Labour accused of playing ‘pork barrel politics’ with new student loan pledge
Labour has been accused of “pork barrel politics” after pledging to tweak the student loans repayment scheme without providing details or funding plans.
Bridget Phillipson, the shadow Education Secretary, announced on Friday that an incoming Labour administration would “make the system fairer and more progressive” by streamlining the current student loan repayments scheme to reduce the burden on recent graduates.
She said Labour would look to “reduce the monthly repayments for every single new graduate without adding a penny to government borrowing or general taxation”, insisting that the party could enact the policy without having to shore up extra funds.
“Labour will not be increasing government spending on this,” she wrote in an op-ed for The Times. “Reworking the present system gives scope for a month-on-month tax cut for graduates, putting money back in people’s pockets when they most need it.”
The Russell Group of elite universities welcomed the move, saying that proposed reforms would “put money back into the pockets of young people to help meet financial pressures”.
However, MPs and academics accused Ms Phillipson of dishing out empty pledges to secure the youth vote ahead of the next general election, insisting that the best policy would be to scrap university tuition fees altogether.
John McDonnell, the former shadow Chancellor, told i: “The tuition fee system is tottering on the grounds that most of the debt will not be repaid and will be written off. The obvious most practical solution remains the scrapping of the whole system.”
It comes after Sir Keir Starmer last month dropped Labour’s 2019 manifesto pledge to scrap university tuition fees. The Labour leader said party would likely “move on” from its former promise amid concerns that the party will inherit a damaged British economy that will leave it with little wiggle room for major policy reforms.
Mr McDonnell previously told i that the move could risk Labour haemorrhaging young votes at the next general election, which is expected late next year. He said it was a “real shame” for young people and would sow deeper tensions with the Labour left, which had spearheaded the push to abolish tuition fees under Jeremy Corbyn’s leadership.
The Conservative vote share has typically remained low in so-called “student seats” across the UK, where more than 10 per cent of the voting-age population are students.
However, it fell by almost 1 per cent at the last general election in 2019, with the Conservative Party boasting just 26 per cent of votes in the 77 student seats across the country, compared to 50 per cent who voted Labour.
The Conservative vote share among students is projected to fall even further at the next national ballot, with the latest YouGov tracker showing a 6.2 per cent drop in the number of 18-24 year olds who intend to vote Tory at the next general election, compared to the same demographic at the previous one.
Academics also warned that Labour’s pledge to reform the student loan repayments model was hollow without full details.
Professor Steven McCabe, associate professor at Birmingham City University, told i: “I suspect Labour are wary of making these big policy pledges ahead of the next general election – they don’t want to be held back by what the finances are going to be in a year’s time.
“What we need is the details… Sadly, higher education is likely to be an example of ‘pork barrel politics’ whereby the two main parties make claims about what they will give to young people in return for their votes.”
He said Labour’s most recent announcement, which comes months after Ms Phillipson pledged to overhaul the UK childcare system without spelling out any concrete details, shows the party is treading too carefully ahead of the next general election by failing to set out full plans for their policy proposals.
“It reminds me of that phrase before the 1997 election where Labour was described as trying to carry a Ming vase across a skate rink,” he told i. “They’re being very careful. They don’t want to be held hostage to fortune.”
Ms Phillipson sparked criticism earlier this year after she insisted that Labour would “move away” from the current system of free childcare hours, but refused to provide details of how it would replace it.
Conservative MPs have also called on Rishi Sunak to shake-up the childcare system, but the party has yet to announce a plan for doing so.
It means neither of two main political parties have proposed any fully-funded, spelt out plans to repair the ailing education sector.
Mr Sunak received criticism last month after announcing an unfunded ambition to make maths compulsory until 18, and raised eyebrows on Thursday after appointing England’s first ever free speech tsar to protect debate at universities, despite concerns over employees’ funding packages.
Labour’s U-turn on its pledge to scrap university tuition fees also means the party’s higher education policy is now closely aligned by the Conservatives’.
i understands that Ms Phillipson will try to amend the current system to weight student loan repayments more heavily on graduates’ later careers, to ease the burden on them after they leave university. It could include an interest rate cut and staggering repayments more dramatically.
Under plans announced by the Treasury last year, graduates will have to start repaying their loans when they earn £25,000, rather than £27,295, and will have to continue repaying for a maximum of 40 years rather than 30. Interest rates will be cut for new borrowers and tuition fees capped at £9,250 for another two years.
The system has been likened to a “graduate tax”, since student loans are subject to interest rates of up to 6.9 per cent and only around a quarter of students currently repay them in full.
Lee Elliot Major, social mobility professor at the University of Exeter, told i that without root-and-branch reform the new system will “penalise teachers, nurses and coal workers – people doing the very jobs we should value most in society.
“We also need to urgently review maintenance grants for less advantaged students, many of who are living on the poverty line, inevitably harming their educational prospects.”
Professor Alex de Ruyter, political economist at Birmingham City University, said: “Labour absolutely should have a vested interest in getting rid of student fees altogether, rather than just promising to cut monthly student loans repayments.
“On top of cost of living pressures, and with rent skyrocketing, home ownership for these people is becoming increasingly out of reach.
“This should be an electoral goldmine for Labour… Why not go all the way and write off student debt and scrap student fees?”
Labour was approached for comment.
