Sep 25 2011

“Too much, too young”

Ed Miliband has decided to open the Labour conference with a policy! A policy to reduce the cap on tuition fees from £6000 to £9000, you can read all about it here, in the Observer. I wrote on my feelings on tuition fees back here.Miliband’s is a somewhat surprising move; Liberal Democrats battered by this issue, will be bemused to discover that all that ire could have been deflected by the simple expedient of only doubling the tuition fee cap, rather than tripling it. The BBC has helpfully been starting their reporting of this issue with the words “Labour, who introduced tuition fees and then tripled the cap…”.

The policy is to be paid for by not cutting corporation tax on banks, as it will be for all other companies, and by increasing the interest on the student loans for those earning more than Miliband believes his supporters will earn.

The policy odd for a couple of reasons:

  • Is this seriously the most important policy area to address? I’d have thought ideas on “going for growth” would be far more important. Or maybe undoing one of those many “attacks” on vulnerable groups.
  • It really doesn’t represent a change in principle to the policy being implemented now, just a fiddling with the cap.
  • It’s quite transparently another attempt at a political kick at the Liberal Democrats.

My personal opinion on “going for growth” is that there is relatively little government can do to boost growth in the medium term, it can spend in the short term to produce a transient increase but with a deficit as high as ours then is this really a good idea? If we could reliably produce growth by policy, then don’t you think we might be a tiny bit better at predicting growth given known policy? As it stands predicts of GDP growth by pretty much anyone are about as good as could be expected by a monkey throwing sticks at a board.

To me the big problem for Labour is the quote later in the article:


He [Ed Miliband] insisted he would stick to his central message that the coalition is cutting too far and too fast, without providing more detail of where Labour would withhold funding.

An observer would be entirely justified in thinking that Labour’s policy is for no cuts, and tax-raising solely on banks and the unfeasible wealthy, both ultimately rather small sources of income even if you jack up rates to very high levels. Given this, and the “revelations” that the Labour top team fought like ferrets in a sack over deficit reduction before leaving power it is unsurprising that they have little economic credibility.

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