On July 17 2023, Prime Minister Rishi Sunak unveiled plans to limit students enrolling to so-called ‘rip-off’ university degrees. He justified this policy position on the basis that 30 per-cent of university graduates in the U.K. did not find high-skilled employment nor did they enter further study. Perhaps more worrying, as the Prime Minister explained, a fifth of all university graduates in the U.K. would be financially better off not having gone to university.

This latter point is particularly accentuated by the relatively high cost of education at public universities in the United Kingdom with respect to the rest of Europe. But, even in a hypothetical scenario where the most part of tuition costs were absorbed by taxpayers, this would not change the first point of concern: that British universities are not sufficiently training students to enter the high-skilled workforce (which, according to government guidelines, can be many types of work).

Justification and Opposition

Arguably, upskilling students to enter the workforce is the primary telos of higher education institutions. Therefore, if those institutions are failing to perform that function effectively whilst indebting young adults and diverting tax revenues to inefficient institutions, it might be that case to increase the standard of students entering higher education by increasing the skills young people acquire in their formative years, as well as diversifying the post-16 pathways for those students who might not go to university should Sunak’s proposal come to fruition. Indeed, this is what much of what Sunak’s recent career as a politician has been dedicated to: as Chancellor of the Exchequer, he approved £1.6bn funding for T-level qualifications and since taking office, his government has announced a clamp down on “anti-maths” culture by extending compulsory mathematics in post-16 secondary education. However, with regards to the ‘rip-off’ degree crack down, there are still a lot of things which have yet to be defined. Specifically, the criterion for a ‘rip-off’ degree and how would those criterion be reviewed in a way that reflects the future of the labour market, rather than the past and present.

For example, if we consider a BSc in XYZ that today has very little employment prospects, but in 5 years’ time, that degree has significantly better labour market performance for graduates – how would British universities by able to catch up with international institutions that might have greater expertise in that specific field? There is also the question of discriminating against specific subjects or disciplines – namely humanities or social science. It is perfectly justifiable to intervene to increase the quality of higher education, but perhaps an alternative approach could be to place a requirement for university departments to have teaching staff with more technical diversity to avoid academic and pedogeological groupthink.

An Ulterior Motive for Reform?

Although a lot of administrative questions remain to be answered in the coming months, the crack down on ‘rip-off’ degrees could remedy a slightly different malaise. That is: declining pension replacement rates and increasing youth unemployment. In 2020, pension replacement rates were around the 58 per-cent mark, making U.K. pension payouts among the 12th lowest in the OECD. Effectively, pensioners on the State Pension lose nearly half of their contributions when they reach qualifying age. As stated by the Office for National Statistics, “[pension] payments by the government for unfunded pensions are financed on an ongoing basis from National Insurance contributions and general taxation”.

So, if the young people entering the workforce decreases (and if a fifth of those young people enter the workforce with substantial debt) at a faster rate than people reaching pension age, the overall pool for unfunded pensions will be proportionally smaller for each individual pensioner. Indeed, in 1990 just under two-thirds of people aged 15-to-24-year-olds were in some form of employment. That number is now around the 50 per-cent mark, which is still better than the average employment rate for that age group in the G7, OECD, and European Union, but the 50 per-cent figure is substantially lower than countries like the Netherlands where three-quarters of 15-to-24-year-olds are employed in some way. Furthermore, Table 1 shows that the proportion of people of working age will decrease slightly with respect to the dependent population between now and 2050.

Table 1 - U.K. Population by Age Group. 2023 data available here, 2050 data available here.

This is a demographic challenge that the UK, as well as the rest of Western Europe, will be contending with more and more as the years go by. Further, the aging population problem will require some sort of unpopular policy reform to European welfare states. As Macron has learnt in France, even something as simple as raising the retirement age can send a leading economy into calamity. In the U.K., the State Pension age has already risen to 67 for both men and women. A further increase to 68 may be on the cards, but Rishi Sunak’s education policies suggest the British government is trying to ameliorate the problem by increasing the employment prospects of the youngest earners rather than narrowly focusing on improving the fiscal efficiency of British universities.

Summary and Outlook

A lot of the practicalities of Rishi Sunak’s push to crack down on ‘rip-off’ degrees are yet to be seen. Concern and opposition are justified and necessary but claims that the proposal is an “attack on aspiration” are a bit far-fetched at the moment. Not least because the option of a decent State Pension is a public service worth protecting and maintaining, but substantially because little is known for the moment about this policy. Thus, until postulation becomes policy, criticisms are as constructive as they are speculative.

That said, Rishi Sunak’s push for education reform is warranted not just on pedagogical grounds but also for the sake of a crucial welfare service. However, the Conservative government must also avoid – by intent or miscalculation – to create elitist bifurcations between academic and technical qualifications.