The great thing about Miliband is that even when he announces a policy that’s a blatant bribe to young voters, he still can’t get it right. Even people inside his own party disagree with his ‘red line’ pledge to reduce tuition fees from £9,000 to £6,000…
The plan is to raid the tax relief on rich peoples’ pension funds – rich being defined as anyone hitting the higher rate tax band – to fund the reduction. Unfortunately, because of the way the fees are repaid through the student load scheme this simply means that higher earning graduates will pay off the loans quicker and save money. Lower earning graduates under the current system end up with part of their loans being written off after a predetermined period, so they’ll end up paying the same.
Sound like a policy that might have been dreamed up by the Tories rather than Labour when you look at it that way.
The Universities don’t like the idea because they think they’ll get less money. Paul Johnson of the Institute for Fiscal Studies said “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, whereas those graduates who go on to less good jobs will not find any difference in the repayments.”
The Tories say it’s uncosted and infeasible. Chancellor George Osborne said: “Ed Miliband’s sums don’t add up because the universities would get less money and there would be fewer students so it’s bad for students, bad for universities, bad for the taxpayer and bad for the British economy.”
And the Lib Dems – who promised no increase in tuition fees and then went back on their promise – have now done a complete U-turn and come out against the reduction. Business Secretary Vince Cable attacked the proposals as “fraudulent” and a “tax on pensioners”.
And within Labour itself Ed Balls, the shadow Chancellor; Chuka Umunna, the shadow Business Secretary and Tristram Hunt, the shadow Education Secretary have all expressed concerns about the plan.
Poor old Ed. I almost feel sorry for him.