The Liberal Democrats have got themselves in quite a mess on higher education funding. Today, we have the bizarre spectacle of the Vince Cable pulling out (on “police advice”) of a planned speech at Oxford University because students planned to protest his Government's plans to at least double tuition fees.
Our guest writer is Wes Streeting, former president of the National Union of Students (2008-10) and currently chief executive of the Helena Kennedy Foundation, an educational charity that promotes widening participation and social mobility; Wes is writing in a personal capacity
The Liberal Democrats have got themselves in quite a mess on higher education funding. Today, we have the bizarre spectacle of the Vince Cable pulling out (on “police advice”) of a planned speech at Oxford University because students planned to protest his Government’s plans to at least double tuition fees. Where the Liberal Democrats would have once organised such protests, now they run and hide from them.
Yesterday in the House of Lords debate on the Browne Review, Baroness Kennedy said:
“I am concerned that we will see the arrival of Tina. Noble Lords may wonder who she is. Tina is the mantra that we hear too often nowadays: there is no alternative.”
Tina has arrived. At Deputy Prime Minister’s Questions this week, Nick Clegg claimed that the Government has looked “very carefully” at the case for a graduate tax, saying:
“…it has also been proposed by the National Union of Students – but it is not workable and it is not fair.”
Clegg, and his Liberal Democrat colleagues, ought to look a bit closer at this issue. Since the publication of the Browne Review the political debate has been allowed to polarise between proposals of the Browne Committee and a pure graduate tax. This has not occurred by chance; it was the only alternative considered and addressed by the Browne Review.
The ‘pure graduate tax’ option is also a complete straw man. I have yet to hear a single commentator or stakeholder recommend a pure graduate tax. It has certainly never been proposed by NUS. There is no evidence that the Browne Review, or the Government, has given the full range of alternatives due consideration.
The NUS model, or some variant on it, could be a serious lifeline for the Liberal Democrats. It differs from the pure graduate tax in a number of important ways. For example, it is time limited for 15 years, the revenues would be held in an independent trust to ensure the revenue reaches universities and don’t end up being diverted by the Treasury. Unlike the Browne proposals, it would eliminate the concept of tuition fees, debt linked to fees and would generate savings for the Treasury in the longer term.
Some Responsibility for this one-sided debate should rest with the Labour opposition. Labour’s message has been muddied by dissent within the Shadow Cabinet from those who were previously only too happy to accept fuhrerprizip on higher education funding. Ed Miliband’s platform was in support of the graduate tax principle and he should continue this break from the past.
There are two real alternatives available to the Liberal Democrats; they can demonstrate the value of their presence in the coalition by changing the direction of current policy, or their ministers can abstain while backbenchers vote against. There is nothing in the coalition agreement that binds the Lib Dems to supporting higher fees. If they do it will be by choice and will be the ultimate betrayal of students and their own values.
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23 Responses to “NUS funding model offers serious lifeline to the Lib Dems to think again”
cim
The debate between “Browne” or “graduate tax” is a little strange, since Browne effectively is a graduate tax, and not massively dissimilar in payments to the NUS model (the NUS model is marginally more generous to mid-earnings graduates and much more generous to high-earnings graduates, and marginally less generous to low-earnings and part-time graduates)
The fees proposed under Browne would leave the vast majority of graduates with a debt that they can’t completely repay before the 30-year writeoff, even with the low-end £7k fees. (For £7k fees, full maintenance loan, and a 3-year course, then a graduate would need their real-terms salary to average £37.5k over the first 30 years). Because of the mostly inevitable write-off, Browne is essentially a 9% graduate tax on earnings over £21k for 30 years.
As I’ve said before, the interesting consequence of this is that for the vast majority of students, there’s no financial consequence to them of paying £12k fees rather than £7k fees (their repayments are identical), but the £12k fees benefit the university more. The only graduates to which there’s an actual difference between £7k and £12k fees are those who end up rich after all and so pay more back under £12k fees rather than £7k fees. But they’re rich, so I’m not really concerned about a little extra taxation for them, since they can afford it. (Which of course means that “Browne but with a £7k fee cap” is generally worse than either “Browne” or “status quo”)
David Levene
“their ministers can abstain while backbenchers vote against”
Which would still see the Browne Review passed
@ cim
The key difference is that under Browne students leave with debt, and with a grad tax they don’t. Young people from more marginalised backgrounds are more debt averse, so higher fees will disproportionately affect them. Bursaries or the prospect of a write-off when you’re 50 won’t change that. How many students look into the bursaries available, or calculate repayment rates against hypothetical earnings, before applying, especially if they’re from poorer schools where careers advice is less good (for example)? There’ll always be a big information gap on that kind of thing, and it’ll be even bigger for those from marginalised backgrounds. The Sutton Trust did some research on this. The headline number will always be the fees charged – there’s no real way to offset that deterrent.
Also I believe there’s a difference in terms of interest rates.
Susan Nash
RT @leftfootfwd: NUS funding model offers serious lifeline to the Lib Dems to think again: http://bit.ly/aZf9RR writes @wesstreeting
Laura Purll
RT @leftfootfwd: NUS funding model offers serious lifeline to the Lib Dems to think again: http://bit.ly/aZf9RR writes @wesstreeting
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