Lifelong Learning (Higher Education Fee Limits) Bill

David Johnston Excerpts

2nd reading
Monday 27th February 2023 Commons Chamber

[Mr Robin Walker (Worcester) (Con)]

I very much welcome the Second Reading of this important legislation and the broad principle of extending the Government’s support for further and higher education to more people through a lifelong learning entitlement. It is a pleasure to follow the thoughtful and constructive contribution from the hon. Member for Warwick and Leamington (Matt Western), who raised some genuinely valid questions. I am grateful to my right hon. Friend the Minister for Skills, Apprenticeships and Higher Education for the briefing he provided ahead of the debate to members of the Education Committee, which I chair.

The Bill is an important step in the journey to create what my right hon. Friend has often described as the ladder of opportunity, and it should benefit people across our country and at every stage in life. Making level 4, 5 and 6 qualifications more widely available, and encouraging HE institutions to offer greater flexibility to those pursuing them, are both worthwhile aims. This legislation, if done right, should stimulate greater competition and innovation in the market for lifelong learning. It has been welcomed by the Open University, which has been a pioneer in this space, and it has long-term potential to transform the skills landscape for learning through life.

I generally make it a rule not to bang on too much in this House about my predecessor but two as Member for Worcester—my late father—but I will make an exception in this debate. My late father, who never had the opportunity to pursue his studies beyond what we would now describe as level 2, set out an ambition in his Macmillan lecture about 40 years ago for people to be able to pursue education through their lifetimes. He envisaged a society in which people would be freed by the technological revolution then getting under way to pursue opportunities for education and advancement at any stage in their career. He summarised that opportunity under the heading “Athens without the slaves”—a piece of hyperbole that was much ridiculed at the time and that is commemorated in a lovely Times cartoon we have in the downstairs loo at my mother’s house—which I think recognises the intrinsic value of pursuing education.

My father’s was a generation in which higher education was a luxury withheld from the vast majority of the population.

[David Johnston (Wantage) (Con)]

I am very much enjoying hearing about my hon. Friend’s father’s views, and I look forward to reading his lecture. Does my hon. Friend agree that many people just do not appreciate education when they go through it the first time round, in the years to 16 or 18? They might have bad teachers, or they might have other things going on in their lives, and they cannot see the relevance of what they are doing in the classroom. Many people would like another opportunity at education later in life, which is why this Bill is so important.

[Mr Walker]

My hon. Friend is absolutely right: there are those who perhaps did not relish being in the classroom at the time. There are also those who go through their whole lives regretting not having had the opportunity to pursue further studies and feeling that they have somehow missed out on something. This Bill should provide a solution for both groups.

As I was saying, in my father’s generation, higher education was available to the few; it was a luxury withheld from the vast majority of the population. However, his generation also recognised that there should be no limits to where aspiration and hard work could take an individual. In his case, they took the lad who left school at 16 and who took his insurance exams while doing his national service to success in finance, politics, the Cabinet and eventually the House of Lords. However, he always recognised that, in missing out on the higher studies and university education that so many of his peers had enjoyed, he and many of his generation lost out on something of real value. He wanted to create the opportunity for people to study later in life, and to keep open the offer of vocational and academic study to adults throughout their lives.

--- Later in debate ---

[Munira Wilson (Twickenham) (LD)]

It is a pleasure to follow the Chairman of the Education Select Committee, the hon. Member for Worcester (Mr Walker).

Mr Deputy Speaker,

“adult education must not be regarded as a luxury for a few exceptional persons here and there, nor as a thing which concerns only a short span of early manhood, but that adult education is a permanent national necessity, an inseparable aspect of citizenship, and therefore should be both universal and lifelong”.

That is not a quote from one of the many briefings that was sent to me ahead of the debate. It comes from Arthur Smith, who was the master of Balliol College, Oxford, in his foreword to a report commissioned by David Lloyd George’s Government in 1919. This Bill is trying to fulfil an ambition outlined more than a century ago by a Liberal Prime Minister—one that, sadly, successive Governments of all colours have failed to deliver.

As we have already heard, there is consensus on all sides of the House about the need for a revolution in adult education. That cannot be understated, given the pace of economic and societal change before us. Research from the Confederation of British Industry predicts that, as a result of changes in the world of work driven by digitalisation and the transition to a green economy, 25 million workers will need to upskill by 2030, and 5 million will need to retrain completely. The 2022 business barometer, which was put together by the Open University with the British Chambers of Commerce, found that 78% of UK organisations suffered a decline in output, profitability and growth as a consequence of the lack of available skills.

Liberal Democrats see investment in education and skills not only as an investment in our country’s future, but much more than that. It is about helping people to maximise their potential, nurture their creativity and develop their interests and talents, so I share the Secretary of State’s ambition that, no matter a person’s background or what path they have trodden, we all deserve equality of opportunity. That is the reason I am a Liberal. The Secretary of State says that it is the reason she is a Conservative. Maybe we can hammer it out over a drink sometime, and I might persuade her to cross the Floor, because as we have seen, it was a Liberal Prime Minister who originally set out that ambition.

However, I fear that the Government’s investment in lifelong learning over recent years does not meet the scale of the ambition that the Secretary of State has outlined. According to the Institute for Fiscal Studies, total adult skills spending in 2024-2025 will still be 22% below 2009-10 levels. The number of students taking non-degree undergraduate courses at higher education providers fell from 330,000 in 2007-08 to 110,000 in 2021-22, most of whom were part-time learners. We are promised that the lifelong learning entitlement will change that, and that it will be flexible, unified and high-quality, with parity between technical and academic routes. We are promised that this Bill will underpin the LLE scheme by providing a credit-based method for calculating the fee limit for whole courses and individual modules. While I commend the Minister and the Secretary of State for their commitment to the cause, I agree with many of the comments made by the shadow Minister, the hon. Member for Warwick and Leamington (Matt Western), that it is plain to see that this Bill is not the century-in-the-making panacea we have all been waiting for.

Many questions remain unanswered in what the shadow Minister described as a skeletal Bill. First, we are debating the Bill in reverse. Parliament is meant to debate and approve the policy framework and then let the regulations deal with the technical details. This Bill does the opposite—it sets out the mechanism through which an LLE will be delivered without setting out any of the major policy decisions about how it will work. As we have already heard, the LLE consultation was published more than a year ago, but we are yet to see the Government response. The hon. Member for Meon Valley (Mrs Drummond), who is no longer in her place, asked the Secretary of State how old someone would have to be to access the loan entitlement. How will maintenance support work? There are no details in the consultation. Will the repayment terms for these loans be the same as for 18-year-olds going to university when many of these learners will have only 20, 15 or 10 years left in their working lives? Will the equivalent and lower qualifications rule be abolished?

Those are basic questions about the nature and structure of the LLE that the Government do not seem to be any closer to answering as yet, but they will make huge differences to the effectiveness of the programme. The lack of any detail on how to support students with living costs, particularly during a cost of living crisis, seems to me a significant oversight, which is made even more unforgivable by the fact that the Department is increasing undergraduate maintenance loans by just 2.8% next year, when inflation is running at more than triple that rate.

I question whether the Government have correctly identified the major problem they are attempting to address through this Bill, because I am not sure they have made the case that the LLE is something that aspiring learners actually want. The Department for Education sought to prove its concept by making student finance available for 104 courses, yet according to Wonkhe, just 26 of those courses are advertising a future start date and just 33 students have applied for student finance as part of that trial. That was backed up by a survey last year by Public First, which found that telling people about the LLE made no statistically significant difference to whether people would retrain. I do not believe that reveals a lack of demand for lifelong learning, but it does show a considerable lack of interest from the public in this mechanism for financing it.

The most commonly cited reason for not showing an interest in the scheme is not wanting to take on debt. Seeing as talking about our predecessors is in vogue, I will say that was the conclusion my predecessor, the former Member of Parliament for Twickenham, Sir Vince Cable, came to in 2019 when he commissioned an expert panel of university, college and adult education leaders to explore alternatives for financing lifelong learning. They found that most mature students have work, a mortgage or family responsibilities, and so are unlikely to be attracted to a scheme requiring them in effect to pay a higher rate of tax for the rest of their working life to participate in further study.

The commission recommended giving every adult a personal education and skills account—what the Liberal Democrats have nicknamed a skills wallet. The skills wallet is not about just bolting modular learning on to the existing higher education fees system, as this Bill proposes, but would offer central Government grants throughout life to incentivise learning at all levels and would leverage private and public investment from employers, local government and learners themselves.

The Government’s consultation says that a learner’s account will show their learning balance “like a bank account”, so why not operate it like a bank account with tax breaks to incentivise individuals to save for retraining? Many short courses are being paid for by employers, so why not make employers’ contributions as commonplace as a workplace pension? Local, regional and central Government could also incentivise retraining during a downturn or following the collapse of a large local employer by topping up the accounts of affected workers.

Tom Bewick, the chief executive of the Federation of Awarding Bodies said:

“The LLE Bill has the potential to be the most radical entitlement to adult education, skills…and retraining…ever introduced.”

But he goes on to say:

“Grants and maintenance support will also be required.”

I fear that the ambition of Education Ministers for the Bill and its scope have been shackled by the Treasury.

[David Johnston]

The hon. Lady is making an interesting case, but does she accept that some people do not want further or higher education and will not benefit from it? People talk about the archetypal bus driver who has not done such courses—of course, sometimes they will have—and ask why he should have to pay for other people to do them. I can see that the measure could be important for low-income families, but does she accept the principle that people who want to do the course should have to contribute themselves?

[Munira Wilson]

I see where the hon. Gentleman is coming from, but equally, we are ambitious about making sure that the whole population, or many parts of it, are reskilling and are ready for the jobs of the future, and for people from low-income backgrounds, loans are a real barrier to putting themselves forward for additional courses. The skills wallet, as in our 2019 proposal, would be a grant given at various points of someone’s lifetime between the age of 25 and 55, with top-ups from local or national Government or employers and some tax breaks to go with it. That is an innovative and pluralistic way of funding that ambition, particularly given the challenges that we face as a country to fulfil the skills that we need for us to thrive and grow, which seems to be a cross-party ambition.

I fear that the narrow scope of the Bill will prevent amendments that probe the big policy choices that await the Government before LLEs are rolled out in 2025, but I hope that Ministers will answer the following questions as the Bill progresses. Will the Secretary of State consider putting the notional hourly value of a credit in the Bill so that modules cannot be devalued by a future Government looking to save money? Universities UK and other stakeholders have raised concerns that clause 2 may allow the Secretary of State to set differential fees based on subject of the course. Ministers should bring forward amendments in Committee to ensure that that is not possible and protect universities’ institutional autonomy.

How will Ministers ensure that learners have access to high-quality careers advice before they get their loan entitlement? David Cameron promised Islamic-compliant student finance in 2013. It is unacceptable that, 10 years later, it has still not been introduced. Will the LLE also be blocked off to Muslim students? Will the equivalent or lower qualification rule be abolished to give learners more flexibility in what they study? Will the Government support the Liberal Democrats’ plan to restore maintenance grants so that university graduates from low-income backgrounds are not punished by having to pay back more of their loans for longer?

This is a pivotal opportunity to shape lifelong learning in this country, and it is desperately important given the digital and green revolutions that are already under way. If we want to ensure that we as a country are at the forefront of capitalising on these opportunities, we need to equip people with the right skills, so these plans need further thought and further detail. We will rue the day if, in another 100 years, Arthur Smith’s ambitions have still not been fulfilled.

--- Later in debate ---

[David Johnston (Wantage) (Con)]

It is a pleasure to follow my hon. Friends the Members for Newcastle-under-Lyme (Aaron Bell) and for Waveney (Peter Aldous). There have been a number of good speeches, but I was struck in particular by a couple of things said by my hon. Friend the Member for Waveney, who is no longer in his place. First, he spoke of FE having been a Cinderella service for a long time, and secondly, he addressed the risk of affluent people using the Bill’s provisions to get a qualification additional to those they already have. I will talk about the issue of access, which I think chimes well with my hon. Friend’s comments.

Before I entered this place in 2019, I ran charities for disadvantaged young people. Those charities pretty much worked with young people aged 16 to 25—a couple of them went all the way down to age 10, but the bulk of young people I worked with in the 16 years before becoming an MP were aged 16 to 25. I am therefore quite familiar with how the system pushes people to do three-year university courses at the age of 18. Indeed, they are set on that path before they even get to that point, because at 16 they have to choose the courses that will set them up for their desired university course. For example, if someone is not studying chemistry at A-level, they will not be admitted to a medical course. We put people on a narrow track at a very early age.

There are all sorts of debates about the international baccalaureate and whether we should study a broader range of subjects. If students are to follow the university track at 18, however, they have to pick subjects at 16, and school visits will often be to universities rather than to colleges and employers. The UCAS system—I am really glad that we are changing this—makes it incredibly easy for people in year 12 and moving into year 13 to apply to university. There is one form, on which they list five universities. The process could not be much simpler, although there are difficult things to do to put the form together. Everything says to young people, and to adults, “There is a slip road at this point, but if you miss your junction”—to mix metaphors slightly—“that is it. You will be set on an incredibly long road without the opportunity to come off at the next junction or go back and find that junction again.” That is what our whole system has done for a long time, and it has been quite instructive.

I do not say this as a criticism, but the two big influencers of young people—parents and teachers—reinforce that message. That is not a criticism, as I say, because we all have to do better in that regard. Parents often want their children to go to university, even if they did not go themselves. My parents wanted me to go to university, but I was the first generation in my family to do so. For many people, going to university is held up as the aspirational thing to do, and the alternatives are not seen in the same aspirational way, which they should be.

Most teachers did exactly what we are talking about: they got to 18, went to university, did a teacher training qualification, and joined the profession. So it is the thing that they are most familiar with, too.

[Rehman Chishti (Gillingham and Rainham) (Con)]

My hon. Friend makes an important point about the influencers —be they teachers or parents—who inspire individuals to go to university. A point that needs to be considered relates to the initial teacher training market review that the Department for Education has just carried out, affecting teacher recruitment. Twelve universities—including Greenwich University, which covers Universities at Medway, and the University of Durham—have been removed from teacher training opportunities, affecting more than 4,492 future teachers. If we are to inspire the younger generation to go to university, we need outstanding teachers and a spectrum of universities from across the country providing that training. Does he agree that it is absolutely right not only that we get the right teachers, but that such reviews take into account the excellent work already being carried out by teachers across those institutions?

[David Johnston]

My hon. Friend makes an important point. I do not know enough about why those universities have been removed, so I will not comment on that, but a point to which I will come later is the importance of outcomes for young people and adults. Whatever the qualification that they are studying, we have to judge the outcome that they go on to, rather than just saying, “Well, you have to go to university or you will have to do this sort of thing instead.”

Apprenticeships, as well as higher technical qualifications, which I know the Bill will enable people to do through the lifelong learning entitlement, do things that teachers and parents are not familiar with, which is quite important. My hon. Friend the Member for Waveney and others have talked about the importance of careers advice. The truth is that there are very few examples of good careers advice anywhere—be it in the state sector or the private sector, for the young or the old. A lot of our decisions are based on anecdote, or being told what not to do rather than what to do, without understanding the full range of available options. One thing that we have to do is to help parents and teachers understand the range of options that are available to young people. If they knew about them, they would probably be more open to promoting them.

[Aaron Bell]

My hon. Friend speaks with great authority on these matters. I completely agree with his point about careers advice. Does he agree that what is perhaps needed at the ages of 16 to 18 is better advice about what courses to take and what will open up the most doors? A lot of people aged 16 to 18 have no idea what career they want to take up. I know that I, for one, did not.

[David Johnston]

My hon. Friend makes another important point, and it leads me incredibly nicely to the point that I was just about to make.

I understand the motive behind the Labour party’s desire for 50% of young people to go to university. It was not a malign motive. Labour believed that that was aspirational and that it would help us compete, but it has clearly had a number of negative consequences. One of the most important—this goes to my hon. Friend’s point—is that we have told people, “The most important thing you can do is go to university at 18. It doesn’t particularly matter where you go to university or what you study. The most important thing is that you go to university, because we want all young people to go to university.” Thanks to a whole range of organisations, including the Institute for Fiscal Studies, which has done great work on this issue, we now know that people who graduate from a number of institutions will earn less than they would have done had they just got a job. In 2020, the IFS found that about 20% of people who go to university—one in five—earn less than people with similar grades who just get a job.

We might dislike that that is the case—we might wish that every university or subject gave people the same earnings outcome—but when I worked in this field, people could choose from 60,000 university courses, which of course do not all give the same outcomes. Certain universities—particularly Russell Group ones—give people higher earnings, as do particular courses, such as medicine, engineering and maths. The charities I worked with overwhelmingly supported disadvantaged young people, and the truth is that it is usually those people who do not get the advice they need and who pay large amounts for courses that do not add to their employability outcomes. They do not get good information, advice and guidance at a young age from school or from parents, in the way that a middle-class child might. That is one big way in which the 50% target has prioritised quantity over quality.

[Sir Julian Lewis]

I thoroughly endorse the direction of my hon. Friend’s thoughtful argument. Does he agree that, even at the Russell Group university end of the spectrum, there has been a serious issue with grade inflation? So many people—a large majority, I think—are now awarded first and upper second-class honours in institutions where, 20 years ago, one in 10 might, if they were lucky, have got a first-class degree, that it becomes difficult for employers to pick out people for the right reasons and for the right jobs.

[David Johnston]

I completely agree with my right hon. Friend. Part of the reason why that has happened is that young people feel, “I’m making an investment here. I’m paying £9,000 a year. I’m not doing that for you to give me a 2:2 or a third at the end of it.” There has therefore been this pressure on universities—often, unfortunately, with the threat of legal action from parents who can afford it—to inflate the grades people are given. This is another unintended consequence.

People will say, “Look, it’s not just about the money you can earn after your degree,” and that is the case, but because we as individuals are making that investment at that age, we understandably want to see an impact on our earnings. However, another problem is that lots of people will never pay back the money they have borrowed, and that is a huge liability for the taxpayer. Some taxpayers have been to university themselves, and some have not, but they will all incur this cost. We lend money to people to go to university, but if they do not earn enough to be able to pay it back, the taxpayer will not get a return on that investment. At the moment, we are on course for only a quarter of people to fully pay back their student loans. That is a huge amount that the taxpayer is investing unnecessarily in something that I hope we will change through this Bill.

As has been touched on, it is also the case that the three-year, full-time model for people aged 18 does not suit every young person. Lots of the young people I used to work with at the charities I ran had caring responsibilities, either for younger siblings or ill relatives. Perhaps a member of their family had unfortunately died, and those young people therefore had greater responsibilities, or they needed to work alongside study in order to supplement the family income. As such, again, we need greater flexibility, and that is before we come on to the technological change that we are expecting. We will see some of the most radical technological change that the country has ever known, and lots of the jobs that we train people for today will become obsolete. A person might make a decision at 18 about the particular course they want to study for a particular job, and in 20 years find that that job is obsolete and that they need to retrain for something else. That is why the Bill will be so important.

As an aside, lots of jobs should not need a degree anyway—we have slipped with the 50% target, I am afraid. In order to make the lives of employers easier, we have applied a higher and higher degree threshold to weed out people when we make selection decisions. If everybody has a degree, we end up starting to ask for master’s degrees, so we have entry inflation, not just grade inflation. Above all, that target has contributed to the disparity of esteem between academic and vocational courses. As has been touched on, this is a limited, smallish Bill, so giving people the equivalent of £37,000 in today’s money to enable them to train themselves across their lifetime, at some point in the future when they decide that they need to study for qualifications that they do not yet have, is so important for what we are trying to do: create that parity of esteem.

The Bill will promote lifelong and modular learning, and set limits on course and module fees based on credits. It will also achieve subtle things. Going back to the point about the whole system being geared towards one particular model, changing from an academic year to a course year is hugely important, because when everything is geared towards academics, we are continually reinforcing the message that the academic model is the only one for people.

We know that lifelong learning has a huge number of benefits. We know it will help with earnings; for some considerable time only about one in eight of the people who are in low pay have escaped that low pay a decade later. That has been true for decades, and part of that is about progression. By the way, that is partly the job of employers —they need to have good strategies for progression —but it is also about allowing adults to train in things they are not able to do, so that they can get more skills and therefore get more money.

[Mr Barry Sheerman (Huddersfield) (Lab/Co-op)]

I came into the Chamber after the hon. Gentleman had started his very good speech, so I hope he will forgive me. Is he trying to reinvent the individual learning accounts, which were an early attempt by Tony Blair’s Government to create that lifelong pattern of learning and open up opportunities? I was Chair of the Education Committee at the time, and unfortunately that Government found out very quickly that that scheme could be scammed, and it collapsed. Everyone said that the Government should have brought it back, even Mr Deputy Speaker, who used to be one of my students. Even he believed in that scheme, but it has never been resurrected.

[David Johnston]

I am grateful to the hon. Gentleman for his intervention. I am a politician, so I would never try to reinvent the wheel, but I think what we are trying to do in this Bill is learn from some of the problems that the Government at the time had with that situation, because lifelong learning is so important and people will need to retrain. People cycle in and out of work, and we will need to train people for jobs that none of us has even considered. Developed economies such as ours are historically bad at retraining people for new technology—it is not just a UK problem; it is a US problem too. All the developed economies find that difficult, so the Bill is an important way in which we can help people. That is before we consider the health and wellbeing advantages of lifelong learning, which are also well documented.

The Bill is set in the context of a couple of problems with which my right hon. Friend the Minister for Skills, Apprenticeships and Higher Education is familiar. One is access. It is still the case that access to certain universities is not what it should be. Disadvantaged young people find it difficult to get into certain universities, and we have to make better progress on that—some universities are still dominated by those from private schools, and that matters for everything we are training people for—and ditto the situation with international students. Some universities have made much better progress on getting international students rather than low-income students. They do that because it gives them a lot more money, but universities need to be making a good contribution to social mobility at home.

With this lifelong learning entitlement, I hope the Minister will, as with everything else, be applying two tests. First, what are the outcomes for people who undertake certain courses? I am agnostic about whether it is level 4 or level 8 and whether it is academic or vocational; the thing I care about most is whether the course helps someone get a better outcome than they otherwise would have had if they had not done that qualification. That unfortunately has not been the case with lots of the university courses that people have done at 18. The second test is simply this: do disadvantaged young people or older people who have been disadvantaged get their fair share of the courses that will really help them to have those better outcomes? Across degrees and apprenticeships, too often it is the most affluent and the most privileged who take most of the spaces on the things that will give the best outcomes. All that being said, this is an important Bill that is trying to get us to that parity of esteem, and I am very pleased to support it.