Tuition Fees

Labour will cut tuition fees to £6,000 and raise grants by £400


The incoming Labour Government will cut university tuition fees from £9,000 to £6,000 a year, and provide additional annual £400 grants for students from lower and middle income backgrounds.  This will be funded by restricting Pension Tax Relief for those on the highest incomes – a change for which I have argued for over ten years; politics can be slow.  I’d prefer a Graduate Tax, but this is a big step forward.

Labour’s goal is a country where the next generation can do better than the last, with tuition fees reduced to £6,000, an apprenticeship for every school leaver who gets the basic grades, and smaller class sizes for 5, 6, and 7 year olds.

The current university tuition fee system is bad for students and bad for taxpayers.

The decision by the Conservatives to increase tuition fees to £9,000 was made with the connivance of the Liberal Democrat MPs – who had all promised in writing to vote against any increase.  So much for their much vaunted principles – disappeared at the first whiff of power…  That decision meant that the average student will now graduate with £44,000 of debt.  Almost three quarters of students will never pay their loan back in full – after having had tens of thousands of pounds of debt hanging over them for 30 years. 

By 2030-31, the current student fee system is set to add £281 billion to the national debt.

Labour's better approach is fairer for all.  We will tackle spiralling student debt by cutting the tuition fee cap from £9,000 to £6,000 for all undergraduates from September 2016, and by providing additional grants for students from lower-income backgrounds.

Cutting the tuition fee cap will reduce graduate debt by nearly £9,000.  Labour will also increase student grants by £400, so that the full grant increases from around £3,400 to around £3,800.  This increase will benefit all students with an annual household income of up to £42,620. More than half of students will benefit.

Because our policy is fully-funded, it is fairer to universities and taxpayers too.

Universities will not lose out, because we will increase the teaching grant they receive by around £2.7 billion; i.e. the same amount that their fee income falls.

This policy will reduce government debt by £40 billion by 2030-31. Just over the 2015-20 Parliament, it will mean over £10 billion less debt.

This policy will be funded by raising £2.9 billion by lessening Pension Tax Relief for those on the highest incomes.  At the moment, people with annual  incomes of over £150,000 get tax relief on pension contributions at a rate of 45%, which is more than twice the 20% rate for Basic Rate taxpayers. This means that the Labour leadership has at last recognised that, although the richest are only the top 1% of taxpayers, they receive 7% of all Pension Tax Relief.  How fair is that?  So Labour will reduce the rate of relief for those with incomes of over £150,000 to 20%; i.e.  the same as basic rate taxpayers.  The annual and lifetime allowances for pension contributions will be reduced. Thus the amount that a person can put into their pensions tax free will be capped at £30,000 a year, or £1 million in their lifetime.  This is fairer – after all, how many people could ever afford to put such a huge amount into their pension pot?

Rob Marris, Labour Candidate for Wolverhampton South West

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