What about the flip side?

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There is a very old joke where three people are arguing about what is the oldest profession.  The engineer invites the other two to look at the wonder and scale of the universe, saying that it is a magnificent piece of engineering, so God must be an engineer.  The architect replies by pointing out that the bible says that the universe was created out of chaos, so would have taken a lot of planning before construction started.  God, he argued, must be an architect.  The politician responded by simply asking “But who do you think created the chaos in the first place?”

Events generally have precursors; they don’t occur in isolation.  This was brought to mind last week with Jeremy Hunt’s promise to write off student debt for ‘entrepreneurs’, which he helpfully defined as those employing at least 10 people for at least 5 years.  His argument is that the creation of jobs is of central importance to the economy.  That’s sort of true-ish, but things aren’t as simple as that in reality.  ‘Entrepreneurs’ don’t suddenly pop into existence; they start out as new-borns like the rest of us.  Getting them to the point at which they start their businesses involves doctors, nurses, teachers and lecturers.  And to perform their roles those people in turn need surgeries, hospitals, schools and universities.  And those facilities get designed and constructed by architects and engineers.  The businesses started by the ‘entrepreneurs’ need transport and communications infrastructure and a supply of trained employees.  They need finance from banks and governments.  They are not something magical or special, merely one part in a long and complicated chain.

What Hunt is proposing is that one part of that chain should be identified as being so special that it deserves exceptional treatment, even if – by the time they’ve employed 10 people for 5 years – they’re so financially successful that they don’t actually need to have their debt written off and even if struggling healthcare and education workers are more in need of financial help.  And in the process, it effectively demeans and devalues the work done by all those other people to make not just that entrepreneur or business successful, but society as a whole – the doctors, the teachers and all the rest.  There’s something very lacking in self-awareness in someone who believes that his or her particular role in society (has he mentioned recently that he was an entrepreneur before becoming a politician?) is so special and unique that it justifies such treatment. 

I’m tempted to wonder whether the reverse should also apply.  Perhaps a successful entrepreneur who subsequently gives it all up to cause chaos by becoming a politician should be hit with a penalty charge of some sort.  In Hunt’s case that certainly has its attractions, although the lawyers would no doubt argue that individual cases make bad law.

Are fees the only option?

Tweet Watching Lib Dems wriggling over the proposed increase in tuition fees ought to provoke at least a degree of schadenfreude, but the issue is really too serious to take any pleasure from.

The outraged noises from the Labour Party are scarcely credible either. They not only introduced tuition fees in the first place, they also appointed Lord Browne to conduct the ‘independent’ review, and we all know that when governments appoint someone to such a role, they invariably choose someone ‘independent’ enough to give them the answer that they want to hear.

The Tories, like Labour, have see-sawed on the issue; what they say seems to depend on when – and where – they are in government, and when in opposition.

And it’s scarcely a secret that I’ve been less than wholly impressed with the stance of some of my own party’s elected members on the issue either – the attempt by the Assembly Group at the annual conference last month to end the party’s outright opposition to charging students for higher education was far from being their finest hour.

There is a problem, though. Far too many politicians are simply presenting the problem as a ‘funding gap’ or claiming that free higher education is ‘unaffordable’ without really spelling out the options. The problem has arisen as a direct result of governments trying to make the opportunity of a higher education available to a larger number of our young people, whilst not providing sufficient additional resources to universities to pay for the increase in student numbers.

There are, in fact, three ways of closing the gap therefore – reducing student numbers, increasing the contribution from general taxation, and charging students ever higher fees (and whether they’re recovered through repayment of loans or some sort of graduate tax supplement is more about presentation than principle). There’s nothing necessary or inevitable about the third choice – unless and until politicians choose to rule out the other options. And that’s the nub of the problem.

Personally, I’m clear that I would not choose to reduce student numbers. Indeed, I’d choose to try and provide a higher education for all those young people who a) meet the entry criteria, and b) choose such a route (although I’d also like to see more ‘parity of esteem’ between what we currently divide into the higher and further education sectors, which might actually serve to reduce the demand). Increasing the overall level of educational attainment of our young people, and helping them to realise their full learning potential, is something which I see as being in the long term interests of society as a whole.

It means, though, that it has to be paid for. The reason we’re being told that tuition fees - and increasing ones at that – are inevitable is because so few politicians are prepared to talk openly about the choices we face in terms of taxation policy. There is an assumption that proposing higher taxes to pay for higher education is a vote-loser – based on the other assumption that we all vote in an essentially self-interested way.

There is, of course, good evidence to suggest that those assumptions are entirely valid. The great victory of modern free market thinking has been to demolish the more collectivist approach which led to the birth of the Labour Party, and it is pretty depressing that the Labour Party itself has done so much of the demolition work.

The alternative to fees is to put the argument for collective purchase and provision of higher education through a progressive system of taxation. The question is whether we want to make that argument or simply accept the current political paradigm. Short term self-interest or long term collective interest? On education, as on so much else, I opt for the latter.

Taxing graduates

Tweet Student fees and loans have been unpopular since Labour first introduced them, and with four of the five Labour leadership candidates supporting a graduate tax instead, it seems that some in that party are, albeit belatedly, realising what a mistake they made. But is a graduate tax any better?

It's hard to make a definitive judgement without a lot more detail, but what seems to be being proposed is a sort of supplement to income tax. So graduates on low incomes may end up paying little or nothing for their tuition, whilst those on high incomes may end up paying several times the cost of their tuition. Whilst the total amount collected may roughly equate to the total cost of fees paid, the amount paid by any individual may bear little relation to the cost of his or her tuition.

In short, it looks very much like a selective form of income tax, where people in one group within the population, graduates, pay more income tax than people earning the same salary who happen not to be in the selected group. Once we start doing that, where do we stop? How about an A-level tax?

The argument, presumably, is that those who gain a degree have benefited from their education by getting a higher-paid job than would otherwise have been the case, and should therefore pay towards the cost. But what if a graduate and non-graduate end up doing the same job at the same salary? They would be paying different rates of tax, with the graduate having a lower take-home pay than the non-graduate.

And we all benefit differentially from a whole range services provided out of public funds; what is it that makes a higher education a service which is chargeable, whilst other services are not? I don't understand what the key principle is which underlies that distinction, other than the base one of 'what do we think we can we get away with?'.

It isn't just graduates who benefit from higher education; society as a whole benefits from an improved level of education. Why do we treat education up to A-level as an investment but education beyond that as something different?

Labour haven't won the argument

Tweet There were no surprises in the announcement this week of the scrapping of the Tuition Fees Grant; but then, no-one really expected any. I understand why the Government has taken the decision, but that isn't at all the same as agreeing with the decision.

There is no doubt, as Adam Price has persuasively argued, that the policy was not only a distinctive measure, but was also achieving one of the Assembly Government's stated objectives of encouraging more Welsh-domiciled students to study in Wales. In some ways, it was a blunt instrument; but even blunt instruments can work well on occasions. There's always an argument for replacing a blunt instrument with a sharper one - as long as it does a better job. This one doesn't.

Adam goes further, and argues that we should make a clear commitment to reversing the policy in the next Assembly manifesto. That's something which the membership will decide when we debate that manifesto, of course.

The more important lesson for me - and I know for many others - is that it isn't just what's in the manifesto that matters. As Adam indicates, it's equally important to define what manifesto commitments are non-negotiable when it comes to coalition negotiations. Experience is not always the most comfortable way of learning a hard lesson.

The whole issue of student finance is, of course, a great deal more complicated than the simplistic question of fees, and the Assembly Government's package to start to address student debt is one aspect which should be welcomed. The question of principle, however, remains whether students should be in debt at the end of their studies in the first place.

For me, increasing the level of expertise and skills possessed by our young people when they complete their education is an investment in the future of all of us. Given a truly progressive tax system, those who use their expertise and skills to earn more than others will pay more in taxes in return, and that helps to fund the next generation's education.

Wales' biggest problem, in economic terms, is that our GVA per head is lower than the UK average. Part of the answer to that, surely, has to be encouraging our brightest young people to make their homes and careers in Wales, rather than to look elsewhere – and encouraging them to study in Wales helps to achieve that aim.

The introduction of top-up fees in England was always going to create difficulties in Wales unless the Assembly Government had a full range of powers on taxation and spending. And increases in the cap level in England were always going to make the situation worse. Policies being pursued in England inevitably constrain the range of options which could have been followed in Wales, and it would be naïve to pretend otherwise.

But, even having said all that, I still don't believe that the Assembly Government needed to simply follow the English lead, which is what the Labour Party wanted to do from the outset. The lack of imagination shown by the Labour Party in Wales on this issue is disappointing, to say the least. They may have got their way at this stage; but they haven't won the argument.

Fees, debts, and deals

Tweet It's not without a degree of trepidation that I return to the question of student fees. It's not exactly the world's best-kept secret that the issue caused Plaid – and myself – a few headaches recently.

One question that I've been asked repeatedly is "how can you have a situation where your party says one thing whilst a government including ministers from your party does the opposite?". It's a fair question on the surface, but it really isn't that strange in a world of coalitions. This is, after all, a fairly common situation in democracies more accustomed to coalition than we are; it's just something we need to get used to. I'd go further, in fact – from the day Plaid signed up to One Wales, it was obvious to me that such a situation would happen sooner or later, on one issue or another.

In negotiating One Wales, the two parties agreed to maintain the current basis of student funding for the first three years, but crucially were unable to agree at that stage what should happen in year four.

So, we have a coalition between Labour on the one hand, who have long wanted to introduce top-up fees in Wales and are seemingly quite content to see our young people completing their education tens of thousands of pounds in debt, and Plaid on the other, who believe that tuition should be free and that our students should not be saddled with debt. The potential for conflict was therefore written into the agreement from the outset - there was never any way that both parties would be able to deliver their policies in full.

The compromise agreed by the One Wales partners effectively allows Labour to introduce their fees, but also provides a package to start to tackle student debt – a key election pledge for Plaid. I wouldn't describe that as a draw, by any means (but then the two teams aren't equal in size), but it's an agreement which reflects elements of both parties' policies.

The other question that I've been asked is whether we could have got a better deal – one closer to Plaid's view. Political opponents are particularly quick to criticise, and suggest that we could and should have got a better deal. I honestly don't know whether they're right or not; the discussions took place at government rather than party level. Those of us outside the discussions can only judge based on our own opinions.

What I do know is that once our team have done their best, once a deal like this is struck, on any issue, the only choices we have as a party are to accept it or to walk away from One Wales. And that's ultimately a question of deciding whether to walk away from what is being achieved overall because of one item which is not being achieved.

It's public knowledge that we've had some agonising before coming to a conclusion, and that some have been agonising more than others. But ultimately, we have to weigh the failures against the successes, and decide whether those successes outweigh the failures. On this issue, we've made our choice, and it is up to the voters next time round to decide whether they think we made the right choice or not.

It's a compromise; of course it is. Not the first, and I'm certain that it won't be the last. It's certainly the biggest one to date, and one which means that our ministers are involved in implementing a policy which runs contrary to what most of us continue to believe to be right. It does not mean that the party has changed its position – and it certainly does not mean that I and other opponents of the policy will be arguing that top-up fees are the right thing to do. They're not, and I shall continue to say that, as will Plaid Cymru as a party.

Ultimately, the conclusion that we reach in circumstances such as these is not so much about whether it's the right decision to take, but whether, taken overall, One Wales is still right for Wales. And I will continue supporting the government as long as I believe that to be the case, even though I may disagree with particular decisions. Where those decisions conflict with Plaid policy, there is nothing at all inconsistent in continuing to promote the party's view.

What we need, if we want to implement more of our policies, is a numerically stronger Plaid team in the Assembly next time round. The larger the team, the fewer the compromises.