Tuition fees: The parable of Nick Clegg shows Starmer’s right to ditch his pledge

Since losing power in 2010, the Labour Party has had two-and-a-half different policies on funding higher education in England.

At the 2015 election, Ed Miliband promised to reduce tuition fees to £6,000. Peter Mandelson’s autobiography said a second Brown government would likely have done the same. But students thought the policy was just a watered-down version of the coalition’s £9,000 fees – and it was disliked by universities that feared getting less money.

At the 2017 and 2019 elections, Jeremy Corbyn went further and promised to abolish fees. As a long-term advocate of ‘free education’, Corbyn was at least consistent. But there was less clarity over what would happen to students’ living costs or the stock of debt already accrued.

During the last Labour leadership election, Keir Starmer said: “Labour must stand by its commitment to end the national scandal of spiralling student debt and abolish tuition fees.” But for much of the time since, he has been running away from this commitment. When asked about his pledge in this week’s Observer, he said “the financial situation has changed”.

So we are left with half a policy in the sense that the Labour leadership seems clear on which elements of the current system they want to eradicate – high fees, large debts – but remain uncertain over what to replace them with.

The parable of Nick Clegg suggests Starmer is right to revisit his commitment. Unlike most LabourList authors, I stood for the Conservatives – in the student seat of Cambridge – at the 2010 general election. In this role, I gatecrashed the Lib Dem meeting during which Nick Clegg signed his infamous pledge “to vote against any increase in fees in the next parliament”.

It was as clear then, before the 2010 election, as it was afterwards that it was a silly policy that would do nothing to improve access to higher education. If you want well-funded universities with lots of places – and the number of school leavers is growing every year – then you cannot sensibly fund higher education solely from general taxation.

That is why Clegg himself tried to change his policy before the 2010 election, but his party stopped him from doing so. The big error Clegg then made was to slavishly follow his members by putting the pledge at the heart of the Lib Dems’ election campaign, rather than telling the truth about his intentions before entering office.

The current uncertainty over Labour’s policy has led close observers to think we are in line for another independent review of higher education finance. This tactic worked for Major and Blair and, later, Brown and Cameron by keeping higher education finance off the radar at the 1997 and 2010 elections. Can the trick be repeated a third time? It seems unlikely.

The Dearing review of 1997 and the Browne review of 2010 were cross-party reviews, but the Conservatives are currently implementing their own Augar review of 2019. So they have less incentive to play ball this time. Moreover, as Harold Wilson said, reviews “take minutes and waste years”, and high inflation is hitting educational institutions and students hard now.

Another common idea in Labour circles is to revisit the idea of a graduate tax. Advocates say this could retain the concept of a ‘graduate contribution’ while eradicating the concept of ‘debt’. There are lots of practical reasons why a graduate tax is a really bad idea, but it remains the favourite approach among those who want to deliver redistribution by stealth.

One new problem, revealed for the first time by new polling of students that we have issued today, is that only 4% of full-time undergraduates – one in 25 – like the idea of a graduate tax. ‘Read my lips: more new taxes’ is not an election-winning strategy, especially among younger people looking forward to getting their first job.

So Starmer is wise to review the Labour policy on student funding, but the right answer may be staring him in the face. In the one part of the UK where Labour are in power, Wales, the Labour administration (with, originally, the help of the Lib Dems) has implemented a policy that broadly works and which has enjoyed the support of universities and students.

In short, the system rests on a combination of high tuition fees and loans, as in England, but also generous maintenance support. The Welsh system includes maintenance grants (abolished in England in 2016) alongside loans and, unlike in England, hard-pressed parents are not expected to contribute. In 2023/24, an English student living away from home will get under £10,000 a year on which to live, but a Welsh student will get £10,710.

Our polling shows over half of students like the Welsh model best. It perhaps now needs a few tweaks to respond to the current high inflation, but it has delivered secure incomes for both universities and students. So the best way for Starmer to tackle his higher education funding problem is to pick up the phone to Mark Drakeford.