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Old Labour planned student loans in 1967

David Walker delves into newly-released government files to find that radical changes to funding were considered long ago

David Blunkett can relax. According to official papers released this week, Old Labour also contemplated radical changes in student financing. The replacement of students' grants by loans was first considered by the Wilson government 30 years ago.

Cabinet papers from 1967, made available last week, show the then education secretary Tony Crosland proposing substantial increases in further education fees and a loans scheme for university students.

These radical changes were much more preferable, he told James Callaghan, the Chancellor, than cuts in the schools budget. According to a memo sent that July, Crosland would have done anything rather than give up Labour's promise to raise the school-leaving age to 16 in 1970.

Referring to other, colourful spending commitments around that year, he said: "The party would hardly think the leaving age less urgent than colour TV or local radio or BBC pop or Concord (sic), all of which we seem to be able to afford."

He quoted a phrase from Michael Stewart, the then first secretary in charge of economic affairs, to the effect that "education is an essential support for economic growth".

However, Labour did renege on its promise and the raising of the school-leaving age was postponed until 1973, though the decision was taken only after Crosland had ceased to be education secretary and the Wilson government had undergone the humiliation of devaluing the pound.

Crosland's loans scheme was to have been operated through the commercial banks. He told the Treasury that savings from loans would take time, perhaps five or six years, before they came through. In a curious echo of what the Thatcher government decided to do 25 years later, Crosland proposed to freeze grants at their present level and gradually substitute loans to pay for student maintenance.

The papers show that some of the problems confronting Blair's Government are far from new. Though the phrase "social exclusion" was not used, official 1967 memoranda linked poor school performance and family disadvantage. Crosland was pressing his Cabinet colleagues to commit money to the proposals for "educational priority areas" as recommended in the Plowden Report.

"There are," he wrote in a Cabinet paper, "high correlations between family poverty and social deprivation in the education sense. Schools in the rundown areas find it hard to attract good teachers, premises are often dingy and inadequate, home environment is painfully limited and parents give children no encouragement."

What was needed was special help for these schools, he said. He wanted new nursery schools in areas of greatest need. But he accepted "an early start may well depend on whether we can staff additional nursery schools with a much smaller proportion of qualified teachers than the existing schools enjoy."

Government, the records show, is not always conducted formally. One prime ministerial file contains a hand-written letter on notepaper headed Hotel Corte dei Butteri in Fonteblanda, Italy. It contains junior arts and education minister Jennie Lee's first progress report on the establishment of Wilson's pet project, the Open University, written while she was on holiday.

Because she was an old political comrade of Wilson she addressed her report to Wilson's private secretary rather then via the civil service machinery. The OU was a bright spot in a year beset by economic problems. "It is nice," she wrote, "to be able to report on something that need not be ruined by the appalling international complications."

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