Saturday 24 September 2011

Ed Miliband's Tax Cut for Rich Graduates

So Ed Miliband has decided that Labour's policy on tuition fees is to reduce the cap in England from £9000 per year to £6000 per year. He says that this will be funded by more taxes on the banks and increasing the rate of interest paid by the highest earning graduates.

The reason? This is what he says, in an ever so pious dig at the coalition:

"We can't build a successful economy if the kids from all backgrounds are put off going to university."

Now we can debate the rights and wrongs about the Coalition policy until the cows come home. But let us look at what practical difference this actually makes. I have used the projections that deduced. I refer you to the red table at bullet point 17 "How much do you pay".

As we have established many times before, the loans repayment programme (thus in practice for a student, their tuition fees) has a 30 year limit, after which any existing "debt" is written off and the system effectively operated as a graduate tax on their earnings over the earnings threshold (currently £21k).

If a student earns less than £35k as their initial graduate salary, and their earnings rise to slightly less than £140k after 30 years, they will not have paid off their student loan, regardless of whether or not they actually chose a course that charged £6k a year or £9k a year. There is no appreciable link between what that graduate "owed" and what they "paid" for their University education.

Contrastingly if a student earns around £50k initial graduate salary and that rises with career progression and inflation etc. so after 30 years they are earning over £200k, they will pay back the whole of their student loan, and will do so well before that 30 year period elapses. In this instance, it therefore matters a lot more how much they "owed" and it correlates much more closely to what they "pay". The difference for that student taking a £9k course rather than a £6k course is that they pay about 50% more, because, funnily enough, they owed roughly 50% more.

So can you see where I'm heading with this? Yep. That's right. Lowering the limit on tuition fees to £6k has ABSOLUTELY no effect on the lowest-earning graduates, but represents a potentially HUGE saving for the most affluent of graduates! Since we have established that the funding system is effectively a kind of graduate tax, this means that Labour are advocating a TAX CUT on the richest beneficiaries of an English University education! The difference between what is owed is substantial enough that the interest rates they'd need to charge the richest graduates to make them pay the same, let alone more, would be of proportions compared to those they pay now.

And of course, this poses the question of where the Universities are going to plug the hole in the finances this creates? Are we to expect more direct state funding? Where is that coming from without increasing the deficit? "Tax the banks" Labour reply. Well here's the thing. Your bonus tax raised absolute pittance compared with the Coalition's banking levy. Just like with the very tuition fees you promised you would never introduce, you command no credibility for delivery.

But that is not even the worst thing about this sordid affair. The worst thing is that Labour, by engaging in this piece of political misrepresentation, are perpetuating the very myths that they have used to scare young people into thinking they can no longer afford to go to University under the Coalition changes. They are doing the very thing that the Lib Dems got crucified for: politicking with the tuition "fee" when they know full well that that headline figure is of zero relevance to the majority of graduates, for whom the repayment matters. They have scaremongered those from poorer backgrounds into believing they can no longer aspire to a University education and all the benefits that brings. Yet their own policy does absolutely nothing to help these people. There is nothing about maintenance grants, which are what really affect the ability of the poorest to be able to go to Uni. This throws money at graduates who are already benefiting in a huge financial way from their degree.

Remember, this is the Labour Party. The Party of Keir Hardie, of Nye Bevan and of Clement Attlee. Those men would be turning in their graves if they saw what this manipulative and regressive cabal led by Ed Miliband and Ed Balls has become.

The Labour Party. Party of the Poor? Words truly fail me.

Tuesday 20 September 2011

22 Days in May - A Major Lib Dem Concession

A few days ago I took ownership of David Laws' account of the negotiations following from the 2010 General Election result. It's a fascinating read (I'm about 1/3 of the way through) and I'd recommend people add it to their lists. My favourite exchange between the negotiating parties is one I hadn't seen in most other reviews of the account. I hope the publishers don't mind if I reproduce the following section (p117-118):
"We paused briefly to consider the issue of what we should say about Britain joining the euro. 'It will not surprise you to know that we are opposed to this," said George Osborne. Chris Huhne, a former MEP and euro enthusiast smiled, and said, 'Well. We have met none of the criteria for convergence, so this is not really an issue.' I shouted out 'Hurrah!', as I have never been a big fan of Britain joining the euro, and have never thought that there was the slightest chance of the British people supporting the euro in a referendum. Andrew Stunell lent forward and said to the Conservative team: 'I hope you realise that this is a very big Lib Dem concession!' We all laughed."
Some other interesting parts include some of the lessons learned from Coalition negotiating strategy in Scotland, with David Laws having been involved in the 1999 talks. It was a curious contrast of Labour's strategy in those talks, where they faced deadlock for about 4 days on a number of key policy differences before relenting, as opposed to desperately scrambling towards Lib Dem positions without the credibility of numbers in the lobby to back them in 2010. What was more intriguing was the way the impasse over the AV referendum was dealt with; being referred up to Cameron and Clegg to discuss so as not to compromise progress on other policy negotiations.

Sunday 18 September 2011

Summer's Over - Back to Uni

Well the summer's almost come to an end. University properly gets going again on Monday. We were relatively curtailed in our activities over the summer as my mum's been in hospital for quite a while, but it was good to spend some time back with the family. After some anxious waiting, my sister got her Highers results in and got a brilliant 5As. She should stand a good chance of getting to do her preferred course (Law) at University when she applies later this year. I'm really pleased for her as she worked hard and is really focused on what she wants to do. I spent two weeks working at my old school as a caller in their alumni fundraising campaign which was challenging but good fun.

I went along to the Pie and Bovril 5s in June, which, is a football tournament held by Scotland's biggest online football forum. It's always good fun and an excuse to have a few beers and a chin wag with the people behind the avatars. Whether it's a St Mirren fan in Cambridgeshire exile or a Linlithgow Rose maths geek, they're all a great laugh. This year the post-tournament venue was The Arc in Glasgow City centre which is a great venue and the weather was good enough for us to sit outside. One of the highlights of the evening was watching the initiation ritual to which the Welsh National Fencing Team were subjected, namely trying to eat a whole raw leek as quickly as possible without vomiting!

Dad and I spent the summer tentatively looking around for my first car. I've said before I really want a classic rather than just a new hatchback, and sharing my dad's enthusiasm for older cars, I was prepared to put in the time to restore an older car if required. The problem with it being based in Aberdeen is that there aren't that many cars within close distance to go and take a look at. I was especially keen to acquire an MG B or Midget, as my dad also owns an MGB GT which is a cracking wee car. We first took a look at a car we found on eBay that turned out to be a complete rust-bucket. The driver-side door wouldn't shut after we opened it and it would have required thousands of investment and substantial rebuilding to become roadworthy. A few weeks later we decided to take a look at another GT, which whilst very tired and in need of a fair bit of work was at least a solid enough shell. The guy looking to sell it runs a classic car business and had panels from other cars he was willing to include in any deal to help us with a rebuild project. We gave it serious thought but in the end we concluded that for the moment it wasn't something we could be sure of committing to, but it's definitely something we'll look at again. It was certainly a valuable learning experience and whilst I would want to consult my dad when buying my first car, I now feel as though I have a much better idea of what to look for as "tell-tale signs" of problems in a classic.

I caught up with old school-friends, most of whom I don't see so much of now they're in Edinburgh. I don't say it much, but they're all great people. I look forward to catching up with them all again at Christmas, if not before then. I'm sure I'll head across at some point over the next couple of months. Quick shout out to Chris Dyer who is on his languages year abroad studying in Malaga and Milan.

Since getting back to Glasgow I attended Nick Clegg's well documented meeting with Lib Dem activists in the city, replaced a broken cooker hood, been to a few Thistle games, and finished a summer marathon viewing of The West Wing. Whilst the summer has been light relief, it has latterly dragged on a little and I'm actually glad to be getting back to work at Uni. With this being my junior honours year, I'll be focusing on honours courses of my own choosing rather than solely taking core courses, which I hope will be more rewarding. I'm especially looking forward to my Law course about the Scots Law Human Rights context and my second semester Politics option on Egalitarianism and its Critics. Whilst it will be good to see people again, it will be a fair bit quieter this year, especially in semester two, as lots of people will be studying abroad. John's already in Toronto and seems to be enjoying himself with a frenetic workload and ample other stuff to keep him amused. He was impressed with Thistle in their 1-1 draw against Hamilton when I roped him along to Firhill in August so hopefully I can persuade him back when he returns! I'm looking to get more involved in the local Lib Dem and the Uni Debating scenes if time allows!

After a difficult start, Thistle are really picking up some form. Just yesterday we dispatched Ayr in a comfortable 4-0 victory. The First Division is really tight after 6 games, only 2 points separating 2nd top from 2nd bottom. We look really settled as a team now and McNamara could really make a big impact if we keep this up.

Who knows what the next year holds? Bring it on.

Tuesday 6 September 2011

Predictable Paradox - World Domaination!

I know with there are millions of readers out there just desperate for their Predictable Paradox fix. Well now you can visit us with our all new domain name,

Or, you know, you could just bookmark the actual site which is still hosted on Blogger anyway. Your choice.

Disclaimer: The acquiring of this new domain does not mean that any content on this blog will be any less predictable or any more paradoxical. Opinions as always are only attributable to the author, a sane madman, who may or may not cease to hold a view as soon as it is expressed. In exceptional circumstances, the view may never have been held and only expressed to amuse or irritate. Please don't litigate.

Sunday 4 September 2011

Thought for the day - Karl-Hermann Flach on Liberalism

No taboos exist for liberalism. For Liberals, any state of affairs is open for discussion and any opinion worthy of dispute. Liberalism therefore automatically desanctifies any subject which people with vested interests try to keep out of the general debate with spurious arguments. Any political and social progress starts with a deviation from established wisdom. In the eyes of Liberals, anyone who bans deviating ideas and persecutes the critical denial of the established wisdom as heresy hampers social and political progress.

Karl-Hermann Flach: Noch eine Chance fur die Liberalen (“Still A Chance for the Liberals”), Frankfurt a.M. 1971