Ed Miliband delivers his speech to the Scottish Labour conference in Perth. Photograph: Getty Images.
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Miliband's promise of a "radical offer" on tuition fees is a major policy hint

Is Labour set to abolish fees and introduce a graduate tax?

Faced with the most significant period of Labour discontent since last summer, Ed Miliband retained his preternatural calm on ITV's The Agenda last night. "I took this job on three and half years ago and always knew this was going to be a close election," he said in response to the narrowing opinion polls. 

To a degree under-appreciated in Westminster, Miliband's strategy has been shaped by the constitutional novelty of a fixed-term parliament. As one shadow cabinet member put it to me, "We know the date of the next election. There’s no danger of the government cutting and running . . . So we can work backwards. We know when we need our pledge cards by, our manifesto by and our party candidates selected by." With major policy work on the economy (The Adonis Review), low wages (The Buckle Review), social policy (IPPR's Condition of Britain) and devolution (Local Government Innovation Taskforce) due to be completed before the National Policy Forum in July, Labour strategists are confident that the detailed agenda craved by activists will begin to emerge. 

In this regard, the most notable remarks made by Miliband last night were on tuition fees. After businesswoman Laura Tenison raised the plight of the young, he replied: 

Young people feel they have no control because they are going to get into mountains of debt if they go to university. We do want a radical offer on tuition fees because the future of our young people - something totally absent from this Budget - is a massive issue that our country faces.

The promise of a "radical offer" on tuition fees was flagged up by Labour sources as "significant" and "worth listening to". 

Miliband has previously promised to reduce the cap on tuition fees from £9,000 to £6,000, but it has long been clear that his ultimate ambition is to replace fees with a graduate tax, the policy he argued for in the 2010 leadership contestIn an interview with Labour List last year, he said: "We’re definitely looking at [a graduate tax]. I think there’s been some work going on at IPPR looking at the options too. We’ve said £6,000 [as a cap] before, and we’re looking at all of these issues for the manifesto, and what can be done."

The report on higher education published by IPPR (one of the most influential sources of Labour policy) last year, modelled an option under which tuition fees and student loans would be abolished and replaced with a higher rate of tax for graduates. This would consist of levying an additional 2 per cent of tax on all income over £10,000 for a period of 40 years (Labour may wish to adopt a graduated version). 

The policy enjoys the support of the NUS and other higher education organisations and, as the report noted, "is one of the most progressive forms of repayment system, since high-earning graduates will continue to pay the tax for 40 years, meaning they will contribute a greater share of the total cost than under the current system (when their contribution stops once they have repaid their loan)". 

One of the most common complaints made by Labour figures about the current system is that it allows the rich to contribute less than others by paying off their loan at a faster rate (thus avoiding interest on the debt). As well as ending this unfairness, the introduction of a graduate tax would also eliminate the fear of debt that deters some from applying to university.

And it would enable Miliband to make the politically potent pledge to "abolish fees", the policy proposed but not delivered by the Lib Dems. With Labour reliant on the support of Lib Dem defectors and the young (it leads the Tories by 42-28 per cent among 18-24-year-olds) to maintain its slight poll lead, a radical offer in this area is rightly viewed as crucial to election victory. Miliband's comments last night suggest it may be coming soon. 

George Eaton is political editor of the New Statesman.

Photo: Getty
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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.