Speaking from a position of not inconsiderable socioeconomic advantage and having attended a high performing state school, I would assert that so-called "grade discounts" are reasonable. With that said, however, I think it might be better (albeit harder to calculate) to base the policy around more variables than just the performance of their school by also taking into account factors such as income in order to target more accurately the students deserving of the extra assistance.
Better still than any of this would be to try to close the yawning achievement gap between the haves and the have-nots in this country. This would require a two-pronged approach. On the one hand, we need to finally address the problem of woefully inadequate funding for most state schools and give them the resources that they need to deliver a decent standard of education - a workload for teachers that doesn't leave them quitting the profession in droves due to exhaustion, the capacity for every school to offer a broad range of A level subjects, and enough funding to reliably provide pupils with essentials such as subject jotters should really not be too much to ask for in the world's 5th largest economy - coupled with a genuine political effort to reduce some of that grinding poverty and inequality in the first place. Grade discounts are imperfect as they essentially concede that students at disadvantaged schools cannot be expected to match the achievements of their more fortunate peers, which ideally should never be the case. The widespread adoption of "grade discounts" should only be a sticking plaster solution for a much wider societal problem, but applying a sticking plaster like this is still better than failing to treat the wound at all.
Many people here are treating the idea of a “grade discount” as if it is a disincentive towards hard work and should therefore be condemned. In reality, I believe that there is no contradiction between a message emphasising the importance of hard work and a policy - the “grade discount” – which rewards hard work in the face of adverse circumstances. In fact, I take exception to the term “grade discount” in itself as the very word “discount” is a little misleading: it implies that the student receiving the offer has been let of the hook in some way, with less effort expected of them. I think the official term of “contextual offer” reveals a lot more about what is actually going on behind these offers: the acknowledgement thatthe amount of hard work and dedication required to obtain a certain grade in a particular context would have translated into a higher grade in a different context. If for whatever reason, be it economic deprivation or under-resourced teaching, an extra amount of effort is required to achieve an A grade in comparison with someone who is more privileged, then that effort should be acknowledged even if it means giving these two people different offers for the same course.
We’re not saying that it’s OK for the more disadvantaged student not to work hard when we say that they require AAB instead of AAA to enter their chosen course, we’re acknowledging that they already have worked much harder for that hypothetical B than might be obvious at first glance. To ignore this is essentially to demand a higher standard of work and commitment from disadvantaged students than fortunate ones, which really would be unjust. I know that in this answer I’m conflating attending an underperforming school with being from a disadvantaged background, but given that there is a very large overlap between these two groups I think that is permissible.
I know there are plenty of people from underperforming schools and disadvantaged backgrounds who have met and exceeded their unadjusted conditions with flying colours. Good for them, and it is incredibly impressive. However, these students’ achievements should not be taken as evidence that there is no need for contextual admissions processes: that some people succeed in a face of adversity doesn’t mean that the adversity isn’t there. To use a slightly exaggerated example, Thomas Cromwell, son of a blacksmith, became an advisor to King Henry VIII, but that doesn’t mean that Tudor England was a perfect meritocracy J. Almost everyone’s achievements will be, to a greater or lesser extent, influenced by the circumstances in which they find themselves and no-one has the freedom or power to exist and behave completely without regard to those circumstances. I’ve digressed slightly here but I think that if our society as a whole, with its fixation on the idea of personal choice, paid a bit more attention to this point, we’d find ourselves with a little less of the iniquity and inequality that leads to us having to discuss contextual offers here.
(On a final note and speaking of hard work, there is nothing to stop students trying to exceed the requirements of their context-adjusted offers!)