Miliband warns of £281bn fees debt

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Published: Friday 27th February 2015 by The News Editor

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Ed Miliband will claim the tuition fees system is on course to saddle the country with £281 billion of debt by 2030 as he accuses the Coalition of betraying a generation.

Students are being burdened with debts today – around £44,000 on average – that are “set to weigh down the taxpayer with more debt tomorrow”, the Labour leader will say.

In a speech in Leeds, during which he is expected to set out the details of his party’s policy on tuition fees, he will warn that written-off loans are set to jump to £21 billion a year over the next three decades, nearly double the money spent on policing in England and Wales.

Costly higher education, combined with a d ecline in training opportunities and increasing housing costs means young people can no longer expect to do better than their parents, Mr Miliband will claim.

He will say: “What has happened over the last five years is more than just a betrayal of election promises – it is a betrayal of an entire generation: a betrayal from their first steps to the time when they stride into the world of work; a betrayal from nursery to school, from college to university; a betrayal to the jobs or homes they hope to have afterwards – and even on their ability to vote.

“This used to be a country where it was almost taken for granted that the next generation would do better than the last. This was the promise of Britain. Now we are a country where it is almost taken for granted they will do worse.

“This is a promise unfulfilled – all that talent, ambition, hope for the future going to waste. Plans put to one side, dreams dashed; the promise of Britain is being broken.

“Today I appeal to every parent and grandparent in Britain: we can turn this around for your children and your grandchildren. None of us want to see our kids treated like this.

“This is a disaster for them and a disaster for the future of Britain too – a country where the next generation is doing worse than their parents is the definition of a country in decline.”

Labour has previously advocated cutting tuition fees in England from £9,000 a year to £6,000.

Vice-chancellors have claimed that such a move would inflict “colossal” damage on England’s universities and would leave a £10 billion hole in revenues over the next five years with little hope of it being filled.

Liberal Democrat Vince Cable wrote to Mr Miliband earlier this month urging him “to reconsider and reject any moves to cut tuition fees to £6,000”.

The Business Secretary insisted that slashing fees – raised by the coalition Government in 2012 – would result in courses being cut and was not the best way to help the younger generation.

Mr Miliband will say: “We all know that under David Cameron and Nick Clegg the fee cap for full-time undergraduates was trebled to £9,000 per year.

“With most universities charging close to the maximum, graduates now leave university with more than £44,000 debt on average.

“My generation would never have imagined beginning our adult life with that amount of debt. But this Government expects it of this generation.”

“Today we are publishing our zero-based review into the current tuition fees system,” he will add.

“Its findings are stark. It reveals beyond doubt that the scourge of debt is not just holding back young people, it is holding back our country.

“The Government has designed a system which is burdening students with debt today and set to weigh down the taxpayer with more debt tomorrow. This is a system that will have added an extra £16 billion more than predicted to public debt by the end of the next Parliament. If left unchecked the system will have added £281 billion to debt by 2030.

“And much of this money will never be paid back. By the late 2040s student loan write-offs will be hitting £21 billion a year – almost double the entire cost of police services in England and Wales. It must go down as one of the most expensive broken promises in history.”

Earlier this week Ed Balls denied having a “big bust-up” with Mr Miliband over the party’s tuition fees policy f ollowing reports of a rift within the leadership over how any cut in fees would be paid for.

The S hadow Chancellor will say today: “This Government’s system is not only bad for students, it’s bad for the public finances too.

” Students are graduating with a bigger burden of debt and our zero-based review has exposed how it is leading to higher national debt too.

“David Cameron, George Osborne and Nick Clegg’s system will add £16 billion more to net debt by the end of the next Parliament than was expected and billions more after that. This is simply not sustainable. We need a better plan which works for students, graduates and taxpayers as a whole.”

Published: Friday 27th February 2015 by The News Editor

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