o, the tide has turned. The Higher Education
Bill still has to negotiate the potentially tricky shoals
of the House of Lords but with the strength of the Commons
rebellion sapped the Government can be reasonably confident
that its Bill will reach the statute book at least largely
intact – and,
crucially, with variable tuition fees as its centrepiece.
Andy yet now more than ever, it begs the question: what’s
the point of variable fees?
After all, any measure that takes such a heavy political
toll on Labour’s electoral prospects should, for any
sensible political strategist have a correspondingly high
importance in achieving the Government’s aims.
Yet the reasons for variable fees have been opaque throughout
the debate. The White Paper emphasises the importance of
funding Universities and students who benefit contributing.
One of the many circular arguments deployed by spokespeople
of both the Government and their allies in the Higher Education
sector is that more funding is essential. One wonders why,
if the Universities are so vital to the UK economy and so
desperately under-funded, they are not worth funding in a
method less politically costly – from general taxation
Of course, there is a perfectly valid case on the left for
agreeing with the proposition that the middle classes who
overwhelmingly benefit from Higher Education should contribute
back. Many on the left would argue that they will do so anyway
through income tax, and that education is a right, not a
Personally, I would accept that there is a good case for
graduates to pay a specific contribution. A right, after
all, is something that is available to all and even if the
Government achieve their target of 50% participation that’s
still 50% short of making it a right, not a privilege. A
service available to less than half the population – the
most advantaged half – seems to me to be a privilege
and not a right.
Furthermore, Universities – and especially the self-styled
Ivy League – are a classic mechanism for passing on
class privilege from one generation to the next. I’m
happy to tax graduates on that basis. This could be summarised
as the socialist case for a graduate contribution.
Unfortunately, it doesn’t amount to any kind of case
for the system devised by the Government, despite the progressive
rhetoric hastily discovered by Tony Blair in the face of
If the aim were to tax privilege in the pursuit of a more
equal society then I would accept a Graduate Contribution
Scheme similar to that the Government proposed. It would
have huge advantages over the status quo, addressing debt
aversion and being a thoroughly progressive tax.
The proposed system, will not, however, do that – potential
students will see their contribution as a debt to be repaid
because it is still called a fee, a specific fee for a specific
course. Furthermore, a review that was supposed to design
a simplified student support system has ended up relying
on each institution to devise its own bursary scheme – and
those with the most disadvantaged students will be those
who can least afford to be generous.
Why have the Government been caught in this trap? Because
if there is going to be a variable charge for a degree, that
will take the form of a fee to be paid. The Graduate Contribution
Scheme could have been a progressive tax where the amount
repaid depends on graduate earnings – surely the best
way of ensuring that those who benefit most contribute the
most while removing the problem of debt aversion amongst
the most disadvantaged potential students. Instead there
will be a virtual marketplace where the Graduate Contribution
Scheme is just a way of repaying a debt incurred to pay a
fee for a service.
The Government discovered a new argument in time for the
Third Reading of the Bill – variability was actually
intended to allow fees to go down, not up. Universities could
decide to discount fees for courses of particular economic
(or other) value but which did not attract sufficient students.
Once again, this fails to convince. For a start, it seems
to accept that potential students will, after all, decide
to take courses based the cost, which is itself a big potential
problem with the system. Secondly, the science courses to
which this would mainly apply tend to be the most expensive
to provide, which doesn’t bode well for Universities’ supposed
inclination to charge less for them. Thirdly, if there are
courses which are so important to the country, why leave
it to the Universities to decide what they are? After all,
they will inevitably be driven by the market considerations
that the system introduces, not the national interest.
So, we are again left to ask, what is the point of variable
fees? Why not a decent, progressive, graduate contribution?
Charles Clarke has proffered several linked explanations
for his opposition to any kind of graduate tax. Firstly,
it doesn’t recognise the “diversity” in
the HE sector. Many of us might think that “diversity” is
better known as “inequality”. We certainly recognise
it (in the HE sector and elsewhere) but we want to reduce
it, not increase it. I can see the unfairness that Clarke
recognises in a student at Coventry paying the same fees
as a student at Cambridge, given the likely differences in
their class backgrounds and graduate earnings.
Unfortunately, variable fees are not a particularly good
way of ensuring fairness, given that even the modern Universities
are, by the Government’s own admission, likely to still
charge the full fee for most of their courses. A properly
designed graduate contribution scheme would, however, address
this perfectly well because the eventual contribution would
be related to graduate income and there could be exemptions
for students from disadvantaged backgrounds in the same way
there are with the Government’s scheme.
The other justifications put by Ministers were that fees
would guarantee a ring fenced private income for individual
Universities, students would know the cost of their course
and be able to make financial judgements in advance and that
they would have greater leverage over their institutions.
These assertions are in themselves questionable – the
level of repayments will depend on all sorts of trends in
graduate employment and earnings and it is hard to see how
this will necessarily be easy to predict. And it is questionable
that students will be able to accurately gauge the costs
of their courses simply because they know the level of fees
when they start.
Even assuming that these assumptions are correct, they amount
to a poor case for anyone on the left. Ensuring a private,
independent revenue stream for individual Universities should
not be a priority for any Labour Government.
This will incentivise attracting the richest students, while
a properly designed funding system would ensure that institutions
were rewarded for widening access. A graduate contribution
scheme based on earnings would make the eventual contribution
difficult to predict, but it should be capped and the Government’s
own system wouldn’t solve this problem. Whilst becoming
consumers is likely to make students more demanding – not
least over such matters as their exam results – one
has only to look at school admissions to see that the top
Universities will choose their students, not vice versa.
These arguments, do, however, give us more of an insight
into the purpose behind variable fees. Those who cast their
minds back might recall the original justification advanced
by Blair– the need to fund ‘world class Universities’.
They need not look much further to see where the idea originated – those
very Universities, who do the most to maintain Britain’s
It is a testament to the enduring power of the old, Oxbridge-educated,
Establishment that they have managed to get their purposes
to be advanced by a supposedly modernising Government. But
it is also a worrying sign of the ideological vacuity in
Government’s current thinking – unsure of their
fundamental aims but desperate to appear “radical” and
instinctively attracted to market mechanisms in doing so.
Meanwhile a market would allow the “best” Universities
to maintain their competitive advantage and gain a private
source of income.
As it happens, by the time the Bill reaches the Statute
Book the amendments inserted to satisfy Labour MPs will mean
it is very far from what the original architects of variable
fees intended. The system proposed by the Bill is a mess
but it is better than the status quo. But this was a terrible
wasted opportunity to reform Higher Education in the pursuit
of social justice – and it should be a wake up call
for the Labour Party that we need to rediscover our sense
of direction and purpose.