The Stupid Party

The Liberal Democrats held their Spring Conference at the weekend, where they reiterated their opposition to what are inaccurately known as university top-up fees. Unsurprisingly, student members of the party held a rally to demand that other people pay for their studies. I was particularly taken with this remark, uttered by one “Thomas Paul, 19, in his second year studying philosophy at Bristol University”, according to the BBC’s report:

I'm going to leave [university] with £12,000 debt which is more than the total earnings for some families.

Indeed it is. And it doesn’t appear to have crossed the beatific slumber that passes for this young man’s mind that it’s Liberal Democrat policy that the entire bill for higher education should fall on the taxpayer, a category that includes families who earn less than £12,000 a year (personal allowance for the current financial year is £4615). As the director of the independent Higher Education Policy Institute put it earlier this year:

Almost everyone except backbench Labour MPs, Liberal Democrats and the Tories has accepted that the taxpayer cannot pick up the entire bill for higher education. There is no country in the world that manages it.

Unlike other public services, a university education is not available to everyone - so, morally and pragmatically, students should pay for the benefit.

Understandably Thomas, 19, would prefer a system of, so to speak, robbing Peter to pay Paul. He is fortunate that, through the agency of a political party, he is able to present his sectional interests as a considered matter of public policy, but there’s no reason that the rest of us should flatter him.

Comments

[Lumico]

An educated populace benefits everyone in a society. Thus, everyone should pay—taxpayers (no matter how small their incomes) and students. The payments should be proportional, based on income levels and realistic future earnings.

Additionally, students should be "encouraged" to study fields in which they would be employable—fields in which the society happens to be producing jobs. All too many students take "basket-weaving" courses such as "womyn's studies" or "art history" and are forever after unemployable and thus, a burden to the state. Students should also be "encouraged" to graduate and become contributing members of society rather than remaining at university (as some do) as "forever" students.

Anything that is "free" is not appreciated. Students who get a free ride often tend to not work toward making their own way in the world.

Lumico

[Lee s]

I'm intrigued to know what form this "encouragement" should take: do they get tax credits, pay back less to the state or what? I'm also surprised that an initially quasi-idealistic point should degenerate into the usual tosh about merely vocational learning. Personally I'd like to live in a scoiety in which people felt passionate enough about art, literature & music to study it and transmit that knowledge to others. But there is always Gradgrind-land, I suppose.

[Squander Two]

Yes, an educated populace benefits everyone in a society. But it is narrow-minded to assume that "educated" can only mean "university educated". Our society gains much benefit from having people who have been educated in how to repair central heating systems, how to build beautiful wooden cabinets, how to make pianos, and how to build houses, and most of those people don't learn their skills at the tax-payers' expense. Unless you can explain why degrees are of some sort of speacial benefit to society in a way that other types of education aren't, I fail to see why taxes should pay for one but not the others.

Also, Lumico, I would rather the government steer well clear of deciding which knowledge makes one employable and which doesn't. That leads to a situation in which people learn the skills that would have got them jobs a few years back. I remember when kids with an aptitude for science were discouraged from studying biology, the lesser science, so that they could concentrate on physics and chemistry, which are important. Just a few years later, the biggest field is genetics.

Incidentally, I have a degree in Mathematics and am unemployable. What makes graduates unemployable isn't the subjects they study; it's successive governments' policy of putting too many people through university, creating too may degrees, and thereby devaluing graduates. That's what you're asking the taxpayer to pay for, and it doesn't make society better off, unless your idea of a thriving society is one in which the minimum-wage phone-monkey you get through to when you call a call centre has a Masters in German.

[Chris Lightfoot]

I am intrigued by, "Unlike other public services, a university education is not available to everyone - so, morally and pragmatically, students should pay for the benefit."

Obviously this applies to schooling too, say, so in order for it to make sense as spoken we must assume that it means "available at some time in everyone's life". Does that mean that as the Labour government extends higher education provision to a larger fraction of the population, the case for funding from general taxation becomes stronger? That's exactly the opposite logic to that used in the tuition fees debate.

[Chris Lightfoot]

(I notice also that Oliver didn't quote the first part of Mr. Paul's statement, in which he argued that "no-one would be able to trust a political system where a Labour manifesto said it would not introduce top-up fees, but then changes its mind." That's tangential to this debate, but also interesting.)

[Lee S]

I took "available" to denote academic quality. After all, the Government's own rash pledge to get 50% of the school-leaving population into Higher Education tacitly accepts that it is not avaliable as an academic option for the other 50%.

In that sense, it is very different from schooling, in which every child is offered a place (and the State goes some way to make sure that this "offer" is accepted).

[Chris Lightfoot]

Oh, I'd assumed that it was an argument from resource constraints. After all, "we think that half of you are too stupid to ..." may not be a vote-winning statement for a political party to make.

[Lee S]

True, although for those working in the Universities it would come as a welcome clarification.

[Wacky Hermit]

Regarding economic incentives for certain majors: in the U.S., some federal college loans can be forgiven (in part) for people who teach full time in public schools.

Regarding the education of the populace: while I agree that widespread education is a public good and should therefore be paid for by all taxpayers, I disagree with the here in thehypothesis that college education for all or most is the best way to get widespread education. My grandfather is a high school graduate who has spent his entire life educating himself. He taught himself mathematics, history, and foreign languages by reading books. I am continuing the family tradition by teaching myself many things even though I already have a Master's degree in mathematics. (And yes, I am eminently employable and well-paid)

[john b]

Sq2:
1) To become a geneticist, you need to understand physics and (especially) chemistry. Biology is borderline-relevant at best.

2) As someone who screens CVs and takes recruitment decisions, I draw a distinction between someone with a degree from Manchester, Leeds or Nottingham, and someone with a degree from the University of Ardwick or the University of Sherwood Forest: the former are somewhat more likely to be employable. In other words, I'd be surprised to learn that the widening of HE had had a major impact on prospects of graduates from real universities.

[Martyn Hencher]

Key points which don't seem to have come up yet:

The Lib Dems propose to fund higher education by a new tax on earnings over £100 000, not by raising taxes for poorer people. An overwhelming majority of those earning over £100 000 are graduates anyway, but this system doesn't penalise those graduates who go onto lower wages in the public services.

(Plus, the surplus money from this new tax would fund free personal care for the elderly and lower council tax bills for all)

Also, in Tom's defence, he is hardly pandering to his own self interest, as he will have left university long before top-up proposals come in. That's an unfair judgement on his motivations.

[Thomas Paul]

A response!
http://thomasjpaul.blogspot.com/

[Anthony]

It appears that the Liberal Democrats are to be be blighted with poor politicians for generations to come. Something that I suppose we ought to be thankful for.

[Oliver Kamm]

"The Lib Dems propose to fund higher education by a new tax on earnings over £100 000, not by raising taxes for poorer people.... Plus, the surplus money from this new tax would fund free personal care for the elderly and lower council tax bills for all."

Superb. The Liberal Democrats claim that their policy of increasing income tax to 50% over £100,000 would generate revenues of £4.7 billion. Total spending on higher education in 2002-3 amounted to around £7.5 billion. That assumed tax revenue does seem to be almost infinitely expandable....

In fact Mr Hencher has his own party's policy wrong. The policy is to abolish tuition fees and top-up fees with the assumed tax revenue. The error of the policy lies in the fact that increasing marginal tax rates on a very small group of financially highly astute people will not yield £4.7 billion or anything like it (there are also political arguments against it, as I've stated before). A Liberal Democrat-influenced government would have to make up the money from somewhere else, thereby underlining the point that the Liberal Democrats are the party of middle-class sectional privilege at the expense of the public good.

[Chris Lightfoot]

Errm. The proposed "top-up" fees would raise £1.4 billion per year. That's rather less than the claimed revenues of £4.7 billion; on that basis, the figures are not incompatible.

Where does the £4.7 billion come from? If it's simply computed pro-rata from existing tax revenues, then Oliver is correct and it's certainly an overestimate. But one assumes that there are proper models for computing expected tax yields, and if the expected revenue was predicted from such a model, there doesn't seem to be any particular problem with it.

And as for "the Liberal Democrats are the party of middle-class sectional privilege at the expense of the public good", aren't we all middle class now? Or is it that we're all working class now? It's so confusing....

[Oliver Kamm]

The figures are indeed compatible, which is why I carefully referred in the original post to the entire bill for higher education rather than just the top-up fees and tuition fees. My point in the comment was to correct the misapprehension of the Liberal Democrat Mr Hencher, who apparently believes his party has found a way of financing all of higher education without any contribution from taxpayers earning less than £100,000. The outcome of Liberal Democrat policy will be to shift the burden of financing higher education even further from the student towards the taxpayer, thereby defending the sectional interests of the Lib Dems' own supporters. (There may no longer be easily-identifiable discrete social classes, but unfortunately this sociological observation does nothing to obstruct the Liberal Democrats in their determination to skew the tax system towards those who already benefit the most from the welfare state.)

On prediction of tax revenues, models do indeed take account of numerous issues (estimating fiscal drag was a big subject when I was doing this in the 80s). But models lag market developments almost by definition, and the point of this policy is that it targets a small constituency that is highly aware both of its own financial position and of means of minimising its tax liability. It's on those grounds that I predict - as the Prime Minister, who presumably knows the limits of the Treasury's model from practical experience, asserted the other day - the revenues from the Lib Dems' policy would be nowhere near the predicted sum.

[Martyn Hencher]

Please. I said, "The Lib Dems propose to fund higher education by a new tax on earnings over £100 000", I didn't mean "The Lib Dems propose to fund higher education SOLELY by a new tax on earnings over £100 000". The funding from this tax would replace top-up fees, not the whole higher education bill.

NO-ONE is proposing that the entire bill of funding Higher Education will fall on the student. Existing tax-payer subsidies (if you will) will remain in place.

The argument is whether some of that money should be made up by top-up fees on students (Labour policy) or by a marginal tax on the highest incomes, most of whom are graduates anyway (Lib Dem). Or by some better but as yet non-existant policy (Tories)

[Chris Lightfoot]

As I recall, the current Conservative policy -- likely to be abandoned -- is to maintain existing net levels of subsidy, but decrease the student intake in order to make more money available per student.

[Phil Rodgers]

Oliver Kamm: "The Liberal Democrats claim that their policy of increasing income tax to 50% over £100,000 would generate revenues of £4.7 billion."

In fact, a moment's Googling reveals that the £4.7 billion figure comes from the Treasury, in a written answer on 14 July 2003.

[Phil Rodgers]

Apologies, that last link didn't say what I'd claimed at all. But here's my very own MP Anne Campbell obtaining a figure of 4.2 billion for 2002-03, so it's not too much of a stretch to 4.7 billion for the coming financial year. Though the Treasury does give the disclaimer that "[t]his estimate excludes any behavioural response to the tax change."

[Chris Lightfoot]

But note in that second answer, "This estimate excludes any behavioural response to the tax change" -- i.e., it's an upper bound on the amount that could be raised.

[Squander Two]

John B,

If you don't like the physics/biology example, think of IT. A few years ago, every child was to be trained in IT because then they'd be able to dictate their own salary. Now, there are a handful of well paid IT engineers and hordes of badly paid ones. After WW2, the British government decided that computers were going to be so hugely successful that, by the end of the 20th Century, we'd need four of them in the UK. Four. You want these people to decide which subjects are important?

Secondly, do you count St Andrews as a "real" university?