Now and again Dan Hilton posts some of his thoughts to try and understand himself. Enough said.

Friday, September 05, 2003

Dear Mr Hilton

Thank you very much for contacting us with regard to our proposed changes
to higher education. The Labour Party values all comments and feedback and
we take the opportunity to read all emails and pass comments on. I would
like to explain why these changes are needed and what they mean for
universities and students.

Our universities are a huge national asset. The number gaining degrees has
tripled in the last two decades. The quality of research is strong and, at
its best, world class. More overseas students are studying here. Recent
years have seen a dramatic increase in the number of new companies spun out
of universities' innovation.

So it would be easy to coast along and leave things as they are. But the
fact is that our universities are at real risk of decline.

High quality research helps to drive our economy but the competition from
other countries ? not just the US is growing. University lecturers and
professors have seen their pay rise one-third as fast as the rest of the
workforce in the past 20 years. We are losing some our best researchers
overseas. Staff student ratios have nearly doubled in the last 20 years.
There is a £8 billion backlog of infrastructure repairs. We need to keep
expanding the numbers going into higher education to provide the skills the
economy needs. And the fact that those from the top three social classes
are almost three times as likely to go to university as those from the
bottom three is a national scandal we have to address.

In the short term Higher Education Labour in government has put in place an
excellent funding settlement ? which gives them a 6% increase over and
above inflation for the next three years - will help to tackle these
problems. But we need a solution for the long term as well and that means
sustained extra investment and it means reform.

This means we are asking students to pay more for their education. But
let's remember that we have one of the most generous student support
systems in the world. And we are increasing that support. In addition
graduates, over their lifetime earn 50% more than non graduates and it is
only fair to ask them to pay part of the cost of getting a degree.
Students who pay the full £1,100 fee are only paying about a quarter of the
average cost of their university education.

Some argue that we are introducing a two tier university education. But
the reality is that our nation already has a multi-tiered university
sector. The fact is universities are not the same. Some excel at
research. Others at working with local industry. Others at teaching.
Some universities get much more funding than others. Degrees from some
institutions and some courses are ? when it comes to getting jobs after
university - worth more than others. Yet the fee for every course at every
institution is identical. That is not fair or sensible.

Of course, there is a worry about whether the fear of debt will put people
off going to university. But to read some of the comments in the papers
you would think that students are currently debt free. At present they
take out maintenance loans of up to £12,000, plus their parents have to pay
thousands of pounds up front in fees ? and there are no grants even for the
poorest students. In fact the average debt today is £9 ? 10,000.

Our deal means that no parent need pay fees at all. Grants come back for
those from low income families. If your parents are not well off the
government continues to pay the first £1,100 of the fee. Universities
expand their bursaries. And those who do have to pay part or all of a fee
have the option of postponing payment ? on an interest free basis - until
after they graduate, when payment will be linked to their income.

We did look at different options ? for example, funding universities
through a graduate tax. Like a graduate tax our system involves making
payments after graduation linked to a graduate's ability to pay. But we
concluded that variable fees were:

o Fairer, as they more closely relate what a student pays to the benefit
they receive.

o Clearer, as they retain a direct link between the student as consumer,
and the university as supplier. Graduate tax is simply paid to the
government and would result in universities continuing to be reliant
solely on the government allocations.

o Cheaper, as a graduate tax would cost the government much more to
implement ? even though it would only raise the same amount of money.
Public spending would have to increase by at least £5bn ? money that
would then not be available for schools and hospitals.

As for the Tories, insofar as they have a policy, it is to cap student
numbers and cut funding. The Lib Dem alternative seems to be to force
students to study at home for the first two years ? so much for choice and
freedom for the individual.

Labour Ministers will be using policy forums to explain and debate our
proposals with local parties and communities over the next few months. But
the Labour party believes that they provide a strong future for
universities and a fair deal for students.

Labour proposals for reforming university and student funding:

September 2004
o Grant of £1,000 per year restored for students from lower income

April 2005
o Threshold at which graduates have to start paying off their loan
raised from £10,000 to £15,00, bringing a saving of £450 per year. A
graduate earning £20,000 will pay back around £38 a month.

September 2006
o Abolition of requirement to pay fees before or while you are studying.
o Universities able to set a fee from £0 - £3,000 per year - but only
if they meet tough conditions on access and bursaries, approved by a new
independent Access Regulator.
o Fee level ? apart from inflation - capped for the whole of the next
o Government keeps paying all or part of first £1,000 of fee up to
family income of £30,000.

For further information visit the DfES website at or
Labour's website at which includes answers to
frequently asked questions.

Thank you again for taking the time and trouble to contact us.

Yours sincerely

Communications Unit
The Labour Party

Hmmmm next post contains my response to this!