“universities have a unique role. We cannot have an economically dynamic, socially mobile or culturally rich society without strong universities.”

So started Vince Cable’s speech today at London South Bank University. It’s a good a start, with which I completely agree. Perhaps HE will be spared the worst of the cuts agenda.

“I wonder how many people in this room really – deep down – are psychologically prepared for a period of consolidation, perhaps even contraction. Because that is what we face.”

Well, that’s not so good. I thought universities were essential for a dynamic, culturally rich society, isn’t that something we’d want to promote? Other countries are promoting tertiary education and research as a way out of recession and to grow the economy. As Vince accepts, telling us that some businesses are wary of cuts, that not only STEM subjects but media studies, arts, languages even philosophy, which is “a lot more than an interesting diversion”, contribute to the growth of our economy. And, of course, it’s not all about economics, as Vince agrees:

“You can’t measure in cash returns alone the transformation of the life opportunities of a working class child through a university education that raises their sights – and those of their children.”

Well indeed, education can be hugely transformative, it can be a great driver of social mobility. That is if everyone can afford to get there. But perhaps everyone can already get there. Maybe we have too many people going to university already.

“Yet at the same time, the CBI estimates that by 2014 there will be unmet demand for 775,000 roles requiring higher level science, technology, engineering and maths (STEM). Around 60% of businesses expect problems recruiting staff with STEM skills over the next three years.”

Well, perhaps not then. On a more serious note, there may be a problem with a system that prioritises higher education and downplays the role and importance of further education, apprenticeships and other routes people can take from school. But those choices need to be open to all pupils leaving school and not dictated by financial circumstances or background.

Back to fees then, Vince tells us we have to accept that in future there will be less public support and more private investment in tertiary education. We need to ensure that “those who benefit most” pay their way in funding our universities and colleges. Well I’m not sure it’s quite what he had in mind but as it happens UCU have a similar idea. That’s why they’re proposing a Business Education Tax to make sure businesses contribute to the education of their future customers and employees. Glad to see Vince is on board.

Of course, Vince didn’t have to pay for his education he had “the remarkable privilege of being educated free” but tells us:

“there was also a sens of unfairness articulated by Alan Johnson when he was Minister: why should a young postman contribute through his tax to pay for an already privileged group to avoid earning a living for three years and then emerge with higher earnings potential?”

To me though, that doesn’t really make sense as an argument. If the graduate is going to have a higher earnings potential won’t they pay the cost of their education back through higher taxes? Isn’t that the point of a progressive income tax? And doesn’t that postman benefit from well trained doctors, teachers, research scientists as much as everyone else in society? Because isn’t education really a public good not a private one? Sure, I enjoy my PhD and getting to work as a scientist. I’ve had innumerable benefits from my time at university, not least my political education and time to write these ramblings. But I hope my work will, someday, contribute back to society and I’m sure many of my friends who are working as doctors and teachers and lawyers and artists and activists are improving the lives of others and their communities. Vince obviously doesn’t agree though and

“In any event, a model designed for 10% of the population could not be applied to 40%: hence the move to a graduate contribution”

But doesn’t the increase in the number of people who go to university actually undermine the case for graduate contribution? The more widespread tertiary education is the fewer people who pay for ‘something they didn’t get’ and the closer you are to just charging the cost equally across society, regardless of educational history.

“In this sense, we already have a form of graduate tax. The problem is that it is a fixed sum – a poll tax – regardless of the income of the graduate.”

Here, Vince is correct. We do have a form of graduate tax already and that admission should, at least, make us wary that this whole exercise isn’t simply a rebranding in order to increase the fees student have to pay in future. But go on:

“It surely can’t be right that a teacher or care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer or surgeon or City analyst whose graduate premium is so much bigger.”

Indeed it can’t Vince, but you know what would fix that, without any costly administration to keep track of who are graduates and where they are, and if they’ve left the country, income tax.

“The current system has the further disadvantage that it reinforces the idea that students carry an additional fixed burden of debt into their working lives. Yet, most of us don’t think of our future tax obligations as ‘debt’.”

And again we see the rebranding of the current system into something much more progressive, yet this description would be just as true if the government were to replace fees and loans with a flat tax, yet that change would have no effect on most people.

“I accept that universities do, of course, need clarity about income streams now, in terms of what level of fees can be charged to whom, rather than an uncertain flow of revenue over the long term.”

Yet if we simply funded education from the general tax pool we could guarantee funding much more easily than the vagaries of the market. Moreover we could intervene to counter those variations in endowments and private funding that result from changes in the market, but then, counter-cyclical spending doesn’t seem to be a very popular idea right now. But if we leave everything to private funding then come the next recession universities could be in an even worse situation.

The full text of the speech

About Alasdair Thompson

Alasdair co-founded Bright Green Scotland in 2009.