This is the reason for the growth in numbers - not because fees were allowed to charged. Also, it was the Conservative Government that introduced differential fee levels. Universities do not have this power as yet. This has proved to be very controversial, and in essence is really a quite a superficial policy. For example, I may choose to study Law, which costs me more than Arts, but might end up not practising at all, or working for a community legal firm where the pay is lousy, but makes me feel good. However, because the Government has deemed Law to be a passport to riches, I have to pay more.
Conversely by majoring in cultural studies in my Arts degree, I might obtain a job with a prestige national newspaper, where I earn squillions thanks to my wit and repartee. I would have thought a better solution would be to increase marginal tax rates for high income groups who are earning real money.
The present Conservative Government has slashed funds to the system, and has allowed partial privatisation to occur, although this situation is like being a bit pregnant - full privatisation appears on the horizon unless we can reorder our priorities. With this happening, universities seem to have little option but to seek funds elsewhere. They certainly have no stomach for a fight.
The commodification of higher education is a hot topic in Australia at the moment. The University of Melbourne has established a fee-paying private "mirror" institution of the public one, which will be open for business in a couple of years for postgraduates and the corporate sector. Universities are continually on the look-out to escape government regulation, and reposition themselves in the private sphere. The question that needs to be answered is, do we want a publicly funded, accessible higher education system, or a private system based on ability to pay? It seems we can't have both.