I’m on holiday in the UK at the moment, which means I end up catching the politics here: Lord Mandelson’s new book dishing the dirt on his Labour colleagues a good few weeks after they lost power; crowdsourcing the deficit (by far the most popular option: cutting foreign aid); and the interesting dynamics of the UK’s first coalition in a couple of generations.
The coalition has a fairly large second party, and quite significant philosophical and policy differences, but is being brought together by a common foe: debt. Britain has an even bigger private debt per capita than New Zealand; unlike New Zealand, however, the government debt is also massive. Partly this was because they bought the banks, rather than letting them fail; partly this was because instead of saving for a rainy day Gordon ‘Prudence’ Brown started spending his way to the prime-ministership, when he became desperate to make the move from the Chancellory (Finance Ministry). So now the cupboard is bare, and all must put their promises to one side.
If this sounds much like 1984 in New Zealand, hopefully at least the Liberal Democrats might halt the Conservatives fully going down a Rogernomics line. Still, cuts of 25-40% in all departments but health and foreign aid are distinct possibilities – today is D-Day for departments to say how they could achieve their required cuts. Whether the austere Conservatives, and the 100s of thousands of public sector job losses they with their LibDem allies propose, will drive Britain back into recession is an open question.
But this backgrounder leads me to the point of my post! Vince Cable, the former LibDem Deputy leader who predicted the Great Recession and the need to break up and regulate the banks etc, has been given the Business, Innovation and Skills ministry in the new government. Part of his remit is tertiary education, so he has just come up with his proposal for how to fund universities in these times of austerity.
What he proposes is a variable Graduate Tax. A ring-fenced amount that all who benefit from university education pay back over their lives as they receive the financial side of that benefit. At the moment it’s a very rough proposal – what rate it would need to be set at to cover the costs is unknown; but grabbing numbers from thin air could imagine a 1-2% addition to graduates’ middle income tax rate, and 3-4% to a top rate, or something along those lines. This would create a large pool of money that could be allocated to universities, probably best done in a manner that Rob proposes.
This being a Tory dominated government it’ll be interesting to see if radical ideas are allowed to come through. Cable’s previous ideas like his Mansion Tax (a land tax on properties valued over £2million) have been scrapped, as has the LibDem’s pre-electon promise of scrapping tuition fees. The more likely option may well be a more than doubling of tuition fees to £7000/year, introducing 2 year degrees, and continuing the student number capping that will see about 1/3 of applicants (or 225,000 students) turned away this year.
However I’d like to see a Graduate Tax, if not in Britain, then certainly in New Zealand. We shouldn’t burden the working poor with the costs of the middle and upper-classes. But we shouldn’t put university fee barriers in their way if they wish to improve themselves. A ring-fenced tax that funded the universities to improve the pay, quality and size of their staff without tuition fees; which could be combined with improved rights to a full student allowance, to truly remove barriers to increasing the education and skills of our workforce for a more innovative, high-tech society.