Fighting the Browne review means making the case for investment in our Universities

The UCU are entirely correct to say that the recommendations of the Browne review of higher education amount to a privatisation of the British HE sector. Were these recommendations implemented, it would radically change the face of tertiary education in this country –three year degrees could cost as much as £68,000, the market in fees could mean a return to a two-tier HE system, parents may have to take the monstrous decision of choosing which of their children to send to University. The coalition government, whilst seeming to have hysterical concern for the public deficit, appears to have a callous disregard for private, household debt. Far from being distinct, the two issues are intimately interlinked.

The dividing line in this debate is simple and best described with a question – do you believe that students should pay more for their degree? I have argued elsewhere that, in the current context, proposals to charge students more for their education are highly iniquitous. In Britain, students already contribute far more to their education than in the rest of Europe. This comparatively high levy on students has taken its toll on participation rates – in the last ten years, our rates of participation have slipped from third in the list of OECD nations, to fifteenth.

From a moralistic perspective, this is itself alarming. But we need more than a sense of moral outrage to win the fight against the Browne review. From an economic perspective, the statistic is also a cause for concern. To survive as a highly skilled economy, Britain needs highly skilled workers.

Cuts to the teaching budgets of universities of up to 80% will exacerbate this comparative decline in university graduates. As a result of this cut, the Institute for Fiscal Studies estimate that tuition fees will have to rise to £7000 simply to maintain the same levels of investment in teaching as before. Cuts in the provision of public money to Universities necessarily translate into tuition fee hikes.

The million dollar question is whether these cuts are necessary. The Free Education Campaign has recently posted an article on the foremost Left-of-centre blog in Britain, Left Foot Forward, on how investment in higher education yields economic returns. Drawing on evidence from the OECD and the Treasury’s own figures, they show that for every £1 invested in the HE system, the economy expands by £2.60, around £1.30 of which comes back in tax revenues. Of course, Higher Education is also vital for high level research. As the economist, Mick Burke, points out, investment in scientific research also reaps massive rewards for the public finances. In short, investment in HE actually makes the government money. It’s therefore part and parcel of closing the deficit in the public finances.

Vince Cable’s stated reason for embracing the Browne review – the state of the public finances necessitates a greater student contribution – is revealed as nothing but Thatcherite rhetoric. As my friend and colleague in the Free Education Campaign, Fiona Edwards, writes:

Missing from his argument has been the central role higher education could play both in reviving the economy now and in promoting long term prosperity and growth in the future.

We need to make sure this point isn’t also missing from our arguments against Browne’s proposals. Uniting and mobilising the broadest possible alliance to reject the review is hugely important. But to make the strong political alliances we need, we also have to make the robust economic case for greater investment in our Higher Education system.

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The Graduate Tax: An Ideological Dead-End for Students

Discussion with several people around Sheffield Union indicates that some, wrongly in my opinion, see the graduate tax as a step forward for students. There are three points that are made to support this position. The first is that the tax is progressive – graduates would pay a sum matched to their earnings, as opposed to a blanket rate of interest that kicks in at a certain income threshold. The second is that there is a psychological difference between “debt”, on the one hand, and a “tax” on the other. “Debt” will deter prospective students, “tax” will not. The third is that the graduate tax, although not perfect, is the only politically viable option – to argue for a reduction in the contribution of graduates is wishful thinking. I examine each argument in turn.

Any discussion about the proposed tax has to be put within the more general context of the existing funding system. As it happens, the balance between the contribution of students, the state and the corporate sector is, in comparison to other European countries and America, weighted favourably toward the British corporate sector. British business, according to Sally Hunt, the UCU general secretary, has a good deal, paying on average 24% less towards the cost of the HE system than its continental comparators. Within this context, calls for graduates to pay more for their education cannot be seen as a step forward – a larger graduate contribution simply exacerbates the existing imbalances.

This is exactly what those proposing a graduate tax advocate. The NUS estimates that the majority of students will pay more under their plans for a graduate tax than they do under the current tuition fee system. Although the tax would link this payment to earnings, the vast majority of those leaving university would be worse off. In this respect, arguing for a graduate tax is akin to arguing for higher tuition fees for the majority of graduates – hardly a step forward.

Regardless of the psychological effects of re-branding an increase in tuition fees as a “tax”, increasing the graduate contribution is objectively an attack on the living standards of those on medium and, indeed, low incomes – an attack made all the worse by the imbalanced context in which it takes place.

Not all graduates leaving higher education go into medium income jobs. Graduates on lower incomes may face higher tax rates than colleagues earning similar amounts of money who have not been to university – this amounts to a selective tax hike on low earners. This iniquity is the natural result of any tax based on use, a concept which itself flies in the face of any progressive ethos of taxation.

It’s in this sense that the graduate tax proposal indicates a worrying attempt to ideologically entrench a consumerist view of taxation, as opposed to the historical use for which taxes have been used – redistribution. This consumerist ideology is contrary to the principle that any robust defence of a publicly funded HE system must adhere – that investment in our universities is good for the economy and therefore society, not just the individual. In this respect, the graduate tax is an ideological and rhetorical dead-end for the student movement.

Naturally, this ideological dead-end has political consequences. In winning their demand for a graduate tax, NUS would make it harder to argue for a greater contribution from the state or big business. To do so, after espousing the virtues of a system which charges graduates more, would be massively inconsistent.

It cannot be stressed enough that the participants in the HE funding debate also shape it. The demand for a graduate tax frames the debate in the wrong way – the fundamental issue for the student movement is not about what form a graduate contribution should take, but about how much that contribution should be. Arguing for a graduate tax causes the debate to revolve around the wrong choice – a choice between two ways of increasing the graduate burden. It moves the debate to the political right.

While some see Vince Cable’s endorsement of a graduate tax as a victory, it can be more accurately described, I think, as an indication that Cable sees the tax for what it is – a way of increasing the burden on students that engenders minimal political opposition. After all, the NUS leadership cannot oppose it because they endorse this form of increased graduate contribution. In this respect, they’ve made it easier, not harder, to increase the burden on graduates. This is a tug-of-war contest – the student movement cannot win by “triangulating” and giving ground. If it does, the rope will only continue to be pulled in the wrong direction.