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1 October 2017updated 05 Aug 2021 6:59am

Why the Conservatives’ new tuition fee policy is even more regressive than Labour’s

It is nothing more than an ill-thought out attempt to win back young voters.

By Sam Moore

Since the general election, the Tories have been floundering to find a way to get 18 to 24-year-olds to vote for them. In policy terms, this means leaning heavily on ideas around housing, and tuition fees. This seems like a direct reaction to Labour’s strengths during the election. Recent YouGov polling showed the voting intent of 18 to 24-year-olds, and whom they trusted on a series of issues, including housing and education, as well as immigration, unemployment, and the NHS.

Housing and education show some of the largest gaps between the government and Labour, so it makes sense that the Tories would try to make up for a great deal of lost ground in those areas. Their solution? Freezing tuition fees at £9,250. While some might think this is a real solution, in reality it is a regressive policy, and a misguided political move.

Of course, Labour’s plan to abolish tuition fees is far from progressive. Research from the IFS has shown that high-earning graduates will be the ones that benefit the most from Jeremy Corbyn’s pledge. The piece shows that “as high-earning graduates repay the largest share of their student loans, they benefit the most from the removal of tuition fees.” The policy is, as Justine Greening said in the House of Commons, “for the moneyed, not the few.”

If Labour’s regressive giveaway to middle-class university students raised the ire of the Education Secretary, then she must have been filled with indignant rage by the policy announced by the Prime Minister. If the complete abolition of fees is largely a tax break for high-earning graduates, they would be the sole beneficiaries of the Chancellor’s policy.

Given that Labour’s policy is regressive, it follows that a weaker version is likely to be even more regressive. By making only minor cuts in the highest level of tuition fees, the benefit is given only to those who would already be paying off most, if not all of their student loan. The IFS report shows that abolished fees lead to a large benefit for high earners, and the Chancellor’s policy would double down on this.

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To benefit from this policy, a graduate would have to pay off £28,500 of tuition loans, plus anything for maintenance, plus interest. The IFS analysis suggests that, on tuition alone, 10 per cent of graduates wouldn’t repay the Chancellor’s reduced fee levels, so once interest and maintenance loans are added, you still end up with the majority of graduates not repaying this new amount. This means that they haven’t actually benefited at all from the freeze in tuition fees, while those who would have repaid their loans in full will essentially be receiving a tax cut of 9 per cent over £21,000 by the time they hit middle age, which leaves you wondering exactly which young people this policy is supposed to be for.

With Labour’s policy, there is some benefit to lower earning graduates, if only in the form of the spectre of debt that would never be repaid being removed. The Chancellor’s policy, on the other hand, does nothing to benefit those who are only paying off small amounts of their student debt, whose earnings just cross over the repayment threshold. With this new fee cut policy, the interest rate is still there. Those only just beginning to pay off their debt would still be paying it off; the benefit would be only for higher earning graduates, by removing the final amount of debt that they would be repaying under the current policy.

In many ways, it reflects the worst tendencies of the Conservatives in general and the Prime Minister in particular since the election. It draws attention to the areas in which their opponents are strongest without actually having a policy offer that goes as far as Labour’s, let alone outflanks them.

The solution offered by the government is barely deserving of that title. In reality it is nothing more than an ill-thought out attempt to win back young voters, and in doing so, revealing where the priorities of this government really lie.

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