A Labour government would cut fees by £3,000, Ed Miliband has announced. (Photo: Getty)
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Labour's tuition fee policy: not awful, but still pretty bad

Labour's tuition fee policy isn't as bad as I feared. It's still pretty dire.

Labour has finally revealed its manifesto position on higher education funding: the much trailed drop in the tuition fee ceiling from £9,000 per year to £6,000; and a lesser noticed increase in the maintenance grant for students from families with an income of up to £42,000 per year. I’ve written against the tuition fee change previously and, just to put this upfront, I was the most senior civil servant to work on the Browne Review of Higher Education which, in popular perception, ‘paved the way’ to the introduction of £9,000 fees – even though that isn’t what we recommended.

Today’s Labour announcements are, I have to admit, better than I expected for two reasons. But they still represent terrible policy.

Let me cover the positives before I do the rest. The first one is that reducing tuition fees on the face of it reduces the resources that universities have to put on courses. Labour has said definitively though that the drop in fee income will be made up through an increase in direct public funding. No funding gap; no imminent decline in quality. This is good news.

The second positive is that Labour’s changes, in a major departure from previous higher education reforms, will apply to all undergraduates not just new entrants. This means that students who are already in higher education or who may be entering this year – prior to the introduction of the new fee ceiling in 2016 – will incur higher fees until 2016 and then will incur the same lower rate as the new entrants. This is important because it diminishes the risk that lots of people thinking about going to university this year will put off their entry for a year, delaying their careers and emptying out classrooms. If Labour had introduced the lower fee only for new entrants, then there would have been a minimum £9,000 advantage to putting off study for a year (the £3,000 reduction in the fee multiplied by the three years of the typical degree); now the advantage of putting off study is only £3,000, because 2015 entrants will receive the benefit of the future fee decrease in subsequent years.

Okay, enough about the positives. The problems with the policy are legion. The first is that the change is simply unnecessary. University applications are rising, despite the higher fee levels, and the gap between the participation rate of young people from disadvantaged backgrounds and others has continued to reduce. Labour has said the policy will cost £2.7bn a year. It will fund that cost through changes to pension tax relief. But the money could have been used for something else. To put the sum in perspective, it is about twenty times what it costs to avoid dropping the benefits cap to £23,000 per year. Perhaps that example is slightly too remote from higher education, in which case let’s think about the ‘forgotten 50%’ that Labour used to talk about. These are the young people who don’t go to university. £2.7bn per year would be transformative for that group. Merely a sixth of that sum would pay for 200,000 higher level apprenticeships. However, Labour isn’t helping them, instead it’s helping those already fortunate enough to go to university.

In fact the bias of their policy is even more unfortunate than this. Despite Ed Miliband’s rhetoric today about a promise for young people, it isn’t young people that pay tuition fees. Fees are paid back through what looks a lot like a tax on graduates. Reducing the fee level reduces the level of taxation on graduates. And because the ‘tax system’ is progressive in its design, the poorest graduates don’t pay back anything like the full amount of the fees. Labour’s policy in effect is a tax cut for graduates on above-average incomes. Forget about the 50 per cent of young people who don’t go to university, this policy won’t even help the poorest 50 per cent of those who do.

One last dig. Labour has suggested concern over the past few years about postgraduate study. The numbers of UK students going on to postgraduate study looks pretty flat, despite the higher demand for postgraduate skills in an increasingly knowledge-intensive economy. This may in part be because there is far less student finance available for postgraduate study. In order to remedy this, the Chancellor announced an extension of student loans to postgraduate students at the Autumn Statement last year. But that new funding builds on a financing system that Labour has decided is unsustainable. Part of their argument today is that fees have to come down because so many graduates don’t pay them back anyway. It’s difficult to see how Labour could wind back from that position to accept postgraduate student loans, which would take the loan amounts – and hence the non-repayment rate – in the opposite direction to what the party has said it wants. Yet it will already be spending an extra £2.7bn a year in direct public funding on undergraduate higher education. So it’s unlikely that it would be able to find even more direct public funding for postgraduate study.

There is a real risk in other words that a Labour government will spend a lot of money fixing a problem that doesn’t exist in undergraduate education and have nothing left to fix a problem that seems real and pressing to many people in postgraduate education.

Emran Mian is director of the Social Market Foundation

Photo: Getty
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Like it or hate it, it doesn't matter: Brexit is happening, and we've got to make a success of it

It's time to stop complaining and start campaigning, says Stella Creasy.

A shortage of Marmite, arguments over exporting jam and angry Belgians. And that’s just this month.  As the Canadian trade deal stalls, and the government decides which cottage industry its will pick next as saviour for the nation, the British people are still no clearer getting an answer to what Brexit actually means. And they are also no clearer as to how they can have a say in how that question is answered.

To date there have been three stages to Brexit. The first was ideological: an ever-rising euroscepticism, rooted in a feeling that the costs the compromises working with others require were not comparable to the benefits. It oozed out, almost unnoticed, from its dormant home deep in the Labour left and the Tory right, stoked by Ukip to devastating effect.

The second stage was the campaign of that referendum itself: a focus on immigration over-riding a wider debate about free trade, and underpinned by the tempting and vague claim that, in an unstable, unfair world, control could be taken back. With any deal dependent on the agreement of twenty eight other countries, it has already proved a hollow victory.

For the last few months, these consequences of these two stages have dominated discussion, generating heat, but not light about what happens next. Neither has anything helped to bring back together those who feel their lives are increasingly at the mercy of a political and economic elite and those who fear Britain is retreating from being a world leader to a back water.

Little wonder the analogy most commonly and easily reached for by commentators has been that of a divorce. They speculate our coming separation from our EU partners is going to be messy, combative and rancorous. Trash talk from some - including those in charge of negotiating -  further feeds this perception. That’s why it is time for all sides to push onto Brexit part three: the practical stage. How and when is it actually going to happen?

A more constructive framework to use than marriage is one of a changing business, rather than a changing relationship. Whatever the solid economic benefits of EU membership, the British people decided the social and democratic costs had become too great. So now we must adapt.

Brexit should be as much about innovating in what we make and create as it is about seeking to renew our trading deals with the world. New products must be sought alongside new markets. This doesn’t have to mean cutting corners or cutting jobs, but it does mean being prepared to learn new skills and invest in helping those in industries that are struggling to make this leap to move on. The UK has an incredible and varied set of services and products to offer the world, but will need to focus on what we do well and uniquely here to thrive. This is easier said than done, but can also offer hope. Specialising and skilling up also means we can resist those who want us to jettison hard-won environmental and social protections as an alternative. 

Most accept such a transition will take time. But what is contested is that it will require openness. However, handing the public a done deal - however well mediated - will do little to address the division within our country. Ensuring the best deal in a way that can garner the public support it needs to work requires strong feedback channels. That is why transparency about the government's plans for Brexit is so important. Of course, a balance needs to be struck with the need to protect negotiating positions, but scrutiny by parliament- and by extension the public- will be vital. With so many differing factors at stake and choices to be made, MPs have to be able and willing to bring their constituents into the discussion not just about what Brexit actually entails, but also what kind of country Britain will be during and after the result - and their role in making it happen. 

Those who want to claim the engagement of parliament and the public undermines the referendum result are still in stages one and two of this debate, looking for someone to blame for past injustices, not building a better future for all. Our Marmite may be safe for the moment, but Brexit can’t remain a love it or hate it phenomenon. It’s time for everyone to get practical.