Tuesday, October 12, 2010

How student fees hit the middle class hardest

A key part of the argument for raising student fees is that, as one Tory activist put it, "our universities need extra funding and they are not going to get it from the taxpayer".

This argument relies on a very strange definition of "taxpayer". The Browne report recommends that people earning more than £21,000 should pay a lot more to help fund universities. By definition, these people are all taxpayers. So, in fact, the universities are going to get extra funding from the taxpayer.

So why do supporters of higher fees argue that universities "aren't going to get extra funding from the taxpayer", when the opposite is true? The most common explanation given, over the past ten years that I've heard these arguments, is that middle class people will not support rises in general taxation to pay for higher education.

This leads to a very strange situation. In order to avoid making middle class people annoyed at having to pay extra taxes, the government is proposing to ensure that the cost of funding this particular public service falls disproportionately on middle class families, through a complicated and bureaucratic system of fees and loans.

We see this in other areas, too. In order to prevent council tax from rising, many councils have a policy instof increasing the fees which they charge for services like childcare, parking or care for the elderly. Again, this hits hardest people who earn or who have savings just above the threshold to qualify for help.

Politicians who promise to keep taxes down pretend that they are doing so to support middle class people. But what they give with one hand in lower taxes, they take back several times over with fees, charges and cuts . And you end up with the absurd situation where people who go to university and go on to earn £100,000 end up paying less then those who go to university and end up earning less than half that, or where families earning £80,000 get more in benefits than those earning £50,000.

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