Leading article: The wrong policy for Lib Dems to oppose

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Reform of the way we pay for higher education is overdue. For years, funding has not kept pace with a rapid expansion in the number of students, resulting in a fall in the amount spent per student and a growing financial black hole in universities – shortfalls only partly met by the introduction of tuition fees.

Unfortunately, though perhaps inevitably, there is no broad national consensus on the way ahead, which is why Lord Browne's report on university funding, out tomorrow, can expect a rough ride in Parliament and in the country. With Liberal Democrats committed to opposing any rise in university tuition fees, and Labour scenting a vital opportunity to score a victory under their new leader, the Government may struggle to get its education reforms through Parliament next month. Even that scenario depends on a fair number of the 59 Liberal Democrat MPs abstaining rather than voting against.

What the former BP chief executive is expected to propose is a lift in the cap on tuition fees from £3,290 a year to around £7,000 a year, with the possibility of some universities charging more for certain courses. As some university heads have said, the changes would mark a major transfer of the cost of higher education from the state on to the student – and here lies the stumbling block for many of the centre and the left of politics, for whom access to higher education is an absolute right, not a privilege.

While the idealism of the Liberal Democrats is admirable, their maths doesn't add up. This is not just a question of the deficit, although predicted sharp cuts to the higher education budget in the October spending review will, of course, make the financial problems in higher education even more serious. In fact, the crisis in student funding predates the deficit crisis.

In the early days of the welfare state, it was easy for government to fund universities, because the total number of students was tiny. Today, when almost every large town has its own university, it is an entirely different matter. Globalisation, meanwhile, makes it essential that universities enjoy more discretionary power to raise the money that will enable them to remain competitive, not merely locally, but in the world. British universities must continue to attract top international students, but this can only happen if they can generate more money to invest in research, bursaries and modernisation.

Liberal Democrat and Labour MPs have yet to say where this extra money should come from – only that it should not come from higher tuition fees. Vince Cable has, mercifully, surrendered the notion of a graduate tax, paid retrospectively, which would have been a bureaucratic nightmare to administer. But we have not heard what the Liberal Democrats' Plan B is. As for Labour, its opposition to the Browne proposals looks downright opportunistic. Labour brought in tuition fees and it was Lord Mandelson who commissioned Lord Browne's report in the first place. Neither Labour nor the Liberal Democrats have set out a convincing case for why the whole population, through general taxation, should subsidise the tertiary education of a minority who can expect to earn well above the average.

While the Government is broadly right in its intentions, it ought not to overstep the mark. The universities minister, David Willetts, should strongly resist pressure to put fees up beyond £7,000 a year. At the same time, the Government must expand the provisions for students from disadvantaged backgrounds and continue to subsidise interest rates on student loans.

The way we fund tertiary education needs to change if the whole system is not to stagnate. But this change should not come at the expense of the social diversity of the student intake. Reform must be hard-headed but progressive. If the Government can show it is serious about the latter, the Liberal Democrats should reconsider their current position on the matter.

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