The Liberal Democrats stand alone among the three main political parties in promising to abolish university tuition fees. They do so in the hope that making tuition ‘free’ will draw more students from low income families into the higher education (HE) system.
This superficially attractive proposition ignores two important facts, however.
First, there is no such thing as free tuition – someone, somewhere has to pay, and under the Liberal Democrat plan that ‘someone’ is the taxpayer. And since most taxpayers are non-graduates with relatively low lifetime earnings, the policy involves a significant redistribution of resources from poor to rich.
Second, the abolition of fees will do almost nothing to get more poor students into university as the Liberal Democrats claim. Why? Because the gap between the HE participation rates of rich and poor students was not created by the introduction of tuition fees. Indeed research suggests that the gap actually narrowed slightly in the years after fees were introduced in 1998.
The real reason why students from low income families are not going to university in greater numbers is because too few are achieving the exam results they need to apply. This fact is borne out by a recent study showing that, although the poorest 20% of students are six times less likely to go to university than the richest 20%, there is almost no difference between the participation rates of poor and rich students with the same A-level results.
The Liberal Democrat policy on fees is therefore both regressive and ineffective. It is also becoming increasingly expensive. As student numbers and average fee levels have grown, so has the cost of the Liberal Democrat policy: abolishing fees would have cost £280 million at the time of 2001 election and £1.5 billion at the 2005 election. In 2010, it will cost £2 billion. If the £3,000 fee cap is lifted, that figure will go up again.
The current economic downturn should help to focus minds on whether or not this represents an intelligent use of scarce resources. With a lengthy period of fiscal contraction (and £37 billion of spending cuts) waiting on the other side of the recession, the party needs to decide whether it really wants to spend an additional £2 billion subsidising relatively well-off university graduates. After all, every pound it spends reducing graduate debt is a pound that cannot be spent enhancing services, or reducing the tax burden, for families further down the income scale.
If the party is serious about widening participation in higher education, it should concentrate its efforts on driving up pupil attainment levels, not bringing down graduate debt levels. It could do this by taking the £2 billion it would cost to scrap fees, and using it to increase the ‘Pupil Premium’ – an innovative new system of deprivation funding designed specifically to improve educational outcomes for disadvantaged school children.
* Julian Astle is Director of CentreForum, the liberal think tank. His latest paper, ‘Time’s up: why the Lib Dems should end their opposition to tuition fees’ is available here. And coming up later today, Paul Holmes MP responds to arguments.