Why is it now that most employers in the UK ask for people to have a degree?

I think if someone applies to an employer with a degree it's a good thing that can add value to a candidates application to work for a company. But I do not believe it should be the be all and the end all. I do believe that work experience and the skills for work are more important than university and I do believe that it is wrong saying 'you must have a degree to work for us'. University isn't something that suits everyone. I was also reading yesterday that now there are 'too many graduates' in Britain, and that made me question if it this situation had been created by the demand that there is for a degree now. Anyhow, I was just wondering if someone could enlighten me on why this was.