Scotland Bill

Lord Sutherland of Houndwood Excerpts

Monday 26th March 2012 Lords Chamber

[Lord Foulkes of Cumnock]

My Lords, I was pleased to put my name to the amendment of the noble Lord, Lord Forsyth. It is not something anyone on this side does lightly. However, as I have said before, even a Tory is not always wrong and on this occasion he is absolutely right—spot on. It is an issue of fairness. I shall be very brief.

It is an issue of fairness when students from Lithuania and Poland can go to Scottish universities for free, but students from England, Wales and Northern Ireland have to pay full fees. As the noble Lord, Lord Forsyth, said, there is double jeopardy. The parents of the students from Poland and Lithuania do not contribute to the costs of Scottish universities, but the parents of the English, Welsh and Northern Irish students pay UK taxes. They have to pay full fees and the taxes that subsidise Scottish universities.

I know that there are concerns about funding. These have been expressed by the chancellor of the Royal Conservatoire of Scotland, the noble Lord, Lord Vallance, and in a letter to me from the noble Lord, Lord Smith of Kelvin, the chancellor of the University of the West of Scotland. However, that is not a matter for us; it is a matter for the Scottish Executive. As the noble Lord, Lord Forsyth, said, they get billions of pounds from the block grant. It is a matter of priorities. Scotland has free care for the elderly, free prescriptions for everyone, including the very rich, and a whole range of other things that are provided. Surely this is something to which they can give consideration. Without pre-empting what the noble Lord, Lord Sutherland, will say, he has looked at the funding in much more detail and can make suggestions. If the Scottish Executive need help, I am sure he would be very willing to provide it—at no cost, I presume.

Finally, I say to my colleagues on the Labour Benches that we now have no Whip on this matter. Therefore, we have the opportunity to vote as we wish. I hope we will make the right decision in voting on this and support the amendment. I have spoken to Labour MSPs who have supported what the SNP Administration are doing. They said that they did not want to do it and regretted having to do it but had no option because of how it was put to them in terms of funding. We have an option: we can support the noble Lord, Lord Forsyth, and we can support fairness. I urge noble Lords so to do.

[Lord Sutherland of Houndwood]

My Lords, the position before us requires a brief summary of how we got to where we are. I see a number of Members in the House who did not sit through all the longueurs of the Committee stage. To them I say, “Welcome to the Michael and George show. It’s amazing”. That said, why are we where we are? How did we get here and what is it? If you live in Dublin or Dundee, you pay no fees. If you live in Belfast or Berwick—I do my shopping in Berwick—you will pay fees at a Scottish university. We could go on with examples.

We all accept that these are unfortunate consequences of administrative procedures. We might also accept that they are unintended consequences of administrative procedures. However, I ask noble Lords to note that they are divisive consequences of administrative procedures, of which the only beneficiaries are those who would turn that divisiveness into the final division of separation. This suits their hand of cards.

The current situation over fees was not sought by the Scottish universities. I wish to stress that. There were some who hinted that the Scots were desperate to charge the Sassenachs et cetera large fees. This was not sought by the Scottish universities. Like the members of the Labour Party in the Scottish Parliament, this was imposed on them.

My reckoning is that this year approximately £28 million to £30 million will be withheld from the Scottish universities grant. That money has to be found by the universities if they are to continue functioning. It will be withheld on the assumption that they can charge students from RUK, as they call it—the rest of the United Kingdom—fees that will fill that gap. That is just the start. The estimate is that the figure will be for just the first year. Over another four years, by 2015, the reduction in funding for Scottish universities from the Scottish Government might be £120 million. This is surely not something with which we can rest content.

By negotiation and ingenuity, the Scottish universities have avoided having an inadequate level for rest-of-UK students imposed on them. This was a risk for them. They have the power to vary their fees, charging up to £9,000 a year. Clearly, several of them will do this. I say to them, “Well done”. At that stage, I would have done the same but why did we get to that stage? The horse has already bolted through the stable door with the first £30 million: the Scottish Government have withdrawn this funding. As realistic chief executives, they did not have much choice other than to enter into a negotiation with which I suspect none of them is particularly happy.

The universities have also done well in devising bursary arrangements, for which I pay tribute to them. I know about the situation in the University of Edinburgh, my former university, in detail. It has done well and has the best bursary scheme anywhere in the UK for students in need. Some of the universities down here could take a look at that; it might help with some of their problems of recruitment.

Scottish universities also have a legitimate fear that, if this amendment were to be passed in its current form, without the following amendment, it would cause chaos if it were imposed for 2012-13. There may have been a hint of that earlier but this amendment does not imply imposing these new procedures for next year. Of course there would be chaos. However, we can deal with that—I will come back to it in a moment. I would not support an amendment that caused such chaos to the intake of students preparing for entry in 2012. That is common ground between all those who have put their names to the amendment. These are short-term consequences and we can deal with them. I completely understand that the short-term consequence would be to cause chaos now but we can deal with it by setting the date back.

However, there are longer-term consequences and implications. This is what I can only call another example of “devo drift” by practice, rather than by legislation. It inserts a further series of divisions, in this case between the young people of the rest of the UK and those of Scotland. This “devo drift” will not, I hope, be subject to another negotiated deal with the Government in Scotland. Are there any pegs that should be put in place? For example, if the next step gave Scotland a capacity in relation to research councils, which is a reserved business at the moment, it would be absolutely horrendous for Scottish universities. I see nothing in current attitudes to suggest that it might not be the next stage along the way. The Scottish universities would then have to decide whether negotiation was a wise practice.

That is all very easy to criticise but how do we proceed? In its briefing note, of which I was eventually given a copy by indirect means, Universities Scotland suggests that everything had been done to raise the question of the European demand that European Union students should not be charged fees. Indeed, the briefing note claims that the Education Secretary in Scotland,

“has actively pursued this issue in Europe and UK support for this issue, including voices within the Lords, would be welcome”.

I support him on that issue. Now what will he do about it? There is a question there to be looked at and we need a bit of time.

More importantly, I suggest that there is a way forward, and we need a bit of time for that. There should be a call for a UK-wide discussion, with all regions—all the rest of the UK—and Westminster, with the relevant Secretaries of State sitting down together and setting a quarter of places for RUK students in Scotland, an equivalent quota for EU students in Scotland, and a quota for Scottish students who go to universities in the rest of the UK. Within that, there may be room for financial manoeuvre because the Scottish students who take places in English universities displace England-based students for whom the Government here would have to make some provision, albeit that they would be charged fees.

[Baroness Brinton]

Does the noble Lord accept that under Article 24, paragraph 1 of directive 2004, it is not possible to provide quotas for EU students, because of the issue of free movement?

[Lord Sutherland of Houndwood]

My Lords, I am prepared to take expert opinion on that. That does not rule out the possibility of the Administrations from Northern Ireland, Wales and Scotland sitting down with the Westminster Government and working out a quota system for within the UK. It is a broader question how the European Union behaves itself on this matter, and there may be alternative views.

[Lord Forsyth of Drumlean]

Is it not the position that in practice because the Scottish Government set a budget for the number of Scottish and EU students that they will fund—that is how they operate—all the noble Lord is saying is that there should be a budget for the English, Welsh and Northern Ireland-based students who attend?

[Lord Sutherland of Houndwood]

Certainly the Scottish universities funding council sets an overall budget which will pay for students who, as it turns out now, are resident both in Scotland and in the rest of the European Union. I accept the point made by the noble Lord, Lord Forsyth.

The force of what I have to say is that there needs to be discussion—I suspect it has been rather absent—between the funding councils and those who instruct them to see whether there is a way of removing this anomaly that none of us likes. How did we get here? By a slow process of change that has not had good consequences.

It would be unfair and unjust to discriminate only against the rest of the UK students, and if that is a principle that this House accepts, I hope that it will support the amendment.

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[Lord Stephen]

Based on the legal advice we were given, we had to come forward with a pragmatic solution. That was to increase the fees to students from England, Wales and Northern Ireland but not above what students were paying to attend their own universities. It was to maintain the principle of equality among those students, if you like to look upon it that way. That is a very different situation from that which has been described this evening.

It all started in 2000 and was introduced in 2001. When fees went up due to the decision of the then Government in 2006, we had to introduce a different system. My colleague at the time, the noble Lord, Lord McConnell, and I were First Minister and Deputy First Minister respectively. There was pretty much cross-party consensus that that was the right thing to do. English, Welsh and Northern Ireland students pay their fees personally, normally through the Student Loans Company or through local authority funding arrangements. However, an important point that has not been mentioned this evening is that payment for tuition in Scotland has, until now, been topped up by the Scottish Government to the tune of about £5,000 per annum for each and every English, Welsh and Northern Ireland student attending university in Scotland.

[Lord Sutherland of Houndwood]

The noble Lord assures us that there was interparty discussion within Scotland about these things. Was there any intergovernmental discussion and, if not, why not? I fear that that is what is lacking at the moment.

[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.

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[Lord Wallace of Tankerness]

My Lords, I understand that there is a serious issue here. As the noble Lord, Lord Browne, indicated, if we end up telling the Scottish Parliament what to do—my noble friend Lord Forsyth says that that is not what his amendment says but I think that, de facto, that is what it would lead to—that would be a serious position for the union, and it would undermine the whole devolution settlement. That is why I find this a difficult issue.

I think that my noble friend has, as the noble Lord said, totally underestimated the number of students who would seek to apply to Scottish universities. It only stands to reason that if you can get free tuition at the St Andrews university but would have to pay £9,000 at Durham, you are more likely to apply to St Andrews. The notion of quotas has never been particularly welcomed.

[Lord Sutherland of Houndwood]

I wonder whether the Minister remembers when this argument was last put forward. On that occasion we were, perhaps unusually, on opposite sides of the argument. I was recommending a form of care for the elderly, wrongly categorised as free, and one of the counterarguments was that there would be a—they did not use the word then—tsunami of pensioners crossing the border to Scotland. I think that it would have been more of a steady trickle which grew. It did not happen, although it was claimed that it would.

[Lord Wallace of Tankerness]

My Lords, it is too easy to dismiss the possibility of it happening. It is probably much easier for a student to choose which university he or she would wish to attend than for a pensioner completely to up sticks and settle in a different part of the United Kingdom. I think, with respect, that the noble Lord is not comparing like with like. However, I do recall that when tuition fees were first significantly increased by the then United Kingdom Government, around 2003 or 2004, the then Scottish Government had to respond to it. There were very clear signs that if the Scottish Parliament did not respond to it—and my noble friend Lord Stephen has indicated that it happened again in 2006—there would be an increase.

I should like to make it clear to the noble Lord, Lord Morgan, that I strongly believe that part of the richness of university education—one of its great pluses—is that it includes people from all different backgrounds. Universities in Scotland would certainly take the view that it is important that there should continue to be students not just from other parts of the United Kingdom but from other parts of the European Union and from around the world. That adds to the richness of a university education. They seek to achieve a manageable flow of students from the rest of the United Kingdom which would ensure the long-term stability of universities in Scotland.