Clap your hands if you believe

With the Treasury stepping out of its traditional role as panto villain, human capital is back atop the political agenda

February 27, 2014

It must be quite satisfying to produce a PhD thesis that only you could have written.

In this week’s Times Higher Education, Andy Westwood, chief executive of GuildHE and a former Labour special adviser, reflects on the lessons he’s learned from doing his doctorate, titled: “Skills and Human Capital under New Labour: what went wrong (and was it my fault?)”.

Not only does the article offer an intriguing glimpse inside the policymaking process, which can be a bit of a black box, but, as Westwood notes, some of it feels strangely current, too.

As in the Labour boom years, a focus on human capital – on skills and higher education – is back in vogue as a way to boost productivity in the age of the knowledge economy.

This reminder of how politics can put private interests and expediency ahead of the greater good is timely amid the wrestling match over immigration

The clearest evidence of this was the chancellor George Osborne’s announcement in the Autumn Statement that the student numbers cap is to be lifted.

Critics point out that not only was this unexpected but the costing seemed highly improbable, too (an echo, perhaps, of New Labour’s sometimes “nebulous” approach to policy).

But even if the sale of the student loan book is not a credible long-term funding plan, where there’s Treasury will, there may be a way that the money can be found – and it is certainly preferable to have the Treasury behind the sector rather than against it.

Osborne’s interest in higher education was also on display last week during a visit to Hong Kong, where he used a speech to business leaders to announce a new partnership between Russell Group institutions and leading Chinese universities.

It is further evidence that the top ranks of the Cabinet have embraced the idea of universities as powerful weapons on the global stage (and, in the Treasury’s case, as economic engines and as investment bait).

Westwood’s article also revives the memory of the extraordinary political divisions within New Labour and the party’s grimly compelling implosion under Gordon Brown.

This reminder of how politics can put private interests and expediency ahead of the greater good is timely in the context of the current wrestling match over immigration.

As the Home Office maintains its stranglehold on the Department for Business, Innovation and Skills, we reveal in our news pages that the Treasury has stepped in to mediate – an intervention that at least raises the hope of David Willetts and Vince Cable retrieving their heads from Theresa May’s armpit.

As the political parties limber up for the general election in 15 months, Osborne’s interest in this issue may be given further impetus by Labour’s position, which Liam Byrne, the shadow universities minister, sets out in our opinion pages.

So what are we to make of this flush of attention from Osborne and his department?Westwood quotes one description of the Treasury as “an old-fashioned villain in an Edwardian melodrama – booed whenever it makes an appearance on stage”.

After the student numbers announcement, it is less pantomime villain, more fairy godmother, he suggests – and this before it intervened in the net migration row.

So far in this Parliament, Osborne has been firmly wedded to his role as the austerity chancellor. He has a year and a bit to prove that Tinker Bell is part of his repertoire, too.

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