Ed Miliband has today unveiled Labour’s pledge to cut tuition fees – on the grounds that they are causing rising debts for graduates and the taxpayer.

It is part of Labour’s overarching pledge for young people: tuition fees reduced to £6,000, an apprenticeship for every school leaver who gets the basic grades, and smaller class sizes for five, six and seven-year olds.

Labour says the Government’s £9,000 tuition fee system is bad for graduates because it loads them up with an average of £44,000 each in debt.

It is also disastrous for the public finances, though – adding £281 billion to the national debt over the next 15 years and with £2 billion in unpayable debts being written off every year by the 2040s.

In response, Labour is planning to introduce reforms of Higher Education earlier than intended so that from September 2016, the next Labour government will have:

• Reduced the tuition fee cap from £9,000 to £6,000, and
• Increased student maintenance grants by £400 – benefitting half of all students.

The aim is to:

• Reduce the national debt by more than £10 billion over the next parliament and £40 billion over the next 15 years.
• Ensure our universities remain world-leaders with increases in the teaching grant matching pound-by-pound the reduction in fee income.

The reduction in tuition fees will cost £2.7 billion. It is funded by:

• Reducing tax relief for people on very high incomes paying into pension schemes, so it is set at the same rate as for basic rate taxpayers
• Capping the total eligible for tax relief in a lifetime at £1 million, and
• Limiting the annual sum eligible for tax relief at  £30,000, but with greater protection for those in defined benefit schemes.

The increase in maintenance grant is funded by making the system of graduate repayment of loans fairer, with the highest-earning paying slightly more.

Ed Miliband, announcing the planned measures, said: “These are fair choices, fair choices that allow a better future for our young people, a better future for Britain. Britain must not penalise the young, if we’re going to prosper in the future. Our economy and our country can’t afford to waste the talent of any young person.”

He added: “Let me say to Britain’s young people: I made you a promise on tuition fees. I will keep my promise. I don’t simply want to build your faith in Labour, I want to restore your faith that change can be believed. I owe it to you. We owe it to our country.”

And he appealed directly to parents and grandparents to help turn around the prospects for the next generation: “Today is about our responsibilities to the young – and that is the concern of every generation, every parent, every grandparent, every person in our country who cares about the future of our young people.

“Today is the day we say: We will not make the young pay the price of hard times. I am a father of two young boys, and I appeal to every parent and grandparent in Britain, every concerned citizen: Let’s together turn around the prospects of young people; let’s restore the promise of Britain; let’s make ourselves again a country where the next generation does better than the last.”

Shadow Chancellor Ed Balls added a few big points, too. He said: “This government’s system is not only bad for students; it’s bad for the public finances too.

“Students are graduating with a bigger burden of debt and our Zero-Based Review has exposed how it is leading to higher national debt too… it’s not sustainable and we need to fix it.

“Unlike the Tories we won’t make promises without saying where the money is coming from – and unlike Nick Clegg and the Lib Dems we will not make promises we cannot keep. We will pay for it in a fair way by limiting the tax breaks which go to the richest in society.”

“Our fully funded plan will cut the debt burden on students – and it will reduce the national debt by £40 billion by 2030.

“It’s the right thing to do – for students, graduates and taxpayers as a whole.”

Ed Miliband’s full speech is available here: http://press.labour.org.uk/post/112217705819/a-better-plan-for-a-better-future-fairer-for

Ed Balls’ full remarks are available here: http://press.labour.org.uk/post/112217840524/ed-balls-mp-labours-shadow-chancellor-remarks

That’s Labour’s plan – but what do you think?

Let’s have a poll:

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