Tuition cap ‘will leave £10bn hole’

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Published: Monday 2nd February 2015 by The News Editor

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Labour will inflict “colossal” damage on England’s universities if it pushes ahead with plans to reduce the cap on tuition fees, academics have warned.

Cutting the limit from £9,000 to £6,000 would leave a £10 billion hole in revenues over the next five years with little hope of it being filled, the vice-chancellors claimed.

Labour is facing attacks on a number of fronts, with warnings by a leading business chief the party would be a “catastrophe” for Britain if it came to power and criticism from within its own ranks.

In a letter to The Times, academics called on Ed Miliband to ditch plans to reduce the tuition fee cap.

Sir Christopher Snowden, vice-chancellor of the University of Surrey, said: “This is purely a pragmatic issue, that a policy is evolving on the hoof which is not really a practical policy going forward and the potential damage is colossal.”

He added: “I really feel Labour has missed the point here. If you talk to students and to many mums and dads, the £9,000 (fee) is no longer the key topic.

“It was when it was first introduced because people were very concerned about how this would map out. But the real issue is actually subsistence, the cost of living at university, particularly for students from lower socio economic backgrounds.

“This hasn’t been addressed at all by Labour.”

Labour mounted a fightback after Monaco-based Boots boss Stefano Pessina said the Mr Miliband’s p lans were “not helpful for business, not helpful for the country and in the end it probably won’t be helpful for them”.

Shadow business secretary Chuka Umunna said voters would draw their own conclusions about business leaders who live abroad and do not pay tax in UK wading into British politics.

“It is important that the voice of business is heard during this general election campaign, not least on Europe,” he said.

“But the British people and British businesses will draw their own conclusions when those who don’t live here, don’t pay tax in this country and lead firms that reportedly avoid making a fair contribution in what they pay purport to know what is in Britain’s best interests.”

Mr Pessina, who oversaw the £46m merger of Alliance Boots with American firm Walgreens and is now its acting chief executive, told The Sunday Telegraph: “If they acted as they speak, it would be a catastrophe.”

His attack came as Labour’s biggest donor John Mills renewed his concerns about the party’s plans for a mansion tax and Jason Cowley, editor of the left-leaning New Statesman, claimed the mood of Labour MPs is “not so much one of despair, it’s worse than that – resignation”.

Shadow foreign secretary Douglas Alexander dismissed the attacks as ” rubbish” while Lucy Powell, vice chairwoman of the election campaign, rounded on critics within the party, warning they were ” not helpful”.

Walgreens Boots Alliance insisted Mr Pessina’s comments had been “taken out of context”.

A spokesman said: “The comments made by Stefano Pessina were a small part of a much larger conversation and have been taken out of context.

“As a businessman, international entrepreneur and investor, he takes a natural interest in a broad range of topics within the economic landscape of countries where he has business interests, like he has done previously in the UK, Europe and the USA.”

“Stefano Pessina was expressing his personal views only and is not campaigning against Ed Miliband or the Labour Party.”

Shadow universities minister Liam Byrne said: “The Tory-led government trebled fees and now it is crystal clear that the student finance system is going bust, saddling students with debts most will never repay of £43,500 on average and costing the taxpayer more than the system it replaced. According to new Ucas analysis, trebled fees have deterred thousands of potential students from applying.

“We will announce our policy in due course ahead of the general election.”

Published: Monday 2nd February 2015 by The News Editor

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