Tuition fees: Lib Dems pay the price but students get the bill

The Government’s policy on higher and further education is deeply damaging, but the Tories who masterminded the policy hope to get away with it.  They have trebled tuition fees to £9000 a year not because they want to expand student numbers, but to fill the hole created by their 80% cut in funding for university teaching.  They have decided to transfer the burden of funding higher education from the state to students.  The Lib Dems have become the lightning rod for student anger after spectacularly abandoning their high profile pre-election pledge to oppose any increase in fees.  They appear to have lied in order to win votes and students, many of whom voted Lib Dem on the basis of this pledge, are incensed.  For Nick Clegg now to dismiss these students as ‘dreamers’ is deeply cynical since it was he who encouraged them to dream. 

A progressive higher-education policy should aim to support and encourage the aspirations of all our able young people, but particularly those from ordinary and poorer backgrounds who would otherwise be excluded.  The whole country and its economy benefit from having a large university-educated workforce that allows us to compete globally.   Achieving this while asking students, as the primary beneficiaries of education, to pay more for their education is not generally in question.  With the massive increase in the number of young people going to university the state can no longer bear the full cost without imposing severe tax rises and service cuts on the population that doesn’t benefit directly, which would be unfair. 

The NUS and Labour’s Parliamentary frontbench support the idea of a graduate tax.  This is a different way of making the student pay, although its supporters would argue it’s fairer than fees.  So if the principle of making the beneficiary pay is accepted, then the argument becomes one about the fairest share of the cost between the student and the state and the fairest way to recoup the student’s share. 

The benefits of fees are that they are known in advance so a student can choose a course aware of what the cost will be.   Universities can raise additional income by charging more for courses that offer the best employment and earnings potential for students.  That income helps guarantee the future excellence of the university since it will not be starved of funding.   The argument against fees centres on the fear that big debts will scare off potential students from poorer backgrounds.  Mechanisms can be put in place to ensure these students have access to grants, to cap fees at a fair level, and to ensure that students don’t pay back their loans until they are earning above a reasonable level.  The Government’s proposals do not meet all these requirements.

A graduate tax offers the attractive prospect of linking repayment to earnings without big debts on graduation.  However, there are problems that any fully worked-up proposal must address.  A graduate tax could see students start paying at a much lower level of earnings than with fees.  Repayments through the tax system are not capped, so students could end up paying far more than the cost of the teaching they received, with students on cheaper courses effectively subsidising students who choose more expensive subjects.  Students would not be incentivised through the cost of courses to choose subjects more important to the economy or even to consider the cost implications of their decisions over courses.  Tax income does not go directly to universities as is the case with fees, it goes to the Government who would then be tempted to spend it on areas other than higher education.   And the increasing number of students who graduate then work abroad would not pay anything back in UK tax even though they might be among the highest earning graduates.

Whichever model is chosen, there is an issue over the sharing of cost between the student and the state.  The Government is imposing an 80% cut in funding for university teaching and making students make up the difference out of their future earnings.  They should not be cutting public spending so hard and fast.  If they had chosen to pay down the debt from bailing out the banks over a full economic cycle rather than the much shorter electoral cycle we would not be seeing cuts on this scale in higher education or in the other services they are attacking.  That would mean, even with the fees model, the cap could be set much lower than £9000. 

Any Government imposing any level of cuts would have to prioritise services.  The Coalition have given higher education too low a priority.  I would rather see the Government tackle inefficiencies in the health system than go for the education jugular given the terrible impact that will have on the economy and the life chances of young people from ordinary backgrounds.  We should also consider the Government’s decisions on university funding alongside their decision to scrap the Education Maintenance Allowance (EMA) that funds young people from poorer backgrounds to stay on in further education.  This is another unfair blow to ordinary people’s life chances. 

As for the Lib Dems, they are now finding that trust is a fragile commodity in politics.  The opportunism of irresponsible opposition does not survive the transition into government and I find it hard to see how the Lib Dems can ever recover under their current leadership.  We’ve seen them lose this way locally, now they are repeating the mistake nationally.  Meanwhile, the Tories are finding the Lib Dems a very useful shield to deflect voters’ anger away from the puppet-masters and towards the puppets.  But the really big losers aren’t the Lib Dems, it’s students who will face the start of their working lives with debts approaching £30,000 each.


About Steve Reed MP

I'm Labour Member of Parliament for Croydon North after being elected in a by-election in November 2012. Before that I was Leader of Lambeth Council since 2006, and was a councillor for Brixton Hill from 1998 to 2012.
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