Thursday, 9 December 2010

Coming to a conclusion on fees

I’m grateful to everyone who took the trouble to contact me about the difficult issue of fees.

I’ve thought long and hard about it, as you might imagine. I’ve had to consider two key things – the content of the policy and the things we said before the election.

I think the policy is far more positive and fair than the media reports would imply. At the moment, students repay their fees as soon as they start earning £15,000 per year, well below the typical graduate starting salary. Under the new scheme, repayments won’t start until £21,000. This means that every new graduate will pay less each month than under the present system. They will pay for longer, but after 30 years the balance of their account will be cancelled if they haven’t cleared it. So unlike a credit card debt, there is an end point, and those who don’t earn much won’t end up paying much of the fees back. In terms of fees, there is no risk in going to university - if your career takes off, you pay back fully, if it doesn't, your outstanding debt gets written off.

A second important positive feature of the change is that part-time students (who make up a surprisingly high proportion of undergraduates) will not have to find fees up front. Until now part-time students have been the poor relations and this will change.

Third, the basic cap on fees will be £6,000 (less than double the current cap). Those universities who want to go further than this will have to show they are working effectively to remove barriers to young people from diverse background getting on courses.

Given the need to make long-term changes in order to get the public finances on an even keel, I think that this is as fair a package as could have been achieved. In the words of the second half of the famous NUS pledge: “I will vote for a more progressive alternative”.

Which brings me on to the things that were said before the Election.

I stood on a manifesto that had literally hundreds of policies and pledges. If we had won the election I would have expected us to implement them, and would have been on the front row of the demonstrations if we hadn’t.

But we were faced with a situation where the electorate elected just 57 MPs, and that makes a huge difference to our ability to implement our policies. We could have sat in opposition and voted issue by issue. But then we would only have been able to implement our commitments if someone else agreed with us! I judged (and still believe) that it was better for us to form a Coalition both in the national interest and in order to deliver more of the pledges on which we were elected.

By the end of this Parliament I believe we will indeed have delivered far more of the things we promised before the Election than we have ever done before. I believe that this was the best way to keep faith to the electorate for the things that I said before the Election. Of course I wish that we could have made more progress in the negotiations over fees. But I ask myself how many other things that we stand for, and on which people voted for us, we would have sacrificed along the way. And if we hadn’t ended up giving ground on fees, would I now be having angry e-mails from people saying I had betrayed them on climate change or civil liberties?

In sum, I believe that the way I have kept faith with the people who voted for me is to seek to implement as much as possible of the manifesto on which I was elected, as part of a Coalition programme for government, and on fees, to seek to make the policy as fair as possible given the crippling financial situation in which we find ourselves as a nation. I believe that I have done both of those things and will be supporting the package in the vote which will shortly take place.

17 comments:

Phil said...

Well said, Steve. I heard Paddy Ashdown on Radio5 the other day and he was brilliant on this issue.

David Kernohan said...

[At the moment, students repay their fees as soon as they start earning £15,000 per year, well below the typical graduate starting salary. Under the new scheme, repayments won’t start until £21,000.]

At 2016 prices - so exactly the same as the current threshold in real terms

[This means that every new graduate will pay less each month than under the present system. They will pay for longer, but after 30 years the balance of their account will be cancelled if they haven’t cleared it. ]

So graduates will pay substantially more overall, and will still be paying as their children consider attending university. And if they get a well paid job, they will pay more than if they choose not to.

[A second important positive feature of the change is that part-time students will not have to find fees up front. Until now part-time students have been the poor relations and this will change.]

Only 1/3rd of part time students will be eligible for loans. This is an improvement, but a much smaller one than you are making out.

[Third, the basic cap on fees will be £6,000. Those universities who want to go further than this will have to show they are working effectively to remove barriers to young people from diverse background getting on courses.]

The published guidance to OFFA does not even mention "exceptional circumstances", and it is clear from vice-chancellors that all universities expect to charge at or near the £9,000 maximum. They need to do so just to continue their current investment in the experience of students.

[Given the need to make long-term changes in order to get the public finances on an even keel, I think that this is as fair a package as could have been achieved.]

This has nothing to do with the deficit and very little to do with long term national debt. You know this because I have told you repeatedly, referencing the detailed analysis HEPI have performed. These proposals will cost the taxpayer £5-10bn within this parliament, and there is serious doubt regarding whether they will ever save the country money. I am FLABBERGASTED that you can cite this as a justification. It is false and you know it is false.


[I stood on a manifesto that had literally hundreds of policies and pledges. If we had won the election I would have expected us to implement them, and would have been on the front row of the demonstrations if we hadn’t.]

This was not one of "hundreds" of equally promoted policies. This was a cornerstone both of your personal campaign and the national campaign.

[ I judged (and still believe) that it was better for us to form a Coalition both in the national interest and in order to deliver more of the pledges on which we were elected.]

Name one that you have delivered.

[And if we hadn’t ended up giving ground on fees, would I now be having angry e-mails from people saying I had betrayed them on climate change or civil liberties?]

You've given way on all of your promises. Even the Tories are surprised.

[In sum, I believe that the way I have kept faith with the people who voted for me is to seek to implement as much as possible of the manifesto on which I was elected, as part of a Coalition programme for government, and on fees, to seek to make the policy as fair as possible given the crippling financial situation in which we find ourselves as a nation. I believe that I have done both of those things and will be supporting the package in the vote which will shortly take place.]

You have not made the policy fairer. You are not voting for a policy that will improve the countries financial standing. You have let down those who have voted for you, and you have brought your career to a likely end for pure political expediency.

kerngog said...

Thanks Steve. That is an excellent summary and is in line with my understanding. Which begs the question, why are the students insisting on a pledge which will make them worse off? Of course I don't expect you to answer that, but I think the true story should get communicated, not just labour lies like "fees tripled"....

Anonymous said...

Will there be a penalty charge if the loans are paid off early?

Anonymous said...

Very disappointed with the fees rise vote.

How can we trust politicians if they pledge one thing before election and then abandon it once in?

The lib dems must never ever make a pledge again, you will just be laughed at.

Anonymous said...

David Kernohan- very well said!

As a Liberal Democrat supporter and recent graduate I find it beyond irritating to keep hearing people I helped get elected come out with this nonsense, and then claim that it is people like me who don't understand the policy.

I seriously wonder how many of them have actually bothered to read the OBR forecasts, and the research by the IFS and the Higher Education Policy Institute in to the changes.
David Cameron himself admitted in his speech yesterday that HE funding over this parliament would rise by £5 billion (from 7 billion to 12 billion)... yet we keep being told that somehow this needs to be done to reduce the deficit?

I have repeatedly made all the points you have made and more, in detail, to my local MP David Ward but he has so far refused to respond and today voted for the increase.

They claim they want people to understand the policy, I think if they had spent a little more time understanding the actual implications themselves, they might be rather less keen on that.

Julia said...

Thank you for this well thought out explanation. I have never had a representative who took such care in communicating and listening to the public as you do. You will never make everyone happy - but you have sufficient integrity to explain your decisions to us. We in South Glos are lucky to have you in Parliament and in government.

Dave said...
This comment has been removed by the author.
Dave Reynolds said...

Steve,

A good set of arguments but would have been better if you had also acknowledged the other side.

In many areas the coalition is averaging around 30-35% cuts. A 30% cut to direct University tuition funding would have necessitated a rather smaller increase in fees. That smaller increase, when balanced with some of the positive aspects of the changes (improved support for part time and for lower income students) might have made a reasonable and defensible package. Universities and students would then have been taking their "share" of the cuts.

However, by reducing direct tuition funding by 79% (which I believe is the right figure) and essentially removing all direct state funding for non-STEM subjects the change in fees became drastic. The scale of debt involved is so large as to make a qualitative, not simply quantitative, difference in attractiveness of university eduction - especially for lower (but even for middle) income families. The impact on universities themselves is also worrying, Universities relying solely on tuition income say they will lose money at £6000/student-year and so have to charge into the higher bracket. This seems like it will inevitably lead to market-based pricing for education where the more prestigious Universities can charge more but will attract the less price-sensitive (i.e. better off) students. The vague "work to remove barriers to young people from diverse backgrounds" seems like a rather weak counter to this.

More significant though is the matter of trust. Your suggestion that the LibDem policy on tuition fees was just one of hundreds of policies, and that you weren't in a position to implement it, is frankly somewhat disingenuous and not worthy of you. It was an extremely high profile policy in the national campaign and LibDem leadership turned it from a policy into something more through the very public signing of the NUS pledge. For me a pledge to vote a certain way is a promise, a different level of commitment from a routine political policy. Sometimes you may have to break a promise but you should then at least acknowledge how serious that step is and show rather more contrition. Instead we have Vince Cable saying "this is not a matter of trust" and now you, who I respected more than this.

Dave Reynolds (wavering-, and possibly ex-, lifelong LibDem supporter)

Dan Proud said...

Steve,

I appreciate the time you have spent to relay what is going with this issue to your constituents and responding to previous emails. however, i find it rude when you do not respond to my emails when i challenge you. as a politician, i assumed debate would be a strong point of yours.

Besides that, i hope to go to uni this September (2011) for three years. will these (ridiculous) increases affect me? and if this is the case, thanks for preventing me to go to university.

phil said...

I get increasingly irritated by people, sadly Steve included, who lecture me on how bad the nation's finances are, and how one must compromise on manifesto commitments to get the best possible.

First, I believe George Osborne stated proudly that he had managed to keep the total levelof cuts to 19%. I think few students and parents would have argued against a corresponding 19% increase in fees. I think perhaps one of the things that has incensed people is that a 300% hike does not feel like 'we're all in it together'. it is grossly unfair when other groups have been protected.

Second, a vauge manifesto commitment is one thing. A personal, specific pledge is another. Steve continues to try and get off the hook by blurring the distinction.

Either of these things would be disappointing, to say the least. What has been fatal for Steve and his fellow Libdems is the 'perfect storm' of these two things together. Steve and his colleagues broke their pledge *and* by so doing allowed a grossly unfair measure to be enacted.

People keep saying that by having to compromise the Libdems are learning the realities of politics. But another political reality is that people will punish you if you break promises. That is how I feel. Despite being a lifelong Libdem supporter I shall be voting for their opposition in future elections, and shall oppose the thing they would like to have *my* vote on, namely electoral reform.

Anonymous said...

I'm a jobbing gardener and I have not earn't £50,000 in 10 year's gardening!
http://www.telegraph.co.uk/news/newsvideo/8218067/Child-benefit-audio-Steve-Webb.html

Anonymous said...

Mr Webb, you should be ashamed of yourself. You attempt to spin and selectively quote your way out of acknowledging your support for the most illiberal assault ever on University education.

We all hoped for so much more from the LibDems.

Have you the ability to reflect on the crassness of your statement "less than double the current cap".
Graduates will now be saddled with between £18,000 and £27,000 in fees debt alone. Plus student loan debt of up to £15,000. How proud you all must be.

Of course these sums present no problems for the ConDem millionaire's club and their tax avoiding constituents. For the children in ordinary working families you have just supported their life long indebtedness.

I voted LibDem for the first time at the last election, buying into the caring sharing façade. Never again.

You and your party's support for the all out assault and further impoverishment of the poor and the disabled; for policies that create regressive redistribution; for ongoing attacks on the public sector; and for the privatisation of everything, guarantees you a long hated Thatcherite legacy.

You are as liberal as Keith Joseph.

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