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Further and Higher Education (Employer Engagement)

I congratulate the Minister on securing this important debate and on the great verve with which he set out his case for greater emphasis to be placed on training and improving our skills base. He made his case passionately. No one in the House could disagree with him. I agree with 95 per cent. of what he had to say. However, when will he live up to the Government's promise about further education colleges and make sure that students at Henley college are funded on the same basis as students elsewhere in Oxfordshire and receive the same capitation support? I hope that he will return to the matter when he sums up. I admire greatly the urgency with which the Minister put forward his argument. I want to alert him to a detail in the Conservative party's arrangements. Such is the importance that we attach to higher and further education that we have divided the business of responding to his great brief. I intend to cover only higher education. My learned colleague, my hon. Friend the Member for South Holland and The Deepings (Mr. Hayes), will deal with further education. I hope that he will catch your eye, Mr. Amess, in due course and get some of the balls back over the net on the further education front. I want to deal with the relationship between the employer and higher education. It is an important subject and, in a collegiate sort of way, I want to tease out the Minister's thinking and find out how far I can encourage him to agree with me about certain matters, and see whether he agrees with me as much as I agree with him. About 150 years ago, Cardinal Newman produced a definition of a university and, as the Minister will doubtless recall, he said:"““It is a seat of wisdom, a light of the world, a minister of the faith, an Alma Mater of the rising generation””." He added:"““It is a place where inquiry is pushed forward, and discoveries verified and perfected, and rashness rendered innocuous, and error exposed, by the collision of mind with mind, and knowledge with knowledge””." Cardinal Newman also said that a university is"““the place to which a thousand schools make contributions; in which the intellect may safely range and speculate, sure to find its equal in some antagonist activity””," and that universities are"““great centres of pilgrimage and throng””," in which the student makes use of"““the ancient method, of oral instruction, of present communication between man and man””," and so on. I find Cardinal Newman's vision of a university still quite inspiring, although it is completely out of date. The story of British higher education institutions in the past 50 years has been one of fantastic success. As the Minister rightly said, it is also a story of expansion. When my parents met at university in the 1960s, not long before I was born, only 4 per cent. of relevant cohorts were at university. There are now 43 per cent. That means that our assumptions of what a university must be have changed, and the taxpayer is now paying the overwhelming share of the costs. There are about 2.3 million students at British universities. I am sure we consider that to be a fantastic investment for the United Kingdom. Higher generates £4 billion in export earnings alone and is wonderful for students and their future prospects. However, we must ensure that it maximises the rewards for society as a whole. That is an entirely reasonable thing for this or any other Government to do. It would be wrong to be too crudely utilitarian. At Question Time a couple of weeks ago, I made my first attempt to find common ground with the Minister. Does he share my preferred definition of academic freedom, which is the one enunciated by the great American Supreme Court justice, Felix Frankfurter, in 1957? I shall repeat it—I am sure that the Minister knows it, but there may be hon. Members present who do not.—[Interruption.] The hon. Member for Eltham (Clive Efford) says something from a sedentary position, which I am afraid I missed, but I shall repeat Felix Frankfurter's definition of academic freedom for his benefit, if for no one else's. He defined it as an institution's freedom"““to determine for itself on academic grounds who may teach, what may be taught, how it should be taught and who may be admitted for study.””" Speaking for myself, ““Ich bin ein Frankfurter””, as I have had occasion to say recently. Does the Minister also subscribe to that definition? He can say so now if he chooses to, but if he prefers to reserve his position on whether he is a Frankfurter, I will happily wait and see. I think that it is a very good definition of academic freedom. We all understand that there are many courses and disciplines that have no obvious vocational importance, but whose study may none the less be of huge benefit to the economy. At the same time, it is obviously the function of government to encourage and facilitate maximum co-operation between employers and institutions of higher and further education. There are some phenomenal success stories in that department, where synergy is taking place between employers and institutions of higher education with or without government interference. We all know—if not, I will tell hon. Members—what happened in the 1980s when Kumar Bhattacharyya, now Lord Bhattacharyya, arrived at Warwick university. Engineering companies were haemorrhaging jobs in the area and the future looked bleak. There was an innovative vice-chancellor hoping to make his mark, and he made Bhattacharyya professor of manufacturing systems and let him get on with it. Some 25 years later the international manufacturing centre occupied six buildings on campus, having long outgrown the department that spawned it. It is the headquarters of the Warwick Manufacturing Group, formed as a club of largely midlands-based companies that put money into the university in return for research facilities and a stream of well trained graduates. The annual revenue of the operation is well over £80 million, and more than 5,000 postgraduates are educated every year through its worldwide network of operations. I read last week that the Warwick Manufacturing Group has opened a new school in Singapore in co-operation with the Singapore institute of management. The same phenomenon can increasingly be seen across not just the leading 19 universities but other higher education institutions. Anybody who goes to Loughborough university knows of the dense interconnection between that institution and the JCB plant nearby. The Minister will know what is going on in York, where there are incubators where people can set up cutting-edge technology and science ventures. If they go bust, too bad—they come and go. I could go on to give countless examples of ways in which universities have been at the forefront of innovation, commercial success and the devising of drugs and patents. Atracurium is an example that springs to my mind; it was devised by scientists at Strathclyde university and is now used in half of all heart operations worldwide as a muscle relaxant. From the point of view of big business, one can see the attraction of such co-operation with universities. Their corporate laboratories are increasingly uneconomic and are closing down, and they cannot afford to have specialists in every field. We have come a long way since the days of the Bell laboratories, when AT&T had a huge monopoly and could recruit Nobel scientists in this, that and the other, and simply ask them to get on with it. No single pharmaceutical company could now afford to conduct work on all the aspects of the human genome. We are moving away from research being carried out by great commercial interests in the privacy of their own laboratories towards what is known, in the buzz words, as open innovation. That is a wonderful development. Anybody who knows anything about innovation says that it is not a linear process; it benefits hugely from accident and serendipity, the chance running together of experts from more than one field. It might be that in the common room, or whatever turns out to be the incubator, somebody who knows about computer sciences meets somebody who knows about biology, who meets a third who has a business application in his head—that is how innovations are generated. That is why the Cambridge area now receives one eighth of the venture capital coming into western Europe, although it has only 0.1 per cent. of the population. The Minister was absolutely on the money when he described universities as being of huge economic importance to the areas that they are in. Nottingham has 46,000 students. It used to be known as a place where bicycles, motor bikes and heaven knows what were made; now it is a place where 46,000 students contribute hugely to the economy. Such centres are the intellectual resources for entire areas and for the businesses around them. How should we support such connections? What should Government do to encourage such synergy? What sort of principles should we apply to the question? I should like to see how far we can agree. There is no use in pretending that all universities are equally good at everything.