Post-18 Education and Funding Review — House of Lords, 2019-07-02
Topic: Education
Andrew Adonis (Labour, Centre-left): Oh, we do. Well, I may slightly be pre-empting my noble friend’s speech. He has been lobbying—he lobbied me when I was in government—for substantial reform to bring us much more in line with the German system, where young people who do not go on to university have a standard apprenticeship offer, which is what we desperately need as a society We have managed the remarkable feat of introducing an apprenticeship levy, which is requiring employers to pay towards apprenticeships, while apprenticeship numbers have gone down. So we have managed the triple whammy of massively increasing resources per head for the most privileged part of the post-18 system, slashing resources for the part of the system that deals with those who have the lowest skill levels at 18, and creating a funding system for apprenticeships which has got more money going in but does not appear to be producing any decent output. If we were not dealing with the crisis of Brexit—and I have to raise that in every speech I make, because it is the opportunity cost and the reason that the Government cannot do anything about any of this—these would be urgent matters requiring attention What should we do? I do not think that the current system is sustainable. I know that I am surrounded by people who are deeply engaged in the work of universities, who would love to think that we can maintain fee levels of £9,500 a year, with a 6% real interest rate and the current system. For what it is worth, speaking as a politician, I simply do not think that it is going to be sustainable. There is no other country in the world that has an average public fee level as high as ours that is required to be paid by students. Most European countries that started to go down this road, because of massive public pressure—of the kind we had at the last election, with it becoming a contentious issue between the parties—have abolished them. Most significantly, looking at leading-edge public policy, the Federal Republic of Germany, which introduced modest fees, has abolished them. In the United States, in US public universities—not private universities, which of course is what we spend most of our time looking at—where most students go, fee levels have been coming down and are being abolished in some states, notably now in New York I do not think the current system is sustainable, and there will be pressure over time to reduce the fee level. Either universities will have to take the burden of that entirely, which in my view they could afford to do if it was done in a managed way, or there will have to be some shift towards taxation. It is very clear to me that that should be done in the form of adjustments to the higher rate of tax, because only about 15% of taxpayers pay the higher rate. The idea that it would be inequitable to move towards a tax-based system is completely wrong. It depends on which taxes you increase and what system you put in place. If there was a modest increase in the higher rate traded off against a reduction in tuition fees and the money was segmented in some form, it could be done. I say all that not because it will be popular in the House but because it is probably inevitable that that will happen in due course The really important recommendation in the report, which is hugely significant for where it might lead in long-term policy, was mentioned at the end of the noble Baroness’s remarks, and that is the proposal for a lifelong loan allowance. The principle of the lifelong loan allowance is, to my mind, incontrovertible, and that is that the state should make an investment in all young people at the age of 18 that is in principle the same: whether you go on to an apprenticeship, further education or higher education, the commitment the state makes to you should be the same. Of course, they will be going to different institutions and many will go into apprenticeships and so on, but it is totally unjustifiable that, at the moment, the state makes a contribution about three times as great investing in students going on to universities, who already, by and large, have most spent on them before the age of 18, with many of them going to expensive private schools. It is totally unjustifiable that they should also then be the beneficiary of so much additional state investment beyond the age of 18 If the principle of the lifelong loan allowance—that all students get the same investment—is accepted, over time that must lead to new investment going into further education and apprenticeships. Then the big challenge—and I look forward to my noble friend Lord Layard’s speech—is how we create a system that ensures we have an apprenticeship regime in this country that resembles that of the Federal Republic of Germany. I have always taken the view in public policy that R&D stands for "Rob and Duplicate": where somebody else does something really well, you should copy it like mad. It is high time that we accepted that many of our continental friends have done a brilliant job of creating high-quality apprenticeship systems, and the sooner we copy them, the better.