My Lords, it is a privilege to participate in this model of rational, illuminating debate. It has already been a particular pleasure to appreciate the strong agreement between the noble Lords, Lord Kerr and Lord Forsyth. I draw noble Lords’ attention to my entries in the Members’ register of interests, particularly that I am a visiting professor at King’s College London, I am a member of the board of UKRI, I advise the edtech company 2U and I am chancellor of the University of Leicester.
This is a very useful report, and it is already prompting lively debate. I very much agree with many of its proposals. I think 16 to 18 year-olds are the group that have had the roughest deal in the last few years. FE colleges are struggling under very heavy financial pressures. The means-tested maintenance grant was a valuable part of the system and it is a pity that it has gone; as a result of that, a low-income student will now leave university with more debt than an affluent student, which is not a defensible position. I also accept that we need to do more for part-time students. There is a lot here that I agree with.
However, there are some ambiguities at the heart of this report, beginning with the following statement in the summary on the very first page:
“one form of higher education has become dominant: the growth in higher education during the 21st century has been almost entirely as a result of ever-increasing numbers of young people going to university to study for full-time undergraduate degrees”.
That statement could have two different interpretations. One interpretation, which I would put on it and endorse, is that going to university should enable people to have a range of types of education; they should not be focused solely on honours degrees; it should be possible to study a level 4 or 5 qualification at university. That is why foundation degrees were introduced by the party opposite and why it is still possible to study HNCs and HNDs at university. That is one interpretation of the sentence. The other interpretation is that university is only for full-time, honours degree courses and other types of higher education have to happen in institutions other than universities. As we are blessed with the presence of so many members of the committee that produced this report, I hope that tension will be addressed during this debate. I believe that universities have a range of distinct missions and we should welcome this.
If I may say so, there is a similar ambiguity in references to technical skills. I am a great admirer of the work of the noble Lord, Lord Baker; these skills are incredibly valuable and this is clearly one of the weaknesses of our education system. This is a result of the grotesque decision that so many young people have to take when they specialise at the age of 16—wisely, this does not happen in the Scottish system. As a result of this, far too many young people give up maths at the age of 16, even though this is of such fundamental value, almost regardless of what they do in the modern world. Sometimes technical skills are talked about as if you could not possibly have a technical education at a university. That again ignores the very valuable role carried out by many of our universities, often the less prestigious ones. If you go to the University of Teesside or the University of Sunderland, you will find they deliver automotive engineering courses absolutely aimed at the requirements of the Honda and Nissan factories nearby. You will find exactly the same at the University of Coventry and Oxford Brookes, linked to Jaguar Land Rover and the Formula 1 motor-racing industry. Those young people are getting a technical education in automotive engineering at a university.
What is the problem with that? Is it that we like what is happening, but we do not think it should be called a university education? It would be called a university education in America. In Germany, the technical high schools which deliver this type of education are in the process of gaining university titles. Treating those institutions as though they do not merit the title of university would be a mistake. It is far better to recognise that technical education happens in many places —a good thing, too. Of course, those universities often take students from more disadvantaged backgrounds. We are very fortunate to have the Minister with us, as he has responsibilities across the DfE. I invite him to endorse the principle of a pupil premium in school education—that schools which take on students from more disadvantaged backgrounds require more funding—and to accept that it would be a very odd result if we tried to apply exactly the opposite principle in higher-education funding, saying that the less prestigious universities, which tend to take the more disadvantaged students, should be further punished by having less funding for their education. The pupil premium should be a coherent principle that applies across education.
Sadly, I will not be able to touch on the funding issue, apart from to say that my other frustration with the report is that paragraph 276 states:
“There should be no change to the repayment threshold, the repayment rate or the term of the loans”.
My view is that, in the technical language, the RAB charge is too high. I fully understand why the debate has opened up about the accounting treatment of the repayment of loans, because such a low rate of repayment is now forecast. It is perfectly possible to use this model and to apply the basic principle that the typical graduate should repay in full. Therefore, I was disappointed, especially looking at the hard-faced Treasury men who served on it, that the committee did not investigate options such as extending the repayment period and lowering the repayment threshold—in other words, bringing down the RAB charge, expecting more repayments.
I end with a political comment, thinking back to my time in elective politics. We have ended up with a system that has a very high interest rate and a very high repayment threshold. That is a terrible combination. Far too many graduates see their debt growing every year because of the interest rate. This is an example of the problems caused by the “policy-making by speech” crisis. In the run-up to the Prime Minister’s party conference speech there was a decision whether to change the interest rate or the threshold. The decision was made to raise the threshold. We should have a low-interest-rate—I completely agree with the committee on this—and low-threshold model where we expect graduates to pay back and not to face the pain of seeing their repayment obligations grow year after year.