Higher Education and Research Bill

Lord Sharkey Excerpts

2nd reading (Hansard): House of Lords
Tuesday 6th December 2016 Lords Chamber

[Lord Sharkey (LD)]

My Lords, I will raise a few rather narrow concerns about the Bill, which introduces a profound change to the current system of student finance—I congratulate the Government on that. As things stand, orthodox Muslim students cannot accept student loans because they bear interest. This means that Muslim students are very significantly disadvantaged in our education system. It means that many Muslim students, though qualified, cannot progress to university.

This is not only a form of discrimination but works to the disadvantage of society as a whole. An important part of our population is denied the chance to go to university, to mix with others, and to learn from and contribute to our culture. Louise Casey’s report of yesterday emphasised the critical importance of the mixing of cultures and the need to avoid ghettoisation.

In April 2014, BIS launched a consultation on possible sharia-compliant ways of financing students. There were 20,000 responses. The consultation had outlined the proposed sharia-compliant student finance system, based on an Islamic finance instrument called a takaful. The Government committed to bringing in such a system once the administration and tax details had been worked through with the SLC and HMRC. The final sentence of the Government’s response to the consultation read:

“Given the complexity of these issues and the time needed to resolve them, it is unlikely that any Alternative Finance product could be available before academic year 2016/17”.

That was two years ago.

The question is: when will Muslim students be able to benefit from the new provisions? I asked the long-standing Minister Jo Johnson exactly that when we met to discuss the issue. He said it would not be for the academic year 2017-18 and possibly not for 2018-19. This seemed to me then, and seems to me now, wholly unacceptable and to continue discriminating against Muslim students. The situation has gone on far too long. We have a solution in the takaful system agreed more than two years ago. It is surely unreasonable that it should take three or four years to put this solution in place. I point out to the Minister that sharia-compliant mortgages were introduced within six months, from a standing start. Surely we can do the same for takaful.

My second point concerns Schedule 9, which deals with the composition of UKRI. Here I declare an interest as chair of the Association of Medical Research Charities. The schedule states that in appointing members of UKRI, the Secretary of State must have regard to,

“the desirability of the members (between them) having experience of”,

almost everything, except that there is no mention in the list of experience of funding research from within the charitable sector. I believe that is a significant and unfortunate omission.

Charities are key actors in UK research. For example, medical research charities invest £1.4 billion each year in UK research, more than either the Medical Research Council or NIHR. Medical research charities, along with others, have great experience of research, development and exploitation, as well as very large funding streams. The charity research sector should have a place on UKRI, if UKRI is to maximise its understanding, coverage and influence in the UK’s research landscape. I have no doubt that we will return to this in Committee.

My third point is also connected to charity-funded medical research. Partnerships between charities, business and research councils are important drivers of innovative research. The noble Lord, Lord Patel, mentioned that. For example, 25% of Medical Research Council expenditure is committed in partnership with other funders. However, in the new UKRI landscape it may be more complicated, more difficult and take longer to establish partnership with UKRI than it currently is with the direct partnerships with research councils. The concern is that the functions of the individual research councils can be in direct partnership with other funding bodies, without UKRI having to delegate the power to do so. It would be good to have some clarity.

Finally, I briefly comment on the element of QR known as the charity research support fund. This fund provides valuable aid to research universities. It contributes to those research project costs that are not covered by charity funding. It currently stands at around £200 million every year, as it has since 2010, but it is administered by HEFCE, which is to be abolished by the Bill. The Bill is silent about what happens to the fund. The charity funders and universities are in need of some clarity here.