Wednesday 25th January 2017
(7 years, 3 months ago)
Lords ChamberHigher Education and Research Act 2017 View all Higher Education and Research Act 2017 Debates Read Hansard Text Amendment Paper: HL Bill 76-VI Sixth marshalled list for Committee (PDF, 214KB) - (23 Jan 2017)
Lord Mackay of Clashfern (Con)
My Lords, I wonder how this works in view of Clause 47(6):
“Regulations under subsection (1) may include power for the OfS to deprive a person of a taught award or foundation degree granted by or on behalf of the OfS under validation arrangements”.
What sort of validation of a degree is it when it can be taken from you—after you have got it, I assume?
Viscount Younger of Leckie (Con)
My Lords, I thank noble Lords for the opportunity to discuss validation arrangements. We believe that they are essential to a fully functioning higher education sector. We have listened to the concerns raised around the potential for Clause 47 to create a conflict of interest. However, I believe that a more substantial conflict of interest already exists within the sector.
At the moment, new providers usually have to find a willing incumbent provider to validate their provision. This gives those incumbent providers significant levers to control which new providers can enter the market, and what kind of provision they offer. Even if established providers are willing to help new providers get a foothold in the sector, there is an inherent conflict of interest if the proposed new provision would directly compete with one of their own courses. Of course, conflicts of interest are not the only problem validated providers can face. We know that some providers still find it difficult to find a partner that is willing to enter into validation arrangements with them, or have established arrangements unexpectedly withdrawn, and not because they are considered poor quality.
The noble Baroness, Lady Garden, stated that there was no evidence, but I have to put her right. We only need to look at events at Teesside University last year. Following a change of leadership, the university unexpectedly withdrew important validation services to 10 local colleges, based on a change of strategic direction and not as a reflection of the quality of the provision. Ensuring new and existing high-quality providers are not locked out of the market via their preferred entry route is essential to ensuring that students are able to access the right type of higher education for them.
The OfS cannot force providers to enter into validation arrangements. If insufficient providers are entering into validation agreements with each other or into commissioning arrangements with the OfS, or these fail to correct the problem, the OfS will need to find another way to promote competition and choice. Without further powers, the OfS could potentially be forced to stand by and watch while good-quality providers that do not want to seek their own degree-awarding powers remain locked out of degree-level provision indefinitely.
The OfS will, if it performs any validation function, have to have regard to the need to encourage competition among higher education providers in England. Its aim will not be to compete with the other higher education providers with a view to diminishing their attractiveness or their ability to offer validation services. It will only offer these services if there is demonstrable evidence that validation services are failing to support the sector. A regulator needing to take a role in the sector it regulates is not totally unprecedented. For example, the Bank of England regulates many aspects of the financial sector in order to maintain financial stability in the UK. In extremis, however, it will also act as the lender of last resort, or a market-maker of last resort, for example by buying and selling assets such as government bonds to provide liquidity at a time of financial stress.
Noble Lords might wish to read an interim report by the Open University and Independent Higher Education on a joint project piloting a streamlined approach to validation. The report highlights several perceived obstacles for providers in developing successful validation partnerships, including restrictive behaviour on the part of some validating universities and,
“insufficient support for alternative delivery models including accelerated and more work-based degrees”.
While the report accepts that this is not representative of all validation partnerships, it recognises the importance of validation as a route into the higher education sector and the need to fix problems which, if left unchecked, could have an adverse impact on student choice.
The report says:
“Validation stands as a critical part of the regulatory infrastructure, and its role as a gateway into the higher education sector means that any dysfunction will have a substantially negative impact on the diversity and quality of provision available to students”.
Relying on incumbents to shape the future of higher education can also curb innovation and result in the entrenchment of the same model of higher education, as providers may be hesitant to validate courses that do not conform to their usual modes of delivery. As the noble Lord, Lord Browne, said, validation can create a closed shop. As part of its work on improving validation services, we would expect the OfS to draw and build on this and other work already carried out.
I also noted the suggestion in the previous debate to create an independent central validation body akin to the CNAA model. As a regulator of the higher education sector, the OfS is ultimately responsible for ensuring that the regulatory framework and its supporting processes are functioning effectively. As the noble Lord, Lord Browne, said, it therefore makes sense for the OfS to have a role in determining how validation problems that could prevent it from fulfilling its responsibilities, such as ensuring that market entry routes and related processes are functioning effectively, are actually fixed.
The OfS’s broader strategic role makes it best placed to identify emerging trends in validation services across the sector and to monitor the impact of whatever solution it puts in place to correct any problems. It will be able to draw on information and advice from all its designated bodies and stakeholders to develop a robust evidence-based approach to address any serious validation failings. I reassure noble Lords that this is not a power easily given or used. We envisage that the OfS would be authorised as a validator of last resort only if it was absolutely necessary or expedient after other measures had been tried and failed.
The noble Baroness, Lady Wolf, said that this would be based only on anecdotal evidence. The Secretary of State may exercise this power if she considers that it is necessary or expedient to do so, having taken OfS advice. That advice is most likely to come in the form of an evidence-based report.
The Secretary of State would need to lay secondary regulations in Parliament. As we all know, it is common practice for these regulations, which use the negative procedure, to be laid before Parliament 21 days before coming into force, giving Parliament the opportunity to see these conditions. As always, Parliament retains the power of veto.
The regulations, should they be deemed necessary, are expected to set out the terms and conditions of any OfS validation activity. I would expect the OfS, as the overall regulator of higher education quality and champion of students’ interests, to be best in class in terms of demonstrating that its validation services abided by best practice validation principles and delivered to the highest standards. I would also expect the OfS to put in place appropriate governance arrangements ensuring that an appropriate level of independent scrutiny was applied to the validating arm of the organisation and the safeguards to protect student interests.
The noble Baroness, Lady Wolf, asked how this would work, who within the OfS would do the validating and whether they would have the requisite skills and qualifications. The regulations by the Secretary of State could attach certain conditions to ensure that the service set up by the OfS was underpinned by the necessary expertise. As we expect members of the OfS board to have between them experience of providing higher education, the organisation will have the necessary expertise to recruit the staff needed to set up a validation function. For further detail on how the OfS validation arrangements would work, I again refer noble Lords to my letter of 19 January enclosing a factsheet published by the Department for Education on validation. With that, I move that this clause stand part of the Bill.
Baroness Wolf of Dulwich
My Lords, I thank the Minister for his full reply, though if anything I am now more confused than ever. Either the validation issue is a serious one, in which case presumably the OfS will be giving out degrees in large quantities, or it is not, in which case I am not quite sure why we have these massive powers. I hope the Government revisit the whole validation issue. I actually have no idea when it appeared on the scene; it was not the case for many years, and I assume it was created by government for a purpose. This is an issue we will want to return to on Report, but at the moment I am happy to see the clause stand part of the Bill.
“(10) Where subsection (8) ceases to prevent a revocation taking effect on the date specified under subsection (6), the OfS is to determine a future date on which the revocation takes effect under the order to be made under section 53(1).(11) But that is subject to what has been determined on any appeal under section 55(1)(a) or (b), or any further appeal, in respect of the decision to revoke.”
(a) a decision of the OfS to revoke, by an order under section 53(1), an authorisation, consent or other approval given to the institution to include the word “university” in its name;(b) a decision of the OfS as to the date specified under section 54(6) as the date on which the revocation takes effect.”
“( ) vary the date on which the revocation takes effect under the order to be made under section 53(1);”
“Duty to compile and make available higher education information
(1) The relevant body must—(a) compile appropriate information relating to registered higher education providers and the higher education courses they provide, and (b) make the information available in an appropriate form and manner to the OfS, UKRI and the Secretary of State.(2) In this section “the relevant body” means—(a) the designated body (see section 60), or(b) if there is no such body, the OfS.(3) What is “appropriate” for the purposes of subsection (1)(a) and (b) is to be determined—(a) by the designated body if the OfS has notified the body that it is required to do so (and has not withdrawn the notification), or(b) otherwise, by the OfS.(4) A notification under subsection (3) may relate to one or both of the paragraphs of subsection (1).(5) When the designated body or the OfS determines what is appropriate for the purposes of subsection (1), it must in particular consider what would be helpful to the persons mentioned in subsection (1)(b).(6) The OfS must from time to time obtain and consider, or require the designated body to obtain and consider, the views of the persons listed in subsection (7) about the information that should be made available under this section.(7) Those persons are—(a) UKRI,(b) the Secretary of State, and(c) such other persons as the body seeking views considers appropriate.(8) In performing the duty under subsection (1)(a), the relevant body must—(a) cooperate with other persons who collect information from registered higher education providers, and(b) have regard to the desirability of reducing the burdens on such providers relating to the collection of information.(9) In carrying out other functions under this section, the OfS and the designated body must have regard to the desirability of reducing the burdens described in subsection (8)(b).(10) The functions conferred by this section do not affect any other functions of the OfS regarding information.”
Lord Willis of Knaresborough (LD)
My Lords, I shall speak to Amendment 371. I hope that the amendment of the noble Lord, Lord Lucas, will not get lost in this group because what he raises is fundamental to the Bill and to the way we are going to improve the offer we make to students and the veracity with which we look at the higher education sector.
I have written to the Minister on this issue and raised it as a question earlier. I am referring again to the role of HESA and the role of data. Unless you have accurate data with which to interrogate, and unless they are consistent across all providers, quite frankly, they are pretty useless. At the moment, it is not simply that you cannot get at some of HESA’s data. I gave the Minister an example just this week. You cannot get the data because HESA simply says, “Different institutions collect them in different ways”. That is a brilliant cop-out for saying, “We can’t let you have it”.
The other cop-out, which occurs quite frequently, is to say that data are sensitive to the universities because they own them, and therefore could be damaging to their reputation. If we are to give students the sort of offer they rightly should have, and if we are to give taxpayers the confidence they rightly should have, data should not be hidden. Data are absolutely key to delivering a higher education system of the highest possible quality which will maintain the high quality we already have in the future. I urge the Minister, in reference to Amendment 371, to reflect on how we are to ensure that data are not just left to HESA, but that the Office for Students has powers to ensure their consistency and effectiveness to be interrogated.
Viscount Younger of Leckie
I thank all noble Lords who have raised these important issues. I agree immediately with the noble Lord, Lord Willis, about the importance and quality of data. I will make one overarching point, in the interest of brevity, before addressing individual amendments. We are not seeking to determine in the Bill exactly which data must be collected or exactly who must be consulted. Data requirements and needs evolve over time, and the body needs to maintain the ability to adapt to changes.
In response to comments made by the noble Lord, Lord Watson, I appreciate what he said. We do not feel it is appropriate, for example, to specify workforce data when all other data will—very importantly—be agreed under the duty to consult. The relevant body will have the duties to plan data publication in conjunction with the full range of interested parties, with sufficient flexibility to take a responsive approach.
Turning to Amendments 376, 377 and 383, given the OFS’s duty to have regard to the need to promote greater choice and opportunities for students, just to reassure my noble friend Lord Lucas, there is, to my mind, no question that under Clause 59(5), considering the needs of people thinking about undertaking higher education courses must include considering what would be helpful to prospective and potential students from a diverse range of backgrounds.
In considering Amendments 368, 379, 384, 396 and 406, it is expected that the views of higher education staff will be considered as part of the voice of the sector institutions. The OfS will also have the discretion to consult persons they consider appropriate, including any relevant bodies representing the staff interests. I think the noble Lord, Lord Watson, foresaw the words that I have just spoken.
Lord Watson of Invergowrie
On that point, the Minister said that it would be “expected” of the OfS, but I do not see what could be done if it chose not to do it. I would think it was a normal thing to do, but if it is expected, why not just say that or something equivalent to it in the Bill?
Viscount Younger of Leckie
The noble Lord makes a fair point, but I must go back to the overarching statement that I made at the beginning of the Bill: we have carefully crafted it to look ahead to the future. I have said specifically that we do not consider it right to be too exact in what we put in the Bill. I hope he will accept that.
On Amendment 371, spoken to by my noble friend Lord Lucas, the Government are committed to making data available publicly and in a format that can be easily used wherever possible. However, the data body will collect personal data and it may therefore not be appropriate or lawful to publish identifiers. In accordance with the code of practice for official statistics, the statistics published by the body should not reveal the identity of an individual.
On Amendments 413, 415, 415A and 415B, fees should be fair and proportionate, neither creating disproportionate barriers to entry nor disadvantaging any category of provider. I want to reassure noble Lords that there are several safeguards to prevent a burdensome charging regime. First, the Bill makes clear that the total fees charged by the body must not exceed the total costs incurred. However, I recognise that there must in addition to this be due oversight to ensure that these costs are kept to a minimum—so let me answer some points raised by the noble Baroness, Lady Wolf, the noble Lord, Lord Liddle, and my noble and learned friend Lord Mackay. The data body will be required to publish a statement showing the amount of the fees it charges and the basis on which they are calculated. Also, as part of the triennial reporting process, the OfS must report to the Secretary of State on the appropriateness of any fees charged by the designated body. We are confident that these safeguards are sufficient and that further specific requirements would be overly restrictive.
On Amendment 366, I must stress that we want to minimise the regulatory burden on providers by avoiding duplication. For this reason, it is best for the sector to have only one body designated to collect the information at any one time. However, I also recognise that there are already several sector organisations with an interest in gathering data, and I understand that noble Lords may have concerns about the availability of data and collaboration over their use. I assure Members that Clause 59(7) and (8) set out a clear expectation that the data body must co-operate with those other organisations and have regard to the desirability of reducing burdens on providers.
The noble Baroness, Lady Wolf, referred to unconnected fees. I hope I can give some reassurance that I understand the intention to ensure that fees are calculated fairly. However, I fear the effect would be to damage the interests of both the data body and providers. It would prevent legitimate overheads related to designated functions being incorporated in the annual fee and block the current practice, common to sector bodies, of charging fees varied by the number of students at a provider, which is essential to ensuring proportionate and affordable fees. With these explanations, I hope the Lord will withdraw Amendment 366.
Lord Mackay of Clashfern
On the Minister’s last point about connected and unconnected fees, I understand that the Secretary of State has to be satisfied that the fees charged are proportionate. On the other hand, the Secretary of State is not obliged to consider whether they are connected in any way whatever with the provider. That is the problem. The Secretary of State’s power to monitor the fees depends on what the authority is for the fees being charged. Most of the illustrations that the Minister has given are connected in some way with the provider. For example, if it is a question of assembling data, the data will include those provided by the provider who is charged—so that is connected to the provider all right. It is perfectly reasonable to charge for overheads in relation to a function connected with a provider, but charging for those unconnected with a provider seems to open up a large and rather unspecific area.
Viscount Younger of Leckie
I will attempt to answer the points made by my noble and learned friend. Surely this is encompassed by the safeguards that I outlined. There will be an opportunity on a regular basis, as I mentioned, to analyse and scrutinise the statement showing the amount of fees, including those that are unconnected, and how they were made up.
Lord Lucas
My Lords, I am grateful to my noble friend for his reply on Amendment 371, but I think he rather missed the point. In respect of school data, the Department for Education already publishes extensive information, under the heading of performance tables, as open data. The level of information has grown substantially over the years and is free for anyone to reuse, as is the database on schools, EduBase. I am very sorry to say, as the proprietor of the Good Schools Guide, that this has resulted in the emergence of a lot of competitors, which is thoroughly tiresome. While it would be convenient for me if the Government did not do it, it is very good for the economy and for students and pupils that they have, and it is the pattern I would like them to pursue with regard to university data.
The Department for Education also makes available the National Pupil Database, which is confidential, at various levels. The whole database is available to the “very serious” level of researchers, but anonymised information is also available at pupil level, which is immensely useful for understanding how schools are operating and how various examinations and other aspects of the school system are working. That is a precedent for really good practice that is, now, contained within the same department that will look after university data.
The practice for university data is different. It is either held by UCAS, in which case it is effectively not available to anybody, or by HESA. In the latter case, there is a long application process to determine whether it will let the data out because nothing is standardised and you have to ask permission from individual institutions. It then charges a hefty fee. This is a comfortable situation for me, as a user of HESA data, because it means I do not get a lot of competition, but it is not the way the market should be. The market should be open. The only reason that the use of the data is charged for is that HESA wants to make money out of it. If it is given the power to charge institutions then it is in the interests of the economy and the country that it makes it freely available whenever it can. It is much better for the country that HESA should make a little bit of money by making it available in a more restricted way and for a large fee, or a substantial fee—not an unreasonable fee; HESA is a good organisation. We should go open. The Government, as a whole, have made a lot of progress in making much bigger collections of data open, when they were formally charged for. There has been a lot of benefit from that. That is the practice we should follow with the university data.
“(a) at appropriate times, and”
“(4A) What is “appropriate” for the purposes of subsections (1), (3) and (4) is to be determined—(a) by the designated body if the OfS has notified the body that it is required to do so (and has not withdrawn the notification), or(b) otherwise, by the OfS.(4B) A notification under subsection (4A) may relate to one or more of subsections (1), (3) and (4).”
(a) an appeal under paragraph 3(1)(a) or (b), or a further appeal, could be brought in respect of the requirement to pay the costs, or(b) such an appeal is pending.”
Lord Stevenson of Balmacara
My Lords, I apologise to the Minister. I was watching a figure behind who seemed to be moving towards an upright position and therefore might speak. If he is not I will carry on.
This is an interesting amendment and I am glad that it has been raised in the form that it has. We cover a number of points every time we debate this, but here is a question that cannot be ducked. The reality is that universities have to face a number of different regulators already. Those that are charities obviously have the Charity Commission as their regulator. Then there are those that are established as companies. As we have heard, many higher education providers have the permission of the Secretary of State to use “university” in their title or, even if they do not, are subject to anything that may be required under the Companies Acts. Many will have a variety of regulators; it is not unknown to have companies that are also charities. There are also bodies that are not for profit—corporations that are subject to the Companies Acts, but in a different way from those that are set up for profit.
However, I think the main purpose was to try to untangle the relationship between the CMA—a recent entry to this area—and the universities. It is a little surprising that the CMA has entered this area rather late given that it stated recently that providers of higher education that now come within its scope are subject to the Consumer Protection from Unfair Trading Regulations 2008; the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013; the Unfair Terms in Consumer Contracts Regulations 1999, for contracts concluded prior to 1 October 2015; and Part 2 of the Consumer Rights Act 2015. That Act went through your Lordships’ House just over a year ago and included the application of consumer rights to public bodies such as institutions of higher education. It was amended during its passage through the House.
As I think is well known, the CMA has carried out a preliminary investigation into the new responsibilities that it has taken on in the last 18 months, and has obtained undertakings from more than a few universities to secure improvements to their terms and/or practices. It has written to all higher education providers, drawing the findings of the compliance review to their attention, and asking them to review and revise their practices and terms, as necessary, to ensure compliance with consumer protection law.
Where will this wave of regulatory practice, which is sweeping in with unforeseen and possibly unpleasant purposes, stop? I do not object to the CMA’s engagement or to anything that raises standards and keeps public bodies moving forward. However, there will be regulatory overload, as has been mentioned. We must be very careful to guard against that. The way most sectors operate in the event of overlapping regulators is to obtain a memorandum of understanding between the principal regulator—or in this case regulators—and the one closest to the bodies concerned. If the OfS is to be a regulator, we will need to know how this will operate in practice. It is welcome news that the Bill team is considering whether to engage more directly with the Regulators’ Code, as that would solve a lot of problems.
Before we proceed further with the Bill, we should be told exactly what the boundary between the CMA and the OfS, as envisaged, is. Indeed, it would be helpful to be informed of the boundary between the Charity Commission and the Registrar of Companies, if that is relevant. We should also probe a little further whether it is envisaged that a memorandum of understanding between these regulators will be drawn up to protect the provision we are discussing. If so, what timescale applies to that? Could that be provided by Report, at least in draft form, so that we can discuss it further?
Viscount Younger of Leckie
My Lords, I thank the noble Baronesses, Lady Brown and Lady Wolf, and others for laying this amendment as it gives me the opportunity to clarify the role of the Competition and Markets Authority in the higher education sector. I say at the outset that I understand that the CMA is content that there is no conflict between the two organisations. The Government share that view.
In summary, the CMA is not a sector regulator but an enforcer of both competition and consumer protection law across the UK economy. It also has a number of other investigatory-type functions across the economy, including investigating mergers and conducting market studies and investigations, so I shall say a little more about competition and consumer enforcement in particular.
Enforcing competition law is a specialist activity requiring particular economic and legal expertise. Enforcement cases require substantial input of specific skills over a sometimes protracted period of time. The OfS will not have these and it would be unnecessary and expensive to replicate them. Placing a duty on the OfS to encourage competition between higher education providers in the interests of students and employers is a very different matter to enforcing competition law. We believe that there is no conflict between these two different responsibilities. Arguably, giving the OfS additional competition enforcement powers would risk distracting it from its important regulatory duties, or would possibly create conflicts of interest.
To answer concerns that encouraging competition would be at the expense of collaboration, there should be no conflict between providers collaborating and the OfS’s duty to have regard to the need to encourage competition where that competition is in the interest of students and employers. We are wholly supportive, as is the CMA, of collaboration and innovation where they are in the interest of students.
““foundation degree only authorisation” has the meaning given by section 40(3);”
The Deputy Chairman of Committees
Perhaps I should point out that even when an amendment is grouped, it is still open, when that amendment is reached, to move it formally or make remarks on it.
Viscount Younger of Leckie
My Lords, perhaps I can be helpful to the noble Lord, Lord Stevenson, in reply. Given that we did not have a full debate on government Amendments 440 and 441, and bearing in mind that noble Lords seemed reasonably comfortable with what we are proposing, I think it right that I write to explain what we are proposing. I hope that is helpful.
The Deputy Chairman of Committees
Would the noble Lord, Lord Sharkey, now like to beg leave to withdraw his amendment?
Viscount Younger of Leckie
My Lords, I thank the noble Lord for bringing forward this amendment. I am very sorry that the noble Lord, Lord Dubs, is not in his place. I think the House is aware, as certainly I am, that he has worked assiduously in support of the Syrians. This is an important issue, and I realise that it is also a sensitive one, but it is already addressed within the student support regulations. The noble Lord, Lord Judd, talked about the importance of the UK being a warm welcoming country. I absolutely agree and I will make some very strong points on that matter in a subsequent debate, which I hope will take place today.
I am pleased to say that those who come to this country and obtain international protection are already able to access student support. Our regulations have for some time included provision for those granted refugee status or humanitarian protection and their family members. As the right reverend Prelate the Bishop of Durham said, people who enter the UK under the Syrian vulnerable persons resettlement scheme are granted humanitarian protection. Like UK nationals, they are therefore eligible to obtain student support and home fee status after only three years’ residence in the UK. Persons on the programme are not precluded from applying for refugee status if they consider they meet the criteria. As Home Office officials said at the Public Accounts Committee on 7 November 2016, the department is aware of the issue and keeps it under active review. I believe that the noble Baroness, Lady Lister, understands that. I reassure the House that I have also had discussions with Home Office officials on this important matter, so there is joined-up thinking—if I may put it that way—between the DfE and the Home Office.
Those with refugee status are uniquely allowed to access student support immediately, a privilege not afforded to UK nationals or those granted other forms of leave. Recently, the Supreme Court upheld the Government’s policy of requiring most persons, including UK citizens, to be ordinarily lawfully resident in the UK for at least three years immediately prior to starting their course in order to be eligible for student support. It also upheld the Government’s case that it was legitimate to target the substantial taxpayer subsidy of student loans on those who are likely to remain in England—or at least the UK—indefinitely, so that the general public benefits of their tertiary education will ensue to the country’s advantage. The second part of the amendment would break that long-established policy by extending support to failed asylum seekers who, it has been decided, do not need our protection but have been granted temporary leave to remain in the UK. In other words, these are persons who have only recently established a connection to the UK, which may well prove temporary. This amendment would therefore allow people who may subsequently be required to leave the country to access taxpayer funding for their study.
I realise that this is a sensitive issue but I hope that with these explanations the noble Lord will withdraw his amendment.
Lord Stevenson of Balmacara
But, my Lords, that is not what the amendment says. I have listened very carefully to the Minister and I will certainly read Hansard when it is published, but the intention behind the amendment—whether he has picked it up correctly or not—is for people who claim asylum and are not recognised as refugees but are granted another form of leave, such as humanitarian protection or leave as unaccompanied children, to be given the fee eligibility of home rather than overseas students if they satisfy the test of being ordinarily resident. That test is if they have lawfully and habitually resided in the UK out of choice since being granted leave, and being eligible for student finance if they are also ordinarily resident on the first day of their course. We are not talking about people who are temporarily here and who might suddenly be removed without notice, making them unable to take their course; we are talking about people with a right to be in the United Kingdom.
All the Minister’s points about this not being in accordance with Home Office policy are therefore not correct, in my respectful view. We have picked up that there are people with an ordinarily resident status who do not technically qualify for refugee status, and that it is only for refugee status that the three-year ordinarily resident requirement is given. If that is where the Minister is coming from, surely what my noble friends Lord Judd and Lady Lister and the right reverend Prelate said were on point: imposing a three-year residency requirement for somebody who wishes to exercise their ability to remain in the UK in order to use that time to study is a ridiculously aggressive attitude for a caring Government to take. The Minister talked about a warm, welcoming, integrated and supportive environment but the facts are that an enormous barrier is being put in the way of people’s ability to benefit from being given the ability to stay in the United Kingdom. That cannot be right.
I understand that this is an emotional and difficult area and it may be better if we could meet outside to talk about it. Perhaps we could also bring in representatives from the Home Office who obviously hold the whip hand. If the Minister is able to do that it would be a great deal better. This is not something we can give up on but in the interim I beg leave to withdraw the amendment.
Lord Stevenson of Balmacara
My Lords, this has been a terrific debate. It must rank as one of the better ones on this topic that have taken place over the years. It has lacked only one thing. We normally like to have the comfort of the noble Lord, Lord Cormack, making an orotund statement to sum up our feelings and allow us to drift off into the night in a comfortable way. The noble Lord is present but he is not going to speak and I am saddened by this. There is nothing more that needs to be said—the points have been put across so well.
Perception is always at the heart of this. We send messages that we are unwelcoming. We do not live up to the best that could happen in UK plc and we are missing huge opportunities in soft power and the development of our own arrangements. It may be a step too far to take back control from the United Nations. Even the noble Lord, Lord Willetts, when he comes to his senses—if ever—will realise that it may not be the best argument we have heard tonight. The arguments are almost irresistible. I cannot believe that the Minister will not want to endorse them in every respect.
Viscount Younger of Leckie
My Lords, I mentioned something about hot seats in respect of my position later in Monday’s debate. I feel that the temperature has risen somewhat in debating this issue. As one noble Lord said, it is rather an old chestnut for this House. Nevertheless, I acknowledge that it is an important matter.
I am grateful to the noble Lord, Lord Hannay of Chiswick, for moving this amendment and to those noble Lords who have put their names to it. This debate has demonstrated considerable strength of feeling and provided a useful opportunity to discuss international students.
Before dealing with the specific amendment, I should like to make clear the Government’s position on international students generally. As has been said—the noble Baroness, Lady Royall, put it pretty succinctly—perception is vital. It is important that we give the impression that the UK is a welcoming place for international students. I make no apology that, when we came to power in 2010, we took steps to rid the system of abuse that was then rife. No one denies now that action needed to be taken then. More than 900 institutions lost the ability to bring in international students. However, there is a world of difference between clamping down on abuse and our policies on genuine students. The Government welcome genuine international students who come to study here. Their economic contribution is significant. Not only do they enrich the experience of home students, they should also form a favourable view of the UK which should serve this country well. That is why we have never imposed any limit on the number of genuine international students who can study here, and why—I must emphasise this point—we have no plans to impose such a limit. Educational institutions will continue to be able to recruit as many international students as they want. I agree that it is a major opportunity, as the noble Baroness, Lady Smith, said.
Noble Lords have said that UK educational institutions are in competition with other countries for the best student talent. I want to outline the UK’s offer and how it compares internationally. Students from outside the EU need a visa to study in the UK. They need to show that they have the necessary academic ability, competence in English and funds to support themselves. Other developed countries, quite reasonably, set similar requirements. The system already allows students from low-risk countries to produce fewer documents. In 2015, 93% of student entry clearance visa applications were approved, a number that has risen every year since 2010, and 99% are approved within 15 days.
The terms which apply to students once here are again highly competitive. International students attending higher education institutions are allowed to work 20 hours per week during term time, the maximum that is compatible with devoting sufficient time to their studies, and similar to the rules in the United States, Australia and Canada. International students are additionally allowed to work full-time during holidays.
Post-study work is a matter of considerable interest to the education sector. Any international graduate of a UK university who is able to secure a skilled job can move into the workforce. There is no limit on the number who can do so and numbers have been rising year on year, with over 6,000 recent graduates doing so in 2015. If international students have been undertaking a course lasting more than a year, which covers the majority, they can remain in the UK for four months after finishing their studies, during which time they can work. The only country in the world with more international students than the UK is the United States. In the US, international graduates, other than when they are undertaking work directly relevant to their degree, must leave the country within 60 days of the completion of their programme.
I give a few statistics to support my proposition that the UK does welcome students. The UK is the world’s second most popular destination for international higher education students. Since 2011, university-sponsored visa applications have risen by 8%. Although Indian student numbers have fallen, as was mentioned earlier, we have seen strong growth in respect of other countries, including a 9% increase in Chinese students in the year ending September 2016, as was also mentioned. This shows that our immigration system allows for growth. I apologise for speaking at some length on these matters but it is important to lay out the facts and address this very important point of perception.
I turn to the specifics of the amendment before us. While I am grateful to the noble Lord, Lord Hannay, for the clear way in which he introduced it, I must confess that I am somewhat puzzled by it as it requires that no student should be treated as an “economic migrant”. But what is an economic migrant? I suspect that we all have a view of what we understand the phrase to mean, but no such term exists in law. We believe that it is used in the media; it is just a term which is used. I assume that those behind this amendment have in mind, when they refer to economic migrants, people who come to the United Kingdom on tier 2 work visas. People on a tier 2 visa come for a specific purpose on a time-limited visa and are expected to leave again when it expires, but that is precisely what the education sector tells us happens with international students. Similarly, those coming on a work visa may have conditions attached about the kind of work they can do. Equally, international students are limited in the number of hours they can work during term time. Again, this seems unexceptionable, and I am not sure why a parallel between international students and economic migrants would be seen as a bad thing. In one important regard there is a difference between economic migrants and international students. The main tier 2 (general) work visa is capped, with an annual limit of 20,700. By contrast, there is no limit on the number of genuine international students who can come to study here.
I should also deal with the inclusion of students in net migration statistics. Immigration statistics are produced by the ONS, the UK’s independent statistical authority. It would be inappropriate for the Government to seek to influence how statistics are compiled. By including international students in its net migration calculations, the ONS is following international best practice. I say in response to a point raised by the noble Baroness, Lady Garden, on this matter that this approach is considered best practice by the United Nations, which I think was mentioned by my noble friend Lord Willetts, and is used by a wide range of countries, including the United States of America, Australia and New Zealand. International students use public services and contribute to population levels. Those planning the provision of such services need to know who is in this country.
With respect to the Government’s net migration target, so long as, in any given year, the number of arriving students broadly corresponds to the number who leave having completed their course, students should make a minimal contribution to net migration. I repeat that genuine international students are absolutely welcome here. We do not, and will not, seek to cap or limit the number of international students.
The noble Baroness, Lady Royall, asked when the Government’s consultation would be published. I suspect she has heard this response in the House before but we intend to seek views shortly. I am afraid that at present I cannot give the House an exact date or timetable.
The noble Baroness, Lady Smith, asked about the arrangements for EU students post Brexit. We recognise that future arrangements after we leave the EU for students and staff who come to the UK is a key issue for the higher education sector. The noble Baroness will have heard my next point before, but this issue will need to be considered as part of the wider discussions about the UK’s future relationship with the EU.
My noble friend Lord Willetts asked a couple of questions, including one on the ability of universities to plan ahead. He asked me to confirm that the Government were not planning changes to the visa regime. He also asked where education was placed within the industrial strategy. I have made it clear that we have no plans to limit the number of genuine international students whom our educational institutions can recruit. They can plan on that basis. I do not have a full answer to his question on the industrial strategy. However, having attended a number of meetings, I know that the skills aspect is very much a key part of that strategy. I think it is best that I follow that up with a full brief on how that fits into the industrial strategy and, indeed, any other educational matters which fit into that area.
As the noble Lord, Lord Stevenson, said, this has been a good debate. I am sure that I have not answered every question that was asked or, indeed, satisfied the Committee given that this is a hot topic and an old chestnut, as was said earlier. I am very grateful indeed to all those who have contributed. However, with the assurances that I have given, I hope that the noble Lord will see fit to withdraw this amendment.
Lord Lucas
My Lords, can my noble friend confirm, as I gather from his speech, that the proposals made by the Home Secretary in her speech to the Conservative Party conference in relation to students are no longer being proceeded with?
Viscount Younger of Leckie
My understanding is that during that speech she undertook to go ahead with the consultation, as I have made clear.
Lord Hannay of Chiswick
My Lords, I am most grateful to all who have taken part in this extremely lively and, I think, rather useful debate—useful, at any rate, if the Government Front Bench has understood the depth of feeling around the Committee. I took a slight risk in saying that my amendment was likely to draw support from all corners of the Committee. It is always a bit unwise to say that before it has actually happened. I thank everyone for preventing me suffering the ignominy of having wrongly predicted that. In fact, it has turned out to be the case.
I do not wish to get into a long argument with the Minister except to say that he has put before the Committee arguments which we have heard for about six years. I accept absolutely that the action taken by the Prime Minister when she was Home Secretary to close down “dodgy” language schools was valuable and necessary. I just wish that the Government would not now snatch defeat from the jaws of victory, because that is what they doing. They have cleaned up the biggest problem in the area, yet still go on introducing measures and using language which discourages overseas students. Therefore, I hope that the noble Viscount will use the gap between now and Report to reflect on the views of the House, which were so strongly expressed tonight. I hope I am not disobliging when I say to him that I propose to withdraw this amendment but not because of the reasons that he advanced.
Lord Stevenson of Balmacara
My Lords, this has been another good debate. In some senses the previous amendment and the two amendments in this group are two sides of the same coin. The first amendment, proposed by the noble Lord, Lord Hannay, set an aspiration for what we were trying to do about the flow of students that, for all the reasons we gave, we wanted to see. The two amendments we are discussing now deal with the detail of how we could achieve that—they could probably be combined to make the point made by the noble Lord, Lord Lucas.
I do not need to say much more about this; I just want to put one point. On our first day in Committee we spent a lot of time talking about what we thought about our universities, what they were and what they were about. We have not really come back to the amendment we were debating then—which is probably just as well, as the wording was, I admit, not very good. The essence of it was an attempt to reach out to an aspiration that everyone in the Chamber, apart from those on the Government Front Bench, felt—that universities do have a particular distinctive nature and character. I argue that these two amendments help us to articulate that in a rather special way: for all the people who attend those universities—our children, and any other students who come to them—we want the very best quality of teaching and research available. That aspiration can be met only if we are able to recruit for it, and that is what these amendments would achieve.
Viscount Younger of Leckie
My Lords, I thank the noble Lord, Lord Hannay of Chiswick, for moving the amendment. I set out in some detail the Government’s approach to international students in response to the previous amendment, so I do not intend to repeat those points. However, I want to say something about the position of international academic staff, since they are specifically referred to in Amendment 464. Again, the Government have a very good record in supporting the sector.
The UK’s immigration system recognises the critical role academic staff can play in the economy and wider society, and that human mobility is linked to the UK’s ability to remain at the forefront of science and research. Immigration reforms since 2010 have explicitly taken account of the needs of academics, including scientists and researchers. The Government have consistently protected and enhanced the treatment of academics in the immigration system.
In tier 2, we have given PhD-level occupations higher priority. None of these occupations has ever been refused places due to the limit being oversubscribed. We have also exempted PhD-level occupations from the £35,000 earnings threshold for tier 2 settlement applications. In recognition of the fact that universities compete in a global talent pool, we have relaxed the resident labour market test to allow the best candidate to be appointed to PhD-level occupations, regardless of nationality and whether there are suitable resident workers available.
The amendments would provide that the immigration controls applying to non-British students or academic staff could never be more restrictive than those applying on the day the Bill receives Royal Assent. I wonder what “more restrictive” means in practice. The terms that apply to international students and workers contain a number of elements. Focusing on students, there are rules on how many hours they can work, how long they can stay in the UK after graduation, how they can move into work immigration routes, and on dependants.
Every student will have a different view on how important those various elements are. Suppose—I stress that I am offering this merely as an illustration, rather than making a statement of the Government’s intentions—we were to reduce the weekly hours that a university student can work during term time from 20 hours to 15 hours but, as compensation, lengthened the period for which undergraduate students can stay in the UK after their studies from four months to six months. Is that more or less restrictive than what currently exists? Some students would certainly see it as such; others would regard it as more liberal. It would all depend on particular circumstances and requirements. If we were to go down the route envisaged by these amendments we would be inviting the prospect of endless litigation as we sought to understand what constitutes greater restriction.
As for academic staff, as I have said, PhD-level university staff are currently prioritised within the limit for tier 2 visas. But what if we wanted, for very sound economic reasons, to give priority to another sector of the economy? Again I make no statement of the Government’s intent, but it is surely a possibility. Even if all the evidence pointed in one direction, the amendments would prevent such a change being made.
However, my principal concern about the amendments is that they seek to set the immigration system that applies on the date of Royal Assent in stone. Imagine that, as sometimes happens, a particular loophole in the immigration rules emerges, which everyone agrees needs to be dealt with. If the remedy was arguably restrictive, nothing could be done to close the loophole—even if government and universities agreed it was a problem—without amending primary legislation.
I am sure the House will acknowledge that we sometimes encounter instances of unintended consequences in immigration rules. We remedy these through minor changes. For example, we have very recently tidied up the rules on academic progression to deal with concerns raised directly by the education sector to the Home Office. These changes have been welcomed as improving the rules on academic progression but, under these amendments, had anybody been able to argue that what we were doing was in any way more restrictive, we would have been unable to respond to the sector’s concerns.
I understand the motivation behind the amendments, but I cannot advise your Lordships to accept them. Setting in stone the immigration system as it happens to be on a particular day, exposing ourselves to the possibility of extensive litigation and denying ourselves the opportunity to make even desirable changes is surely not the way forward. On that basis, I hope that the noble Lord will withdraw Amendment 463.
Lord Hannay of Chiswick
My Lords, I have listened carefully to what the Minister said—although I was fairly appalled by some of the script that he had been given to present to the House. The answer to his question about what would happen if the Government wanted to make the provisions for the amount of work students could do during their study here less generous, but also wanted to increase the amount of time for which they could stay on in the labour market afterwards, is perfectly simple. You can do the second any day you like; as for the first—no, you cannot do it. It is not very difficult to answer that question.
As for setting things in concrete, of course that would not be happening. The amendments would allow the Government to make the rules more liberal any day they liked. It is just that they could not make them more restrictive. That is all. It is not a huge thing because of course the Government, as the Minister himself recognised, can any day they like come down with a piece of primary legislation saying, “An appalling loophole has appeared. Here are all the statistics and evidence for it and, despite this provision in the Higher Education and Research Act 2017, this will override it”. They can do that, if they have the evidence. At the moment, they have no evidence whatever. Such evidence as there is is that some 1% of students overstay. I will not place the whole weight on that because I know that the figures are based on fairly small samples, but the Government do not have any figures at all.
Of course I will withdraw the amendment now, but I am afraid to say that I do not do so because of the arguments that have been advanced in favour of withdrawing it. I say very clearly that we will return on Report and I hope that the Government, instead of polishing yet another series of unconvincing reasons to not accept them, will find some way of accepting them. I beg leave to withdraw the amendment.
Viscount Younger of Leckie
My Lords, I thank all Peers for raising the important issues of freedom of speech and of unlawful speech in our higher education system during this short debate. I agree that free speech within the law is a value that is central to all our higher education institutions. Being exposed to a wide range of ideas and opinions and learning the skills to debate and challenge them effectively is key to the experience of being a student in the UK. My noble friend Lord Lucas put it well in his short intervention.
The existing duty requires certain higher education institutions to take reasonably practical steps to secure freedom of speech within the law for their members, students, employees and visiting speakers. The duty currently applies to a large number of providers, but not to all. Those subject to it already take this duty very seriously and we agree that it is absolutely right for them to do so. We are considering how to make sure that providers continue to be subject to this duty under the new definitions in this Bill. However, the requirement in the amendment changes the nature of the duty so that providers must ensure that staff, students and invited speakers are able to practise free speech in providers’ premises, forums and events.
It is not clear how this would interact with the existing freedom of speech duty and there is a real risk that it would introduce a lack of clarity in relation to that duty. So, while I am sympathetic to the intention, I fear that the word “ensure” unreasonably and unnecessarily imposes an additional and disproportionate burden on providers. To ensure that something happens, regardless of how reasonably practical it is, may well require them to address matters that are realistically outside their control and potentially override other important considerations, such as the security of attendees at a particular event.
Lord Watson of Invergowrie
My Lords, Amendment 471 in this group is in my name. It seeks to remove part of new Section 123B on supplementary powers of a higher education corporation in England:
“A … corporation in England has power to do anything which appears to the corporation to be necessary or expedient for the purpose of, or in connection with, the exercise of any of their principal powers”.
We want to withdraw this because we do not see why it should be necessary. It seems almost nonsensical. It is completely open ended. It would be interesting for the Minister to tell us to what he thinks it refers or might refer. I feel like coming out with a list of ridiculous examples of things that a corporation might choose to do that may be within the law and indeed within the exercise of its principal powers. I am not going to do that but just in the last few minutes we have had a couple of examples. What if a corporation decided to turn a blind eye to the sort of activities that the noble Lord, Lord Storey, outlined in terms of plagiarism and so on? What if a corporation thought, “Well, that helps our pass rates”? It is not illegal as yet—I hope it will be. In the amendment the noble Baroness, Lady Deech, just spoke to about free speech, the corporation could take action or not which may be seen to be offensive by students, staff or the public where the university or college was situated. I say to the Minister: what is this about? Why is it necessary and really should it not be deleted?
Viscount Younger of Leckie
The noble Lord has set me a task. I will keep my response suitably short, given the lateness of the hour. The Bill amends the Education Reform Act 1988 to deregulate the prescriptive statutory requirements that apply to higher education corporations in England, while ensuring that the route for FECs to achieve HEC status is kept open. The noble Baronesses, Lady Wolf and Lady Brown, suggested that research institutes should be given a similar legislative route. However, dozens of collaborative relationships exist between universities and research institutes across the country and they do not agree that these relationships are a shortcoming. For example, one such institute, the Laboratory of Molecular Biology, says on its website:
“This relationship, between the LMB and the University of Cambridge, gives our graduate students membership of two of the world’s leading research institutions”.
Further, there is no legislative barrier in this Bill that would, in principle, prevent an institution that provides supervised programmes of research embarking on the process of achieving registered higher education provider status, and ultimately seeking to gain its own degree-awarding powers, if it wished to do so and could meet the applicable requirements.
I turn to Amendment 471, spoken to by the noble Lord, Lord Watson. I begin by offering reassurance that these provisions are not new and nor do they allow a HEC to do whatever it pleases. The provision’s wording is the same as that already contained within existing legislation on HECs—specifically, Section 124(2) of the 1988 Act.
All the Bill does is remove the list of ways this power to do what is necessary or expedient can be exercised. This might include, for example, the power to supply goods and services, to enter contracts, or to acquire land or property. This list is detailed and non-exhaustive, and setting out specific powers in this way is perceived as outdated and unnecessarily restrictive. As a consequence, there is a risk that it stifles innovation and growth and slows down institutional change. It is also inconsistent with the Government’s commitment to establish a more level playing field in higher education.
We want to allow HECs the power to do anything that is necessary or expedient to further their objects, as many of their counterparts established under different corporate forms can do. For example, higher education institutions that are incorporated as companies under the Companies Act 2006 do not have their specific powers listed in legislation in this way.
I wish to reassure noble Lords that this will not give HECs an unfettered ability to do anything. A HEC’s powers must be permitted by law and exercised in furtherance of its objects. We also understand that HECs may wish to explicitly specify some or all of their powers, and they will be able to do this in their articles of government.
With that short explanation, I hope that the noble Baroness will withdraw her Amendment 470.
Baroness Brown of Cambridge
I thank the Minister for his response. I am disappointed that he does not recognise that the content of the Bill is somewhat heavyweight for the kinds of institutions with existing track records to which I was referring. However, in the light of his explanation, I am happy to beg leave to withdraw the amendment.