Liberal Democrat MPs should vote for the new tuition fees proposal

I’ve read, seen and digested the views and opinions of students, politicians, parents and commentators on the new tuition fees proposal. After much deliberation I believe that the Liberal Democrats who are Ministers should vote for the new tuition fees, those outside the Government can vote as they wish, but preferably for or abstain.

The reason why is what we’ve agreed on in the Coalition Agreement. The argument that we’re breaking promises, principles etc. was lost when tuition fees was not negotiated as a red line during the 5 days after 6th May.

All the MPs who are getting hot under the collar now had a chance to state that tuition fees had to be non-negotiable at the time of the coalition talks. They didn’t, if they did they didn’t complain hard enough to our team of negotiators.

We, as members, had a chance to reject the Coalition Agreement if we felt that tuition fees were that big an issue. We didn’t. Some members like Linda Jack and David Rendell did voice their concerns and voted against, I admire them for that.

It was obvious to all that once tuition fees was dependent on the Browne review a rise would happen, to claim otherwise is naivety at best, downright wishful thinking at worst. Our role then is to get as best a deal as we can, to make it as progressive as possible.

We have done that, the proposals mean no fees up front, payments starting at £21k, 30% of future students will actually be paying less for their Higher Education than under the current system. A graduate tax is virtually the same proposal except there is no cap or guarantee that the money will only be spent on Higher Education.

If we want to be a party of protest, snipe from the sidelines and see none of our policies implemented then we can go back to that, but I want to see Liberal Democrat policies implemented and you can only do that in government. We are now in Government, we must govern.

The Politics of Economics

Yesterday’s Comprehensive Spending Review will have been well analysed by all the papers and commentators with lots of questions about whether the cuts are “fair” or not and if they are necessary at all.

What was more interesting to me (or dismaying) as an economist (but very much lapsed one) was the extent the political aspects decided the economic decisions. This is never unusual but given the unique financial situation interesting.

2010 Comprehensive Spending Review being delivered

I won’t touch on if the cuts are necessary or not except to say that as Labour were overspending when the economy was in a boom, therefore not saving for a rainy day, when the recession struck our borrowing rocketed and we ended up with the worst structural deficit of the G20, and gave us less room to carry out some of the fiscal expansionary policies of other countries such as Germany and France.

So on the political aspect, the key was the Prime Minister was determined to stick to as much of his electoral promise as possible, this makes sense politically to ensure manifesto promises were being kept. However, this causes a few economic problems:

• NHS, one of the largest government spenders, was ringfenced
  • This meant other departments cuts had to be increased
• Universal benefits were not looked at
  • I really felt, as Vince Cable said, that everything must be reviewed (this was in relation to tuition fees) then the idea of the well off receiving Winter Fuel Allowance, free TV licences, free bus passes and even a state pension to be absurd. However, the grey vote are more likely to vote and have strong lobbying powers so this was always a dangerous territory
• Income tax would not increase, under any party
  • One way to fill to ensure spending could be protected, but seen as deeply unpopular, even though it could pay for Higher Education and protect some of the social housing
• Due to the above welfare was targeted, which although needs to be reviewed, was taken further than expected
• The child benefit political hit was in exchange for the Liberal Democrats hit on tuition fees, even though tuition fees was much more symbolic to the Liberal Democrats than child benefit to the Conservatives

So what did I make of it?

Well I really felt the Conservative need to protect the NHS and universal benefits restricted the options available. I would have:

• Ringfenced no department except International Development (peanuts in the grand scheme of things)
• Scrapped universal benefits for well off pensioners
• Put a little bit more money into capital investment projects
• Ensured a coherent plan on housing, both private and social, as the new proposals are clever in encouraging more housing associations to build property at commercially viable rates, there is no proposal to ensure enough housing does get built. One of the key problems of the past 30 years.
• Probably would not have brought forward the rise in pension age for everyone to 2020, fundamentally wrong for women in their 50s.

I was a little surprised that more was not made of the fact:

• Total government expenditure is still rising to 2014/5
• The rate of growth is declining
• Total public sector expenditure as a % of GDP will be at the same level as 2006/7.

The problem with all the above points is the NHS is growing in real terms so everyone else gets less of the pie. What I can’t work out now is how we’ll get enough money to increase the income tax threshold again, although it is in the coalition agreement so should happen.

Lord Browne’s review – what now?

So Lord Browne’s review has been published and thrown a potential grenade into the coalition. However, his proposals do not have to be implemented, they are merely an indepedent recommendation. I’m not willing to comment until a Government proposal has been put forward, but I obviously want the Lib Dem MPs to stick to the NUS pledge which they, and I, signed at the general election.

Although all this presure on the government is forgetting one thing as “Liesandstats” commented on the Guardian today….

“In the interest of fairness it might be worth pointing out that the last government in the shape on Mandelson commissioned this report which at the time was reported as a ruse to kick the subject of university funding into the long grass until after the election. It was also Labour that introduced tuition fees in the first place in England. University education was free in England up to 1998 when labour introduced a £1000 charge and then upped that to £3000 in 2003.

Its simple you need to decide your finding priorties and make sure your MP knows them. We can waste billions on Afghanistan, Trident but you can’t educate your children.

I suggest you either move to Scotland or go abroad to take a degree it will be a lot cheaper in the long run.

The worrying thing in Scotland is if Labour get in next May we will be in the same boat as you couldn’t really put a fag paper between their policies and the Tory/Lib coalition if they had been returned to power.”

Red Ed or Yellow Mili?

Ed Miliband used his first major speech as Labour party to leader to position himself and the party back into the centre ground. It was almost as though his brother, David, was giving the speech, talk of having to deal with the deficit, not backing unnecessary strikes over public sector spending cuts and wanting to reform welfare.

He paid tribute to Labour’s achievements, but also made several attacks on its past like:

• An unjust war on Iraq
• Student tuition fees
• Attack on civil liberties
• Loose regulation of financial services

Is it me or is Ed Miliband saying that the Liberal Democrats have been right all along on these issues? Does he want to join the Liberal Democrats?

Actually of a bigger tactical note is he’s making both an attempt to move to the centre as well as appeal to Liberal Democrats voters and open a flank for potential co-operation in the next parliament should there be a hung parliament. The other risk for the Liberal Democrats is of being squeezed, even more reason to continue to shout about the Liberal Democrat policies being implemented.

Of course we need to see policy announcements but the speech sets a tone, but that can change over time, David Cameron veered from soft and cuddly to right wing depending on his own political situation.

It’s only day 3 of Ed Miliband’s leadership but he’s certainly shown over the past months something his brother David Miliband never had – balls. And I don’t mean having to work with Mr Yvette Cooper!

Tories broken society more like a broken record…

At least that’s the verdict by the Economist who disagree with the notion that Britain is in a mess and getting worse.

I have spoken to many public sector and charity workers in Bromsgrove who deal with the people the Tories describe as part of the “Broken Society” and they don’t recognise the term. Sure the country isn’t perfect, but it’s not “broken” and if it was what are the Conservatives doing to help the few who need help the most?

Almost all their policies are aimed at the middle class voters. Marriage tax allowance; inheritance tax threshold increase; allowing parents to run schools (only those with time will do this) and focus on only imprisoning criminals.

The Lib Dems, however, are focusing on helping those most in need to create a better society for all:

• Increase income tax threshold to £10k to help break the poverty trap and improve the incentives for individuals on low incomes
• Extra £2.5bn in education for schools with pupils on free school meals. This resource can be used as headteachers deem appropriate, whether smaller classes or one on one tuition. Many classes can only proceed as the slowest pupil so this will benefit all pupils.
• Scrap tuition fees, to break the psychological barrier of debt for many people going to university. There is enough student debt and c. £10k less would make a big difference to many future graduates
• 67% of prisoners will re-offend when they are released, why? Because some have no alternative of employment, they may be illiterate, don’t know what to do. We would do more for rehabilitation and give these people skills and the ability to become a part of society.

The homeless – a hidden problem in Bromsgrove

Last week I visited the Basement Project, an award winning Bromsgrove charity based in Bromsgrove Baptist Church, which offers support and advice to 16-25 year olds who are homeless or facing homelessness. It may surprise people in Bromsgrove to think that there is a homeless problem in the area but there are many people affected of all backgrounds for various reasons.

The causes may be breakdown in child/parent relationship, no family support, wrong choices made in life or simply unemployment. The staff at the centre have seen so many cases that they are no longer shocked by anything, although they do find things upsetting.

The centre has 3 projects:

1. Drop in centre open every week day. Where visitors can have some food, clean themselves up and seek confidential advice whatever the problem.
2. Outreach service where staff will go and give help on a one-to-one basis with individuals, as they want it
3. Private tenancy scheme which helps young people to rent a private property with some assistance.

With the Basement staff (l-r Marina, Lance and Elaine)

There are no simple solutions and government help on housing for the under 25 could be improved (they have lower financial support than those older than 25). Improving the educational opportunities for all young people will help more have the skills required to help them through life. Some of the projects work can be as simple as basic life skills, managing money to help with getting a job or further education.

Providing the safety net for those in need is vital, but so is the support to enable them to get out of their situation. Many of these young people are incredibly bright and have aspirations, and we need to ensure the opportunities are there for them.

All party’s could do more, but I am proud that education is at the heart of the Lib Dem’s key policies, especially the scrapping of tuition fees, which is a severe barrier to those with little income in even considering higher education. I will be seeking to understand how housing support for under 25s can be improved.

If you would like to know more about the Basement Project please visit their website or e-mail Elaine Mortimer: elaine@bromsgrovebasementproject.co.uk

With Alison, one of the volunteers at the centre

Clegg has been prudent in putting some policies on hold

My view is that a lot of what the Lib Dems were looking to do; free personal care for elderly, free childcare, extended shared maternity leave, citizens pensions is not feasible when you are also talking about making cuts in government expenditure not just rebalancing the books. We are already proposing cuts to trident replacement, abolish Child Trust Fund, restricting public sector pay increase for two years to £400 and cancelling ID cards.

You have to be realistic and reasonable. Companies and families adjust to the economic situation and so must political parties. We still firmly believe in free personal care for the elderly and no tuition fees for students, we did introduce these measures in Scotland when we were in coalition government.

We can still say what we stand for and advocate their introduction when the time is right, which is better than being populist and jumping on the nearest bandwagon that rolls by.

The Lib Dems are still proposing pretty serious changes, which would make the UK a fairer country:

• A fairer tax system – lifting income tax threshold to £10k, effectively a £700 tax cut and taking c.4 million low paid and pensioners out of tax. Paid for by taxes on the wealthy and with green taxes (to change consumption behaviour).
• A fair start for children – maximum primary school class sizes of 15 for children up to age 8. Most children from impoverished backgrounds will automatically be behind by the time they are 7 so we need to give them as good a start as possible.
• A fairer economy, investment in green technology and industries, it is a growth industry and we’ll become less dependent on the financial sector.
• A fairer form of government, more power to local authorities and  electoral reform to enable proper choice for voters people and make sure their votes count.