The UK has too many biology and history graduates and not enough people with vocational skills entering the workforce, peers say in a critical report.

The House of Lords’ economic affairs committee has called for an overhaul of the "deeply unfair" higher and further education system.

The UK has a “skills mismatch” and “there are particular shortages of science, technology, engineering and mathematics (STEM) skills at technician level, but an oversupply in other areas, such as biological science graduates,” according to the National Audit Office.

As a result, “the oversupply of some graduate-level skills, and the undersupply of technician-level skills, could result in graduates occupying technician-level roles for which they are overqualified and under-skilled,” a report, published today, says.

This, in turn, can lead to “low morale and high staff turnover” for businesses.

The problem has been caused by a student funding system that is “too heavily skewed" towards full-time degrees and which has led to the "collapse" of part-time, flexible options and skills training.