It’s three weeks since Vince Cable announced in the House of Commons that he, on behalf of the Coalition Government, supported the broad thrust of The Browne Report’s recommendations — in particular, that tuition fees in England should be increased.
This Lib Dem policy U-turn sparked the biggest outcry among party members of the Coalition to date, with many members regarding opposition to tuition fees as fundamental to a belief in free education and to the party’s broader identity. (See the comments threads here, here and here, for example.)
Lib Dem Voice’s survey of party members suggested that a bare majority, 52%, might be persuadable on tuition fees if Vince brought forward significant changes (41% were wholly opposed to Browne’s recommendations, while 7% were wholly supportive of them). The top two suggestions that earned favour among Lib Dem members were:
- Increasing the maximum level of maintenance grant to students from families with lower earnings, and increasing the number of families who would benefit; and
- Variable rates of interest for graduates dependent on their future earnings, with zero or nominal rates for lower-earning graduates and higher rates for top-earning graduates.
David Willetts, the Conservatives’ higher education minister, is just about to announce the Government’s formal response to Browne, but well-placed media reports suggest some concessions have been wrung over the past few weeks, and the following seems to be the package that will be put forward today:
- a cap on fees of a maximum of £9,000 (Browne proposed no cap);
- any university charging above £6,000 will have to show support for widening access to students from economically poorer backgrounds, with obligations to fund summer classes, outreach programmes and targeted scholarships;
- loans to be repayable once students graduate and get a job paying more than £21,000 (compared with the current threshold of £15,000);
- graduates to pay 9% cent of their income above £21,000 per year to pay off both the loan, and an above-inflation rate of interest;
- variable rates of interest for graduates with lower rates for lower earners so that no individual’s debt burden will grow from year to year in real terms (Bowne proposed a flat rate regardless of subsequent earnings);
- graduates wishing to repay all or some of their loan more quickly would have to pay a penalty to compensate for the interest they would no longer pay;
- but students from wealthier families will still be able to pay up-front for their university education and avoid taking out a loan altogether.
Will this package be enough to persuade Lib Dem MPs they should break their pre-election pledge to oppose any increase in tuition fees. It seems unlikely, at least if Jenny Willott (quoted in today’s Guadian) is any guide:
Jenny Willott, MP for Cardiff Central, and parliamentary private secretary to the climate change secretary Chris Huhne, told the Guardian she would stick to her pre-election pledge to vote against any rise in tuition fees.
She said: “I will not support an increase in tuition fees and I’m deeply concerned about increasing levels of student debt.” If she does, the ministerial code of conduct will require her to resign or be sacked as a PPS. She was not coming under pressure to change her mind, she added.
So is a Government defeat likely? The paper’s report concludes not:
While the coalition allows Lib Dems to abstain, as many as half the 37 backbenchers may chose to go further if they regard the spirit of the policy to be against their pre-election pledge. The government is unlikely to be defeated on this issue unless a dozen Tory MPs were also uncomfortable. Lib Dem sources said that government ministers were considering introducing the measures via other routes than legislation, which could avert the flashpoint of a vote.
That last point in particular could prove controversial. I understand the government doesn’t need to legislate to vary the level of fees — but anything that smacks of circumventing Parliament, while perhaps tactically convenient, is likely to be seen as sharp practice by more than just opponents of the rise in tuition fees.
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28 Comments
Browne proposed no cap, but he did propose a levy starting at 40% on any fee over £6,000 to discourage Universities from charging more than that, by £12k the levy was 100%.
So this ‘concession’ has effectivelty lifted the fee norm from £6,000 to £9,000.
If this does not go through parliament every LibDem MP will be tarred with the same brush. It needs to go through parliament in order that any principled MP (or even any LIb Dem MP for a University seat) can be seen to oppose it.
I wouldn’t think so. The spirit of the policy is certainly against the pledge many Lib Dems signed. However, I am starting to think that the Russell Group are seriously flirting with going private which would have more consequences on the government’s legislative amibitions.
Tripling fee’s
No Levy on Fee’s over 6k
students from wealthier families will still be able to pay up-front for their university education and avoid taking out a loan altogether.
3% interest above inflation.
This is not Progressive, and is an insult to anyone who voted Liberal Democrats on the basis of their promise to abolish tuition fee’s
Any Liberal Democrat who Abstains, or votes for this policy, should rightly lose their seat in the next election, In fact I would go as far to say, that the electorate should have the right to recall any MP or Minister who goes against their “election pledge” and that fails to Vote No.
Do people realise that the Petty £150 million promised to fund scholarships would only pay for 5555 people
Assuming 5555 People where given full scholarships to go on to the most expensive courses at 9K
9000*3 years =£27000
£150’000’000/ £27000 = 5555 People
Are Liberal democrats going to try and convince us there are less than 5555 students from poor backgrounds, who are brighter enough to go to university, but can’t afford it?
Why would anyone want to go into teaching or social work, if they’re going to have to pay 9% more income tax?
“variable rates of interest for graduates with lower rates for lower earners so that no individual’s debt burden will grow from year to year in real terms (Bowne proposed a flat rate regardless of subsequent earnings);”
I don’t think that’s correct.
Browne proposed that there should be zero interest for those below the threshold, and also that if repayments would be less than the annual interest, part of that interest should be rebated, so that the debt would not grow in real terms.
It is understandable that occasionally polices have to be dropped in the face of reality but is is far from understandable to have a complete about face and applaud/support the exact opposite to your original policy, especially so soon after an election. in my opinion anyone who does so has no principles, no honour , cannot be trusted and deserves to be thrown out office asap
nige (exLD)
@matt
Press release says this will give them a free first year, makes no other commitment than that.
At best it’s a 1/3 discount for poorer stuents – they still have to be prepared to pay £12-18k over the rest of their lives. Oddly given that they’ll likely be part of the middle classes if they graduate it means there will be a two tier payback system, where if you were born poor and become middleclass you will be better off than someone who was born middleclass and remains middleclass in terms of these fees. This is progressive in a sort of cack handed way I suppose.
RichardSM – graduates paying back under the current system already pay 9%.
I don’t think that the government should allow the Russel Group to go private, even if it means nationalising them or simply imposing legal limits on the fees that they can charge.
so what’s happened…
a cap on fees of a maximum of £9,000 (Browne proposed no cap);
which you can bet now means that £9k is now the norm….
any university charging above £6,000 will have to show support for widening access to students from economically poorer backgrounds, with obligations to fund summer classes, outreach programmes and targeted scholarships;
just a rehash of what already happens
loans to be repayable once students graduate and get a job paying more than £21,000 (compared with the current threshold of £15,000);
widely trumpeted before….
graduates to pay 9% cent of their income above £21,000 per year to pay off both the loan, and an above-inflation rate of interest;
variable rates of interest for graduates with lower rates for lower earners so that no individual’s debt burden will grow from year to year in real terms (Bowne proposed a flat rate regardless of subsequent earnings);
Not actually correct see@Anthony
graduates wishing to repay all or some of their loan more quickly would have to pay a penalty to compensate for the interest they would no longer pay;
but students from wealthier families will still be able to pay up-front for their university education and avoid taking out a loan altogether.
So actually hitting middle income graduates (who will get hit with a penalty) whereas wealthier parents just cough up and avoid all this nonesense.
Concessions – ha!
That’s right Tom, only from a lower threshold of £15,000 annual income, not £21,000.
So those wealthy enough, or who have wealthy parents prepared to pay for them, will still be able to pay upfront, avoiding any interest. And this is progressive how? Yet again an attack on the poor and squeezed middle. Whilst those with trust funds, and hereditary titles escape the pain. All in this together?
This is a complete an utter sell out by Clegg and his ministers. Let’s see if the parliamentary party will join in with this betrayal.
This quote from Gove says it all in a nutshell: “Someone who is working as a postman should not subsidise those who go on to become millionaires” – narrow-minded, populist, divisive stuff.
No recognition that a graduate engineer designed (and maybe maintains) the IT, letter-sorting equipment, etc, that the postie needs to do his job. No recognition that a graduate GP may be useful to our postie, or that a teacher may have some benefit to his kids and society. Nor that grads are rarely “millionaires” and may well earn less than non-grads (i.e. the mid-high £20sK of a postman). And very offensive to posties, singling them out as some sort of ‘anti-graduate’ (I’ve known a few graduate postmen)!
To any LibDems (I’m just a voter) who are reading this and can influence things in any way: please do think where these and your other ConDem changes are leading us. OK, we need to pay down the deficit but, one that’s in train, do we want privatised HE? Significant further NHS privatisation? More and more neoliberal policies…? You go on about your ‘big society’ but only when it fits your neoliberal agenda.
@ExLD
Not forgetting that on average graduates pay considerably more tax in their lifetimes than the average postman. Taxes that help to provide services that the average postman relies upon.
This tactic that is being used by the coalition is a very pernicious one. Every week a new group of people are to blame for the position we find ourselves in. Whilst weare apportioning blame amongst ourselves, the real culprits get off scot free. All thanks to their friends in the coalition.
Every Lib Dem MP who signed the NUS pledge should vote against any increase in fees.
Next!
I am no expert on parliamentary procedure, but by my reading of Section 26 of the Higher Education Act 2004[1] the fees can only be increased by a statutory instrument made under the affirmative resolution procedure.[2] Thus secondary legislation is, I think, required, even if primary legislation is not (to increase the level of fees only, the other changes I think would require primary legislation).
And this means I think that MPs who are opposed to the plans can force a division by yelling out “No” at the appropriate time, and then we will have a record of which MPs support the fee rise and which don’t.
So I think the Lib Dem sources that the Guardian quotes are wrong when they claim that “ministers were considering introducing the measures via other routes than legislation, which could avert the flashpoint of a vote.”
[1] http://www.legislation.gov.uk/ukpga/2004/8/section/26
[2] http://en.wikipedia.org/wiki/Statutory_Instrument_(UK)#Affirmative_resolution_procedure
“variable rates of interest for graduates with lower rates for lower earners so that no individual’s debt burden will grow from year to year in real terms (Bowne proposed a flat rate regardless of subsequent earnings);”
As far as I can tell, the rate _will_ now vary with earnings (though not “so that no individual’s debt burden will grow from year to year in real terms” – which was always the recommendation). The highest rate will be 3% (higher than suggested by Browne), but that won’t apply to people earning less than about £40k. I suppose the result of that higher interest rate will be to push up the proportion of graduates who continue to make payments over the full 30 years (estimated at 60% by Browne), and therefore making it a bit more like a graduate tax. And also to save the government a bit more money, of course.
Tom King
Correct – but only £10k – not £27k. There’s a bit of a difference!
To show what I mean, this is the statutory instrument (S.I. 2009/3113, or The Student Fees (Amounts) (England) (Amendment) Regulations 2009 to give its full title) that set the current cap on tuition fees for this academic year at £3,290:
http://www.legislation.gov.uk/uksi/2009/3113/made
So yes, some kind of legislation is definitely needed to raise the cap (and if it’s above the level of inflation, then it needs to be under the affirmative resolution procedure rather than the negative resolution one).
Tom King
Correct – but only £10k – not £27k. There’s a bit of a difference!
It gets down to simple capitalistic reasoning: if the investment required has now nearly tripled, and the risks have increased, then the return on capital investment needs to be greater.
@Anthony Aloysius St: According to the BIS press release:[1]
“In order to make the system financially sustainable, a real rate of interest will be charged on loan repayments, but with a progressive taper:
For graduates earning below £21,000, there will be no real rate of interest applied to their loan.
For graduates earning between £21,000 and around £41,000, a real rate of interest will start to be charged, reaching a maximum of RPI plus 3%.
Above £41,000, graduates will repay at the full rate of RPI plus 3%.
Under our new more progressive repayment system, around a quarter of graduates, those with the lowest lifetime earnings, will pay less than under the current system.”
It’s interesting also to note that the Government is proposing a less generous system of maintenance grants and loans than the Browne Review recommended.
Browne Review on maintenance grants:[2]
“Additional support for students from families with an income below £60,000 per year, up to £3,250 in grants”
Government on maintenance grants:
“Students from families with incomes of up to £25,000 will be entitled to a more generous student maintenance grant of up to £3,250 and those from families with incomes up to £42,000 will be entitled to a partial grant.”
Browne Review on maintenance loans:
“Support for living costs available to all through an annual loan of £3,750. No means testing for access to loans for living costs.”
Government on maintenance loans:
“Maintenance loans will be available for students from families with incomes up to £60,000.”
[1] http://bis.gov.uk/news/topstories/2010/Nov/student-finance
[2] http://www.bis.gov.uk/assets/biscore/corporate/docs/s/10-1208-securing-sustainable-higher-education-browne-report.pdf
“Will the tuition fees concessions be enough to win over Lib Dem MPs?”
Not the honest ones.
No amount of spinnning can disguide or pretend that voting to triple student tuition fees is remotely compatable with signing a pledge to vote against any rise in fees.
Those who vote for an inrease must be very confident they have a extremely safe seat or their tenure in Parliament will be for one term only.
So a 3 year degree course at a top university will now leave people with a debt of:
£3750 x 3 = £11250 living expenses
£9000 x 3 = £27000 fees
Total = £38250 debt
Paid back at 9% of salary over earnings of £21,000 and with an RPI + 3% (RPI average over 20 years is 3.8%) interest rate applied it will mean that someone on £30,000 (the typical graduate salary) will end up paying:
£30,000 salary – £21000 threshold = £9000 salary with 9% repayment triggered
9% of £9000 is £810 a year to be repaid
Meanwhile the £38250 is having 6.8% interest applied to it.
£38250 * 1.068 = £40851 or £2601 added interest.
So those on £30,000 a year will see a net increase in debt of £1791 per annum.
After 10 years they’ll end up having paid £8100 but will owe £65748
If, after a decade on £30k, they are lucky enough to then get a promotion and earn £50,000 a year (deputy head, manager in large business etc) then they’ll be paying 9% of £29,000 which is £2610 a year, however by now the debt of £65748 will be attracting interest of £4470 per annum.
Is there actually any way this debt can ever be paid off?
It is a massive and frightening sum of money to be saddling our young with.
Calling it “progressive” takes the pee entirely – shame on any Lib Dem who supports this.
“It’s interesting also to note that the Government is proposing a less generous system of maintenance grants and loans than the Browne Review recommended.”
It’s difficult to compare those rather sketchy details against the fully specified Browne recommendations, but they do sound less generous. In fact, if it’s true that only those with family incomes under £60,000 will be eligible for maintenance loans, that represents a cut compared with the _current_ system. But I wonder whether it is true. The parliamentary statement says “There will also be increases in maintenance loans for students from families with incomes from £42,000 to £60,000.”
“Is there actually any way this debt can ever be paid off?”
For most people it’s estimated that it won’t be paid off, but will be written off after 30 years.
Why are Lib dems even trying to support this? All LD MP’s signed a pledge. Whatever MPs who do not vote against say to try and wriggle out of this, they lied and whatever they say in any forthcoming election will also be considered a lie. Do not try and blame the deficit, that is now wearing thin and it is becoming more and more obvious that the ConDem govt. wish to hammer those who are not rich like they are and keep their nepotism going. This was a major issue i asked the Lib Dem canvasser in the election and why you got my vote, the promise that tuition fes would be ABOLISHED and that there would be no increases until then. By the way, I am not saying this because it effects my own children, one graduated and one in second year, their debts are frightening now! When you have a rich elite in government, this is what you get. I fear for the future of the UK and can see real unrest on the horizon.
The IFS have issued their initial response, ‘Higher education reforms: progressive but too complicated’:
http://www.ifs.org.uk/publications/5342
The section on ‘Upfront support for students’ clarifies exactly what the Government is proposing on maintenance grants and loans for students from households of different incomes (short summary: it’s much more complex than Browne’s recommendation and the IFS think it should be simplified).