University top-up fees

I’m not going to talk much about the Labour government’s narrow, shallow, hollow victory in the House Of Commons this evening over university tuition fees, because it makes me too damn angry.

The bill, which gives the go-ahead for universities to charge students variable fees of up to £3,000 per year doesn’t apply here in Scotland. So why should I be bothered? First of all, Scotland is part of the United Kingdom, and as such benefits from the education of all its citizens. Secondly, the Scottish Executive is going to be watching this bill with great interest. There is going to be pressure on Scotland to introduce a similar system. Maybe not this year or next, but soon enough.

Top-up fees are a huge step down the road towards turning university education into a commodity that is bought, rather than obtained through intellectual effort. And as with all commodities, the rich will have more and they will have better. Talk to me all you want about loans and grants and scholarships allowing gifted poor students to attend expensive universities, but those are exceptions. The rule is that those universities will be populated by students whose parents can afford the fees.

A £3,000 fee might not seem like much, but it’s their very existence that poses a threat to the future of British further education. Once the fees are in place, and universities are benefiting from the money they provide, it will be almost impossible to remove them again. Doing so would be seen as cutting money from education, and that’s political suicide. But when universities come clamoring for more cash, as they inevitably will, the chancellor will have two options: allocate more money from the public pot, or raise the maximum fee universities can charge. What chancellor is going to be able to resist the latter option?

This bill is an arrow straight to the heart of our education system twenty years from now. And it has come about because of two stupid, stupid pieces of public policy. One is the desire to keep income taxes low, and never be seen to raise them. This leads to governments raising funds in back-handed, circuitous ways that don’t affect the bottom line of your pay slip, but suck the money out of your wallet nevertheless. The second is Labour’s target of 50% participation in higher education. This second policy has numerous consequences, one of which is the need for universities to offer a much wider spectrum of courses, which means they need a lot of extra money.

Individually, those two policies are reasonable, but put them together and suddenly you hit a funding crisis. Outgoings exceed income, and what do you do then? You have to raise money by other means. The chancellor could either borrow more money, or cut funds elsewhere, but that’s not acceptable to the Labour leadership. The “third way” is to allow universities to charge students directly for top-up tuition fees. This allows Tony Blair to stand up at the next election and make three claims: 1) he hasn’t increased taxes, 2) he hasn’t increased public borrowing, 3) he hasn’t cut spending.

What he has done is move university funding out of the purview of direct taxation (income tax) and into indirect taxation (taxes on things you “choose” to buy).

In Britain, income tax is a progressive tax, whish is to say that the rich pay proportionately more than the poor. In 2003/04, you pay 22% tax on income up to £30,500, and 40% on income above that amount. Indirect taxes, however, hit everyone equally. You pay the same 17.5% Value Added Tax (VAT) on a new television whether you earn £10,000 a year or £100,000. The difference is that the 17.5% is pocket change to someone on the higher income, whereas it makes a material difference to the lower earner.

Is this what we want? An education system where the rich can choose whatever university they like, but the poor have to scrimp and save, jump through humiliating bureaucratic hoops, and place themselves in debt for the next twenty years of their lives to get a degree? How do we, as a society, benefit from turning education into a fashion accessory for the wealthy?

Well, it looks like I talked about it after all. Grr. I can’t believe it’s a Labour government introducing this measure. One more reason to be voting Scottish Socialist.