SPECIAL FEATURE
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A CONVERSATION WITH LORD DAVID WILLETTS By Swati Raipancholia, Economics (2019) and Anna Howell, Economics (2019)
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his year, the University of Nottingham had the pleasure of welcoming and interviewing The Right Honorable David Willetts: a respected Conservative party politician, academic, and Minister of State for Universities and Science from 2010 to 2015. Our conversation with Lord Willetts was centered around the themes presented in his latest book: ‘A University Education’ and one of his most recent TED Talks on changing attitudes to university. As an important figure in the field of education policy, Lord Willets’ input provided an enlightening perspective on how the university system could operate under current economic conditions.
As spending is due to increase significantly in the UK in the next 20 years, how would you propose revising the tax system to ease the income gaps between baby boomers and our generation of graduates and youngpeople generally?
You’re right, even with no change in public policy, just maintaining the kind of welfare state, as we are used to, does put up public spending as a percentage of GDP. I think an important source of tax revenue is capital taxes. What has happened in the last 20-30 years, is that the value of capital has risen relative to GDP from about 3-times GDP to about 7-times GDP. Meanwhile, the tax taker of capital as a percentage of GDP has not increased at all. The main capital tax we’ve got, council tax, is a very poorly designed tax. There are different ways in which you could tax capital. You can start with some of the specifics like property, as some property is undertaxed; second homes are definitely undertaxed. In general, housing is undertaxed. You could make council tax more progressive. You could reform inheritance tax which is known as a classic bank tax – it’s at a very high rate but starting above at a very high threshold. Those are the kind of things that we propose the government should look at next.
Regarding your TED Talk on the changing attitudes to university, do you think there’s a stigma around that universities ranked comparatively low on tables such as ‘The Complete University Guide’ are not worth attending?
I think the ranking of universities by research performance has relatively reliable metrics – not perfect. There’s actually a
piece out this week that citations of articles are not as good a metric as we thought. Basically, we can rank universities by research, for example a university like this one (University of Nottingham) scores quite highly in research. When it comes to the other elements in the rankings, I think they’re much more dubious. Teaching quality is very hard to assess and employment outcomes for students is much more dubious. Employment outcomes are heavily shaped by, firstly, the subject that you do, secondly, by prior attainment when you arrive and thirdly, by parental background. Some of the rankings are incredibly crude, they literally just rank universities by the grades of the entrance requirements. That means that you’re ranking universities as a signalling function, it’s no measure of the added value of universities or quality of teaching, it’s just telling people, including employers, about good A-Level grades. I think that’s a very poor measure of university performance. My frustration when I was the minister, and we still haven’t cracked it although people have tried, is, comparing with schools, we haven’t got any reliable measure of added value – the teaching gain, the learning gain while at university. Partly because, of course, there is no standard exam for university leavers.
What has happened in the last 20-30 years, is that the value of capital has risen relative to GDP from about 3-times GDP to about 7-times GDP. Once Brexit deals have been finalised, what do you predict will happen to the fees paid by EU students starting 2020? There is talk of the fees increasing to be the same amount as international students, is this a good thing? Do you think it will happen?
I don’t know what will happen. In 2020, we will still be in the transition period, so I would be surprised if there was any significant change then. Down the track, this is one of the many issues for negotiation. You could imagine that, at the end of the transition period, EU students are in the same position as overseas students. Equally, the government may do a deal where you keep some of the current regime. Who knows? They might not extend entitlements to loans. You
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