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Willetts’ Webcast on the Proposed Fees Hike Leaves Questions Unanswered

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Willetts’ Webcast on the Proposed Fees Hike Leaves Questions Unanswered

On Tuesday 7th December, three members of the Campaign for the Public University took part in a live webcast with the Universities Minister, David Willetts, on The Times’ ‘School Gate’ blog.  To my mind the minister struggled to give satisfactory replies to questions raised by contributors on the speed of the fees vote process, the simple maths of the proposed fees scheme, the potential harm that cuts and fees could inflict on universities, and on the fairness of the proposed scheme.

Speed of the Process

The minister was asked to ‘explain the Government’s rushed decision to vote on Thursday, amidst such great challenges to the proposals,’ to which he replied:

‘Our proposals draw on the Browne review which was commissioned by the previous government more than a year ago. It collected evidence widely and held public meetings. The report was published nearly two months ago since when Vince Cable and I have both made statements to Parliament and we have had a debate too. There has been lots of academic discussion of these ideas for years – not least when Labour introduced variable fees five years ago.’

The minister evidently thinks that an 8 week turnaround on a decision to fundamentally alter the university system is not rushed.  But let’s also remember that the first big protest in London against fees and cuts was only 4 weeks ago on 10th November, and the decision to hold the vote on a fee increase this Thursday was only announced last week on 2nd December.  MPs are being asked to vote on the increase with one coalition party still having internal debates over whether or not to abandon their election pledge to vote against a fee increase.  They are also being asked to vote before the government’s Higher Education  White Paper is published which will set out the full picture of their plans for universities.

Does the Maths Add Up?

A question was asked about the maths of the proposed fee increase: would the government have to write-off most of the fee-loans because the majority of students will be unable to pay them off within 30 years – causing massive financial problems for future governments?

Mr Willetts seemed relaxed about the prospect: ‘We reckon that for every £100 we lend students we will get back roughly £70. I do not mind writing off the £30 or so – that is our social commitment to people who cannot repay because they are taking time to raise a family or have low earnings.’

Relaxed, but this is no answer to the question of how far the sums add up.

Harming Universities

Contributors put forward concerns about the potential harm the proposed changes would inflict on universities.  Would we end up with a two-tier system as in the USA?  David Willetts hopes not.  He would not want an American system and thinks that we are very different because we offer loans to all students financed by the tax payer.  His hope to avoid a two-tier system is to be commended, but why not ensure that it does not happen rather than trust to hope?  The point of differential fees is precisely to open-up differences of perceived quality via a pseudo-market. 

On the other hand, as one commenter pointed out, the US has higher public investment in higher education that the UK.  There was no reply given to this statement of fact.

On the question of public investment being withdrawn entirely from arts, humanities and social science the Minister contradicted government policy, saying ‘We value all the different disciplines. Politicians should not play favourites. It is the choices of students which matters’ when the politicians in his coalition have done precisely that.

Fairness

One of the most telling themes in the discussion concerned the fairness of the proposals.  When asked about what he would say to those who believe that he and his government are trying their utmost to punish future generations for his own generation’s mistakes with the economy, he chose not to address the issue of mistakes, instead saying that ‘I believe that this is a fair deal for the younger generation.’  He went on to explain that this is fair because they don’t have to pay up front or start repayments until they earn £21 000 a year.

When it was pointed out that students would be paying more overall, he agreed, but tried to explain that as people face the heaviest financial pressures when they are just starting-off this it would be fair to spread the cost out over a longer period.  He chose not to address the question which asked: ‘Isn’t the general argument about cutting the deficit to do with protecting future generations and now you are offloading funding out of current taxation onto the next generations?’

Finally, the minister pointed out that fee-loan repayments will not be charged at a commercial rate but at a rate which rises from 0% up to 3% on top of inflation if your income is over about £41,000.  So if you have a loan you pay back more than you borrowed.  And what if a student can afford to pay their fees upfront will they still pay an interest charge? If not then surely students from middle-income families would then be paying more for the same degree than those from a wealthy family?

Willetts’ reply to this was telling.  He ignored the issue of fairness, saying simply that ‘you can always pay fees straight out up front if you wish – that is a feature of the current system and we are not going to change it.’

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