5 reasons why Labour’s tuition fees plan is a big improvement

I was ready to be underwhelmed by Ed Miliband’s tuition fees announcement today. In recent weeks the outlines of Labour’s HE funding policy had been clear, leaving little scope for a ‘big bang’ announcement. And besides, cutting tuition fees to £6,000 didn’t look like a particularly radical reshaping of a system that is quite critically flawed.

If the only policy that had been announced today had been a cut in the headline tuition fees figure I’d have been a bit underwhelmed. But the package that Labour have announced today – including, crucially, an increase in maintenance grants – has a lot to recommend it over the previous system.

That’s not to say that there aren’t questions that need to be asked. Would this money – two billion, at a time of constrained budgets – not be better spent on early years where it will have a bigger but less heralded impact? And is it fair that students who have been paying £9k fees will still be saddled with heavier debts that the students who follow them?

But on the whole, Labour is offering a big improvement to the Higher Education funding system, here’s why:

It’s a cut for every student and makes it cheaper for everyone to attend university – lets start with the most obvious, headline offer to students. They will pay less for their university education under Labour than they would under the current government. That’s a benefit to all students, regardless of background, institution or future career – you might call it a universal benefit. It also means students will owe less when they graduate (meaning less pressure on their finances) and – crucially – the government will be in less debt, which has a positive impact on what Labour could do in other areas too.

Raises maintenance grant – for me, this is the most significant part of today’s announcement. An extra 400 quid might not seem like a great deal for many of those in the Westminster Bubble, but for the average student, those hundreds of pounds could make a massive difference. Millions will benefit (as well as paying lower fees – so those who receive maintenance grants will benefit twice). The way this is funded is progressive and sensible too – by making higher earning graduates pay a higher rate of interest on their loan repayments, Labour’s plan ensures that rich graduates aren’t the main winners from a cut in fees – students from low-earning families will be.

Contains what could become graduate tax – I’d rather we didn’t have a headline fee for university education at all. I appreciate that during the tuition fees era the number of students has risen consistently (despite warnings that the numbers would drop off), but I still believe there are a substantial number of young people who take a look at University education – in a volatile jobs market – and think it’s not for them. I favour a Graduate Tax (if state funding of HE is politically impractical, as it is at the moment) where students pay what they can afford based on their earnings without being hampered by student debt. The system under which higher earning graduates repay more money is a step in that direction – and a Graduate Tax is still on the table under a Labour government.

Addresses the intergenerational settlement – how the fees cut is paid for is important too. Young people are not only the least likely to vote, they’re also the most likely to be ignored by politicians and mainstream politics in general (and there’s a link there). But since the 2008 crash (and before, if we’re honest) the prospects for young people looked less healthy than for their parents. What Miliband calls “the promise of Britain” – where each generation is better off than the last – has been broken. Young people are beginning to wonder – quite rightly – why their parents and grandparents made off with all of the cash and let them in a crumby bedsit with a zero-hours job at a call centre (university degree or not). So a means of funding Higher Education and reducing fees that also looks at the intergenerational settlement was important. And removing giveaways on the pensions of the very wealthiest of earners (those on £150k a year aren’t “middle class pensioners” no matter what nonsense The Telegraph might peddle) to help millions of young people afford university and start their working lives saddled with less debt seems like a reasonable use of funds to me.

Sustains University funding levels – a critical component of any plan for a new university funding system had to be (at least) sustaining current university funding levels. Anyone who has spent any time considering the budgets of universities (it’s fun…honest) knows that they’re under constant pressure, which is why universities are so often calling for higher fees. They don’t (as a default) want to screw over students, but they do want to protect the work their institutions exist to produce. That was at the crux of Peter Mandelson’s intervention last week – and today’s announcement sustains funding levels through direct government funding. Our Universities are one of our greatest national resources (in terms of research as well as undergraduate education) and are real world leaders. Labour’s plan makes university cheaper for students, without compromising the quality of education they’ll receive. Despite the concerns I might have about the scope and scale of this proposal, that’s a real achievement, especially with government finances under pressure.