Comment: The coalition must go further on tuition fees

Mark Littlewood is the director general of the Institute of Economic Affairs
Mark Littlewood is the director general of the Institute of Economic Affairs

The raising of the cap on tuition to £9,000 is a step in the right direction, but the coalition has shown once again it lacks the courage to do what is necessary.

By Mark Littlewood

The decision by the coalition government to raise the cap on tuition fees to £9,000 per annum is a step in the right direction, but to be truly competitive in the global economy British higher education needs leaps, not mere steps.

The colossal increase in those attending university has made the old system of funding increasingly unsustainable. But it is also morally right for students to bear the cost of their own degree courses. The £9,000 cap is still too limiting for top universities providing the highest quality courses and it is likely that it won't be too many years before the limit is raised further still. The sooner the better.

In the meantime, one can expect institutions to try and find inventive ways of effectively charging students a higher fee without this formally constituting part of the tuition fee.

The Liberal Democrat portion of the Coalition has, of course, learnt a painful but important political lesson. Having made an apparently copper-bottomed campaign pledge to appeal to the student vote, many LibDem MPs have found out the hard way that headline-grabbing promises in the heat of an election campaign can come back to bite you hard if they are impossible to credibly support in office.

In political terms, the volte face on tuition fees marks a further - and welcome - erosion in the credibility of the Liberal Democrats' own byzantine policy-making process. Lib Dem policy - passed by a relatively small number of party delegates in a conference hall - didn't matter very much when the party seemed destined to be permanently in opposition. But it seems not to matter very much either when the party is actually in a position of power.

Lib Dem policy making has effectively been transferred to the party's Westminster leadership and Nick Clegg and his colleagues deserve some credit for embracing reality rather than sticking to an unaffordable and indefensible party policy.

But, in truth, the coalition would do better to remove the cap on tuition fees altogether. A £9,000 limit makes it difficult to offer courses which compete with the very best in the world - particularly those offered by the top American universities.

Much has been made of the issue of student debt, of course. But £27,000 for a three year Oxbridge degree is a very modest sum indeed to pay back over one's career - both in terms of the experience enjoyed and in terms of the enhanced earning potential that such a degree bestows.

Of course, the hike in fees may lead some to conclude that a university course is not for them. They may judge that the benefits are outweighed by the costs. This may be a perfectly reasonable and rational decision and the mere fact that someone would have chosen to take up the course if they were even more heavily subsidised by the taxpayer is not reason enough to portray the decision to enter the workforce rather than higher education as unfree or unfair.

It may well have been wrong to heavily subsidise university students when only around 2% of adults went on to university, but as this percentage accelerates towards 50% it is also just impossible to do so. Despite all the wailing and gnashing of teeth, Britain's universities will continue to attract vast numbers of applicants despite the rise in the cap.

But, as with so much of the coalition's policy agenda, they have edged towards the right policy solution without having the courage to go all the way.

Mark Littlewood is the director general of the Institute of Economic Affairs.

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