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Higher Education and the Economy

Part of the debate – in the House of Lords at 3:31 pm on 19th April 2007.

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Photo of Lord Butler of Brockwell Lord Butler of Brockwell Crossbench 3:31 pm, 19th April 2007

My Lords, I congratulate the noble Baroness, Lady Warwick, on obtaining this debate. I declare an interest as master of University College, Oxford.

The noble Baroness spoke eloquently, as have other noble Lords, of the wide contribution that higher education makes to employment, exports and our culture. I shall concentrate these few remarks on research. There can have been few periods in history when opportunities have been greater for advances through intellectual effort and applied research. Research attracts money, not only from research councils in the UK, but from sponsors of all sorts. It is important for current economic activity but, of course, its significance spreads far more widely than that. It supports advances which address both the world's needs and—as the noble and right reverend Lord, Lord Carey, has said—give our country a competitive edge against the lower labour costs of the Far East.

To their credit, the Government have recognised the importance of this national asset. Their support for research, through the Science Research Investment Fund and in other ways, has been strong and commendable. Coming from Oxford, I pay particular tribute to the Government for their staunch support for the construction of Oxford's biomedical research facility against the obstruction of animal rights protestors.

I make two points about the future. I read a press report last week saying that a number of universities are offering incentives to obtain the best researchers, in the expectation that cutbacks in the Comprehensive Spending Review will reduce the overall supply. I make no complaint about the competition for research funds being tough. While the UK's share of the most highly cited research papers is second only to the United States', we also have more than our fair share of the least cited papers. This suggests that it would be a mistake to spread the available resources more thinly at the expense of supporting the best.

Lest the noble and right reverend Lord, Lord Carey, should think that I wish to deny funds to the newer universities, my second point is that the cap on tuition fees means that money that could be spent on research has to be diverted to subsidising teaching. The fact that HEFCE's teaching grant plus tuition fees is less than the cost of teaching undergraduates means that the deficit has to be made good from elsewhere. It is a tax on the research so crucial to the UK's economic future.

The irony is that this can be put right without cost to the taxpayer. Recent surveys show that students are prepared to pay a higher tuition fee than the current limit of £3,000 for high-quality higher education. It is to be hoped that, when the Government review the tuition fee in 2009, they will raise the threshold to a level that more accurately reflects the cost of undergraduate teaching and thus release funds for research, which is the life blood of our national economic strength in the future.