TNAG-0937-FCO40-1156-Visits-of-Sir-Murray-MacLehose--Governor-of-Hong-Kong--to-th-1980 — Page 47

CONFIDENTIAL

OVERSEAS STUDENTS' FEES

ORIGINAL DECISION

: ESSENTIAL FACTS

1. Decision to raise overseas students' fees purely on financial

grounds. FCO not properly consulted beforehand; effect on foreign

relations and relations with Dependent Territories was not fully

considered. Resultant saving to DES Vote of about £90 million.

No possibility of making good this amount from FCO/ODA Votes.

Treasury oppose finding new money to finance exceptions. DES

argue that if they have to pay for further exceptions, education

of UK students will be adversely affected.

CURRENT EXEMPTIONS

2.

Home student fees conceded in favour of EC (And Gibraltar)

for two reasons:

a) Community regulations would shortly have required it;

b) it is a reciprocal concession.

REACTIONS

3.

Criticism of decision in and outside Parliament on political,

developmental, commercial and defence grounds. Representations

made by many Governments. Poorer Commonwealth states and

Dependent Territories, especially Hong Kong, resent concession

for EC and Gibraltar students. Case of French Overseas Departments

especially controversial.

4.

Governor has stressed drift away from UK institutions.

Applications for student visas to UK from Hong Kong are over 40%

down on last year, with a 50% increase in those applying for Canada.

/FUTURE ACTION

CONFIDENTIAL