Pat McFadden has become the latest senior Labour figure to question the party’s own proposals for a graduate tax, urging his colleagues instead to back the coalition’s plan for further education funding laid out by Lord Browne this week – writes Elizabeth Rigby.
In a shot across the bows of Ed Miliband, his new leader, the Blairite former business minister of state said yesterday that Labour should stop opposing the plans and concentrate on making the Browne proposals more palatable to less affluent pockets of society. Lord Browne’s report on higher education, which is likely to be backed by the coalition, has advocated charging more for courses funded through student loans rather than a pure graduate tax.
Mr Miliband said last month that a graduate tax – at up to two per cent of income – was a “fairer” system of funding. “The alternative is two things. Higher and higher tuition fees, which lead to higher and higher debts for people – and I’m afraid that does put people off going to university and is a burden on middle-class families,” he said.
Mr Miliband’s support for a graduate tax was also criticised last month by Alan Johnson, the new shadow chancellor, although his comments were made before his promotion to the job.
Mr McFadden told FT Westminster that Labour should drop its commitment to graduate tax and accept the Browne report as the basis for reform. “The truth is there are many tax elements to the Browne plan. You only pay when you are earning above £21,000, any you pay more if you earn more,” said Mr McFadden. “Browne is essentially right, but Labour doesn’t have to accept it exactly as it stands.”
The Browne report published on Tuesday advocates English universities being free to set their own tuition fees in what would be the most radical shake-up in higher education since the second world war. It also recommends richer graduates should pay more for state loans to finance their degrees. But the report is proving politically difficult for the Coalition.
Many Liberal Democrat MPs signed a pledge before the election to vote against rises in tuition fees and are struggling to swallow the about-turn; Menzies Campbell and Charles Kennedy, both former party leaders, said they would vote against a rise in fees this week.
Labour’s frontbench have remained relatively silent on the issue of higher education funding following the publication of the Browne report on Tuesday. But Mr Miliband consistently argued throughout the leadership hustings over the summer that such reforms would “put too many people off university”. Mr McFadden suggested that the changes Labour could push for is a cap on fees while also pushing for higher earners to pay higher interest on loans or have their repayment periods extended to make the system more redistributive.
* I’ve done a slight edit after readers reminded me that McFadden was shadow business secretary this summer and previously a DBIS minister under Mandelson – but never business secretary.
Jim Pickard
Kiran Stacey