View all newsletters
Sign up to our newsletters

Support 110 years of independent journalism.

  1. Politics
27 February 2015

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.

By Emran Mian

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.

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU

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.

Content from our partners
The promise of prevention
How Labour hopes to make the UK a leader in green energy
Is now the time to rethink health and care for older people? With Age UK

Select and enter your email address Your weekly guide to the best writing on ideas, politics, books and culture every Saturday. The best way to sign up for The Saturday Read is via saturdayread.substack.com The New Statesman's quick and essential guide to the news and politics of the day. The best way to sign up for Morning Call is via morningcall.substack.com Our Thursday ideas newsletter, delving into philosophy, criticism, and intellectual history. The best way to sign up for The Salvo is via thesalvo.substack.com Stay up to date with NS events, subscription offers & updates. Weekly analysis of the shift to a new economy from the New Statesman's Spotlight on Policy team. The best way to sign up for The Green Transition is via spotlightonpolicy.substack.com
  • Administration / Office
  • Arts and Culture
  • Board Member
  • Business / Corporate Services
  • Client / Customer Services
  • Communications
  • Construction, Works, Engineering
  • Education, Curriculum and Teaching
  • Environment, Conservation and NRM
  • Facility / Grounds Management and Maintenance
  • Finance Management
  • Health - Medical and Nursing Management
  • HR, Training and Organisational Development
  • Information and Communications Technology
  • Information Services, Statistics, Records, Archives
  • Infrastructure Management - Transport, Utilities
  • Legal Officers and Practitioners
  • Librarians and Library Management
  • Management
  • Marketing
  • OH&S, Risk Management
  • Operations Management
  • Planning, Policy, Strategy
  • Printing, Design, Publishing, Web
  • Projects, Programs and Advisors
  • Property, Assets and Fleet Management
  • Public Relations and Media
  • Purchasing and Procurement
  • Quality Management
  • Science and Technical Research and Development
  • Security and Law Enforcement
  • Service Delivery
  • Sport and Recreation
  • Travel, Accommodation, Tourism
  • Wellbeing, Community / Social Services
Visit our privacy Policy for more information about our services, how New Statesman Media Group may use, process and share your personal data, including information on your rights in respect of your personal data and how you can unsubscribe from future marketing communications.
THANK YOU