Criticism of Labour’s proposed fee reduction

The Labour party have promised to cut university tuition fees in England from £9,000 to £6,000 per annum starting in autumn 2016, should they be elected in the forthcoming general election.

They have also pledged to keep this policy in the event of a coalition.

Ed Miliband has said that this would be accounted for economically by reducing tax relief on pensions for those earning over £150,000 per year, and also promised to increase maintenance grants by £400 per year.

However, maintenance grants would only be available to families of a total income below £42,000, raising concerns regarding the sufficiency of loans for students from “squeezed middle” families.

The plans were announced by Ed Miliband at a speech in Leeds.

His speech highlighted that the average student leaves university with £44,000 worth of debt.

He also mentioned Nick Clegg’s failure to carry out his policies regarding tuition fees, blaming this for leaving “a whole generation doubting politics”.

The leader of the Labour party also claimed that this policy would save the taxpayer £40 billion by 2030, noting that the current system means that too much student debt ends up being written off.

The Institute for Fiscal Studies said that this policy would “leave university finances largely unaffected in the short run” and “reduce government debt in both the short and long run.”

However, criticism of this policy has emerged from Business Secretary Vince Cable, who called the proposals a “tax on pensioners”, as well as from Chancellor George Osborne, who said: “Ed Miliband’s sums don’t add up.”

The University and College Union (UCU) said that it “welcomed any reduction in the cost of accessing higher education. However, what students and staff really need is a long-term funding solution for universities which allows all who would benefit to go.”

The UCU also added that they were “disappointed that Labour has not introduced a ‘business education tax’”. This is essentially an increase in corporation tax, which could be used to finance the abolition of tuition fees.

The policy would also mean that interest rates on repayment of loans would be increased from three percent to four percent for graduates earning over £42,000.

There are concerns that this only benefits high earners, who overall would see their repayments going down if fees were reduced, but lower earners would experience little difference.

Sam Freeman, first year MORSE student, said: “[The promise to cap tuition fees at £6000 per annum is] a poorly veiled attempt to capture the votes of young people, especially bearing in mind the rise [in fees] in recent memory under the current coalition government.”