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September 25, 2011

The verdict on Miliband's £6,000 tuition fees gambit

A day on, the shape and significance of Ed Miliband's £6,000 gambit on tuition fees has become clearer.

The precise form of the pledge Miliband has made gives him a lot of flexibility. He has said the cap at £6k is something he would do now. But the FT and BBC say aides are refusing to promise that the policy will be in the manifesto. That gives Miliband the flexibility to push the cap higher or lower at election time, or to drop the policy in favour of a graduate tax, or do something else entirely.

On the Andrew Marr show, Miliband hinted at pushing the cap lower. “If we can do more, we will,” he said. If you're sceptical you could worry about the cap going higher, but that to me would look weak and diminish the clear blue water between this and the Coalition policy, so I think it's unlikely.

Does this new policy mean the end of Labour's flirtation with a graduate tax (something I'd welcome)? It's hard to find a straight answer to this.

Over at Channel 4, Gary Gibbons reports that, "Ed M’s team say what they’re actually doing is 'bending' the tuition fees policy into a graduate tax." But that sounds almost exactly the same as what Vince Cable says about the current policy.

The BBC's political correspondent, Norman Smith, wrote that John Denham told him that Labour's long-term aspiration was to introduce a graduate tax. But I suspect he may be missing nuances because he then only quotes Denham as saying something weaker and more Cable-esque: "That is the direction we've said we always wanted to move in. A fairer system of payment for the degrees, for the contribution we ask graduates to make. This is something that can be done today."

To me, it looks like Miliband is following the path Cable trod a year ago, not wanting to stir up U-turn headlines while leaving a graduate tax behind in favour of something whose mechanism would be similar to the new system. However, he has a lot of wiggle room and there may still be unresolved tensions within the Labour high-ups over what way to go. The Conservative Party's press office tweeted, "Ed Miliband said that lowering tuition fees is a policy ‘we’re very committed to it’ but then Denham said it was just an ‘interim position’."

Miliband's gambit has come under attack from both Right (Conservatives) and Left (Lib Dems, NUS).

David Willetts says he has written to Miliband asking for details of how the new policy would be paid for. Hopefully we'll then find out exactly what is in store for graduates earning over £65,000 a year. Meanwhile, the Conservative attack has focused on the change in policy. The lines on the BBC at 6pm tonight were accusing Miliband of "weak leadership" and a "cynical U-turn". That's default knockabout stuff and what I see is a party that is - wisely - holding back while it figures out how to effectively attack Labour's policy.

From Lib Dem bloggers there has been quite an effort to paint the Labour policy as socially regressive, with language like "tax cut for the wealthy" flying about. I can't find anything from Cable or the rest of the leadership. As I suggested yesterday, the bloggers' attack is all revolving around deciles of graduates by earnings - the Coalition's favourite terrain - rather than the wealth of the family the student has grown up in, which is Miliband's angle. You pays your money and you takes your choice. But I think it is going to be very hard to make a cap at £6k with higher interest for top earners look socially regressive; it's such a counter-intuitive argument.

The NUS line is interesting, if ultra cautious. £6k isn't low enough? And anyway we want a graduate tax? Of course the NUS would say that. But there is plenty of scope for Labour and the NUS to hammer out a deal ahead of the election around that £6k figure. For example, a pledge to cap fees at £6k for the entire length of the next Parliament might, after inflation, not look too bad - especially if other aspects of student support can be fixed.

Finally, I want to recap on three points I made yesterday that critics of Miliband's plan have not yet engaged with. First, that Miliband is right when he says students and graduates feel weighed down by debt, and that cutting fees to £6,000 will ease this. Second, that however clever the repayment mechanism, £9,000 is viewed as too high by most voters while £6,000 is within the bounds of acceptability. Critics can ignore these attitudinal points or write the public off as misinformed if they want to. But that will be just a quick way of gifting Miliband victory on this issue with the voters.

Thirdly, if the cost of the proposal is £750m a year as the FT has reported, then that is quite possibly less than the corresponding reduction in public spending that would be triggered by the fall in the CPI measure of inflation triggered by the cut in tuition fees. And if you're not stunned by that possibility, you should be.


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£750 million doesn't seem to be enough to make good the lost tuition fee income for the top-fee institutions.

This raises the amusing prospect of watching the Russell Group campaign *against* a funding increase for universities...

@Andrew It would be great if you could post some calculations on your blog of what a more realistic price tag would be for this policy.

I've done a very simple first cut here http://heplanningblog.blogspot.com/2011/09/6000-fee-cap.html, but I may try to do something more thorough later. No promises! The pile of posts I meant to write is already a large one.

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