This is what it comes down to: where do we find twelve billion pounds?
With slightly under two million students, and fees between six and nine thousand pounds per year, apparently, plus some living allowances, at a BARE MINIMUM that's two million lots of six grand. Twelve billion quid.
Where can we find the cash?
More cuts? Twelve billion pounds is a tenth of the NHS. Or a third of the defence budget. Surely we can't slash more benefits!
So the government has chosen instead to tax students out of their future.
We've GOT to do BETTER than THAT!
Liberal Democrats, I KNOW it is NAUSEATING to be lectured by Hard Labour on this. They gave a manifesto commitment to not introduce fees… and then introduced fees. We don't need lessons from Labour about broken promises.
But it's EVEN WORSE when the two-faced, lying, bandwagon-jumping hypocrites are RIGHT.
They say we should be ashamed and we SHOULD be ASHAMED.
We DID promise to oppose rises in tuition. WE promised to get RID of the cost of tuition. And we SHOULD keep that promise.
The ONLY excuse for breaking our pledge would be if we could do something BETTER, and – even with the 30% worst off students paying LESS under this scheme – this still ISN'T BETTER ENOUGH.
The proposals now revealed by the Coalition for funding higher education are an at-least-doubled fee paid for by a loan repayable once you are earning over twenty-one thousand pounds (£21,000), with an escalating rate of above-inflation interest.
The simple consequence of this is that people earning up to a certain amount – for you standard three-year degree it's probably about thirty-three thousand pounds (£33,000) – will NOT pay off the loan within thirty years: for those people this is simply a GRADUATE TAX of 9% of your earnings over the twenty-one thousand pound (£21,000) threshold.
People earning above that amount will pay higher monthly contributions, but they will pay off the loan, so they won't be paying for the full thirty years, and in consequence will pay less in TOTAL.
You end up paying the MOST if you very-nearly-but-not-quite pay off the loan. So, for the hypothetical "standard" degree (3 years at £6000 a year, i.e. £18,000), people earning roughly £33,000 would JUST pay off the loan with their last repayment, having paid a total of slightly less than thirty thousand pounds (£30,000).
So the system proposed is moderately progressive. Up to a point, the more your earn, the more you pay back in.
The rather IRONIC fact is that INCREASING the fees actually makes the system MORE progressive.
Increasing the fees increases amount up to which you know you're not going to pay the fees off, i.e. increases the number of people for whom the graduate contributions is a straight 9% tax (limited to 30 years).
For example, at £9,000 per year, or £27,000 for a three year course, only people earning more than thirty-EIGHT thousand pounds (£38,000) will finish repaying.
AND people earning less than £33,000 do not pay any more than they would if the fees were £6,000 (because they have the SAME repayments – for them, it's just a bigger amount written off by the government at the end).
So, why stop at £9,000 then, you may ask. Why not make the fees £90,000 and make the scheme progressive all the way up to the few people earning two hundred grand who are the only ones who will ever pay it all back?
The answer to that one is that what the government calls "writing off" actually means repaying what's left of your loan out of general taxation, and this would be setting up yet another ridiculous bill for future taxpayers.
Which of course brings me back to the point.
This is just DISGUISED GOVERNMENT BORROWING, with a hidden TAX RISE on the poor future graduates to cover the repayments.
The MOST SERIOUS FLAW in our model of government spending is that over the last fifty years, we have been taxing fewer and fewer YOUNG people in order to keep spending more and more on health and pensions and care for OLD people!
We've tried increasing taxes; but the spending on the welfare state kept going up.
We've tried cutting everything else; but the spending on the welfare state kept going up.
We've tried borrowing until the government credit card smoulders.
I'm a bit of a HERETIC and I suspect we DO spend more than is good for us on the health service: it's grown from an essential protection to a national comforter, which we cling on to because it's there, making ever more use of overstretched services BECAUSE they are free-at-the-point-of-need when we might just occasionally be able to cope on our own if there wasn't a giant nanny there to make it all better for us.
But a LOT of our health spending is going on making sure that ever more retired baby-boomers have healthy comfortable and very, very LONG retirements in which to enjoy all the property they bought up before house price inflation made it impossible. And we expect a dwindling pool of working age people to pay more and more taxes to fund this.
And now, on top of that, we're expecting them to pay for their OWN education as well as the cost of OUR retirement AND cleaning up OUR mistakes.
It's really not on.
Instead of dumping the problem in the lap of the next generation, we should be addressing the real problems.
Firstly, Labour's dogmatic target of 50% of people to receive a degree has very badly served both students AND universities. Ridiculously academic qualifications are now widely seen as entry-level requirements to the jobs market. Half of the country get into universities; half are marked as failures. Well done, Labour: you've basically succeeded in recreating the 11+ only at 18.
We need to STOP trying to force every young person into the straight-jacket of a degree. 20% would be a more realistic target, and if you went to a state-funded school, you shouldn't have to pay.
But that's NOT a money-saving scheme, because we ALSO need to provide alternative routes, apprenticeships, city & guilds, incentives to employers, so that instead of the Hobson's Choice – degree or not degree, that is the question – people have GENUINE OPPORTUNITY to get into employment be it at 16, 18 or 21.
So we come back to where we started. Where DO we get twelve billion quid?
Well, almost regardless of the question of higher education, we have got to address our national addiction to the NHS and the welfare state before we lose control completely.
And at the same time, we need to look again at unlocking the amount of unproductive WEALTH bound up in property and investments benefiting very few.
And I'm afraid it means taking head on the power of the GREY VOTE. We've got to stop making promises to pensioners and start KEEPING our promises to young people.
Or sooner or later, they may just turn off the life support.
PS:I should emphasise: all these figures are EXCLUDING the effects of INFLATION, which would make the REAL terms cost of the loan LESS. That is, repaying £100 in a year's time is less onerous than repaying £100 today (suppose you HAD the £100 – if you repay it today it's all gone, if you put it in a back and get a tiy little amount of interenst you will have something left when you repay the £100 in a year). It will – I guess – also affect the starting-to-pay point and thus the amounts repaid as you go along.
Also, these calculations don't work for AVERAGE salaries; there's just no way my simple maths can take account of the way people's salaries grow: e.g. imagine Jane earns £20,000 a year for three years, so pays nothing, but June earns nothing for two years and then £60,000 in the third year, so pays £3,510 in year three even though she's earned the same ON AVERAGE as Jane.