A book by leading Tory modernisers, including David Willetts, advocates a state-backed loan system for postgraduates supported by undergraduates repaying more, and describes student protesters as "misinformed".

Tory Modernisation 2.0: The Future of the Conservative Party was published on 16 January by Bright Blue, a group that campaigns for the party to implement "liberal, progressive policies". The book may offer signals as to Tory manifesto commitments on universities if the modernisers hold sway.

Bright Blue's advisory board includes Theresa May, the home secretary, and the book's foreword was written by Francis Maude, minister for the Cabinet Office.

Ryan Shorthouse, Bright Blue's director and a special adviser to Mr Willetts, the universities and science minister, when he was in opposition, contributes a chapter on education reform.

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It is "untrue" to say that "too many people go to university", he writes. "It's the complete opposite", with higher-level skills "essential for UK competitiveness".

He goes on to argue that income-contingent loans make university affordable despite the trebling of fees. "The student protesting...[in 2010] was misinformed," he adds.

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But he notes that public subsidies to the loans system mean that undergraduate numbers remain capped.

"Until the cap goes, we won't have a real market which gives students value for money," he writes. As a solution, he proposes to "extend the loan repayment period or reduce the repayment income threshold".

Mr Shorthouse suggests that "maybe universities, whose balance sheets are healthy...could contribute to reducing the loan subsidy".

He warns that postgraduate study, increasingly demanded by employers, comes with "eye-watering fees" that are "truly off-putting to those from modest backgrounds".

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He adds: "Reduce the subsidy on undergraduate student loans...and extend government loans to postgraduates. Do it now."

A chapter by Mr Willetts cites the coalition's science funding policy as an example of "the creative power of government".

john.morgan@tsleducation.com.