Ed Miliband on tuition fees: £6k not £9k. The reaction so far…

by Stephen Tall on September 25, 2011

Rejoice! Rejoice! Labour has a policy.

Party leader Ed Miliband has vowed that, if Labour were in government now, they would double tuition fees to £6k from the current £3k level set by the last Labour government with immediate effect. In other words, they would undercut the Coalition’s £9k fees by £3k.

Here are some early thoughts:

1) The principle of cutting fees from £9k to £6k

The reality is the cut from £9k to £6k makes no difference to the monthly repayments that poorer students will repay once they’ve graduated and earning more than £21k.

Don’t take my word for it: here’s MoneySavingExpert.com’s Martin Lewis: ‘Whether you choose a course that costs £6,000 or £9,000 you’ll repay the same amount each month, as that purely depends on what you earn (9% above £21,000).’

However, we’re in a new world of higher education finance. The truth is we just don’t know yet what will be the consequences of raising tuition fees above the current level of £3k. Will potential students, especially from the lower-income groups, be deterred even from applying? Or will demand hold up across all income groups just as it did when fees were tripled to £3k by Labour?

If there is real debt aversion at the headline figure of £9k then Labour’s policy could have a positive impact. If that debt aversion has been over-hyped, and students take a cool look at the figures and realise their repayments (unless they become higher-rate earners) are unaffected under either Labour or the Coalition’s policies, then it will make no difference.

2) The politics of cutting fees

I am genuinely surprised Ed Miliband has chosen the issue of tuition fees to put in place a first tangible policy of his leadership. The fee rises have proved to be a vote-loser for the Lib Dems in the past year — but principally because of the breach of trust rather than the fine detail of Vince Cable’s policy, which many acknowledge as an improvement on the one it replaces.

Yet it’s hard to see this being a vote-winner for Labour.

For students, vowing only to double rather than treble fees is hardly the most earth-shattering piece of good news.

And for the rest of the public, fees have never been that big an issue. It ranks well down the list of voters’ concerns, and when asked specifically about tuition fees polls have shown a pretty even split between voters who support the Coalition’s policy and those who oppose it, albeit with slim majorities against. (For example, in this YouGov poll here: question at the top of page 5.)

Put bluntly, if I were Ed Milband I would be a lot more concerned with winning back the voters Labour needs to from the Tories than about wooing current and former Lib Dem voters. To do that, he needs to get real about the deficit, not commit to new spending promises which, no matter how well-costed, are going to look like an indulgence to most voters whose major concern right now is the state of the economy, not tuition fees.

3) What it means for the Lib Dems

It could cut either way for the party. On the one hand, Labour is now outflanking the Coalition on the left, committing to raise new taxes to fund a cut in tuition fees. That will be potentially appealing for those on the progressive, liberal-left, many of whom have voted Lib Dem in recent years.

On the other hand, by finally nailing his colours to the mast and signing Labour up to a doubling of tuition fees from their current rate, Ed Miliband has undermined Labour’s crude attempts to position themselves as the party most opposed to fees (fees which they introduced in 1998 and increased in 2003, both times specifically against their own manifesto commitments). Now Labour has a policy, and one which represents a shade of grey rather than black-and-white opposition to the Coalition, they have diluted a point of differentiation.

However, let’s remember that official Lib Dem policy is still to oppose tuition fees notwithstanding our MPs’ votes in favour of Coalition policy. It’s a point that’s often forgotten because to be honest it’s fantasy politics. In reality it’s inconceivable that the party could, with any shred of credibility, include a commitment to abolishing tuition fees in its manifesto in 2015. Yet currently that’s our position. Lib Dems may attack Labour for posturing on this issue, but we’re hardly free of guilt ourselves.

Here’s what Lib Dem bloggers have been saying…

Seek, locate, triangulate: The hypocrisy of Ed Miliband (Sara Bedford)

After all Labour’s hot air and hand wringing, reminiscent more of a public convenience that a political party, Ed has taken his previous distinctive policy of a direct graduate tax and binned it in favour of a small sticking plaster on the coalition’s policy of a graduate tax by another name. Both the Labour faithful and the LibDem deserters must be furious.

University funding: LibDems are trying to benefit lower earning households. Labour are trying to benefit the upper middle earning households (Paul Walter)

Ed Miliband’s Tax Cut for Rich Graduates (Graeme Strachan Cowie)

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! …

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.

Tuition Fees and Labour (John Hemming)

This is an interesting political placing. We are trying to benefit lower earning households. Labour are trying to benefit the upper middle earning households.

Miliband and the 6k tuition fees promise #lab11 (Andrew Emmerson)

So what we’ll see also is that the proposed reduction on tuition fees to £6k only actually reduces the cost of education for the richest graduates! Because only rich students pay £9k (even at universities which charge £9k), because poor students get assistance. Those same packages of incentives really won’t be available if Labour cut the price tag.

Ed’s tuition fees rationale in full (Carl Minns)

Please use the comments thread to highlight any other posts from Lib Dems responding to Ed Miliband’s announcement…