The Guardian view on tuition fees: Labour may pay the price

http://www.theguardian.com/commentisfree/2015/feb/02/guardian-view-tuition-fees-labour-may-pay-price

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Those who wonder whether Ed Miliband displays the clarity and decisiveness that are normally thought essential to winning an election will not find themselves short of evidence from Labour’s current handling of the tuition fees issue. This is, after all, the very same tuition fees issue that poleaxed support among full-time students for the Liberal Democrats after 2010, resulting in a 24-point swing to Labour among students between then and 2014, according to a recent study. In a close election contest where every seat matters, therefore, Labour clearly has a vital self-interest in ensuring that it retains its post-2010 gains among student voters. Student votes in a handful of constituencies could decide the 2015 general election.

Mr Miliband seemed to grasp this when, back in 2011, he announced that Labour would cut university tuition fees from the coalition’s maximum £9,000 a year figure to £6,000 a year. That was a big, clear pledge, which was welcomed by students and their parents, who saw themselves paying less under Labour, and disturbing to universities, which asked how Labour proposed to balance their books. That was three and a half years ago. In the interim, Labour has neither developed nor promoted the plan to any significant degree. It has simply left it hanging; so much so that, when the head of UniversKities UK wrote to the Times on Monday to oppose a cut in fees, he spoke of the reduced fee policy as “speculation”.

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Labour has spent the past 24 hours insisting that the £6,000 maximum fee pledge remains firm. It is not hard to see, in political terms, why that should be. To go ahead with the policy could help to secure the Labour vote among students, reminding them of a key difference between Labour and the Lib Dems while offering a response to the growing support among students for the Greens, who optimistically propose to abolish tuition fees altogether. To abandon the policy would not just squander that potential advantage but would also raise much wider doubts about whether Labour thinks things through or means what it says. In practice, there must be some doubt that the policy will really have the impact among students that Labour hopes. Yet whether the £6,000 fee pledge is a good one or a bad one, the reality is that Labour is stuck with it.

Labour’s current problem is balancing the books. Universities UK says cutting fees to £6,000 will leave its members facing a shortfall of at least £10bn. Labour says budgets will be fully funded but has not said how the shortfall will be met. The options are tight, because Ed Balls has pledged to keep current spending on a tight rein, and because extra spending for the business, innovation and skills department has been ruled out. But this is an avoidable mess. Labour could and should have answered the student-funding question long ago. The failure to do so undermines Labour’s credibility and allows opponents of a cut in fees to frame the debate, as happened on Monday.

Barring a large cut in student numbers, which would be politically toxic among aspirational voters, the most likely solution to Labour’s dilemmas would seem to be other forms of taxation, either in the form of increases in existing taxes, perhaps national insurance, or a new approach like the graduate tax that Mr Miliband favours. Yet neither of these options is especially popular with the public or with those who want to go to college, while both of them cause problems for universities. Neither tax would be hypothecated, and in both cases the revenue would go to the Treasury rather the universities themselves, as is the case with tuition fees. Moreover, the income from any graduate tax would only come in later years, so the state would still have to pay the universities some large amounts upfront.

There are no cost-free answers to university finance. If the funding shortfall is not met, some universities may cut bursaries for poorer students to meet tuition costs, may try to borrow from private not public funds, or may try to recruit even more overseas students at the expense of domestic ones. All of these possibilities imperil the principle of a publicly funded higher education sector open to all who are qualified academically. Labour is taking a risk with the universities. The longer the issues remain unresolved, the greater these wider dangers.