Category Archives: Fiscal Policy

Dear Mr Corbyn, hands off my tuition fees

I wish Leftist politicians would stop lumping me in with all the other, equally Leftist students in this depressing General Election. Specifically, I don’t like to hear Jeremy Corbyn talk about tuition fees as if all students are utterly appalled by them.

He did it last night during his relatively underwhelming Question Time performance. He reiterated his desire for national funding in education before making the false claim that “the number of people from disadvantaged backgrounds going to university has gone down”.

Naturally, he attributed this trend to the introduction of and rises in the cost of tuition fees. Though immediately after he said this, ‘Full Fact’ rebutted his nonsensical claim, saying:

“There are a number of ways to measure what a ‘disadvantaged pupil’ is, but on all UCAS measures young students from disadvantaged groups in England are more likely to go to university now than any other year on record.”

The reference to England is particularly interesting when you compare it to its historically hostile northern neighbour, Scotland. In May 2016, the Sutton Trust, a distinguished education agency, published a report entitled Access in Scotland, in which they found:

“The gap in university participation between young people from the most and least advantaged areas is higher in Scotland than in the other home nations. Scottish 18 year olds from the most advantaged areas are still more than four times more likely to go straight to university than those from the least advantaged areas.  In England, those from the most advantaged areas are 2.4 times as likely to go to university as those from the least, and three times as likely in Wales and Northern Ireland.”

Scotland, unlike the rest of the United Kingdom, does not charge its home students tuition fees. It seems that where tuition fees are implemented, the proportion of ‘disadvantaged pupils’ (of which I am one) attending universities actually increases.

By scrapping tuition fees, as the Labour Party plans at the cost of £8bn per year (according to the IFS), they propose not only a subsidy for the rich, but a strangulation on university funding, which relies largely on fees across both undergraduate and postgraduate study. It is unclear that, with existing cuts to teaching budgets already made, scrapping fees will not be adequately compensated for.

Research by ‘The Russell Group’ showed that between 1989 and 2005, ‘government funding did not keep pace with increasing student numbers, leading to a 40% fall in funding per student’. Even in light of compelling evidence, I do admit that funding caps have not been kept even with the rate of inflation, which has started to see decline in real term funding gains.

There is therefore a stronger argument for increases to fees than there is to scrapping them altogether. Fears over under-admitting students from poorer backgrounds simply haven’t been realised. The reality has been that tuition fees have increased ‘per student’ funding and improved the quality of education for the disadvantaged, with repayments organised on the basis of post-study income.

The system is fair as we look at things. Education cannot be free, as the Left often claim it ought to be. There is a bill to be paid, and it is a question of who pays and for whom. It is not acceptable for working taxpayers to pay for the education of students from wealthy families. And why should others pay for my degree? They do not benefit. I benefit. And thus, I should foot the bill for my studies.

My current student debt sits at £36,000 when additional, supplementary loans are factored in. I am classified by government as a ‘disadvantaged pupil’ by income measure. My journalism degree has just concluded, but when I was studying, I constantly reminded myself of the costs of study.

Tuition fees didn’t put me off or make me want to drop out in order to avoid large, growing debts. They actually had the opposite effect on me psychologically. Fees galvanised me, reminding me of the price I would pay and that I should strive to get as much out of university as I possibly could. I do not pretend to represent all students (especially as a Right-wing conservative), but I suspect I am not the only student who experienced this.

The Labour leader has repeatedly referred to his party’s manifesto as a careful and well-considered document that is both fully costed and a positive alternative for the country. Though as far as university funding is concerned, I don’t think students should see it this way.

Students may be dismayed by the prospect of sizeable debts, but they ought to consider the factors that I have outlined above. The national conversation about the costs of tuition tends to imply that scrapping fees is a policy that students universally agree with and one that will encourage poorer students to embark upon Higher Education. Neither claim is the case.

Mr Corbyn, hands off my tuition fees.


Labour’s proposed £10 minimum wage shows just how unelectable they really are

Criticising Jeremy Corbyn’s leadership of the Labour Party and attacking him personally is now futile. It has been done and done again. It is demonstrable that, from an electoral standpoint, he is ineffective. Don’t take my word for it; listen to the increasingly agitated voices of his critics on the Left.

Equally true in my opinion is that one of the worst aspects to contemporary politics – thanks especially to the public relations industry and mass media – is the celebritising (Microsoft Word tells me this isn’t a word, but I have not been corrected in person and refuse to let a red line discourage me from using it) of politicians and the focus placed upon personality rather than policy.

This trend will continue to have a profoundly negative impact upon the legitimacy of public servants. In an age of status and reputation obsession, it is important to draw attention back towards the things that matter.

One thing that matters immensely to a country is having a strong opposition that applies adequate pressure to an incumbent government. They say that it’s best to have conservative government with a strong labour movement in opposition, and the UK is in renewed, desperate need for a strong labour movement.

One of the things that most frustrates me about the Left is its insistence that its programs help the disadvantaged, the poor and the worker, when, in actual fact, evidence shows that they do precisely the opposite. Mr Corbyn’s fresh pledge to raise the UK’s minimum wage to £10 per hour provides an excellent example of this problem.

First off, government should be out of the business of setting wages (with the exception of those working in the civil service, of course). We have seen throughout history the damage caused by government control of pricing.

And wages are a price. They represent the cost of labour to an employer, and ought to remain a private concern that both parties to that transaction agree to. The beauty of capitalism has always been that it is based most fundamentally around the concept of voluntarism.

When government steps in and artificially raises the price of labour, several important things happen. Firstly, a surge in unemployment is almost inevitable. A 2006 review of more than 100 minimum wage studies by David Neumark and William Wascher found that about two-thirds found ‘negative employment effects’.

When employers are forced to pay their staff more money, they need to make alterations in order to break even. This could mean cutting back on staff directly, cutting the benefits of existing staff or scrapping hiring plans or schemes in the future. Young people, too, will suffer disproportionately as they lack the skills and habits of work and will be more expendable in the workforce.

Secondly, arbitrary rises in the price of labour may lead to significant price hikes on the high street. As basic market laws and common sense tell us, if the price of a good increases, the likelihood that a customer will buy it decreases. For the worker on minimum wage, there may be a crucial trade-off: a pay rise for all, for his job.

In his influential Economics in one lesson, Henry Hazlitt notes: “it may be thought that if the law forces the payment of a higher wage in a given industry, that industry can then charge higher prices for its product, so that the burden of paying the higher wage is merely shifted to consumers.” A pay rise is, after all, only relative to inflation and changes to the cost of living.

It therefore stands that the best way to raise the earnings of a worker is to ensure that market forces are culpable for the raise. Labour productivity must be increased either by means of management or production innovation, or by improving technology and training. Creating an environment that is conducive to the making of profit will be far more beneficial to workers in the long run.

We have just entered a period of two distinct changes to the National Minimum Wage (now called the National ‘Living’ Wage because, you know, PR): its introduction and its subsequent raise. Employers are currently coming to terms with these rises as well as the prospect of leaving the European Union.

Any further government control of labour costs is bound to have a substantial disemployment effect. But there is more. The difference between welfare and wages must also be taken into account.

If as a country we say that it is illegal to pay a man less than £160 per week, and we also say that an unemployed man can earn up to £120 (I am using arbitrary figures) per week through the welfare state, then we prevent another man from enjoying the dignity of work and self support for anywhere between £120 and £160 per week.

This may sound like pedantry, but it is an important consideration for those who advocate governmental wage control. Artificial increases in the cost of labour will result in a gap between the minimum a person will earn in work and the maximum he or she will receive in benefits. Any such gap is a barrier to employment. 

And why does the Labour Party not see this? I am struck by just how coy the Left can be with economic programmes. Anybody remember Natalie Bennett’s housing policy disaster at the last General Election? Of course, I do not think this will matter in the long run.

Labour will not be elected into government in 2020. Even with a change of leader in the next twelve months, its troubles (from a damaging referendum divide to the lingering stench of anti-Semitism) are far from being dealt with.

Perhaps Jeremy Corbyn’s quiet resignation that he will not make it to Number 10 is making him lazy. If he thought he had a real chance, he would surely be trying a lot harder. Most polls now show ‘don’t know’ to be a better candidate than the Labour leader for Prime Minister.

And with policy proposals like a new inflation-inducing minimum wage, it’s not hard to see why.