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Government may cap tuition fees at £7,000, says Vince Cable Business secretary scraps Lib Dem policy of opposition to fees and accepts thrust of Lord Browne's report into university fundingThe government may cap tuition fees at £7,000 a year, Vince Cable said today, as he told MPs he accepted the thrust of Lord Browne's report proposing a radical overhaul of higher education funding.In statement to MPs, the Liberal Democrat business secretary scrapped his party's policy of opposing tuition fees – but he may still face rebellion from his backbenchers. Before the election all Lib Dem MPs, including Cable and Nick Clegg, signed a pledge opposing tuition fees.Cable told MPs this afternoon: "We are considering a level of £7,000. Many universities and colleges may well decide to charge less than that, since there is clearly scope for greater efficiency and innovation in the way universities operate. Two-year ordinary degrees are one approach."Exceptionally, Lord Browne suggests there should be circumstances under which universities can price their courses above this point. But, he suggests, this would be conditional on demonstrating that funds would be invested in securing a good social mix with fair access for students with less privileged backgrounds, and in raising the quality of teaching and learning. We will consider this carefully."The business secretary said the government endorsed "the main thrust" of Browne's report. "But we are open to suggestions from inside and outside the house over the next few weeks before making specific recommendations to parliament, with a view to implementing the changes for students entering higher education in autumn 2012."More detail will be contained in next week's spending review on the funding implications. But as a strategic direction the government believes the report is on the right lines."He said one of the government's proposals might be "exempting the poorest students from graduate contributions for some or all of their studies".Directly addressing the issue of the breaking of the Lib Dem pledge, Cable said that he was the first member of his family to go to university, something he did not have to pay for. He would like others to have that opportunity, he said, but in the current circumstances that was not possible."I signed that pledge with my colleagues," he said. "[But] in the current financial situation ... which we inherited, all pledges, all commitments, will have to be reexamined from first principles."John Denham, the shadow business secretary, reminded Cable that Clegg had said before the election that increasing tuition fees would be "a disaster". "Promises were made by the business secretary and the deputy prime minister at the last election that should not be lightly thrown away," Denham said.Cable plans an early repayment penalty for tuition fees to prevent rich graduates paying less for their university education than those on middle incomes by avoiding cumulative interest payments, the Guardian has learned. He outlined the proposal to Lib Dem MPs last night. It is not clear how exactly he would organise the penalty, but it suggests he recognises there is a flaw in the scheme being proposed by Browne that makes the scheme less progressive than it might be. It is also not clear whether the early repayment penalty has the support of the Conservatives.Browne proposed the cap on tuition fees – currently £3,290 a year – should be entirely lifted, with graduates starting to repay the cost of their degrees when they start earning £21,000 a year, up from £15,000 under the current system. Institutions charging more than £6,000 would have to pay a rising percentage of each additional £1,000 as a levy to government.The interest rate at which graduates pay back their loans would be at the government's cost of borrowing – inflation plus 2.2%. However, those students earning below £21,000 would pay no real interest rate under the Browne plans. Their loan balance would increase in line with inflation.But the business secretary is battling to prevent a full-scale rebellion taking hold of his party over Browne's proposals.Greg Mulholland, the Liberal Democrat MP for Leeds North West, emerged as the ringleader of the rebellion, warning: "Without Lib Dem support and with Lib Dem ministers abstaining, it will be very difficult to get this through."It is certainly my belief that this is not a done deal and the strength of feeling among Lib Dem MPs could derail any attempts to see fees rising substantially and I will certainly be doing everything I can to make that happen."Mulholland insisted that his rebellion did not a represent a threat to the future of the coalition arrangement.He added: "I do not think this is a threat at all because it [the agreement] clearly states that Lib Dems will be allowed to abstain."Many Liberal Democrat MPs know their credibility and chances of retaining their seats rest on showing they are fighting the rise in tuition fees.Simon Hughes, the Lib Dem deputy leader, called for all Lib Dems to "consider fully" both Browne's proposals and the government's response. He said his fellow MPs were "very conscious of the positions we have taken on higher education and the policies we campaigned for at the last election"."Parliament should only support a progressive system which takes into account future earnings and makes sure that those who benefit most financially from a university education contribute the most," Hughes – who functions as a lightning rod for Lib Dem discontent – added.Tim Farron, the Lib Dem MP who is standing for the post of party president, wrote on the Twitter website that he would vote against an increase in tuition fees. "Unhappy with Browne report & would vote against fee rise," Farron posted.John Leech, the Lib Dem MP for Manchester Withington, said: "I signed the NUS pledge and supported our manifesto, which promised to vote against any rise in tuition fees. I am going to keep that promise. This is a political red line for me."His fellow MP Stephen Williams told Radio 5 Live he was unhappy about tuition fees going up and said he would "certainly" vote against the government if the Browne report was just about increasing tuition fees. But he hinted that, if Cable were to produce a more progressive scheme, he could support it. "Effectively at the moment you've got a flat-rate poll tax on all new graduates and if Vince is able to come up with a progressive system with different thresholds, perhaps different rates of repayment – you wouldn't call it a graduate tax, but it will have elements of graduation within it – that will be a much more progressive system for repayment than we have at the moment."Gordon Birtwistle, the Liberal Democrat MP for Burnley, who is a parliamentary private secretary in the Treasury, said: "At the moment, the Browne report as it is, is unpalatable, and we need to see what changes we can make. I was against an increase in tuition fees, but the financial situation makes it inevitable that it will happen. The country is basically bankrupt."Asked how he would vote, Birtwistle said: "I am keeping my powder dry."John Hemming, the Lib Dem MP for Birmingham Yardley, also gave a measured response, saying: "If you have a progressive scheme in which people on high incomes pay more than those on low incomes then it is moving towards a graduate tax. I will be getting out my calculator and studying the proposals in detail. One question is whether it is the fees system or a progressive graduate contribution."Clegg knows that many of his minsters will be free to abstain, and many are likely to do so, but he cannot yet know if public opinion will see that as sufficient form of resistance.Linda Jack, a member of the Lib Dems' federal policy committee, told the BBC's World at One she thought around 30 Lib Dem MPs could rebel over tuition fees. "I expect them to vote against because, frankly, if they abstain they are effectively voting for, because they know that if they abstain it will go through. The integrity of the party is at stake here. Everybody signed that pledge that they would vote against an increase in tuition fees so they have really got to stick to their guns on this."Liberal Youth, the youth and student wing of the Liberal Democrats, warned that removing the cap on tuition fees would lead to unrestricted costs and a market in higher education.Martin Shapland, the group's chairman, said: "You simply cannot build our future on debt. This move has the potential to cripple students with unprecedented levels of debt which will act as a real deterrent to those from poorer backgrounds seeking a better life through the education system."Higher fees will not be acceptable to grassroots Lib Dems and, I imagine, most of the parliamentary party."Tuition feesHigher educationStudentsEducation policyVince CableLiberal DemocratsLiberal-Conservative coalitionPaul OwenAndrew SparrowPatrick Wintourguardian.co.uk © Guardian News & Media Limited 2010 | Use of this content is subject to our Terms & Conditions | More Feeds guardian.co.uk |
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