Higher Education (Basic Amount) (England) Regulations 2010

Lord Bilimoria Excerpts

Tuesday 14th December 2010 Lords Chamber

[Lord Bilimoria]

My Lords, the human tendency since time immemorial is for us often to take things for granted. I do not think that we stand back and appreciate enough how excellent the higher education sector in this country is. We always punch above our weight. The benchmark for excellence in higher education is the United States, yet as a country six times smaller, we consistently produce four or five of the top 10 universities in the world, the others being American. Again, I do not think it is highlighted enough that the United States spends as a proportion of GDP nearly three times as much on higher education as we do, almost 3 per cent versus 1.1 per cent. What is more, government expenditure in the United States is 1.2 per cent of GDP, higher than our combined expenditure on higher education, both public and private.

There is no question but that we need to increase overall expenditure on higher education. The ideal situation is when we get to the same place as the United States, where two-thirds of the provision is private and one-third comes from government. The two-thirds provision should come from student fees, benefaction, endowments, scholarships and sponsorships. In this light, my noble friend Lord Browne was asked how we could improve higher education. So much of his report is good and there are many excellent suggestions, but instead of moving towards what I have just outlined, the cat was let out of the bag in the last sentence of his report. It states:

“These measures create the potential to allow the numbers of student places to increase by 10% and enhance support for living costs while still allowing public spending reductions to be made”.

Here we are, on the one hand with the Government actually proposing to cut teaching support by 80 per cent to try to save £3 billion over four years, and on the other hand by almost tripling tuition fees in one go in 2012.

We all know that the finances in this country are in a dire position. We all know that cuts need to be made, and we all know that public expenditure is far too high as a proportion of our GDP. But to get out of this predicament, we do not necessarily just have to make cuts; we also have to grow as an economy, and to do this we need the elements of our economy that are our unique selling proposition—our core competences—and there is no better example than our higher education sector.

There are cuts and there is carpet bombing. We need to be selective and to cut effectively by pinpointing. There are big-ticket items where billions can be saved, such as inefficiencies and administrative savings in the NHS. It is possible that tens of billions could be saved. The Department for Work and Pensions budget is nearly £200 billion. That is where big savings can be made. But to try and save £3 billion in an area where we are the best of the best in the world, and in such a blunt way, does not make sense.

This is combined with an immigration cap. Every day I hear from businesses that say that they are hurting because of the immigration cap. I hear every day from our higher education sector, where 10 per cent of our academics are foreign and where it is estimated that foreign students bring up to £8 billion of direct and indirect income into this country. We must learn that when the United States clamped down on immigration, it lost out; we benefitted. We have competition—10 EU countries spend more on higher education as a percentage of GDP than we do.

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Tabled by

[Lord Bilimoria]

To move to resolve that this House accepts that an increase in tuition fees is necessary to maintain and improve higher education in this country; but regrets the drastic cuts in higher education funding and the multi-fold increase in tuition fees being proposed to fill the gap created by these cuts; and calls on the Government to consider and report to Parliament on the possibility of staggering and phasing in over a period of years any increases in tuition fees and not to implement the increases all at once in 2012.

[Lord Bilimoria]

We have had an extensive debate and the Government have won the vote in both Houses. My Motion does not propose to change anything but acknowledges only that we as a House regret that higher education funding has been cut and that, as a result, tuition fees have had to be put up to such an extent. It requests that the Government consider not postponing the increase but implementing it in a staged manner from 2012 onwards. The reason for this is that we have balanced the books of the country and of universities but we have not thought enough about the students. They will suffer so much because of this and the Motion would have helped them. The perception at the moment is that the Government do not care enough, and we all need to be wary about that perception.

However, given the way in which the debate and the votes have gone, I shall not move my Motion.

Motion not moved.