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Category Archives: Philosophy

Responses to ‘Robbins Rebooted’ – 28 August 2014

 

Dear friends,

 

I’ve been delighted by the response to my pamphlet, ‘Robbins Rebooted’, where I set out the terms for a 21st Century debate on the future of higher education. Below is a short selection of responses so far from higher education stakeholders.

 

  • The Higher Education Policy Institute referred to the pamphlet as ‘wide-ranging and well-informed’. Their full comment can be seen here.

 

  • Million+ stated that ‘Nine months ahead of the general election it is good to see political parties contributing to the debate on higher education policy’. Their full response is here.

 

  • University Alliance ‘welcomed this timely addition to the higher education debate’. See their response here.

 

  • The Russell Group felt that Robbins Rebooted was a ‘…thoughtful addition to the higher education debate.’ See their comments here.

 

  • The University and College Union (UCU) said this ‘contribution…should kick-start the debate’. Their response is here.

 

  • The 157 Group welcomed the ‘the continued emphasis on creating sustainable high-quality vocational pathways for more and more young people’. See their response here.

 

  • The Association of Colleges (AoC) welcomed the review saying, “higher education needs to change…” See their response here.

 

 

Liam Byrne publishes ‘Robbins Rebooted’ – laying out a vision for 21st Century Higher Education and university reform – 28 August 2014

 

Dear friends,

 

Today the Social Market Foundation (SMF) has published my pamphlet entitled ‘Robbins Rebooted’.

 

You can view an electronic version of the pamphlet here.

 

In it I set out options for reform of Britain’s universities to boost the country’s knowledge economy and open high paying technical and professional jobs to the ‘forgotten 50 per cent’.

 

These options draw together hundreds of conversations that I have had with university and college leaders, academics and students over the last six months in Britain, Europe, India and China.

 

Invoking the ‘white heat’ message of Harold Wilson’s government, elected 50 years ago this year, I argue that reformed universities are now key to fostering more high paid jobs in the ‘light speed’ global digital economy.

 

The following are the ‘big five’ ideas which university and college leaders, students, teachers and researchers want to hear debated:

 

1. ‘Technical Universities’, a collaboration of employers, major university science and engineering departments and colleges, offering students the chance to study a new ‘earn while you learn’ ‘Technical Degree’

2. A revolution in links between colleges and universities based on the US-style community college movement.

3. Reform of research funding to support British universities in creating global ‘Star Alliances’ of the world’s best scientists with longer term research support.

4. A big increase in university enterprise zones to better link universities to regional growth.

5. A new revolution in access to higher education, with a new national advice service to support young people into higher academic and technical education, support for university-school trusts, an expansion of the Open University’s Massive Open Online Courses and a new partnership between the Workers’ Education Association and UnionLearn.

 

I would love to hear your reflections on the pamphlet so please do get in touch.

 

With all best wishes

 

Liam

 

‘The market is failing – we need a new way forward’ my piece for the Evening Standard – 17 July 2014

 

Dear friends,

 

 

Earlier this week I became Chair of the APPG on Inclusive Growth at the group’s inaugural meeting.

 

 

To mark the occasion I have written a piece for the Evening Standard which was published this afternoon. See below.

 

 

All the best

 

 

Liam

 

 

 

 

Liam Byrne: The market is failing – we need a new way forward

 

A fresh consensus is emerging about how Britain must think long-term to remain globally competitive

 

 

The puppets are for the chop. Earlier this week, Wonga’s loveable grandparents flogging payday loans on children’s TV were dispatched in the UK by the firm’s new chairman. It comes at a time when shareholder activism is on the rise, with a number of eye-wateringly large pay deals for top executives shot down by shareholders. The conscience of corporate Britain is rumbling as unease with Britain’s malfunctioning marketplace deepens.

So it should. With this week’s good job news has come fresh evidence of the squeeze on pay packets. Inflation has jumped to a five-month high. Meanwhile, the Institute for Fiscal Studies reports that the under-30s lost 13 per cent of household income, from 2007 to 2013 — nearly twice the hit taken by the older generation.

 

It is becoming harder than ever to earn a decent living — and if we don’t fix this soon, we’ll face not just an economic problem but a profound moral challenge. Hard work is hard-wired into Britain’s psyche and our moral code. This was supposed to be the deal: hard work got you on in life. Yet Britain’s families are working harder and going backwards, £1,600 a year worse off now, on average, than in 2010.

 

It’s not just a question of fairness: it doesn’t make business sense either. As someone who established my own company, I know very well that virtues such as trust, integrity and stability drive consumer confidence. They are the keystone of capitalism.

 

We can’t go on like this. Nearly 30 years ago, Ronald Reagan spoke for a new generation of neo-liberals, declaring that “government is not the solution to our problems, government is the problem”. Today the market is the problem: together, business and policy-makers are going to have to fix it.

 

So this week a cross-party group of parliamentarians has come together to find answers to the challenge of how we fix our malfunctioning markets and reconnect hard work with getting on in life. Our goal is simple: to build a new consensus on how we can change the rules of the game.

 

Since the Second World War we’ve enjoyed two grand phases of consensus that connected business and government in pursuit of the common good. After the war, we called it “Butskellism”, a marriage of ideas epitomised by the calm moderation of the Tories’ Rab Butler and Labour’s Hugh Gaitskell. The second phase was the neo-liberal consensus, born in the storms of the late Seventies and now in its death throes.

 

It’s time for a new approach: a “third wave” of consensus to reset the rules. There’s already plenty on which we can agree.

 

First, business and politicians know money markets need to act for the long term rather than the short term. The disastrous behaviour of the interest-rate riggers and the high-frequency traders portrayed in Michael Lewis’s new book Flash Boys epitomises a fill-your-boots piracy that destroys a firm’s ability to think long term.

 

It’s not just capital markets that need reform — it’s labour markets too. Unless we boost skills, it’s hard to give workers a pay rise. I think there’s wide consensus about what needs to change.

 

Lord Baker’s work on university technical colleges exemplifies an ambition to build a high-quality vocational route to better skills. Ed Miliband, Tristram Hunt and I have put that at the core of a new offer for a vocational path to degree-level training for the “forgotten 50 per cent”, those who do not want to pursue the traditional academic route.

 

Third, we can agree that a bigger, better business-government partnership in science and technology is vital to winning the race to the top, boosting productivity and jobs in and around Tech City, the Crick Institute and the spin-outs around London’s universities. The foundations of this “supply side” boost were built by Peter Mandleson and Lord Sainsbury, and were respected by the Tories’ David Willetts, who left government this week.

 

Abroad, business and government should agree that “good growth” is easier if markets are bigger, which is why we should be at the heart of Europe. At home, there is broad agreement that a radical devolution of power is vital if big parts of Britain aren’t left to languish. “Inclusive growth” is not just about who prospers, it’s about where prospers — an idea championed by Lords Adonis and Heseltine in their plans to return power to our cities.

 

We cannot avoid some issues where consensus will be harder but where the status quo is not an option: making sure companies pay their taxes and don’t rig markets to short-change consumers and cheat their competition.

 

Indeed, hard-headed Tories such as Lord Heseltine and Richard Harrington, who have real experience of running large businesses, recognise that the market needs to work in a more sustainable way. It needs to respect its consumers and its employees, making a profit while not becoming immersed in a race to the bottom that, in the end, hurts most businesses as much as it hurts working families.

 

From boardrooms to Westminster, we need to crystallise this “new consensus”. For a decade and more, the price and prize of globalisation have not been fairly shared. Yet we risk a new era of inequality if we don’t get our act together. The new potential of trade and technology is accelerating the “second machine age”, where from driverless cars to automated checkouts, technology wipes out both blue and white-collar jobs, concentrating riches in the hands of a tiny global elite.

 

The founders of the greatest traditions in British capitalism — leaders such as George Cadbury, William Lever and John Spedan Lewis — knew that “enlightened self-interest” was always the best way to do business. If we want to build a great society in a global economy, reformers need to join together now: we’re running out of time.

 

Rt Hon Liam Byrne MP is chairman of the newly formed All Party Group on Inclusive Growth.

 

 

Liam Byrne welcomes Royal Society’s ‘Vision’ report on Maths and Science Education – 26 June 2014

 

Dear friends,

 

I wanted to let you know about the Royal Society’s excellent Vision report for science and mathematics education. You can access the full pdf copy here.

 

Published on Thursday, just two days after our science green paper, this is an insightful reminder of the kind of ‘supply line’ of science which our country needs if we’re to see science and innovation-based growth.

 

Just like our science green paper (which you can read here) this report sets out a number of concerns that the Royal Society has about the state of science in our country. Research for the report highlights some of these concerns. For example; in 2011 57% of university science staff reported that practical skills of new undergraduates had declined in the previous five years and just 13% of young people in the UK study mathematics beyond the age of 16.

 

Great Britain has a glorious scientific history. Many of the scientific discoveries and innovations that have shaped our modern world were made here in the UK. But this status as a world-class player in science and research is now under threat.

 

As Sir Paul Nurse sets out in his introduction; if we are to continue shaping the world in the centuries to come we need a plan for science and maths education which can; “…enable people to make informed choices, empower them to shape scientific and technological developments, and equip them to work in an advanced economy.”

 

I am pleased to say that the Labour Party is already committed to maths education until 18 and I am sure we will be looking very closely at some of the other recommendations that this report makes.

 

I met with Prof Jim Al-Khalili, one of the board members behind this fantastic report, earlier this week. We discussed the report as well as our science green paper; ‘Agenda 2030: One Nation Labour’s Plan for Science.’

 

Liam and Jim Al-Khallil3

 

 

 

My speech to Parliamentary Links Day 2014 – Launching Labour’s Green Paper on Science – 24 June 2014

 

Dear friends,

 

It was an honour to launch Labour’s Science Green Paper, entitled: Agenda 2030: One Nation Labour’s Plan for Science and Innovation, this morning at the annual Parliamentary Links Day 2014.

 

You can read the paper here.

 

My speech is in full below:

 

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Strengthen British Science and Strengthen Britain

Launch of Labour’s Green Paper, Agenda 2030: One Nation Labour’s Plan for Science and Innovation

Rt Hon Liam Byrne MP

Speech to [Parliamentary Links Day], House of Commons, London. Tuesday, 24th June 2014

Check against delivery

Chairman

It is a tremendous honour to help mark the greatest day of the year for science in parliament.

I want to pay an enormous tribute to Dr Stephen Benn and the Society of Biology for helping bring the day together.

I want to commend you all for the way so many people and so many organisations have come together from across the worlds of science and engineering to talk, debate, speculate and lobby and leave us here in parliament with fresh impressions, fresh analysis and fresh evidence of how important both science and engineering are to the future of our world.

I want to thank you above all for the inspiration of your example.

I count myself as very lucky to have known an extraordinary scientist from a very young age.

She was a biologist and a teacher and a head of science at comprehensive schools including my own.

She was someone who inspired in me a lifelong wonder for science, a curiosity, and an admiration.

Ruth Byrne was not only my teacher, she was my mother.

And when she died at the age of 52 from cancer of the pancreas, she left me not only with a sense of scientific possibility but a sense of how much work still lies ahead.

 

 

 

Science and Parliament

Your theme this year is about Parliamentary links to Science and Engineering. I want to offer you a view about how we cement science and engineering centre-stage in the run-up to the General Election. As we are in Parliament I thought it would be apposite to reflect on the way science and engineering, industry and politics come together today and the relationship that lies ahead.

Around 300 years ago, a very great writer left London on his travels around the country to write a book, which is today one of our finest records of Britain on the eve of the industrial Revolution.

Daniel Defoe’s ‘A plan of the English commerce, being a complete prospect of the trade of this nation’ paints a portrait of a country amidst tremendous change.

‘The most flourishing and opulent country in the world,’ he called it and the cause he said was clear; ‘Trade’ and its two daughters, ‘Manufacture and Navigation’

Defoe suspected that for all the advance he saw, something bigger was coming.

And he was right.

By the time ’A Plan’ was published in 1728, the Royal Society, founded in Gresham College, was 50 years old. Sir Isaac Newton, its great master, had died the year before and in Birmingham, one of founders of the industrial revolution, Matthew Boulton was born.

Over the next six decades, Boulton, together with his friends in the Lunar Society in a story wonderfully told by Jenny Uglow, took the traditions and methods of those great founders of the Royal Society and fused them to industrial method, helping trigger the industrial revolution.

A nation of explorers and traders quickly became a nation of inventors and industrialists. The worlds of science and industry were irrevocably connected.

Back in the early days of the Enlightenment, the French writer Diderot had observed that uniquely in Britain:

‘philosophers are honoured, respected; they rise to public offices, they are buried with kings’.

Well, it wasn’t long before we were putting great inventors and industrialists like James Watt alongside our philosophers and our kings.

But it was to take another century before science and industry were really fused with the dirty and difficult business of politics.

From the 1850s and 1890s, concern with the state of our science base, and the state of our schools gathered pace until under the burning pressure of world war one a real partnership came together;

-          The Department of Scientific and Industrial Research was founded in 1915.

-          Universities came to play a mission critical role in the work effort and crucially a new alliance between science, industry and government was hard-wired together.

And we’ve been trying to get the relationship right ever since.

Now that alliance has never been more important.

The scale of the problems, which I realise are merely solutions in disguise and which we are tackling today, are simply too big for one scientist, one university, one company, or one government to tackle alone.

The new partnerships that you see in such spectacular collaborations like the Gaia One Billion Star Surveyor, or the Hadron Collider are gigantic incarnations of the same ethos and approach that drove the Lunar Society, but they are global in scale.

These journeys of curiosity, exploring the endless frontier, are rightly your principal concern.

But there is a second reason the alliance is so vital.

Your country needs you.

Searching for some inspiring words for today’s speech, I stumbled across these in the House of Commons library last week;

‘the position of Great Britain as a leading industrial nation is being endangered by a failure to secure the fullest possible application of science to industry; and second that this failure is partly due to deficiencies in education’

Those were the words of Lord Percy, Rector of the Newcastle Division of Durham University, reporting to the government in 1944.

They could have been written last week.

Two years later, Lord Barlow agreed;

‘If we are to maintain our position in the world and restore and improve our standard of living’ he wrote ‘we have no alternative but to strive for that scientific achievement without which our trade will wither’.

What was true back in 1945 is true again today.

 

 

The Challenge Today

Our old enemy, ‘British disease’ is back with a vengeance.

That traditional crisis, of extremely low productivity while other nations streak ahead, now scars the recovery and haunts industry, making it even harder to escape today’s cost-of-living crisis.

Producing more with less, as every business owner knows, is the key to doing well and the fastest way to give your workers a pay rise.

But look at the figures today.

Since the last election, output for every hour worked has not gone up; it’s actually gone down. Equally, output per worker has not gone up. It’s gone down. We’re actually less productive than we were four years ago.

This appalling record is far worse than the last years of the 1970s, long deemed the moment when ‘British disease’ reached its peak but a period when output per worker, and output per hour worked actually rose by over 5%.

Worse, we’re now falling rapidly behind our competitors. The gap in productivity per hour between the UK economy and G7 average is now 21 per cent – the widest gap there has been since 1992.

This is absolutely fatal for any escape from the cost of living crisis. If companies can’t produce more then it’s not easy for firms to give their staff a pay rise.

As someone who started work behind a fry station in McDonalds, I know that any job is better than no job.

But I also know that a good job is better than a bad one and right now we’re simply not producing enough good jobs.

Today, the average full-time worker has to work an extra one hour and 52 minutes a week in 2013 to earn what they earned in real terms in 2010.

Look at our ‘knowledge economy’ and it becomes clear what is going wrong.

Economists and scientists now know[1] that science and research is the key to growing productivity.

As the breakthrough report from Research Councils UK put it;

‘The greatest long-term productivity advances come through breakthroughs in basic knowledge’.

In the US, the authors of the Gathering Storm remind us that 85% of growth in wealth per capita is driven by innovation[2].

The knowledge economy is the powerhouse of productivity growth, creating better jobs with better wages.

Yet, with the honourable exception of automotive and aerospace, which Labour did so much to save during the global crash, the story isn’t good.

Getting innovation policy right is not actually rocket science. It is about people, ideas and money. You need great people, great institutions and strategic investment.

Yet, look at what is happening in the UK.

In 2012, the last year data is available, UK investment in R&D by government and business together has fallen by nearly £1 billion – (£923M) – the largest annual fall since consistent records began in the mid-1980s.

Amongst advanced Western nations, Britain now ranks 23rd out of 33 in the league table of R&D spenders.

In our most important research industry – pharmaceuticals – which accounts for a quarter of all UK R&D spending, research budgets have fallen by a huge £467 million since 2010, that’s a 10% fall.

In telecoms, one of our other leading R&D sectors, budgets have fallen by 20% – that’s £240M.

 

Look at our great institutions.

In our universities, the great epicentres of science and knowledge, we have the world’s best thinkers.

But their labs and classrooms now rest on a mountain of debt. University borrowing will reach £7.3bn worth of debt by 2015, an increase of £1.8 billion from 2012. That’s £45.6 million for every university in the UK.

Vice-chancellors tell me that falling research budgets now mean that the brain drain has been gathering pace for at least the last 18 months.

And that’s nothing when we consider the black hole that’s been created in the finances of the Department for Business, Innovation and Skills by the Government’s unsustainable funding system.

The Public Accounts Committee now estimates that at current rates, students will be borrowing nearly £200 billion over the next twenty years to fund their studies and 45 per cent of this will be written off. It’s universities and our researchers of the future who will be paying the price.

And let’s not forget that other great institution that is important here.

The European Union.

European policy makers now understand that innovation is the only way out of austerity.

And the creation of the Horizon 2020 programme is proving crucial for the strength of British science, as UK universities, research centres and businesses can expect to receive £2bn in the first two years of the new funding round.

Leaving the EU, as some propose, would be absolutely catastrophic for science funding.

Third we must address human capital. The skills gap across the country grows worse. A fortnight ago, KPMG reported that skills shortages are bringing to a halt the plans of manufacturing firms to ‘re-shore’ work.

Since 2010, the number of people working in ‘Scientific research and development’ has fallen by over 12,000.

The Migration Advisory Committee has now added 117 high skilled roles to the shortage occupation list, which employers can fast track onto visas, because there are not enough skills in Britain.

The Royal Academy of Engineering estimates that we’re currently 36,000 short and at the rate we’re going there will still be big gaps to fill.

In our schools, Michael Gove’s disastrous School Direct scheme for teacher training has produced a huge shortage of physics teachers.

Half of state schools now send not one girl to do A Level physics.

Practical experiments have been taken out of the exam curriculum. The careers service has been destroyed. Apprenticeships for the under 24s are actually falling.

We cannot go on like this.

That’s why today I am pleased to be launching our green paper on science and innovation.

Our message is simple.

We need to strengthen British science – because British science will strengthen Britain.

We want to start a big debate on how business and government come together to grow the strength of science.

We want to work with the science and engineering community, in all parts of Britain to get the answers right.

We want to work across parties – because wherever we can maximise cross-party consensus we will.

We know that predictability and certainty are important; that they help make your work easier.

We want a new culture of science and evidence in public policy.

We want stronger universities with a bigger share of global science budgets and a bigger role in their regional economies.

And crucially we want to strengthen every rung on the ladder up into a science and engineering career for our young people.

 

Conclusion

As NESTA argued two weeks ago, the debate around science and engineering is seen by the public as vitally important.

In part, that’s because the public knows science, engineering and the business of innovation is key to the development of new cures for diseases, earlier diagnosis, greener, cheaper energy and crucially the jobs of the future.

The public knows that if we are not the pioneers then others will be.

If we don’t develop the jobs of the future, then others will.

And that will irreparably damage the opportunities of our children and our grand-children.

After all they are the very people for whom we want better chances than the chances that we enjoyed.

I think we know how futures are really built.

I think we learned that lesson a long time ago.

And now is not the time to ignore the lessons of history.

[2,245]



[1] http://www.rcuk.ac.uk/RCUK-prod/assets/documents/publications/researchforourfuture.pdf

[2] [2] http://www.nap.edu/openbook.php?record_id=11463&page=1. The 85% refers to the work of Robert Solow and Moses Abramovitz published in the middle 1950s demonstrated that as much as 85% of measured growth in US income per capita during the 1890-1950 period could not be explained by increases in the capital stock or other measurable inputs. The unexplained portion, referred to alternatively as the “residual” or “the measure of ignorance,” has been widely attributed to the effects of technological change

 

 

 

 

 

One Nation Labour’s Plan for Science – 24 June 2014

 

Dear friends,

 

This morning I will be sharing our Green Paper on Science entitled – ‘Agenda 2030: One Nation Labour’s Plan for Science.’

 

If we are to build an opportunity economy with high skilled jobs and the wages to go with them then science and innovation have to be central to our strategy. Britain needs a long-term vision for science and this paper intends to start a discussion about what that vision should look like.

 

Please do read the document here and share your views.

Science Green Paper front cover

With all best wishes

 

Liam

 

 

Letter to the Bishop of Birmingham from Shabana Mahmood MP & Liam Byrne MP

 

Dear friends,

This morning Shabana Mahmood and I have written to the Bishop of Birmingham on the subject of a inter-faith panel on education in Birmingham.
You can see the text of the letter below:

 

Your Grace

 

Inter-faith Panel on Education in Birmingham

 

Further to conversations on Friday with yourself and Mark Rogers, we write to ask whether the Birmingham Inter-faith panel might consider creating a special task-group to advise the city’s education leaders, at all levels, on how excellence in standards and strength of faith can be coupled better in our state schools.

 

We believe that faith can play a crucial role in educating the children in our city for whom faith is an essential element of their lives. The divisive nature of the debate around the so-called Trojan Horse allegations risks damage to this view, damage which must not be allowed to go un-checked.

 

In particular, thousands of Muslim parents feel under seige. Values and practices associated with their faith are being incorrectly defined, in our view, as extremist.

 

This cannot be right.

 

The Birmingham Inter-faith panel is a unique group with a unique capability to offer advice and crucially set about the task with a spirit of unity that is desperately needed.

 

We stand ready to offer whatever support we can to such crucial work.

 

Yours, in hope and solidarity.

 

Liam Byrne MP
Shabana Mahmood MP

 

 

Don’t Lose Faith – a message from Liam Byrne MP and Shabana Mahmood MP

 

Dear friends,

 

See below for a message from myself and Shabana Mahmood MP:

 

Don’t Lose Faith

Liam Byrne MP and Shabana Mahmood MP

 

The allegations made about some Birmingham schools are incredibly serious. From the word ‘go’, we demanded that nothing be swept under the carpet, that parents have the facts – and fast.

 

We want specifics; has gender segregation taken place in mixed schools, yes or no? Have extremist preachers been invited to give assemblies, yes or no?

 

Why is this necessary? Because Michael Gove’s education policy has left our city with a fragmented school system over which no one has control. Michael Gove and the DfE are theoretically responsible for the numerous academies in our city but how on earth can they do that from Whitehall?

 

The fact is they can’t and everyone knows it. This has allowed claim and counter claim to flourish – in this context the truth is hard to find.

 

As the net has widened, these investigations have left local parents with an anger-making sense that schools have come under suspicion merely because they serve a population that is predominantly Muslim; that state schools which make reasonable accommodations for local needs – like allowing a day off to celebrate a religious festival, or allowing pupils to use a school room to pray during the lunch break – might be fine for some – but not for Muslims.

 

Schools take these steps because they respect students with strong religious convictions and recognise that faith plays an important role for those students in driving their aspiration and every child we inspire helps make our city a richer and better place.

 

Yet now thousands of Muslim parents feel that they and their children are automatically under suspicion, and that the education they receive will be viewed through the prism of counter-terrorism.

 

We simply do not accept this.

 

For many people faith is an integral part of their daily lives. It is a strength to be harnessed which is why today we call on the city’s faith leaders to come together to show the city just how excellence in standards and strength of faith can be coupled better in our state schools.

 

At the same time we hope that the lessons will be learnt. Ofsted must ask some searching questions about how it so misjudged standards in the past. Michael Gove has to tell us how he let things get out of hand. Of the five schools allegedly bound for special measures, four are academies for which he and no-one else is accountable.

 

Faith has inspired greatness in our country – and has done for centuries. Let’s build an education system in which it can flourish.

 

Not just for some.  But for all.

 

 

‘Inclusive Growth’ – My speech to the Oxford Martin School – 5 June 2014

Download PDF here

View my slides here

Watch my speech on YouTube here

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Inclusive Growth: How New Ambitions and New Alliances Can Rebuild the Opportunity Economy

Speech to Oxford Martin School

Rt Hon Liam Byrne MP

Thursday 5th June 2014

 

It’s a real pleasure to speak here at the Oxford Martin School today.

In a short space of time you’ve put yourselves on the map as a place of people thinking deeply about the most important questions of our day.

We admire you not just for your search for truth, but your search for action.

You not just looking for ideas. You’re looking for answers.

And in politics right now we all need more answers.

 

The Crisis

You’ve quickly acquired a leading role in the chorus line that shaped up in the last four years, chanting for change

All crises expose the flaws in the political economy of the day.

And this one is no different.

But if we’re serious about answers then we need to recognise that change can only come from renewing an alliance that is now a century old.

This year we mark the hundredth anniversary of the Great War in which so many of our young men and women lost their lives.

The war was not simply an appalling human conflict – it was a crisis that revealed profound weakness in the British economy – a weakness that forced business and government to work together in radical new ways to first win the war, and then the peace.

When Queen Victoria came home from the Great Exhibition in 1851, she confided to her diary that her belief that ‘we are capable of doing anything’.

In 1897, hundreds of thousands had gathered in London to mark Queen Victoria’s Diamond Jubilee.

‘I remember the atmosphere’ said the young historian Arnold Toynbee;

‘It was ‘Well, here we are on top of the world, and we have arrived at this peak to stay there forever’.

Yet within two decades, World War One exposed Britain’s comprehensive failure to master the key technologies of the second industrial revolution.

As Correlli Barnett put it

“… British manufacturers were behind other countries in research, plant and method.”

We lacked machine tools, fuses, a coal-tar industry, ball-bearings, magentos, aero-engines, industrial gauges and optical glass.

Before the war, many had been calling for change, not least the appliance of science.

From the 1850s, scientists and engineers were agitating for reform; the ‘Cambridge network’ of scientists pleaded for more science on university curricula; Parliamentary committees were formed, the magazine Nature was founded in 1869, and a National Association for the Promotion of Technical Education (1887).

Some nineteen enquiries were undertaken into the state of elementary schooling, public schools, secondary schools, universities, scientific instruction and technical instruction.

 

Others made the argument free trade reform; Joe Chamberlain’s pronouncement in 1902, that

“The weary Titan staggers under the too vast orb of his fate”

sparked nationwide debate about free trade reform – an argument ultimately defeated by the Liberal landslide of 1906.

And the fiscal crisis that followed the South African war, coupled with rising domestic spending provoked a fundamental reappraisal of Britain’s global defence strategy, acquiescence in the Munro doctrine in the Americas and the Anglo-Japanese alliance (of 1901) – in essence, a retreat from the both the Western and Eastern hemispheres.

With the exception of the gold standard, the basic nostrums of the Edwardian political economy – the night watchman state, free trade, ‘splendid isolation’ – were all acute pressure in the years before World War I.

 

 

But it took the crisis of the war to fuse together government and business into a new alliance to drive Britain into the modern, industrial era where, as Alfred Chandler memorably argued, scope, scale, science and skill were the keys to success.

Back in the 1895, the Conservative prime minister, Lord Salisbury was all too clear that he;

‘detested the new plutocracy of industrial and financial wealth’.

Thus, there was only one man with an industry background – Joe Chamberlain – in the Cabinet; and only one industrialist – Vickers – on the board of the Bank of England between 1890-1914.

World War One changed all that.

It was the moment when Britain realised that business and government had to become partners if the country was to fulfil its promise, not waste its potential.

And for the last century we’ve trying to get that partnership right.

Today’s crisis is very different to the crisis of a century ago.

A century ago, we were debating how business and government could together build a different kind of economy.

Then we sought to make the second industrial revolution work in Britain.

Today, we’re trying to make the digital revolution work for Britain’s people.

 

 

A model of inclusive growth. 

Since the short, sharp financial crash and the long, deep ‘wage crash’ that has led to a cost-of-living crisis, consensus has grown about the need to re-connect wealth creation and social justice.

Both the IMF and the OECD have now warned of the economic risk of big, new inequalities.

In February, the IMF[1] reported;

‘We find that inequality is bad for growth…in and of itself. And we can say that redistribution by itself doesn’t seem to be bad for growth unless its very large’

Last week, Christine Lagarde argued that:

“[only] by making capitalism more inclusive [can] we make capitalism more effective”.

Business schools and academics, like my old teacher, Michael Porter at the Harvard Business School are making the case for ‘shared value’.

Business leaders like the Blueprint for Better Business group are arguing for reform to foster both a renewal of trust and new, long term horizons.

Around the G20, both business and labour organisations are now hammering out an agenda for reform.

Business finds its echo amongst faith leaders and trade unionists.

Both the Archbishop of Canterbury and Cardinal Vincent Nichols have called for a revived sense of the ‘common good’ between business and society.

Trade unionists like Frances O’Grady are arguing for a re-discovery of the inspiration of ‘progressive change’.

It’s the principle at the heart of Labour’s ‘Agenda 2030’ as set out by Chuka Umunna – our plan for long-term balanced and sustainable growth which works for all.


 

Rebuilding the Opportunity Economy:

In essence, when you boil down what everyone is saying: one challenge looms large.

How do we rebuild the opportunity economy, not just for some but for all?

The bald facts for families here in Britain are well known.

The great wage crash is now almost proving as damaging to workers’ livelihoods as the global financial crisis caused by the banks.

The wage crash has now destroyed 8 times more real income since 2008 than the financial crash.

Average earnings are now £1,600[2] lower per year than they were at the last election.

The average family has to work two hours extra each week, just to make what they did four years ago.

All these gains in productivity and creativity haven’t been fairly shared.

They’ve gone to those at the top.

At this rate, most households won’t win back their pre-recession living standards until 2020.

Now we can debate why:

The economics of super-star earnings are now much better understood.

Others argue that a global digital marketplace gives successful entrepreneurs the ability to sell in a multi-billion big market at almost zero marginal cost.

Thomas Pinketty argues that over the long term, returns on assets always outstrips the rate of economic growth.

But while we can debate the causes, the results are pretty clear:

Last month, the OECD confirmed that here in Britain, we’re now one of three countries in the OECD where the majority of wealth created goes to the tiny minority of people; an honour we share with the United States, Canada and Australia[3].

Back in 1981, just over 6% of pre-tax income went to the top 1% -

Now the top 1% has more doubled their share.

90% of Britons now only enjoy just over half [54%] of total income – this means that 44% of the country’s total wealth is owned by just 10% of people.[4]

If this is not fixed, we will confront not just a political crisis but a moral crisis.

 

 

Hard work isn’t just vital to the economics of our country, it’s vital to the ethos of our country.

The spirit and habit of hard work is deeply engrained

Not for nothing is Rudyard Kipling’s ‘If’, the nation’s favourite poem, with its call to

‘fill the unforgiving minute, with sixty seconds worth of distance run’

Today people feel like their run is like a hamster, sprinting on a wheel.

No matter how fast they run, they don’t get any further forward.

A few weeks ago, the Daily Mirror’s leader column had two stories; one about the record number of billionaires in Britain and the second about loan sharks preying on mums at school gates.

In cities like mine child poverty is spiralling.

I’ve just finished a major enquiry into child poverty in the city of Birmingham; the birth-place of the industrial revolution.

The stories I’ve heard are horrifying;

  • We’ve heard NHS leaders in the city tell us more children are presenting in A&E having tried to take their own lives, driven by the pressure of poverty and stress at home
  • We’ve heard how school secretaries ring the city’s food banks for mums in floods of tears who’ve dropped their children off at school without breakfast – and no food in the cupboards for dinner
  • We’ve heard how many families face ‘scrounge week’ at the end of every month as they beg and borrow from friends and families in order to make ends meet
  • We’ve heard of households where there are 3 or 4 people sharing a bed or a parent having to sleep on the sofa so that their child could sleep in the bed. Children going to school exhausted because there is no space for peace and quiet at home.

Yet most of the parents of these children are in work.

And, up the road, in Britain’s corporate bank accounts is sitting £440 billion in cash.

I ask you:

How did we create a country where corporate bank accounts are full – and childrens’ stomachs are empty?

Is it any wonder people feel ‘the deal has broken down’?

 

 

Peoples’ worries for their children and grandchildren are even more profound.

Young people today leave college with higher debts, take longer to find work, need to save more to buy an home, and then face longer to work before they retire.

The lack of good jobs today means that it is harder than ever to make a living by working hard.

Nearly 80% of the jobs created since the election are in low skilled sectors.

We’re becoming a low pay, low skilled, low value added economy, out-paced and out-boxed by new powers, rising around the world and old nations who, unlike us, have got their act together.

We can’t go on like this. We have to change course.

Our challenge is enormous: to rebuild the opportunity economy so that hard work gets you on in life once more.

 

 

The challenge of the future

If you are in any doubt about the need to get this done, then simply take a causal glance at the future….

Let me start with where you start; the future of work.

It’s no secret that there are some big forces at play.

Technology has now automated huge numbers of what were once, reasonably skilled, reasonably paid jobs.

And sometimes it feels like what technology hasn’t killed, trade has moved to those parts of the world where workers are cheaper.

In America, economists Autor & Dorn are amongst many who’ve reported there’s been massive substitution of those

‘low skill workers performing routine tasks – such as book-keeping, clerical work and repetitive production and monitoring activities  – which are readily computerized because they follow precise, well-defined procedures’.

It’s created what some call the hour-glass; high skill jobs, and low skill jobs and very little in between.

This is exactly what is happening here in the UK.

Indeed, the Resolution Foundation tells us that jobs in sectors with a high concentration of routine tasks fell by 5% between 2007 and 2012.

But guess what: there may be an awful lot worse to come.

 

 

A book that a lot of people are reading right now is the Second Machine Age.

It’s a positive book and its argument is simple:

Our ability to combine technology – processing power, cheap sensors, robotics, networks, social media, big data, means we’re now at an inflection point in our ability to combine and recombine technologies to do new things, revolutionising technology from Google’s driverless cars to better diagnosis of diseases.

  • There’s now enough technology in a Nissan LEAF to render the car a fly-by-wire robot, the kind of technology that could revolutionise the logistics industry.
  • GE already makes robots that can climb and repair wind turbines.
  • Future Advisor already uses Artificial Intelligence that’s strong enough to offer personalised financial advice.
  • Algorithms are taking on tasks once performed by para-legals, contract and patent lawyers.
  • Oncologists at Memorial Sloan-Kettering Cancer Care use IBM’s Watson computer to provide chronic care and cancer treatment diagnostics.

What’s does this mean for jobs?

Well, here at the Oxford Martin School, you estimate that as many of 47 per cent of the jobs in our economy today may be automated.

First technology took the blue collar jobs. Now it’s the white collar jobs as well. The challenge of building an economy of inclusive growth is about to get immeasurably harder.

Enlightened self-interest:

As someone who spent has spent half a career in business and half in politics, I happen to think business and government need to solve this together – with an awful lot of help from you.

What we need is enlightened self-interest from business – and determination from government to use it.

We need a new alliance between business, government, unions and civil society, to rebuild the opportunity economy so that it works for working people once more.

Once upon a time, this was a common place – especially for those non-conformist entrepreneurs who transformed Victorian Britain.

In my home city, the Cadbury brothers helped show the way.

And in the years before World War One, it was the founder of Britain’s first great multinational, William Lever, who took up the challenge; putting in place the 8 hour day, profit sharing, secondary and technical education, pensions, homes in Port Sunlight, health insurance, and half pay sickness allowance.

In his biography, William Lever’s son quotes his father:

‘The truest and highest form of enlightened self interest requires that we pay the fullest regard to the interest and welfare of those around us, whose welfare we must bind up with our own, and with whom we must share our prosperity’.

The expression said his son ‘crystallises his business philosophy’[5]

Putting ‘inclusive growth’ back at the heart of the opportunity economy can’t simply be left to business.

And it can’t simply be delivered by governments.

But together: we stand a fighting chance.

So the task of policy makers and profit makers today is to zero in the win-wins to build a settlement that is genuinely ‘pro-company, pro-worker’ (to use a phrase from my colleague Maurice Glasman).

So, to help the debate, I want to propose today five big win-wins we have to get right.

 


 

Win-wins:

First: We all have to recognise that inclusive growth is hard without growth.

So raising growth and raising productivity has got to be the first step.

Here, we’ve got to boost demand and supply-side measures that boost the markets we sell to, and second, boost the supply of science and technology which we know is good for productivity.

Countries that trade more grow faster.

So in this post-Doha world, we should set our sights on new, ambitious trade deals.

The EU-US free trade agreement could add an increase in UK national income of between £4-10 billion annually, or up to £100 billion over a ten-year period.

The EU-China Investment Agreement could up to £1.8 billion in growth every year to the UK economy.

And here in Europe, we need to be realistic that countries running big trade surpluses like Germany, do not need to suppress demand, they need to do more to reform their domestic services industry so there is truly an level playing field.

In short, we need to finish creating the Single Market, as writers like Charles Grant at the CER, have been arguing for years.

 

 

Now, if we’re to trade more, then we need trade-enhancing infrastructure; roads, ports, high speed railway lines.

Here in the UK, our infrastructure investment rate still lags the OECD average.

The World Economic Forum ranks the UK twenty-eighth in the world on overall quality of infrastructure.

Congestion on our roads will add some £10 billion of business costs by 2025

Our rail network is overcrowded at peak hours, especially in the south-east and north-west.

Demand for shipping is forecast to outstrip port capacity.

If we want to trade more, then quite simply we need not just trade deals but a new deal on infrastructure.

To these demand side reforms, we need to add some supply side changes.

Crucially, we need a bolder plan to boost the supply of innovation and science.

Let’s be blunt.

Innovation is the only way out of austerity.

The best way to raise average wages here in Britain is to grow the knowledge economy, the home of those jobs that pay on average £161 per week more than the national average.

And so, when we set out our policies for science and higher education a little later this year, you will see one lode-star: an ambition to build here in Britain a bigger knowledge economy.

That’s not something you can deliver by passing a law or raising a budget.

It can only be delivered by business and government working together in new ways. It is therefore a win-win that we have to work out together.

My third win-win is ‘Patient Capital’.

Reform of financial markets is widely regarded as critical to creation of inclusive growth.

On the one hand, the thirst for short term profits drives dysfunctional corporate behaviour which damages growth and jobs in the long term, and on the other limits the supply of capital for longer term investment in both infrastructure and innovation.

PWC recently forecast that globally assets under management will top by 2020, over $100 trillion. But as Michael Lewes’ recent book, Flash Boys, makes clear, predatory behaviour is still alive and well.

So how do change investor behaviour?

If anything, argue Dominic Barton and Mark Wiseman[6];

‘the shadow of short-termism has continued to advance’

 

 

In their survey of 1,000 board members, they found that nearly two-thirds reported that pressure to generate short-term results had increased over the last five years.

Nearly 4/5 said they were especially pressured to demonstrate strong financial performance over just two years or less – yet almost all said that a longer term horizon would be better for performance, innovation and financial returns.

It echoes the findings of John Kay here in Britain:

“We conclude’ wrote John, “that short-termism is a problem in UK equity markets, and that the principal causes are the decline of trust and the misalignment of incentives throughout the equity investment chain.”

The key reform, argue both Barton and Wiseman, is to change the behaviour of the asset owners – pension funds, insurance firms, SWFs, and mutual funds – who in the US own 73% of the top 1,000 companies (in 1973, they owned 47%).

There’s a range of changes that make sense; defining long term strategy; allocating more to illiquid assets like infrastructure and housing; taking a bigger role in companies when things head off track, and crucially they need to start measuring different things – the kind of corporate performance that drives long term gain like staff turnover…

Now public policy has a part to play.

 

 

Ed Balls has called for:

A shift in the culture and professional standards in the banking sector; imposing duty of care across all financial services, and reform of remuneration practices.

That’s why Labour will call an end to mandatory quarterly company reporting, because we know this will curb short-termism in the City.

And Gregg McClymont has argued for a change in the rules of the game for our pension funds:

“If we want financial services that prioritise the savers’ interest, fiduciary obligations deliver these. Fiduciary obligations will most effectively be delivered in pensions where pension schemes are managed by independent trustees.”

Labour is also leading the drive for a British Investment Bank, supported by a network of regional banks, which will become a key source of investment for long-term innovation.

 

 

Our fourth win-win has to be around productive workers – and the restoration of a very simple deal: where workers do more to boost corporate profitability, then boards need to give them a pay-rise.

Work is key to inclusive growth – and skill is key to raising productivity and therefore wages.

The goal of full employment now has cross-party support and there is a widespread view that reform of the education and vocational education system is critical to closing the gap between the class-room and the successful career – in work.

Here in the UK, that means action to stop people falling too far from the labour market. That’s why we propose a jobs guarantee. We want more people to enjoy the right to go to university. But critically, we know that we have to build a vocational track to higher level skills.

All over the OECD, countries are modernising their apprenticeship system to help apprentices train to higher level skills.

Here in Britain, we send just 6% of our apprentices to degree level skills. That isn’t good enough and it’s why we’ll propose reforms of our higher education system to fix it, adding to the proposals we have already announced to boost quality apprenticeship opportunities.

 

 

More productive workers however, need to be better paid workers. And if they’re not then we have to ask ourselves whether corporate governance is in the right place.

Around the world, campaigners are fighting for a pay rise.  In China, last year. In Seattle. In Switzerland. In Germany. And here Ed Miliband is leading the charge with plans to strengthen the national minimum wage.

When productivity and profitability is rising – but wages are falling, then something is going wrong; and that’s why arguments for a Living Wage have such resonance.

I’m very proud that my home city of Birmingham is determined to become Britain’s first living wage city

If we can do it in Birmingham, then we can do it in Britain, and Alan Buckle’s report has shown the steps we can take to spread the idea nation-wide.


 

Fifth, we obviously have to look at the competitive intensity of markets, and the ease with which new high growth market entrants can challenge the status quo

Broken markets are markets that foster oligopoly.

They’re bad for prices, bad for consumers, bad for suppliers – and we have to fix them.

Sometimes that means upsetting incumbents – but competition is good for business – especially the new businesses which create jobs.

Competition and enterprise are good for jobs. That’s why we need a competition health check on all markets and that is why Labour have promised to act on the broken energy market.

Indeed, policy-makers are now much clearer about the huge impact that high performing entrepreneurial firms can have on jobs.

Not too long ago, in fact NESTA argued that ‘the vital 6%’ of new firms may account for upto half of net new jobs.

That is a very powerful case for supporting that handful of new challenger firms that can change the way we do business and employ an awful lot of people along the way.

There are then two further big issues which are key to inclusive growth.

First, we have to make sure that no place is left behind.

And second, we have to make sure that the burden of paying for all this is fairly shared.

 

 

Finally, there are two fields of policy where politicians are perhaps more important – but where companies have a big stake to getting the policy right.

Here in Britain, poverty is now more spatially concentrated than ever before.

We cannot create a country of inclusive growth if swathes of our country are left behind.

Fostering a better balance between rich and poor areas is critical to creating a country where wealth is better shared.

There are no signs that this too may be a matter of cross-party consensus – at least on paper.

Lord Heseltine’s review of growth was an admirable attempt to sketch out a practical plan for re-balancing growth across the United Kingdom by letting local areas take control of their own destiny.

It was simply a shame that the government which commissioned Lord Heseltine then did their best to ignore him.

I can assure you that when Lord Adonis presents his plan on many of the same issues, we won’t ignore him. We will turn his ideas into action.

 

 

Finally, we cannot ignore the question of tax.

As the OECD recognised in their survey of top incomes, tax policy absolutely plays a role in determining who profits from growth.

Quite simply, government cannot support policies for more inclusive growth – like good education systems, or tax credits, or regional economic development – unless people pay their taxes.

And business leaders know that a good level playing field on tax policy, where tax avoidance is not used to undercut competitors – is key to good business, and higher levels of public trust.

Conclusion:

Writing in 1926, JM Keynes in the End of Laissez Faire wrote:

‘Devotees of capitalism are often unduly conservative and reject reforms in its technique which might really strengthen and preserve it for fear that they may prove to be the first steps away from capitalism itself’[7].

A century ago, society, government and business came together to win the war.

And for all the mistakes, a very different kind of economy was born – and a very different kind of partnership between business and government.

It wasn’t strong enough to defeat old prejudices like protectionism or old ideas like the gold standard – that took the hard work of the policy makers at Bretton Woods.

Today, the debate about a new economy, a more inclusive capitalism, where work once again commands it’s just reward now has the potential to unite us, not divide us.

It’s time to get round the table and talk.

Ends


[1] http://www.imf.org/external/pubs/ft/sdn/2014/sdn1402.pdf

[2] IFS ‘Living Standards’ 2013 – http://www.ifs.org.uk/budgets/as2013/as2013_david.pdf

[3] OECD, Top Incomes and Taxation in OECD Countries: Was the crisis a game changer’ May 2014

[4] Distribution of Total Wealth, ONS May 2014

[5] Lord Leverhulme, p243.

[6] D Barton and M Wiseman, Focusing Capital on the Long Term, Harvard Business Review, February 2014

[7] JM Keynes, The end of laissez-faire, 1926

My speech – ‘Robbins Rebooted’ – 1 April 2014

 

Robbins Rebooted 

 

Agenda 2030 and Britain’s Higher Education Speech to Business in the Community: Role of Universities in Fostering Leaders

 

Tuesday 1st April 2014

 

 

Thank you very much.

 

It’s a great pleasure to speak to Business in the Community today.

 

I had to come and speak today in part to say thank you for everything you’ve done to help me in Hodge Hill, enjoining our fight against youth unemployment.

 

Over the years, and never more than today, you brought the enterprise, power and creativity of business to tackling problems we share in common, and today I want to draw on that tradition to talk about how we can work ever closer together in the field of higher education, preparing our young people and preparing our country for a very different world taking shape around us.

 

 

Let me start with where the country now finds itself.

 

You might say: what a difference a fortnight makes.

 

Last weekend saw much speculation about Labour’s position on how we pay for higher education. In due course, we will set out our plans. But Ed Miliband has made clear our direction of travel.

We have to reduce down the huge levels of debt write-off that make the today’s system unsustainable.

 

That’s the lesson from the revelations of the last two weeks;

 

Revelations which have driven a coach and horses through the government’s higher education policy.

 

Revelations that have raised huge concerns for students, for taxpayers and for Vice Chancellors.

 

They are revelations which have comprehensively changing the terms of the debate.

 

 

First, there was the admission to me in a parliamentary answer that the government now expects the write off of student loans to rise so high, that the new system of tripling student fees might not save the tax payer any money.

 

A surge of speculation that student fees might have to rise even higher quickly followed. In the Commons, Nick Clegg said there was no case for such a rise, but in the TV studio, David Willetts was telling a different story.

 

After her interview with the Universities Minister, Cathy Newman of Channel 4 News reported:

 

“As David Willetts was leaving the studio, I suggested it sounded like another tuition fees rise was on the way… ‘Could be’ was his response.”

 

Mr Clegg tried to defend himself by arguing that the amount students would pay back each month was less than under the old system.

 

He somehow forgot to mention that the average student today won’t pay their loans back for 27 years. That means students today will approaching 50 before they are free from the debt burden.

 

In stark contrast, it was estimated that for students starting after 2006/07 the average Student Loan would take 11 years to repay for men and 16 years for women.

 

This last week, we got the story’s latest instalment, when a fresh batch of answers arrived to the parliamentary questions I tabled on the scale of private providers now enjoying hundreds of millions of pounds of support funded by the taxpayer.

 

The sheer scale of the subsidy surprised everyone.

 

Nearly £1 billion of publicly funded loans and maintenance grants are now flowing through students to private providers.

 

That, as the Guardian pointed out, is a 2100 per cent increase in recent years.

 

But what really surprised me, is that government has no idea about the level of profit these private providers are now making.

 

In a parliamentary answer to me, David Willetts said, “The Department has not made an assessment of the level of profits made by for-profit alternative providers with courses of higher education that are designated for student support”.

 

But, worse, it turns out that the government doesn’t even check whether a college is profit making or charitable before it agrees loan support.

 

A further answer confessed; ‘In assessing students’ eligibility for student loans, the Department does not distinguish between those alternative learning providers that operate on a commercial for-profit basis, and those that do not. The information requested is not available.”

 

Just to round it off, Mr Willetts underlined; “The Department has no plans to regulate the profitability of alternative providers with courses of higher education designated for student support.”

 

You heard it.

 

No plans.

 

None.

 

Together these revelations have profound implications for the future.

 

Not so long ago, many in the university sector set out to me how uncapping students into the next parliament was a vote winner for the Tories.

 

But now it’s clear that what is proposed is a system that combines the worst aspects of a free for all and a money pit.

 

Call me old fashioned, but I happen to believe that public universities do a brilliant job.

 

The national system of higher education that emerged in the 1960s, with a national admissions system and a national grant regime ensured that today we enjoy not only world class universities, but a world class university system.

 

It’s diverse, it’s competitive in a way that encourages innovation in research and teaching and it deliver high standards.

 

It’s also highly efficient.

 

I happen to think we should be very proud of it.

 

What is not clear to me is how it is good for public universities to maintain a system where half of the new money earmarked for expansion is locked up in an escrow account to provide for loan write-offs, and where there is zero control of how much is creamed off in profit by a hungry private sector. I look forward to hearing the arguments in favour.

 

With this is mind, it’s very welcome that Universities UK is grasping the nettle and seeking to maximise cross party consensus on a new way forward.

 

I very much look forward to joining those talks, and to help get the conversation going I want to set out today the principles which I think should guide us.

 

These are principles deeply rooted in our history and academic traditions, but more importantly a sense of the future, in a world turning east, where technology is moving faster than ever, and where we in Britain need new answers to help us, collectively, earn our way to a better standard of living.

 

It’s not so much Robbins Revisited. Its Robbins Rebooted.

 

 

Principles

 

The starting point for our principles is the speech Chuka Umunna made to the Engineering Employers Federation a few weeks ago.

 

In that speech, Chuka set out the basic truth in politics today.

 

In a country, where living standards are under such acute pressure and where the deficit still looms so large, innovation is the only way out of austerity.

 

As Chuka Umunna put it; “We, the Labour Party, are clear about our goal: a high-productivity, high-skilled, innovation-led economy.”

 

That is why our universities are so important. They are the power-houses of the knowledge economy. They need to be bigger, stronger, more central to our economy in the years to come.

 

As the Royal Society put it so simply, so eloquently in 2010, Britain need to put science and innovation at the heart of a strategy for long-term economic growth.

 

Unless we grow smarter, we will grow poorer.

 

Over the last five months, I’ve travelled all over Britain talking to hundreds of students and teachers, scientists, innovators, business leaders large and small, sixth-formers and their parents, and most of the nation’s vice chancellors.

 

I’ve been struck how our debate is in sore need of a few basic principles.

 

You can take as read, my sympathy with some fundamentals, set out with characteristic eloquence by Nigel Thrift in his recent speech: British Higher Education: Where Next?

 

In particular I want to double underline what Nigel said about the importance of universities as ‘disinterested producers of knowledge for its own sake’ and that ‘universities must remain as conscious moulders of sceptical and informed subjects’, ‘focused on being public goods’.

 

Today, however, I want to step out further, and having reflected both on the IPPR’s seminal Commission on Higher Education, and Mr Willetts own contribution to the debate, Robbins Revisited, I want to set out five tests that I think should help us judge what good university reform looks like.

 

 

First, obviously, is financial sustainability. Good research, good teaching, needs good and sure foundations.

 

And what is now clear is the Tories’ student loan system that pays for our universities, voted through by the Lib Dems, is a time-bomb.

 

According to the Public Accounts Committee, its storing up perhaps £70-80 billion of debts that may never be repaid.

 

Today’s system with tripled fees and big debts for graduates is now as expensive as the system where students were charged a third as much. It has become an indefensible system. So people should now stop trying to defend it. Or relying on it for the future.

 

 

The second test, must be: what is good for our science base, our store of knowledge and wisdom. Whatever is proposed for the future must pass one simple judgement: is it good or bad for the science base?

 

Today, while other powers emerging and established are investing in science like never before, we are cutting science spending across government according to the Campaign for Science and Engineering, to the tune of over £800 million.

 

Nationally, research and development as a percentage of GDP is at its lowest level since the turn of the century. Last year it fell for the first time since 1985.

 

 

Test number three, is student choice. Are we offering students a real choice of pathways through to higher level skills?

 

Today, while we do a decent job of getting A level students or those on an academic route to university, we do a terrible job of lifting apprentices up to the same standard.

 

While great firms, like Rolls Royce train fifty per cent of their apprentices to degree level skills, as a country we manage just six per cent. That’s right, six per cent. The grand total of 6,000 people. It’s not good enough. Its not good enough for the future.

 

As if I needed persuading, this was a point rammed home for me in Paris yesterday by OECD economists and policy advisors.

 

 

Fourth, we need to do far more to fix Britain’s skills base; when regional skills gaps are opening wide all over Britain, then I’m afraid we do need a deeper conversation between business and universities about the graduates we’re educating.

 

I’m a firm believer in education for education’s sake.

 

But I know too that a good job is fundamental to the way we flourish and right now half of graduates are not in graduate level jobs.

 

 

Finally, Labour will always demand faster progress when it comes to social mobility.

 

The shutdown of Aim Higher was obviously foolish. The IPPR is amongst others who have proposed new ideas like a ‘student premium’.

 

NUS has consistently argued for better hardship funds to help poor students stay the course.

 

It’s time these arguments were taken seriously.

 

These are the tests that should shape the way we think about the future. The government’s proposal to pour more money into ‘more of the same’ has now been exposed as impossible.

 

What’s proposed isn’t sustainable, it does nothing to boost the science base, diversify student choice, or bring universities and business together, or deliver fast enough progress towards social mobility.

 

Half the new money proposed in the next parliament bleeds straight out to provide for debt write-off – and much of what’s left will go straight to the hundreds of private providers whose students now consume north of £850 million a year in public subsidy, while zero control on their profitability.

 

I put it to you that this is not a system that is fit for purpose.

 

This year we celebrate an important anniversary in the Labour calendar. The 50th anniversary of Harold Wilson’s election – a moment when a party relentlessly focused on the future swept away an old boy network lost in the modern world.

 

Higher education was central to our offer then.

 

And so it is today.

 

The Tory ways have failed.

 

It’s time for a new way forward.

 

ENDS

 

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