Britons in their sixties must accept that they are the “luckiest generation” in history, former Conservative leader Lord William Hague has said, as he called for a “national conversation” about student loans and the bleak jobs market.
In an interview with the FT, the chancellor of the University of Oxford said young people were “systematically losing out in the economy” and warned that the “unsustainable” student loan system risked putting people off higher education at a time when graduates were needed.
“My generation [those in their sixties] . . . we are the luckiest generation that has ever lived, in multiple ways, but partly because we’ve lived through this period where all the house prices went up . . . we still got defined benefit pension schemes . . . and we [went to university] before student loans,” said Hague, 64.
“There is going to have to be a national conversation about the economic position of young people, and that is going to have to take into account that my generation is on the whole, historically speaking, quite well off.”
Hague’s comments come as calls grow for the government to reform the student loans system, respond to the advance of AI in white-collar work and tackle UK youth unemployment, which has climbed to its highest level in more than a decade.
Official data shows almost 950,000 people aged between 16 and 24 are not in education, employment or training, and cuts to headcount over the past year have been concentrated in sectors such as retail and hospitality.
Both employ large numbers of young people and were hit hard by chancellor Rachel Reeves’ increase in national insurance contributions in the 2024 Budget.
Last year the government said annual tuition fees for domestic students in England would rise from £9,535 to £9,790 in 2026-27, and pledged to permanently link future increases to inflation.
It also said it would freeze the salary threshold at which people on “Plan 2” student loans, taken out between 2012 and 2023, started repaying their tuition fees at £29,385 from 2027, prompting claims of a “stealth tax” rise.
Students today leave university with just over £50,000 on average in loan debt, in part because of interest charges, according to the Institute for Fiscal Studies think-tank.
Hague, who was Tory leader when Sir Tony Blair’s government introduced tuition fees in 1998, declined to say how he would change the loans system but insisted that “there will have to be a solution”.
“It’s another thing that hits the people in the middle, on top of how the income tax system works . . . I think that’s a big disincentive for people in the future,” he said. “Whatever happens with AI . . . the need to have large numbers of people coming through higher education is not going to go away.”
Asked about the government’s wider approach to higher education, Hague said universities had to be seen as among Britain’s “greatest assets” and welcomed Reeves’ commitment to the Oxford-Cambridge Arc.
Shelved four years ago after then Conservative prime minister Boris Johnson prioritised “levelling up” poorer regions, the project is designed to connect the high-growth economies of Oxford, Cambridge and Milton Keynes.
But Hague added that ministers “could do so much” to boost tax incentives for venture capitalists backing university spinout companies, as well as overhauling procurement policy to support homegrown start-ups.
While tuition fees would “have to keep rising” to help the higher education sector stay afloat, Hague warned against a planned £925 annual charge on international students to fund maintenance grants for domestic students.
“Even Donald Trump taxes other people’s exports, not America’s own,” said Hague, foreign secretary between 2010 and 2014, referring to the US president’s tariff regime. “Avoiding taxing our own successful exports would also be part of a successful economic policy.”
Education secretary Bridget Phillipson said on Sunday that there were “flaws” in the student loan system and pledged to “look at” Plan 2 loans. But she stressed that they had been introduced under the previous Tory government.
“We will continue to keep under review the ways in which we can make life better for graduates,” Phillipson told the BBC.
Tory leader Kemi Badenoch meanwhile promised to cap the interest paid by people repaying student loans, describing the Plan 2 system as “broken”.
On Tuesday Hague will award honorary degrees to eight “distinguished individuals” including former US secretary of state John Kerry, elections expert Sir John Curtice and journalist Christina Lamb, in a ceremony to mark his first year as the 160th chancellor.
The position, which dates back to 1224, is unpaid and largely ceremonial, and it has become increasingly focused on fundraising at a time when universities are scrapping courses, making redundancies and exploring mergers.
In the year to July 2025, Oxford’s income, which does not include the university’s £4.2bn endowment, held steady at £3bn. Tuition fees and education contracts yielded £600mn, up 10 per cent on the previous 12 months. New cash gifts and commitment pledges amounted to £220mn.
A student of philosophy, politics and economics at Magdalen College and president of the Oxford Union in the early 1980s, Hague was a frontrunner for the chancellorship from the outset and waged a high-profile campaign in 2024.
He beat four other shortlisted candidates: Lady Elish Angiolini, former principal of St Hugh’s College and another of Tuesday’s honorands, Labour peer Baroness Jan Royall, Tory ex-attorney-general Dominic Grieve and Lord Peter Mandelson.
Dons told the FT they had breathed a sigh of relief about the election result since documents published by the US Department of Justice this year revealed the extent of Mandelson’s relationship with sex offender Jeffrey Epstein. “Phew!” said one. Another said: “Can you imagine?”
Hague, who will serve a maximum term of 10 years, did not comment on Mandelson but has spoken to Angiolini, Grieve and Royall since taking office, and stressed that the “biggest challenge” for universities in the next decade would be preparing learners to enter a world reshaped by AI.
“The students are as brilliant as ever. The research is, in most cases, world-leading. The economic impact is expanding all the time,” he said. “In a world of so much disorder and hatred . . . it is a really inspiring thing to see.”