In practice how many people would be ok with a poorly educated young man earning £26000 for working a till while their degree educated son earns only £1000 more having gained a PhD and a job in a university?
To be honest, I reckon most PhD graduates wouldn't mind, providing their education was free (ie. they don't graduate in a shit-ton of debt).
Doing a MA / PhD is a kind of work in itself. You produce new research and develop new knowledge from which the rest of society can profit. Because competing postgrad study requires a kind of nerdiness and almost blinkered interest in the subject field, it is obviously of limited interest - ie if PhDs suddenly became free, you likely wouldn't get a mass stampede of people elbowing one another out of the way to get back to University. So if you get to study something you're really interested in for 3 years, at no expense to yourself, and graduate debt-free, I reckon a lot of PhD students would be pretty happy with that.
Fwiw I do like his ideas - especially his ideas about the railways, a living wage, and housing. But I do also think he's a bit of a rampant idealist and I'm not sure it would all work.