Ed Miliband is giving a speech in Leeds today, outlining Labour’s tuition fee policy. In the usual Miliband way, it is heavy with hyperbole.
“This is a disaster for them and a disaster for the future of Britain too – a country where the next generation is doing worse than their parents is the definition of a country in decline.”
I should note that he’s referencing Coalition policy here, not his own (things haven’t got that bad – yet). This is a line Labour have been spinning since the rise in tuition fees to £9,000 was introduced at the end of 2010. The headline things they said about it at that time were that it would put people from poorer backgrounds off university and that it was a move to an American system. Both of these assertions turned out to be false.
The number of kids from poorer backgrounds has actually gone up since the introduction of the new system. As for the “Americanisation” of post-secondary education, lets examine both systems briefly. In America, you are required to pay the whole of your year’s tuition up front. If you don’t have it, as most people from all but the wealthiest of families will not, you have to take out a slightly modified commercial loan. Modified only in the sense that you don’t need to start repaying it until you either graduate or drop out, but after that point it becomes exactly like any other loan – in other words, you are required to pay it no matter what, even if you are unemployed, at a commercial rate. I know a nurse in New York who has to keep taking night classes only because the moment she stops taking them her debts would immediately bankrupt her, and I do mean literally, as in she would lose everything she owns.
Meanwhile in Britain, you pay nothing whatsoever up front and only have to start paying back once you earn £21,000 or more a year. So basically nothing up front and a percentage only after you start making a living wage. That’s a lot different to having the threat of bankruptcy hanging over you, I think you’ll agree.
So what’s the substance of Labour’s policy on tuition fees then? It can be summarised in one sentence: it’s the current Coalition policy basically, only the fee ceiling is £6k instead of £9k. So fees of £9k are a “disaster for the future of Britain” but £6k are utopian in Labour-land. Bizarre, especially as the move from £9k to £6k will make no difference whatsoever to those on modest pay as they won’t end up paying it all off anyway, even on £6k fees a year. Not unless you raise the percentage that comes out of their pay packets anyhow. In other words, this policy will change nothing at all for their core audience.
The only major difference is that the universities will be worse off. Meaning the government will have to put more into them or the quality of the education will suffer.
What I really don’t understand about any of this is the politics of the announcement. Why instead of sneaking this policy very quietly into the Labour manifesto, Miliband is giving a speech on the subject alongside a big press push. Do they really think a very minor tinker with a Con-Lib policy is going to win over the Green waverers and Lib Dems last timers? These people want tuition fees of zero pounds a year. They were abundantly clear about this, if November 2010 is anything to go by. I feel pretty certain that if the Coalition had announced the policy Miliband is announcing today back then, there would have been precisely as much demonstrating against it, by the same group of people. That’s something for Labour leaflets this time round: “Labour’s £6k tuition fee pledge: less riot worthy by a third”.
In conclusion, Miliband has ended up today talking up a slight adaptation of a policy made by a Tory prime minister. Only instead of £9k it’s £6k. Some on the Left describe the Labour Party as Tory-lite. Never has this been more literally the case than today.
Pretty much agree, though it does help out in one failure of the policy…
Listening to Question Time last night, I noticed Rachel Reeves mention that the coalition had trebled tuition fees. Clearly, it hadn’t occurred to her that Labour also trebled tuition fees. There is some difference between what motivated the Labour top-up fees and the new £9000 pa scheme.
Primarily that the the Labour move was to provide additional funding for an expanding university system whereas at the new scheme aims to but all the burden on students.
I say aims as it doesn’t, the way it has been set up means that hardly anyone will pay it off. The increased interest rates (it’s now a it complex),larger sum and a higher payment threshold means that many people won’t even see their debt go down at all, let alone significantly. The only people that will pay it off and get out of what feels like an additional tax when you pay it is the uber earners who will pay it off before it gets written off. I haven’t analysed in detail but the way the interest rates are set up mean that those high earners will be milked a bit extra for the interest but still they will be shot of the debt whilst no one else is.
The problem is then the millions of write-offs that are going to happen, it’s a time bomb the new system kicks the funding can down the road somewhere and no doubt in twenty years time various financial types will be lurking around to see if they can make a quick buck out of this somehow.
At least on the 3k a year system it meant that a decent chunk of the debt is paid by students and didn’t create this black hole of debt.
I have no idea if I will pay off mine, personally. I did a fourth year which means I will be paying this off for quite some time (more debt, more interest), currently at around 24k of student loan debt and it is not going down quickly.
£6000 a year alleviates the debt issue but I can’t see it solving it. By government swapping some of the eventual write off cost for upfront funding it would most likely work out cheaper.
In reality, for the average graduate £3K/6K/9K doesn’t have such a big a effect, for all of those schemes graduates have a small, annoying but not crippling, chunk taken out of their monthly salary for 20 -30 years.
Miliband was initially in favour of a graduate tax, which to me seems like a pretty fair way of doing things, would result in similar payments for most graduates whilst leaving it up to government and universities to work out funding between them.
Philip Thomas says
It is fairly obvious: Miliband is setting bait for the Liberal Democrats to rise to- he wants Liberal Democrats around the country making speeches on tuition fees.
We wouldn’t fall for that, would we? It would be like the Tories making speeches on net migration…
Rod Parker says
This is little more than a mediocre populist gesture by a lack lustre labour party who seem to have lost their direction.
Tracker is a free tool developed by a team of
experts who wanted to help people like you.