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Miliband would cut top tuition fees to £6,000

Labour pledges to reduce top university fees by scrapping cut to corporation tax.

Labour would lower the cap on tuition fees if in government, Ed Miliband has announced.

Continuing his strategy of aligning himself with the "squeezed middle" -- the ordinary people suffering from the fall-out of the economic crisis -- he has said that if he was in government, he would cut the maximum tuition fee from £9,000 to £6,000.

The move is one of the biggest policy decisions Miliband has made during his year in leader, and is a clear attempt to attract some of the student vote that the Liberal Democrats lost when they broke their promise on tuition fees. Speaking to the Observer, aides implied that it may not stop there: "This is what we would do now. But in three and a half years' time we might be able to do even more." However, once the new fees are ensconsed, it is difficult to see Labour promising to reduce them further.

Given all the murmurings about his party's "economic credibility", Miliband has emphasised that this cut is fully costed -- it would be funded by charging more interest for the highest paid graduates, and by scrapping a planned cut in corporation tax.

This last is a canny political move. Directly equating hikes in living costs for ordinary people with cuts for those who precipitated the crisis is likely to strike a chord with a public already angry at this double standard. The coalition has already criticised the proposal, with Lib Dem MP Gordon Birtwhistle telling the BBC that companies affected are potential employers of students. However, this does not ring true as it is not a hike in corporation tax, merely the reversal of a cut. It is a bold move, and sends a potentially powerful message about where Miliband believes the burden should lie.

However, he did not refer to the huge cuts to university funding that the coalition plans. These cuts of up to 80 per cent mean the crisis in university funding -- which the Browne Review was created to address -- has not been solved, as transferring costs from the state to the student does not address university's shortage of cash. Miliband's move is an effective piece of positioning and a potentially popular policy -- but it does not address this funding gap.

This announcement comes on the same day as YouGov/IPPR poll found that 70 per cent of people said they might be prepared to vote Labour, versus 64 per cent for the Liberal Democrats and 58 per cent for the Tories. Just 30 per cent say they would "never" vote for Labour, as opposed to 36 per cent for the Lib Dems and 42 per cent for the Tories. While this has yet to be translated into actual concrete support, it suggests that Labour is not seen as the most toxic party, despite concerns about their handling of the economy. As the conference opens, this reiterates that there is a big opportunity there for Labour. It remains to be seen whether they will capitalise upon it.

Tags: Party Conferences 2011  tuition fees

16 comments

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mcquade's picture

"but it does not address this funding gap."

Have you done the figures, Shamira, or is this just a guess as I strongly suspect.

mcquade's picture

"we need to reduce corporation tax so that we are the country of choice for start-ups"

That's not what City institutions said when surveyed by Think London, the agency that promotes Foriegn Direct Investment in London and produces the FDI Barometer produced by Think London. It shows that overseas investors are less likely to invest in London, not more likely because of recent developments in UK economic policy. In a survey of over 300 executives responsible for making FDI allocations, 60% said the lower tax rate would not change the attractiveness of London as an investment destination, 13% said it would make them more likely to investment, but 22% said it would make them less likely to invest. Therefore a net balance of 9% said lower corporate taxes would make London less attractive to investors!

In fact those surveyed were much more agitated about immigration policies - with 48% opposed to the Coalition’s cap on non-EU immigration.

http://www.ft.com/cms/s/0/9db3fb5e-2336-11e0-b6a3-00144feab49a.html

And this report also shows why corpration tax cuts do little to create jobs and growth.

http://www.newstatesman.com/blogs/the-staggers/2011/05/tax-cuts-osborne-...

mdwh's picture

Interesting reading at http://www.libdemvoice.org/labour-tution-fees-25395.html - basically the 30 year cap means this change will make no difference for anyone except high earners. It's a tax cut for the rich - and one that will be nullified anyway if they balance the system out by increasing their interest payments!

And let's not forget who introduced tuition fees in the first place, breaking their pledge not to do so... Yes, I'm disappointed at those Lib Dem MPs who voted in favour, but the idea that I should switch back to Labour over the issue makes no sense.

Luddite's picture

mcquade, The state can not produce sustainable employment, have you learned nothing from 13 years of squander? STOP making it impossible to employ people, make it easy for folk's to become employers. Get-off the backs of the wealth creators. We are sick of carrying political baggage. Labour made many promises to industry but never kept one. I'm no fan of this government, but it remains preferable to the previous one.

matthew fox's picture

Luddite carries more baggage then Terminal 5, if only the cage he lived in wasn't so rusty, all that oxidation seems to be harming the last few brain cells.

David Lindsay's picture

You, or your parents, will still be allowed to pay nine thousand pounds upfront to a university at the start of each academic year. That is a lot less than the fees for the grandest schools. And it would, on the basis of parental wealth, avoid the above-inflation, profiteering interest payable by those who will have to wait until after they themselves have graduated and established themselves in careers. How about something on that, Ed?

carol down's picture

So why did the labour party introduce fees in the first place. AAAAARRRRRRGGGGGHHHHHH More bullshit from pathetic liars, and not just the labour party either, ALL parties.....
W A K E U P P E O P L E

Luddite's picture

Labour betrayed the very people that but the most trust in them. The truth is Labour's falling apart. It's no longer a united party, but a party of vested interests, a party financed and controlled by our new aristocracy the public sector unions, that draws it's support from dick-heads such as 1% isn't that right matthew fox?

Stu's picture

I voted Labour in 97 because they PROMISED they will not introduced tuition fees... I thought great... my bro can go to uni without debt... I WAS CONNED!!! 1 year in and Blair/Brown introduced them and now Ed wants me to believe that they will cut it to £6000? what a joker! I say again. Labour isn't credible, they have sod all plans on the economy which should be their main line of attack except we now have the Eurozone dictating whether we live or die...

Marcus's picture

@Stu - you cant believe any of them. They are in the business of getting elected and continuing their careers.

No careerist politician ever gives back power.

We are all financially doomed because the Keynesian economics used by Europe since the war is fundamentally broken and they know it.

Bill Fraser's picture

This U-turn on student fees is just a stunt to grab the conference headlines, there is no commitment to reduce it to £6000... just the possibility they will if circumstances allow.

And, there is a big difference between Milliband saying they "would cap" student fees and saying they "will cap" student fees...

Shinsei67's picture

It's a headline grabbing policy certainly but doesn't it just confirm that the coalition's university funding policy is essentially correct, just a little bit too costly.

And, of course, now that taxing the banks more has been spent on tuition fees how is the VAT cut or any other measures to actually stimulate the economy going to be funded ? Lower tuition fees does nothing to boost the economy (except in the very very long term).

The difference between £6000 and the current average of £8000 isn't that great.

Luddite's picture

"Labour pledges to reduce top university fees by scrapping cut to corporation tax". When is this idiot doing to learn you can't squeeze blood form a stone. The money's all gone our wonderful previous and now totally discredited Labour government spent SORRY!! squandered the lot leaving the country massively in the RED. "toxic party, despite concerns about their handling of the economy" TOXIC!! 'try' pure poison..

Eddy S's picture

firstly this introduces one very bad anti-growth policy. we need to reduce corporation tax so that we are the country of choice for start-ups, we are way down the league now in terms of tax competitivness and it is start-ups that will encourage growth, new jobs in the private sector and long term sustainable growth espcially in high tech and green technologies.

we do need to cut tuition fees though but we've missed a trick here, in order to make this policy pro-growth, we should have said that there will be no fees for engineering courses but full fees for all the arty-farty degrees. china and india are churning out engineering graduates and we need more of them if we are to compete in the future global economy, if we want to create the next apple computers or other high growth companines we need more engineering graduates - this move would again increase the chance of sustainable economic health.

if ed was a real visonary he would adopt both of these policies but sadly this oppurtunity has been missed for short term political advantage.

Awake!'s picture

so to sum up
on the morning that the euro area is discussing a 3 TRILLION euro plan to save our largest trading partner from spiralling into oblivion, with the US econmyt collapsing under 15 TRILLION dollars of debt, GDP numbers massively negative in Japan, GDP numbers collapsing globally, Labour have a conference.
The leader talks about tuition fees (funded by cutting corporation tax, a spur to growth in the real world), the shadow chancellor says sorry, sort of, drones on about vat, bankers tax ..yawn.
No one talked about SME's though, or how to support enterprise, ideas leading to job creation. Nope. And then someone here commented that tax cuts for corporates dosen't spur growth, fact...
I mean with the greatest will in the world...

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