Labour is finalising plans to slash university fees in an audacious bid to win over parents and students concerned by the spiralling cost of higher education and mounting student debt.
Labour leader Ed Miliband is expected to promise to reduce the £9,000 annual fee by at least £3,000. Insiders suggest the figure could be cut to £4,000 as the party prepares a counter attack to Tories pension reforms in a bid to win back voters.
The policy is understood to cost £1.7bn to implement – a sum that Labour are expected to argue will not be an additional cost to the Treasury because of the fewer debt write-offs. Tories last night dismissed the plan as an “underfunded spending promise”.
The student loan pledge was first floated by Mr Miliband in his 2011 conference speech but has been reignited in recent days after government calculations estimated that 45 per cent of outstanding student debts will have to be written off.
That figure is a marked increase from ministers’ original estimates of 28 per cent. Analysts say that should the figure creep over 48.6 per cent it would leave the Government set to lose more money than it gained by the tuition fee hike.
Party insiders say the proposal could be designed as prelude to the scrapping of tuition fees altogether. Liam Byrne, Labour’s shadow higher education minister, has previously said the party was considering a two-stage reform of student fees, starting with a cut and then a shift to a graduate tax.
“The rate of default emerged this week and it’s very high,” Labour’s Shadow Foreign Secretary Douglas Alexander told the BBC’s Andrew Marr. “I expect it is a policy that we will address in our manifesto and I hope that we’re able to offer a better solution to the students in this country and to the finances of this country than we’ve seen from the Conservatives.”
A Labour Party spokesperson said last night: “Labour will set out our manifesto policy on tuition fees at the appropriate time – but Ed Miliband has set out a clear direction of travel on this.
“Under this government we’ve seen a trebling of tuition fees alongside a lack of action on widening participation and access. Now it has also become clear that the Government’s decision to raise tuition fees to £9,000 is unravelling and could actually cost the taxpayer more.”
A Conservative spokesman said: “Ed Miliband is making an £800 million unfunded spending promise. That will mean more borrowing and more taxes to pay for it - exactly what got us into a mess in the first place. It’s the same old Labour with no plan to secure Britain’s future.”
Any pledge on fees is likely to be greeted suspiciously after the Liberal Democrats’ 2010 election promise to axe them, only for the party to support raising fees to £9,000 when in coalition.