Undoing the Demos: Neo-Liberalism's Stealth Revolution
ZONE BOOKS, 2015
Since university tuition fees were first introduced in the UK by the Blair government in 1998, there has been an on-going debate as to whether the policy is more or less equitable than a graduate tax. The debate provided Gordon Brown's camp with an opportunity to throw the occasional rock at Blairites throughout the early 2000s, and Ed Miliband (formerly of said camp) was still proposing a graduate tax when he became leader in 2010. Now that the original 1,000 [pounds sterling] annual fees have risen to a maximum 9,000[pounds sterling], the capacity of a graduate tax to fund higher education without saddling graduates with vast debts looks more compelling than ever. Yet Miliband fought the 2015 election promising only to reduce the cap on fees, to a maximum of 6,000 [pounds sterling].
What's interesting about how this debate played out was the philosophical schism it revealed in the centre-left. Both sides had good reason to claim theirs was the more progressive policy. The argument in favour of tuition fees rested on two crucial claims. Firstly, that higher education creates economic benefits that accrue largely to the individual graduate. State funding of universities is therefore a regressive policy, in which society (including those on low incomes) pays for the middle classes to entrench their advantages. Secondly, tuition fees could be waived for those on low incomes, as indeed they have been.
Meanwhile, graduates have to reach a certain income threshold before they start paying off their debts. Put these claims together, and tuition fees look not only fair, but positively redistributive.
By this form of calculation, the disadvantage of the graduate tax is that it is inflexible and incompatible with any means-testing. Graduates would simply pay it, regardless of family background or earnings. The justification for tuition fees (and hence mushrooming debt) may be a brutally economistic one, but it is also apparently a progressive one--at least for the time being. In the early days of the policy, the whole issue seemed like a relatively minor technicality, given that student loans already existed (to cover living expenses) and fees were so low. But as we now know, a line was being crossed, and most undergraduates today will still be paying off debt in their 50s. Meanwhile, the UK student loan book is now ripe for all the forms of financial chicanery of the sort that gave us the sub-prime crisis (McGettigan, 2015).
What was never clearly articulated by proponents of a graduate tax, but should have been, was the inherent virtue of taxation as a funding mechanism. Not only would a graduate tax have the cultural and psychological properties of de-coupling education from debt (keeping at bay barbaric questions such as the 'return on investment' of a humanities degree), it would also ensure that the funding of universities was a question that remained within the terrain of fiscal policy, arguably the foundational issue of liberal representative democracy. As it is, universities in Britain now stumble...