Miliband pledges tuition fees cut

Ed Miliband today pledged to cut tuition fees to £6,000 a year if Labour wins the general election, as other parties lined up to rubbish the proposals.

Under the proposals, the new policy would be introduced in September next year, benefit those starting new courses in the autumn and those already at university.

The Labour leader insisted that the move will be fully funded through a reduction in pension tax relief for higher earners.

In a speech at the Leeds College of Music, he said: “The scourge of debt from tuition fees is not only holding back our young people, it is a burden on our country,” adding that the policy will “go down as one of the most expensive broken promises in history”.

But David Cameron argued that the plan is “ill-thought out” and would damage both universities and the economy, while Liberal Democrat Business Secretary Vince Cable said the policy is “based on a sound-bite” and “completely financially illiterate”.

Labour’s announcement first came in a message to supporters as Mr Miliband took to the stage in Leeds.

He told the audience: ” We’re going to reduce the debt on university students. We’re going to reduce the debt on taxpayers.

“From September of next year, the next Labour government will reduce tuition fees from £9,000 to £6,000. Meeting our obligations to the next generation.

“It will benefit those starting courses next year. It will benefit those already at university.”

He claimed that the proposals will cut the burden on taxpayers by £40 billion by 2030. The average reduction in the debt will be around £9,000 per student.

Labour also plans to raise maintenance grants for the poorest students to help them with their living costs by £400 a year. This will apply to those with family incomes of up to £42,000.

Mr Miliband, anxious to avoid a repeat of Nick Clegg’s failure to deliver a pre-election promise on tuition fees, said Labour’s policy would be a “red line” in any coalition negotiations after the election.

Asked whether the promise would be a “cast-iron” one, he said: “Yes, yes, yes.”

The Labour leader had earlier told supporters: “Let me say to Britain’s young people: I made you a promise on tuition fees. I will keep my promise. I don’t simply want to build your faith in Labour. I want to restore your faith that change can be believed.”

Under the plan, graduates who earn more than £42,000 a year will pay a higher rate of interest on their loans – 4% instead of 3%, which Mr Miliband insisted would making it a more progressive system.

The party was still examining the idea of a graduate tax system for the future, Mr Miliband suggested.

In a message on Twitter, David Cameron said: “Labour’s ill-thought-out tuition fees policy would damage our universities and our economy – and hard-working taxpayers would pay the price.”

Speaking during a visit to Wales, Mr Cameron said: “This is a cobbled-together policy that shows Labour is incompetent and would lead to chaos.

“It doesn’t help the people it is meant to help. It helps rich people rather than poorer people. It would damage universities and build up a mountain of debt for Britain. That is why so many experts have roundly condemned it.”

Mr Cable said: “Labour’s policy is based on a sound-bite, and as a result is completely financially illiterate. It will either do great harm to universities or it will create a costly black hole in the national budget.

“For a party presenting itself as a government in waiting they are showing staggering ignorance of how university finance works.

“They are proposing to spend billions of taxpayers’ money for a policy which only benefits the very wealthiest graduates and helps few women. They cannot pretend this is a progressive policy.”

Universities UK (UUK) has previously warned that limiting the fees to £6,000 per year would create a £10 billion funding gap over the next five years, while Labour’s former business secretary Lord Mandelson has warned that any reduction in income from fees must be made good from other sources.

Today, university leaders welcomed Mr Miliband’s assurance that the shortfall caused by the fee cut would be covered, and increased support for student living costs.

Professor Sir Christopher Snowden, president of vice-chancellors’ group Universities UK, said: ” It will go some way to help reassure universities that a future Labour government would continue to provide a stable funding environment in the next parliament.”

Paul Johnson, director of the independent Institute for Fiscal Studies told BBC Radio 4′s The World At One that Labour’s plans would see a £3 billion increase in taxes on pensions to pay for £3 billion additional spending on universities. And he said that the financial benefit from the change would go to those graduates who go on to high-paid jobs.

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Miliband pledges tuition fees cut