Scotland Bill

Debate between Lord Sewel and Lord Stephen

Monday 26th March 2012 Lords Chamber

[Lord Sewel]

My Lords, perhaps because of my previous interest in Scottish higher education, I have been somewhat targeted by universities in Scotland. I must say, from the start, that I find myself in the difficult position of being in opposition to the noble Lord, Lord Wilson of Tillyorn, who was my chancellor. I was targeted for making what have been called “unhelpful comments” in Committee. I quite like making unhelpful comments in Committee. Of all the representations that I have received, not one adequately addressed the EU anomaly. They were silent on that. They were, of course, concerned, institution by institution, with the need to protect their income but that is ultimately a matter for the Scottish Government, not for this Parliament. The Scottish Government could easily devise a funding formula that enabled English domiciled students to be supported at Scottish universities.

The other thing that I have found offensive—I use the word carefully, but I do use it—is the argument that if there is not this discrimination, Scottish universities will be swamped by English students. That has something akin to the ring of ethnic cleansing about it. I say that as someone who has, fortunately, had the great privilege of being educated in an English, a Welsh and a Scottish university. As my noble friend Lord Morgan said, anything that turns away from that great value just does not understand the nature of higher education as a universal good.

Let us come down to the grubbiness of it. When I was a Scottish Office Minister I was in charge of the first comprehensive spending review. As we developed the argument, I asked the simple question: what would happen if Scottish universities were funded out of the block grant on the basis of Scottish students? My officials turned to me and said: “Minister, we would at least have to close one Scottish medical school. The best card we have up our sleeve to defend the Barnett formula is that we educate English students out of the Scottish block”. Just think what the implications for higher education would be if that became the reality: much more than the problem of solving English students being properly financed to attend Scottish universities.

That is in the past. Issues like this can usually be reduced to very simple propositions. The simple proposition here is that what is intended is deeply and grossly unfair and nothing that I have read or heard persuades me otherwise.

[Lord Stephen]

None of this is simple. The Scottish Parliament came forward with some very practical and pragmatic solutions to try its very best to tackle this problem. Back in 2000, when we first looked at the problem, the big issue was how we treated Scots attending universities outside Scotland, because they, too, are prejudiced—in terms of some of the quite extreme language which has been used at times in this debate. For them, there is a system that is different from that for students from England, Wales and Northern Ireland when they choose to study at a university outside Scotland. I referred to the legal advice that we received that day when I said in the Scottish Parliament:

“We wished to treat all Scots the same, but a significant problem was drawn to our attention. Members have asked for the legal advice and I will try to be helpful on that point … Article 12 of the Treaty on European Union prohibits discrimination on the ground of nationality against nationals of other EU states. The imposition of fees on students who are students of other member states as a condition of access would amount to discrimination if the fees were not imposed on nationals of the host member state … We had to consider whether we, in Scotland, as part of the UK member state, could provide that Scots—who for this purpose would be regarded as UK nationals—did not pay tuition fees in the rest of the UK. Given the risks of challenge by other EU nationals and based on the best advice available, we produced the proposals that are before us today”.

In other words, if we had funded Scottish students to attend universities in England, Wales or Northern Ireland without payment of tuition fees, to put them on a level playing field with other students in Scotland, the Scottish Government could have been held liable to fund the tuition fees of all EU nationals from outside the rest of the UK who attended universities in the rest of the UK. This is a complex and difficult problem created, in many ways, by the EU legislation. “Change your lawyers”, I hear from the Bench in front in me, but we were given that advice by some very senior lawyers, one of whom is present on the Opposition Bench today—a noble and learned lawyer. We came up with what were called the Quigley principles—how many people remember them? It was all about creating some sort of level playing field. I am not going to get into the rather offensive language of ethnic cleansing or use the word “swamping”. We simply wanted to stop a surge in demand—a disruption of the system that currently allows over 20,000 students from the rest of the UK to study in Scotland. That is a significant number of students, it has been a pretty stable number of students and it has only stayed stable because we have managed to maintain a level playing field. We were given legal advice that this was the only legal way to do it—that quotas would not be acceptable.

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[Lord Stephen]

I agree with the noble Lord. The answer is that there was not enough intergovernmental discussion because the UK Government were entirely hostile to the notion that tuition fees should be removed for Scottish students. Their hostility was made known to us on more than one occasion. They were unhappy with what was proposed in Scotland.

Scottish students had their fees paid by the Student Awards Agency for Scotland and then, separately, the £5,000 payment from the funding council was given for their tuition. In other words, until now, English, Welsh and Northern Ireland students were part of the cap as well as Scottish students. It is important to make that point.

We introduced that pragmatic solution to a potentially major problem, which could have scuppered the proposal to get rid of tuition fees in Scotland. I have to say that many of my colleagues in the Labour Party, my friends whom I worked with in coalition, subsequently said that it was one of their proudest boasts, their proudest achievements through the Scottish Parliament to get rid of tuition fees in Scotland. It was certainly one of mine. As I said, back in 2000, we were disappointed with the legal advice that we were given at the time and wished that it were different. If it can be changed, let us change it.

The bigger question, in my view, is the one mooted by more than one noble Lord this evening: if Scotland were to be independent, how would the Scottish Government tackle the legal situation? It would be difficult to understand how they could legally respond to the challenges I have described. Free tuition would then have to be offered to all EU students, including those from Scotland, England, Wales, Northern Ireland and the rest of Europe. We have not heard a response from the SNP on that issue.

The situation now is that English, Welsh and Northern Ireland students are being moved outside the cap. That is another important point. The funding from students will now be sufficient to remove the need for a contribution from the funding council. Why is that? Self-evidently, because fees in England, Wales and Northern Ireland have been allowed to increase so much. There will now be the £9,000 per year limit, so English, Welsh and Northern Ireland students will be in the same position as international students, who have always been discriminated against—if that is the language we wish to use. They will be put in the same position as international students, but with a cap of £9,000 per year.

In my view, the preferred solution would be to remove tuition fees across the whole of the UK. That would work equally well in tackling the problem— removing it, to use a political phrase, at a stroke. The policy was never to fund all EU students. That is not what we wished to do; that was what the legal advice drove us to do.

[Lord Sewel]

The noble Lord has given us a detailed exposition of the funding difficulties. Perhaps he could carry that a little further in terms of what he thinks the effect on the Barnett formula would be if the Scottish Funding Council funded only Scottish-domiciled students.

[Lord Stephen]

As I understand it, there would be no effect on the Barnett formula, so the £85 million per year currently spent on the English, Welsh and Northern Ireland students to attend universities in Scotland would become available to the Scottish Government as those funding arrangements changed. The noble Lord, Lord Sewel, looks incredulous at that, but that is my understanding.

To finish, different policies for different parts of the UK so that different people, including students, can be treated differently sounds to me pretty much what decentralising power, devolution, is all about. It is surely the responsibility of those elected to the Scottish Parliament to introduce new ideas and new policies. What we found deeply uncomfortable was the notion that you could discriminate within a member state but not between member states. That seems nonsense, but I know of no other way to tackle it based on the legal advice and the pragmatic solution that we have chosen. Let us be honest, this is hardly a burning issue of major importance in the reaction of students and families across the UK, because we still have ready access through our pragmatic solutions for English, Welsh and Northern Ireland students to universities in Scotland and we continue to have Scots attending universities outside Scotland.