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11 January 2018

Theresa May’s reshuffle raises questions over the future of university tuition fees

The Department of Education lost Justine Greening and Jo Johnson, both of whom believe that the existing fees system is effective and progressive.

By Stephen Bush

Theresa May’s Plan A for the reshuffle was to move the two ministers responsible for higher education: for the Secretary of State, Justine Greening, to be shuffled to the DWP and for Jo Johnson to be moved to a junior post at Transport, with the role of minister for London (and the leg-up to be the Tory candidate for mayor that comes with it) presumably designed to sugar the pill. In the end, only Johnson took the offer.

That move raised eyebrows in both the sector and at Westminster, one of a number of consequences of the reshuffle that I outline in my column this week. It also left several DfE officials convinced that change was coming as far as tuition fees go, as both Greening and Johnson believe that the existing system is effective and progressive and should stay, while Downing Street takes a different approach.

Now Nick Timothy, has added credence to that with his column in today’sTelegraph, saying that Greening blocked moves to reduce tuition fees. (TheTelegraph splashes on the news as well)

Abolishing fees was the most expensive single item in the Labour manifesto and while we can’t prove it for sure, it seems likely that it was a big driver of votes in that 18-24 demographic which helped the party to make gains in the likes of Canterbury, Warwick and Leamington and in other student-heavy seats.

So as far as ways to blunt Labour’s surge go, scrapping tuition fees aren’t a bad shout, not least because it doesn’t, unlike, say, tackling the housing market, create problems elsewhere in the Conservative electoral coalition.

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The problem is that it is very pricey year-on-year and that as both John McDonnell and Philip Hammond are committed to balancing the books year on year, though McDonnell has more latitude for infrastructure and investment spending, the commitment has to be paid for elsewhere. (That’s one reason why the welfare cap had to remain in place in Labour’s 2017 manifesto: between paying for the 40p rate cut to remain under Labour and fees to be scrapped, there is no money left, to use that fraught phrase.)

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That makes cutting fees – from say, £9250 to £6000 – more tempting because it is cheaper than full abolition. The thing is, while it is cheaper, it is still really quite expensive – Sam Moore has written a good primer on this all here – and it’s actually even more regressive than abolishing fees outright. Why? Because only the richest graduates will pay off the full bill anyway, so the “winners” of cutting fees are even better off than the winners from abolishing them.

We know, too, that when Ed Miliband committed to a mere fee cut he didn’t get that big boost among 18-24 year olds. So cutting fees really is the epitome of bad policymaking: it benefits the wealthiest, it costs the Exchequer a good bit of money, and it doesn’t move the electoral dial at all.  As far as tuition fees go, the only options worth anything to the Tory party are either to go all in and match Labour’s abolition, or to stick with the status quo and lavish any money not on “young people” aged 18-24, but “young people” aged 30-40, who voted for them as recently as 2015.