from across the planet”. It is understandable that there was nervousness about them at a time when the economy was not in great shape, but that is of no consequence and is no excuse. Whatever the economic backdrop, we need, want and welcome international students. Of course we should not be naive about fake students, the conjured-up course and the non-existent institution, but those things are no reason to clamp down and shut the door on all that possibility. I do not want to be overly Rumsfeldian, but it is very difficult to say how many non-existent institutions exist. However, we do know how many fine, excellent and value-driven higher education institutions exist across Great Britain and Northern Ireland. They need the input, involvement and participation of international students for economic, social and political reasons in the short, medium and long term.

It was estimated that in 2012, in fees and living costs alone, international students contributed £10.2 billion to this country. If they stay on and work here, that contribution increases by multiples. If they go back to their own countries, what fabulous brand ambassadors for Great Britain they will be. Soft power is so essential, so misunderstood and has been so underdeveloped for so many years. The report by the ad hoc committee of this House clearly demonstrated that soft power is real power. International students can play a key role as ambassadors in that soft power agenda.

We currently gain around 13% of the international student market. That is good—we are in silver medal place behind the States—but there is so much more to be gained. Over the past nine years the figure for the States has dropped around 10%. We should go out there, grasp all the opportunities and say to international students, “The doors to great British institutions are open; come and be part of this. We want the brightest and the best students to study, to strive and to want a great British higher education”.

Employability, which for too many years has often been seen as the preserve of the careers office, underresourced and often undervalued, is now seen as absolutely critical—as significant as the degree award itself. That is not in any sense to be overly reductive; it is not about seeing education as merely learning to labour. It is about enabling an individual, alongside whatever academic course they are on, to gain employability skills, which will not just assist and potentially give that person the edge with their first job but will last throughout their entire career. The study shows that 80% or so of graduates in the UK are in employment six months after graduating. That is a good figure, although it could certainly improve. It is interesting that there is now an indicator which tracks this alongside degree results and other key indicators for our higher education institutions.

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To move on to the specific, I will talk about BPP; my involvement with that institution is indicated in the register of interests. It is a university based on the delivery of professional courses in law, accountancy, business, nursing and health. It has developed extraordinarily over the past 15 years, gaining university status and constantly thinking about where the next edge in education is. It focuses on excellence: nine out of 10 of the worldwide prize winners in the CIMA exams studied at BPP. As regards employability, 96% of BPP graduates are in work six months after leaving, which is well ahead of the average figure I quoted some moments ago.

BPP delivers professional education to students who come from more than 50 countries from around the world. To the business point, it is connected with almost every one of the 100 FTSE companies. Business, international students and excellence are all wrapped up in one professional education offer; it is an incredible testament to the focus, drive and determination of its chief executive, Carl Lygo, who has driven this strategy for more than a decade.

In conclusion, higher education is the source of incredible innovation, the generator of global research, creator of jobs, driver of growth, and cornerstone of our soft power—it is nothing short of a gleaming gem right at the centre of our national crown. I salute it, I raise a glass to it, and am unstintingly committed to United Kingdom higher education.

12.50 pm

Baroness Donaghy (Lab): My Lords, it is always a pleasure to follow the noble Lord, Lord Holmes of Richmond, and I thank the noble Lord, Lord Ahmad, for introducing this debate. It is quite right that he talked up the universities. We have a room full of expertise and knowledge, but also a room full of passion about higher education, although we might disagree about certain things, of course.

My contribution is about the importance of universities in teacher education and training. I spent 33 years at the University of London Institute of Education, and recently had the pleasure of attending a meeting at the institute at the invitation of the noble Lord, Lord Nash, to see the exciting developments that are taking place in research and development in teacher education. The noble Baroness, Lady Shephard of Northwold, was also in attendance in her role as chairman of the institute council.

The university connection with teacher education started in 1890, and the McNair report of 1944, exactly 70 years ago, consolidated that connection by establishing area training authorities, whereby colleges of education were attached to a university hub to raise standards and ensure consistent qualities. I am aware that the right reverend Prelate the Bishop of Winchester recently made a speech about teacher education, and I wanted publicly to thank him for that contribution.

Some policy changes that are taking place are damaging the connection with the universities and may lead to some universities opting out of teacher education. Indeed, some already have. I thank James Noble-Rogers from the Universities Council for the Education of Teachers, or UCET, for his excellent briefing on this subject. The teacher education base was sound in

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2010; 94% of higher education institutions offering initial teacher training were good or better, according to Ofsted, and 47% were outstanding, compared with 26% of school-based routes. The partnership between universities and schools was strong—in fact, among the most developed in the world. In the most recent survey, conducted in 2013, more than 90% of newly qualified teachers, after having been in post for one and a half terms, rated the quality of training that they had received as being good or very good. The Education Select Committee in 2012, while welcoming moves towards the more school-led approach of this Government, cautioned against any diminution of the role of universities in teacher education.

I am not claiming that everything is perfect. Some schools did not take responsibility for the next generation of teachers or did so half-heartedly, and some initial teacher training providers viewed schools as providing classroom experience without engaging in leadership and the design of programmes. In some cases, there was too much focus on initial teacher training and not enough on continuous professional development, which produces better teachers, increases their confidence and helps to retain them in the profession.

When the Government published their teacher education proposals in 2011, there were many things to welcome, such as raising entry qualifications—although there is no direct correlation between degree classification and someone’s effectiveness as a teacher—a greater focus on partnerships and a stronger school involvement in initial teacher training. This is something that universities and UCET have urged for many years. Schools should have a central role that goes beyond the traditional model under which they—sometimes reluctantly—accept student teachers on placement. The fact that a school needs sufficient resources to carry out this very resource-intensive exercise goes without saying, but I feel that I ought to say it.

This country has led the way in developing partnerships between schools and universities. Universities explicitly and actively supported the Government’s proposals to develop networks of teaching schools which could, if done properly, engage schools more effectively in teacher education, both initially and in continuing professional development, including masters and research and development projects. But then we come to School Direct. When it was launched in 2011, it was described as a scheme under which 500 training places would be allocated directly to schools to help them meet teacher supply needs which could not be met through the existing supply system. At the time, no one suspected—not even the Government, I would like to bet—that it would become the centrepiece of the school-led, market-driven agenda. It could be made to work—and there are some good examples. However, the speed with which this policy is being introduced is causing supply problems and planning headaches and is a threat to the quality of teacher education and training.

There were 900 School Direct places in 2012-13, of which only 50% were filled. This soared to 25% of total places in 2013-14, and to a provisional 37% of places in 2014-15, even though mainstream programmes offered by higher education institutions are better at filling places. The dangers of this too rapid expansion are

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obvious: it will cause instability in the initial teacher training education infrastructure, leading to unsustainable provision and reduced choice for schools. Bath University and the Open University have already dropped out of initial teacher training: both were rated outstanding.

It is true that 70% of School Direct places are allocated to partnerships involving universities, but this system is by its very nature fragmented and unpredictable. For example, a university might have 10 School Direct places to train English teachers in any one year. However, once a school holding those School Direct places has recruited the teachers it needs, it is not going to recruit any more. A university is unlikely to maintain staffing and resources for training English teachers in the hope that it will be able to pick up different contracts each year from different schools. Good programmes will close, which could cause teacher supply problems. Schools that want to participate in teacher training, but not through School Direct, will have their choice taken from them, while schools which want to be involved with School Direct will have fewer providers with which to work. There is nothing school-led or market-driven about that.

School Direct has led to places not being filled because of the inflexibilities in the new allocation and application system. It is desperately urgent that these inflexibilities are dealt with now before the summer. Universities are turning away highly qualified applicants while School Direct vacancies exist in the same area. Recruitment is 43% below target in physics and 22% below target in mathematics. School Direct also undermines the ability of an integrated teacher education infrastructure to deliver system-wide change, which, of course, all Governments like to do. With an integrated system, significant policy changes can be implemented quickly and effectively. Without commenting on the quality of the policy, an example would be systematic synthetic phonics, which this Government introduced. The Minister for Schools has written to universities and schools to congratulate them on their achievements in this area. Higher education institutions can be a route for getting new policies and new ideas into schools. Training that is entirely school-based risks replication of established orthodoxies and institutional conservatism.

UCET has already suggested quick and easy solutions to some of these problems both to the Minister and to the Select Committee on Education—an appropriate balance between the allocation of core and School Direct places. Following the last allocation, there are parts of the country with no training taking place in particular subjects through either the mainstream or School Direct. This cannot be right. To maximise recruitment, there needs to be virement between core provision and School Direct. The current inflexibilities will lead to disaster this autumn.

Prospective teachers should have an informed choice about the route for taking their careers further. There is a market but it must be sustainable. Schools should have the choice between School Direct and core provision. There is the broader market of the education system as a whole, where demographic changes require teachers to be trained to work across a system and not with the needs of a particular school in mind. The trainees are also customers who want flexibility, adaptability and

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transportability. For every one teacher who wants to stay in the same school throughout their career, there will be nine others who want to move.

Without a good base of core allocation, universities cannot sustain their involvement in teacher training, including the School Direct provision, to a good standard. Current policy risks a race to the bottom in the quality of training, determined in large part by locally negotiable financial considerations. Initial teacher training infrastructure is likely to be broken up, with provision offered by associate or brought-in staff or abandoned altogether. Warwick University has placed all its initial teacher training provision in a self-financing business unit. It will be interesting to see where research and development find a place.

In order to remain in the market, some providers have begun to offer validation-only routes. They appeal to schools because of the low cost, but a validation-only approach will drive down standards and is out of step with high-performing systems internationally.

Finally, I believe that this Government are sincere about improving schools and the quality of teachers. However, their policy initiatives will do the exact opposite if changes are not made soon, and the university connection, which has been in existence for more than 100 years and is admired by the rest of the world, will be irreparably damaged.

1.03 pm

Baroness Sharp of Guildford (LD): My Lords, it is a pleasure to follow the noble Baroness, Lady Donaghy. To my mind, she has raised an extremely important issue, because the quality of teaching in our schools and universities is fundamental to the success of our education system.

I have been in this House for almost 16 years and have spoken on higher education from these Benches on numerous occasions. It is unusual that we have not had a major debate on higher education for some time and I am very grateful to the Minister for raising this important issue. My own background is that of a university teacher and a researcher. I spent the last 20 years of my academic life at the University of Sussex in the Science Policy Research Unit. During my career in this House, I have concentrated quite a lot on the role of the science and technology subjects and the importance of, in particular, the teaching of mathematics, and I continue to take an interest in these subjects.

I have also played an active part in developing Liberal Democrat policy. During the early part of this century, when my noble friend Lord Willis was the spokesman on education for my party in the other place, he asked me whether I would work with him on developing a rationale for our policy of zero fees. I have had little difficulty in justifying that policy. Having been the product of a regime in which I paid no fees whatever and received very generous maintenance grants which enabled me to go to Cambridge—I share the admiration for that university expressed by the noble Lord, Lord Holmes—I nevertheless felt that in terms of intergenerational equity it was not difficult to justify a regime in which, because it was becoming increasingly important that we should do so, we extended tuition through to the age of 21 for the current generation of young people and they would pay for it later.

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I suppose that, for that reason, I also became at that time a convert to the concept of a graduate tax. Given the not wholly progressive income tax system in this country, it seemed to me somewhat unfair that those who were on relatively low pay and had not benefited from a university education should have to pay through their income tax for those who benefited and gained considerably from such an education. Today, I continue to feel that some form of graduate tax is the best way of coping with the situation.

However, my remit was also to look at an integrated system—one that incorporated the further education sector as well as the higher education sector. We should not forget that the further education sector provides higher education for some 200,000 of our 1.3 million students. Therefore, it is a considerable player within the higher education sector. The scheme that we came up with was one that, in effect, looked to some form of voucher system for young people and provided a degree of flexibility between the sectors and between different elements in the sector. I shall come back to that later.

As the noble Lord, Lord Bilimoria, who is not in his place at the moment, the noble Lord, Lord Holmes, and the Minister himself have indicated, we have much to praise our higher education system for in this country. In terms of international ratings—I was looking at the Times Higher Education reputation rankings—we have 10 universities in the top 100 and are second only to the United States. In terms of publications, with 1% of the world’s population we produce 6.4% of the world’s scientific publications and 14% of the most highly cited publications. The quality of our research attracts many international R&D laboratories, especially in the life sciences, where we have forged a position as an international leader.

The universities themselves are great generators of wealth. It is estimated that their contribution to the UK’s economy is more than £70 billion—2.8% of GDP —creating 750,000 jobs. We attract large numbers of international students, in spite of the efforts of the Home Office. I entirely endorse what the noble Lord, Lord Bilimoria, said about the sheer ludicrousness of the current policy in relation to international students. It is rather absurd that the Department for Business, Innovation and Skills is doing its best to encourage international students to come here while, at the same time, the Home Office does its best to discourage them. That is quite stupid. As the right reverend Prelate the Bishop of Winchester indicated, these students give considerably to their local communities.

However, we need to beware of complacency. The farewell lecture that Bahram Bekhradnia gave when he departed as director of the Higher Education Policy Institute warned that we cannot assume that our relative success will continue indefinitely. Many other countries are investing very heavily in their higher education sectors. South Korea, Singapore and Hong Kong have been rising up the league tables very rapidly, as indeed has China. If we look at spending on tertiary education, we are spending rather below the OECD average of 1.5%—we spend about 1.4%—compared to the USA which spends 2.8% of GDP, Canada 2.5% and South Korea 2.5%. We spend relatively lowly on tertiary

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education in terms of our proportion of GDP. China is investing in and expanding the sector in spectacular fashion. We may currently be taking large numbers of postgraduate students from China but they are returning to become the key academics in their universities in that country. There will come a day, as we have seen in Hong Kong and Singapore, when students will stay at home because their universities are ranked as highly as our universities over here.

The UK is not investing enough in R&D, as the noble Lord, Lord Bilimoria, said. It is not just our universities; the private sector is not investing enough in research and development. Our total spend at 1.7% of GDP is well below most of our competitors who are now spending roughly 3% of GDP and rising. Ours has been falling. In the late 1980s we were spending 2% of GDP on R&D and even that was low at the time, but it has now fallen to 1.7%.

We should not be complacent about teaching. The research assessment exercise, as it was then called, was introduced in 1989. It is now the research excellence framework. This has given a considerable bias within universities for people to concentrate on research rather than on teaching. One of the reasons why we have been rising up the research rankings is that all the incentives are there within universities to concentrate on research. However, has that been at the cost of teaching? Far too many classes in universities are taken by postgraduate students who have no training whatever in teaching. We hear too many stories of work not being marked promptly and of little feedback being given to students. I went to university in the late 1950s when only 7% of the age cohort went. We are now looking at 45%. The pedagogy has to be very different. We can no longer assume that students are self-motivated and can be sent off to the library with a list and told to work by themselves. The internet has done an enormous amount to make material available but students still need teaching. As I say, the pedagogy in our universities has not had the attention that it deserves.

Above all—this point was raised by the noble Baroness, Lady Morris—we have not been looking enough at the dynamism and the diversity of this sector. We need a sector that shows greater flexibility in meeting the challenges from such things as the new online facilities. There is a need to mix and match courses and provide for young people who perhaps move from one institution to another. There is a need for us to consider where our skills gap lies and whether the universities are meeting it. The OECD, in its report Skills beyond School, highlighted the issue. It stated:

“While many young people in England pursue vocational qualifications at universities at bachelor level, very few undertake the kind of shorter vocational programmes that would represent a more cost-efficient response to the need for certain mid-level skills”.

In 2008, the Leitch report on skills made the point that 70% of those in the workforce in 2020 would have already completed their education. We need to think much more about education for mid-career which is not there at the moment. We need to have a stable financial framework if we are to develop new frameworks for higher education. The Dearing report in the 1990s suggested that funding should come from society and

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industry as well as from individuals. Industry funds remarkably little in the way of higher education. It contributes a certain amount to R&D but it does very little for teaching in higher education. Although students pay fees of £9,000 a year, the switch has been from the state paying the money to the state lending the money, so the money is still coming from the state. As so few of the loans will be repaid at the end of the day, the subsidy continues to be extremely high. I was among those who had some scepticism about the student loan system. It was described by Nick Barr on one occasion as a very dodgy form of PFI. To my mind it is both unduly expensive and ineffective. It transfers the cost of loans from the present to the future generation while taxing disproportionately those young people whose families are not sufficiently well heeled to pay off their debts. My own party has made a great deal of the IFS endorsement of the present system as more progressive than its predecessor as the threshold is £21,000 rather than £15,000 so that those on low incomes pay back less. But it ignores totally the fact that the distribution of wealth in this country enables those at the top end to pay off their student debts so that their children do not have the 9% surcharge on income tax that others have. In 2010, I was among those who predicted that the system would not prove sustainable. Its potential collapse came rather sooner than I expected. I thought that it would probably go through to about 2020 when the debt burden would become apparent.

I have gone on much too long already but I want to go back to the point about diversity. I feel that it is extremely important to develop a system where there is a greater mix of short and longer courses and where universities play a part alongside the further education colleges and other specialist colleges. To oil such a system we need to have a proper form of credit accumulation so that people can transfer from one form of the system to another. I feel this particularly with the development of online facilities and the mix and match of campus-based learning and distance learning. I urge the Government to try to develop a system that is much more diverse and flexible than the current one and to consider a student loan system such as that proposed by Million+ which looks to paying back over a longer term loans directly funded by the Government.

1.18 pm

Baroness Coussins (CB): My Lords, I, too, am grateful to the noble Lord, Lord Ahmad, for introducing this debate, and I should like to raise some concerns about the teaching and learning of modern languages in British universities. It is an area that is changing rapidly and the Government need to be fully aware of the implications of these changes for the future of the UK’s capacity in business, in diplomacy and security, in teaching and specialist language services and, of course, in intercultural understanding. I declare interests as chair of the All-Party Parliamentary Group on Modern Languages and vice-president of the Chartered Institute of Linguists.

Last week, Salford University became the latest university to announce that it would no longer be teaching any degrees in or with languages, including

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postgraduate courses in interpreting and translation. This will bring the total number of universities offering language degrees down to 61. In 2000, there were 105, so that is a pretty dramatic decline. In the case of Salford, the announcement is not only a body blow for languages, for prospective students and for those who would have been teaching them; it is also disastrous for international bodies such as the EU and the United Nations, which have in the past seen Salford as one of their principal recruiting grounds for specialist linguists. The shortage of English native speakers in this field is at crisis point and, as a nation which aspires to be influential on the international stage, this is a challenge that the Government need to acknowledge urgently. Is the Minister aware of the recent report from the British Academy,

Lost for Words

, which spells out the importance of languages for meeting the UK’s public policy objectives in international relations and security.

As well as the overall decline in the number of universities offering language degrees, there has also been a concentration of the provision that does exist within certain types of university. The Russell group dominates, offering 78% of the degrees in European languages and 95% of the degrees in non-European languages. Adding to the perception of elitism, 28% of languages undergraduates now come from independent schools. This compares to only 9% across all subjects.

This, of course, links back to what is going on in schools. The removal of a modern language as a compulsory subject after the age of 14 in 2004 was a retrograde step. Take-up at GCSE in the state sector halved as a result. It is to the Government’s credit that we are now, finally and belatedly, seeing a significant improvement at GCSE attributable to the EBacc. However, we will have to wait until 2025 to see the full impact of the Government’s other strategic initiative—mandatory languages at key stage 2 from next September.

In the mean time we are likely to see further decline in modern language degrees because universities will, quite reasonably, continue to respond to the decline in applications. In 2012, we saw a 14% drop in student applicants for language degrees, attributable to the tripling of fees, which had a disproportionate impact on language courses because they are four-year courses. The introduction of Erasmus Plus and the settlement over fee waivers has been encouraging in this respect.

However, on the down side, we learned only two weeks ago from the 2013-14 Language Trends survey that the number of pupils doing A-level languages is dropping at what was described as “an alarming rate”. What is more, this decline is particularly marked in the independent sector. There are three reasons. First, if too few students opt for a language course, the course is considered unviable and the school will not run it. Secondly, sixth formers perceive languages to be tough, and it is true that there is certainly a big leap between languages at GCSE and at A-level. Thirdly, and related to this, the Russell group universities are calling for triple A grades for admission. Schools and pupils all know that there is convincing evidence now to show that language A-levels are more harshly marked than other subjects, so why are they going to risk their A or A* by choosing a language?

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I appreciate that the Minister today is speaking for BIS rather than the DfE, but the links and the interdependency between schools and universities are self-evident. Is the Minister aware of this latest finding on the alarming decline in A-level languages and its likely knock-on effect for higher education? Does he agree that it would be much better to act swiftly to nip this trend in the bud rather than watch it fester for years, like the GCSE decline, and then have to administer life support?

We cannot wait until 2025 for the impact of the new policy to resolve all this. We need to attract and retain students at A-level now and encourage them to continue languages in higher education. This will not happen unless we campaign to change public attitudes towards the value of language skills and the wider cultural value of studying another language. What do the Government plan to do to lead such a campaign? Specifically, would the Minister respond to a suggestion, made at a recent meeting of the HEFCE steering group for the Routes into Languages programme chaired by Sir David Bell, that the issue of languages in HE needs to be the subject of a Downing Street forum, in the same way as happened successfully for the STEM subjects? Languages have to feature more prominently on the political agenda. I hope that not only will we see such a forum at No. 10 but that over the course of the next year we will see every party’s manifesto spell out positive, detailed and informed policies on languages, recognising that this can be what makes or breaks success in so many fields, from exports to community cohesion.

As for universities, I hope that more of them will acknowledge that to survive in the 21st century means more than just using fine words in the mission statement about being an international institution and producing global graduates but that in practice this means fostering languages, not abandoning them. More universities could set the right tone from the beginning by emulating the UCL policy of requiring a GCSE language or equivalent from every applicant at matriculation, irrespective of degree subject or, failing that, requiring all first years to take an accredited language course.

HEFCE and the Government still regard modern languages as “strategically important and vulnerable subjects”. Never has this descriptor seemed more apt. The continued funding for Routes into Languages is welcome and I ask the Minister to confirm that this is secure for the foreseeable future. Will the Government also support the bids from universities to the HEFCE catalyst fund for five-year projects for improvement and innovation in languages in HE?

The final point I want to make is to explain the apparent languages paradox at British universities because, despite what I have said, there are more students doing a language course than ever before. However, this is because of non-specialist language provision—in other words, students doing a degree in another subject, such as law, business or economics, but doing a short language course on the side. About 60% of these are getting some form of credit, but 40% are taking it as extra-curricular and often have to pay extra fees on top of the high fees that they are already paying for their degree. The courses I am talking about are provided

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in the university languages centre, not within the language faculty, and they focus exclusively on practical language skills.

It is important not to be misled into thinking that this is a viable replacement for or updating of the modern languages degree. The courses in question are not even being taken mainly by UK students. At the last count, at least 55% were non-UK students picking up their third, fourth or even fifth language. The others are taking one course in one language for one year and are very unlikely to acquire more than basic levels of competence or have the confidence to take a year abroad to consolidate the language in context.

By contrast, it is a requirement for all those doing a languages degree to have that year abroad. That is a major advantage in terms of immersion in the relevant culture and society and also for future employability. The UK needs graduates with the highest levels of fluency and cross-cultural competence to enable them to operate in a complex global society. The insights and refined understanding of other cultures developed through specialist study of literature, culture and society through a particular language takes the learner way beyond the merely functional and transactional. This is vital for our diplomats and business people. It is only from among language graduates that we can develop translators and interpreters and the language teachers that we need to go into our schools system. It is not a question of either/or; both types of provision are needed. However, the language degree courses are strategic and vulnerable and must not be allowed to wither away.

In the words of the latest Language Trends survey,

“speaking only English in today’s world is as big a disadvantage as speaking no English”.

Our universities are uniquely placed to ensure that we produce a critical mass of young people who can not only function in a global economy but lead and succeed in it. Will the Government support the universities in achieving this objective through languages as vigorously as they have, rightly, supported the STEM subjects?

1.30 pm

Baroness Warwick of Undercliffe (Lab): My Lords, it is a privilege to follow the noble Baroness, Lady Coussins, in her typically passionate plea for modern languages. I am also delighted that the right reverend Prelate the Bishop of Portsmouth, who is to follow me, has chosen this debate in which to make his maiden speech, and I welcome him warmly to this House. I thank the Minister for securing this debate, which has enabled many noble Lords to celebrate the great success story that is the UK higher education system, while alerting the Government to dangerous trends in their policies ahead.

I spent well over 20 years representing in one guise or another the higher education sector, not as an academic but as an organiser, influencer, advocate and, until a few years ago, chief executive of Universities UK. I still have some direct involvement and I declare an interest as a member of the council of University College, London, a university that is an exemplar of the ways in which a university can contribute to society

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and the economy as well as providing a first-class education for its students. Perhaps I should say at this point how delighted I am at the partnership between UCL, the London Legacy Development Corporation and the mayor’s office, and at UCL contributing to the Olympic legacy. However, although the decision in principle has been made to create a campus, we now need to make the finances work, and I hope that the Government will fulfil the commitment made in the autumn Statement to support this great initiative financially. If the Minister could confirm that in his reply, I would appreciate it.

My involvement in HE started in 1982 when I became head of the Association of University Teachers. Since then I have seen enormous changes in HE, many of which have been for the better. I am thinking particularly of wider participation and the exploitation of research. Many of these changes have helped to transform HE into the hugely influential sector that it is today. HE now extends well beyond the universities. We had a briefing for this debate from the Association of Colleges reminding us that 180,000 students study HE in local further education colleges. Not all of HE is now publicly funded. In 1982, the only private provider was the University of Buckingham. Now an entirely new set of alternative private providers has emerged, some for profit and some not for profit, but all looking very different from the three-year, full-time undergraduate institutions that many Members of your Lordships’ House experienced. Even that has changed dramatically, with almost 40% of students studying part time. But it is worth noting how susceptible part-time study has been recently to changes in government policy. The numbers have declined substantially, which is a cause for concern, particularly for women and in terms of widening participation. Can the Minister comment in his reply on how the Government propose to halt this precipitous decline?

Other major changes have occurred. Women outnumber men at undergraduate level, while many more students from disadvantaged backgrounds now achieve degrees. The student body is now much more ethnically diverse. A much higher proportion of students now live at home, and the Open University is providing an increasing number with the prospect of earning while learning. The proportion of international students has increased dramatically. That has been a great success story, as many noble Lords have spelt out in the debate, and during the course of the Immigration Bill many Members of this House had hoped to persuade the Government to recognise the damage their policies were doing to this success story. The Government are presiding over the first decline in international students for 30 years. I still remain hopeful that they will respond.

It is significant to note how much more publicly visible HE now is. If we had had this debate even 10 years ago, I doubt whether we would have received a briefing from Which?, the consumer magazine, but we have had one this week, which reminds us that students increasingly regard themselves as consumers, given the financial commitment they now have to make if they go to university. That, of course, is one of the most significant changes. In 1982, students made no personal contribution to the cost of their degree

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course and there were grants for maintenance. Today, students emerge with average debts of £50,000, albeit with a beneficial repayment regime. That funding regime, which has shifted the cost from public taxation on to students, has ramifications not just for students themselves, but for the financial stability of institutions, a point I shall come back to in a moment.

I want first to focus briefly on the HE system as it is now, the contribution it makes to the country, and its importance to future prosperity. I was really pleased to see that BIS, as the government department responsible for HE, has begun to document the benefits of HE participation for individuals and society in a systematic way, and here I refer to research paper No. 146. It presents this as “Quadrants” or a “taxonomy of benefits” which focus on greater social cohesion, reductions in crime, civic participation, political stability, social mobility and health benefits, all of which are improved by the experience of HE. It also identifies economic benefits such as increased tax revenue, faster economic growth, higher earning value to employers, increased entrepreneurial activity and productivity, all of which should be music to the ears of the Treasury. It is clear that we benefit as a society both economically and socially because our universities produce well educated and employable graduates and world-leading research.

On research in particular, the system is remarkably efficient, and on every metric we outperform the money we spend on research. But it is nothing but complacency to assume that the UK has a God-given right to be a leading research nation and not make the investment that this requires. Can the Minister say whether the Government still have the aspiration to bring spending in line with the OECD average? That is because, in fact, we are dropping behind. Universities UK’s reliable patterns and trends data show that investment and expansion have slowed down in the last two to three years. This is at a time when we need to maximise the potential of HE as one of the main engines of economic growth, and when other OECD countries are increasing their investment. The noble Lord, Lord Bilimoria, highlighted the figures in his speech. It has become common to talk of universities as “economic anchors”, as institutions that can generate jobs and growth across all sectors of their city or region. Because they are spread throughout the country, they are uniquely able to promote growth that benefits all of our country, not just the south-eastern corner of it. In my own home region of the north-east, which struggles on many economic measures, universities have generated a higher proportion of jobs than in any other region. Last week, the Minister for Universities described his ambition to see new campuses built in “cold spots”, precisely because they can rejuvenate and enliven a local economy.

Universities themselves have not been idle. They have secured increased investment from the EU, charity and industry, as the Minister, the noble Lord, Lord Ahmad, himself acknowledged. There has been a substantial increase in knowledge exchange activity, which is particularly beneficial to small and medium-sized enterprises. Sir Andrew Witty, in his review of university-business interactions, highlighted the comparative advantages they offer the UK. He specifically recommended that the Government should make a long-term commitment to the Higher Education

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Innovation Fund, which generates £3.4 billion-worth of knowledge exchange income alongside the broader economic impact of universities of £73 billion, which represents 2.9% of GDP, and is therefore a not insignificant figure. Yet the Government, despite explicitly recognising,

“the enormous economic impact and leverage”,

of the HEIF, and that,

“every £1 of HEIF funding generates £6.30”,

have refused to commit themselves to raising the level of HEIF funding. I hope that the strength of the arguments in this debate will convince the Minister that he should urge his colleagues in the Treasury to think again, and that he will commit to that in his response.

The Treasury must surely be looking for ways to boost income. The revelation last week that around 45% of graduates will not earn enough to repay their student loans and that the system could end up costing taxpayers more than the one it replaced calls into question the decisions the Government have made about the way in which universities are funded to teach students. This week, the Higher Education Commission held its first evidence session on the topic of funding, and as we heard last night at a meeting of the All-Party Parliamentary Group on Universities, the current system is not sustainable and, worryingly, is unlikely to provide the basis for the affordable expansion of university education that the country so clearly needs. Given that we heard from three former Secretaries of State for Higher Education, the Government will need to take note of the findings of the commission and the all-party parliamentary group.

This is a complex problem. I am not going to be able to solve it in this speech but will outline a few questions that need to be considered in any attempt at a solution. First, what is an affordable and reasonable rate at which we could expect graduates to repay their loans? Does the current system provide this or could it be changed? Secondly, what is the appropriate level of state funding for higher education and how can we ensure that this does not get degraded by Treasury salami slicing over time? Thirdly, what changes can and should be made to the way in which we deliver higher education that could make it more affordable to graduates and the state? How can we persuade employers to invest in higher education for their staff and reverse the dramatic decline in part-time study?

It is a complex problem but one that it is essential for us to solve in a way that will be sustainable in the long term. Neither universities nor students benefit from major reforms taking place every few years or, indeed, from retrospective clawbacks, as happened with HEFCE funding this year, when, for example, UCL found its in-year funding reduced by £1 million. We derive enormous benefit as a country from our university sector. The world-class research it carries out and the graduates it produces are the basis of our future economic success. It provides anchors for jobs and growth throughout the country, and we damage it at our peril.

Finally, I share with the House my delight at the news this week of the first Max Planck centre in the UK, a joint centre with UCL on computational

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neuroscience and psychiatry. There will be others. This historic and ground-breaking collaboration with one of the most influential research centres in the world has arisen only because of the reputation of research in the UK and because of far-sighted investment. Such initiatives will be impossible in the future if we fail to invest. The Government really cannot go on ignoring this danger.

1.41 pm

The Lord Bishop of Portsmouth(Maiden Speech): My Lords, it is with astonishment that I find myself here today, rising to speak for the first time, keeping such company and sharing with you responsibility for the health and stability of our nation. In my heart of hearts, I am still a jobbing priest, and certainly with no desire to be an amateur politician. If I attempted that, then I would indeed be amateur. I delight to see people flourish, especially, to be parochial for just a moment, in Portsmouth diocese, serving south-east Hampshire and the Isle of Wight, whether they are lay or ordained churchgoers, British or foreign nationals residing in our midst, island schoolchildren who have never travelled far enough to see the beaches of their own island, those residents or visitors enjoying the vibrant waterside city life of Portsmouth—the second most densely populated city in the land—or globetrotting commuters and businesspeople who circle the world several times over.

I am more than aware that my distinguished predecessor, Kenneth Stevenson, who I know was much respected in this House, had education very much at his heart and led the church’s board of education. So it feels right and good that my maiden speech is in a debate that has at its heart a concern for human flourishing in education. Universities are anchor institutions in local communities, and Portsmouth University is no exception. It anchors the city and area financially, directly employing some 2,500 staff and indirectly supporting many more employers in and around the city. It anchors businesses, ensuring a regular supply of appropriately trained graduates to take on key roles and as a motor for the growth of small and medium-sized business enterprises; it funds multimillion-pound building projects as it continually updates its facilities; and it anchors the city morally, too, by providing a multicultural forum in which the issues of our day can be debated and the best insights can be lived.

As I know first hand from periods as a student, economics lecturer, chaplain and finance committee chair at the University of Hertfordshire, the higher education sector contributes extensively to the flourishing of our nation and our world. Now, as bishop and as a governor—an interest noted in the register—I see at first hand how Portsmouth University, along with universities all around the country, anchors and focuses financial, practical and moral flourishing, not just for students but in terms of enriching partnerships across the whole region, including, as you will expect me to note, my own cathedral’s innovation centre, where space and both voluntary and expert support provide opportunities for new businesses to take root and to grow, even in challenging economic times.

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I use the word anchor in relation to Portsmouth advisedly. You will of course be aware of the losses that Portsmouth has recently sustained in the shipbuilding industry. In the wake of those losses, higher education has gained even more importance. The university has a pivotal role to play in providing good-calibre, creative students who can help to diversify employment and business opportunities in the city and in developing the local and regional economy. This is true for homegrown students, but the reality is that for Portsmouth —or any university—to flourish, it also needs international students. I am aware that my friends the right reverend prelates the Bishop of Chester and the Bishop of St Albans have previously argued in this House for the importance of considering higher education immigration separately from other forms, as have other noble Lords in this debate. Indeed, as we have heard, the House’s Select Committee on Soft Power has described the present policy as “destructive” and “disingenuous”.

In Portsmouth, we currently have 2,941 international students, out of almost 22,000 in total, from approximately 140 countries. That reduced number, confirmed recently across the whole national HE sector, costs us all as we turn away the world’s talent and ideas. That presence is vital both in monetary and in human and educational terms. They enliven and enrich the whole community; their flourishing matters to us all, and needs to be safeguarded in our legislation.

I say this mindful of the huge vulnerability of the majority of students in the present day—the intellectual vulnerability that we all embrace as we embark on a new learning experience, and the financial vulnerability of students facing increased fees and debt. As someone who today feels vulnerable in the face of a new learning opportunity, I find myself freshly in solidarity with such students, and, indeed, with businesses learning and relearning how to make the best of opportunities in a fast-changing local and national economic landscape. I am committed to their welfare and will be glad to engage further with you as to how best to serve their needs.

I will be particularly glad also to learn how I can best help improve the lot of people who are suffering the effects of economic injustice. A local parish priest recently estimated that up to 20% of people living in her parish were in receipt of doorstep loans, and countless food banks and other informal food outlets have sprung up in the past year or so. There is huge poverty in Portsmouth diocese, not just among those who are on benefits but also among those who are working full-time but still cannot afford to live. It is surely a matter of the greatest concern that a job no longer always pays a living wage. This is an issue very close to my heart, to which I will be glad to devote time and energy in this House.

As I join you in this House, I thank your Lordships for your most generous welcomes, and the officers and staff who serve us here, and for your patience with me as I continue to get lost in the labyrinth of the corridors and figure out how best to engage with the issues at stake—to your good, the good of the communities and people of Portsmouth diocese and the good of the nation.

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1.51 pm

Baroness Greenfield (CB): I congratulate the right reverend Prelate on his inspiring and insightful speech. I warmly welcome him to your Lordships’ House and look forward to his continuing contributions on a wide range of issues, including economics, social welfare and the Navy. Turning back to universities, I join other noble Lords in thanking the noble Lord, Lord Ahmad, for introducing this important debate.

Having spent most of my working life in the university sector, I am fully aware of the diverse issues that we need to explore. I have been in turn an undergraduate, a postgraduate and a tutor of medicine at Oxford University, where I remain a senior research fellow at Lincoln College. In addition, I served for seven years as chancellor of Heriot-Watt University, as well as working in higher education establishments abroad; namely, the Collège de France in Paris and New York University Langone Medical Center. I am also aware of the thrills and spills involved in commercialising university science, having recently spun out a biotech company, Neuro-Bio Ltd, where I am chief scientific officer.

This debate will encompass many different questions, each of which could be the single subject of its own debate, but there is a common theme, which can be summed up in a single word: ideas. Surely universities are all about ideas, be it the dissemination of existing ideas —teaching; the generation of new ideas—basic research; or the application of those ideas—commercialisation. Inevitably, time constraints will mean highlighting just a few examples of concern in each of these areas.

With regard to teaching, the particular issue I would like to flag up is the impact of IT. In one study 55% of academic staff reported that lecture attendance had decreased as a result of introducing digital audio recording of their presentations. When asked why they did not attend lectures, almost 70% of the students surveyed claimed that they could learn just as effectively using digital audio recordings. However, in yet another study, students who learnt course material via virtual delivery performed significantly worse than those who attended traditional lectures. What is particularly interesting is that while the two groups did not differ in regard to grasping basic concepts, the group learning virtually fell significantly behind in their grasp of complex material, surely indicating that it may be more difficult for sophisticated ideas to be transferred via the screen. When college students in an economics course were randomly assigned either face-to-face or video-streamed lectures, the students who attended lectures in person had higher test scores.

The reciprocal of teaching is learning, and the mindset of the generation used to living for varying numbers of hours a day in front of the screen in a parallel universe is surely a consideration. The brain becomes good at what it practises and research suggests that those who have rehearsed the various skills required, for example in video games, will have a higher IQ and an improved working memory. However, they may also have the less welcome profile: a short attention span, a greater propensity to low-grade aggression, greater recklessness, a higher degree of narcissism,

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lower self-esteem, a premium on sensational experience, a less deep understanding and a more volatile sense of identity. Teaching someone with this disposition will clearly require different strategies compared to earlier generations. Incidentally, I would be very happy to refer noble Lords to the peer-reviewed papers reporting the research I have just cited.

The second broad area of university activity is the generation of ideas—basic research. Francis Bacon, the 17th century philosopher and scientist regarded as the founder of empiricism, distinguished two types of experiments: experimenta lucifera, those that shed light; and experimenta fructifera, those that bear fruit. Other noble Lords may well speak in favour of the former—basic blue-skies research—so I will simply give a telling example from a century ago illustrating the essential need to allow the scientific mindset to range free, since it is impossible to predict where such imagination will lead.

Quantum theory, concerning the inseparable nature of waves and particles, seemed when it was developed to be a highly abstract notion that no one could really understand. However, this baffling theory gave insights into the basics of matter and energy and was eventually to have astounding effects on more translational areas of both the physical and biological sciences. Advanced devices such as lasers and transistors and therefore ultimately computers rely on the principles of quantum theory. Likewise, in biology, the currently emerging feats of gene manipulation, triggered by our ability to manipulate atoms, are reliant on an understanding of molecular bonds and the technique of X-ray crystallography, both of which hark back to quantum theory.

That leads us to the third area of university activities, the application of ideas—experimenta fructifera, those that bear fruit. It is well known that UK universities carry out significant levels of innovative research but are generally less successful than countries such as the US in implementing the research into practice. Great research needs to benefit mankind, and technologically complex advances require capital and business expertise. Translation of university research into businesses, jobs and national prosperity is vital to make best use of British science. Sadly, our ability to exploit our science falls well short of our ability to do the science. It is scant reward for researchers, universities and the country if our science ends up being exploited abroad.

The need to improve technology transfer is widely recognised. Many reports have been produced recently, such as the Wilson report in 2012, the Witty review in 2013 and the latest document from the other place on Bridging the Valley of Death. The challenge now is making things happen on the ground and building really strong technology transfer organisations in all our universities.

One key problem is that universities generally have very limited budgets—for example, for patents—which forces technology transfer offices either to form spin-out companies too early, resulting in a very high rate of failure, or to drop patent applications before any value has been realised through licensing. Moreover, these limited budgets lead to reactive rather than proactive

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personnel, where the scientist-investor has to approach the understaffed technology transfer office rather than the other way round.

One happy win-win solution could be to engage the entry-level intake of management consultancies to act as talent scouts on campus. The scientist would benefit from exposure to the private sector mindset, perhaps during informal conversations over coffee, while the aspiring young business guru would seize the initiative of taking back potential projects to the tech transfer office. The management consultancy firm might eventually get a modest royalty, although one company, with which I have already discussed this idea, said that the benefit to junior staff of the experience itself would be sufficient compensation.

Another issue is that most universities either do not have budgets or have very limited budgets to carry out market engagement. National and international travel, attendance at exhibitions, dedicated business development resources and purchasing of market research reports can all prove prohibitively costly. But a lack of knowledge of customers and market opportunities has a negative impact on the quality of the licences negotiated and the spin-out companies created, as well as the number of industry-funded collaborative research projects.

That brings us to the appeal of university-based research to investors. Oxford University, for example, prefers to retain the IP and offer instead exclusive licence agreements. While the merit obviously lies in insuring against an investor failing to realise the true potential of the invention, as an opening condition in negotiations it is a disincentive. Moreover, the fees paid to the scientist on such a licensing deal would be fixed at 15%, with an eye-watering 85% retained by the university. This is hardly an attractive incentive to the scientist, any more than the alternative option of starting up a company where, before any investment is made, the university already owns 50% of the equity.

A further component of this translational research bottleneck is the academic mindset. Scientists often view IP as a fifth wheel and prefer to focus their time on publishing as much and as quickly as possible, because they are driven remorselessly by the current audit mentality of the various research assessment exercises of the past decade. It might help if knowledge transfer targets were included within performance in this review process.

More generally still, innovation through translational research is hampered by discrepant agendas between investors and scientists, where the latter have a distrust regarding patents and their intellectual freedom that may be misplaced, as well as a poor understanding of why an investor prioritises a solid management base.

Meanwhile, we lack appropriate funding models to allay the investor’s frequent and understandable concerns that the technology is incomprehensible to them, that the work is too high-risk and at too early a stage, that the funding required is too little to give a good return, that the burn rate is too high and that the exits are not obvious.

One possibility could be to set up a venture capital or angel syndicate giving small, private sector “grants” rather than investments. Relatively small but much needed amounts of money could be awarded, and

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those sums, along with the risk, would be diluted by the collective membership. In return, however, members of the syndicate would have privileged access to the research as it was developed and therefore first refusal on purchasing the IP and developing a spin-out as and when they saw the work maturing. Each member of the syndicate could operate independently, but other members might receive a small consideration from any future profits of the young company. The notion of private sector grants is not necessarily in the culture of either academics or of venture capitalists, so the Government might be the perfect third-person broker to get such a scheme up and running.

Other possible innovations could be, first, to make someone responsible for tech transfer—not least as it crosses multiple Whitehall departments and ministries—especially for life sciences, which will also include the Department of Health; secondly, to gather and publish statistics on how well each university is doing in proportion to its research strength; thirdly, to tie university funding to universities’ ability to do tech transfer; fourthly, to set up an inspectorate to drive quality; fifthly, to award prizes or grants and run competitions; and, sixthly, to identify a team of tech transfer champions to tour around and support tech transfer offices.

Lord Dearing eloquently stated back in 2002:

“Just as castles provided the source of strength for medieval towns, and factories provided prosperity in the industrial age, universities are the source of strength in the knowledge-based economy of the twenty-first century”.

We need to provide an environment where knowledge itself—ideas—can be disseminated for maximal understanding, can be generated with open and unfettered minds, and can be applied as effectively and comprehensively as possible.

2.02 pm

Lord Mackay of Clashfern (Con): My Lords, I first entered the field of work as a university lecturer in mathematics at the University of St Andrews, but my interest in the university sector had been sparked a good time before that by the inspiring lectures that I heard at Edinburgh University from the late Sir Edmund Whittaker and Professor Max Born. The thrill of being given inspiring lectures by people who were at the very forefront of research in their subjects was a terrific opportunity that I greatly relished and still cherish.