Smothered in academic robes, perfumed by prosecco and with only a few of the blokes wearing sports socks beneath their suits, I watched students graduate at one of Britain’s top-10 universities last week.
The ceremony was for engineering students, so there’s no chance of their department getting shut down by Rishi Sunak’s “crackdown on rip-off degrees”. In fact, for the young men and women I met, the world is now their proverbial oyster.
With an ageing workforce, and an investment boom across defence, green energy and construction, those young engineers can be certain of higher than average incomes; not so for their counterparts who studied for non-vocational humanities.
So what’s wrong with Sunak’s new policy? He has pledged to cap student numbers on degree courses that do not provably lead to earnings above average for those without degrees, and to encourage more 18-year-olds into vocational training. What’s wrong is that the whole higher education system is a mess, and Sunak’ gestural tinkering does nothing to sort that out.
As a result, we are staring down the barrel of a mid-century skills crisis that will stand in the way of everything that governments need to achieve – from better healthcare, to cleaner energy, to rising real incomes and a highly productive economy.
When last authoritatively surveyed, by the Institute for Fiscal Studies in 2018, the correlation between degrees and graduate earnings looked like this. Medicine, dentistry, maths and economics correlate with a salary 30% above the average graduate five years into your career; studying creative arts correlates with earning 15% below. Even filtered for social background and selection, the outcomes remain dramatically uneven.
So if you, as an individual, want to earn more and can do the work – which means maths, further maths and at least two science A-levels – doing a STEM or economics degree is a logical choice. But going to the LSE has a much bigger impact than any of these choices; or Bath University, or the Royal Veterinary College.
The signalling effect of going to a prestigious institution could be a much bigger factor than the degree subject; so could the connections you make while doing so. That’s why, said the economists who did the survey, you cannot interpret correlation as cause when it comes to relating degree courses TO higher incomes.
So what policy should be concerned with is not the individual but the wider socio-economic outcome. And here’s where the complications of 30-odd years of marketisation kick in.
Unless British universities produce tens of thousands more engineers per year, the green transition is stuffed. Yet among the young engineers I watched graduate this July, I am certain that many are mesmerised by the allure of business consultancy and the financial markets, because the pay is better, you can live in a global city and you don’t have to work in a factory, building site or on a nuclear sub.
Unless universities produce tens of thousands more doctors and nurses, the NHS workforce plan cannot be delivered. Yet even if they do, there is nothing currently to stop those qualified doctors and nurses professionals slinging their hooks to Australia, and nothing to compel them to work in the Welsh valleys instead of a big-city teaching hospital. In short, all the incentives for Britain’s most talented graduates seem misaligned with those of our economy and society.
In addition, it is true that there is a “missing middle” – of skilled, trained non-graduates of the kind that make up the backbone of the German automotive industry. Nothing the Tory government has done so far has made a dent in this problem. Capping the numbers on a few creative writing courses looks unlikely to solve it.
What we need is a whole-economy workforce strategy. It took the government 13 years to get around to writing one for the NHS alone, and its predicted outcomes will not kick in until the mid-2030s. But nobody – and I mean this literally – is responsible for asking: how might the NHS training plan negatively affect numbers in life sciences R&D, or the veterinary professions?
Once you take a strategic view of the skills crisis, you are looking at something similar to what the Baldwin government had to face in 1936, when the horrible necessity of rearmament dawned. They could not grow defence and shipbuilding without bankrupting manufacturing. They could not authorise selective recruitment from, say, a sewing machine factory to an aircraft production line, without collapsing productivity. They could not order workers around under military discipline for fear of a second general strike. And they could not boost army numbers without crippling industry.
And this was in a highly regimented and regulated economy where people tended to do as they were told.
How much greater would our own problems look if someone actually calibrated them against the national and global crises we face? We need to create a renewables engineering workforce, a massively expanded healthcare workforce while replacing tens of thousands of teachers leaving the profession due to exhaustion, and boosting R&D across all sectors.
Yet there is no overall national skills plan and nobody in government whose job it is to think of one. Capping the numbers on a few performing arts or tourism degrees is not going to solve this. Nor is dissing the universities that provide them, or raising the epic debt levels graduates are carrying.
We just need a more skilled and educated workforce, whether to degree level or degree equivalent. Any politician who refuses to answer how we’re going to get one is basically in the business of fantasy economics.
