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19 May 2016

Why Jeremy Corbyn’s Labour is right to be making noise over tuition fee rises

For both political and policy reasons, the party is better-placed to benefit from a row over tuition fees than in times past. 

By Stephen Bush

Yesterday’s Queen’s Speech was written with one eye on the referendum and the other on the first line of David Cameron’s obituary, so it was mostly non-contentious (prison reform, life chances) or abstract (spaceports). 

But Labour believe that the government has, far from avoiding controversy, stumbled into a big row over tuition fees. Lost amid a flurry of announcements was the government’s intention to allow universities with good teaching records to charge above the £9,000 cap. If implemented, it would represent the beginning of a two-tier education system in the United Kingdom.

Labour are launching a campaign focussing on what they are dubbing the “Tory price tag”. Senior Labour sources believe the policy is almost ideally suited to Jeremy Corbyn’s strengths as a politician, allowing him to tap into the grassroots movement of student anger at tuition fee rises while also building a coalition across age and class with parents and lecturers to be targeted as well.

In years past, tuition fee rises have been politically pain-free as far as the government is concerned, but the party believes that things will be different this time. Corbyn is a longstanding opponent of tuition fees full stop, which will give him a clearer stance than that of Ed Miliband.  

And in times past, the costs of a tuition fee raise to new graduates entering the job market for the first time have been wiped out by tax cuts elsewhere. Even allowing for the effective 9 per cent increase in marginal tax rates for graduates on £9,000, the government’s increases in the income tax threshold have given graduate employees similar pay packets than they would have enjoyed had fees remained at the £3,000 level and the threshold not increased.

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With the income tax threshold due to hit £11,000 by 2016-7, new graduates will no longer be feeling the benefit of future raises – but will face what is effectively a hike on basic rate of 10, 11, 12 per cent. This means that not just students, but new entrants to the job market, will feel significantly less prosperous  increasing the odds of this latest round of tuition fee increases being rather more crippling to the government than those in times past.

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