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My Lords, it is entirely appropriate, given his distinguished academic reputation, that the noble Lord, Lord Norton, secured this important debate, and it is fair to say that the quality of contributions that it has drawn today more than justifies that initiative.
I congratulate, too, the right reverend Prelate the Bishop of Chichester on a fine maiden speech, in which he highlighted the benefits of learning in general and in higher education in particular. I look forward to hearing more contributions from him in the months and years ahead.
There can be no doubting the value to the country in terms of the wealth generated by the higher education sector. All noble Lords have cited those figures, and I do not intend to repeat them. It is, however, worth while emphasising that, last year, the Department for Education said that, in 2014—the most recent year for which accurate figures are available—the total value of UK high education sector exports and transnational education activity was in excess of £12.4 billion. The sector brings economic, cultural and academic benefits to these shores and, as my noble friend Lord Parekh said, the presence of overseas students opens the minds of UK students to different cultures, broadens their outlooks and enriches them in general. The benefits are generated by modern as well as ancient universities and, as this debate concerns the UK, it should not be forgotten that they are felt in every country and region, in terms of jobs both on and off campus as well as the wider local economies, particularly small businesses.
Two weeks ago, noble Lords debated part-time and continuing education and the role of the Open University and that is also relevant to today’s debate, because the value of distance learning extends not only around the UK—the Open University works with 27 overseas partners in 20 countries. The bullish comments in the Times today by Sir Michael Barber augur well for the much-criticised Office for Students strengthening the sector’s reputation. The figures brook no argument as to the importance of the contribution that higher education makes to the UK economy—all the more reason, then, to ensure that that contribution is not diminished in the years ahead. As the noble Lord, Lord Norton, said, diminution is already happening, although the impression gained is that the Government do not share the concern and are not aware, or at least not fully aware, of the risks that face the sector.
Of course, as the noble Lord, Lord Smith of Finsbury, emphasised, the main threat stems from the fact that we are leaving the European Union. More than two years on from the referendum, the Government still have no credible or coherent plan for what life after the EU will, or even might, look like. It is not that the Government have not been warned. In April last year, a House of Commons Education Committee report noted the “significant uncertainty” caused in the higher education sector by the UK leaving the EU. The committee highlighted areas for the Government to prioritise, including: improvements to the immigration system to ensure better movement to and from our universities, which would involve the removal of overseas students from net migration figures; continued involvement in research frameworks, such as Horizon 2020, and planning for domestic funding for a scenario where access fails; and continued involvement in Erasmus, or a home-grown replacement, with an ambitious mobility strategy for universities. Fifteen months later, none of these crucial issues has been meaningfully addressed, let alone resolved.
That report also recommended that the Department for Education, in co-operation with the Home Office and the Department for Business, Energy and Industrial Strategy, should publish a contingency plan for higher education to prepare for a no-deal situation. I have to say that, as the shambolic last few days have illustrated, there are a significant number of Tory MPs who are determined to bring about a no-deal situation, irrespective of the terrible costs that that would entail and the jobs and livelihoods that it would destroy. In their response to the report, the Government said:
“we … encourage the sector to continue to think about what it could do to best prepare for our exit from the EU–whether in mitigating potential risks or in taking advantage of new opportunities”.
I am sure that there were many in the sector who thought that a rather patronising suggestion; it is fairly clear to me that the higher education sector had worked out for itself the necessity of mitigating potential risks or taking advantage of new opportunities. That is what many have been doing since probably the day after the referendum, and many have made considerable progress.
However, the options available to higher education institutions remain restricted by the Government’s intransigence on the issue of international students coming to the UK. In 2014-15, international students paid almost £5 billion in tuition fees to UK universities, which is, I understand, around 15% of their total income. Yet the Government send out the message that international students are seen as part of this country’s perceived “immigration problem”, because they insist that students remain in the Government’s net migration target. The noble Lord, Lord Smith, said that only the Prime Minister seems to continue to believe that this is appropriate. That may date back to her being the Home Secretary who introduced the measure and may now risk losing face if that were to change. But surely we want the UK to be regarded as a welcoming place by young people choosing where to study.
In recent years, the UK higher education sector has suffered a decline in market share, and global competitors—as we have heard—are developing attractive offers to students that this country has not effectively responded to. The risk is surely that the UK will be left behind, which is a situation that, as a country, we simply cannot afford in either academic or financial terms. The noble Lord, Lord Norton, referred to the decline in the numbers of students from India. That should be a worry to the Government, given the size of India, or so we would have thought, but apparently not. Last month, in a Written Question, I sought to ascertain why, when more countries were included in the expanded low-risk tier 4 visa category for overseas students, India was not among them. The response from the noble Baroness, Lady Williams of Trafford, was that the decision was arrived at,
“taking into account objective analysis of a range of factors including the volume of students from a country and their Tier 4 immigration compliance risk”.
That is a not very veiled comment on the trustworthiness of students from India, which I think is a disgraceful slight on that nation.
Can the Minister say what initiatives the Government intend to take to increase the numbers of international students in both short-term and full-time study in the UK and to ensure that the UK is seen as a welcoming country to students globally? Do Ministers and officials from the Department for Education and Home Office meet to discuss the issue of international students and the net migration figures? The Government have commissioned the Migration Advisory Committee to provide an objective assessment of the impact of EU and international students, which is due to report by September. That is two months away and the Government will then presumably require further time to consider the report. The clock is ticking towards our exit from the EU, and it is unlikely that any change in policy on this issue will be able to influence student applications until the 2020-21 academic year at the earliest. Meanwhile, competitor countries will not be standing still; they will be seeking to capitalise on our indecision.
Labour believes that there should be no national target to restrict the numbers of students coming to the UK. As a minimum—as the noble Lord, Lord Holmes, and others have said—the Government should immediately remove overseas students from the net migration target. Many prospective EU students are now inquiring about studying in the UK from 2019, but Ministers have so far failed to clarify their status beyond 2020. What are the Government doing to address the longer-term status of EU students? Any changes to free movement rules for EU nationals, such as applying to them the visa requirements that currently apply to non-EU nationals, would give rise to a substantial barrier to entry on the grounds of immigration status to EU nationals. This would not just affect the top universities. Barriers such as this would reduce the UK’s attractiveness as a destination for study, making it more difficult for specialist institutions such as London’s Guildhall School of Music and Drama to attract the most talented from important European centres of training.
Postgraduate study and work are also important factors. Will the Government consider suggestions made by Imperial College, 60% of whose students and 40% of whose staff come from outside the UK, that the tier 4 pilot scheme for master’s students should be expanded, or that a new post-study work visa for the best STEM graduates—another point made by the noble Lord, Lord Norton—should be introduced?
The ability to collaborate across borders with people from different backgrounds, cultures and nationalities is what drives the world’s best universities. As many noble Lords have said, the UK has many of the world’s best universities, and the Government’s lack of planning stands to threaten not just their status but those of all higher education institutions in the UK. The higher education sector stands exposed, and we are already beyond the point when the Government should have begun taking decisive action. Many in the sector will be following this debate and hoping that the Minister is about to give them some encouragement that the void in government policy is about to be filled. We await his words of wisdom, and of hope, with much interest.