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14 September 2015

Why is Jeremy Corbyn proposing a tax cut for the rich?

Unpicking the new Labour leader's regressive tuition fees policy.

By Tim Wigmore

A tax cut for the rich is one thing you won’t hear Jeremy Corbyn advocate anytime soon. Yet the new Labour leader is proposing one by stealth. His policy to scrap tuition fees would overwhelmingly benefit the richest in society. It would be fantastic news for the same City bankers Corbynistas so loathe.

During the Labour leadership election, Corbyn announced a £10bn plan to scrap all tuition fees and restore maintenance grants, funded by an increase in corporation tax and higher national insurance for high earners. Only £3bn would be spent on restoring maintenance grants, with the remaining £7bn spent on abolishing tuition fees.

This is a funny sort of progressive politics. It lowers the effective rate of tax that the richest graduates have to pay by nine per cent, but does nothing for those on the minimum wage. As policies go, they don’t come much more regressive.

And the idea that abolishing tuition fees would have a symbolism that spurred on more disadvantaged children to apply to university is nonsense. The past decade have shown how to get more disadvantaged pupils into higher education. The number of disadvantaged pupils at the best universities, as both a number and percentage, has never been greater: £9,000 annual tuition fees, which graduates only pay off when earning over £21,000, have not put them off. Universities are more accessible than ever before because of beefed-up outreach programmes, improvements in state education and financial support for disadvantaged pupils when they need it – at university, not after.

Although restoring maintenance grants is welcome, as a whole Corbyn’s university flagship still amounts to a huge handout to those who do not need it. It is middle-class populism of the sort the Liberal Democrats once espoused. The £7bn spent reducing fees for high-earning graduates would have been far better invested in primary education, to stop poor children slipping inexorably behind the rest before the age of seven.   

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For all the burned effigies of Nick Clegg, tuition fees, even after they were hiked to £9,000, have been no barrier to disadvantaged students reaching the best universities. Scrapping tuition fees makes no difference at all to the poorest students if state schools lag behind and universities do too little to invest in access. We know this because deprived students in Scotland, which abolished tuition fees in 2000, are far less likely to go on to higher education than those south of Union Bridge.

Corbyn is not interested in such evidence. His tuition fees policy suggests a man more committed to populism for populism’s sake than actually helping the disadvantaged he claims to represent.

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