A Fee Too Far?

Students protest in London (BBC News)

I feel fortunate that I am not an MP today, and even more fortunate that, way-back-when actually governing seemed like a distant pipe-dream, I didn't sign any sort of pledge to abolish tuition fees. I'm sure it seemed like a good idea at the time but some Liberal Democrats are learning the hard way that photo opportunities (like the tutition fee pledge) sometimes come back to haunt you. Today, our nation's Liberal Democrat parliamentary representatives will face one of the most politically challenging decisions of their careers when they face a vote on proposed changes to higher education funding.

Under the new scheme, the cap on tuition fees would be increased to £9,000 per year (up from around £3,200). This is to offset changes under the deficit reduction plan that will see cuts of at least 40% to university funding. Essentially, the weight of responsibility for university funding will be shifted from the taxpayer to the graduate. While this might seem frightening (particularly when you consider a typical degree will take three years, incurring up to £27,000 of debt for the graduate before they have even taken a job), plans have been put in place to try and alleviate the burden. First and foremost, under the proposed scheme, students will not have to pay anything up front, thereby maintaining the accessibility of university education. Secondly, no graduate will pay a penny until they are earning £21,000 per annum (with this threshold increasing annually according to the rate of inflation). Once graduates do start paying back their fees, they will pay only 9% per month. While this might seem alot, it ensures that higher earners will pay more back, and will pay more quickly than those on lower incomes. Finally, the debt will be written off after 30 years so no-one will be lumbered with the burden indefinitely.

Happily, having never made any election promise pertaining to tutition fees, I feel secure in stating for posterity that I am in favour of the new proposals and that, if I were an MP today, I would vote accordingly. While I baulk at the thought of students accumulating debt to the tune of almost thirty grand, I acknowledge that present circumstances prohibit even the status quo, never mind abolishing fees altogether. Present circumstances include the fact that we are in coalition and must compromise with our Conservative colleagues, allowing them to meet some of their election pledges at the same time as meeting some of our own. We have, and will continue to achieve some of our manifesto policies, but abolishing tuition fees was never going to be possible in a coalition, either with the Conservatives or with Labour. Furthermore, the previous government has left the country with a much greater deficit than even the most pessimistic estimates predicted. As a result, cuts have had to be deeper and more immediate than we believed was the case during the election period. (Welcome to the world of Labour lies.) Either way, the simple truth at the end of the day is that there are more important spending priorities, including health and schools, than ensuring a free university education for anyone that wants it. I would, of course, prefer not to increase tuition fees at all and would love to be in a position to guarantee free higher education to all but, facing budget cuts, universities have to be allowed to charge students higher fees. If they are not allowed to do so, it will not be a reduced uptake for students from poorer backgrounds that we face, or a generation of students in a debt crisis; it will be a generation of students fighting for a greatly reduced number of university places and this benefits no-one.

In addition, there is the greater debate of whether it is right for the taxpayer to fully fund higher education. I have found very few people that believe the taxpayer should shoulder the burden alone, but most of the people I have discussed it with are cautious about increasing fees to the proposed £9k. It seems therefore that the problem is not the fees themselves but the number. £9,000 is still a lot of money to most people, especially multiplied three times. Generally, however, I have found a lot of support for the new proposals, especially when people come to understand that those who earn less will pay less. Most people seem convinced that higher education should not be pervue of the taxpayer.

This debate fundamentally differs in England than in Scotland where there is a cultural tradition of free education. I know my Dad is very much against tuition fees, but I haven't discussed with enough Scots to get a reasonable grasp of public feeling north of the border.

Either way, the choice in government today is simple: increase the cap on tuition fees and ensure funding security for universities, or maintain the status quo on tuition fees and doom thousands of youngsters to a future where there is no university place for them at all. There is no question of whether we should abolish tuition fees or not, because it is not achievable in coalition. Faced with these choices, I believe the proposals are progressive and I therefore support them. I believe that students will be better off in the long-run and that the policy has greatly benefitted from the influence of the Liberal Democrats in government. Without this influence, the cap would probably have been lifted altogether and I doubt that any of the measures to ensure accessibility for students from poorer backgrounds would have been part of the policy.

Of course, if I were an MP today, I may well have got there by signing a pledge or campaigning on the principle of abolishing tuition fees, in which case my views are quite different. For those who have made promises, particularly by signing pledges, the situation is very much more complex. It is clear that some MPs will feel bound to vote against the proposals, regardless of any merits. I personally feel that an MP's duty is first, to their constituents and second to the government as a whole. MP's are there to represent the people that elected them so if a candidate stated that they would oppose any increase in tuition fees, in simple terms, they risk betraying their electorate if they vote in favour of the proposals. There is a question about whether this individual policy was crucial in each individual campaign and how many constituents realistically support the abolition of tuition fees, as politics is anything but simple, so it will therefore be a matter of conscience for some Liberal Democrat MPs and I leave it to them to determine how best to represent their constituency. However, I would personally discourage abstention as 'the cowards way out'.

My final concern is how the Liberal Democrat party will be perceived after this crucial vote. In coalition with the Conservatives, I always feared that we would come off worse. It is harder for our credibility to survive compromise with the defense "it would've been worse without us" than it is for the Conservatives, who will convince right wing supporters that their more moderate policies are all our doing. I would like to think that four years down the line people will be better off and recognise our influence in bringing that prosperity. It is particularly difficult to think positively in a firestorm of negative media coverage and also difficult to think positively when the future of the nation is hurling missiles and injuring police in violent protests. How representative of voter feeling these protests are remains to be seen. After all, Labour promised not to introduce tuition fees and did, and pledged not to increase them and did, and they survived in government for over a decade. I think as long as we can maintain our identity as Liberal Democrats and ride out media interest without being seen to be weak, we will get-by.

Rural Unemployment

I worked from home today so I had the pleasure of the BBC News channel this morning while I was logging on. There were several interesting reports - student fees and benefits were the hot news of the morning - but the one that really caught my attention was a report that said unemployment in rural areas was lower by percentage than in urban areas. The BBC went on to report about two young people from rural communities, one apprenticing as a butcher and a young woman learning a trade as a stone mason. It was a very interesting report but sadly, very poorly reported and sorely under-researched.

I spent my adolescence in a rural Scottish community so I know too well the choices and issues that people living in rural communities face. I therefore wasn't surprised by the statistic and can immediately think of some reasons for it that the BBC didn't even mention.

Firstly, populations in rural communities tend to be quite static, occasionally increasing or declining, but not usually by too much. Planning constraints and green belt often limit the number of homes that can be built which limits the potential for growth. This in turn has the additional effect of inflating house prices as demand (by wealthy investors looking for holiday homes or second homes) outstrips supply.

Employment and education also tend to control the population. Back when I was approaching the end of my school days, if you were good at exams, you were encouraged to go to university (if you weren't the careers advisors made other suggestions, including the armed forces, college in Inverness 40 miles away, apprenticeships or work.) and going to university meant moving out and moving away. Dundee is the nearest city to Strathspey, where I grew up, and is around 90 miles distant; Aberdeen and Edinburgh are just over 100 miles away and Glasgow is about 125 miles away. As a school leaver in the Highlands with decent exam results, moving away was a virtual certainty. However, because of the type of employment available in the area, staying away was an almost equal certainty.

While there are plenty of employment opportunities in rural communities, they can also be quite limited and often unstable and this keeps young people away. In Strathspey, many of the employment opportunities are based on the tourist industry, which is highly seasonal and horribly unstable. There are plenty of positions in hotels and bars, in retail and in sports and leisure but this type of work is notorious for being there one minute and gone the next. Tourism is dependent upon so many factors: Lots of cheap overseas deals is death to the British tourism industry; something like a Foot and Mouth outbreak keeps visitors away in their droves; even the wrong sort of weather (a warm winter or a wet summer) might result in a massive drop in visitor numbers and global terrorism keeps foreign visitors away too. It's also ironic that the recession is doing wonders for our tourist industry: When the nation is prosperous, British tourism suffers as people are able to spend more money on overseas holidays to exotic destinations. Rural communities do present other opportunities; in farming, land management, environment, education, social care and local government, but such positions are far less abundant

In addition, when you live in the middle of nowhere, the cost of living is also higher. In a city, if you can't get work, you get rid of your car and you shop in Aldi instead of Sainsbury's. When you live in a rural community, you need a car because there is limited or no bus service. (Where I lived, the Doctor was in the next town, 3 miles away, as was my school and the chemist.) In a rural community it also costs more to run your car. In a city you have a choice of any number of petrol stations to fuel up (I have 6 choices within a 5 minute drive of my house or place of work) but in a rural community, there might only be one within a 30 minutes drive. A captive audience means a higher price. And forget going to Aldi for your shopping; if you're lucky you might have a supermarket in your town, but you might equally be reliant on a supermarket quite some distance away, or on smaller shops with higher prices.

Don't get me wrong, rural life is wonderful. Living in a rural community is an enriching experience and if I felt it was a viable option, I would have moved back years ago. The air is cleaner, locally produced food is better, the pace of life is more relaxed and the view is magnificent, but make no mistake, rural life is also bloody hard. For more than a decade I watched my parents working hard to make their business - a gift shop and cafe - work through years of tough conditions. It was graft. Every single day. And decisions had to be made with the business and their survival in mind. (I got married in September because that was the best month dictated by the requirements of the business.) It doesn't surprise me that unemployment is higher in the urban areas than in rural communities because, in a rural community, if you lose your job or it disappears because of a bad season, the choice is to get something else, quickly, or leave for a place with more opportunities. When you also consider that young people, who tend to move away from rural communities to take up study after school, are the worst affected by unemployment, and the statistics mentioned by the BBC begin to make more and more sense.

What Else Are They Hiding?

Back in 2007 it became all too apparent that for years, banks around the globe had been trading irresponsibly. In the space of a year, something in the region of thirty global banking organisations went from operating normally to teetering on the brink of oblivion. The consequences of this fall from grace are well documented and continue to be felt by ordinary people all around the world as unemployment, higher taxation and low interest rates begin to erode the money in our pockets.

The warning signs of the crisis were there to be seen, if you chose to look hard enough, but you didn't have to be Vince Cable to see them. There were plenty of symptoms of the ongoing corruption that anyone could spot.

As early as 2006, thousands of people were successfully reclaiming bank charges by arguing that they were unlawful penalties. These were the charges levied by banks for each bounced direct debit, bounced cheque or for each transaction that exceeded an overdraft limit. Charges were, at that time, typically around £30 or £35 each, and it was not unusual for a bank to make multiple charges for a single infringement, for a bank to charge against transactions that they were able to block, or to refuse a transaction for less than £30 only to then levy a charge of £35. They were sneaky and underhanded practices that punished those most in need of help, like people on low incomes and individuals suffering temporary financial problems beyond their control. Banks justified their practices using a number of excuses, and defended them in court by claiming that the charges recovered additional administration costs. At one stage extra admin costs for these functions were estimated to be somewhere between zero and £6 per transaction. Most banks continue to charge over £10 per fee, and many continue to charge almost double that.

In addition, there are thousands of PPI (Payment Protection Insurance) policies may have been mis-sold. Payment Protection Insurance covers the policy holder in the event of redundancy or illness. However, many of the policies have been taken out without the borrower's knowledge or consent, have been sold when not needed, or been sold where the policy didn't apply so that the borrower could not actually make a claim.

There have also been multiple complaints about other products being 'sold' without the borrower or account holder's knowledge. Most banks now have privilege accounts that include extras, such as holiday insurance, mobile phone insurance, breakdown cover and more. For these so-called services, the banks charge anywhere from £10 to £20 per month, adding up to somewhere between £120 and £240 per year. If you don't take a holiday abroad, don't have a mobile phone (or have home contents insurance that already covers your mobile phone), don't drive a car or pay separately for breakdown cover, this is money. It is better in your account than in your bank's pocket. Even if you do take advantage of one or two of these add-ons, you are still probably paying well over the odds for the product.

Today I read that the British Bankers Association is seeking a judicial review of new rules that are due to come into force on the 1st of December designed to prevent these kinds of practices and to ensure those that have been mis-sold PPI receive refunds. The BBA's reasoning for seeking a judicial review is that they believe the new rules are illegal. It seems the actual reason for the review is that the banks are concerned that they could be forced to refund billions in mis-sold PPI policies, but worse, that this could then set a precedent that would open the doors to refunds for other mis-sold products. It makes me wonder what else the banks have swept under the rug that might be a liability for them.

The fact is that practices that have been employed by most, if not all of Britain's banks, have left them horribly exposed to liability and litigation. These practices may not have been systemic, but the were certainly endemic. They were callous, ruthless, devious practices that were possibly encouraged and, when complaints started to roll in, were certainly ignored. The banks made a mint off unsuspecting customers and in many cases refused to issue refunds when they were caught out. This is a mess that is of the banks' own making. It's time they accepted the legacy that they have made for themselves. An apology for their collective arrogance wouldn't go a-miss either.