The Institute For Fiscal Studies (IFS) has been running its calculators and slide-rulers over the new system, and here are some of the key points that it has concluded:
- “The new system eventually saves the taxpayer around £760 million per year, driven by a dramatic cut in direct public funding to universities.”
- “But for universities, this cut is more than offset by almost £15,000 in additional fee income per graduate – a 140 per cent rise over the old system. Thus the total amount spent – from both private and public sources – on higher education is expected to increase as a result of these reforms.”
- “The average student will also be better off while at university, enjoying an increase in cash support of some 12 per cent.”
- “The poorest 29 per cent of graduates will actually be better off under the new system [and the others will pay more].”
- “Low-earning graduates benefit from the increase in the earnings threshold, which (combined with the debt write-off after 30 years) ensures that the majority of their loan is never repaid. This makes the new system substantially more progressive than its predecessor: the richest graduates are likely to repay ten times as much as the poorest, and would even pay back more than the value of what they borrowed.”
- “As long as students are well informed and not averse to the kind of debt involved – repayments of which only depend on one’s ability to pay – participation rates should not suffer. But there are grounds for concern if students have difficulty understanding the complexities of the new system – which are substantial – or if they are deterred by the prospect of higher borrowing regardless.”
All in all, I think this highlights why Nick Clegg’s apology was the right thing to do. Looked at dispassionately, the policy has many good points. If Liberal Democrat conference had voted for it in, say, autumn 2009 many conference representatives would have been very disappointed at not having ‘axe fees’ as the policy, but I doubt very many would have felt this alternative policy was dreadful.
Even the impact of the policy in practice so far is – the important caveat of mature student applications aside – turning out fairly well, with application rates (when remembering to factor in the declining number of teenagers year on year) holding up well, especially from the most disadvantaged households.
But politically all that is trumped by the pledge.
However, unless all you are interested in is the politics of a policy, the substance of how it works is also of interest. And on that the IFS’s verdict includes not only a repeat of an unsurprising point – that for the least well-off the new system means they’ll pay less – but also throws in an important point about overall funding for universities, which has often been talked about (at least where I’ve been listening) as if it has been cut under the new system. Their calculations are otherwise (see bullet point two above).
* Mark Pack is Party President and is the editor of Liberal Democrat Newswire.
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38 Comments
“As long as students are well informed and not averse to the kind of debt involved – repayments of which only depend on one’s ability to pay – participation rates should not suffer.”
I think it’s therefore the NUS and Labour who should apologise, for misleading young people in the hope it will serve them politically. 1/2 of young Londoners apparently believe these charges must be paid up-front – that’s atrocious and anyone who’s fanned that misinformation for political gain should be ashamed of themselves.
I recall that the Social Market Foundation calculated that the graduates who pay the most are those who earn £26,000 because unlike well paid graduates they cannot pay back their loans early and as a result they pay more interest. I would be interested to know what the IFS response to that is.
Whilst it is good news that low income graduates have their debts written off 30 years later, I wonder what the impact of that will be on the funding of higher education?
Sigh. Indeed – we’re throwing more money at universities, in the name of throwing less money at universities, a move which was supposed to be motivated by the immediate need to save money but clearly has more to do with bumping up student satisfaction figures (here, kiddies, have an iPad!) at the expense of the rest of their lives. This money-saving move will ‘eventually’ save over £760 million a year; the word ‘eventually’ made me curious, so I went to look at the linked article and discovered that the origin of this factoid is a paper behind a Wiley paywall, which is I suppose is transparency in action. Nonetheless, I logged in and discovered that the word ‘eventually’ here means ‘we actually haven’t a clue when that will actually happen, and have explicitly said that we’re not predicting the real world – we’re just playing with a model here, people.’
From the paper: ‘It is worth emphasising that our earnings simulations are not predictions of the future. This means that our analysis of the effects of HE funding policies on incomes does not represent a forecast or prediction of what we think the effects will be. Rather, it provides an estimate of what the effects would be, given our simulations of the distribution of lifetime earnings of graduates.’
Also, I’m enjoying that ‘71% of people will be worse off’ stat — looking at that graph, in most cases much worse off. A quote from the paper that didn’t make it into the PR: ‘Students will be significantly better off while they study due to the increased generosity of student support. After university, the average graduate will be considerably worse off over their lifetime.’ Considerably worse off over their lifetime; a nice quote, thank you for bringing it to my attention.
“Also, I’m enjoying that ’71% of people will be worse off’ stat — looking at that graph, in most cases much worse off”
Worse off is such a loaded term. 71% will pay more than they did under the older system. They will, however, pay much less per year than they were. In year on year terms students will be significantly better off, and have the freedom to enjoy their pay much more readily. I guess it depends on your definition of “worse off”, for me having more manageable finances for a duration of a loan (which pretty much everyone will see to the end due to the way the interest rate is crafted) is the more important thing.
If you were offered £10k but had to pay it back in installments of £300 a year (never paying it off fully), or £30k but had to pay it back in installments of £200 a year (never paying it off fully), for a maximum of 5 more years… which “debt” would you rather take?
tl:dr; for last comment.. Yes, you are worse off than 2010, if you earn more money than most other people in the UK. Hence the progressiveness of this measure.
“But there are grounds for concern if students…………… are deterred by the prospect of higher borrowing regardless.” And this for the LibDems is what this is all about. The Pledge was that eventually there would be NO debt that would deter any student. We are told endlessly how good and progressive the ‘new’ Fees system is. It still involves a sizeable debt, and as such is light-years distant from the LibDems’ promise [no fees whatsoever] as well as their current official policy. Surely the LibDems must realize that no amount of worthy and wordy endorsement of the Fees system will re-write history. You promised –and still do promise – to get rid of fees for HE.
@ Daft ha’p’orth: One of the key arguments justifying the new fees policy is that higher education creates a substantial lifetime earnings premium for graduates, and that those individuals who benefit directly should contribute more than non-graduates to the funding of the system once they earn enough to do so.
It is therefore unsurprising that “the average graduate will be considerably worse off over their lifetime” compared to the previous system, since the policy transfers the cost of the teaching budget from the taxpayer in general to graduates in particular.
Another way of putting it is that non-graduates will be considerably better-off as a result (since the cost would otherwise be met by actual or deferred taxation), or that graduates’ earning premium will be slightly reduced taking into account the repayment of fees. Now, you may disagree with the policy but the fact that it does what it says on the tin is hardly a clinching argument against it.
The overall IFS findings are interesting and useful in debunking some myths about the new fees policy, which is far from perfect but a long way from the caricature peddled by its more vitriolic opponents. However, there are a couple of other downsides that need to be acknowledged in my view:
– Whenever Nick Clegg and other government ministers say the new system involves graduates “paying less” than the old system, they need to be precise that it is the monthly repayment burden they are talking about (as a result of the threshold being raised substantially from £15K to £21K). Clearly it is disingenuous to claim that they will be paying less in total over their lifetime; as the IFS analysis shows and as indeed was the stated aim of the policy, the reverse is true.
The point about the monthly repayment burden is important, since it addresses concerns that graduates will not be able to afford the repayments. However, it won’t be believed if there is an attempt to pretend that there is no ‘catch’. The main consequence of the policy is that fee payments will extend much longer into the typical graduate’s working life than was the case previously.
– Given that the fee payment system works by deducting 9% of gross income above the repayment threshold, the effect is to raise the ‘effective marginal tax rate’ or ‘marginal deduction rate’ for graduates compared to non-graduates. For someone on average earnings, this rate is 41% (20% income tax plus 12% employee NI plus 9% fees), or 48.2% if we include employer NI (as we should – ie 48.2% of the employer wage cost). Of course this is already the case, but graduates will now faces these high deduction rates into their 40s and beyond. If there is any overlap with the benefit and tax credit systems, withdrawal rates will be higher still. Tax and benefit policy will therefore need to be carefully calibrated to avoid serious disincentive effects.
It’s not quite the rate you say Alex, but you’re right. With the interest rate configured as it is you’d have to be earning a VERY good starting salary to ever repay the loan, which means it’s essentially just a tax. But as it starts at £21k it’s not as simple as saying it’s a 9% addition to the 20% rate (plus NI).
Tuition fees are, by definition, regressive. Those that earn higher salaries pay a smaller proportion of their cumulative lifetime income, provided they are earning above ~35k, which isn’t very spectacular given that the average graduate starting pay is 26k. It is, therefore, the majority of graduates on those graduate middle incomes that get hit the hardest, whilst those that failt to get a graduate job and those that end up in a highly paid job pay a smaller proportion of their income. The opposite of a graduate tax.
The other issue is the burden of payment between graduates and non-graduates. If the average graduate earns 100k more over their lifetime than a non-graduate then they’re also paying 35k-40k more tax over their lifetime, which means that even without fees, graduates subsidise non-graduates (as thei additional tax more than covers the cost of tuition and they get nothing more back for that additional tax). Under the new system, graduates (especially those on average graduate incomes) are being fleeced.
So, if the average graduate earns 65k net (after tax) more than the average non-graduate over their lifetime and they also have to pay 27k in fees plus ~15k (or whatever) in maintenance loans plus interest then how much better off are they for their hard-work given they will have also lost three years of income? The answer is, that the majority of aspiring graduates would be financially better off over their lifetime if they didn’t bother going to university. That is the advice I will give my son if the new system is still in place (unless he is heading for a job in medicine, the law, the city or macdonalds, or if he wants to leave the UK).
Lets not forget that this combines with the rising of the income tax threshold. If a graduate earns, say, 21k in their first job, they’ll be about £100 a month better off than under the old system of tuition fees and tax system – £40 a month from lower tuition fee repayments, and £60 from the income tax change.
I suppose the irony is that a policy which was derided for hitting the poor disproportionately, making students worse off, universities worse off and graduates worse off has actually hit the rich disproportionately, made students better off, universities better off and graduates better off.
@ Lee: “But as it starts at £21k it’s not as simple as saying it’s a 9% addition to the 20% rate (plus NI).”
Yes the starting threshold for fee repayments is much higher than that for income tax and NI, which is why I gave the example of someone on average earnings (approx £25k).
The marginal deduction rate for an employee in such a situation is indeed 41% (excluding employer NI) – ie 41p of each additional £ they earn is deducted at source. It is the marginal rate (not the average rate) which is most relevant when considering the effect on incentives.
On its own this would be tolerable, but I imagine that the interaction with benefit and tax credit tapers could make it pretty ugly in some cases…
I am not opposing the fees policy – I think the previous arrangement was unsustainable for universities and abolishing fees would not have been a sensible use of scarce public money. (It’s better to target available education funding at early-years provision.) But the new policy does have consequences in terms of the duration of fee repayments.
“The poorest 29 per cent of graduates will actually be better off under the new system [and the others will pay more].”
Yes, but, this picture that people paint, that Joe earns £21K per year all his life while Bill earns £60K a year all his life, it’s not accurate, is it?
The reality is that the majority of graduates start at the “poorest” end, but rise into the “richer” end as they get older. So, this picture of how marvellous our system is for the poorest mainly only applies to the youngest.
The crucial point is Steve’s, above: that by definition, tuition fees are regressive. If the successful graduate who earns £80K in his/her forties, and the less successful graduate who earns £30K in his/her forties, are each paying the same amount, that’s hugely regressive.
If, instead, we had funded tuition from general taxation, then the guy on £80K would be paying a lot more than the guy on £30K. Even if we had a completely flat income tax, using that to pay for tuition would have been neutral rather than regressive. What we have done, therefore, is a lot more regressive than a flat tax. If anyone had suggested a flat tax, we would have recoiled in horror from anything so Tea Party extremist. But what we have actually done is worse!
Adam. “I think it’s therefore the NUS and Labour who should apologise, for misleading young people in the hope it will serve them politically”. Do you not think that the Liberal Democrats were by far the most guilty of misleading young people. It was the LibDems alone who promised faithfully to abolish student fees; and was this not done to serve your Party well politically? (as well as helping students).
Yeah, I know what regressive means, but I also know the meaning of the term ‘rip-off’. So your viewpoint is: as pointless as this may have been in terms of the original goal of saving money; as counterproductive as it turns out to be in terms of increase in cost to the vast majority of individuals, as well as in the foreseeable future to the nation; as huge a barrier as these fees are to so many people, the ones you all pretend don’t exist who are barred from retraining or sometimes from finishing their studies; as tempting a slippery slope this buy-now-pay-later stuff continues to be; as obvious and ugly an attempt at offloading an accounting nightmare to the future as it is… according to this graph, the overall increased expense is (mildly and unevenly) progressively distributed. This monologue of self-justification is ugly to watch.
“If you were offered £10k but had to pay it back in installments of £300 a year (never paying it off fully), or £30k but had to pay it back in installments of £200 a year (never paying it off fully), for a maximum of 5 more years… which “debt” would you rather take?”
I’d want to know why you suddenly decided you had a right to charge £30k at all. I’d sit down and seriously ask myself whether it’s worth £10k, an amount which I could reasonably hope to clear relatively fast by dint of enough hard graft, and hence reduce my debt for a time when I’ll need every penny for the kids, or whether it’s worth £30k, an amount which would be almost impossible to clear on low wages no matter how many evenings and weekends I put in. I’d want to know what it actually cost you to provide the service that I’m paying for. In fact I’d want someone with integrity to sit down and do a really good requirements analysis on the whole area of university education (not just finance, which introduces absurdities such as the graph-based accountancy failure to see the forest for the trees), and then I’d want a serious, public, reasoned discussion about how to achieve it. A discussion which did not begin by making the assumption that increased costs are just fine and that it’s simply a question of precisely how our chosen economic formula distributes them.
But then again, I’m repelled by the idea that individual debt should be seen as a convenient national piggy-bank, as well as the fact that nobody seems remotely bothered about loading up the youth with thirty years of hefty repayment obligations which they would have no intention of coughing up themselves. It’s all remarkably hypocritical and shameless and politicians of all stripes should be heartily ashamed of themselves. I get the impression that all of you think that debt doesn’t really matter, that a lifetime of interest-only repayments is perfectly okay, which to me is just unethical. Then again a lifetime of debt is apparently the Lib Dem vision for the future, so I guess we just have irreconcilable differences.
No-one has ever managed to say how a government 30 years hence will be bound to write off the massive amounts of outstanding debt, which after the effects of compound interest at usurous rates are taken into account could be as much as £250k for a public sector worker. Multiply this by the number of such graduates and the write offs could amount to tens of billions per year by that stage. It is much easier to imagine a future government saying that to do so would be unaffordable and/or that there are higher and more deserving priorities.
“It is therefore unsurprising that “the average graduate will be considerably worse off over their lifetime” compared to the previous system, since the policy transfers the cost of the teaching budget from the taxpayer in general to graduates in particular.”
Whereas Lib Dem policy was (and as far as I know officially still is) to transfer the cost in precisely the opposite direction – from graduates to the taxpayer. In terms of principle, the new system is dead against Lib Dem policy.
People try to sell the system on the basis that repayments are shared out more progressively. What they need to address is the fact that total repayments (and individual repayments for over two thirds of graduates) will be much larger, when party policy was to abolish them altogether.
Hmmm. Are the conclusions that I’m supposed to draw from this that Labour were right to introduce tuition fees and right to commission Lord Browne’s report, Labour and tories were right to want to raise fees after the election, and that the Lib Dems have been wrong to oppose it for all this time? In that case Clegg might have bigger apologies to make.
On the related subject of it being “fairer” to spread out the student loan repayments over a much longer time, leading to smaller monthly repayments but a much bigger total debt, then on any given duvet day I’ve seen plenty of companies offering to consolidate my personal debts in the same way and I’ve never considered them to be a “fair” model for Lib Dem policy.
Finally, I’ll repeat the link posted elsewhere by Chris Riley which certainly makes one think about the viability of the scheme and the basis of some of the figures: http://www.timeshighereducation.co.uk/story.asp?sectioncode=26&storycode=421227&c=1
@ daft ha’p’orth: “I’d want… a discussion which did not begin by making the assumption that increased costs are just fine and that it’s simply a question of precisely how our chosen economic formula distributes them.”
What you describe is not just the universities’ or the present government’s approach to higher education funding, but the approach of all British governments since time immemorial as to how they run their departments and finance their activities.
For example, discussion of public spending routinely starts from the assumption that it is normal to assume that a significant year-on-year increase in costs (often well above the economy-wide inflation rate) is necessary to maintain a given level of service. If the competitive parts of the private sector operated on this basis the businesses concerned wouldn’t last long. The difficulty of measuring productivity in the services the government provides is a handy cover for high cost inflation and lax procurement practices.
In the current financial climate it is particularly important to challenge this trend so that every penny of public money is spent effectively. To that extent I welcome Ed Balls’s proposal for a ‘zero-based’ review of all public expenditure – although I don’t find it at all credible coming from him, and suspect it is simply a device to put off tough decisions about spending until affter the next election.
Still, it is something the coalition could and should have done as part of the 2010 Spending Review. I remember Vince Cable called for just such an approach in his Reform paper of autumn 2009, calling for the whole size and scope of government to come under the microscope. Yet when the opportunity arose to do just that he was strangely silent…
Chris and Peter Watson: I think you raise a fair point about the contrast between Lib Dem ministers justifying and indeed extolling the virtues of the new fees policy, and their ambiguous attitude to the policy the party stood on at the last general election. I happen to think it was the old policy that was unwise (and I questioned some of the costing assumptions at the time) and the pledge doubly so.
I also think both Nick Clegg’s apology and Vince Cable’s faltering Newsnight appearance indicated that they share this view. Indeed it’s pretty apparent that many of the leading party spokespeople were sceptical of this policy and felt it was an unwise hostage to fortune, yet they were unable or unwilling to prevent the party being saddled with it and then foolishly signed up to the pledge.
“So, this picture of how marvellous our system is for the poorest mainly only applies to the youngest.”
Diddums to the people earning a lot of money in their twighlight years, after many of their other financial obligations are paid, paying some of their privileged earnings back into the system. It’s a shame it’s not either graduate wide (regardless of when you went to uni) or even general taxation funded…not sure we can cry too hard for the person who is in one of the top earning positions in the entire world having to help keep HE going.
“What they need to address is the fact that total repayments (and individual repayments for over two thirds of graduates) will be much larger”
If you’re actually earnings rich. I’m sorry…but isn’t the Lib Dem policy (I’m not a Lib Dem, I don’t know 100%) to essentially make the rich pay for Higher Education for all so it’s free for first degrees? Given the threshold is set at the median wage in the UK, and you have to hit the average graduate wage before you pay back more, isn’t this…albeit in a narrow populace…moving towards the model Lib Dems want?
“Hmmm. Are the conclusions that I’m supposed to draw from this that Labour were right to introduce tuition fees and right to commission Lord Browne’s report, Labour and tories were right to want to raise fees after the election, and that the Lib Dems have been wrong to oppose it for all this time? ”
No, just that this system is an improvement, vastly, on the mess that Labour made by simply not making more intelligent choices on how to fund HE through general taxation.
“I’d want to know why you suddenly decided you had a right to charge £30k at all. ”
That completely skips over the point I was making…
” an amount which would be almost impossible to clear on low wages no matter how many evenings and weekends I put in. ”
…as you demonstrate here by continuing to frame the “debt” in unrealistic terms.
“But then again, I’m repelled by the idea that individual debt should be seen as a convenient national piggy-bank”
We’re all in debt to the nation, this is just the first time that the portion of society debt is being attributed to is told how much that “debt” is. Imagine that we all have a million pounds of debt to our name that we are told to repay through income tax when we first reach working age…not that we have to pay off the entire million if we don’t pay enough, but that the interest rate will be fixed as such that you’ll never be able to actually pay the debt off.
Do you hate income tax too? Because TBH this isn’t what I can’t get my head around, those arguing that this system is so awful should be calling for the dismantling of taxation in general. This system isn’t awful, it’s just narrow, and taking a step towards proper graduate tax, is a step further towards going back to fully paid HE out of general taxation.
“I’ve seen plenty of companies offering to consolidate my personal debts in the same way and I’ve never considered them to be a “fair” model for Lib Dem policy.”
Let’s not compare loan models that feed off of the poor’s inability to pay and stick them in a loop of financial commitment to a system designed not only to not require you to pay if you cannot, but to only deem you as being able to pay once you reach the median wage in the UK, hmm? Ridiculous.
Let’s also not forget that HE funding has been in a catastrophic decline for a decade or two now. There’s a reason this was in the wings, and that’s because if we want to retain universities in the UK as a world high ranking set of institutions they need better funding to keep standards up. Obviously it’s regrettable that the easy option is to up fees, in such a way that in essence the government is injecting a lot of cash in to the system right away that it has borrowed to do just that, but the other options are logistically and politically harder.
Personally I see the argument against moving the burden to general taxation much harder to make when the peak has been met for the amount of debt that the UK will carry for this scheme, and managing that constant debt becomes a priority.
“If the successful graduate who earns £80K in his/her forties, and the less successful graduate who earns £30K in his/her forties, are each paying the same amount, that’s hugely regressive.”
They’re not paying the same amount.By my reckoning, simple models involved, your first graduate will have paid £106k in real money (not todays money), the second £45k. What’s more if someone is “only” earning £30k in their 40s (assuming that’s today’s money, not with inflation) they’ll actually pay LESS than they would have under the last system …and that’s while having a consistent *good* wage!
I find our stance of tuition fees weird at best. We’re a party that constantly calls for more tax on the rich and less on the poor. The tuition fees system means that those that are better off in our society pay more taxation than both poor graduates and those who never had the opportunity to go to University.
Thomas:
The problem is that everyone benefits from a socially mobile and educated populace, and no-one benefits more than the businesses that have a wealth of talent to pick from. Currently we have people that either didn’t go to university, or went to university before fees, raking in very healthy salaries and sitting on significant wealth off of the back of graduates that are starting to pay for the system they’ve used. Business and rich individuals should be putting more in to the system to make it work, since they reap the benefits of the system as a whole.
This is actually a step in the right direction, but it’s not a big enough step to be fair. But that doesn’t stop it being fairer than it was.
(Allen) “If the successful graduate who earns £80K in his/her forties, and the less successful graduate who earns £30K in his/her forties, are each paying the same amount, that’s hugely regressive.”
(Griffin) “They’re not paying the same amount.By my reckoning, simple models involved, your first graduate will have paid £106k in real money (not todays money), the second £45k.”
I don’t know what model you are using, but, they both have to pay off the same amount of debt. OK, the rich guy pays it faster, so at some point, he is ahead – which is presumably what your model says. But then the poorer guy (unless he’s so poor that he never gets there) has to catch up.
So, properly assessed over a whole life time, this policy is horribly regressive. The snapshot assessments which fees apologists make at particular points in time, usually early on, are designed to disguise this fact.
David Allen – you’ve made your own point. The poor guy never gets near paying it off.
I think that the difference between monthly and cumulative (or total) repayments leads to a lot of confusion in debates over tuition fees (especially for me!), and I think that sometimes the confusion is created deliberately.
Supporters will often say students “pay back less” under the new scheme. What they mean is that the monthly payments will be lower. Because of the higher (real) rates of interest under the new scheme (and the basic fact that the loan is larger) then of course they will pay back more in the end (unless they can stay under the radar – or working abroad? – for thirty years). On that matter – does the new system provide a powerful financial incentive for highly employable graduates (engineers, scientists, doctors, etc.) – to emigrate and take their valuable skills with them?
It also appears that higher earners will have a smaller lifetime debt, and if they have repaid the debt earlier then it is clearly “regressive” at that point compared to their lower-earning peers who are still making monthly payments.
I get more confused when I read, as in the article above, that the poorest students will be better off. Factually, how can this be correct when the lowest-earning graduates paid nothing back before and will pay back nothing now? I guess it depends how far up the scale you go to define “poor” (perhaps high enough to make the figures look good?). Furthermore, although such descriptions make it sound like a great tool for social mobility, aren’t we defining the “poorest” by the salaries they go on to earn not the family background from which they’ve come.
I also get completely confused when I try to understand what Lib Dem policy is on this issue. I don’t remember hearing a new policy agreed upon at any conferences, so apparently our leaders think this is a fair, progressive system that they would replace with general taxation at the first opportunity.
I don’t know if we have a fair system, but it’s certainly complicated.
Thomas Long
I find our stance of tuition fees weird at best. We’re a party that constantly calls for more tax on the rich and less on the poor. The tuition fees system means that those that are better off in our society pay more taxation than both poor graduates and those who never had the opportunity to go to University.
Yes, but you’re putting that as if you think the tuition-fees-with-guaranteed-loans system we have now is our ideal. It isn’t, it’s what we were able to get as a compromise from the Tories. As others have said, it isn’t as bad as has been painted, it doesn’t mean, no matter how much Labour supporters and those who know no better say it does, that poor people can’t afford to go to university. However, when you open your mouth and try to say that, they just assume you’re a Tory who wanted what we have all along. It’s quite simple – just because it’s better than what the Tories would have given us if they had a full majority does not mean it’s our ideal, but neither does it mean we should not have bothered trying to get it into the form it has now. It does seem Labour would rather we had rolled over and died in May 2010, so they could have the comfort and pleasure of living under a completely Tory government. However, I suppose “Na-nah-nah-nah-nah-nah, rotten dirty LibDems, you put in the Tories” beats having a campaign strategy that involves developing realistic alternative policies. Of course if they REALLY believed we had any other alternative than what we did in 2010, they could offer us the terms for their coalition now. They don;t because 1) they know they don’t have enough MPs for it to be viable 2) that involves accepting the end of the good old two-party system and 3) it involves them having to do some constructive thinking in policy.
Of course, it would be easier to get this across to the electorate if we didn’t have a leader whose strategy does seem to be to paint whatever the coalition comes out with as the best thing possible rather than a compromise which isn’t in our terms.
I think the parents of students, former students and the like are tax payers. Plus the saved money is not going to the Tax payer, it’s going to the black hole that is deficit reduction.
This is just another piece of free market dogma designed to cut the role of the state and make people reliant on the debt creation machine of the banking system. Personally, I think it will create a mini-debt bubble, impact on the housing market 10 to twenty years down the line and will result in fewer and fewer people going into higher education, which will in turn produce further tuition fee rises.
@Matthew Huntbach “it’s better than what the Tories would have given us if they had a full majority”
Is it? Based on their manifestos, a Conservative (or Labour) government would have based any measures on Lord Browne’s report, and his key recommendations included removing the cap on fees, upfront loans to pay the fees, real-terms interest to be charged on those loans, raising the salary level at which repayments were made, writing off after 30 years. Yes, as implemented there is a cap on fees, but that was set at a level which was expected only to be reached in exceptional circumstances. Arguably, setting a cap removes some of the price-sensitivity that supporters of fees might claim would lead to a market in university places which would drive up standards (or drive down costs).
Overall, I am not convinced that Lib Dems in government have done much to change what the tories (or Labour) would have done alone, and whether the new system is good or bad, better or worse, Lib Dems did abandon their policies and pledges when they implemented it.
Tabman,
The very poorest guy never pays off the whole debt. The great majority do. So it’s a broadly regressive system. With a tiny progressive element at the margins, which is put there so as to confuse the credulous.
Glenn
I think the parents of students, former students and the like are tax payers. Plus the saved money is not going to the Tax payer, it’s going to the black hole that is deficit reduction
There isn’t any saved money. It’s still really the government borrowing money and promising to pay it back by getting it from the ex-students they lent it to. It’s a fix to get it off the books, as PFI was. Had the costs of university education remained paid by direct government subsidy, the same money would have had to be borrowed to pay for it, and future generations would still have to pay it back as they do any government borrowing. So, unless those opposing tuition fees can tell us what whacking new tax they would like to see to pay for it, they’re STILL putting a big debt burden on future generations.
The premise of the article is wrong.
Tuition fees are wrong. Forcing students to face such huge debts (regardless as to when they start paying those debts off) means that students from poorer backgrounds will not aspire to learning at the more prestigious universities . Further, students (after graduating), will aim for the higher paid professions at the expence of such vocations as teaching and nursing.
Peter Watson
Overall, I am not convinced that Lib Dems in government have done much to change what the tories (or Labour) would have done alone, and whether the new system is good or bad, better or worse, Lib Dems did abandon their policies and pledges when they implemented it.
Clearly, a party with less than one in ten of the seats in Parliament cannot implement all its policies. It seems to me to be as foolish to accuse the LibDems of being bad people for “not implementing their policies” as it would be to accuse the Labour Party of “not implementing their policies”.
If the argument is that the LibDems should not have backed policies that were not in their manifesto, well the same applies to all the other parties. If every party sits back and says it will block every policy proposed by any other party, government will be impossible when no party has a majority. The argument against the LibDems seems to boil down to a supposition that with their less than 10% of the seats they could nevertheless force the Conservatives to entirely abandon Conservative Party policy and instead troop through the lobbies to back entirely Liberal Democrat policy.
Well, if the LibDems have some sort of magic Conservative-converting power to do this, it would be good, but they don’t. You might as well argue that Labour, with its one third of the seats should be able to convert all the Tory MPs to Labour policy. The reality is that all the LibDems can do in the coalition is swing the balance in the Tories, so that if there’s a policy which two-fifths of the Tories support but three-fifths oppose, the LibDems can get it through. Quite obviously this means the only aspects of the LibDem manifesto that can be got through are those that chime with at least a substantial minority in the Tories.
It seems to me that this is what politics is about – coming together and finding a compromise. This accusation of “breaking promises” because a compromise will not be one’s ideal seem to me to be infantile. It would be good if there were a more mature understanding of how representative politics works amongst the people of this country. Here is where I blame the party leaders because they do not encourage such a view.
Clegg is now trying to blame the democracy within his party for forcing the pledge on student fees on him. The fact that this was singled out as the one policy where there was a pledge to vote AGAINST something is the problem. As oppositions by their nature vote against government policy, the only point of making such a pledge would be to insist one would still stick to it even if one were the junior partner in a coalition – that’s where Clegg is on a hook. It’s not enough to say the party forced on him unworkable policy – because no other policy the party had made was turned into a pledge to vote against something. It was the marketing men who ran the LibDem campaign who insisted on making this pledge a big separate thing, rather than just another line in the manifesto.
Then Clegg made it worse by over-playing his role in government, making out he was almost an equal partner with the Conservatives, and others in the party (notably its President, Tim Farron) made it even worse by making the claim that “75% of our manifesto has been implemented”. This was appallingly poor tactics, falling into what ought to have been seen as an obvious trap. The result is that because, as I’ve pointed out above, actually the LibDems don’t have that much power in the coalition – how could they with just one-sixth of its seats? – what Clegg and Farron are trying to put across comes across as weakness or as the LibDems having conceded to the Tories because they wanted to.
The better tactics would have been to have been honest at the start about the limited power a junior coalition partner has when there is no other viable coalition, then what small could be gained by swinging the balance in the Tories would look much more worthwhile, and the argument “if you want more LibDem influence in future, it would help if there were more LibDem MPs” might get a hearing.
@Matthew Huntbach
I agree with a lot of what you say on this (and other issues),and I was quite deliberate when I accused the Lib Dem leadership of abandoning their policies and pledges over tuition fees (and I kept away from expressing an opinion on the notion of tuition fees). I hope that everybody accepts the need to negotiate and compromise in coalition government: it underpins the whole idea of supporting a smaller party. It has and will be debated ad infinitum that the making and breaking of personally signed pledges goes far beyond trading a few policies, especially in the context of a campaign on the basis of “no more broken promises” and a “new kind of politics”, so no point in going there now. But even on the basis of a manifesto policy our leaders, perhaps bound by collective cabinet responsibility (a notion which I think is unsuited to coalition), do not seem to have made their case on the basis of “we wanted this, they wanted that, we’ve compromised on the other”. So our leaders promote their new system as fair and affordable, the same claims they made for the manifesto policy, it is not apparent that they had any influence over thenew system and there is no evidence to indicate whether or not they tried, and it is unclear whether they still (or ever did) agree with their manifesto policy. This leaves them open to accusations of hypocrisy, incompetence, etc., and we are all then tarred with the same brush.
Regardless of the acres of verbiage, the point of principle concerning the pledge remains supremely simple.
If as a parliamentary candidate you make a written, unconditional promise to vote in a certain way if elected, then you should honour that pledge, come what may.
If you sign such a promise in the knowledge that you not be able keep it, you are being dishonest.
@Chris
Quite right, and there are going to be many candidates at the next election who will be cursing the day they allowed the tuition fee pledge photo to be taken.
Peter Watson
So our leaders promote their new system as fair and affordable, the same claims they made for the manifesto policy, it is not apparent that they had any influence over thenew system and there is no evidence to indicate whether or not they tried, and it is unclear whether they still (or ever did) agree with their manifesto policy.
Yes, I have posted time and time again, from the start of the coalition with the “Rose Garden” imagery and ever since, that I believe the policy of the leadership of our party of exaggerating the influence it has in the coalition and of praising policies coming out of the coalition as if they are our ideal rather than a compromise we have to make under the circumstances, is damaging and should be dropped. However, I do believe in giving credit where credit is due, and what I have heard in some cases from people directly involved, is that the LibDems did push quite a way to make sure the loans for tuition fees were available to all and would in fact be paid back in a way that made them more a form of tax than a loan. So I think it is completely unfair to claim they didn’t even try.
It seems to me quite obvious that since the loans are available to all taking their first degree, and have to be paid back only after income reaches a certain level that they ARE affordable. I can say that without it stopping me from still preferring a system whereby the costs would be paid from general taxation – though unlike most opponents of tuition fees I am willing to say just how I would pay for them – my preference would be big rises in inheritance taxes.It’s hard to have respect for people who throw abuse at the LibDems for the position they eventually took, and yet who can’t and won’t say how they would pay for it.
So it seems to me to be perfectly possible to say policy A is affordable without that being in contradiction with a previous claim that policy B is affordable. As to fair, well, please supply me wit h a measuring tape to measure fairness. And what number on that tape does a policy have to reach to be “fair”? If the number is N, and policy A hits N+d on the tape while policy B hits N+2d on the tape, then both are “fair” but B is more fair than A.
I’m afraid I don’t do “yah booh” politics. I’m extremely unhappy with the leadership of the LibDems, but one of the things keeping me in the party is the “yah booh” nature of the attacks on the party from almost anyone outside it to its left. It’s a difficult position leaving me feeling really ground down between the illogical and hypocritical nature of the attacks on the Liberal Democrats from outside, and the way the leadership of the LibDems keeps on and on making presentational mistakes which bolster those attacks and make it much harder for people like me who wish the party to succeed and accept the need to compromise in the current situation to defend those compromises.
@Matthew Huntbach
“what I have heard in some cases from people directly involved, is that the LibDems did push quite a way to make sure the loans for tuition fees were available to all .. So I think it is completely unfair to claim they didn’t even try.”
I agree entirely with your criticisms of the leadership’s approach to coalition, and even in your defence of them over tuition fees, your phrase “what I have heard” emphasises the problems we have because of the way they have behaved. What they may have said or done, disagreed with, pushed for, traded away, etc. is all behind the scenes and subject to rumour, gossip, speculation, hope, leaks, off-the-record briefings, … But on the record they give the impression that they have had a Damascene conversion to a wholly different approach than the one they espoused before the election. And at the next election it is what they have done and said in public, not what they might have done behind closed doors, that will damage them and the party.