The key thing to remember when judging changes to the existing tuition fees policy is that many people will get their fees written off rather than paying them off in full. In fact, it’s the possibility that it may be so many that the system ends up not saving very much money which has been a consistent thread of recent coverage.
So reducing the headline fees figure for all those people simply means that they end up paying the same – but the sum that gets written off at the end is smaller, rather than larger. The only people who benefit are those who would have paid off all or most of the fees – which isn’t the poorest but the better off. For today’s Labour figures it looks like it will only benefit those earning £35,000 per year or more – well above the average.
But there’s a second mistake too. The funds to pay for this are coming from a relative “easy” option – reducing the pension tax breaks on the very richest by around £2 billion. In the current times of financial astringency, taking that option to raise £2 billion makes a lot of sense.
But given all the competing demands, taking the £2 billion and spending to help people well above average incomes is wrong. It should go to help people on well below average incomes. Take your choice whether you’d prefer that in the form of tax or spend but either way, Labour is planning to squandering a significant source of extra revenue, not on helping those most in need but on those well above average earnings.