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University Funding (Yorkshire)

Mr Amess, Huddersfield is not a coastal town, as you might have noticed, but I am very fond of all things Whitby and Broadstairs. So that is a declaration of interest in the subject of the last debate. This is the first Westminster Hall debate I have secured in the new Parliament and I do not apologise for returning to a subject that is absolutely crucial to all our regions. I say ““all our regions””, but I remember the Chancellor's recent speech, in which he said:"““Between 1998 and 2008, for every private sector job generated in the north and the midlands, 10 were created in London and the south.””—[Official Report, 22 June 2010; Vol. 512, c. 176.]" In so many ways, we are two countries. We are, first, a country of the regions outside London and the south; and secondly, a country of London and the south. I understand that when the future of the regional development agencies was being discussed, it seemed that London, the south-east and the south-west would lose the particular focus that had been put on them. Is it not true that we must address the imbalance between the regions in terms of employment and innovation? Many years ago, when Sir Keith Joseph became the Secretary of State for Education he gave a reading list to all his civil servants and junior Ministers. My approach in my speech today will be rather like that. Furthermore, I would like anyone who takes note of this debate to appreciate that Yorkshire and Humber is a microcosm of all the regions: the problems that Yorkshire and Humber has are similar to those that all the regions outside London and the south-east have. I would like to refer everyone to the recent reports from the National Endowment for Science, Technology and the Arts and the ERA Foundation about the productive capacity of our country and innovation. In particular, the NESTA report sets out four scenarios for the future of Britain's productive capacity, which go to the very heart of the concerns I am expressing today about the funding of universities. In doing so, the report is concerned with how we will make a living and achieve a good standard of life for the citizens of this country. The first scenario that the NESTA report sets out is that we carry on doing more of what we are already doing—we carry on as we are. However, all the testing that NESTA has done of that scenario shows that it will not work; it will not increase productivity and jobs or get the economy moving again. The second scenario is that we invest entirely in and focus completely on a rebirth of manufacturing. Although that scenario is not entirely discounted, it is certainly not seen as an overall answer to the question of how we can re-energise our productive capacity. The NESTA report focuses on the third and fourth scenarios for the future. They involve changing the whole nature of our economy, turning it into an innovative one in which we seriously apply innovation to all its sectors. On reading the NESTA report, time and again we find that the real agent for delivering such change is our universities, and that if we do not use them to take a lead and innovate, we will not achieve the increase in productive capacity that we must achieve if our constituents are to have ““the good life””. The ERA Foundation report is also interesting. Many people do not know this, but the Royal Commission for the great exhibition of 1851 made so much money that Prince Albert was able to invest in buying most of Kensington. Imperial college, the Victoria and Albert Museum and other such institutions are built on that land, and they have the freehold and receive the rents. Through the ERA Foundation, they provide a lot of money—between £60 million and £80 million, I think—for research into productive capacity, manufacturing and much else. The ERA Foundation report, which came out at about the same time as the recent NESTA report, puts more emphasis on manufacturing than the NESTA report does, but like the latter it says that manufacturing must be highly innovative. Indeed, it says that manufacturing must be led by innovation and by small and productive new enterprises. Again, universities figure prominently in improving our capacity to deliver. So when I talk today about the particular challenges in Yorkshire, I am actually talking about something that is good for our whole country—investing in higher education. The data show that we invest about 5% of GDP in education. That figure is a little higher than the average for OECD countries but it is not the highest—I think the average is about 4.6%—so we should not get carried away. Even with all the work and investment in education that has gone on during the last 13 years, we have still not become the OECD or world leader in investing in education. I used to chair the Education Committee, or whatever else it was called during the 10 years I chaired it, and time and again we looked at the increase in per capita spend on education. Of course, the great fashion—it was also absolutely the right fashion, in that it was an evidence-based policy—has been to invest in early years education: education of the youngest age group through to school-age. Later on in the age range, one sees that investment in higher education has been less than in education generally. Higher education has therefore been fighting to do more with less for a long time, and people must bear that in mind. Those who campaigned against what the Labour Government called ““variable fees”” and what the then Opposition called ““top-up fees”” should bear it in mind that the reason why I was always totally in favour of top-up fees and why the Committee eventually came out in favour of them was that we could not see any other way of getting a high level of investment in university teaching and research salaries. Indeed, Mr Amess, if you look at the figures you will see that nearly all the money that has been raised from the top-up fees fund—whereby people make a payment towards their fees, capped at £3,000—has gone into the salaries of researchers and lecturers. British universities have been greatly blessed by having that ability to pay a decent wage, so that they can attract and retain the top talent. Mr Amess, I want to refer you and everyone else here to three other pieces of reading. The first is the recent speech on higher education by the Secretary of State for Business, Innovation and Skills; the second is a speech by Professor Malcolm Grant, the president and provost of University college London; and the third is an article by Professor Steve Smith, the president of Universities UK. I hope that people will read those speeches and articles and balance them against each other. The Secretary of State made a good and balanced speech, saying that we must do even more with less. He also indicated that there were certain ways in which we can raise funding and he spoke about how that funding is retained—or not retained—in universities.