Briefing from the Prime Minister’s Official Spokesman on: Tuition Fees, UK Economy and Europe.
Tuition Fees
The Prime Minister’s Official Spokesman (PMOS) drew journalists’ attention to an OECD report, published today, which highlighted positive elements of the Government’s policy on higher education. It said that letting graduates pay a larger share of the study costs would be "both fair and economically efficient. The Government’s plan to introduce a graduate contribution scheme was both innovative and welcome. It resolved the credit constraints facing students from poor backgrounds by giving a loan to fund increased tuition fees which would have to be repaid after graduation, unless the person’s income fell below a minimum threshold". The report also stated that the Government’s plans for a graduate contribution scheme were "commendable". It also made the point that, given the growing constraints on public finances, it would be difficult to raise large amounts of extra funding for British universities via general taxation. Nor would it be fair when considering that the individuals endowed with education enjoyed large gains from it. The report also talked about how maintaining the improvements in areas such as Sure Start, while expanding higher education based on contributions from those who benefited from it rather than based on general tax revenues, was the most direct way to ensure equity in education outcomes. The report concluded by saying that the UK’s graduate contribution scheme "could be a role model for other countries in Europe". The PMOS said that Charles Clarke had issued a response to the report this morning in which he had warmly welcomed the findings.
Asked if the Prime Minister felt that he won over any of the critics in the Newsnight audience last night, the PMOS said it was important to remember that the audience had been chosen precisely because they were opposed to the Government’s policy. As was well known, the Prime Minister had never been one to duck an argument. He believed that it was important to take on those who had concerns and were more critical of the Government’s policies. Of course, no one was under the impression that the National Union of Students, for example, was necessarily going to change its position on this issue based on a 45-minute discussion with the Prime Minister. The Prime Minister was committed to listening with respect to what people had to say. Obviously people had concerns, but he believed that the more people listened to the argument and heard what he had to say and what the Government was actually planning to do, the more they would realise that these were difficult choices and difficult decisions and that what we were proposing was fair and right. He believed it was important to go out and make the argument, which was precisely what he was doing. It was important to be clear what this issue was all about. As the Prime Minister had stated many times, there was no Plan B which would deliver what everyone wanted, namely more money for higher education, in a way that did not mean raising revenue from somewhere. That principle was pretty firmly established, he thought. The question was whether to raise some of that extra revenue from the individuals who would benefit from higher education, an idea of which today’s OECD report approved, or whether it should be done through general taxation. One of the slides the Prime Minister had used in his presentation at his monthly press conference last week showed that at the moment we invested £1,800 a year in the education and care of each three year old, £3,200 for each primary age child, £4,000 for each secondary age child, £4,300 for each young person who went to college after sixteen, and £5,300 a year for each university student. The question was that if more general taxation was to go into the education system, where was it most equitable for it to go. As the OECD report had set out today, continuing to invest in Sure Start and primary education was obviously the best way to ensure equity of outcome. Asked why the money couldn’t go to both, the PMOS said that it was always open to Governments to increase general taxation and put the money raised into all sorts of different areas of public spending. But the Government had to make judgements about overall levels of taxation. Equally, there were a very large number of commitments and competing needs in the country which the Government obviously had to look at in the round. The Prime Minister would be meeting MPs again today to listen to their concerns and make his arguments. Asked if he was engaging in more ‘arm-twisting’, the PMOS said that he wouldn’t characterise the meetings in those terms. The Prime Minister was continuing to go out and make the arguments. He understood that some MPs had concerns. However, he believed that once the totality of the policy was explained, people would see that it was balanced and fair.
Put to him that comparisons between three, five, eleven, sixteen and eighteen year olds were ’specious’ inasmuch as it cost less to teach young children, the PMOS said that as the OECD report pointed out, much of the increase in education spending since 1997 had gone into improvements in nursery education with the Sure Start programme, and in compulsory education, notably improving achievements by relatively more in schools in disadvantaged areas. The report talked about maintaining those improvements while expanding higher education as the most direct way to ensure equity in education outcomes. Investment in Sure Start was increasing as the scheme was expanding around the country. However, it was not at the level that everyone would necessarily want it to be. Clearly there were tough choices to make. Given the fact that something like five sixths of the cost of higher education would continue to be subsidised by general taxation, the question was whether to put even more general taxation into higher education when the individuals concerned would benefit from it through increased earning power. If safeguards to protect poorer students were built in, as they had been, access to university would still be maintained.
Asked if the Prime Minister was concerned that the public’s trust in him had diminished to the extent that even a fifteen-year-old school girl was accusing of him of lying over the issue of tuition fees, the PMOS repeated that the Newsnight audience yesterday had been chosen precisely because they were critical of the Government’s policy. The Prime Minister had never subscribed to the view that participating in discussions meant appearing in front of a patsy audience of people who were going to give him plaudits. It was better to go out there, confront the arguments head on, listen to what people had to say and engage in real debate. The schoolgirl in question had expressed her view and the Prime Minister had listened respectfully to her. In turn, he had explained why he believed that the policy was the right one to pursue. His words spoke for themselves.
Asked how the Treasury was planning to keep track of graduates after university to make sure that they repaid what they owed, the PMOS said that as he understood it, the scheme would work in the same way that current students paid back their loans - through the tax system.
Asked if it would be fair to characterise the Government’s policy as a brain tax or intelligence tax, the PMOS said that he would leave journalists to write the headlines. He hadn’t heard anyone characterise it in that way. The policy was about developing a fair system of repayment consistent with getting extra investment into our universities and protecting access.
UK Economy
Asked if the Prime Minister would also welcome chapters 2 and 3 of today’s OECD report which warned the UK that its housing market was at risk and that the Government was borrowing too much - a large amount of which was not going into Britain’s public services, the PMOS said that that the OECD forecast confirmed the Government’s view that the Golden Rule was on track to be met over the current economic cycle. The PBR forecast, which was based on cautious assumptions, showed that we could meet all our commitments, both in Iraq and at home, that borrowing would remain substantially below that of the US, Japan, Germany and France for example, and that we would meet our fiscal rules. Asked if the Prime Minister would agree with the report’s warning that the UK might not be getting value for taxpayers’ money and that the housing market was at risk, the PMOS said that the Government continued to believe that its spending plans remained fully affordable, consistent with the fiscal rules, and that, moreover, they were necessary to correct the decades of under-investment in our public services. He would dispute the thesis that the extra investment was making no difference to our public services. It was - and that was because it was being allied to reform. People were already seeing changes across the piece - for example on health, where the number of people waiting twenty-six weeks for outpatient treatment had been virtually eliminated. He could go on. Put to him that it was a contradiction to welcome the OECD’s conclusions on higher education while disagreeing with the report’s assessment of the UK’s economy, the PMOS said that the Government would continue to manage the economy prudently. Our track record thus far showed that we had delivered stability consistent with low interest rates, low inflation and low unemployment.
Europe
Asked about Jack Straw’s meeting with the French and German Foreign Ministers yesterday and why we had failed to flag it up, the PMOS said that the British Government had meetings with representatives from other Governments all the time. It was not unusual. We continued to work closely with France and Germany on a number of issues, as the last Brussels Summit showed, on defence for example.
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