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Saturday, February 28, 2015

Labour row over Miliband tuition fee pledge

Labour's new tuition fee policy has certainly caused a few ripples in the electoral pond but not necessarily in the right places. As has been pointed out elsewhere the plan is to cut tax relief for pensioners so as to knock £3,000 off the cost of studying. However, the effect of this ruse is to help the well-off rather than those who need it most.

Labour's new policy means that only graduates with a starting salary of at least £35,000 will pay less. Much as I dislike the system it is currently working in that there are now a record number of applicants from disadvantaged backgrounds. If Miliband wanted to make a difference he would have done well to have used the money instead to bolster maintenance grants by a lot more than they propose instead.

According to the Independent the policy has caused unease within the Labour Party as well. They say that some senior Labour figures are believed to be concerned at the direction the policy is going in. These include Ed Balls, the shadow Chancellor; Chuka Umunna, the shadow Business Secretary and Tristram Hunt, the shadow Education Secretary:

Paul Johnson, director of the Institute for Fiscal Studies, said Labour’s sums added up but the shake-up would not help the poorest half of graduates.  He said they would not earn enough to be paying back any less under the Labour policy than under the current policy. “The group who will benefit from this are the higher earning half of graduates. So those graduates who go on to the best jobs will find that their repayments go down where as those graduates who go on to less good jobs will not find any difference in the repayments that they actually have to make.” 

All in all the whole policy looks like a mess.
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