Lord Wallace of Saltaire writes….Liberal Democrats’ investment in education has been socially progressive

I took part in a five-party panel at York University the other weekend, organised by the University’s Politics Society, in front of a packed lecture hall with over 200 students.  No other panellist or questioner mentioned the subject of tuition fees, believed by some Liberal Democrat activists (and right-wing journalists) to be an issue that hangs like an albatross round Nick Clegg’s neck. The overwhelming impression I came away with, reinforced by informal conversations with several students after the meeting, was not that we face an outraged student body which can never forgive us for the tuition fees ‘betrayal’, as the NUS would like to portray it; it was of a student body which is switched off from party politics, unsure of whether to vote or not, but with some intelligent questions to ask.  ‘I wasn’t planning to vote until I came to this’, one student told me afterwards, ‘but maybe now I will.’

Since nobody else did, I addressed the tuition fee issue.  I said that we had found it impossible to persuade our Conservative partners in the coalition to pay for this, against the background of a yawning gap between revenue and expenditure in 2010, and had therefore focused on striking a deal that was as progressive in its impact as possible; that the package had ensured that graduates only start to pay back when they are earning good money; that the rise since then in the number of students from disadvantaged backgrounds applying to university has shown that we got that right; and that there was no no way any future government would want to take us back to free fees in the face of other competing demands for government funding.  I went on to say that we had worked in government to put money into ‘the other 50%’ – the young people who never go to university; that doubling the number of apprenticeships, paying a Pupil Premium to encourage schools to put more resources into helping those who most need it, and expanding nursery education to give children a better start in life had proved to be more progressive and cost-effective than free fees for the better-off.

Not even the Labour candidate on the panel disagreed with me.  And no student, in over an hour of questions, returned to the subject. We had questions on employment and career prospects, renewable energy, foreign policy, gender inequality and tax; I raised a laugh by answering a question from a student who asked how someone who wanted to vote ‘progressive and left’ should choose between the Greens and Labour, by saying he should not assume that Labour is necessarily either a progressive or left party (the York Labour Party, like many other local Labour Parties, helps to make that point strike home).  Sharp criticism from University Vice-Chancellors of Labour’s hesitant suggestion that they might offer a cut in fees to £6000 a year, without any evident counter-enthusiasm from student organizations, shows how dead the argument has become.  The barrier to students from poor families going to university now, as several informed critics have pointed out, is the affordability of living costs, not access to student loans for fees that will only have to be paid back when earnings have risen.  Targetted bursaries for disadvantaged students should be a priority for universities from now on, and for government financial support as spending restraints diminish.

I never understood while ‘social Liberals’ erected free tuition fees into a symbol of radical Liberalism.  When I was working on the 1997 election manifesto, I worked out how far our promised ‘penny on the income tax to pay for education’ would go.  Starting with investment in early years, moving up to more generous support for primary schools in disadvantaged ares (which has now evolved into the pupil premium), and hoping to put more into training and FE colleges, we would have spent it all before we reached the universities.  The rise in the percentage of 18-year-olds going to university in the 20 years before 2010 had come from the increase in women from prosperous families, not from much significant improvement in social mobility.  Yet the self-proclaimed radicals on the FPC successfully resisted several efforts by education spokesmen to moderate the commitment to what was, in effect, a middle class subsidy.  Nick Clegg, too loyally, accepted the FPC’s insistence that this had to be one of our flagship policies, and went out to campaign on it.  Since then, those same self-proclaimed radicals have refused to forgive him for failing to deliver, while failing to recognise that the balance of spending on education we have fought for, against Gove’s diversion of funds to free schools and academies, has achieved a number of clear socially-progressive goals.  Time to lay off condemnation of Clegg, and to persuade this generation of students that the policies we have successfully promoted in education have focused on those who benefit most from extra investment in improving their future chances?

* William Wallace is Liberal Democrat spokesman on constitutional issues in the Lords.

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155 Comments

  • That was NOT the response at our local College. Some may think it is socially progressive, but reality is that up to 90% of students are not and will not vote for us. For that we only have ourselves to blame.

  • Matthew Huntbach 20th Feb '15 - 10:30am


    2. “Yet the self-proclaimed radicals on the FPC successfully resisted several efforts by education spokesmen to moderate the commitment to what was, in effect, a middle class subsidy.”

    Sorry, no. I was very sympathetic to what the article was saying until I came across these political attacks. Sorry, there was no need for this, and it turns what would have been a good article into a piece of faction fighting.

    I have myself defended our position on tuition fees in the Coalition from the start, using just the lines given here: that the Conservatives just would not agree to the taxation that would be required to fully subsidise university tuition, and that the compromise of accepting what they wanted in the way of fees but ensuring the loans were available to all with generous pay-back and write-off conditions actually is probably the best we could have obtained under the circumstances. I really dislike the way the debate on this has gone, with all the attacks made on us over complete ignoring the fact that if it isn’t paid this way, it has to be paid another way. Labour are now caught on a hook over it, because having benefited from the “nah nah nah nah nah” attacks on us over this issue, they are coming to the point where they have to deliver and alternative and they know they can’t. There is a real and justified fear in academic circles that Labour having appeared to make a pledge to bring tuition fees down to £6000 will end up just doing it by making big cuts to university funding.

    So, as someone who I suppose falls into the category of a “self-proclaimed radical”, I very much resent this accusation that I “have refused to forgive him for failing to deliver”, because although I have been critical of Nick Clegg on many grounds, this is not one of them. Indeed, I have been subject to much abuse here and elsewhere for defending Clegg in this issue. So, Lord Wallace and Simon Shaw, if despite that, my rewards for this defence in the face of abuse is abuse from you, you are demonstrating why I’m reluctant to do anything further for the party while factionalists like you are at the top and seem to want to push me out through throwing this sort of insult at me.

  • Matthew: Are you saying you are on the FPC? As you have said you have been very cogent on this issue. I very much doubt that William Wallace (nor Simon Shaw for that matter) had you remotely in mind when explaining the problem.

    William is saying that the tuition fee policy was badly oversold. He actually presents the history of this in a way that echoes your criticisms of Lib Dem behaviour in coalition. I do not know you but I am fairly sure that you and William Wallace would see eye to eye on policy in this and other areas. Why do you feel that an “insult” is directed at you, who as I understand it, work in HE?

  • Matthew Huntbach 20th Feb '15 - 11:06am


    Nick Clegg, too loyally, accepted the FPC’s insistence that this had to be one of our flagship policies, and went out to campaign on it.

    Sorry, this is a partisan remark because it misses some key aspects. Who were the “self-proclaimed radicals” who told Nick Clegg not just to campaign on this issue but, unlike any other policy, to sign a “pledge” on it, with the pledge worded in a way that it could only be taken as stating that it would be a “red line” in any coalition deal? I don’t believe there were any, it was the incompetent PR people around Clegg who took it from being just one of our many policies and made it into this.

    All of us who have been in practical politics know that it has to be a matter of compromise and that of course anything expensive on the list of what we want to do has to be balanced by a budget that will pay for it. Therefore we are perfectly capable of accepting the position that something may be a stated policy, but it may not be achievable if we are in coalition. I suspect that most of us who have been involved in campaigning for the party for a long time are very much aware of the dangers of raising something from an aim that has to be balanced with other aims and circumstances to a “pledge” where you have to be absolutely sure you can honour it in all foreseeable circumstances. So, don’t blame us, Lord Wallace, don’t use this as a line to force people who were once hard-working campaigners out of the party by making us appear unwelcome. Blame those PR people who turned it into a “pledge” and made such a big thing out of it in the electoral campaign. I know myself that while I supported this policy, had I been asked I would have urged exercising caution in actually making a pledge to vote against it, knowing that this could cause big problems if we had ended up in a coalition where the other party would not support the taxation necessary for it. The possibility of a coalition with the Tories was hardly unforeseeable in April 2010, was it?

    Of course this policy needed to be balanced with practical aspects of how it would be implemented and paid for. Who are the “self-proclaimed radicals” who are denying that? Not me, I assure you. Therefore from the start we should have made clear that the cost of this policy was higher taxation somewhere. It is perfectly possible to support this policy and support also the higher taxation and acknowledge the two go together, and so if one is unobtainable so is the other. So to accuse all those who supported the 2010 policy on tuition fees of pushing something unrealistic is wrong. Had our 2010 general election campaign been more clear on this, then it would have been easier to justify what we had to do later as it would be more obvious why we had to back down. Who was responsible for the 2010 general election campaign which failed to do this? Well, it wasn’t “self-proclaimed radicals”.

    We were assured from the top that our 2010 manifesto was fully costed. Who did the costing? Who gave us this assurance? Well, I don’t think it was “self-proclaimed radicals”. Of course the assurance that it was “fully costed” emboldened us to push it forward. Had we been told from the top that it was a long-term aim, but we did not think we had the money to do it right away, of course we would have been more cautious. So who let us down? Who put us in this embarrassing situation where we were encouraged by the “pledge” and promises that it was “fully costed” to push this so hard?

    Why has our support gone down so much? Why, for example, has all the hard work I put in as one of those who was building up the party in Lewisham all been wrecked – we went up to 18 councils seats, in 2014 we went down to 0. We went up to 2nd place in all three Parliamentary constituencies in 2010, close enough for winning them next time to be a reasonable objective, where will we be in this year’s general election? 3rd, 4th or 5th place? When I ask people what’s wrong, why have they turned against us, many things are said, but the tuition fees issue tends to be the first of them and the one said most often and most forcefully. So, sorry but though actually I do accept the argument that the compromise we reached is actually not nearly so bad as it appears at first, and have defended it and our leadership in public on that basis, I can’t accept the argument put here that actually it isn’t an issue that bothers people very much any more.

    Anyway, Lord Wallace. If you do want me to continue to defend the party in public on this and other issues where we have had to make compromises, you’d better try and be a lot more polite to me, and a lot more acknowledging of my position than you are here.

  • Matthew Huntbach 20th Feb '15 - 11:08am

    Simon Shaw

    Gosh! So I’m at the “top of the Party”, on a level with William Wallace.

    I have no idea what position you might hold. However, you do seem to be a loyal supporter of the faction that dominates at the top.

  • Matthew Huntbach 20th Feb '15 - 11:13am

    Martin

    Matthew: Are you saying you are on the FPC?

    No, I am not on the FPC. However, I support the FPC’s insistence that this was party policy and so should be part of what we campaigned on. I am also making the point, which is contradictory to Lord Wallace’s accusations, that it is perfectly possible to support a policy as a long-term aim, and yet to accept there has to be caution on promoting it which accepts cost issues and the necessity of reaching compromises which was highly likely to be what we wold have to do if we did end up “in government” in May 2010.

    That is, I think it is wrong to put the blame on the FPC. The blame should be put on those who ran our national campaign and chose to highlight the policy in this way and single it out with a “pledge” unlike any other policy.

  • Matthew Huntbach 20th Feb '15 - 11:16am

    Martin

    Why do you feel that an “insult” is directed at you, who as I understand it, work in HE?

    Because it attacks one set of people, with whom I identify, as if they are solely responsible for the problem it caused, whereas, as I have argued, the blame should fall elsewhere, or at least be shared if you want to come to a compromise over it.

  • Sadly William, your urge to “lay off condemnation of Clegg” is not something that Lib Dems can deliver. It is the one thing that most voters remember of our first involvement in Westminster Government in decades and to them it proves that Nick Clegg cannot be trusted. Even worse to many of them it proves that Lib Dems cannot be trusted.

    In 2010 many voters supported us because we were offering a vision of how politics could be so much better. Labour had messed up again and we had a chance to show what we could do. By 2011 voters condemned hundreds of good Lib Dem councillors and many good MSPs based on Nick’s failure to stick to his pledge and each year after that things have got worse, leading to a halving of the number of councillors we have across the country and the worst debacle for the Lib Dems ever in the European election results in 2014. The Labour party, the Greens, the SNP and everyone else with an eye to the main chance of winning our voters over are replaying it massively on the doorstep. It won’t just go away just because we can reiterate a good case for what we did.

    We made a pledge; we broke it; we promised a new way of dong government; we promised an end to broken promises. Nick did this on our behalf as leader, and the public and we believed him. Is it any wonder we are in the mess we are in now?

  • Simon, I have one vote and it will be Lib Dem. The public have millions and will show their judgement on our performance as a coalition partner in government shortly. I never blame the public. They matter. They are the reason I am in politics. And in May 2015 I believe a very large number of them will blame us. You may want to accept that you and all LIb Dems were personally responsible for tuition fees, NHS reform etc and say so on the doorstep. You may want to say none of it was our fault, it was the nasty Tories. You may even want to say it wasn’t our fault all the money had gone and the first thing we jettisoned was a pledge. None of those arguments will wash with most people.

    You may even wish to imply coalitions cannot be trusted. However, I know there was a better way it was “a new way of doing government” and it definitely was “an end to broken promises.” Even more than that, it was being on the side of the governed not simply on the side of the government. It’s not that coalitions cannot be trusted, but it will be clear after May that most people believe that Nick failed to make coalition work, and that will be bad for Liberal Democracy. And that is the one judgement that matters.

  • “I raised a laugh by answering a question from a student who asked how someone who wanted to vote ‘progressive and left’ should choose between the Greens and Labour, by saying he should not assume that Labour is necessarily either a progressive or left party”

    Once upon a time, the immediate answer from any self-respecting Lib Dem would have been that the Lib Dems are a progressive party of the left-of-centre. Instead, Wallace’s implicit message was clearly “Go for the Greens, they’re your only option.” Which, of course, is a conclusion more and more people are reaching.

  • Matthew Huntbach 20th Feb '15 - 3:32pm

    Simon Shaw

    I don’t understand that. In (1) you say that the FPC was right to insist that we campaigned on this policy, but in (2) you say the FPC can’t be blamed for us campaigning “too vigorously” on this policy.

    I think I have gone to some lengths to explain, and if you lack the ability to understand what I was saying, well, that’s your problem.

  • Matthew Huntbach 20th Feb '15 - 3:39pm

    Simon Shaw

    I would, however, agree with you that there was Party HQ pressure for candidates to sign it, and I think that was a big mistake.

    Right, ok, so actually that was the point I was making. Plus, as I thought I had made clear, and have been saying so many times previously, I believe in our campaigning we should have made a clear linkage of the policy with whatever was necessary to pay for it. One can do that “vigorously”, can one not?

    That really is at the heart of so much that is wrong with politics now. It is seen in terms of separate independent policies, rather than a whole direction. Policies which are about spending money are put forward as a separate and independent thing from policies which are about collecting money, even though at the heart of practical politics is the issue of balancing these two things.

  • Matthew Huntbach 20th Feb '15 - 3:43pm

    Simon Shaw

    In my 40 years of active involvement in the Party I’ve always loyally supported the “faction that dominates at the top”

    Oh, well, I tend to think for myself. As I’ve said many times, that’s because I’m a Liberal and I do not agree with the Leninist model of politics.

  • I entirely agree with the stance that William Wallace adopted in his discussions with students. Putting the argument the way he did makes it very difficult to argue that we should have continued the previous policies that prioritised higher education spending over other critical needs and effectively favoured middle class students because inadequate spend went on encouraging students from disadvantaged backgrounds into HE.

    One thing that puzzles me though is why there is so much focus on Nick Clegg in all this. Why don’t we hear more from Vince Cable. It was his Department that was responsible for crafting the new policy and he should surely take the main responsibility and the credit for doing it in such a clever and careful way that the numbers of students have gone up and the numbers from disadvantaged backgrounds very considerably.

  • Richard Sangster 21st Feb '15 - 9:40am

    Young people, between leaving school and having children, make little use of local services and often do not pay for them. Whilst they may not have a great interest in national politics, it is likely to substantially greater than their interest in local politics. In other words, anyone, who thinks people are only interested in local matters, is likely to turn off young people.

  • Neil Sandison 21st Feb '15 - 12:46pm

    For give me folks but tuitions fees is getting a bit like a dog going back to eat what he regurgitated a bit earlier .Now is the time to put the emphasis on the positive more low icome students than ever before have entered higher education more young people than ever are going into modern apprentiships .The overall trend in youth unemployment is down
    as opposed to being stuck at a high level under labour .We have a positive policy and record on education lets flaunt it.

  • Lord William Wallace:
    “I said that we had found it impossible to persuade our Conservative partners in the coalition to pay for this, against the background of a yawning gap between revenue and expenditure in 2010”

    But it’s been long since established that, contrary to government expectations, the current system is costing more than the old one and will do for many, many years to come – thereby increasing that “yawning gap” you talk about. So how can you still trot out deficit reduction as a reason for the policy?

    If the previous policy was unaffordable, the same is more true of the current one – so what plans do the coalition have to make up the shortfall? A higher interest rate? A freeze in the payment threshold, meaning that it will decrease in real terms, eventually to a point where those low paid students (who the government is using as a sort of human shield to deflect criticism of this rotten policy) could end up paying more than they would have done under the Labour scheme? The latter of these two options is, according to Martin Lewis and others, already being actively considered. This should be an important question in the election.

    @John Kelly
    “[Vince Cable] should surely take the main responsibility and the credit for doing it in such a clever and careful way that the numbers of students have gone up”

    This argument – being put out a lot by Lib Dems as the day of reckoning approaches – is sneaky at best, dishonest at worst. Of course the number of applicants has been going up the last couple of years, the same as they were for years before 2012. But you’re glossing over the big drop in applications in 2012, which is still having an effect.

    UCAS are very clear in their latest statistical analysis of 2015 applications that the number of 18 year old applicants continues to be around 2.5% lower than it would have been had the drop in applications in 2012 not occurred. That’s nearly 6,000 18 year olds fewer applying for university this year (and every year) as a result of the current scheme. See :-

    https://www.ucas.com/sites/default/files/jan-14-application-rates.pdf

    So it simply isn’t honest for Lib Dems to be going round saying “don’t worry – the higher tuition fees aren’t putting anyone off applying for university”.

  • The link above is to the 2041 version. This is the 2015 version :-

    https://www.ucas.com/sites/default/files/january_application_rates_2015_final_0.pdf

    Note that the rate of growth is far less in 2015 than it was in 2014.

  • “2041 ”

    Which of course should be 2014…

  • @Simon Shaw
    “A quick glance at the document you refer to suggests that it says the exact opposite of what you claim. However it is 39 pages wrong. So if you really think it supports your argument you need to give chapter and verse.”

    Er no, right near the top of page 1 it says: “Based on trends using revised population estimates, this model would suggest that the application rate is around 2.5 percentage points lower than it would have been if there had not been a decrease in the application rate in 2012.”

    Which bit of the document are you saying suggests “the exact opposite” of that?

    “you must surely accept that it means that the current system is a lot fairer and more progressive than the previous, Labour, system, insofar as lower earning graduates end up paying less than before. This is compensated for by higher earning graduates paying more.”

    How do you know that ANYBODY will end up paying less than under the Labour system? Do you have a crystal ball which tells you what the interest rates and thresholds will be for the next 30 years?

  • A couple of years ago Michael Meadowcroft caused a huge intake of breathe at the SLF conference when he pointed out how progressive the loans policy is, and more recently a journalist in the New Statesman also generated incredulity amongst the readership by making the same point.
    Loans are by their nature regressive – the rich normally pay less interest than the poor. Vince did everything he could to make the policy progressive and I think he largely succeeded. However the law of the land prevented him from forcing students to take out loans for tuitions so that the very rich can pay their fees up front and as a result not pay interest – so they get a good deal out of this compared to everyone else.
    However it is also true that the government overestimated how much graduates would earn and as a result there is a significant shortfall of how much of the loans will get paid back. Will a future government have to increase the loans even more? There is surely a tipping point where increasing student debt becomes counter productive? I think there is a lot of complexity on this issue, personally I do not know what to think. Scotland continues not to have student loans, is that a good thing or a bad thing? Are students in Scotland less likely to come from deprived backgrounds than the progressive policy in England and Wales? I do not have the figures and I am curious to know.

  • Philip Thomas 22nd Feb '15 - 9:09am

    The system is unfair compared to a graduate tax because not all graduates pay: those who graduated before fees came in escape unscathed.

    And of course, both a graduate tax and this system are unfair compared to meeting the costs out of general taxation, because everyone benefits from having university graduates and, to the extent that graduates benefit from earning more, they already pay more through the general progressive taxation system.

  • Philip Thomas 22nd Feb '15 - 9:51am

    When we earn an average or above average salary, we fund part of the cost- we pay taxes. The more we earn the more we pay (tax avoidance aside). If two people are earning the same amount, it is invidious for one to pay more tax because they were educated at state expense. If you don’t think that is true, then perhaps you’d like to support special tax breaks for Old Etonians?

  • Philip Thomas 22nd Feb '15 - 10:29am

    C has benefited just as much from public spending as A- he’s earning the same amount. Quite likely his earnings wouldn’t have been possible if there were no graduates in the UK. B benefited less but he pays less. Of course the higher earners have to keep *some* of their higher earnings- a 100% marginal taxation system offers no incentive to work harder and increase their salary.
    Anyway, lets introduce D: D is just a bright as A & B and went to University like A did, but D was at University before tuition fees were introduced. Under the current student loans system, A has less net earnings than D. Do you think that is fair?

  • Philip Thomas 22nd Feb '15 - 10:47am

    I’m arguing that the current system is very unfair indeed. I don’t like graduate taxation systems, but I’d rather have real graduate taxation than phoney graduate taxes which disproportionately target those who graduated more recently. Its also a fiscal disaster: eventually we will realise this, write the loans off and be forced to increase general taxation. The longer we wait for this, the deeper into the red the assumption we’ll get back the money is taking us. So we should do it now.

  • Me: ““How do you know that ANYBODY will end up paying less than under the Labour system?”

    Simon Shaw: “Because the starting point for repayments was shifted upwards significantly compared to the Labour system.”

    As was the interest rate and repayment period – both of which, funnily enough, you never want to talk about, despite expending a huge number of words in these threads.

    But the point I was making – and which appears to have soared over your head – is that all of these parameters can be changed very easily by the government, and given the fact that the system is costing vastly more than expected, you can pretty much guarantee that if the coalition stays in power then at least one of the parameters will change. Martin Lewis is already reporting that the government is considering freezing the threshold (i.e. reducing it in real terms). So unless you have a functioning crystal ball, you have no idea how many people (if any) will end up paying less than under the Labour system.

    This is one of the most invidious aspects of the system – that young people are signing up to colossal amounts of debt without knowing how the terms may change during the interminably long repayment period.

    As to the issue of whether the current system is more fair – you seem to be labouring under the misunderstanding that so long as a relatively small number of people at the bottom may benefit, then the net fairness of the system as a whole is increased. This seems to imply that you think the eye-watering increase in overall payments for those on average earnings is entirely justified by the (much smaller) decrease in payments for those on low incomes. You are basically using the (fairly small) number of people who benefit as a human shield to deflect attention from the gross unfairness elsewhere in the system. You’re also glossing over the fact that very high earning graduates actually end up paying substantially LESS than graduates on middle incomes – how does this fit in with your notion of fairness?

    But more importantly, you seem to think that the new system represents a redistribution of wealth from low earning graduates to high earning ones. It doesn’t. It is much more accurate to say that the new system redistributes wealth from young people who graduate after 2014, to all those who either graduated before 2014 or never graduated at all. (At least, that’s the plan – due to government incompetence it will inevitably require increases in payments to actually work.) So wealth is being redistributed from today’s 21-year old graduates, who start their working lives with tens of thousands of debt, as well as no prospects of things like affordable housing or decent pensions, to people like myself, who graduated in 1992 with zero debt, bought a cheap house, and have a good pension to look forward to. Frankly, Simon, I don’t need money redistributed to me in this way, and that’s why the system is so appallingly unfair. It was unfair when Labour brought it in, and the coalition has made it massively more unfair.

  • “But more importantly, you seem to think that the new system represents a redistribution of wealth from low earning graduates to high earning ones.”

    Correction, that should of course be other way round :-

    But more importantly, you seem to think that the new system represents a redistribution of wealth from high earning graduates to low earning ones.

  • @Simon Shaw
    “I’m assuming you join me in welcoming that news [that applications are increasing], which is the exact opposite of what some people (were you one of them??) predicted.”

    You misunderstand. Did anybody really predict that applications would never rise again? Can you provide any examples? Annual growth is only half the picture. The Greek economy has recently returned to growth – I presume you think this means the Greek economy is doing really well.

    What a lot of people predicted – and I was certainly one of them – was that the number of people applying under the new system would be less than the number who would have applied without the new system. And that’s exactly what UCAS say is happening. From the 2014 analysis :-

    “This pattern is consistent with the model that the introduction of higher and more variable tuition fees in 2012 reduced the level of 18 year old demand for higher education, but did not materially alter the pattern of annual increases in that demand. Based on trends using revised population estimates, this model would suggest that the application rate is around 2.5 percentage points lower than it would have been if there had not been a decrease in the application rate in 2012.”

    So according to UCAS, in 2014 there were 2.5% fewer 18 year olds applying than would have been expected from the pre-2012 data. Geddit?

    They seem to have dropped this model in their 2015 analysis (how convenient for the government in election year!), but given that applications were 2.5% down on pre-2012 trends last year, and have only gone up 0.6% this year (much less than the 2014 increase), it’s safe to assume that the gap is still at least 2.5%, and possibly quite a bit more.

  • Philip Thomas is on much stronger ground when he argues that HE benefits the whole economy and should be funded centrally. After all, he could have added, this is an important reason why we fully fund state education up to 18.

    However, he does need to specify how the money should be raised (what tax increases, what cuts?) and how university independence can be assured; the story of central government and state education is not a happy one.

    His advocacy of a retrospective graduate tax is ridiculous: clearly unworkable unless levied on employers. It is no use proposing impossible hypotheticals.

    Let me be clear, like William Wallace, I strongly support state education, I do not like the present system, though I do recognise that it is better for graduates who do not earn a lot and that it is progressive up to £60 000 or perhaps higher. I wish I could show where funding could come from and how it could be administered.

    Stuart is wrong about redistribution, quite clearly those who will be better off will be paying more back into the system than those who are less wealthy and those under the average wage are much more fairly treated. For very high earners it will be important to take the regressive nature of the system into account when determining their taxation rates.

  • @Martin
    “However, he does need to specify how the money should be raised (what tax increases, what cuts?)”

    This is actually an odd question, since graduates bring in a huge amount of extra revenue for the government during their working lives :-

    http://www.bbc.co.uk/news/education-27763112

    It’s a rock solid investment.

    “Stuart is wrong about redistribution, quite clearly those who will be better off will be paying more back into the system than those who are less wealthy and those under the average wage are much more fairly treated.”

    I can’t tell which part of my comment you are saying is “wrong”. As you point out yourself, the system is only progressive up to a point – after which it becomes massively LESS progressive. (According to the Martin Lewis website, a graduate earning £50,000 will end up paying £39,000 less than someone on £40,000.)

    As for whether the new system redistributes wealth from future graduates (as a whole) to everybody else – that’s actually the whole point of it. Even Simon agrees on that one – it’s about the only detail of the system he has understood.

    Even if one accepted that the current system is “progressive” (which, as I’ve pointed out, is only true up to middle incomes), that is not the sole measure of fairness. Imagine if the government introduced a tax on people with ginger hair. You could certainly make the system as progressive as you please, with low-earning redheads paying no tax and high-earning redheads paying tens of thousands. But would it be fair? Given the enormous economic contribution made by graduates, I’d argue that a special extra tax on them – restricted only to the young, and over and above the extra taxes for high earners that already existed – is just as arbitrary and unfair.

  • Stuart: I had seen very different projections to those you quote. Perhaps these figures arise from a calculation based on a constant pay level. I cannot recall where the figures I saw were from but were quoted in a context that claimed that estimated revenues were unrealistic.

    Whatever the strength of your argument, and as I have made clear, I do buy into the idea that university education is a good for the whole of society, questions remains about where the money comes from, which taxes need to be increased, what cuts should be implemented and how the university funding should be administered.

    If I had these solutions, I am sure I would be agreeing with you.

  • @Simon Shaw
    “And the parameteres on the previous (Labour) system could be changed very easily by a future government as well.”

    No, they couldn’t – that’s the whole point. The interest rate was essentially fixed (at, in real terms, zero). The current government had to bring in new primary legislation to enable them to introduce the higher and variable interest rates suffered by students on the post-2012 scheme. They haven’t dared touch the zero-interest Labour scheme, in fact they have strengthened assurances that that the terms of the Labour scheme will not be altered retrospectively. See here :-

    http://blog.moneysavingexpert.com/2013/12/10/student-loan-sell-off-should-you-be-worried/

  • Philip Thomas 22nd Feb '15 - 1:12pm

    Martin, yes the graduate tax is unworkable (how do you prove someone is a graduate?), so the rhetorical flourish where I said I would prefer a genuine graduate tax to the current system was perhaps silly: the fact remains the current system unfairly penalises more recent graduates* vis a vis less recent graduates as well as vis a vis non-graduates.

    *I think the loan is still repayable if you fail to graduate and subsequently earn more than the threshold, if so “graduates” is a simplification.

    I would fund the immediate cost by raising income tax and cutting spending on pensions. Actually Labour’s current proposals (for reduction of fees, not elimination) seem to be thinking on similar lines, at least with regards to pensions.

  • @Simon Shaw
    “There are a lot MORE poorer students going into HE under the new system than under Labour’s. This is despite what some people predicted.”

    Who exactly predicted that the very long-established trend for applications (whether for poor students or others) to increase would go in to permanent reverse? Can you provide a link to anybody saying that? I’ve asked you this question already and as usual you dodged it.

    What was predicted – and what UCAS say has happened – is that the number of applications under the current system is less (by 2.5% in 2014) than would have been expected under the Labour system. That’s around 6,000 18 year olds who were put off applying for university in 2014 by the current scheme.

    Do you welcome that?

  • @Simon Shaw
    “2008: 29.2%
    2009: 30.3%

    2012: 32.5%”

    Deft bit of editing there Simon! Have 2010 and 2011 been wiped from history? Anybody would think you were a politician.

    “If you ignore the ‘scrap the gap year’ spike of 2010 and 2011, then there seems to be a fairly clear linear growth over the full before and after period.”

    UCAS’ data analysis experts have taken all that in to account – as well as demographic factors – and concluded that 2.5% fewer 18 year olds are applying for university than would have been expected had the Lib Dems and Tories not trebled fees. Perhaps you have superior methods of analysis at your disposal – but I doubt it.

    And where has this “‘scrap the gap year’ spike” of 2010 suddenly materialised from? How did 2010 applicants – who filled in their applications in 2009 – know that tuition fees were going to be trebled after the election, when no party was proposing it? In fact some parties were “pledging” they would do the opposite. How were so many applicants able to know what nobody else knew, and take evasive action? Were they clairvoyant?

  • Simon: If the applications for 2010 were up, your explanation is highly unlikely. The application cycle does not work like that. The drop in deferred applications can only really work for 2011. Nonetheless your progression that leaves out the two years is fairly persuasive.

    There was a change (also known as dumbing down) to the exam system that meant that AS exams were easier. This could have meant that there were more with high enough scores to make the applications. However in statistics variations are expected, it is the underlying trend that matters.

    According to the claims without the tuition fee changes applications would now be close to 38%, but where are the missing 2.5%? Have they gone abroad? Were they in the UK? Could they be those from outside the UK who have decided not to apply? Without a llink and not motivated to scour the UCAS website, I still wonder what the percentages are of and whether UCAS is using the raw total of applications. In any case what matters more is the numbers who actually get to university.

  • Philip Thomas 22nd Feb '15 - 3:17pm

    Well, the government has been actively trying to discourage foreign students (despite some of the rhetoric), so there could well have been a drop in applicants from abroad: this would have nothing to do with domestic tuition fees however.

  • @Simon
    “Once again you conveniently choose to ignore the fact that the then Labour Government launched the Browne Review in 2009. How else do you explain the sharp spike in 2010 applications?”

    Plenty of explanations offered here :-

    http://news.bbc.co.uk/1/hi/education/8503921.stm

    Though strangely nobody suggests that the “spike” might be down to applicants having powers of clairvoyancy, enabling them to see (a) the outcome of the Browne review (which itself only launched in November 2009 – by which time many 18-year olds would already have applied), (b) who would win the election, and (c) to what extent the Lib Dems would ditch their commitments.

    If your theory that the increase in 2010 was down to Browne is correct, then how come applications in Scotland and Northern Ireland rose more sharply than they did in England?

  • @Simon
    “You seem to assume that those bright enough to go to university were too dim to have any inkling what Labour were planning”

    While you seem to think that those with enough powers of clairvoyancy to predict the outcome of the Browne review a year in advance would somehow fail to predict that Labour would lose the election…

  • Stuart, your BBC link is interesting, even though it barely seeks to explain the sharp increase in applications. What makes it interesting is the references to the pressures on university funding such as the programme of (Labour) cuts and calls from the NUS to increase funding. The article states that applications from outside the UK were increasing more steeply than the overall applications.

    This gives the background to the decision to increase tuition fees. I have sometimes thought that Lib Dems would have done better by refusing to accept any change that increased fees, left Labour’s system as it was, but used it against the Labour party to make political points. Your link indicates why no change was not sustainable and a new solution was required. Too bad that it has made a ready target for Labour point scoring.

    Whether changes to A levels, the economic downturn or whatever explains the spike, the overall trend as Simon maintains shows a steady underlying progression.

  • Stuart you speak a lot of sense here on tuition fees. Many LD’s are in denial and its the reason why I left. Too many Tory apologists. My son has just thankfully decided not to go to University in September after working out he will be left with £45k debts. The sheer scale of these debts was giving me and my wife sleepless nights. I have saved but not even enough for one years tuition. I wonder if Clegg’s children will be taking these loans out or whether he will pay them off up front . Hardy progressive when wealthy people can by pass them, but the poorest in society are saddled with 1,000’s and 1,000’s debt that the rest of us will probably end up having to write off in the future.

  • Jackson you are doing your son no favours at all. You really have taken the “debt’ characterisation hook line and sinker. You could assure your son that so long as he earns an average wage or less, he will have to pay very little, if any at all or are you worried that on £40K + too much will be deducted by HMRC?

    As for the Cleggs, you might wonder if they will be taking advantage of Dutch universities, Maastricht is well regarded for example, where the tuition fees are much lower. Come to think of it, has your son considered the opportunities elsewhere in the EU.

    In any case while under Labour’s previous system where repayment begins below the living wage, there was some sense in paying tuition fees up front, it makes no sense to do that under th new system.

  • Philip Thomas 22nd Feb '15 - 5:02pm

    Equality of Opportunity is essential to a stronger economy and a fairer society, and charging for university education is a denial of that. That loans are available mitigates the problem, but Jackson’s example (and he is not alone) shows that it does not solve it: those who cannot afford to pay the fees directly are deterred by the prospect of large debts I understand why some Tories want to restrict access to higher education, but I don’t understand our collusion in thisI goal, except insofar as there had to be a government and this was the Tories’ price. Yet it isn’t that- there seems to have been a Damascene conversion among the higher reaches of the party, who genuinely believe tuition fees are a good thing.

  • @Martin
    “In any case while under Labour’s previous system where repayment begins below the living wage, there was some sense in paying tuition fees up front, it makes no sense to do that under the new system.”

    I would have thought the reverse is more the case.

    Under the Labour system – which, remember, had a zero real interest rate – nobody in their right mind would have paid the fees up front. There would be no reason to whatsoever.

    With the new system, you can save yourself tens of thousands of pounds if you pay the fees upfront – assuming that you are very confident of being in reasonably paid employment. A person in such a situation would be throwing money down the drain if they did not pay up front.

    I’m referring, of course, to people like the Cleggs. With their money and contacts, let’s be frank about this – their children will never need to worry about funding employment. The only reason the Cleggs could have for not paying up front would be if they considered the tens of thousands in potential savings to not be worth bothering about.

    The current system therefore turns the whole thing in to a gamble. Assuming you have the means to do so, paying up front will save a fortune for a lot of people. It all boils down to how confident you are of Daddy fixing you up with a job. It really should not be like this – and this is one of the major reasons why Vince Cable was right to say that this system is emphatically NOT a graduate tax, however much people like Simon try to pretend that it is like one.

  • Philip Thomas 22nd Feb '15 - 8:49pm

    Yeah, related to ability to pay. If you are able to pay up front (or you have parents who can do so) the you pay much less than those who are less able to pay who earn over £21,000).

  • Philip Thomas 22nd Feb '15 - 9:01pm

    In fact (and maybe my maths is wrong here) since we’re talking about a debt, isn’t an advantage to pay back more of it earlier? As long as you end up paying off the whole debt, it would be better to pay it off early (by high earnings in early career) than to pay it off more slowly (by low-medium earnings over the 40 year period)- you’d end up paying less money. If I’m right (and again, maybe I’m making a maths blunder) it is the reverse of progressive!

  • The problem with the graduate tax is that it provides a massive incentive for graduates to work abroad where British taxes cannot be enforced.

  • @Simon Shaw
    “Of course it’s not a Graduate Tax”

    That’s the opposite of what you’ve said previously :-

    https://www.libdemvoice.org/pack-tall-debate-tuition-fees-lib-dem-party-policy-26903.html

  • Dr Michael Taylor 22nd Feb '15 - 10:07pm

    Philip Thomas: The whole point about the system we have now is that there is NOTHING to pay up front. It is in fact deferred taxation because you only start to pay if you earn more than £21,000 (this is increased with inflation) and then you pay according to your income and after 30 years you aren’t required to pay any more whether or not you have paid in full.
    So anyone paying up front is barmy because they could invest that money and use it to fund the repayments and probably make a profit.

  • Dr Michael Taylor 22nd Feb '15 - 10:11pm

    Stuart. Under the Labour system you HAD TO pay up front, otherwise you didn’t go to university. Now the money for your fees is paid for you and you then start paying them back AFTER you graduate and only once you earn £21,000.

  • Dr Michael Taylor 22nd Feb '15 - 10:23pm

    David Allan: Before you go and vote Green you may wish to read their manifesto. There’s nothing radical about it and it’s certainly not Liberal.
    Also beware of what you wish for. I attended a (private) meeting at which a founder member of the Green party (or so he claimed) was pressed on what Greens would do to implement their policy, because it would take more than 5 years.”Oh, he said, we’d abolish elections till we’d implemented our policies”.

  • Dr Michael Taylor: Thank you for that confirmation. I was puzzled by Stuart’s reply since it was made clear to me by my daughter’s college that I had to pay up front before she could matriculate, other than pay in termly instalments there wasn’t any option.

    It would be interesting if there were figures for how many are opting to pay up front now (obviously leaving aside non EU overseas students). I would guess that there would be hardly any, but I simply do not know. I suppose there may be a few students with high private incomes who would do that, but there cannot be that many teenage dot com millionaires going to university.

  • Peter Watson 22nd Feb '15 - 11:58pm

    @Dr Michael Taylor “So anyone paying up front is barmy because they could invest that money and use it to fund the repayments and probably make a profit.”
    Those who have families with the wealth to pay upfront and high salary expectations (mini Camerons and Cleggs) can save money by avoiding the tuition fees loan (Scenario 3 – http://www.moneysavingexpert.com/students/should-i-get-student-loan). Equally, the lack of an early repayment penalty means those who have a loan but are in high salary jobs can repay early and pay less than their less wealthy peers. These are two factors that make the new system less progressive than appears to be the case when it is assumed that everybody takes out the loan and follows the repayment schedule. A third might be those graduates whose skills are in demand and who can work overseas and evade repayment.

    Compared to the previous scheme, the relatively high interest rate which applies from day 1 makes it less attractive to take the loan and invest the money elsewhere (combined with the high marginal tax rate), but if it were feasible then it would sound like another way that the wealthy can benefit from the scheme.

  • Peter Watson 23rd Feb '15 - 12:06am

    @Martin “I suppose there may be a few students with high private incomes who would do that, but there cannot be that many teenage dot com millionaires going to university.”
    Paying upfront to reduce future graduate repayments is more about the wealth of the student’s family than it is about the income of the pre-university student.
    As an aside, it makes me wonder whether our hypothetical high-earning dot com millionaire student would have to start repaying the loan as soon as he borrowed the money.

  • Peter Watson 23rd Feb '15 - 12:21am

    @Dr Michael Taylor “Under the Labour system you HAD TO pay up front, otherwise you didn’t go to university. Now the money for your fees is paid for you and you then start paying them back AFTER you graduate and only once you earn £21,000.”
    I am not sure what distinction you are making here between the two systems. Obviously the higher repayment threshold is an important difference between the systems but you appear to be emphasising the other points.
    Fees still have to be paid upfront (perhaps not the best word since payment is termly, but upfront in terms of being before graduating or receiving teaching), either by the Student Loans Company on behalf of the student or by the student themselves, otherwise the student cannot go to university, and under both schemes repayment was/is after graduation (or dropping out).

  • Peter Watson 23rd Feb '15 - 12:31am

    It goes without saying, but I’ll say it anyway, that no matter what side we take in debates over the details of tuition fees loans and repayments, that is not really the issue for Lib Dems. Lib Dems did not campaign against Labour’s policy, make personal pledges, and appeal for student votes, because they felt that tuition fees were too small.
    The more that Lib Dems defend the new system on its own merits, the less honest and/or competent the party’s previous (and notionally current) position appears. That taints whatever Nick Clegg and other Lib Dems say on any political topic, regardless of whether the audience understands or cares about the funding of university education.

  • Peter Watson 23rd Feb '15 - 12:45am

    On the subject of tuition fees, university application figures, and social mobility, two points I seem to keep returning to are:
    1. To what extent does “nursing” flatter some of the claims being made? Entry to that career changed to being exclusively at degree level over the last few years, meaning that nursing is now the most popular degree subject, probably drawing students from a different range of backgrounds than traditional degree subjects, with tuition fees paid by the NHS.
    2. For children who had been planning their careers for a large part of their lives, did the government offer any new alternatives to going to university at the same time as it increased tuition fees, particularly at a time of economic uncertainty? It is sad to think that anybody might have been discouraged by the changes, if that is what the figures show.

  • Peter Watson 23rd Feb '15 - 1:25am

    And finally ..
    party loyalties and broken pledges aside, within the Lib Dems there is probably a lot more in common between the two sides than often appears to be the case during arguments over tuition fees.
    Generally there seems to be agreement that university education is important and should be properly funded, that there should be a contribution to the cost of going to university from both government and the student/graduate (especially when we consider maintenance and tuition fees), and that payments or repayments should be progressive and not avoidable by the wealthy and high paid.
    There are many important principles to be considered, and it is a shame that the debate seems to be solely about either supporting or opposing the current system.

  • Philip Thomas 23rd Feb '15 - 8:07am

    Well, I chose to pay off my student loan early (with some generous help from my parents). But that was before the current exorbitant level of fees. The value of investments can go down as well as up (come to think of it they might well have collapsed given the route the economy took subsequently) and I preferred not to enter working life encumbered by debt. I was lucky to have the choice.

  • Joshua Dixon 23rd Feb '15 - 9:39am

    I’ve skimmed the comments and no one seems to be concentrating on the fact that the funding model we have built is completely unsustainable. Funding higher education through writing off student debt instead of through teaching grants just seems nonsensical when government is reluctant to find ways to combat the rise in write offs, opting for threats to privatise the student loan book to find short term funding for it.

  • Whatever the arguments about 6k versus 9k there is one thing that is beyond all doubt – that the system introduced by the coalition is regressive – i.e. high earners pay a far smaller percentage of the lifetime salary compared with middle-income earning graduates. That is a system that is the complete opposite of the position advocated for so many years by a party called the Liberal Democrats, i.e. a system of funding HE with progressive taxation, rather than regressive fees.

  • Simon Shaw

    You have been repeating yourself on here for the past few years. My response is also the same. LD’s are dishonest and are scrambling round to justify their complete u-turn. Your problem is that the people who you need to listen aren’t listening any more and the people who need to believe you simply don’t. Outside the LD bubble you have no credibility. Just take the situation in Scotland. If the current level of fees are so fair, etc, why aren’t LD’s in Scotland advocating it. Or are they waiting to get back in Gov’t so they can do another u-turn and use all the well rehearsed and tired arguments they use in England.

  • Jackson: Since your comments reveal that you have failed to understand the fees system and how it operates, it is difficult to regard your comments as much more tha off target.

    The best that can be said perhaps, is that by implication, you are suggesting that your misunderstanding is widespread and that this is a problem.

    Nevertheless, the situation in Scotland is a valid point. A question that needs to be raised is how much this is costing Scotland and whether this is the best use of the money. Would the money be better spent on education in areas of deprivation for example?

    Overall the problem is that of government revenues: basically, not enough people vote for higher taxes. A good intellectual case can be made for higher taxes and free tuition to the age of 24, but in practice people in the UK are not willing to shoulder the burden. Politics is often described as ‘the art of the possible’.

  • @Dr Michael Taylor
    “you only start to pay if you earn more than £21,000 (this is increased with inflation)”

    So you say – but in fact there is no guarantee whatsoever that the threshold will increase. There have been reports that the government is already thinking about freezing it. See :-

    http://blog.moneysavingexpert.com/2015/01/09/a-deliberate-threat-to-the-government-u-turn-on-the-21000-student-loan-repayment-threshold-i-will-organise-mass-protest/

    “and then you pay according to your income and after 30 years you aren’t required to pay any more whether or not you have paid in full.”

    Note that unlike the previous scheme, many graduates will have to keep coughing up long after they have paid off the original debt in full – because they’ll have a fortune in compound interest to pay on top.

    “So anyone paying up front is barmy because they could invest that money and use it to fund the repayments and probably make a profit.”

    Hardly. The debt increases by RPI + 3% (currently 5.5%) from the moment you start studying to the April following graduation. Once you have graduated, the interest rate starts at RPI (current 2.5% – based on March 2014’s figure), gradually going back up to RPI + 3% once you’re earning £41K. Even if you earn less than the £21K threshold, your debt will still be going up by 2.5% (at current values) even while you are making no payments.

    At the moment, it’s impossible to invest your money in a product that will guarantee a rate of interest higher than even the 2.5% charged on graduates earning less than £21K. (The only exception is the new pensioner bonds.) So if you have a son or daughter at university, have the cash to pay up front, and have the ability/contacts to guarantee your child a decent job on graduation – you’d be bonkers not to pay up front, because you could save yourself thousands. The only reason you might not want to would be if you were willing to take a chance on non-guaranteed forms of investment (e.g. the stock market) which MIGHT give a return greater than the interest paid on the loans – but this would be very risky.

    Either way, it’s the rich who hold all the cards as usual. If the system were really all that progressive, this would not be the case.

    @Peter Watson – excellent posts.

    @Jackson: “If the current level of fees are so fair, etc, why aren’t LD’s in Scotland advocating it.”

    What a brilliant point. Perhaps Simon might want to have a stab at answering it!

  • Martin

    Maybe…just maybe… most people are right and you’re wrong. Have you ever considered that inside your bubble?

    I fully understand the fees. I understand £45k debt. I understand £9k a year fees after promising to abolish them. This debt gave me and my wife sleepless nights over my son attending University and I know a lot of other people who feel them same, My son has decided against University as a direct result of the fees. Clegg benefited from a free university education as did I. Why should we burden our young people with eye watering debts. The difference is Clegg will not be affected by the fees and neither will his children as he will be able to afford to pay them for them. I unfortunately can’t. Yes very progressive. My son would end up paying back 10s of £1,000 of fees back while millionaires pay no interest whatsoever.

    Maybe you, in your wisdom, could answer my point about LD’s in Scotland promising (I know, it means nothing) zero fees while making English students pay £9k a year. Why are we so different to Scottish students?

  • @Martin
    “A good intellectual case can be made for higher taxes and free tuition to the age of 24, but in practice people in the UK are not willing to shoulder the burden.”

    For one thing – what burden? I’ve already linked to figures showing the huge amount in extra tax revenue contributed by graduates. Worrying about how to pay for HE is a bit like fretting about whether you can afford to spend £50 on a goose that lays golden eggs.

    Even if one accepted your notion of a “burden”, where is the evidence that the public are not willing to pay it? The Lib Dems certainly seemed to think the opposite was the case at the last election – do you really think they would have been so happy to sign those pledge cards, if they didn’t believe it would be a vote winner?

  • Philip Thomas 23rd Feb '15 - 9:31pm

    I suspect we in the rest of the UK are (through the Barnet formula) paying for Scottish free tuition (which I understand is not available for English students at Scottish universities, although available for other EU students). That isn’t such a bad thing- Scotland is part of the UK and Scottish graduates benefit the whole of the UK. If only we could extend this principle more widely!

  • @Jackson
    “I fully understand the fees. I understand £45k debt. I understand £9k a year fees after promising to abolish them. This debt gave me and my wife sleepless nights over my son attending University and I know a lot of other people who feel them same,”

    Very well put Jackson. I feel much the same. I also graduated for free, and the only £45K debt I had in my mid-20s was for my first mortgage. Young people today get a rough enough deal as it us (due to ours and previous generations screwing so many things up). Imposing these levels of debt on them is one of the most unfair things I can think of.

  • Philip Thomas 23rd Feb '15 - 9:52pm

    I also note that, honourable though the intention of the 30-year moratorium may well be, it will have the practical effect in 30 years time of loading yet more burden on the younger generation (assuming no one has seen the light by then and that the response to loan default is to increase interest rates on those who can pay).
    @Simon Shaw “sympathy for very high-earning graduates”?? very-high earning graduate can pay off early and avoid the compound interest. Stuart’s sympathy is with the squeezed middle.

  • @Simon Shaw
    “Much as your sympathy for very high earning graduates is fascinating”

    Strange, as I could have sworn it was YOU who supported a system (i.e. the current one) in which very high earning graduates pay substantially less than those on modest incomes. See the figures on Martin Lewis’ website.

    “if you are going to have something LIKE a Graduate Tax, then that is inevitable”

    What are you talking about? In what way were the compound real interest rates imposed by this government inevitable? Why couldn’t the system have been devised interest-free like the previous one?

  • @Simon Shaw
    “And yet two parties which disagreed with your position each secured more votes and a lot more seats than the Lib Dems in 2010. Strange that, isn’t it?”

    Perhaps some people were interested in other issues as well. Have you considered that?

  • Philip Thomas 23rd Feb '15 - 10:15pm

    @Simon Shaw: Most people? Here we are, on a Liberal Democrat blog discussing a Liberal Democrat policy, and so far the only consistent defender of that policy is you. Have you not noticed that our support has fallen by about 2/3 since 2010 and that the primary reason given on the door steps for not voting Liberal Democrat is “tuition fees”?

  • @Simon Shaw
    “I don’t think it is, actually. I think he is concerned about people in the top earning 25%. To me that isn’t the ‘squeezed middle’.”

    Please stop making stuff up Simon. Everyone else taking part in this thread is trying to have a serious discussion in good faith.

    You know full well – because you’ve seen the figures yourself on the Martin Lewis website – that very high earning graduates end up paying a lot less than those in the middle. Those who can guarantee their kids a job can save even more by paying up front. I’ve criticised this situation many, many times. You, notably, have not – do you actually support this feature of the system, Simon?

    Your own son – who you say wants to be a primary school teacher – will very likely spend most of his career in that £30K-£40K bracket that gets clobbered the most under the current system. He’ll never be rich, but he’ll pay a heck of a lot more for his university education than those who ARE rich. I find it downright bizarre that you are comfortable with this state of affairs. This has to be the worse case of child cruelty in politics since John Gummer fed his kid that BSE-infested burger.

  • Philip Thomas 23rd Feb '15 - 10:22pm

    @Simon Shaw

    How much is “very high earning”, exactly? And what do you call the group of earners who earn more than “very high earning”: “very very high earning”?

  • “Secondly, very high earning graduates pay a lot more than those on modest incomes. I suspect your idea of what constitutes a “modest” income is way out of line with most people’s.”

    I think a very high earning graduate should not be able to pay less than ANYBODY who earns less.

    Would you agree?

    The fact that they DO pay less makes a mockery of your claims that this is a progressive system. Progressive should mean those at the top paying the most, not those in the middle.

  • Philip Thomas 23rd Feb '15 - 10:34pm

    23% at the election, polls have us at about 7%.

    I live in Brentford and Isleworth, but I have been canvassing in three London constituencies and that is (in my limited experience) the most common reason given by former Liberal Democrat supporters: there are other reason given by those who were never voting Lib Dem in the first place.

  • @Simon Shaw
    “I recognise the issue you refer to. I would certainly support any amendment which addressed that problem. Do you have a suggestion, because I assume it is actually rather more complicated than you (simplistically ) imply?”

    The issue only arises because of the positive real interest rates the current government introduced. Do away with that, and return to the zero real interest rates of the previous system, and the issue disappears. That’s all you have to do.

  • Philip Thomas 23rd Feb '15 - 10:43pm

    For what it is worth, I do think everyone in this thread, including Simon Shaw, is trying to have a serious discussion in good faith: we’re just getting a bit carried away and occasionally make “debating points” of a slightly dubious nature…

  • @Philip Thomas
    “For what it is worth, I do think everyone in this thread, including Simon Shaw, is trying to have a serious discussion in good faith: we’re just getting a bit carried away and occasionally make “debating points” of a slightly dubious nature…”

    I just don’t think it adds anything to the debate when Simon ascribes opinions which he knows full well are the opposite of the truth. Nobody else is doing that.

    I do seriously wonder sometimes what it would be like to have a drink with Simon and see if he’d do that face to face.

  • Philip Thomas 23rd Feb '15 - 10:59pm

    Yes, our support has generally fallen less in constituencies where we have a sitting MP (also true in London). The figures I was referring to are of course the nationwide figures: in Brentford and Isleworth itself we had 23.7% last time and Election Forecast puts us on 14% this time- so better than the national average.

    I have no doubt the views of Londoners are not representative of the country as a whole- and London has a high student population (although concern on the doorstep tends to be from parents, maybe because many students have better things to do on a Saturday). The concern is partly that we broke our promise rather than simply that the policy is unfair.

  • Stuart: As I wrote before the intellectual argument is fine, however in the immediate term the money for H.E. has to come from somewhere. It would be very interesting if you had some practical proposals, because this is the missing link in the arguments.

    There is a lot that irritates me about the tuition fees system, particularly that it appears to be driven by an accountancy sleight of hand, but there is even more that irritates me about the unrealistic tone of much of the criticism. Rather like the monarchy question, it is not where I would like to be, but the issue is where to go from here.

    The fact that the tuition fee system is regressive at the top end is not in dispute, however the regressive element has to be considered in the context of overall taxation. The requirement is that other aspects of tax are sufficiently progressive to compensate, suggesting that the 40p rate threshold should not be raised as much as other thresholds (which I think has happened) and that the 45p threshold should be lowered or at least frozen. Even so, this account is simplistic as those in the higher earning brackets may be more efficiently taxed in other ways, such as capital gains tax (which I think this government increased by 10% to 28%).

  • Philip Thomas 24th Feb '15 - 7:32am

    In the immediate term the money is coming from somewhere: mostly not repayment of student debt, because if that ever happens it will be for the future. The current amount actually being raised from repayment cannot be very great, and I already said that I would make up any shortfall by raising income tax and cutting pensions. You can criticise my proposals for being unpopular, but don’t claim there are no practical proposals being made.

    There’s always a tendency for the rich to pay less tax as a proportion of their income: they can afford to hire accountants to make it happen, and (as we seem to be witnessing over student fees) they get to write legislation which favours them. The idea that making them pay 28% on capital gains (which can easily be covered by nominal capital losses and is subject to a substantial allowance and significant exceptions) is more efficient than making the not quite so rich pay 40% on income (mainly through the difficult to avoid PAYE) is laughable.

  • Philip Thomas: My reference to capital gains tax was more in relation to the additional (45p) tax at a rather higher end of the income spectrum. Certainly many, but dertainly not all, taxed at 40p are in very little position to avoid PAYE.

    Your proposals are OK in themselves, however the issue is whether they can command sufficient support. It is clear that the tendency of political parties to imply that something can be had for nothing has made it more difficult to generate support. The other point repeats what I wrote earlier, the money for H.E. must come from somewhere and currently it appears to involve an accountancy trick, leaving me to wonder whether a better trick might not have been found somehow. But I do not know what this trick might be, I do not even understand why the borrowing trick is off the government balance sheets in the first place: it does not really make sense to me.

  • Matthew Huntbach 24th Feb '15 - 10:37am

    Martin

    There is a lot that irritates me about the tuition fees system, particularly that it appears to be driven by an accountancy sleight of hand, but there is even more that irritates me about the unrealistic tone of much of the criticism.

    Yes, same with me. I don’t like the system, but I can see the argument that it was indeed a clever sleight of hand which appears to give the Tories what they wanted while underneath maintaining the status quo. No-one else seems to be able to get that point, and if one tries to argue it, the consequence is inevitably denouncement which refuses to acknowledge that a compromise is not necessary an ideal: I don’t defend this system because it is what I would want if I had a choice of all possible alternatives regardless of political realities, yet as soon as I try to defend it on the basis of practical reality, the barriers go down and the “nah nah nah nah nah”s come out, and I am attacked as if I am a mad Clegg fan who goes along with whatever his leader says.

    I’d have preferred university tuition to be paid by straight taxation, and in particular I would like to see inheritance tax raised to whatever level would be needed to do that. This seems to me to be just – inheritance was originally all about giving people a start in life, but it no longer plays that role now that people live so long that when they die their children are likely to be nearing or past retirement age. Using inheritance tax to pay for it would also counter the argument that subsidising universities is subsidising class inequality, because it would be subsidising in the best way to tackle class inequality. But how many of the people who moan about tuition fees, how many of those who say “nah nah nah nah nah, dirty rotten Liberal Democrats, I’ll never vote for you again after that”, are prepared to stand up alongside me and support this option. Well come on, those who have contributed attacks here, will you?

    I regard anyone who moans about tuition fees, but is not willing to propose a realistic alternative to pay for universities that would actually get public support as hypocrites. As we see, again and again and again, people moan about these things, but actually propose some new form of taxation and they melt away. This we saw when we dipped out toe into the lightest and smallest bit of extra property tax, and it was denounced in a ridiculous manner, even by many Labour politicians. A tax on extremely high value properties is a tax on Londoners, an attack on those of us who live in London? What utter nonsense – it would be the best thing that could be done for most Londoners since it would help bring house prices down, and so many of us suffer from stupidly high house prices.

    So, the Tories would never agree to any of this, and it’s the Tories that the people voted in (any argument “oh no, they didn’t actually gain a majority” being destroyed by the AV referendum – sorry, after that, yes, you Brits, Tory government IS what you voted for, and you have got what you voted for). The clever-clever thing the LibDems did was to go along with the Tories, but subvert what they wanted by making the loans and write-off conditions so generous that actually it IS paid by government borrowing (thinly disguised), and is now predicted to be more generous state subsidy than what we had before.

    Why do people find it so hard to understand the argument that if it wasn’t paid for by state borrowing under the tuition fees system, it would be paid for by direct state borrowing, so it would STILL therefore be a burden on the next generation?

  • Peter Watson 24th Feb '15 - 11:17am

    @Simon Shaw “And yet my son waited until he was 25 before he started his degree (two and a half years ago), in what was the very first year of the new system. He could have gone to university in any of the previous 7 years, under Labour’s marvellously fairer system (or so you say) but he chose not to. Funny that, isn’t it?”
    I am not entirely sure what point you are making here. Are you telling us that your son chose not to go to university previously because he did not like the old tuition fees system and the new one made him change his mind, or simply that the new system was not bad enough to discourage him from changing a decision that had been 7 years in the planning? The drop in university applications from mature students was more severe than for those under 21, so your son would be an interesting counterexample if the increase in tuition fees was a motivation for choosing to go to university.

  • Peter Watson 24th Feb '15 - 11:40am

    @Matthew Huntbach “I’d have preferred university tuition to be paid by straight taxation, and in particular I would like to see inheritance tax raised to whatever level would be needed to do that”
    I agree entirely with that. I also suspect that it would have to be accompanied by some sort of restriction/regulation/rationing/quality-control, and a range of provisions for post-18 education and training. It is that debate which I think would be more interesting and important than the one about the relative merits of two flawed fees systems, but the current political situation and the reputational damage it has caused the Lib Dems makes it so much harder to have that discussion. I also wonder how feasible it would be to change now because of the issue of former students with loans under the current schemes, though perhaps the “accountancy trick” means that it might not be so difficult.

  • Philip Thomas 24th Feb '15 - 7:53pm

    @Matthew- yes the accountancy trick sleight of hand argument is fair enough. We can’t have a perfect world after all. And actually this is not an important issue for me, despite the amount of text I have spent on it here. If it was an important issue I would probably not be supporting the party (I met someone who used to deliver for us today, but no longer, you can guess why). I am not sure how predictable inheritance tax income is, or if an increase could deliver sufficient revenue without amounting to confiscation, but I would be willing to consider increasing inheritance tax as one way of funding higher education (and I certainly oppose raising the threshold which the Tories seem rather keen on).

  • @Martin
    “Stuart: As I wrote before the intellectual argument is fine, however in the immediate term the money for H.E. has to come from somewhere. It would be very interesting if you had some practical proposals, because this is the missing link in the arguments.”

    Given that you seem to accept that HE is a good investment that benefits all of society and ultimately leads to increased tax receipts, I still tend to think that the onus should be on those who are in favour of fees to explain why we shouldn’t pay for HE through the public purse.

    Still, your question deserves an answer – though of course we need to know first exactly how much money we’re talking about.

    In 2012/13 (the most recent year I can find figures for), HE institutions received £29.1bn in income from all sources. (Incidentally, they only spent £27.9bn, so ran a £1.1bn (rounded) surplus.)

    In the same year, 2013, graduates paid back £1.4bn in loan repayments. Set against that, the SLC had running costs of around £115m, so the net receipts from repayments was more like £1.3bn.

    So of the £29.1bn received by institutions in income, only around £1.3bn came from loan repayments. Given the HEI’s surplus, if you took this £1.3bn away, they’d only have been £200m short of breaking even.

    As for how I’d raise that £1.3bn from elsewhere – well I’d certainly agree with the other posters who suggested inheritance tax. So much better to tax the well-off dead than the hard-pressed young.

    Another option would be to forego this year’s £500 increase in the personal tax allowance, which will cost the government £1.4bn in 2015-16 – about the same amount being received in student loan repayments, coincidentally enough. I’d be more than happy to give up my hundred quid so that tomorrow’s graduates are not starting out on adult life with eye-watering debts.

    Sources for the figures quoted above :-

    http://www.slc.co.uk/media/789932/slc_annual_report_1314_v6.pdf

    http://www.parliament.uk/briefing-papers/SN05440.pdf

    http://www.parliament.uk/briefing-papers/SN01079.pdf

    https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/293759/37630_Budget_2014_Web_Accessible.pdf

  • Matthew Huntbach 25th Feb '15 - 10:14am

    Philip Thomas

    I am not sure how predictable inheritance tax income is, or if an increase could deliver sufficient revenue without amounting to confiscation,

    I’m not sure myself, but I’d like to see some figures which would give an indication. It seems to me that it’s as predictable as anything else, unless we really do discover a cure for death, and given that the majority of people own houses and the high values of houses these days, it would seem to me that if one taxed income from inheritance at the same rate as income from work it would raise a great deal of money.

    Of course, I’m well aware of the sentimental arguments against it. I remember even when I was a schoolboy arguing the case against inherited wealth and being surprised by the vehemence of the opposition I got for my views, even from people who like me came from a poor background and so would be the losers in a society where having inherited wealth or not makes such a huge difference. All my life I’ve thought inheritance tax to be the fairest tax and found that hardly anyone else ever agrees with me on that issue.

    However, this is the point – we need to put across the clear line on any issue of state expenditure “if you want it, you have to pay for it”, and at least suggest ways of paying for it. Then it’s up to the people to decide if they’ll accept those ways, or if on reflection they’d rather not have the state expenditure now they can see what would be necessary to pay for it. Because the political left does not put across this line, because it always goes quiet in that side while attacking the political right for “cuts”, in the end it always loses the argument. The political right puts out the argument that calls for higher tax are due just to “envy”, and the usual sentimental lines against such things as inheritance tax, and the political left has not put forward the counter-argument to those lines, so it loses.

    This we saw with tuition fees. We (or at least the PR people running the election campaign) made a big thing about the “pledge” to scrap them, and at most (not even that really) a little bit of hand-waving about how to pay for scrapping them. So, people voted for the party whose biggest pledge is to keep taxes low, and thought the Liberal Democrats were bad people because as a junior partner in a government run by that party we could not get it to agree to scrap tuition fees. Had we been honest about the tax consequences at the start, either people might not have been so willing to vote for the low-tax party, or they might have found it easier to see why we couldn’t get what we wanted past them.

    The leader of the Green Party has just been viciously attacked on this issue, and quite right too. Good on you, Nick Ferrari. What happened there illustrates so well why I, as a very unhappy member of the Liberal Democrats still clinging to its left and feeling I am being pushed off have no interest in moving to the Greens. Natalie Bennett showed up so well why the left loses, because it won’t put both sides of what it wants, and so is easily beaten by the right when the right asks the straightforward question “OK, but how would you pay for it?”. Given that the same person had already in a previous interview recently been attacked on the same grounds and been unable to reply, you’d have thought she’d have got herself clued up for the same happening again. Gosh, but she hadn’t. Incredibly, we have here someone even more incompetent than Nick Clegg at being a party leader.

  • Peter Watson 25th Feb '15 - 10:24am

    @Simon Shaw “But I’m not aware that anyone is arguing that the public purse shouldn’t pay for quite a lot of the cost of HE. It’s just that it’s not clear why the public purse should pay for all of the cost, particularly if there is a significant financial benefit to the individual, as well as to society as a whole.”
    It’s important to distinguish between the cost of tuition and the cost of maintenance at university, though in Lib Dem circles most of the debate is inevitably about the tuition fees element. Even if the public purse paid for the tuition, students must still pay the cost of supporting themselves for 3-5 years, with grants available to the poorest students and loans to everybody else.

    With average costs estimated around £9000 p.a. (more in London), this is already a very significant investment by students. The balance has changed from maintenance (loan capped at <£6k outside London) being the largest component of the student loan to it being the smaller part. Also, the large increase in the interest rate means that the student loan for maintenance is no longer a no-cost loan for those who cannot afford to go to university without it.

    Regardless of positions over the current scheme, I think most people agreement on the need for a balance between financial contributions by the student and by the state, but it is important to remember that students and their parents incur large costs over and above any tuition fees.

  • Peter Watson 25th Feb '15 - 10:31am

    P.S.
    On reading that back it might sound like I’m whinging about the cost of living for a student, but to clarify, I was trying to point out that zero tuition fees does not mean that students have a free ride at the state’s expense.

  • @Simon Shaw
    I think if you asked most people they would consider your attitude misplaced. Quote please. I have not found such a poll. Unless you mean “I think if you asked most people inside the Lib Dem bubble they would consider your attitude misplaced”. Then I believe you

    As I said to you two weeks ago, do you worry about the extra tax that your son would have to pay if he ends up in a high paying job? Of course not.

    You’re right – I do not. Why should I? He is a high earner. Of course he should pay more tax, I really don’t get the point you are making. Unless you mean he should pay even more for a University education, in effect paying twice. Then I don’t agree. Society benefits from having well-educated people….doctors, teachers, nurses, engineers, etc, and that was the principle upon which I was a member of the LD’s and I believed all LD’s fought the last election. Apparently not.

    The present Student Finance System is just the same, and it’s certainly more progressive than the previous (Labour) system. No – its worse. £45k debt. £9k a year tuiton fees. how is it better. Just because someone pay less per month, but over three times as long does not make it better. Imagine a single parent with 2 children on £22k a year struggling to make ends meet saddled with that debt against Clegg’s children with none. How is that progressive? Labours system was no worse or better, but after 10 years they pay nothing, whereas under LD system they have another 20 years of payments. I prefer neither system. I benefitted from a free education, as do Scottish students. Why shouldn’t my children?

    Also, how many of Danny Alexander’s constituents pay the tuition fees he voted to treble? Answers on a post card please.

  • @Matthew
    “We (or at least the PR people running the election campaign) made a big thing about the ‘pledge’ to scrap them”

    No, the pledge was simply not to increase fees. It may have been policy to scrap them, but that’s a different thing.

    The writer of the following page (somewhat satirically titled “Get The Facts”) is also confused about the difference between the policy and the pledge :-

    http://www.libdems.org.uk/get_the_facts_student_finance

    Why did Liberal Democrats allow tuition fees to increase?
    Neither the Conservatives nor Labour agreed with our policy to end tuition fees.”

    Which of course does not answer the question! In fact, it sounds like the Lib Dems are trying to blame other parties for the fact that most of their MPs walked into the opposite voting lobby to the one they’d promised voters they were going to walk in to.

  • Philip Thomas 25th Feb '15 - 6:44pm

    @Matthew. I don’t consider myself on the political left, but you are right all state expenditure must be paid for and my preference is for it to be paid for from taxation if possible (fiscal conservatism). Sentimental as my attitude to inheritance tax may be, if you set tax rates too high people will find ways to avoid them. This is one reason why we should be very careful before cutting taxes: it is so much more difficult to raise them back again because perception of “too high” shifts. But successive parties think tax cuts win elections, so here we are with a massive deficit.

  • Matthew Huntbach 25th Feb '15 - 7:59pm

    Stuart

    Which of course does not answer the question!

    Right so where would the £6000 extra per student come from? As I keep on and on saying, and people like you keep ignoring, it’s NOT just a matter of tuition fees and nothing else. If Tory budget plans were to abolish university subsidy, as clearly they were, then if the LibDems forced through not abolishing it, Tory budget plans then HAVE to be met either by more taxation (which the Tories would never support), more government cuts (so what would YOU cut beyond what’s already been cut – and which the Tories would agree to cuts as well (so not “Trident”, which would probably be your answer)?) or by more government borrowing, which the Tories would not agree to either.

    So actually it was met by disguised government borrowing, which is what the tuition fees and loan system is.

    As I KEEP saying, yes the “pledge” could have been kept, but at what cost? My guess would be massive slashes in university places, which many Tories wanted anyway, but they would blame it on the LibDems “Oh dear, we had to do it so they could keep their pledge, sorreee”.

  • If simon shaw is representative of modern Liberal Democrats, then it’s no wonder they are 7% in the polls. When I ended my membership I noticed more and more LD members with his attitude towards “non believers”. How he hopes to recover lost support with the condascending attitude he has towards people who have principles I will never know. I gave met plenty parents who have worried about their children’s debts. How you can justify this I never know. You see I believed the LDs had a costed plan to eliminate tuition fees over 6 years, and immediately abolish them for final year students. Did you? Even though they knew the extent of the deficit that’s what they said and all signed up to and made such a huge issue of It at the election. I will bet that simon shaw et al made a huge fuss when tuition fees were originally introduced at £1000 in 1998 ( if only they were still the same).

    I wanted to pay my sons tuition fees becaus I don’t want hi starting life with £45 k debt. If you don’t get that then you never will. I don’t see why my son who comes from a modest background should be saddled with a lifetime of debt while cleggs children will have theirs paid by daddy, and Mr Alexander’s children and constituents will pay zero while voting for mine to pay £9k. How is that progressive and fair. I’m sick of listening to LDs squirm over the issue. I’ve just had my 6th visit since Xmas from LD here in Sheffield. I asked them this time which policies they will ditch if they get into a coalition. Oh this time we won’t be making any promises like that was the reply. Slams door. . Believe me they are desperate, but no one is listening. He’ll struggle to hold on to the seat and I’ll vote for anyone to get rid of Clegg.

  • @Simon Shaw
    “Most Lib Dem MPs DID NOT ‘walk into the opposite voting lobby to the one they’d promised voters they were going to walk in to’.”

    Hurrah for the Lib Dem MPs!

    But if you want the facts, here they are.

    The Lib Dems had 57 MPs at the time. Half of 57 is 28.5.

    Most of the ones who actually voted did indeed walk into the lobby they’d sworn they wouldn’t do – by 28 to 21.

    Of the 8 who didn’t vote, Chris Huhne obviously would have voted to treble fees had he not been in Mexico for a summit – in fact he was on standby to fly back and do exactly that if the government had been in danger of losing. There was no need for him to do so, because most Lib Dems who did vote were happy to treble the fees.

    If memory serves (from previous threads where this was discussed), at least one or two of the other non-voters planned to vote yes but were unable to attend for some reason or another.

    Whichever way you look at it – a majority of Lib Dem MPs were in favour of trebling fees. 21 out of 57 actually did what they told voters they were going to do – that’s 37%. The other 63%, didn’t.

  • @Simon Shaw
    “Unlike your son, none of my four children (now all in their mid-20s) were or are “high earners”, but I had no thought of paying for the tuition of the two children who have been to university. Maybe that makes me a bad parent? I would have said it makes me a fairly average parent.”

    I’d say that makes you very odd. If my kids go to university, and I’m in a position to help them out financially, I’ll do it in a heartbeat. I’m sure most rich parents would do that, so why would I want to put my kids at a disadvantage?

  • Peter Watson 25th Feb '15 - 10:30pm

    @Simon Shaw “Where I live the Lib Dems are at 36% the polls.”
    Would that happen to be in a seat where the Lib Dem MP voted against the increase in tuition fees?

  • @Matthew

    I think your whole analysis of the financial position is deeply flawed. Please see my earlier post where I discussed how much income universities receive, and how much of that is being covered by loan repayments. It’s a very tiny percentage (about 4.5% in 2012/13). Obviously this will rise (though not substantially until a distant point in the future), but the point is we’re already paying for HE NOW – proving that it can done. (And lest you say “what about the deficit?”, we were paying for HE before the deficit, and the deficit certainly wasn’t triggered by a sudden explosion in HE spending.)

    “As I KEEP saying, yes the ‘pledge’ could have been kept, but at what cost? My guess would be massive slashes in university places, which many Tories wanted anyway, but they would blame it on the LibDems “Oh dear, we had to do it so they could keep their pledge, sorreee”.

    Did the Tories really want to slash places? I seem to recall it was a Tory government that started off the rapid expansion in universities in the ’90s (the general wisdom at the time was that this was keep the unemployment figures in check). Just last year, in an article I’ve linked to several times, David Willetts was saying that university places would expand and that this would all be self-financing because of the increase in high-earning graduates created. Two brains or not, Willetts certainly understood the concept of investment – which seems to be as incomprehensible as quantum mechanics to most Lib Dems.

  • Peter Watson 25th Feb '15 - 10:42pm

    @Simon Shaw “Where I live the Lib Dems are at 36% the polls.”
    In fact, while we’re considering the popular Lib Dem MP for Southport, at the time of the Commons vote “He [John Pugh] has told party whips he will vote “No” on Thursday to the bill to raise the cap on tuition fees from £3,350 to up to £9,000 a year. It is important to stress that the Constituency Party in Southport overwhelmingly baack their MP on this issue.” (http://birkdalefocus.blogspot.com/2010/12/another-tuition-rebel-goes-public.html)

  • @Simon Shaw
    “But I’m not aware that anyone is arguing that the public purse shouldn’t pay for quite a lot of the cost of HE. It’s just that it’s not clear why the public purse should pay for all of the cost”

    It’s called believing in the idea of public services, Simon! You may not agree, which is fine, but I don’t understand why you are finding it so hard to get the idea that others do.

    “particularly if there is a significant financial benefit to the individual, as well as to society as a whole.”

    You could make exactly the same argument about numerous other public services. Pre-18 education. Job centres. The expensive heart operation my dad had last year – it won’t really benefit anyone other than my dad, so why should you and other taxpayers have to foot the bill? What’s the difference?

    All this endless debate boils down to is that you don’t believe higher education should be a free public service like schools and the NHS. Which, as I say, is fine. But please stop making out that those who disagree with you are idiots. They are guided by sound principles, and in the case of the massive returns to the exchequer (and society as a whole) from having a highly educated workforce, strong financial sense as well.

    For some bizarre reason, in the UK we have come to see higher education as a burden rather than an investment. This kind of short-sightedness is the sort of thing that makes me despair of being British at times.

  • Philip Thomas 25th Feb '15 - 10:54pm

    @simon shaw I think you misunderstood when Jackson talked about his son being a high earner- I think Jackson was discussing the hypothetical scenario (which you raised) of him having to pay more income tax because of high earnings. I don’t think he has said his son is a high earner *now*. Of course, I may have misunderstood.

    Simon, since you support raising tuition fees, why do you seem so proud less than half the party voted for it?

  • @Simon
    Yes, I’m happy to apologise and give you a figure I’m sure you can agree with :-

    57% of Lib Dem MPs who bothered to vote did so in favour of trebling tuition fees.

    http://www.bbc.co.uk/news/uk-politics-11964669

    Chris Huhne, though regrettably detained in Mexico, raised a Mojito in celebration.

  • @Simon Shaw
    “I think you’ve brought things back very neatly to William Wallace’s reference to the previous Lib Dem policy being ‘a middle class subsidy.'”

    Whereas the current one is an upper class subsidy.

    As the 2010 Lib Dem manifesto put it: “We will scrap unfair university tuition fees so everyone has the chance to get a degree, regardless of their parents’ income.”

  • As the 2010 Lib Dem manifesto put it: “We will scrap unfair university tuition fees so everyone has the chance to get a degree, regardless of their parents’ income.”

    Someone have a chisel handy to write those words on the Lib Dem tombstone come May 8th. Good night Simon!

  • @Simon Shaw
    If the upper class person earns less than average income and therefore ends up paying back little or nothing, then I suppose you could say that there is an “upper class subsidy”.

    Simon, please refer back to 23rd Feb ’15 – 10:35pm where you admitted that high earners end up paying back less than middle income earners. Those with rich parents who can pay up front pay back even less. There’s the upper class subsidy. Had you forgotten you admitted that?

    “regardless of their parents’ income” – I assume you would accept that part of the statement has been achieved?

    Simon, please refer back to 21st Feb ’15 – 1:22pm, where I quoted UCAS research that indicates around 6,000 18 year olds per year are being scared off applying by the Lib Dems’ mega-fees. Who do you suppose those 6,000 kids being scared off are – the rich?

    Perhaps this is a good time for you to re-read all the posts from the start, since you’ve now started regurgitating things that were proved false several days ago.

  • Matthew Huntbach 26th Feb '15 - 1:17pm

    Stuart

    I think your whole analysis of the financial position is deeply flawed. Please see my earlier post where I discussed how much income universities receive, and how much of that is being covered by loan repayments. It’s a very tiny percentage (about 4.5% in 2012/13).

    Er, sorry, what has that got to do with it? The money the universities receive comes from the loans, not the loan repayment. Whatever proportion of the loans is getting paid back doesn’t affect how much the universities get.

    So, sure, the loans are disguised government borrowing. Analysis suggests a high proportion of them won’t be paid off, then it becomes undisguised government borrowing. So what? Isn’t that what those who want government subsidy of universities wanted in the first place? Why do you moan when you get what you want?

    Now, my point is that the Conservatives would never have agreed to this level of borrowing had it been actual government borrowing in the first place. But they were so anxious to push through the fees idea (on the – completely mistaken – idea it would create a real market and so drive prices down and quality up), that they accepted what was actually the same amount of borrowing in this disguised form.

    I’m not saying this is the best thing that could possibly be done, I’m certainly not saying the result was a wonderful system, and I wasn’t there in the negotiations so I don’t even know to what extent the LibDems could have got something better if they had pushed harder. But I do work at a university, and I know we are doing very well in terms of our jobs and quality being saved, compared to local government which is suffering huge cuts, and it was bad enough when I was a councillor 9 years ago, so what it is like now I hate to think (actually I know, I have relatives who work in local government, it’s horrendous).

    Now, my point is that if this was the only way the Conservatives would agree to save the university system, I can see the argument for accepting it. That’s all. On that basis, I don’t condemn the Liberal Democrats as evil pledge breakers as people like you and so many others do, because you and all the others just seem to think the Liberal Democrats could have clapped their hands and the Tories would have agreed to full university subsidy, and somehow that would have cost no-one anywhere anything. Sorry, I’m not a Green Party person, I do rather feel we have to look at both sides of policies, costs as well as results.

  • Matthew Huntbach 26th Feb '15 - 1:20pm

    Stuart

    For some bizarre reason, in the UK we have come to see higher education as a burden rather than an investment.

    It isn’t a charity either. I do work in it, and I do rather want to get paid for what I do. Somehow the money has to be found to pay me, you know.

  • Matthew Huntbach 26th Feb '15 - 1:35pm

    Stuart

    Did the Tories really want to slash places? I seem to recall it was a Tory government that started off the rapid expansion in universities in the ’90s (the general wisdom at the time was that this was keep the unemployment figures in check). Just last year, in an article I’ve linked to several times, David Willetts was saying that university places would expand and that this would all be self-financing because of the increase in high-earning graduates created. Two brains or not, Willetts certainly understood the concept of investment – which seems to be as incomprehensible as quantum mechanics to most Lib Dems.

    Sorry, as I’ve already argued, the tuition fees and loans system IS disguised borrowing, so just the sort of investment which you claim is “as incomprehensible as quantum mechanics to most Lib Dems”. If it works as you say it would here, then the loans will be paid off by the high-earning graduates you say it will produce. However, before those graduates graduate and become high earners, there is this little issue of me and my colleagues expecting to be paid for teaching them. What are you suggesting? We should do it for free, and then stand with begging bowls in front of those high earning graduates saying “We got you there, please spare a penny” in the future?

    Are you now suggesting that actually the Tories wanted to have straight government borrowing and higher taxes to pay for universities and it was the Liberal Democrats who persuaded them not to? Well, your words seem to be suggesting that, so where’s your evidence for it?

    Now Tories say a lot of things, but have you ever heard Tories praising ex-polytechnic lecturers? I think you will find in Tory circles there would be plenty of enthusiasm for closing down places at the sort of universities top Tories would never send THEIR children to. Come on now, if it comes to keeping taxes low for the rich, and closing down what they would dismiss as “Mickey Mouse” degrees, what would a top Tory do? Especially when doing the latter could be excused by “Oh dear, dear, dear, the LibDems made us do that so they could keep to their pledge”.

  • I see the the Lib Dem censure is out in force seeing as my comments have not been allowed. What ever happened to the LD party I joined (and left) all those years ago. It’s now full of Tory lites.

    If this is the level of debate the liberals have now stooped to, to stop anyone who disagrees with party policy from commenting you are welcome to the party.

    Let’s see if this is allowed. No wonder you believe all the hype. I wonder how many other dissenters comments have been censured out the debate.

  • @Matthew
    “Er, sorry, what has that got to do with it? The money the universities receive comes from the loans, not the loan repayment. Whatever proportion of the loans is getting paid back doesn’t affect how much the universities get.

    I never said it did. The amount of loan repayments received affects the amount of money the government has to pay to make up the gap between what the SLC pays out and what it receives. The money your university receives to pay you (which seems to be your primary concern) does not appear out of thin air.

    “Isn’t that what those who want government subsidy of universities wanted in the first place? Why do you moan when you get what you want?”

    I would have thought that was obvious. If the government is going to pay for HE anyway, it would be better to arrange matters in such a way that students are NOT lumbered with the fear of a colossal debt – a fear which, according to UCAS, is scaring 6,000 18 year olds a year off from applying. Equally obviously, the low levels of repayments are happening more from incompetence than design – hence the current government has deliberately made the system’s key parameters (threshold and interest rate) easily variable. So though the government may be paying for HE now (and I mentioned that only to demonstrate that it is clearly possible, since it’s been going on for years), that’s unlikely to stay the case for long.

    my point is that if this was the only way the Conservatives would agree to save the university system, I can see the argument for accepting it.

    Pure hyperbole. I defer to nobody in my dislike of the Tories, but the idea that they had to be persuaded to “save” the whole university system is preposterous, for the reasons I mentioned yesterday (10:39pm).

    It isn’t a charity either. I do work in it, and I do rather want to get paid for what I do. Somehow the money has to be found to pay me, you know.

    Since I’ve been calling all along for investment in universities – your comment is inexplicable.

    Are you now suggesting that actually the Tories wanted to have straight government borrowing and higher taxes to pay for universities and it was the Liberal Democrats who persuaded them not to?

    No – it was other way round, sadly. Seems like a long time ago now.

  • stuart moran 26th Feb '15 - 8:44pm

    Stuart

    I agree with what you are saying

    University Funding = Taxation + Borrowing + Student Contribution

    The question is, if you want to maintain the same funding, is where you split the two terms on the right hand side. I don’t think anyone has yet suggested that we reduce the left hand side (will touch on that later)

    I believe that taxation/borrowing should be the far bigger proportion of the two, with the student contribution being zero or at a very low level.

    The current system suggests that up to 80% of the funding will eventually come from the student contribution, but as you have pointed out this is nonsense at the moment because there is hardly any student contribution. The only time we will see extensive payment from the students will be decades into the future and is an unknown number (the assumptions have already changed massively!!!).

    Up until the student contribution is effectively from borrowing underpinned by the Government

    I get perplexed because there seems to be an argument going on that we must have 9000pa to fund but at the same time there is another that it doesn’t matter because most will never be paid back anyway. Matthew also argues that reducing the 9000pa to 6000pa will immediately mean a drop of in university funding even though the actual Government contribution will stay the same until years in the future. As you have said it is easy enough to change the terms and so what may appear ok now may not be at much higher interest rates and if the threshold is held….all questions that cannot be answered

    There is also a valid argument to say that Government borrowing should be used where it delivers value……does having such high numbers of students deliver value? I think this does so am happy for Universities to be taxpayer funded, if it doesn’t then why are we borrowing to fund it, and even more to the point, why are we asking the students to pay for something that does not deliver them value either! The benefits they get will be paid back in higher taxation….if we have a suitably designed taxation system (I am ignoring any indication that people who have not attended university would be ‘unfairly’ treated by that – it is a nonsense and luddite opinion that is typical of British attitudes to education and is a favourite of those with a chip on their shoulder!)

    Borrowing for investment is normal practice, by Government, by business, by individuals. Borrowing for borrowings sake is not a good idea.

  • stuart moran: Perhaps someone can explain it all for us, however for some accounting (but barely accountable!) reason, when the money is nominally a loan to students, the borrowing disappears from the governments borrowing figures. It is all very frustrating.

    I believe that similar ‘magic tricks’ apply to PFI. Scarcely believably to most, bar accountants and economists who are in the know, this makes it all OK, even though it ends up costing more and is more wasteful.

    If only the economists and accountants could come up with a cleverer sleight of hand!

    There is, though, an additional advantage in the student tuition fee system, and that being that it gives universities more independence of government. This insulated universities from the negative tendency of governments to insist that research is applications based. Although applications are great, without the pure research, overall research will ossify and wither. The new breakthroughs are rarely the result of applied research and it is only once the pure research has advanced that the applications become evident.

  • stuart moran 26th Feb '15 - 9:31pm

    Martin

    Regarding the accounting I assume you are right – there will be some fiddling of the figures as you suggested…..

    The last point on Government funding. The golden era of research was surely under Government funding alone. Since then it is the attitude of ‘everything has to make a profit’ and Universities are not edifying examples now.

    They either are in hock to the big business sponsors who build their facilities for them or are too focused on trying to commercialise everything

    As a person who is involved in the external contacts side of a business, it is really unpleasant dealing with universities now. Everything is monetary value driven – can we get IP, can we make money…..!

    The proliferation of journals and dross in them is hiding some of the brilliant research still done in our Universities – I know lots of people who hate being in academia now – it seems to be going down the same path as schools

    I do not think that is due to Government funding alone but rather an indictment of the current world!

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