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 MoneySavingExpert.co.uk 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 Wonga.com 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.