Monday, 3 July 2017

Payback Time

Less than a fortnight before she called the general election, Theresa May claimed that Labour's proposed policy to fund free primary school meals through VAT on private school fees was evidence that a government led by Jeremy Corbyn "would bankrupt Britain". Not much thought seems to have gone into that response, considering that Labour's proposal was cost-neutral and the amount in play was tiny, which perhaps reflected that the Prime Minister's mind was already elsewhere. Since the election, the debate on education policy has jumped from the wisdom of scrapping free school lunches and reintroducing grammars to scrapping tuition fees and reintroducing the education maintenance allowance. Support among Tory MPs for taking food out of the mouths of babes appears to have waned while some, such as Damian Green, are admitting that tuition fees are an "issue". That said, veterans of the coalition government that raised fees from £3,000 to £9,000 in 2012 are firmly resisting any backsliding, largely on the grounds that free tuition represents an unfair subsidy. As Michael Gove put it: "If you don’t benefit from a university education, you shouldn’t have to pay additionally to support those who do".

The premise behind this is that non-graduates do not benefit from the education of graduates. This is obviously wrong in particular - a non-graduate may directly benefit from the ability of a graduate doctor or nurse to save their life - but it is also wrong in general. There is a strong correlation between average educational attainment and national GDP, and strong evidence that graduates are not just more productive themselves but that they help raise productivity among non-graduate co-workers as well, thereby producing higher incomes all round. While the state obviously pursues an ideological agenda through education, and religious indoctrination is still a factor in school and curriculum management, the primary objective of modern government is to ensure that students have the skills demanded by industry. That increasingly means analytical and data manipulation skills, hence the expansion in further education since the 1990s. A secondary objective is to cajole university research, through systems like the Research Excellence Framework, towards areas that may ultimately be of benefit to the national economy. The UK's investment in R&D remains low, relative to other developed nations, which means that the higher education sector (which accounts for about a quarter of the total) is critical to any future above-trend growth in investment. A coherent and comprehensive industrial strategy would seek to expand this.

While Secretary of State for Education during the coalition years, Gove emphasised economic value as much as the development of moral fibre, even going so far as to insist that all schoolkids should learn to code while wearing ties. That might sound like a joke, but it is representative of Gove's ambition to reconcile the old instrumentality of "traditional intellectual disciplines" (learning Latin will get you a job on a broadsheet) with the new instrumentality of "modern technological innovation" (learning computer science will get you a job building apps). In reality, further education largely inculcates general skills (chief of which is how to pass as middle-class) and thereby provides a series of signals to employers in respect of socialisation and pliability. The instrumentality can be over-done. Just as it is foolish to praise the often anti-intellectual culture of the traditional British university, so it is idiotic to pretend that we're now teaching every child to code (if they're interested, they'll teach themselves). Of course Gove is a journalist, not an educationalist, as is Jo Johnson, the current Minister of State for Universities, Science, Research and Innovation. Johnson minor echoes Gove: "Abolishing tuition fees & funding unis out of general taxation would be regressive, benefiting [the] richest graduates".

What this populist spin highlights is a confusion among Conservatives as to the dynamic behind the growing unpopularity of tuition fees and student debt. Gove believes that the ressentiment of the non-graduate can be deployed in defence of the status quo, forgetting that many non-graduates have children who already have (or are resigned to acquiring) hefty student debts. Similarly, the Tory media struggle to see past free tuition as anything other than a bribe to secure the youth vote. The issue for new graduates is not simply the quantum of debt but the sense of being trapped: either stuck in a low-wage job and so unable to pay down the debt at all or seeing a portion of a modest pay packet disappear every month to service a capital amount that barely seems to shrink. And that feeling of intimidation spreads from children to parents, particularly those used to fretting about money. This is not something that upper middle-class parents like Gove (despite his more humble origins) are likely to properly appreciate. They either have the spare cash to pay up-front and so avoid the need for a loan, or they can be confident that their child, who graduated from Oxbridge rather than an ex-poly, will soon be earning enough to pay off the loan within a couple of years. For some, funding an unpaid internship is more of an issue. Telling poorer students that they may never have to pay the debt back if they don't earn enough over the next 30 years is not much of a consolation.

Given the likelihood that tuition fees will continue to rise ahead of wages, and that interest rates on the debt will probably remain in advance of inflation and may even rise further (the government is now busy selling-off the loan-book in tranches), the looming spectre of future student debt is beginning to worry parents with much younger children. In part this is because of those parents own experience, having either "got in under the wire" and enjoyed the last of free tuition and 100% maintenance grants in the 80s or been among the first to incur a (then modest) debt in the 90s. If we date the cultural impact of student loans from 1998, when tuition fees were first introduced and most maintenance grants were converted to loans, then we are about to see the first generation of kids applying to university whose parents will include some (if very few) that still have outstanding loans from their own college years. The post-2012 point is that the number of still-indebted parents will grow as fees increase over time and full repayment becomes more difficult. The occurrence of inter-generational student debt could turn out to be significantly bigger than that of inter-generational, long-term joblessness (that famous chimera).

This goes back to a point I made in an earlier post: the "Thatcherite denial of society places increased stress on that traditional redoubt of conservatism, the family. The fairness of distribution between the generations becomes a point of potential conflict within the home (all too often a literal struggle over property ownership), rather than a social conflict negotiated through politics in which the family's interests are largely common. A likely reaction to this is for more of the older generation to become politicised, in the sense of deliberately pushing the issue of distribution back into the social sphere, as the best means of advancing their offspring's interests without familial grief". While housing as a point of friction has the potential to be ameliorated through inheritance, the only solution to the psychological burden of student debt in families of modest means is for parents to help pay off their childrens' loans early. Telling them that they're wasting their money and should be comfortable with long-term debt falls on deaf ears in an environment where paying down the national debt is considered a moral necessity. I'm guessing, but I suspect parents who do this are disproportionately non-graduate Daily Mail readers, not graduates who read The Financial Times

In other words, the Tories "divisive" stance on this issue is probably alienating many of their natural supporters. The claim that non-graduates gain no benefit from the education of graduates jars with common sense and sympathy when that graduate is your own child. Just as the "intergenerational conflict" around housing obscures class - it is the children of social housing tenants who face the greatest barriers to getting a foot on the property ladder today - so the graduate/non-graduate dichotomy obscures age and the generational watershed that occurred with the expansion of higher education in the 90s. The Tories recast tuition fees in 2012 as an aspirational mortgage secured against talent, but austerity has made many parents a lot less confident about their children's future income prospects, and that's on top of the continuing class and gender inequalities of employment opportunity and pay. If the dementia tax was popularly interpreted as a demand for the payback of house price windfalls, student loans are now being interpreted as debt bondage but without the upside of a lottery. The Tories' problem is not just that they cannot easily articulate a "socialised" tuition funding system but that their policies are hurting families, and they seem largely oblivious to this.


  1. Ben Philliskirk4 July 2017 at 12:20

    I think it has caused a lot of resentment from the less academically-minded students and graduates that they have had to saddle themselves with £30,000 of debt in order to have a chance of getting jobs that their parents or grandparents got at 18 or even 16 with a handful of O-Levels (even CSEs) or a couple of mediocre A-Levels.

    1. Quite. Many students see loans not as a progressive graduate tax but as a regressive tax on graduation. In other words, a punitive fee you must pay to have any hope of a halfway decent job.

  2. That is basically what it is though isn't it.

  3. Ben Philliskirk6 July 2017 at 08:34

    It might be an idea for Labour to broaden this into a general critique of 'mini-entrepreneurialism'. Given that fewer employers are willing to provide training programmes, many adults are having to spend valuable time and money taking vocational courses while not even knowing if they will get a job, let alone a career, afterwards. When you consider that workers are having to saddle much more of the costs of acquiring 'skills' that business and the state depend upon, while at the same time being reminded that 'there is no such thing as a job for life', this issue is clearly not restricted to the university.

    What we are seeing are increasingly crass and desperate attempts to divide working people.