The sleight of hand


There is a bit of a sleight of hand employed by the Conservative/Liberal Coalition on the whole issue of Tuition Fees. It is a little untouched, and quiet, and isn’t really being spoken about, but it needs to be.

I went to a Question Time style event at University tonight. It included Labour MP for Leicester South Sir Peter Soulsby, Conservative MP for Loughborough Nicky Morgan, and our Student Union President. The Liberal Democrat dropped out, spinelessly. No Liberal Democrat contacted in the area would take up the spot. The rats are in hiding it seems.

I got a couple of questions in, and especially focused on the Tory’s claims that her Party do not dislike the public sector or funding higher education because her boss David Willetts, the Universities Minister often speaks highly of both. I pointed out to her that 9 months ago Willetts referred to students as a ‘burden on the taxpayer’, yet amusingly he claimed thousands of pounds in Parliamentary expenses to do up his home, public money that could have been used to fund any one of us students in that room, or not in the room who are likely to be put off going to university due to the Coalition’s horrific attack on higher education. So I asked her given that information, who does she consider to be the real burden on the taxpayer? The student, or the insufferable hypocrite David Willetts.
She didn’t answer. She went on a rant about how much the Tories love the NHS. I wanted to say to her “sshhh, you’re talking bollocks“. I refrained.

On the subject of Tuition Fees, Nicky Morgan, the Tory made the point to say:

“The important thing here, is that you don’t have to pay anything in upfront fees under our system.”

We don’t pay upfront fees now. Never have. Nor does anyone actually think that under this new Tory/Lib system, students are expected to turn up on their first day with £9,000,000 in a briefcase ready to hand to the University. That has never been the argument against the rise in tuition fees. It is purely a nice thing for Tories and Lib Dems to say, in order to sound like they’re doing us a favour. They aren’t.

And then there is the real sleight of hand.
There has been much praise amongst Lib Dems and Tories for them raising the amount you need to be earning before you start paying back your tuition fee loan, from £15,000 to £21,000. This is their flagship policy, because they claim it’s more progressive than the current system. I have a couple of issues that make this a sleight of hand. The idea is those earning less will not have to start paying back.
Firstly, raising the bar to £21,000 is great, if your loan amounts to what it does at the moment. If I leave University with a £20,000 debt, a £21,000 threshold is workable. But it is highly ineffective if i’m leaving with a debt of £40,000. That is a huge difference. Also, the interest rate is set to rise from 1.5% to anywhere up to 3% for those earning over £40,000 a year. So that’s more money we’re going to be paying back overall. Whilst at the same time the University budget is to be slashed beyond recognition. Yet they insist on calling it a fair deal and progressive. It is like a barman saying “Hey, why don’t you pay for a pint, and i’ll give you half a pint? That’s a fair deal for all of us!” Paying a lot more, for a lot less, has never in the history of the World been considered fair and progressive; unless you’re Nick Clegg living in a fantasy World.
And secondly, and most importantly; The plans are based on 2012 prices, which the Government has been quick to point out don’t matter because no one pays up front in 2012. So, the plans should be based on the first lot that leave under the new system; 2016. This means that adjusted for an expected 2.2% rise in inflation by 2016, the threshold is not £21,000 but is actually closer to £17,000. That represents a massive sleight of hand that will save the treasury a lot of money, and cost graduates a hell of a lot more in monthly repayments than the previous system, a hell of a lot more than the Government has lead the public and the Institute of Fiscal Studies to believe.

The Institute of Fiscal Studies pointed out that whilst 20% of graduates will indeed benefit from the plans; 8 out of 10 graduates will pay a lot more than they would do under the current system.

Vince Cable stated:

“Almost one in three graduates will pay less than they do at the moment under the scheme that the Labour Government introduced.”

Almost? Not quite one in three. So, that means more than two in three will pay more than they do at the moment. How is he still insisting that this is a fair and progressive system? It’s fucking awful. The plans by some Lib Dems to abstain, is absolutely useless. If they signed the pledge, they should vote no next week. If they abstain or vote yes, they do not deserve to call themselves elected representatives.

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3 Responses to The sleight of hand

  1. Really good article, but I think you’ve missed something that will make this far worse. In the small print, the ConDems are planning on charging a rate of interest above inflation. At the moment, interest is pegged to inflation and uses the ‘basket of shopping’ principle, that the amount you pay back may rise but remains the same in theory because over time you would still be able to buy the same number of baskets, even if the numbers may be larger. This is why the interest is acceptable to the Muslim students who follow their beliefs that interest shouldn’t be charged on money.

    However, by charging above the rate of inflation the government will be making money out of every single student. I will be very suspicious of who proposes to take the Student Loans Company over if it is privatised, as the ConDems have proposed. Charging commercial rates of interest may well prevent some Muslims from being able to access the loans, which will only help to fuel extremism within the UK.

    Your article also seems to assume that students will get a loan for the full cost of the tuition fees, but one of the proposals from the Browne review that the ConDems are considering is giving students loans of £6k, so if they want to go to a university that charges £9k then they will have to provide the rest themselves each year. This will be fine for the rich, but for the rest of society this will be unaffordable, especially if more than one child from a family wants to go to university at the same time.

  2. Black Order says:

    If the UK did away with government subsidies to universities altogether as well as a tax waiver for both universities and students alike, it would create a market where universities could and would compete to offer a comparable quality education for less than their competitors, therefore lowering tuition to an affordable price for the average student.

    Government(tax payers) saves money – universities lower overhead cost – students get an affordable quality education.

    Win/Win/Win

    Free Market Capitalism

    🙂

  3. Black Order says:

    Add to my last response for a solution to relax government imposed education standards.

    They would still provide a quality education, but their reasons would change from “because the government says so” to “because we need to be competitive and offer more bang for the buck, more so than the others”.

    And without the operating costs associated with meeting guidelines/standards and/or taxes, they would be in the position to do so.

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