Scotland Bill

Lord Sutherland of Houndwood Excerpts

Thursday 2nd February 2012 Lords Chamber

[Lord Forsyth of Drumlean]

My Lords, I speak to my Amendment 24. Just to make sure that people realise that the noble Lord, Lord Foulkes, and I agree only on some things, I respectfully remind him that it was the Labour Government who introduced tuition fees.

I remember that particularly well because the only time I have taken a Bill through this House was when the much missed late Lady Blatch was our Front-Bench spokesman. She was ill and asked me to take the Bill through the House. The rather splendid noble Baroness, Lady Ashton, who has sadly been taken from us to other duties, was leading on the Bill. I said to her, “Look, I have a problem”. There was an issue about gap year students having to pay more. I said, “If you will amend the Bill and allow for gap year students, I won’t waste your time and be unnecessarily difficult, but there is another thing I need you to do. I need you to help me to make sure that we do not get a vote on the principle of tuition fees”—which the Liberals were very keen to achieve—“because I'm being told by the powers that be in our party that we have to vote against tuition fees and most of the people on my side would be in the wrong lobby”. So we attempted to avoid having a vote because most of my colleagues rightly recognised that the future of universities depended on having tuition fees.

This is not a debate about the principle of tuition fees. Indeed, my amendment does not mention tuition fees. The Bill is about the exercise of power—we have taken back Antarctica; we are giving other things—and it defines the powers of the Scottish Parliament. The new clause in my amendment is intended to make clear that the Scottish Parliament is free to exercise its powers, but it cannot exercise its powers in a way that discriminates against people from England, Wales and Northern Ireland relative to people in other European states. That is the real wickedness involved in what is happening now: Greeks, Germans, Poles and French all get the same deal as the Scots, but English, Welsh and Northern Ireland people do not. When I say Northern Ireland people, Welsh people and English people, this is not about nationality but about the place where you live.

As I said to someone from the BBC the other day, “You work for the BBC. You get posted to Glasgow. You've got three children who are aged, say, 14, 15 and 16 and they want to go to university. You get rung up by the director-general and told that you have to move to Manchester. That could cost your children £100,000 in fees because they will no longer be eligible to go to some of the best universities in the country”—I declare an interest as a graduate of St Andrews—“such as St Andrews, Edinburgh or Glasgow for free. The moment you move to England, they will have to pay. This is just a complete nonsense. Of course, you could accept a job in Madrid, or Paris or anywhere else in Europe—but not in England, Wales or Northern Ireland”. It is an absurdity.

The real wickedness comes when you say in a reasoned way to Alex Salmond, “This is not fair”. The response you get is: “If Scotland is independent, the English will get the same deal as the Greeks, the French and the Germans”. That is not good enough. I hope that my noble and learned friend is not going to get up and give the same, lame arguments about how this is what devolution is about. No, it is not. Devolution is about making decisions in Scotland in the interests of Scotland. It is not about discriminating against people from the rest of the United Kingdom in a way which was never envisaged during the passage of the Scotland Act through this House.

I am sorry that the noble Lord, Lord McConnell, is not in his place. Last week, when we were discussing the Bill, he came up with a brilliant image when, in trying to explain the apparently irrational behaviour of the First Minister and his separatist colleagues, he said that it is a bit like tenants who want to get a move from a bad estate to another estate: the first thing you do is upset the neighbours. This is about upsetting the neighbours, and upsetting the neighbours it is. There is real anger about this.

I stood recently in a rectorial campaign in St Andrews—I only got 900 votes, which is actually not bad for a banker and a Tory these days. The winning candidate was very good indeed. I spent a week in St Andrews with the students. There you have, side by side, students working very hard, much harder than I ever did when I was at St Andrews, in a university which has been transformed. A third of the students are English, a third are Scottish and a third are European or international. The Scottish students will pay nothing. The fees are going up to £9,000 a year and it is a four-year degree, so that is £36,000 if you are English. The European students are paying nothing. They are all working side by side.

The other thing that struck me was that St Andrews just looks the same as it did—most medieval towns do. The restaurants and the pubs are the same. The students are certainly much more focused. However, whereas in my day there were no students working in the restaurants and the bars, there now are. They need to do so in order to make ends meet. It is quite divisive and wrong to have students from different parts of the United Kingdom faced with substantial borrowing and debt, or no debt, simply because of which part of the United Kingdom they live in. I believe that this is a deliberate policy to create anger. There is genuine anger and resentment, not least on the part of those students who feel that they are being given a better deal relative to their colleague than they perhaps deserve.

There is also anger on the part of parents. I suggested to someone who shall remain nameless who was at St Andrews with me that they might like to make a contribution to the university in its 600th anniversary year. She said, “Not on your life! Not while my children are not able to go to St Andrews without having to pay these enormous fees”.

So it is quite wrong. It would be entirely appropriate for the Government to restrict the powers of the Scottish Parliament so that it cannot operate in this way on any area of policy. As the noble Baroness, Lady Liddell, a former Secretary of State for Scotland, pointed out, the Barnett formula is extremely generous. The spending per head on education is about 20 per cent higher. It really is adding insult to injury to ask the English to send more money per head north of the border on education for the privilege of seeing their children treated less generously than people from Greece.

If the Prime Minister says that he will defend the union to the last fibre of his being, here is a test. I ask my noble friend to ask the Prime Minister to look at this, and ask him seriously whether we can go on allowing this to happen. This is very timely. Hitherto, the fees have been at levels of £3,000 a year, so it would be £12,000. Now they are going up to £9,000 a year, so it is a huge imposition upon these students and is building enormous resentment. I hope that my noble and learned friend will give this some consideration.

A third party is very angry about this: the universities. I am delighted to see in his place the noble Lord, Lord Sutherland, with all his experience of higher education in Scotland. The universities are the poor mugs who have got to set the fees with this difficult and divisive position for their students, and who take all the flack for its consequences. I am not going to press this to a vote today, because I want to give my noble and learned friend time to think about it and come back at a later stage, but I hope that he will take it seriously. This is the first opportunity that we have had since the introduction of tuition fees and top-up fees to debate this matter. It is widely resented around the country. It is a deep, deep injustice which needs to be put right.

[Lord Sutherland of Houndwood]

My Lords, I thank my two preceding speakers for their kind remarks. I run the risk of being drawn into this love-in going on across the Benches and I do not especially wish to be, so I hope that they say something nasty about me at some point.

I support the two amendments. Neither is perfect, and they need a bit of further thought, but I particularly welcome their pairing. Amendment 22 illustrates very well the general principles implied in Amendment 24, which are what I wish to speak about. As a declaration of interest, I am a former principal of Edinburgh University. I have links with most of the universities that I will talk about, but that of course includes many south of the border that are our friends, colleagues and competitors. There is a view across the whole country on this which must be taken it account.

The problem, which has been well illustrated, is clearly the differentials in treatment of students from what is now called the RUK group—there is now a formal title in Scotland for the “rest of the United Kingdom”—and students from the European Union. This is disproportionate. The differential between them and the way in which they are now being separated out is unjust and is not something that we happily live with on either side of the border, or in the university system across the country.

This division started quite some time ago. There was a trickle of complaints when fees were originally raised through this mechanism but they were small sums of money, comparatively speaking. This trickle grew into a pretty strong stream when the target hit £3,000 and is now a vast torrent. There will be much irritation and anger, and a great degree of thinking twice about where to study as a result of this policy.

The figures in question come out of a series of decisions taken on the administration of higher education which started in 1992, when the two funding councils were separated. On grounds of consistency, I have to say that I opposed that separation. Indeed, if you read the relevant speech of the Member for West Lothian in the other place at the time, you will see that he quotes me as being against it. That was because I began to worry then about the kind of separation that will take, and has taken, place. The two funding councils are proceeding well according to their own administrative arrangements. I do not blame the accounting officers or members there. They have financial settlements imposed upon them by government, not least by this House.

The division that occurred then has grown in practice, perhaps in a way in which none had envisaged and certainly in a way that most of us regret. The issue today is not whether you can turn the clock back completely. Devolution has happened; I accept that. The issue is whether we want the kind of devolution that produces this sad differential between students from different countries and different areas within the United Kingdom.

[Lord Sewel]

Was the noble Lord as uncomfortable as I was when reading the justification of some leaders of Scottish universities for imposing the highest fees? They used the argument that it was necessary in order to prevent Scottish universities being swamped by English students. I found that deeply uncomfortable.

[Lord Sutherland of Houndwood]

I am very uncomfortable with that. On the other hand, there were reasons, which I shall come to now, for the level of fees being set as it is.

The policy of the Scottish Government and the funding council is such that in the period from last year to next year a gap of roughly £40 million will have opened up in the funding of those universities. The University of Edinburgh, much to its credit—as the noble Lord, Lord Sewel, will be pleased to hear—recruits a large number of students from south of the border, and they contribute significantly to the life of that university. That is part of the way in which the university focuses on its United Kingdom, let alone its international, obligations.

With regard to that gap of £40 million, I know it is put about by some that the universities are raiding the coffers of the rich English and that is why they are setting the fees as they are, but that is not the case. A funding gap has been created. I pay tribute to the University of Edinburgh because I believe that at the same time it has put in place the most generous and best scheme for helping students who could not otherwise afford it to come from south of the border. It is a very good scheme which I think could be emulated by others.

Where did this fees level come from? It came from two decisions. One was the coalition Government’s decision to increase the fees to £9,000, although I have to say that they were following the example of their predecessors. This is not an argument about whether there should or should not be fees. I resist the temptation to get into that, although I have strong views on it. That was one element of what created this division. The other is that the Scottish Parliament, through its allocation to the funding council, deliberately created a gap in the funding of Scottish universities—it is in its accounts—of over £50 million. It created that gap and in effect instructed the universities to raise the money from students coming from the rest of the United Kingdom. That being so, there is a dual responsibility here, and it simply illustrates the point made more eloquently by the previous speakers about how we can sometimes set out on a constitutional road that leads not just to unintended consequences but to very unfair and unacceptable consequences as many of us see them.

Students from the rest of the United Kingdom, or RUK—it has a name, which is a sign of how well entrenched it is—will have to live with students whom they know will be paying none of the £36,000 that they are paying. The case has already been given of at least two such universities. It is sometimes suggested that the £36,000 is unnecessary. That is not true. If we are to compete with the best in the United Kingdom, that is the carefully estimated sum of money that has to be put back into the budget of individual universities, and they have set their fees accordingly.

I should mention that I was rather pleased to hear in the Antarctic debate mention of the University of Edinburgh. It has very strong research interests there and I am glad that we are protecting those interests. The only other interest that I could think of Scottish universities having in the Antarctic was if a very strong strain of clever penguins started applying to universities. They would have to decide what fees to charge the penguins, but happily we are unlikely to face that problem.

To summarise, an indefensible gap has arisen. I am not sure that either of these amendments would deal with it completely, but it is time for further thought. Do we want our university community, which shares knowledge and a passion for truth, to be divided within the United Kingdom financially in this extrovert way—a way that will distort human behaviour and the ways in which applications to universities are made? I hope not.

[Lord MacGregor of Pulham Market]

My Lords, I am delighted to be able to follow the noble Lord, Lord Sutherland. He referred to the eloquence of the other speakers but, if I may say so, he has spoken with great eloquence, great authority and great experience on this subject.

When I woke up this morning, I had not been expecting to take part in this debate but I was working in my office and at other meetings in the House and happened to bump into my noble friend Lord Forsyth over a sandwich. Having realised what the subject is, I am only too delighted to be able to intervene. I hope to speak on the subject briefly because many of the points that I wanted to make have been made already.

I was born and brought up in Scotland and, like my noble friend Lord Forsyth, I went to the University of St Andrews. I listened to the point that the noble Lord, Lord Sutherland, made about the contribution of English students to the University of Edinburgh. I recall very clearly that one of the great richnesses during my time at St Andrews came from the university having so many students from America and elsewhere but particularly from England. I believe that that had a very beneficial effect in widening my horizons.

Subsequently, of course, I came to England and for many years represented an English constituency, and I shall say something about that in a moment. The noble Lord, Lord Foulkes, referred to the sensitivity of dealing with the Scottish Parliament on this issue. However, I think that there is no more sensitive an issue than this question of tuition fees for parents who live in England but who, like me, may have been born in Scotland and who hope that their children will go to Scottish universities. From knowledge gained from my friends and particularly from my constituents in Norfolk, I can say that the resentment is very great.

I know how this issue arose originally—the Scottish universities had to accept the ruling that EU students had to be treated the same as those in Scotland but that did not apply in the United Kingdom. That argument is not understood by any parent or potential student who wants to come to Scotland. I hesitate to mention the Barnett formula but the noble Baroness, Lady Liddell, has done so already. I was going to look at the Barnett formula in a slightly different context. I have always—since first being in government—been a strong opponent of the Barnett formula, but that is another story. However, there is no question that Scotland benefits greatly from the formula. One way of putting this resentment right would be to meet the fees required from English students coming to Scotland through the extra expenditure that the Scottish Parliament has received from the Barnett formula.

I want to say one other thing on this subject. For many years, I tried to persuade my constituents and many others in Norfolk and elsewhere of the unfairness to those in England—very often receiving grants from local authorities and so on—of the Barnett formula in treating Scotland so much better. I could never persuade my constituents of the importance of this case because it seemed remote from them. However, the one issue that they really understand and which creates resentment is when they want one of their children to go to the Scottish university that they attended but they find that the financial penalties are such that they are not able to do so. That is what comes home to them. I used to get a lot of representations from people in this situation and I could never convince them otherwise; I could only agree with them. That is why I strongly support these two amendments.

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[Lord O'Neill of Clackmannan]

I am very pleased to follow the noble Lord, Lord MacGregor. There seems to be an outbreak of unity in the Chamber today and we should be grateful to the noble Lords, Lord Forsyth and Lord Foulkes, for their amendments. The amendments may have imperfections but the point has been well made that devolution was to be about the extension of democracy, greater accountability and, ultimately, greater transparency. Through that, we hoped that there would be a measure of equity. In fact, what we have here is a classic example of the inequitable character of our constitutional arrangements.

I voted very reluctantly in favour of the principle of charging fees—I was probably one of the last converts from the Whips’ arm-twisting process and what have you. However, I am not sure whether I would have voted in favour of the principle of fees if I had thought that it was going to be abused in the way that it is being abused by the Scottish Government. From the very speedy but quite succinct analysis given by the noble Lord, Lord Sutherland, of the accounting procedures adopted by the separatist Administration in Edinburgh, it is quite clear that they are out to discriminate against the rest of the United Kingdom and to prevent young people coming to our universities. If they do come, they will be making a disproportionate contribution to the finances of these institutions.

It is certainly the case that some institutions for historical reasons, such as Edinburgh, are probably better endowed and better able to introduce generous systems of support. There are a number of institutions that one might almost call marginal in their financial capability to provide the kind of support—

[Lord Sutherland of Houndwood]

I thank the noble Lord for giving way. The money that Edinburgh will put forward for needy students comes from the total fees package that is taken in. Clearly, they test alumni—looking around the Chamber, I remind Members of this—for additional funds to do that, but a significant part of the money comes from the fees that they charge.

[Lord O'Neill of Clackmannan]

The point I was going on to make is that some of the newer institutions are less well endowed in the round, have smaller numbers of alumni for a start, and are discriminated against in another way. Those institutions are not as attractive and are therefore unable to benefit from students from the rest of the UK or from abroad. Even within the system there are difficulties and inequities. There are imperfections in the two amendments, and the Government have to take the point that this Chamber is not happy with the way in which things have developed, nor with the unfairness that has been inflicted on children and families across the country. One part of the United Kingdom is able to benefit from devolution in this way and have free education at undergraduate level, while others in the same country are discriminated against when they come to Scotland to study or are deterred altogether, which I think is even more significant. Our universities and our Scottish institutions make a unique contribution to the mix.

I have had this discussion in my own family with my sons. They say, “We’re not really interested in going to Oxbridge; we think Edinburgh and Glasgow are perfectly adequate to provide us with an education”. One could argue that they might have got the emphasis a wee bit wrong, but that mood still prevails. However, we do not want children to grow up in some kind of Caledonian closet, where they will not be open to other relationships and cultures. My younger son, who went to Glasgow, learnt a lot from being in the same halls of residence and playing in the same football team as young men from Northern Ireland, whose cultural and social background was dramatically different from his own. Such people will not necessarily have the chance to come to our institutions and the Scots who go to our institutions will not have their company.

Money is at the beginning, the middle and the end of this situation, but there are other dimensions. When we started on the road to devolution, we wanted, as I said earlier, to create a better United Kingdom, not a United Kingdom that was inequitable because of the cynicism of separatists in Scotland who wished to use the mechanism at their disposal to discredit the concept of the UK. This is an opportunity for us to avoid that and to ensure that they can be exposed for the charlatans they are when they argue in favour of free education for some but not for the rest, not because they do not happen to be Scottish but because they just happen to live in the wrong part of the United Kingdom.

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[Lord Sutherland of Houndwood]

There is, however, one significant difference. Many of us come from a generation where we had to live at home when we went to university, which I did intermittently for a few hours each night. But that is not a choice available to students going from England to Scotland, so they cannot economise on the cost of university education by making a choice that others can, for example, who live in London.

[Lord Wallace of Tankerness]

They can actually make the choice to go to London and possibly not pay any more or any less.

[Lord Sutherland of Houndwood]

Clearly the choice is driven then purely by financial constraints rather than by educational aspirations.

[Lord Wallace of Tankerness]

I agree and accept that, but we are perhaps kidding ourselves to think that those students in Scotland who chose to go to a university very close to home were not also taking into account financial considerations; albeit that they were fortunate to have so many universities of considerable quality on their doorsteps. If you came from the part of Scotland that I came from, nowhere was on the doorstep. I pay particular tribute to my noble friend Lord Forsyth for what he did when he was Secretary of State for Scotland in giving an impetus to the idea of the University of the Highlands and Islands, which, as my noble friend Lord Maclennan has indicated, has now come to fruition. It has taken a somewhat long time but it was worth it. I know how keen he was on it. It has made higher education available on the doorsteps of many people who otherwise would not have had that opportunity.

I never particularly like, and do not think this debate lends itself to, technical issues, but the amendment from the noble Lord, Lord Foulkes, is deficient in a number of ways. It reserves to the UK Parliament the power to make variations in fee levels between different parts of the United Kingdom. I am sure that it is not really quite what he was intending. I acknowledge and appreciate that my noble friend Lord Forsyth has sought to couch this in a way that is more related to an issue of principle rather than focusing on tuition fees. However, as the noble Lord, Lord Browne, pointed out, with the possible exception of rights of audience, you would be hard pushed to actually think of any other circumstance where this principle might arise. I will clarify the position on rights of audience. I clearly recall that it certainly was the case. I know of many practising advocates now at the Scottish Bar who are also at the English Bar—and some, indeed, at the Northern Ireland Bar—as well as some solicitors trained in Scotland who now work in firms in England. It does seem easier at a practical level to go between jurisdictions than it was hitherto. The point of my noble friend’s amendment is very much focused on tuition fees, which he did not attempt to disguise in speaking to his amendment.

However, one should always be aware of the law of unintended consequences. One possible consequence of his amendment is that the Scottish Government could address this by paying the tuition fees of every student from England, Wales and Northern Ireland. My noble friend says that would be fine. Obviously it could be budgeted and other things would have to give way to fund that. However, it would suddenly mean that it would be hugely cheaper for students from England, Wales and Northern Ireland to attend universities in Scotland. My noble friend says that is ridiculous, but of course that would be the consequence.

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[Lord Wallace of Tankerness]

The point I was making was that there was clear evidence, which we were looking at in about 2003 or 2004, in an overall review we did of higher education at that time in Scotland, that a differential where Scotland was much cheaper than England, Wales or Northern Ireland would have a considerable impact. I totally subscribe to what noble Lords have said in this debate—that the essence of many of our universities, the advantage of them and the thing that gives richness to student life, is the fact that you are shoulder to shoulder with people from many different backgrounds, nationalities and cultures. I subscribe to that overwhelmingly. But it is naive in the extreme to think that, if university tuition in Scotland was free for students from England, it would not have some quite material effect on the numbers applying.

[Lord Sutherland of Houndwood]

I thank the noble and learned Lord for giving way and I promise not to intervene again, but there is a further argument in this area that is relevant. If Scotland is not charging fees for students who come from the continent but England is, there will be a displacement of students from continental bases to Scotland. Last time I did a back-of-the-envelope calculation, European Union students were costing Scotland between £80 million and £90 million a year. That could grow as an unintended consequence of the policies. I am not questioning good faith or decisions taken constitutionally in the right way; I am just saying that we really are creating consequences, and that is another one that we ought to look at very carefully.

[Lord Wallace of Tankerness]

I think that actually supports the argument that I was just making—that if the numbers are going up from European Union countries, a fortiori the numbers would increase from other parts of the United Kingdom. That is something that would have to be addressed. I do not think that my noble friend has actually thought that through.

Just as the noble Lord, Lord O’Neill, said to the noble Lord, Lord Browne, that he might have to talk to the leadership of his party before the matter comes back at the next stage, so my noble friend Lord Forsyth said that I should draw this matter to the attention of the Prime Minister and my noble friend Lord Maclennan asked that we think about this before Report stage. I do not think that it would be a service to the House if I did any other than say that obviously we have to reflect on the very strong views that have been expressed in this debate.