Power of Privy Council in Relation to Designated Institutions

Orders of the Day — Further and Higher Education (Scotland) Bill – in the House of Commons at 10:30 pm on 5th February 1992.

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Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow 10:30 pm, 5th February 1992

I beg to move amendment No. 89, in page 29, line 4, leave out from "functions" to end of line 7.

This is a probing amendment. Like all probing amendments, it can be elastic. My first point relates to the central issue of money, and it is to ask the Minister what he would have said in response to new clause 21, about superannuation entitlements. I hope that that does not stretch the House's patience too far. We know what happened a few minutes ago—there was a mistake—and this is an important subject.

The purpose of the probing amendment is to ask what the Government's attitude is to academic endowments. I couple it succinctly with a strong personal feeling that in this country we do not take advantage of potential endowments as happens in the United States and, perhaps above all, in Israel. Anyone who has been to the Hebrew university in Jerusalem will have seen many faculties endowed by people whose names have been preserved—

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

My hon. Friend is a scientist who has travelled widely, and he knows exactly what I am talking about.

Some universities abroad attract a great deal of money through named bequests. It is an understandable trait of human nature that people often like their names and those of their wives or others to be remembered, and they give a great deal of money to that end. We have lost in the past 20 or 30 years by not tapping that source of money.

Earlier, we discussed the chair of Scottish history and the Fraser endowment. Incidentally, I think that the Fraser endowment moneys have not been managed as wonderfully on the stock market as they might have been, but that is bye the bye. However, the important fact is that they were endowed in the first place, and that is how many such chairs occurred. In such circumstances, I feel entitled to ask what the Government's attitude is to academic endowment. It would be a great courtesy if they would tell us in answer to the issue that my hon. Friend the Member for Clydebank and Milngavie (Mr. Worthington) and our colleagues raised on the subject of superannuation entitlements, producing the new clause which read: '—. The Secretary of State shall ensure that provision is made for staff of institutions newly designated as universities to have superannuation entitlements which are no less favourable than those applicable to staff in established universities.'.

It would be a courtesy to the House if the Minister could respond to that.

Photo of Mr Michael Forsyth Mr Michael Forsyth , Stirling

Perhaps I can help the hon. Member for Linlithgow (Mr. Dalyell) in so far as this matter is concerned with money. I suppose that new clause 21 was also concerned with money, so that there is a clear link between the two. I am grateful to you, Madam Deputy Speaker, for your tolerance, but I know from experience in Committee that the hon. Gentleman will find a way to pursue the matter, so I am happy to respond.

The key point in relation to academic staff and pension provision is that the main benefits which are payable by the two schemes are broadly the same, which is one eightieth of pension salary index linked for each year of reckonable service up to a maximum of forty eightieths at normal retiring age and a lump sum payment of three times annual pension. Therefore, conferring a right on individuals to transfer between them is of little value. In fact, the level of employee contribution in the university scheme, at 6·35 per cent., is marginally higher than that in the teachers' scheme at 6 per cent.

What I would have said in respect of new clause 21 is that it is wrong-headed because pensions are essentially a benefit which flows from employment and it is employers rather than individual employees who must decide which scheme to provide. It would also involve considerable extra financial burdens for employers, money which the Government believe should be spent on the provision of higher education.

On amendment No. 89, subsection (2)(c) is not a new provision. It is lifted directly from section 77 of the Education (Scotland) Act 1980 and was inserted into that Act by the Education (Scotland) Act 1981. The reason for the provision was that the Secretary of State's powers to reorganise educational endowments which were contained in part VI of the 1980 Act were being handed to education authorities, at least in respect of locally funded education.

The powers relating to grant-aided colleges were retained and transferred to the section of the 1980 Act dealing with the government of these colleges. It might interest the House to know that the Secretary of State's powers in part VI of the 1980 Act were simply carried over from the Education (Scotland) Act 1962. Therefore, the Secretary of State has had the powers to deal with endowments for at least 30 years.

The provision in clause 39 allows a simple means of amending endowments to reflect changes to the institutions to which they relate. For instance, if at present a grant-aided college, or, in future, a designated institution, were to change its name or merge with another institution, the appropriate change could be made to any endowments related to the college or institution.

So clause 39 simply transfers to the Privy Council the Secretary of State's existing powers in that area. We have made no changes to the provisions relating to endowments, in keeping with the spirit of the higher education White Paper, which was that existing and successful arrangements for the colleges should broadly remain as they are.

By way of summary, let me say that the answer to the question asked by the hon. Member for Linlithgow is that there is no change in the Government's policy on the matter.

Photo of Mr Tam Dalyell Mr Tam Dalyell , Linlithgow

That was as helpful a reply as the Minister could have given. I think that the Department should discuss the matter with the Treasury, and reflect how endowments for hard-pressed institutions such as the University of Edinburgh could be encouraged. In that spirit, unless any of my colleagues wishes to speak, I beg to ask leave to withdraw the amendment.

Amendment, by leave, withdrawn.

Amendment made: No. 80, in page 29, line 10, after 'above', insert 'if neither the institution nor the governing body is, immediately before the order is made, a body corporate.'.—[Mr. Michael Forsyth.]