A.H. Halsey says both graduates and taxpayers must pay for higher education. How shall we pay for our new mass system of tertiary education? We cannot incidentally stop at the 1992 decision to call all polytechnics universities and fund them all as if they were polytechnics. We must unify all post-compulsory education and find a viable mix of public and private resource.

Oddly enough we have seen here an old question if in a new form. Alfred Marshall, as long ago as 1872, proposed that educational expansion could take Britain out of the misery of poverty, with long hours of work and low wages into a wealthy, democratic and civilised age with short hours and high wages for a trained work force and an educated citizenry. Today's dreams are essentially the same except that we have substituted universities for secondary schools.

You might think it is easy. We are at least four times better off than in Marshall's day, other countries have found ways to make recipients pay part of the costs of their graduation and all parties and persons agree that the nation needs to be better educated. Some, especially Labour and Conservative as well as Liberal leaders, narrow the focus and make qualifications into the means that will deliver the ends of capacity to compete with German workaholics, American entrepreneurs and Asian tigers, all of which may be partly valid, though reality is much more complex.

The essential point, as Marshall pointed out, is that the uplift would be self-sustaining. The social and personal returns would pay for their own growth.

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Others, at present rather quiet though they were once the dominant voice of the left, insist that the nation needs to be more civilised and all must therefore learn what is most true and most beautiful. The economism of our political leaders and the managerialism they encourage to creep across academia, conspire to discourage everything other than vocational studies.

The trouble here is that irrational and verbose opposition to enlightenment and science has formed a formidable force in the colleges, leading not only to mistrust of politicians but also to the sheltering of frivolous philosophers (who dream of some crazy Parisian groupuscule where all you have to do to announce a new age is to "critique" an established period or practice by prescripting it with the word "post"). I do not mind whether arguments for expanding learning are couched in economic or cultural terms. I want us all to be better workers and better citizens though the latter, I suspect, is a more reliable and permanent friend of the learning society.

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On the other hand you may think that paying for higher education is impossibly difficult. People want soap operas and the National Lottery. Both Conservative and future Labour governments seek to reduce and not to raise taxation. But, let us be unequivocal about this, no movement towards mass education, primary, secondary or tertiary, has ever occurred in education history without substantial government finance. A government that seeks wealth for the nation cannot avoid colossal investment in its people. It must give relative priority to education and allocate accordingly to health and welfare. Here Labour has the edge. But a government of either stripe must at least recognise that the country is three times better off than Attlee's or Churchill's when first and second strides were made, in the shape of the 1944 Act and the late acceptance of Robbins.

Again you may say that these past reforms only created the problem of an overburdened state. R. A. Butler brought in secondary schools for all and no grammar school fees. Robbins simply ignored the Anderson committee on student support and planned for a trebling of the elite system of full-time undergraduates aged 18 to 21 attending universities for three years on green-field sites with names to challenge the anti- quity of Oxford and Cambridge.

So we quickly ended up with student support costs that were higher per capita than those of our industrial competitors. True, but also notice that our talent search was more efficient than that of Germany or France, that our universities were the envy of the world and, along with the BBC, were our most successful export industry.

Nevertheless, the deficiencies of the system were also glaring. It was backward looking. It defined the student as a full-time undergraduate and usually male. Other learners were ignored or given the right only to discretionary grants. The system did not fit modern notions of lifelong learning for all. It thought only about equity among gentlemen and was egalitarian only in the sense of establishing the equivalent of a fair competition for entry to a mandarin class of imperial and professional administrators.

Apprenticeships, articles, indus- trial training, further education and night schools all belonged to a different, lower, more proletarian world. In future we have to depend on part-timers, mature students, seekers for non-degree qualifications and in general the hitherto disadvantaged.

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All discrimination against them has to be swept away. Incidentally, an overhaul of the traditional English arrangement whereby an undergraduate from Canterbury bears no different financial burden by choosing to go to Newcastle or Kent is urgently necessary. It is a residue of our gentlemanly imitation of the ancient Chinese practice of removing advanced students from their original locality.

Perhaps the most baleful consequence of expanding the old system was that although a target of one in three of the relevant age group was set for the year 2000, a lid on the total numbers has been applied in practice by the Treasury.

So we have a political quota for United Kingdom applicants and a free market only for foreigners. Moreover the financial nervousness of the state has also reduced the real purchasing power of grants for maintenance and tuition. The maintenance grant is worth a quarter less than in my own days as an ex-service grant holder after the war. And the tuition grant now buys not much more than half of the teaching it bought in those days. The staff/student ratios were then 1:8 or 10 and are now 1:16 or 20. The overhead projector and book list may be argued to be an improvement over the traditional chalk and blackboard; but I doubt it. So what is to be done? We must assume the recurrent education society. We must make x years of education and training a citizen right. We must do more work on Learning Banks. And we must make opportunity fairly available to everyone. Both graduates and taxpayers must pay.

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Ideally the proportionate cost would be to the graduate for personal returns and to the taxpayer for social returns on the investment. Nick Barr and some Australians know how to avoid the early burden of mortgage-type loans, how to keep down the administrative costs of recouping debt and how to make loan repayments income-related. Maureen Woodhall, Howard Glennerster, Geoffrey Holland and Ken Mayhew can guide us through the admittedly complex detail of a fair and adequate funding system.

Between them they know that the British tradition of careful calculation of cost, and returns to individuals and to the community - what is known as political arithmetic - which comes down from the origins of the Royal Society in the 17th century is now at a low ebb. It needs vigorous revival if we are to restore our universities to the top of the international league and usher in a new democratic and more lively era.

There are three main ways of raising the money to sustain higher education. First there is the guild which supported the medieval colleges with the authority of popes and monarchs and the conscience money of known sinners. Second, there is the civil service, to which modern secular European systems have approximated, especially in the 20th century. Then there is the market. Current fashion inclines to the market. I advocate a continuation of all three types.

A. H. Halsey is emeritus professor of the University of Oxford and author of Decline of Donnish Dominion.

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