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Labour to confirm tuition fee cut plan

Posted by Warren Fyfe on February 27, 2015 in Warren Fyfe Site

Ed MilibandEd Miliband will reveal how Labour would fund a reduction in tuition fees

Ed Miliband is to set out Labour’s plans to cut £9,000 university tuition fees by a third.

He will reveal how a Labour government would pay for such a reduction – which could include reducing tax relief on pensions for high earners.

The rising level of student debt has been a “disaster”, he will say.

A Conservative spokesman said under the current system, the numbers of students from disadvantaged backgrounds were at their “highest ever level”.

Universities UK has warned that limiting the fees to £6,000 per year would create a £10bn funding gap over the next five years, threatening “significant damage” to the higher education system.

In a speech in Leeds, Mr Miliband will explain how he believes such a funding gap could be covered.

This could include reducing tax relief on pensions for high earners, which would be used to provide funds for universities to bridge the gap from reduced fees.

Tuition fee protestThe increase in tuition fees prompted waves of protest

It is also expected that the Labour leader will promise more support for students’ living costs. There have been concerns that young people from middle-income families do not have access to sufficient student loans.

The announcement of Labour’s policy on fees has been much delayed, with reports of disagreements between senior party figures over whether cutting tuition fees should be a priority for investment.

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Analysis: Iain Watson, BBC political correspondent

Ed Miliband’s opponents – inside as well as outside the Labour party – have urged him to drop plans to reduce the maximum level of tuition fees in England from £9,000 to £6,000, arguing that there is little political or economic benefit in doing so.

So today he’ll attempt to answer his critics by denouncing the current system as bad both for graduates and for taxpayers as a whole.

He is determined to press on with his policy despite the scepticism, because he believes it will have an inter-generational appeal.

Labour’s private polling suggests that tuition fees isn’t just an important issue for young people, but that older voters too dislike the idea of the next generation apparently being saddled with debts.

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University heads have also argued that the increase in tuition fees to £9,000 has not deterred applications from poorer students, instead the numbers of poorer students have risen.

Mr Miliband will say that the current system is putting unacceptable levels of debt on to young people and proving expensive to the taxpayer, because so much of student loans has to be written off.

Under the present system, students are being left with an average of £44,000 debt, he will say.

“The government has designed a system which is burdening students with debt today and set to weight down the taxpayer with more debt tomorrow,” the Labour leader is expected to say.

“This is a system that will have added an extra £16bn more than predicted to public debt by the end of the next Parliament. If left unchecked, the system will have added £281bn to debt by 2030.

“And much of this money will never be paid back. By the late 2040s, student loan write-offs will be hitting £21bn a year – almost double the entire cost of police services in England and Wales. It must go down as one of the most expensive broken promises in history.”

‘Failed experiment’

Mr Miliband will say that young people have been “betrayed” by the tuition fees system, leaving them worse off than previous generations.

“This is a disaster for them and a disaster for the future of Britain too – a country where the next generation is doing worse than their parents is the definition of a country in decline.”

GraduatesUniversity heads have said rather than cutting fees there should be more support for student living costs

The Labour leader will seek to reassure university heads that they will not lose out in the proposed changes.

But Universities UK, representing university leaders, has voiced its concern about cuts to fees.

“Cutting the fees cap from £9,00 to £6,000 creates a £10bn funding gap over the next parliament,” said Sir Christopher Snowden, vice-chancellor of the University of Surrey and president of Universities UK.

“Such a shortfall, if not met in full from other sources of public finance, could cause significant damage to the economy, to social mobility, to student choice, and to our universities. For universities, it is a funding question, not a fee question.

“One has to ask whether a policy of cutting fees is sensible given the many other pressing demands on public funding. Students are telling us they need assistance with living costs rather than tuition fees,” said Sir Christopher.

The National Union of Students has welcomed plans for a cut in fees.

“Forcing debt on to students as a way of funding universities is an experiment that has failed,” said NUS vice president, Megan Dunn.

“Higher education is a public good which should be publicly funded and shouldn’t involve any additional charges for students or graduates, but lowering tuition fees and a move away from the market in higher education is a positive step forward.

“We would also welcome any improved financial support measures like an increase in maintenance loans, as we know that students are currently in the throes of a cost-of-living crisis.”

A Conservative party spokesman said: “Providing access to higher education for all hard-working students, irrespective of their background, is a key objective of the government’s 2012 reforms.

“Our reforms have seen a record half a million students enter higher education this year, with entry rates for students from disadvantaged backgrounds increasing by over 10% to their highest-ever level.

“As England’s top university vice-chancellors have warned, a cut in fees would damage the economy, impact the quality of students’ education and set back work on widening access to higher education.

“Like with so many other issues, Ed Miliband hasn’t thought this policy through.”

Article source: http://www.bbc.co.uk/news/education-31640592#sa-ns_mchannel=rss&ns_source=PublicRSS20-sa

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