TOP UP FEES
No tuition fees, no top-up fees - university affordable for every student. Labour broke their promise on top-up fees. The result: tens of thousands of able students saddled with mountainous debts, or frightened altogether from going to university. Funded by reallocating money from other, lower priority, areas of government spending, Liberal Democrats will abolish all tuition fees - as we already have in Scotland. No one should be deterred from the chance of a university education because of the fear of debt.
Why oppose top-up fees?
The Liberal Democrats oppose the Goverment's top-up fees plans because:
- Tuition should be free
As a matter of principle we believe that education should be free and that no one should be denied access to learning because they cannot afford it. The simplest and most cost effective way of achieving this objective is to ensure that tuition is free for everyone. - Top-up fees will not generate the new money
promised
In 1997, the Government said that tuition fees would "put higher education on a firm footing for the next two decades." Instead, public funding per student was cut as fees income grew, leaving universities no better off. The same is likely to happen with top-up fees. Public funding for teaching is growing by less than 1% per annum up to 2006. The UK is ranked 25th out of 29 OECD countries in terms of public expenditure on higher education as a proportion of GDP (that is excluding income from fees). This is below the OECD average, and less than Hungary, Ireland and Mexico as well as the United States, Canada, France, the Netherlands, New Zealand and Australia. - They are unfair
The post-graduation repayment system will impose what amounts to a very high marginal rate of income tax (higher than the rate paid by a millionaire) on those least able to pay - young graduates just out of college and those working in lower paid jobs in the public services and voluntary sector, who are, incidentally, disproportionately women and from the ethnic minorities. - They are inefficient
The Government is switching from up-front fees to post-graduation repayment via the student loan system. The cost to the taxpayer of financing this debt will be substantial. The Explanatory Notes published alongside the Higher Education Bill indicate that, in order to raise £1 billion for universities in top-up fees income, the cost to the taxpayer will be in the region of £445 million. A written parliamentary answer confirms that for ever £1 of student loan the taxpayer contributes 42p in subsidy and administration costs. This indicates that direct investment by the taxpayer would be a much more efficient way of getting money to our universities.
The average student debt is now £12,000 (up 10% on the previous year's according to Barclays). Barclays Bank estimates that average student debt on graduation will triple by 2010, to over £30,000. At the time of their lives when we want young people to be starting to build up a pension, and they want to be buying their first house, they will instead be trapped into repaying massive debts.
Students from poorer backgrounds, who tend to be more debt-averse and who have to take out higher debt because their families are less able to help them out with their living costs are already deciding not to go to university because of the prospect of debt. If this policy does not change, universities will again be the preserve of the wealthy.
Everyone in society benefits from well-qualified, highly educated people living and working here. We see the benefits through economic prosperity and through the UK being at the cutting edge of scientific and technological developments. We also see the benefits through having highly skilled public servants, such as doctors, nurses and teachers.
What's the Lib Dem alternative?
Liberal Democrats agree with the Government that our universities need more money. However we continue to believe that top-up fees are not the answer.
Liberal Democrats would:
- Abolish all tuition fees - We would get rid of both the present fees and the top-up fees due to be imposed from 2006.
- Re-introduce maintenance grants of up to £2000 towards living costs for students from low-income homes. Under Labour's plan, many poorer students will be expected to count their grant towards tuition costs. Under the Liberal Democrats, every penny will be available for living costs.
- Put more resources into the university sector to help recruit and retain good staff and improve the quality of the buildings, libraries, etc.
- Develop a 21st century higher education system which would bring together universities, further education and e-learning, open up routes to technical and vocational as well as academic qualifications and make it easier for those who wish to study part-time.
- Fund these commitments By reallocating money from other, lower priority, areas of government spending. At the last election we identified £5 billion of government spending which we would have reallocated to higher priority areas. This included money budgeted for the Eurofighter, baby bonds and the DTI. We believe the amount of money we can identify for reallocation can be significantly increased. Julia Goldsworthy MP, our Shadow Chief Secretary to the Treasury, is already on the case to identify 3% of total government spending (approximately £15 billion of government spending) which could be spent more effectively, on our priorities.
The government says that it is right that graduates should pay for their tuition because on average graduates earn more than the rest of the population. Teachers and nurses are graduates, but whilst they tend to earn more than the government's repayment threshold, they certainly do not earn enough to find repaying five figure debts easy.
Where do we go from here?
The Higher Education Act became law in the summer of 2004. During its passage through Parliament it was improved on the margins - for example, a fees concession for those wanting to take a gap year in 2005 after the Government accepted the Liberal Democrat argument that this was a real problem - but it still introduces top-up fees, directly breaking Labour's 2001 manifesto promise.
The Liberal Democrats are carrying on the battle to scrap tuition and top up fees. This is now a key issue for the next General Election.
Top-up fees will not be introduced until 2006. A drop in the number of Labour MPs could enable the plans to be reversed. Every student, their parents, families and friends could stop top-up fees if they vote Liberal Democrat at the Election. Charles Clarke (Norwich South), who, as Education Secretary, introduced top-up fees, could be one of the casualties if there is a swing towards the Lib Dems, along with other seats with high student populations such as Cardiff Central, Cambridge and Bristol West.
This is too important to give up now. Labour has broken its 2001 manifesto promise to the electorate. People should not forget this when we get to the General Election.
