This is a full account of how I arrived at my decision to abstain in the vote to increase tuition fees. It was clear from the moment that the Coalition Government was formed that the vote on tuition fees would be the most difficult vote for the Liberal Democrats in the whole five year term of government.
The Lib Dems had gone into the election with a policy distinct from the Conservatives and Labour. Both the other parties were committed to the maintenance of tuition fees. Furthermore, both of them planned to increase fees. Prior to the election the Universities Secretary Peter Mandelson had set up a review of higher education by former BP chief executive Lord John Browne. Its remit had been agreed with the Conservatives and was expected to pave the way for a rise in fees. The report was staged for publication after the general election. As the Lib Dems’ shadow Universities Secretary at the time I criticised this decision as it robbed the electorate of the opportunity to have a full appreciation of all the parties’ policies.
The NUS pledge has been much discussed. The pledge was in two parts – to oppose a rise in fees and work for a fairer system. No leading Labour or Conservative MP signed the pledge. This should have been a clear signal that both of them were intent on a fees rise and saw no need to reform the system.
The pledge was launched in November 2009. The Lib Dem manifesto was finalised in the spring of 2010. It significantly downgraded our opposition to fees, which were now to be phased out over two Parliaments. We were absolutely clear however that we wanted to see a move to a fairer system. In the manifesto we spelt out plans to put part time students on the same basis as full time undergraduates, which is not currently the case. We would introduce a national bursary scheme. There would be greater transparency for students on what they could expect from universities and a tighter quality assurance regime for lecturers. However, the manifesto was silent on the long term replacement for the existing flat rate fees and repayment regime. Internally we had looked quite hard at a pure graduate tax. But a hybrid was more attractive as it could run alongside the existing maintenance loan repayments and could not be avoided either by EU students or English graduates living overseas, one of the problems with a pure graduate tax regime.
The Coalition Agreement foresaw the difficulties and provided for an abstention vote by Lib Dem MPs. Early in the life of the new government several of my colleagues broke this agreement and stated they would vote against a fee rise whatever the detail of the proposals announced in response to the Browne Review. I decided that I would work with the new Secretary of State for Business, Vince Cable and the Universities Minister, David Willetts, to try and inject as much Lib Dem policy and principles as possible into the final package.
Browne had proposed a complete lifting of the cap on fees for new students from September 2012. There would be a rise in the graduate repayment threshold to earnings over £21,000 and most part time students were to be put on the same repayment regime as full timers, so they no longer had to pay up front. Although this was a step in the right direction, I was convinced we could make major improvements to this package.
Firstly, any fees rise had to be capped and come with conditions. The government has now proposed an unrestricted cap of £6,000. A higher cap will apply at £9,000 but to move to this level universities will have to meet tough conditions on fair access to students from all backgrounds. This has always been my main concern – making it easy for the brightest students to access the best university courses, regardless of their background.
Nick Clegg announced the setting up of a National Scholarship Scheme, with an initial £150 million of government money. This will pay the fees some of the poorest students, at least for their first year. It will build on the party’s flagship election education policy of the pupil premium, with those who had been on free school meals being the main beneficiaries. Universities wishing to charge more than £6,000 will be expected to participate in the National Scholarship SchemeI will be working with Vince Cable and David Willetts to develop the details of the scheme over the next few months. As someone who was on free school meals myself I know how important it is to give a clear pathway from poverty to university.
The repayment regime for graduates has also been made more progressive. Currently, graduates make a payment equivalent to 9% of their earnings in excess of £15,000. This threshold will be raised to £21,000 for graduates from the new scheme. Crucially, the repayments will be made more progressive by charging a sliding scale of real interest payments. Graduates earning more than £41,000 will be charged 3% real interest. This surcharge subsidises the lower repayments for those with smaller salaries. This is a graduate tax in all but name. It is also collectable from international students and British students who move abroad. And it’s fairer than the NUS’s own “fairer system” from their pledge!
The day before the vote Vince Cable announced further modifications. These will largely benefit current students and graduates who are or will be repaying loans under the existing regime. The £15,000 repayment threshold has not been changed at all for over 5 years. From 2012 it will be uprated annually in line with inflation. The new £21,000 threshold for graduates from the new scheme (who will begin repayments in April 2016 at the earliest) will also be subject to annual uprating. More part time students will also be eligible for support.
I took the view that the Liberal Democrats had secured the best possible deal given the political and economic circumstances. But I remain troubled by the scale of the fees rise and the fact that arts and social sciences are to be mainly dependent on graduate contributions. As I had been involved in the discussions with ministers on improving the package I did not believe that I could reasonably vote against the government. Abstention was thus the best option available to me and it was in line with the coalition agreement from May. I was however the only government MP in the West Country not to vote with the government.
An inevitable contrast will be drawn with the previous vote on raising tuition fees in 2004. That year Labour broke its tuition fees pledge from the 2001 general election. This was despite the fact that they won the election with a substantial majority of seats and faced no difficult economic circumstances. The situation in 2010 is totally different, with a coalition government and the most dire state of public finances in decades. The 2004 rise came with little mitigation for poorer students (a derisory £300 maintenance bursary) while the 2010 package comes with a substantial raft of progressive measures to protect the poorest students and to levy the graduate contribution more heavily on the high earning graduates.
If the Lib Dems had won 270 more seats in the election then we would be able to implement more of our manifesto. In the circumstances which I and my party find ourselves we have done the best that we could for both students and graduates.
NOTE – anyone reading this blog would benefit from reading my October posting too, to get the long term background.