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Osborne plan would mean significant tuition fees rise, says Vince Cable Osborne plan would mean significant tuition fees rise, says Vince Cable
(35 minutes later)
George Osborne will have to raise university tuition fees significantly above the current £9,000 cap if he proceeds with his plan to make billions of pounds in extra spending cuts, Vince Cable, the business secretary, has said.George Osborne will have to raise university tuition fees significantly above the current £9,000 cap if he proceeds with his plan to make billions of pounds in extra spending cuts, Vince Cable, the business secretary, has said.
Speaking at Lib Dem party conference, Cable said this would probably have to be accompanied by lowering the £21,000 earnings threshold at which graduates start repaying loans and large cuts to the pot of money for student support. Speaking at the Lib Dem party conference, Cable said this would probably have to be accompanied by lowering the £21,000 earnings threshold at which graduates start repaying loans and large cuts to the pot of money for student support.
As business secretary, Cable controversially oversaw the tripling of tuition fees from £3,000 to £9,000 despite the Liberal Democrat promise not to allow this to happen. As business secretary, Cable oversaw the tripling of tuition fees from £3,000 to £9,000 despite the Liberal Democrat promise not to allow this to happen.
He said he would be “very reluctant” to allow fees to rise again but it was “a choice the next government would have to make”.He said he would be “very reluctant” to allow fees to rise again but it was “a choice the next government would have to make”.
The business secretary warned this was all but inevitable if Osborne were to proceed with his plans for a further £25bn of cuts in the next parliament. Cable said it was all but inevitable if Osborne were to proceed with his plans for a further £25bn of cuts in the next parliament.
He told a fringe meeting in Glasgow: “If the Osborne policy were to prevail, and I was fairly scathing about it yesterday, which is drastic cuts combined with no taxes rises, you would see without doubt - it is difficult to say how they could do anything else - a significant increase in fees, a reduction in the threshold, and the thing that would save money is really taking a lot of money out of student support, effectively by stopping grants and turning them into loans. He told a fringe meeting in Glasgow: “If the Osborne policy were to prevail, and I was fairly scathing about it yesterday, which is drastic cuts combined with no taxes rises, you would see without doubt – it is difficult to say how they could do anything else – a significant increase in fees, a reduction in the threshold, and the thing that would save money is really taking a lot of money out of student support, effectively by stopping grants and turning them into loans.
“That is how they would probably save money in the university sector. It would be quite painful and we need to point that out a little more explicitly.”“That is how they would probably save money in the university sector. It would be quite painful and we need to point that out a little more explicitly.”
The business secretary raised a number of other problems on the horizon over funding universities in the next parliament. He said universities have lost income through the falling number of overseas students, who have been discouraged by Home Office efforts to bring down immigration. The business secretary raised a number of other problems on the horizon over funding universities in the next parliament. He said universities had lost income through the falling number of overseas students as a result of Home Office efforts to bring down immigration.
Another unresolved issue is how the government will pay for its policy of lifting the cap on the overall number of students, as every place has a cost to the public purse – a situation that is currently worrying universities. Another unresolved issue is how the government will pay for its policy of lifting the cap on the overall number of students, as every place has a cost to the public purse – a situation that is currently worrying universities. Cable, who supports the lifting of the cap, acknowledged there was “an issue about financial sustainability”.
The business secretary, who supports the lifting of the cap, acknowledged there is “an issue about financial sustainability”. He dismissed concerns raised by Labour that there is an impending black hole in university finances because more students will default on their loans than previously thought, making the current system barely cheaper than the one it replaced. “I don’t worry about it because in effect they are losses crystallising in 30 to 40 years’ time,” he said.
Cable dismissed concerns raised by Labour that there is an impending black hole in university finances because more students will default on their loans than previously thought, making the current system barely cheaper than the one it replaced. Cable warned against Ed Miliband’s plans to cut the cap on fees to £6,000, saying it was hard to see where Labour would get the £2bn needed to make up the shortfall in funding at a time of continued spending restraint.
“I don’t worry about it because in effect they are losses crystallising in 30 to 40 years’ time,” he said. Labour was due to unveil the policy at its party conference in Manchester, but this appears to have been delayed. Liam Byrne, the shadow universities minister, told a fringe meeting at the Labour conference that the party would not make promises it could not keep.
Cable also warned against Ed Miliband’s plans to cut the cap on fees to £6,000, saying it is hard to see where Labour would get the £2bn needed to make up the shortfall in funding at a time of continued spending restraint. “We cannot do this on the cheap. But until we are clear enough about how that kind of change will be paid for, it’s not an offer we are going to put on the table,” Byrne said. “Of course we want to make these changes. But we will not lead people up the garden path. We will be clear and honest, and we will only make promises that we can keep. This is a big debate for us over the next few months.”
Labour was due to unveil the policy at its party conference in Manchester, but this appears to have been delayed.
Liam Byrne, the shadow universities minister, told a fringe meeting at the Labour conference that the party would not make promises it could not keep.
“We cannot do this on the cheap. But until we are clear enough about how that kind of change will be paid for, it’s not an offer we are going to put on the table,” Byrne said.
“Of course we want to make these changes. But we will not lead people up the garden path. We will be clear and honest, and we will only make promises that we can keep. This is a big debate for us over the next few months.”