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Academic and Academic-related Staff Pay and Conditions Bill [H.L.]

2.42 p.m.

Lord McCarthy: My Lords, I beg to move that this Bill be now read a second time. I am not certain whether I should declare an interest as a member for some 36 years of the Association of University Teachers which, after all, favours the establishment of a separate pay

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review, except in so far as the AUT affects my emoluments, as the Oxford University insists on calling them. They are related to what the AUT did or failed to do in the past as against what the AUT may succeed in doing if we have a system of pay review. I certainly express a great personal interest in the Bill. Perhaps I may put forward the arguments in favour of it.

The purpose of the Bill is quite simple: it is to establish a system of independent pay review for academics and academic-related jobs in universities and colleges of higher education. The Bill recommends the establishment by the Secretary of State of a pay review board or body which would make appropriate recommendations on pay and conditions of employment and take appropriate action, if the Secretary of State thought it advisable, on other similar issues such as the recruitment and retention of staff. The Bill will enable the Secretary of State to choose some five to nine people, one of whom will be the chairman. That will be entirely a matter for the Secretary of State. They will make recommendations and it will be entirely in the hands of the Secretary of State to decide what is to be done with those recommendations. Indeed, the Bill proposes a system very similar to that which exists for doctors and dentists, nursing professionals, the police, the armed services, school teachers and those covered by the Senior Salaries Review Body.

The system is largely modelled on the successful pay review body established for school teachers in 1992. We would argue that virtually all comparable professions covered in the public sector have pay review. The one significant group of professionals in the public sector that does not have pay review are academics and those in academically related posts.

Four main reasons can be advanced as to why this is a most appropriate moment to introduce a system of pay review for academics. First, it is very much in line with the underlying proposals and assumptions of the Dearing report, which the Government have welcomed and have taken as the central thrust of their analysis of higher education and its future needs. The Dearing report made three important points which are particularly relevant to what I am arguing today. First, the report said that the current arrangements for pay had produced "chaos"--the report's word--and had failed to determine effectively and efficiently pay and conditions in the academic profession.

Secondly, it said that, as a result, the existing system had caused or presided over a substantial decline in the relative position of academics and related grades in comparison with almost anyone else with whom one might reasonably compare their pay and conditions. The report then gave some figures to illustrate that point. Thirdly, the report said that there was an immediate need for an independent review of current levels of pay and conditions in the profession. After that came the independent review under Sir Michael Bett which was established by the employers. We are all waiting for the report of Sir Michael. It is expected in the very near future, perhaps towards the end of this month.

I do not intend to speculate on what is in the Bett report but I do know what I read in the newspapers. How accurate those reports are and to what extent the

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information has leaked to the newspapers and, in particular, to The Times Higher Education Supplement, I do not know. I merely report what I have read. It is said that Sir Michael will recommend a 9 per cent increase in the pay bill over a period of three years. It is said that he will recommend an inter-related national negotiating body. It is said that he will recommend that, whatever system of negotiation of collective bargaining is established, it should deal with a number of important problems; for example, the problem of equal opportunities and the sex imbalance in pay and promotion. But I understand--no one has suggested that I am wrong--that Sir Michael is doing a one-off job. He is recommending a relatively short-term solution. He does not intend to deal with the long-term problem of maintaining a reasonable relationship between pay and performance and productivity in the academic profession. I submit that the only way that can be done is by the establishment of a system of pay review.

I come to my second argument, the almost unbelievable reduction in the relative position of academics and academically related trades and professions during the 1980s and 1990s. In a period when academics have been expected to deal with almost twice as many students, when the conditions of their work have deteriorated in a number of ways, when they have lost tenure and when their profession has become to a significant extent casual, they have received no significant increase in real pay. The increase has been only 1.1 per cent over 20 years. I do not know of another group remotely comparable. One would have to go to the poorest paid in the public sector who have not received any real increase in pay over the past 20 years. At least it can be said that those in that group are still slightly better paid than people doing comparable jobs in the private sector. That cannot be said for academics. There is no other group of similarly qualified people in the public sector, or indeed the private sector, whose remuneration has been chained, whose conditions of work have deteriorated and whose security has declined in this way in the whole of the British labour market.

There is an abundance of figures in broad terms to support that argument. The public sector as a whole has, over the period since the early 1980s, received 50 per cent more in money rates of increase than academics. Nurses, the police, doctors, teachers--those who have been favoured by pay reviews over this period--have received real increases, not merely money increases, of between 30 and 35 per cent. So have most private sector non-manual workers. If we look at the many groups with whom academics might think to compare themselves in terms of qualifications and with whom they compared themselves in the past, the relative disparity in the pay of academics is even more remarkable. If we think of business economists, consultants, investment analysts, solicitors, barristers and MPs, the relativities have declined much more markedly within the public sector.

The only group among academics--one might say "pseudo-academics"--who have significantly improved their position over the past 20 years are vice-chancellors. They have done so because they have

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broken out of the system. Historically, vice-chancellors received much the same as professors and heads of houses. They now receive more than twice as much. Why? Because, by and large, they pay themselves out of their own system. That is why they stand for local bargaining--because they would be in charge of it. So there is an evident disbalance. There are inverse relativities between academics and anyone else with whom they might be compared. They should be put in a special category.

My third argument relates to pay review. Anyone who looks objectively at pay review must concede that in general terms over the past 15 or 20 years it has been an outstanding success from the point of view of all involved: workers, employers and companies. In the past, it was pay review which averted a pseudo-revolution among doctors. Without pay review we would not have any doctors in the health service; it would have broken up. We remember the problems with the police. The police were almost at the stage of introducing forms of industrial action until they had pay review.

The most recent examples of the success of pay review have been the nurses and teachers. The teachers are an example of an outstanding--and recent--success. Anyone in the House who goes back in industrial relations as far as I do--and few people can--will remember what happened to teachers. Before the interim advisory committee in 1998 and the establishment of pay review in 1992, morale and conditions of service in the teaching profession appeared to be in a hopeless state. Yet pay review, which first came in a shadow form and then in a real form in 1992, has made possible the transformation of industrial relationships in employment in the teaching profession. It has made it possible for this Government and to some extent the previous one to put in radical changes in the workload and systems in the teaching profession without significant resistance because the pay problem had been solved, put on one side. The issues were about what teachers did, not about what they were paid.

The significant point I am trying to make to the Minister is that it was done without runaway wage inflation. The real wage rise of the teachers as a result of their pay review, year by year, is about 1.5 per cent. The teachers' pay review body recommended something slightly or significantly above the level of inflation. The Government accepted it in principle, then staged it and cut 1 per cent. off the cost. For a real income improvement of 1.5 per cent. per year, we had peace in the teaching profession. Whether or not one agrees with them, radical changes were able to be introduced. What was done for the teachers, doctors and police can be done for the academic profession at a relatively small cost.

My fourth argument is that the existence of pay review enables all kinds of other reforms to be introduced, as in the pay review boards. For example, the Dearing Committee said, and I am sure the subsequent committees will say, that one of the great scandals is equal opportunities in the academic profession. Pay review has presided over the virtual solution of the problem of equal opportunities in the

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teaching profession. Women teachers now get 88.4 per cent. of what male teachers get. It has been done by pay review. Nurses and midwives now receive 95 per cent. of what male nurses and midwives receive and it has been done under a system of pay review. However, in the poor old administrative and clerical grades in the NHS, the situation is probably getting worse. There remains a 37 per cent. or 40 per cent. gap between men and women because they do not have a flexible system of pay review. Whether we are talking about greater flexibility by subjects or local labour markets, it can be introduced via a system of pay review.

I turn to my penultimate point. There is always a case against everything and there is a case against pay review. There is a case against it among academics, not because it would cost a lot or would not bring benefits, but because, in a sense, it is said that they do not deserve it. If academics are prepared to put up with that and with 20 years during which their real income has not increased, if they are prepared to put up with a situation in which despite the doubling in the number of students and growth in quality appraisal form filling, the ending of tenure and decasualisation and there is no general observable shortage of academics, there is a case for saying, "If they have put up with it, why shouldn't they go on putting up with it?" But it is a very short-sighted view, especially for this Government.

If one looks closely one finds that things are happening in the academic world which no one who is concerned with higher education can possibly disregard. I take one small fact which I find very illustrative. There has been a 400 per cent increase in the past four years in the number of health-based retirements among academics. Academics are retiring like mad, particularly at the end of the scales. One wonders why. One may say that they have fairly good retirement provisions, but there has been a very significant increase in the number. One may say, "Well, these old fellows and girls might as well go. What do they have to give us?" I understand that some 2,000 academics under 35 were recruited to permanent posts last year, and there has been a 65 per cent loss in turnover in 12 months. That cannot go on for very long.

I am aware from personal experience--no working academic would deny it, although there are no statistics to support it--that there are real shortages in the number of first-class degree graduates coming forward to fill academic posts. In some posts in fields such as law, accountancy, IT and so on, there are very real shortages. Finally, there is growth in a kind of self-defeating militancy among academics which takes the form of recent industrial action. It reminds me most depressingly of what happened to teachers before they got forms of pay review.

We all know that when the Government were elected and the Prime Minister was asked what he believed epitomised and summarised the essence of their endeavour, he replied, "Education, education, education". Can it really be sensible to stand by and allow this decline in the quality, commitment and morale of those who are supposed, at least formally, to be engaged in the highest levels of education?

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I am aware that, more than anyone else, the Minister knows the truth of what I say. I also know that as a Minister she is limited in what she can say today. But I am also aware that, because she has been an academic all her life, she appreciates this crisis and dilemma. I hope that she can say something which will be helpful.

I conclude on a personal note. One of the most rewarding aspects of my career as an academic--I am sure that this is true also of the Minister--is the moment when I can encourage young students who are hovering on the brink of becoming academics to take up that life because I believe that it suits them. I have long since stopped feeling that I can do it with enthusiasm. One must tell young people who like the academic life that it may need more than commitment, intelligence and a sprit of adventure; it may also require a very highly developed penchant for self-sacrifice. It is in the hope that we can do something better than that that I commend the Bill to the House.

Moved, That the Bill be now read a second time.--(Lord McCarthy.)

3.4 p.m.

Lord Wallace of Saltaire: My Lords, I hope to make a brief speech on this useful but modest Bill. I must declare an interest as a member of the academic staff of the London School of Economics. To come here today I rearranged my normal Friday teaching, so this morning I managed to fill in only four of the forms which the Government now require us to complete. I drafted and signed two references; saw two anxious research students; and have 10 more examination papers to mark before I finish this evening--because as noble Lords know, academics do not really do much work!

There are two aspects to the Bill, the content and the procedure, which interrelate. I shall concentrate on the problems of the next generation of academics and on how we can manage to recruit them. When we were recruiting in my own department last year, I was struck that we offered a salary of £18,000 to people who would have worked for four years after their initial degree, and accumulated in almost all cases considerable debts. I can walk out of my department, and cross the road at the Aldwych to see in Pret a Manger that after six months' training one can earn £16,500 working for that company.

The attractions of working for universities at present are very low. The Minister is aware that Economic and Social Research Council figures indicate that the number of British students applying to do graduate work to PhD level has declined by 10 per cent in each of the past two years; and that there is a catastrophic decline in particular in the number of people entering economics for graduate and research study. In my own field of international relations, the number of British students applying for research degrees last year declined by over 20 per cent. The age structure of the profession has a large number of people like ourselves who entered academia in the balmy 1960s and who will be retiring in the next 10 years.

The consequence is that British universities are making do, as far as they can, by recruiting people from abroad. I noted the other day that 40 per cent of the

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academic staff of the London School of Economics are now non-British. I welcome much of that, but I worry slightly because on the past two or three panels for junior academic staff there were almost no good quality British applicants. I am happy that there were a number of others from abroad--refugees from the German system and others--but it should be a matter of considerable concern to the Government that we have to find the next generation of academic staff if we are to maintain the quality of our universities.

The system has been enlarged considerably in the past few years. We still have the highest quality university system in Europe, but as quantity has been increased, so there is a real problem that quality may now begin to decline.

I say a little about procedure. Over the past 15 years, in the higher education system we have also seen a remarkable growth in direct state control--socialism imposed by the former Conservative Government. I recognise that the Minister and this Government have inherited a deeply unsatisfactory situation: a demoralised profession which had seen its salary go down; a huge funding crisis; and the Dearing committee which was in many ways a deliberate fudge. I suspect that the Minister privately believes that the current funding situation is unsustainable. I also suspect that she is unable to say so in public. It seems desirable from the Government's point of view that they should be able to stand back from too direct an intervention in levels of academic salaries. That is part of the attraction of a pay review body, such as exists for doctors and other professions--I hope that we may all agree that academic teaching is a profession. It adds a certain degree of distance between what Ministers have to decide and what universities may have to accept.

There is of course the danger--I am sure that the Treasury has added this point to the Minister's brief--that the Government fear that they may lose control of a major element in higher education funding. I note from the AUT briefing that a 10 per cent increase in academic salaries would add £340 million to academic costs over the course of a year. Having been involved in my party's manifesto exercise in 1997 and worked out how much one gains for education from an additional 1 per cent on income tax, I am conscious of just how far £340 million goes.

Nevertheless, there is a problem of content and procedure. We all agree that academic salaries have sunk too low for quality to be sustainable. Therefore, the question for the Government is: do they wish to hold on to direct responsibility for them or do they accept that it is time to distance themselves by accepting a permanent pay review body, which this useful Bill proposes? I hope that the Government will welcome the Bill and that we may take it further.

3.10 p.m.

Lord Shore of Stepney: My Lords, this is an important Bill and I am grateful to my noble friend for giving us the opportunity to debate this well-judged and well-timed measure. Unlike my noble friend Lord

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McCarthy and the noble Lord, Lord Wallace, I am not an academic. However, I am pleased to say that I have friends, acquaintances and relatives in academia. While they are good in not clamouring for my attention, it is useful to be able to talk to such a range of people in order to discover what is happening and to hear from those at the coalface, as it were. I always dislike industrial metaphors applied to academia, but I hope that I shall be forgiven.

I shall be brief because much of the ground has been covered very well. However, I wish to add my voice to establishing four unassailable and significant facts about academia. If those facts are accepted, as I believe they are--they are not controverted--the conclusions and the need to act will be unarguable.

First, we have gone through a period of massive expansion in higher education. The latest figure indicates that 1.8 million students are now in academic life. That is an increase of more than 100 per cent over the past 10 to 20 years, and probably much in excess of that.

Secondly, it is relevant that that magnitude of increase has brought with it a substantial increase in the workload of academics. That cannot but be so. I accept that a lecturer can give the same lecture to a group of 10 students as to a group of 50, but when one has to tutor and supervise them and mark their essays and look at their examination papers the difference between 10 and 50 becomes all too obvious. Our academics are heavily overloaded with that vast increase in their workload and the tiny increase in their number during that period.

The third fact has already been strongly emphasised. It is the almost unbelievable failure of the system of rewards in academia to keep pace with either some compensation for the workload or with the relative pay and rewards of virtually all other public sector employees and indeed everyone else in the country. It is amazing, and I almost chide myself for not being more aware of that, because it has been happening for a long time.

The AUT has circulated a short document and I shall quote only one passage. I could hardly believe it when I read it and I shall be grateful to my noble friend Lady Blackstone if she can confirm it. Is it really the case that between 1981 and 1996 or 1997, whichever is the latest date for which figures are available--a period of more than 15 years--academic pay rose, in real terms, by only 1.1 per cent? Is it possible that that could be true? That is an incredible criticism, mainly of previous Ministers who manned the Treasury Benches in the 1980s and the first part of the 1990s. If correct, it requires our urgent attention.

The fourth fact, which is again incontrovertible, is that our success as a nation depends crucially on our country's intellectual performance and, in particular, on the contribution made to research and development in industry and many other areas of our life by those who are the products of our universities. The first report of the House of Lords Select Committee on Science and Technology considered research expenditure in Britain

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and the Dearing report. The report notes that Dearing concluded that:

    "The funds available to support research are barely adequate". The Select Committee itself then referred to the funds available and stated:

    "It is our view that they are wholly inadequate and that without substantial and sustained additional public investment the Government will be putting the nation's future prosperity and quality of life at risk".

That is one of the most powerful warnings that I have ever read; and I have read an awful lot of Select Committee reports.

That establishes the facts, which are incontrovertible.

What are the consequences? One is the increasing difficulty in recruiting academics. The noble Lord, Lord Wallace, quite properly drew attention to one manifestation of that, namely, the way in which the number of British students with first-class degrees enrolling for PhDs has fallen away. They are nearly all foreign students. It is ludicrous to be in such a position.

As a nation, there is an incredible shortage in a number of specialist areas where we should be in the lead. We are a creative country, and we have in the past, and still do, take the lead in many areas. But good heavens, we have fewer trained doctors per ten thousand of the population than virtually every other developed country in the OECD. Professor Jarman's recently published report makes that point. It is unbelievable that the country which pioneered the National Health Service should find itself desperately short of doctors. That is why we cannot get the waiting lists down quickly and effectively; we do not have the doctors available. Then there is the constant temptation, due to the inadequate pay here, for the trained people that we do have to be attracted to universities, research institutes and other places of learning in other countries and, in particular, the United States, where the rewards are much higher.

What conclusions can be drawn? I do not know if others among your Lordships have read the quite remarkable article by Martin Wolf in the Financial Times on Monday. Mr Wolf is a serious journalist. He begins by saying--and let the words again sink in--that:

    "The quality of teaching and research in British universities faces collapse". The quality faces collapse. He goes on to say:

    "By global standards, there will soon be no first-rate universities in the UK (if there is one today)". Surely that must make people sit up and start to think about what they should be doing. I do not think any stronger words could be deployed.

I do not mind what the actual arrangements are, and I am sure that my noble friend who introduced this Bill does not mind either, provided that we have a body which will examine and constantly update the needs of the academic profession. I hope greatly that the Bett committee will do something about raising its pay substantially in the short term. I hope that we shall then have a permanent review-body like others in the public sector to ensure that this does not happen again.

Finally, although I am afraid that my noble friend who has replied to the debate knows far more about this than anyone in the House--I have no doubt at all about

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her sympathies and wishes--I shall have to be a little sharp and harsh. I do not believe that what the Labour Government have done in the past two years has helped. The academics of tomorrow, who will conduct the research and development which is so essential to the quality of our national life and to our prosperity, are, of course, the students of today. These students, as I am sure one of my noble friends who has already spoken has pointed out, are now leaving university more heavily laden with debt than ever before. The average debt will be at least £15,000. There may be another extra £1,000 in fees, though that is not the main factor. In my judgment the withdrawal of maintenance grants is the more important factor. But still the problem is that the students will be in debt. They will probably select a partner who is also in academia with a similar level of debt. Then they are to be offered lectureships without tenure, at--what?--perhaps £16,000 per year, when all their contemporaries are going to jobs not only in other parts of the public sector, but also in the City and in industry. Those areas pay significantly higher rewards.

This must stop. It must be stopped extremely quickly. We must await the Bett Committee report. But I say to my noble friend, in all friendliness and candour, the Treasury must be shaken. The only solution is a massive increase in the amount of money granted directly from the Chancellor. Money lying around in different universities which can be deployed differently will not solve the problem. We need an increase in public expenditure. Whether or not the Chancellor observes his golden rules, he had better get on to the job quickly. If he does not I shall rely upon my noble friend and her Secretary of State to make sure that the matter is raised in Cabinet and is brought to a satisfactory solution.

3.24 p.m.

Baroness Sharp of Guildford: My Lords, I too must declare an interest. I am a member of the AUT. Until the end of September I am employed by the University of Sussex which I joined in 1981 from a Civil Service post where I would now be paid considerably more--even if I had stayed at the same grade in the Civil Service--than I am paid in academia. For a considerable period of time, in the latter part of the 1980s until 1996, I was a member of the executive committee of Save British Science.

This Bill establishes a permanent pay review body for academical-related staff at universities. It directs the Secretary of State to establish a permanent, but independent committee of between five and nine members and it gives the Secretary of State power to refer to that committee on an annual basis issues concerning the employment and remuneration of academics. As the noble Lord, Lord McCarthy, stressed in introducing the Bill, it would be up to the Secretary of State to decide whether and how to implement the recommendations from the pay review body.

We welcome the Bill on these Benches. As we have already heard from my noble friend Lord Wallace, the noble Lord, Lord Shore, and even from the noble Lord, Lord McCarthy, we face a crisis in the academic profession. There has been an erosion of pay in

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academia in relation to other professions, which is having an effect on the recruitment and retention of high calibre young people.

Towards the end of the 1980s a report was written for Save British Science, based on a survey carried out among its members, on the recruitment of young people into scientific careers as contract researchers. I wrote an article based on the survey. The short research paper was aptly called Neglecting the Seed Corn. That warned, almost 10 years ago, that unless we heeded the problems that such young people faced as contract researchers, not only with regard to uncompetitive pay, but also uncompetitive conditions of employment, the quality of the British academic research base will be badly eroded. Frequently, after fulfilling the requirements of a masters degree and a doctorate, such young people were then expected to spend six years without tenure, moving from one job to another, uncertain whether they would be able to get another job and unable to have mortgages because they had no tenure of contract.

We are in danger of losing those whom we need in our scientific professions, the very best of our scientific brains who are not entering into doctoral studies in this country, but are carrying out their doctoral studies abroad, and, frequently, not returning home. Something like two-thirds of our FRSs are now resident abroad. That shows what is happening to the scientific professions in this country.

In regard to my personal experience, for the past seven years I have been running a research centre--the Science Policy Research Unit--within my unit at the University of Sussex, which has won international acclaim. In that research centre, we have about 20 researchers, most of whom are employed on fixed-term contracts. I am conscious that a number of my colleagues, including myself, will be retiring over the course of the next few years and that it is important for us to nurture young people in specific areas of specialism so that they can take over the mantles we have been holding. Within the past six months, three of those young people have announced their departure because we cannot compete in the terms we can offer and the money we can pay. One is moving into a private sector job, another to a National Health Service job and another to a tenure job elsewhere in the university system.

It is extremely difficult for us to recruit staff of the quality we need at the salaries we can currently offer. All those factors, as the noble Lord, Lord McCarthy, acknowledged in his introduction, were discussed in the Dearing report. As the noble Lord said, the situation in relation to university pay is chaotic. He rightly pointed to Recommendation 50 in the report--that higher education employers should appoint, after consultation with staff representatives, an independent review committee to report by April 1998 on the framework for determining pay and conditions of service. It said that the chairman should be appointed on the nomination of the Government.

That pay review body was appointed, although not as quickly as the Dearing report recommended. The Bett committee's report has been sadly delayed and

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continues to be delayed. As we understand it from newspaper reports, the problem is the cost of implementing the committee's recommendations. As the noble Lord, Lord Shore, pointed out, academic pay has fallen back by 40 per cent in comparison to related professions over the past 18 years. But let us suppose we introduced a 10 per cent increase; it would cost in the region of £360 million, which is a great deal of money and undoubtedly the Treasury is dragging its feet on that sum.

In a sense, the Bett committee illustrates the difficulties of appointing an ad hoc committee to solve a problem, and it is that difficulty that the proposal of the noble Lord, Lord McCarthy, seeks to solve. Ad hoc committees lead to peaks and troughs in pay. First, there may be a catch-up pay rise too large for the Treasury to fund, but perhaps implemented in part or over the course of a number of years. Over the course of those years, increases below or at the level of inflation mean that the problem builds up again. That is followed by another ad hoc committee and another bump in pay rise.

In the public sector it is never easy to know what is a fair rate of pay, particularly where we have, as we have in this case, a monopoly employer in terms of the state. As the noble Lord, Lord McCarthy pointed out, over the course of the years the concept of pay review bodies is probably the most satisfactory way that we have discovered of dealing with this. That is why we on these Benches feel that the setting up of a pay review body is long overdue.

The Committee of Vice-Chancellors and Principals objects to the proposal. As the university and college employers' association, it puts forward three specific objections. First, that the pay review body would not allow for sufficient local flexibility. But the Bill makes it quite clear that it would only set a minimum and that it would be open to local institutions to decide upon any variations that they wished.

Secondly, the university employers object because such a body would remove from them key employer responsibility for managing staff. I regard that as complete humbug. There are few employers who have been as irresponsible on occasions as have the universities in terms of their broad responsibility for training, conditions of work or, indeed, any aspect of employer relations in universities.

I am delighted to see that this Bill is about academic and academic-related staff pay and conditions. The scandal of the lack of attention to employee relations was brought out in the Dearing report and it is about to be exposed again in the Bett report. We know, because it has leaked out to the press, that the Bett report will address the issue of sex discrimination: the fact that women academics and others in the university area have been systematically underpaid at every level, whether they are academics, administrators or manual staff. There is also the scandal of the fixed-term contract staff who have been expected to sign away their rights to redundancy over the course of the years.

The third objection put forward by the employers is that it may be divisive to have employees on two different scales; in other words, the support staff and the

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bureaucrats at universities should be on a different scale from the academic staff. Yes, it may be divisive, but it may not be. I would argue that support staff and bureaucrats in universities have very different functions from the academic staff. Moreover, they are not under the constant pressure to meet performance criteria in relation to teaching and publications. I do not deny that everyone in the academic sector is overworked and overstressed. A colleague of mine mentioned the other day that he carried out a survey among his staff and discovered that 70 per cent of them were on medication for stress.

I believe that we have reached an absurd situation in the academic sector, and in other parts of the public sector, where we are expected to meet the pressures of the market-place and, side by side with that, the full bureaucratic panoply of command economy performance indicators--that means endless time spent filling in forms, counting activities and writing reports justifying one's activities--rather than being able to get on with one's own research writing upon which one is being measured. All that spills over to our bureaucrats who are equally hard-pressed and the butt of many insults; but they do not have to go home at weekends and cope with the marking of hundreds of essay and exam scripts, let alone turn their minds to learned articles in obscure journals, which is necessary to satisfy the demands of the research assessment exercise. I can see no real reason why academics and academic bureaucrats should be on the same pay scale; nor why they should not have two separate pay scales.

As I have made clear, this Bill has the full support of these Benches. Academic pay in this country is currently far too low and wholly uncompetitive with the professions with which it competes for the best minds in our country. Conditions of employment are sometimes scandalous. The record of the universities as employers is appalling and their attitude to successive governments is supine, to say the least. The setting up of a permanent independent review body, which might have a little bit more spunk, is well overdue.

3.38 p.m.

Baroness Seccombe: My Lords, I do not have to declare an interest as I am not involved in academia, but I am the proud mother-in-law of a newly qualified PhD in linguistics. This has been a most interesting, thought-provoking and important debate. However, I shall make only a brief contribution at this stage.

I do question the timing of the Bill. It is common knowledge, as has been expressed on all sides of the Chamber today, that the Bett committee will be publishing the report of the review on higher education staff pay and conditions very soon. Indeed, if rumours are to be believed, I understand that the date of publication is likely to be 23rd June. Therefore, would it not be preferable to consider the report as a whole, and its conclusions, before taking legislative action? The committee will clearly address many issues, including the desirability or otherwise of appointing a pay review body for higher education, differential pay between men and women in higher education, levels of pay, the

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relative treatment of academic staff and support staff, the degree to which short-term contracts are used in higher education, and so on.

Until the Minister responds today we cannot be certain as to the attitude of Her Majesty's Government. This is therefore an opportunity to pose some questions ahead of the report's publication for consideration by the Secretary of State and, if possible, for a preliminary response from the Minister today. Do the Government have any misgivings or objections to a pay review system for university staff? Can the Minister tell the House, in the spirit of open government, whether the Government covered the issue of a pay review body when giving evidence to the Bett committee because it has been reported that the implementation in full of the various recommendations contained in the Bett report can only take place at some cost? If, as has been suggested, the report is likely to recommend increased pay, particularly at the bottom and at the top of the salary scale, and an effort to redress the pay inequalities between male and female staff, the costs could be considerable. A figure of £450 million was mentioned in this week's Times Higher Education Supplement. Will the Minister give a guarantee that the Government will fund these costs in full, and if so will this constitute a real term increase in the total higher education budget, or will an increase in funding to finance the Bett proposals be matched with cuts elsewhere in the higher education budget?

What view is taken by the Government on the level of academic salaries and was it conveyed to the Bett committee? Do the Government accept that pay review bodies operate within the principles of affordability and fairness? If so, in what way do the Government see these principles applying to higher education? Have the Government given any indication to the Bett committee of an alternative system to a pay review body? As we have heard, the Association of University Teachers is particularly concerned that, given the Government's commitment to longer term financial planning and following the comprehensive spending review, the allocations for higher education have still not been announced.

One important point for consideration at this stage, for I am sure there will be other issues to be addressed once we have seen the report, is that of flexibility. There is within the higher education sector considerable diversity of provision and of the nature, style and structure of institutions. Could a single pay review body for the whole sector reflect this diversity and to what extent would it remove flexibility from university employers? This is a point that I know my noble friend Lady Carnegy of Lour would have raised if she had not been unavoidably absent from the House today. She is extremely sorry not to be here as she is much interested in the subject. It is a key point of concern of the Committee of Vice-Chancellors and Principals. Therefore I wish to ask for some assurances.

First, is the Minister aware of fears among vice-chancellors that the Bett report may place them in a pay and conditions strait-jacket if, as expected, it recommends a national wages structure? What

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guarantees can the noble Baroness give that the new system will not rob universities of the necessary local flexibility on pay and conditions?

There is much interest in the Bett report which, as noble Lords will know, was commissioned in response to a recommendation from the Dearing report. Many issues will be raised to be considered by government and the higher education sector in addition to Members of Parliament in both Houses. However, I conclude where I started by saying that this is not the time to be considering one aspect of university pay and conditions in isolation from and in advance of the Bett report.

I do not expect detailed answers at this stage. I am sure that noble Lords present would be grateful, however, if the noble Baroness could give some idea of the Government's position on these issues in anticipation of the Bett committee's findings.

3.45 p.m.

The Minister of State, Department for Education and Employment (Baroness Blackstone): My Lords, the terms and conditions of those who work in higher education are of great importance. I have listened to all the points made in the debate with great interest. We all agree that this country's world-class reputation in higher education has been achieved by the quality and excellence of the staff who work in it. There is no question about that. Whether they be academic, non-academic, management or support staff, they all contribute to the maintenance of our enviable position. I disagree with what Martin Wolf said in his article in the Financial Times earlier this week. I do not believe it is the case that the quality of British universities is in terrible decline in terms of research and teaching. I am sure that that position is also taken by the academics who have contributed to the debate. There is still a great deal of wonderful work going on in our universities. I regret that a journalist I much admire should take such a negative position.

I take this opportunity to express the Government's appreciation of the hard work and commitment demonstrated by staff in higher education in recent years. As my noble friend Lord Shore said, they have had to deliver a significant expansion in student numbers and they have done so at a cost the country can afford.

The Government have been clear about the agenda for higher education. There is no doubt that we are committed to ensuring that our higher education system continues to enable those who can benefit to enjoy more and wider opportunities to participate in a high-quality system, especially those groups who traditionally have been under-represented. That will be good for the individuals and for the country.

That is why my right honourable friend the Secretary of State for Education and Employment announced an additional £165 million for higher education in 1998-99. He has also announced more than £750,000,000 extra over the next two years compared with 1998-99. So I am rather more optimistic about the sector than the noble Lord, Lord Wallace of Saltaire.

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The noble Baroness, Lady Seccombe, asked about the final year of the Comprehensive Spending Review. There will be further announcements later this year about what will be provided for the HE sector. I believe that the announcements will be well received.

Perhaps I should say to my noble friend Lord Shore that the package we have announced allows for greater student numbers, for improving quality, for raising standards, for supporting capital improvements and for boosting research. That is a demanding agenda. It has implications for both the management and staffing of our universities. The systems for determining the terms and conditions of staff in the sector need to be capable of reflecting the importance of greater flexibility and responsiveness in meeting the challenges of the coming years, as the CVCP and SCOP have recognised, and as the noble Baroness, Lady Seccombe, has mentioned.

I turn now to my noble friend's Bill, which attempts to put such systems in place. The Bill proposes the creation of a body, appointed by my right honourable friend the Secretary of State, to examine and report on such matters relating to the remuneration and other terms and conditions of academic and academic-related staff in HE. It also allows for the implementation by secondary legislation of the recommendations of the review body. It is an interesting idea, but it is one on which I have a number of reservations. Perhaps I may explain why.

I know that pay is important. I can recognise that people in the sector want to improve their pay and other terms and conditions of employment. Perhaps I may advise the noble Lord, Lord Wallace of Saltaire, and my noble friend Lord McCarthy, that I know that academics work extremely hard. There is no question about that. I also accept, as nearly all noble Lords have commented, that there was a relative decline in the pay of academics under the previous government. However, I am puzzled by the figure mentioned by my noble friend Lord Shore of a 1.1 per cent increase in real terms since 1981. The previous AUT figures that we have had quoted to us are of a 12 per cent increase in real terms since 1981. I am therefore a little confused as to where the lower figure comes from.

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