Why the Liberal Democrats SHOULD NOT adopt a free market approach to education by accepting tuition fees

Earlier today, Julian Astle laid out Centre Forum’s new policy paper about student finance. We asked Paul Holmes MP to respond.

On behalf of Centre Forum Julian Astle makes a very superficial and flimsy case for joining the New Labour/Conservative club and welcoming the free market into Higher Education.

First Julian sets up a straw man by making the claim that “Liberal Democrats hope that making tuition ‘free’ will draw more students from low income families into higher education.” Really? I don’t actually remember that as being central to any of the Parliamentary or Conference debates that I have ever taken part in.

Actually the point has always been much more that Liberal Democrats believe Tuition Fees to have a deterrent effect that leads to students choosing University places according to ability to pay rather than by academic ability. This effect has already been clearly identified in Australia, the source New Labour borrowed their Fees model from.

When the Education and Skills Select Committee visited Australia their fees were 10 years old. In Canberra the Government and the academic whose brainchild the scheme was, told us that all was well and no problems had arisen. It took the opposition education spokeswoman (ironically from the Australian Labour Party who had actually introduced Fees when in Government), to point out the Government amnesia. This had she said, prevented them from remembering the negative aspects that had been identified by Government research, but only dragged into the light of day by an opposition Freedom of Information request.

Ten years of fees had resulted in students from lower socio economic groups opting for cheaper, shorter degree courses and opting out of the lengthier, more expensive – but in the long term more prestigious and lucrative degrees such as law, medicine and postgraduate courses. Women – due to child birth and career breaks – were already noticeably being hit harder by long term student debt than men.

Here in England of course research is showing exactly the same effects. More noticeable in our compact island where students could traditionally move around more easily than in the vast and different states in Australia, is the greatly increasing propensity for students from poorer backgrounds to simply go to their nearest university, so that they can live more cheaply at home. Students are also of course undertaking many more hours of paid work during term time – with all the research showing that it is the students from lower socio economic backgrounds who work the most and to the worst effect on degree outcome.

Now £9,000 of fees debt is currently only around half of the financial problem of course, with living costs being the rest. But that brings us to the next stage of the Liberal Democrat objections to fees. One that Julian touches upon in passing and with an alarming appearance of full acceptance. We argued in 1997 that £1,000 was the thin end of the wedge. We argued in 2001 that £3,000 was merely a staging post. Next year (unless postponed due to imminent elections), sees the review of fee levels. Vice Chancellors are already queuing up to stake a claim to £7,000, £9,000, £14,000 or in the case of Chris Patten and Oxford University “mortgage level” fees.

Fees at these levels are the ultimate free market objective and if Liberal Democrats drop their opposition to fees what credibility will there be to our arguments against taking the cap off?

Can we afford our policy at £2Billion in 2010 asks Julian? Given that 1p on Income Tax raises £4.5Billion (pre-recession at any rate), then we are talking the equivalent of half a penny or less. Contrast that with our existing and fully costed plans to cut Income Tax by a massive 4p in the pound – funded from closing tax loopholes and incentives for the super rich plus pollution taxes. Come to that contrast it with the £4 – £5Billion of further tax cuts that our Leaders want to finance from cutting even more wasteful Government spending. The latter money I argued at Conference would be better spent on key public spending priorities at a time when our tax levels as a nation have only just reached Western European averages, as has our investment in health and education.

But even without impinging on the up to £22Billion of tax cuts above, the by comparison rather small sum of £2Billion needed to scrap fees is already accounted for in our spending plans anyway. Redirecting up to £15 Billion of current and planned Government spending (such as 3rd tranche Euro Fighter, Baby Bonds, ID Cards etc), into our priorities such as pupil premium and scrapping fees was adopted as Party policy two years ago.

Should we then abandon one of our very few distinctive policies? One of the few that distinguishes us clearly from Con/Lab? One of the few that is both very simple to explain and popular. Should we instead adopt a policy that in its effect discriminates against women, the poor and ethnic minorities as seen in Australia, as increasingly seen here and as clearly seen in the polarised two tier USA?

It really seems to be a no brainer.

Paul Holmes is Liberal Democrat MP for Chesterfield.

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This entry was posted in Op-eds and Party policy and internal matters.


  • Jock, this is where our previous conversation about CBI starts coming into its’ own. Education or land, whatever, it will require something radical to shift the inverted status quo.

  • Couldn’t agree more. As Jo Grimond pointed out long ago, tuition fees are an obscenity & cause great harm to society because they put people off & encourage youngsters to regard debt as normal.

    I would restrict access to the ablest. Yes, A Level results will always partly be influenced by class, but hopefully the gap can be narrowed & the able students from poor backgrounds encouraged by a pupil premium.

    These students should receive an education paid for out of general taxation & there should be no tuition or accomodation fees… for those who can prove that their presence at university is worthwhile, which to be honest would exclude many who are currently there.

    Additionally, the idea should at least be entertained of higher grants for subjects like hard sciences, whilst those “studying” “subjects” like sociology, media studies et al receive less.

    Education is a public good like the best of public sector broadcasting. A free market would not necessarily yield the best results, so there should be incentives & disincentives built in by the state. Let the libertarians howl, but education should be guaranteed as a bastion against dumbed-down commercialism & New Labour’s Gradgrindian approach.

  • Paul is dead right that education should be available on the basis of ability, not income. But the problem is that neither the current system, nor the pre-1990s system delivered that.

    The big obstacle to kids from poor backgrounds getting to univ is that the many of the schools that they go to are not good enough to overcome the disadvantages that being brought up by people who are poor or less well-educated or have lower aspirations.

    That, above all, is why our univs are stuffed with middle class kids. If we want univs to be background blind, we need to spend a lot more money on pre-univ education, and that money has to be found somewhere. At the margin I think that fees are a good way of finding that money, since the evidence in recent years is that fees have had no impact on the numbers going to univ.

    Of course we should abolish baby bonds to increase education spending – but that amounts to about 50p per kid per week. And of course we should scrap ID cards etc, etc. But having done all of that we are still left with the choice of more money for school education, so that results aged 16 and 18 are more background blind, or more money for affluent kids at univ. That seems an easy choice to me.

  • Matthew Huntbach 2nd Dec '08 - 11:39pm


    “At the moment, with 98% (I think it is) of courses charging the current maximum fee, there is no price mechanism by which prospective students can help judge what is going to be best for them”.

    Rubbish, complete and utter rubbish. There is a big price mechanism, and that’s A-level points. Students effectively use their A-level points to purchase university places. The most prestigious universities and the high demand subjects can impose very high costs in terms of A-level points, they can ask for three grade As in the right subjects. Other universities and subjects have to find a way to set their prices in terms of A-level points which will be enough to fill their places. At the bottom you’ll find bargain basements and institutions where there are always “special offers”. Just because the prices aren’t in pounds doesn’t mean it isn’t a market. I know, having been involved in setting the prices, the cost of a university place in terms of A-level points falls at preciely what the market will bear, what is just right to fill the places you have going.

    The flaw in this, however, is that the customers aren’t very sophisticated. Indeed, they tend to believe the higher the price, the better the product, so if a poor product can bear a high price because it has a trendy label, it’ll bring in the customers regardless. It’s rather like the fashion industry – rubbish products with the right brand name can sell at inflated prices, good products with a brand name that isn’t fashionable struggle to find buyers. It is also the case that as the quality of a degree depends to quite a high extent on the quality of the students on it, a degree which is able to sell at a high price in terms of A-level points becomes quality regardless of its intrinsic merit.

  • Matthew Huntbach 2nd Dec '08 - 11:57pm


    “The big obstacle to kids from poor backgrounds getting to univ is that the many of the schools that they go to are not good enough to overcome the disadvantages that being brought up by people who are poor or less well-educated or have lower aspirations.”

    I agree with Liberal Neil, and it fits in with my previous message – the quality of the education depens to a large extent on the students rather than anything intrinsic to the institution. I don’t think children from poor backgrounds perform poorly at school because it just happens by tremendous fluke that all the schools that are poor in terms of teaching quality just happen to be economically in poor areas. The tendency to blame the school is, I think, often just sapping morale and misses the real problem.

    We have to find ways to change the damaging culture that exists in many poor areas, but that in itself runs into conflict with our liberal values – we can’t force people not to live in ways we don’t like. I’d love to find a way of making them switch off the television set, and to encourage the self-help clubbability that used to exist in working class areas but has largely gone now. But isn’t that just imposing my own view on people as to how they should live?

  • Matthew Huntbach 3rd Dec '08 - 9:09am

    Jock, you say “Your A-level point “price” does not enable a prospective student to make a cost benefit analysis of what course and where would benefit them the most”. In what way is that any different from the floating level fees you suggest? Why do you suppose when a prospective student sees degree A charging £10,000 and degree B charging £5000, the student is well informed as to which is the most beneficial degree, whereas if the student sees degree A requiring 360 UCAS points for entry and degree B requiring 180 UCAS points for entry, the student is clueless about which is the most beneficial?

    Turning it round to the point of a university recruiter, why do you suppose a recruiter given a choice between a propsective student with 360 UCAS points and a prospective student with 180 UCAS points is clueless about who would benefit the university most to admit, but it’s plain sailing when choosing between a student who is willing to pay £10,000 and a student who can only pay £5000?

    Please note, by the way, that though for point of argument I use UCAS points, that tariff system is deeply flawed. Fortunately, admissions tutors aren’t forced (yet) to use it, grades can be demanded in particular subjects. In my case, a rough rule of thumb was that UCAS points gained in A-level Maths were approxmately twice as valuable as UCAS points gained in A-level ICT, for example.

    Regarding grade inflation, well I only wish when I did that job that I was in a position where I had so many AAA applicants that I had trouble picking between them. Some universities, two in particular, and some subjects, have that issue. Most don’t.

  • Matthew Huntbach 3rd Dec '08 - 9:28am

    Jock, when in reply to my

    “We have to find ways to change the damaging culture that exists in many poor areas, but that in itself runs into conflict with our liberal values – we can’t force people not to live in ways we don’t like”

    you wrote

    “It doesn’t bring us into conflict with our “liberal values”. Perhaps our “social democratic” values. Offer them real choices instead of coralling them all into the same set of cattle trucks. Offer them streaming that will allow more effective allocation of teaching resources to those who need the extra help or extra discipline”

    you were actually completely missing the point. I wasn’t actually writing about what is on offer in schools, I was writing about lifestyles outside school, since there is plenty of evidence that that is the key factor in educational performance.

    Regarding “Offer them real choices instead of coralling them all into the same set of cattle trucks”, well I am all for (within reasonable limits) schools being free to teach what and how they want, but I don’t think that’s the issue. If children are being brought up in a profoundly anti-intellectual environment the adults bringing them up aren’t going to care about your nice choices all on offer, and certainly won’t be able to pick the most beneficial ones. The real issue is how can we get people to make the choice of what is best for them without illiberally forcing them?

    Regarding “Offer them streaming that will allow more effective allocation of teaching resources to those who need the extra help or extra discipline”, who says it is not on offer? So far as I am aware if schools wish to offer it, they can, and in fact most secondary schools do have some form of it.

  • true-liberal 3rd Dec '08 - 9:54am

    As ever, Paul Holmes misses the point.

    The vast majority of young people with good A-Levels go on to university (regardless of economic background). The true barrier to widening participation is a poor education system.

    Full-time undergraduates no longer pay up-front tuition fees. They pay them back, once they can afford to do so. Scrapping fees will therefore not assist current students, as they will still have to struggle to live off the current and inadequate loan and grant regime.

    Paul needs to explain what we should do to help current students who are struggling to pay for textbooks, rent and food (once we have already committed £3bn to scrapping fees).

    Remember, no current student would feel the benefit of scrapping fees and still stack up mountains of commercial debt.

  • Martin Land 5th Dec '08 - 10:15am

    For those of us who work for the party this is something of an academic argument as we are unlikely to ever earn enough to be troubled by large repayments!

    Paul’s point about Universities demanding higher fees is troubling. I think we should say that there should be a maximum fee which a LD government would allow – say £4000 and anything above that would see a £1000 reduction in government support for every £1000 charged. In other words, a 100% tax.

    Also if Universities are increasingly money driven and elitist should their status be reviewed. Would ‘Oxed Inc.’ or ‘Campay PLC’. be more honest descriptions and should they continue to enjoy a special tax status?

  • Matthew Huntbach 6th Dec '08 - 11:45pm

    “The true barrier to widening participation is a poor education system”

    This point keeps being made, but if it were true it would be just a tremendous coincidence that “poor” schools happen to be found in places where the pupils come from lower income backgrounds.

    Of course it is not a coincidence – the problem is not the schools are “bad” it’s that the cultural background of their pupils makes it a harder job to motivate them towards conventional education and successfully educate them.

    If we start accepting this elementary point, and stop saying it’s because the schools happen to be intrinsically bad, we might start making progress on how to solve the problem.

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