My Lords, over Christmas I read the report with great interest and a dawning sense of familiarity. I found that I agreed with everything in it—which was a great relief since I was, and am, a member of the committee that worked on it a year ago and published it in May. There is something wrong with our procedures. It took the Government three months to produce a rather bland and cursory response, in the middle of the Summer Recess, and, here we are, eight months after the presentation of this very important report, debating it.
It is a pleasure to serve on the committee, which is led imaginatively, inclusively and impartially by the noble Lord, Lord Forsyth of Drumlean, and it was a particular pleasure today to hear his loud praise for Eurostat.
Because the report was published so long ago, the Minister can now of course say that events have moved on—and that is partly true. The ONS change to the definition in the national accounts is highly welcome. I hope the Minister will tell us today that the Government are going to pay attention to the report on interest rates and to concede that it is not fair to students to charge 6.5% on money that the Government borrow in the markets at 1.5%.
I was chairman of Imperial for a time and I know a bit about universities. The bits of the report that I found most interesting were those dealing not with universities but with other parts of the higher education sector. The need to recreate parity of esteem between universities and further education institutions is really important. I am not going to say any more about that because the noble Lord, Lord Baker, will speak after me, and he is a world expert. However, I think that the linked issue of unfair and inefficient funding arrangements, and the rather savage budget cuts in further education, have produced very low morale in further education colleges. I hope that the Minister will respond more sympathetically on that point, which is clearly made in the report, than did his August paper.
My third point is that I became convinced that the case for reinstating the system of means-tested maintenance loans and grants, abolished in 2016, is absolutely overwhelming. If you are interested in helping people from a disadvantaged background, that is even more important than changing the interest rate on student loans. I need say no more about that because the noble Lord, Lord Sharkey, already has.
The final point that struck me was on apprenticeships. I was already aware that several large firms with well-developed apprenticeship schemes of their own were ignoring the government scheme. They are just paying the levy and treating it as a tax, and not bothering with the rigmarole of acquiring vouchers exchangeable for courses provided by recognised providers meeting nationally determined standards. The system was, and still is, seen by some of our biggest industrial companies as just too complex and bureaucratic: the game is not worth the candle. I think the whole committee was shocked to find out how slow and cumbersome was the process of agreeing the standards for such courses.
Apprentice numbers have gone down since 2015, when the target of 3 million by 2020 was set, and that target was pretty meaningless because it was framed in terms of apprenticeships started rather than completed—40% are not completed. It also does not distinguish between one-year and three-year apprenticeships. We concluded, therefore, that it encouraged the rebadging of training that should not be described as apprenticeships, such as MBAs at business schools—and here I apologise to my distinguished noble friend Lord Burns. For all these reasons, we were convinced that the target should be abolished immediately. In the Government’s response—which was, as I said, a bit bland and cursory—that recommendation was completely ignored. There is nothing in the response in answer to the central recommendation that the target which is driving the apprenticeship scheme at the moment—and driving it in a number of wrong directions—should be abolished immediately. I hope that the Minister will provide some answer today.
The threats to universities posed by Brexit and immigration policy are well known, and our universities are world-leading and vibrant. But the state of the rest of the higher education sector—the poor relations—is much less well known. We need to crack the productivity problem, improve workforce skills and invest much more, absolutely and relatively, in the rest of the sector—in further education, in flexible, part-time, mid-career and technical education, and in real apprenticeships—and return to maintenance support for those from less wealthy backgrounds. To create or restore parity of esteem requires not just words but action.