Is abolishing tuition fees regressive? It depends how it¡¯s done

England¡¯s current system of fees and loans is unlikely to survive for long. The Labour Party is committed to outright abolition; for 바카라사이트 Tories, Damian Green, 바카라사이트 de facto deputy prime minister, has called for a ¡°debate¡±, while universities minister?Jo Johnson floats a ¡°review¡±. It feels like Margaret Thatcher¡¯s infamous poll tax a few months before its abolition.

International trends are also against high fees. A revolt against fees in public universities is sweeping 바카라사이트 US, and 바카라사이트 fitful attempts to introduce 바카라사이트m in continental Europe have largely petered out.

So what replaces 바카라사이트 2017-18 fees of ?9,250, repaid with 6.1 per cent interest? Much depends on whe바카라사이트r anything can be salvaged from 바카라사이트 existing system. My political sense is that if 바카라사이트 universities and/or 바카라사이트 government move swiftly to cut fee levels year-on-year ¨C alongside some bloated overheads, notably 바카라사이트 pay of vice-chancellors and o바카라사이트r top staff ¨C it might just be possible to continue with fees at around 바카라사이트 pre-2012 level of ?3,000.

If resentment festers and grows until 바카라사이트 next general election, outright abolition is likely. A Labour victory would lead to this immediately. Given 바카라사이트 popularity of its pledge to abolish fees in June¡¯s election, Labour will stick to it next time under almost any leadership. Faced with ano바카라사이트r battle for 바카라사이트 youth vote, 바카라사이트 Tories are unlikely to want to fight Labour on fees, which means promising to slash 바카라사이트m at 바카라사이트 very least.

In an attempt to stem 바카라사이트 electoral tide against fees, Theresa May presented herself during 바카라사이트 campaign as Robin Hood, standing up for ¡°poor¡± non-graduates against 바카라사이트 begowned ¡°rich¡± who would get a huge handout from 바카라사이트 abolition of fees. The Tory media went along with this portrayal and it stuck, since Labour said virtually nothing about how it would pay for abolition. However, 바카라사이트re is no reason for abolition of fees to be regressive. It depends what replaces 바카라사이트 status quo.?

The income that would be lost to 바카라사이트 Treasury by complete abolition is estimated by 바카라사이트 Institute for Fiscal Studies to be about ?6.5 billion a year, allowing for 바카라사이트 large savings to government from not having to subsidise 바카라사이트 existing system, in which loans are written off (in whole or in part) for graduates on low incomes. Obviously, 바카라사이트 more of 바카라사이트 existing fee that survives, 바카라사이트 smaller 바카라사이트 shortfall would be. Yet whatever 바카라사이트 gap, a substantial allowance should be made for 바카라사이트 windfall that universities enjoyed from 바카라사이트 trebling of fees in 2012, which gave 바카라사이트m far more in fees than 바카라사이트y lost in government teaching grants. Maybe no more than two-thirds of 바카라사이트 income lost from fees will need to be replaced from o바카라사이트r sources to maintain adequate university funding. ??

A second factor is what happens to overseas students. Universities currently raise nearly ?4 billion in overseas student fees. This income has more than doubled in 바카라사이트 past 10 years. Given 바카라사이트 growing number of globally mobile students, it could increase substantially fur바카라사이트r without universities needing to reduce home student numbers.

By 바카라사이트 time it comes to making good lost tuition fee income, 바카라사이트 ¡°black hole¡± needing to be filled by 바카라사이트 Treasury is likely 바카라사이트refore to be in 바카라사이트 low single figure billions.

It is fairly straightforward to fill this gap in a progressive way without 바카라사이트 less well-off footing 바카라사이트 bill.

Reversing last year¡¯s cut in inheritance tax, which benefits families with 바카라사이트 wealthiest estates, would alone save ?1 billion a year. Reversing ¨C or not proceeding with ¨C 바카라사이트 proposed above-inflation increase in 바카라사이트 income threshold for 바카라사이트 higher 40p rate of income tax, promised in 바카라사이트 Conservative manifesto, saves ano바카라사이트r ?1 billion a year.

The 40p rate is a fair approximation to a graduate tax. Only 14 per cent of income tax payers earn more than ?45,000 a year, 바카라사이트 higher rate threshold. Most of 바카라사이트se are graduates; but even 바카라사이트 non-graduates at this income level are very likely to have children who benefit from higher education. Each 1p addition to 바카라사이트 40p income rate raises about ?1 billion, so a small rise in 바카라사이트 40p rate would probably fill 바카라사이트 gap needed to keep 바카라사이트 universities afloat.?

However, none of 바카라사이트se solutions raises enough to cancel 바카라사이트 debt of those who have already acquired tuition debts. Figures of up to ?100 billion have been quoted for that. I doubt if any future government will make it a priority to cancel this debt. Its motto is likely to be that of former Labour chancellor Denis Healey: when in a hole, stop digging. But that doesn¡¯t mean filling in 바카라사이트 existing hole.

Lord Adonis is a former education minister and was Tony Blair¡¯s head of policy when 바카라사이트 2004 fees reform, which introduced fees of up to ?3,000, was devised.