Education: Contribution to Economic Growth

Lord Liddle Excerpts

Thursday 5th December 2013 Lords Chamber

[Lord Liddle (Lab)]

My Lords, I should like to declare an interest as the pro-chancellor of Lancaster University and a former director of the University of Cumbria, and as a member of Cumbria County Council, in which capacity I will probably be knocking on the door of the noble Lord, Lord Nash, quite soon.

It is a great pleasure to speak in this debate introduced by my noble friend Lady Morgan of Huyton, with whom I worked in No. 10, which now, I fear, seems a bygone era. It has also been a very good debate. It is a great privilege to hear the noble Lord, Lord Baker, speak. In Cumbria, we are very excited by the creation of one of his university technical colleges. It was also a great privilege to listen to the maiden speeches by the right reverend Prelate the Bishop of St Albans, and particularly by the noble Lord, Lord Sherbourne of Didsbury. Although we have been on opposite sides of the political fence, he has made a distinguished contribution to public service in his lifetime. I share his view that London is not the centre of the universe.

We also heard an excellent veteran speech by my noble friend Lord Graham of Edmonton, to offset the maiden speeches. His experience reminded me of the absolute political commitment that we ought to have to education. My mother left school when she was 14 for exactly the same reasons as he had to, and went to work in a confectioners for five bob a week.

I want to make four propositions in this debate. First, education has contributed to economic growth, is contributing and has the potential to contribute much more. Having heard a little of what my noble friend Lord Hanworth said, I hesitate to talk statistics, but I looked to the excellent authority of David Willetts, who has written a very good pamphlet called Robbins Revisited. He argues in that that 20% of UK economic growth in the past quarter-century has resulted from the increase in graduate-level skills, and that a third of the increase in UK labour productivity in the decade before the financial crisis was due to the growing number with university degrees. Economic growth is not the only benefit that better education brings. He cites research that says that people who are well educated are more likely to be members of a voluntary organisation; likely to be more tolerant; less likely to suffer depression; less likely to drink a lot—I am not sure about that; less likely to smoke; less susceptible to criminal activity; and more likely to live longer. Those are all good things.

He also cites evidence that education leads to less cost in public spending. Indeed, the net lifetime benefit to the Exchequer of getting someone through university successfully is, according to David Willetts, £260,000 to the Exchequer for a man and £315,000 for a woman. Perhaps the Minister can explain why, in the light of this compelling logic, today the Chancellor has announced cuts in public spending that affect the Department for Education and the Department for Business, Innovation and Skills, and prevent those economic potential gains being realised.

The second argument I will make is that we have in Britain a huge problem of two nations in education, which we have to overcome. That is what the recent PISA studies show. We have, on the one hand, a combination of great academic standards, wonderful universities and world-leading research, and, on the other, average standards that are too low and regional divides between success in London and failure in northern cities. We have huge deficits in vocational qualifications and skills that Governments have failed to tackle over decades. We have a deplorable position of leadership in Europe on the question of NEETs—young people not in education, work or training of any kind.

I do not think one should play politics about this. This is a huge national problem. I do say, however, that, in response to the PISA studies this week, I thought the Secretary of State for Education—for whom I have respect because he is a man with genuine commitment to equal opportunity—demeaned himself by trying to turn the PISA results into an attack on Labour’s record in office in those years. Labour inherited an education system that was in crisis in 1997. Yes, we got some things wrong. We had perhaps too many targets and perhaps the wrong targets. Perhaps getting rid of languages as a requirement in 2004 was a mistake. All Governments get things wrong. What we got right, however, was a 74% increase in spending per student below university level in those Labour years and an increase in higher education spending per student of 38%. Let us not play politics with education. Let us recognise that we have these underlying problems.

My fear about the present coalition’s policy is that, although there are aspects of it that are very attractive, the problem of the two nations may be made worse. I will give a few examples. One of the good ideas in the coalition policy is the pupil premium. When you look, however, at what is happening in teaching, autonomy in schools should not become an excuse for hiring loads of unqualified teachers. That will not improve the quality of teaching; nor should the proposals to reform the system of teacher education be rushed. The Government are right to want a lot more apprentices. Yes, there is a need for more apprenticeships, and the previous Government, I think, got things wrong on Train to Gain. I am quite willing to admit that. However, I looked at a recent report from the Boston Consulting Group—this is not a Labour think tank, this is the Boston Consulting Group—which said that, of the 240,000 new apprenticeships created in the past two years, 58% were low-level and 75% went to people over the age of 25 who were already in work. It looks to me as though this is not a dramatic breakthrough in skills education but another form of employer wage subsidy. We have progress to make on apprenticeships.

That is also the case in higher education. My noble friend Lady Warwick talked about the decline in part-time students and mature students, which is a great shame. The noble Lord, Lord Paul, mentioned how migration policies threaten the future of our universities. I think the Government may have the wrong priorities. For instance, I am sure that, in the other place today, there will be a lot of applause for the married couple’s allowance and the universal free school meals. Would it not, if you were seriously interested in educational opportunity and that was your principal objective, have been better to spend that money on children’s centres and early years?

Our education policy needs a rethink, on a cross-party basis, to try to establish consensus. We need to make institutional changes to our education system that will withstand changes of Government. We need to make systemic change to raise quality, not just fiddle around at the edges. We need to raise the status, as Labour attempted, of the teaching profession. We need a new system of post-16 funding. I think the Labour Government experimented with an individual learning account and it went wrong, but we need something like that. We also need a new, more settled approach to higher education.

In conclusion, we will succeed as a country only if we improve our educational quality. The greatest national resource that we have for our future is the unfulfilled potential of so many of our young people. We need a national consensus if we are to achieve that.