Alison Wolf

The Swedes face problems that mirror our own, so it's not surprising that they look with interest at developments in the UK

What do your colleagues think of when they hear the word "Sweden"? Abba, of course, and then social democracy, egalitarianism and free gold-plated childcare. Ask in the education department and you will get some extra, overwhelmingly positive replies. The Swedes? Well, they always come at the top of international achievement surveys, right up there with Japan and Korea. They have a wonderful, properly funded system of adult education.

And their knowledge of foreign languages is fantastic - puts us to shame.

As near educational perfection as you will get in an imperfect world.

Like most stereotypes, these contain a large kernel of truth. So I have been surprised, in recent years, by the interest Swedes take in our own much-criticised system and especially our university reforms. This is partly because the Swedes debate policies seriously, as anyone who was there just before the euro vote can attest. Also, the country's small size probably encourages a wider perspective. However, it is mostly because Sweden's higher education faces problems that mirror our own, and our government has at least engaged with them.

Sweden's politicians are enamoured of "education for growth", in line with their counterparts worldwide. They have pushed adult education to be more overtly vocational and embraced university expansion. Sweden has a 50 per cent target, based on the same economic rationale as the UK's. Like us, they have found that aspirations rise with participation - more than 60 per cent of their teenagers plan to attend university.

Sweden has a unified university system. It is much less hierarchical than ours at an institutional level, but courses differ enormously in prestige, with highly competitive entry for the most desired. And, again like the UK, Sweden is facing an explosion in high grades among school-leavers, although theirs are awarded by teachers rather than through public exams.

Swedish students, like the British, know where their interests lie. The earnings gap between Swedish graduates and non-graduates has held up in the wake of rocketing numbers of enrolments. However, this can be explained only partly by changes in the jobs available. Swedish academics emphasise that numbers of professional and technical jobs have increased far less quickly than graduate numbers, and other jobs have not changed dramatically in their requirements.

Of course, there are differences, too. Swedish admissions procedures are much simpler and are based directly on academic criteria. Working-class students are underrepresented at undergraduate level, relative to their share of the population, but far less so than in the UK. On the other hand, at graduate level, with what we Brits would see as extraordinarily generous stipends and conditions, it is overwhelmingly middle-class students who benefit. "Why should working-class taxpayers subsidise all this?" asks one of my Swedish acquaintances, sounding exactly like a Labour minister defending our new fees policy.

The main difference between us is current taboos. Tuition fees, in Sweden, is a policy that dare not speak its name: higher education must be free to anyone who is accepted. So discussing English policies becomes a debate by proxy on the future of Swedish higher education. And a necessary one, because the bills generated by mass higher education are running up against a fiscal barrier. Sweden is already an extremely high-tax economy, and no one thinks taxes can go much higher.

The problem for public services is that employees' wages must rise with national trends or recruitment becomes a nightmare. Factories or banks with new machines, or simply better fault-finding skills, can increase output without any loss in quality, which is the sort of thing that increased productivity involves. But pre-school and nursery teachers cannot increase the number of small children they care for without reducing quality. The same goes for supervisors of graduate students.

Richard Murray, the chief economist of the Swedish state's Agency for Public Management, has been detailing the extent to which Sweden's welfare services now involve moving money around without actually redistributing income towards the poor. The Swedish welfare state has reached the end of the road, he argues. Indeed, universities bear him out. In 2002 alone there was a 9 per cent increase in student numbers. The Social Democrat government managed to increase "real" funding by 8 per cent. But allow for cost changes, and the real increase turns out to be just 4 per cent.

Many people in Sweden now think that fees are a question of when and how, not if. Until then, expect the minutiae of British parliamentary in-fighting to be of surprising interest on the shores of the Baltic Sea.

Alison Wolf is professor of management at King's College London.