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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.

5 comments

  1. Ed W

    I’m sure your doubling remark is tongue-in-cheek but the direction of travel is very important. Changing the first derivative (velocity?) of tuition fees from positive to negative changes the terms of the debate from whether the cap should be raised every few years to how much it should be lowered by.

  2. Ian

    @EdW Miliband was indicating on the Marr Show this morning that this was simply a policy for if he were in government *now*, and explicitly refused to say it would be policy at next election. So I don’t believe it indicates a direction of travel.

    What this has highlighted to me is that the current system is close to a graduate tax already (see this post on LibDem Voice here), it’s anticipated that many students will never fully repay their loans. It seems the tuition fee cap is more to do with making a market in HE, rather than charging students – it doesn’t appear to be working in the “making a market” part.

  3. Ed W

    I don’t know exactly what he said on Marr, but from the Guardian blog (http://www.guardian.co.uk/politics/blog/2011/sep/25/labour-conference-2011-live-coverage), 11.57am:

    “If we can do more by the time of the election, we will. But this is an important first step.”

    This suggests to me that lowering the cap to £6,000 is the minimum we can expect in the Labour manifesto. My hope is this will spark a reverse bidding war with the Lib Dems, who presumably won’t be willing to sacrifice all their university seats without a fight.

  4. Ian

    Labour did say they wouldn’t introduce tuition fees and then as a government with a massive majority (not a coalition), they did, and then they said they wouldn’t increase tuition fees and they did. So I’d argue your position was wildly optimistic, to say the least!

    As far as a bidding war is concerned, LibDem party policy, I believe, is still to scrap tuition fees but it hasn’t been debated since before the general election.

  5. Ed W

    Yes, I was disillusioned with Blair long before it was fashionable for that very reason. But I’m willing to give a new leader the benefit of the doubt for now.

    Similarly if the Lib Dems chuck Clegg overboard before the next election I’d be willing to give their new leader the benefit of the doubt as well. But I won’t believe a word he says on tuition fees after he dropped the fees pledge like a stone during the coalition negotiations.

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