Student debt: Shadow Chancellor rows back on Jeremy Corbyn's pre-election pledge to 'deal with it'

'I don’t want to promise something we can’t deliver'

Rob Merrick,Samuel Osborne

Sunday 16 July 2017 10:05

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Shadow Chancellor rows back on Jeremy Corbyn's pre-election pledge to 'deal with' student debt

John McDonnell has backtracked on Jeremy Corbyn’s pledge to pay off some historic student debt – downgrading it to an “ambition” for Labour.

At the general election, the Labour leader fuelled a huge surge in support among young people by promising help for students stuck with enormous debts from tuition fees.

Pledging to axe fees in future, he told NME magazine: “I don’t see why those that had the historical misfortune to be at university during the £9,000 period should be burdened excessively compared to those that went before or those that come after.

“I will deal with it.”

Should I vote Labour? Corbyn's biggest policies explained

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1/9Should I vote Labour? Corbyn's biggest policies explained

Labour is committed to leaving the European Union but would have different negotiating priorities to the Conservatives. It has said it would have a “strong emphasis” on staying in the single market and the customs union. German Chancellor Angela Merkel and leading figures in Brussels have been unambiguous that membership of the single market is impossible without free movement.

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The party would drop “bogus immigration targets” but move to a managed system of migration favoured by many leave voters. It has said this “may include employer sponsorship, work permits, visa regulations or a tailored mix of all these”.

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Labour’s manifesto commits to balance government spending with the amount raised by taxation, which can mean little more than significant tax increases. The greatest burden will fall on higher earners but they cannot meet demand on their own. It has also promised to bring rail companies back in to public ownership and cap fares. The party would also renationalise Royal Mail. It also promises a “transition” to publicly owned energy.

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No one earning under £80,000 would pay any more in national insurance or income tax. It would raise corporation tax, from the current low of 19p to 26p. This higher rate would still be a competitive internationally, but the government is currently fighting hard to attract business in the wake of Brexit and they say a low corporation tax rate is crucial. Labour would also lower the top, 45p income tax threshold to £80,000. In theory, this could raise £7bn, but only if higher earnings did not decide to move abroad.

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Labour has promised more money for GP services, free hospital parking for patients, staff and visitors, and to take a million people off NHS waiting lists by guaranteeing treatment within eighteen weeks. These promises will be expensive to keep, and there is no certainty that the party’ s commitment to raising taxes on higher earners, increasing capital gains tax and reversing cuts to corporation tax will be enough to meet the need.

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The party has pledged to abolish university tuition fees and reintroduce maintenance grants and give free school meals to all schoolchildren.

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Labour’s manifesto commits to building 1m new homes, and would introduce controls on rent rises for private renters. It would also scrap the so-called bedroom tax.

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Labour would ban fracking, but, crucially, also supports new nuclear projects. It would also introduce a new Clean Air Act to deal with illegal air quality

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Its manifesto says it is committed to the NATO target of 2 per cent spending on defence. It is also committed to the renewal of Trident, even though Jeremy Corbyn has spent a lifetime campaigning against it.

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But Mr McDonnell, the Shadow Chancellor, has now acknowledged the expected bill – around £100bn – is “a lot of money”.

He told the BBC’s Andrew Marr Show: “We will look at what we can do.”

Mr McDonnell added: “We are going to try to, it’s real ambition of ours – I don’t want to promise something we can’t deliver.”

Last week, the Shadow Education Secretary, Angela Rayner, said it was Labour's "ambition" to write off all student debt.

However, she also admitted it was a “huge amount” and said the party would not commit to doing so “unless we can afford to”.

While Labour pledged to scrap university tuition fees in its manifesto, Mr Corbyn went further by suggesting existing debts could be wiped from the books.

The Greens were the only party to include a similar commitment in their manifesto.

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