Tag: Vince Cable

W(h)ither the Lib Dems?

Some musings on the state of the party I voted for last time…

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What have the Lib Dems ever done for us?

“What have the Lib Dems ever done for us?”, asks Liberal Democrat blogger Mark Pack, rhetorically, before going on to provide a helpful infographic to illustrate just that. It’s a useful data point, because the Lib Dems are not getting this information across very well to their public. For most, they’re simply the junior partners in a nakedly ideological right wing Tory government, haplessly propping up a Conservative Party eager to push through reforms that even Margaret Thatcher would have considered a little extreme.

So, what have the Lib Dems done for us? I mean, as distinct from their multi-millionaire, public school-educated plutocrat counterparts in the Tories (never mind that that’s a fair description of Nick Clegg too)? Turns out there’s a fair bit of stuff that the centre left might approve of, actually. The only trouble is, does it serve to counterbalance the right wing extremes of their Coalition partners? And is it as good as it seems at face value? As good as these measures may seem, it appears that they’re always trumped by Tory policies making the lives of ordinary people worse.

The Lib Dems have indeed lowered the income tax burden for the lower paid, with their pledge to gradually move the tax threshold so that those on less than £10,000 a year will pay no income tax. There are even thoughts about making this threshold higher. Well done, those Lib Dems; it’s hard to find anything wrong with that (though in the interests of objectivity, I’ll have a go).

It is worth bearing in mind that all those low earners may well see many of those benefits disappear in a puff of VAT, as they’re the ones most likely to have been hit hard by George Osborne’s early decision to raise it to 20%. And if that won’t do it, the ever increasing taxes and duty on fuel should, with another 3p per litre duty rise due in August. Not to mention the rising costs of TV licenses and phone bills – though if we listen to Edwina Currie’s views, the poor have no right to such remarkable luxuries.

The Lib Dems have also prevented the Tories from abolishing the top (50%) rate of income tax, and lowering inheritance tax for those poor deprived individuals whose deceased relatives leave them enormous houses. Raising the inheritance tax threshold to £1million was a key Tory manifesto pledge, and abandoning it for the sake of a coalition agreement must have hurt. But a loss of face for David Cameron does not, per se, make low and middle earners’ lives better – they’re unlikely to inherit a mansion.

And as to the 50% tax rate, the Lib Dems are already in the process of negotiations for it to be dropped. To give them their due, it’s looking like the trade-off will be for Vince Cable’s treasured ‘mansion tax’ – a 20% tax on all property worth over £2million. This is an excellent idea, as it’s hard to avoid tax by moving your house to the Cayman Islands. Trouble is, it stands a whelk’s chance in a supernova of getting past Cameron and Osborne (even though, reportedly, Osborne isn’t as opposed to it as Cameron is).

Taxing property is anathema to Tories, and immediately the big guns (well, Jacob Rees-Mogg) have been wheeled out to outline horror scenarios of little old ladies chucked out of houses they’ve owned for decades because the house is their only asset and they can’t afford to pay the tax. As so often with criticism of Lib Dem policies, this is plain wrong – the proposal is for 20% to be levied on the value of properties once they exceed £2million. In other words, if your house is worth £2,000,001, you’ll pay a 20% levy on that excessive £1. And so on (see p14 of the Lib Dem manifesto).

Good though that sounds, apart from the difficulty (well, impossibility) of getting the policy past a party who value untaxed property slightly more than human life, it would depend on getting decent valuations of houses across the country, which hasn’t been done since Council Tax was introduced in the early 90s. As this would inevitably result in almost everyone’s Council Tax bill getting higher, no government wanting to get re-elected is ever likely to do it – a shame, as reforming Council Tax to make it more progressive would be a pretty good alternative to the mansion tax.

Recognising the impossibility of this, Nick Clegg rather surprised everyone at the Lib Dem spring conference by independently wheeling out his plan for a ‘tycoon tax’. Certainly Vince Cable must have been surprised at this sudden proposal to ensure a minimum rate of tax to be paid by ‘tycoons’ – say, perhaps 30%.

It sounds good – although the fact that 30% is an acceptable ‘minimum’ is a revealing indicator of just how little tax the hyper-wealthy currently pay. But in practice, surely it’s even more unworkable than the mansion tax. After all, there are so many loopholes for tax right now that it’s easy to make it look like your income is far lower than it is, if you’re in that hyper-wealthy 1%. And if your income appears lower than it really is, how will paying 30% of a spuriously low figure hurt?

Other laudable Lib Dem policies include:

Put like that, I realise it sounds like I’m determined to find the cloud in the Lib Dem silver lining. The Lib Dems undoubtedly have good intentions; though so did Neville Chamberlain (am I exempt from Godwin’s Law if I don’t mention the feller he was appeasing?). These are the kind of policies I could happily support, and perhaps I’m unduly pessimistic about the positive impact they’ll have. Trouble is, does that offset the genuinely nasty bits of Tory legislation currently being hustled through Parliament with the Lib Dems’ apparent support?

Playing doctors and nurses at conference

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Andrew Lansley’s shambolic NHS reform bill is a very good example. This is a bill, it seems, which almost nobody wants – a huge proportion of the medical profession, the public in general, more than a few Tories and even the Daily Telegraph want it dropped.

It’s hard for those of a centre-left bent to defend this bill. True, the claims that it will reduce the NHS to a US-style insurance based private system are largely hysterical hyperbole; but even with the amendments proposed by last spring’s Lib Dem conference, and the House of Lords, it will permit hospitals to gain up to 49% of their income from private healthcare. This is massively worse than the 2006 Labour bill which allowed market forces in in the first place; that, at least, banned private income from exceeding 2003 levels, apparently an average proportion of 2%.

Critics of the bill are regularly countered with the accusation that they “don’t understand it”. And yet it’s hard to see how so many august medical bodies, journalists and legislating peers have all somehow misconstrued its intent. It is true to say that many of the proposed amendments have yet to be included; and yet the bill has already been described as “incomprehensible”, by people who have gone through it thoroughly. With more amendments yet to come.

Even among those who support its basic premise, there is plenty of opposition on the grounds that it is, quite simply, a terrible attempt at legislation, appallingly mishandled politically. The Lib Dems are in a key position to restore a lot of their pre-Coalition support if they bow to the undeniable pressure to stop it, and vote against its passing. Nobody, it seems, wants this bill to happen. Except, weirdly, Nick Clegg.

So what did they do at last weekend’s spring party conference? Uniquely among the major parties, the Lib Dems have a truly democratic process by which attending party members may vote on overall policy, and the leaders would be unwise to ignore the feelings of their grassroots members. This, in theory, is more truly democratic than either Labour or the Conservatives, though it does occasionally produce the appearance of a Monty Python sketch as factions debate endlessly over obscure minutiae.

On the NHS bill, they had the choice of debating one of two emergency motions. One, with the support of 204 conference reps, was to drop the bill entirely. This had the less-than-exciting title “Withdrawal of the Health and Social Care Bill”. The other, supported by a mere 15 reps, was to support the bill, and was emotively titled, “Protecting our NHS: The Shirley Williams Motion”. Guess which one was voted through for debate?

The bizarre implication that to oppose the bill was to abandon the ‘protection’ of the NHS was trumped by the naked populism of appending Lib Dem grandee Shirley Williams’ name to it. I like Baroness Williams, and have a lot of time for her views, but on this she’s just plain wrong – despite having changed her mind at least twice on the issue. More importantly, even if she sanctioned the use of her name to sway doubters, Shirley apparently had never even seen the wording of the motion until five minutes before the debate, which, for added emotional blackmail, she personally got to summate at the climax.

Shirley made an emotive speech in support of the amended bill (although her interpretation of it seemed at odds with that of others). Nick Clegg chimed in his own two cents’ worth at a Q & A session, in which he got members’ backs up by proclaiming that opposing the bill was the same as agreeing with Andy Burnham – perilously close to George W Bush’s assertion on the ‘War on Terror’, “Either you are with us or you are with the terrorists”. Bush is hardly a man Clegg should be looking to emulate; but he reiterated his reductive binary assessment in Prime Minister’s Questions yesterday, using the slightly different tack that to oppose the bill is to oppose any reform of the NHS, as though this were conclusively the only way to do that.

Unfortunately for Clegg, his members declined to vote in favour of the motion. Unfortunately for the party as a whole, voting against supporting the bill is not the same as voting to stop it – it is, in fact, exactly the kind of fence-sitting the Lib Dems were frequently pilloried for in Party Political Broadcasts of the mid-80s. It’s less a statement of principle than an exercise in sophistry that will be completely lost on the wider electorate – all they’ll see is that the Lib Dems could have stopped the bill, and didn’t.

‘Nice’ vs ‘Nasty’ – being weighed in the balance

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In just the same way that, however many piecemeal tax concessions and minor social victories they may have scored, they’ve been unable to stop the Tories’ other massively controversial pieces of legislation. The Coalition agreement may permit them to abstain from voting in extreme cases, but it doesn’t permit party whips to allow outright opposition to ‘government’ (read ‘Conservative’) policies. Hence, the public have seen the Lib Dems appear to support Iain Duncan Smith’s draconian welfare reforms, Michael Gove’s clueless education reforms, and George Osborne’s suspiciously ideological and dubiously effective austerity policies.

What’s more, thanks to the doctrine of Cabinet Collective Responsibility, Lib Dem ministers have even had to publicly appear in favour of all this, whatever their personal feelings (even though Clegg, bafflingly, genuinely seems to think the NHS bill is a good piece of legislation). The upshot of this is that the public at large, or at least the genuine majority of the country who oppose the Conservatives, have come to see the Lib Dems as little more than a powerless adjunct of the Nasty Party, basically the crutch that enables their masters to trample on the poor. As a result, their popularity has plummeted from the 30%-odd at the election to around 8%.

This is actually rather a shame. The protests of Lib Dems that “it would have been worse without us” are very probably true; imagine an undiluted NHS bill, or Cameron getting his tax cuts for the rich through unopposed. But they’re still politically naive, as can be seen by the haste and overeagerness which they rushed into the Coalition agreement in the first place (an agreement that looks worth less than the USB stick it’s stored on, considering its pledge of “no top-down reorganisation of the NHS”).

I’m not sure Clegg and David Laws realised what a powerful negotiating position they were in when the Agreement was drawn up. After 13 years of increasingly bad Labour government, the electorate were still not ready to forgive the Conservatives for their 18 year reign before that. Cameron was desperate to get into power; sure, the negotiations dragged on for days, but I still think they were too rushed. Had the Lib Dems held out harder for some of their aims – or for freedom to oppose those of the Tories – they could have come out in a far stronger position.

Or they could have exercised the ‘nuclear option’ – simply stated they were unable to reach an agreeable compromise with the Conservatives and just walked away from coalition, leaving the Tories looking like the intransigent bad guys and having to try to get their reforms through a minority government. I’m not at all convinced that this would have led to another general election within months, as others have speculated; but even if it had, and the Tories had gained a slim actual majority, I think they’d have had a far harder time getting their legislation through. And I think they’d have been a one term government if they had managed to be the ‘unmoderated’ Nasty Party.

Sadly, that’s all speculation, which of course can’t be proved either way. In the mean time, we’re stuck with what we’ve got – the risk of the Lib Dems being so thoroughly absorbed (in the public’s view) into the Conservatives that they may as well no longer exist.

I’d regret that immensely. Unlike many who drifted from the increasingly authoritarian Labour Party to the Lib Dems, I’d hate to lose them. Many of those defectors have now drifted back to Labour, perhaps missing the point that, socially liberal though they may be, the Lib Dems were never a left wing party. Yet if you think the disappearance of our third party would be a good thing, take a look at how well an entrenched two-party system works in the US. Look how much tribalism we’ve already got – aren’t you sick of hearing the mantra about “the mess we inherited from the last Labour Government” being responsible for everything from the financial crisis to the Black Death?

The Lib Dems are – or could be – good for democracy. If they learn a little more political nous, and stop putting themselves in lose/lose situations as with the Coalition Agreement and the NHS bill, they could regain some of the support they’ve lost. They’re starting to learn that, but it’s still stumbling baby steps, as last weekend’s party conference showed. They could maybe do with abandoning the increasingly isolated Nick Clegg, who’s now beginning to look like a figurehead for his party’s identification with the Tories. Their increasing ability to assert distinctions from their senior partner offers a shred of hope. But there’s still three years till the next general election, and they’ve still got a lot of learning to do if they want to survive their partners’ policies.

Horror Excess

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For the last few days, the subject of boardroom excess has been brought firmly to the forefront of the news. That news has been firmly fixed on what should have been a government owned bank – the Royal Bank of Scotland, whose disastrous purchase of failing Dutch bank ABN AMRO was in no small part responsible for the near-collapse of the British banking system. The targets of media – and thus public – ire have been its former chairman, ‘Sir’ Fred Goodwin, and its current CEO, Stephen Hester. Politicians and their supporting press have had their knickers all in a twist over, firstly, Hester’s surprisingly large £963000 ‘bonus’, then Goodwin’s apparently undeserved knighthood.

Both narratives have reached a convenient resolution, so convenient it actually looks a bit contrived. And, as far as I’m concerned, so it is – contrived to distract people from a much larger systemic problem of which these two rapacious capitalists are merely the tip of the iceberg.

I can’t help wondering what backroom deals and political pressure caused first RBS’ chairman, Philip Hampton, to decline his own £1.4m share gift ‘bonus’, then Hester to finally relent and decide he wasn’t going to take his. Both made their decisions amid a mounting storm of public anger; but as usual where a press narrative is concerned, the shades of grey were barely touched upon.

The assumption that RBS is ‘publicly owned’ is close to, but not the actual, truth – the bailout of £45 billion of OUR money to rescue the bank from its own unthinking greed actually left 17% of the bank outside government hands. This was in the dying days of the New Labour government, when the party was somehow still desperate to avoid associations with its own socialist past; so buying the whole thing and effectively nationalising it was right out. Nobody, they thought, wanted to be reminded of British Steel, British Leyland and British Rail – ignoring the fact that privatisation has in many cases rendered formerly nationalised industries worse than they previously were.

So RBS, remained, effectively, a private organisation – albeit one in which the public had a vast majority share of 83%. David Cameron had a point when he said that it wasn’t the government’s place to interfere with remuneration arrangements in a private company; but as shareholder rather than legislator, it certainly could have had a say. It now seems that they did, and Hester’s £963000 bonus had actually been halved at the hamfisted insistence of our beloved Prime Minister. How he thought that kind of sum would be in any way more acceptable than twice the amount shows his trademark lack of empathy with those who aren’t hyper-wealthy millionaires, but hey, at least he made the gesture.

Trouble is, the gesture WE all saw was a middle finger to those who thought senior bankers were already being paid an insane amount, and the PR pressure didn’t let up. And the discussion of the issue was starting to lead onto a wider discussion of, well, if we can’t control the rampant excess of a company that’s 83% publicly owned, maybe, just maybe, something’s wrong with the entire system that allows this to happen.

I’m only theorising, but I wonder if, at this point, a quiet word was had from ‘someone’ in the Treasury (perhaps with the initials G.O.) with the board of RBS, to the effect that, unless they sacrificed their goodies this time, the whole comfy system might come crumbling down for the entire sector. And again, just theorising, but maybe Mr Hester was prepared to call the bluff, but Mr Hampton wasn’t. So, when Hampton gave up his bonus, it really did become politically untenable for Hester to cling on to his.

At this point, another banker was thrown to the wolves – step up, Sir Fred Goodwin, the ‘mastermind’ behind the ABN AMRO takeover and chief architect of RBS’ near-collapse. There’d been quiet rumbling for a while about the prospect of ‘punishing’ Goodwin by stripping him of his knighthood. Lest we forget, this knighthood was given out – in happier financial times – by New Labour in yet another attempt to prove that they weren’t so different from the Tories when it came to looking after The City. There’s a revealing clip of Harriet Harman defending this at the time by saying she “believed” the honour wasn’t for services to the banking sector, but more because Goodwin was such an all round nice bloke.

Buckingham Palace would beg to differ. It was indeed for ‘services to the banking industry’ that Goodwin was knighted, although with hindsight it’s easy to wish the Queen hadn’t just used that big sword to cut his head off and save her country a lot of money. Now though, with the public mood towards bankers something akin to their feelings for Nazi war criminals, it’s been arranged that Goodwin will no longer be “Sir Fred” and revert to plain old “Mr Goodwin”.

This was arranged by a little seen body called the Forfeiture Committee, staffed by civil servants and entirely apolitical – you know, just like the whole Honours system isn’t. There is, undoubtedly, a certain amount of satisfaction to be gained from Goodwin’s stripping of his title. Mind you, I at least might have preferred it if he’d instead been stripped of his pension – a pension that leaves him struggling on a mere £350000 a YEAR from the funds of a bank that WE paid to rescue from his calamitous mismanagement. Still, could have been worse – the original pension was nearly twice that amount, but Goodwin grudgingly ‘agreed’ to sacrifice half of it at the urging of then Chancellor Alastair Darling, himself being leaned on by his Opposition equivalent – one Mr George Osborne. How times change!

So yes, I’d have been happy for him to keep his meaningless knighthood if he’d given back the pension that we’ve paid for. After all, the knighthood’s costing us nothing. And I suspect “Mr Goodwin” has enough of a personal fortune from his obscene pay while still working for RBS that he could probably manage without a pension at all.

Richly deserved fates for both Hester and Goodwin, many are saying, and I find it hard to disagree. Many others, however, are saying that these men have been sacrificial lambs on the altar of public opinion, and I find that hard to disagree with too – but not for the reasons most are saying it. Stripping Hester of what was actually a share gift rather than a cash settlement doesn’t actually achieve very much; he couldn’t have sold the shares until they vested after four years, in which case it would surely have been in his interest to make RBS do well, which presumably is what we want. And removing an archaic medieval title from Goodwin, while it’s nice to see him humiliated, is little more than a meaningless gesture.

No, the reason these two men come across as scapegoats is that, presumably, we’re meant to be satisfied with these two highly-publicised bits of ‘justice’ and stop talking about the problem they actually represent – the increasingly insane levels of remuneration at the top of not just banks but every substantial private organisation.

Yes, Hester has given up his bonus – but he still draws a ‘basic’ salary of £1.2m. This, it is argued, is because it’s the going rate for a talented CEO, and such a person is necessary to restore ‘confidence’ (a word that so easily precedes ‘trick’) in the RBS. The tradition of ‘bonuses’ is justified in the same way – they must be doled out, regardless of merit, because everyone else does it (although this seems to be a tradition largely confined to the UK and the US). Indeed, so great is the expectation of this kind of entitlement among bankers now that the former employees of failed bank Dredsner are actually suing their now-defunct employer for the $66m in bonuses they didn’t get this year – because the bank went bust. That’s some brass neck.

Meanwhile, CEOs and board members routinely award themselves annual pay rises of around 40%, at a point when the lowest ranking members of staff are seeing regular pay freezes. Just ask the employees of HMV, whose Christmas bonus has now been abolished, and have been told that Bank Holidays no longer count as public holidays, so must be worked by all without overtime pay. So they’re working slightly harder than most board members, whose jobs are so undemanding that many sit on multiple boards drawing huge salaries from each.

As with so many political issues, there are two aspects to this – the moral and the pragmatic. A moral argument on the topic is almost impossible to win, because everyone’s morals are subjective. Anyone criticising the state of affairs regarding income inequality is immediately branded as using “the politics of envy” by supporters of the status quo. Bloody right we’re envious – when Tesco CEO Philip Clarke gets paid £6.9m a year while his lowly employees have to use tax credit just to survive, I’d say there was a right to envy. But envy doesn’t mean critics of the system want to be in the same position as Clarke; it’s not a binary argument. They just want some form of fairness restored to a system in which the tax rate tops out when you’re earning £150000 a year, and men like Clarke earn many multiples this amount.

Still, some argue that this IS a fair system – I can see the point about rewarding hard work and keeping the state out of it. That’s plainly not the case – but it’s their moral stance, and unlike religion, it’s virtually impossible to proselytise your own moral code. But there’s the pragmatic argument too, which is harder to shoot down. There’s a finite amount of money in the system. If CEOs and board members continue to get annual raises of 40% or more, they’re increasingly going to be hoarding the vast majority of that finite amount at everyone else’s expense.

I say “hoarding”, because that’s what they do. They’re not actually spending these vast sums of money, which might help stabilise the economy. No, it sits, often untaxed, in foreign banks and tax havens. It’s been estimated that, currently, there is $18 TRILLION worth of untaxed assets sitting in offshore havens. That is, I believe, more than a third of the GDP of the entire planet. And if the rich keep getting 40% pay rises, that figure is only going to get larger.

Unfortunately for such vested interests, the issue has become a hot political topic, even with the apparent dismantlement of the Occupy movement. It was unsurprising to see Barack Obama address income inequality in his State of the Union address this month; but more surprising to see Republican hopeful Mitt Romney vilified by his own party for paying a meagre 15% tax on his gigantic income. Ordinary Republican voters, it seems, are no longer being conned into voting against their own interests by the vague promise that they too can be hyper rich and benefit from the system.

Over here, motivated by political necessity, there have been things afoot too. Many are somewhat ineffectual, if well-meaning. Vince Cable’s much-publicised proposals on curbing boardroom excess strike me as weak at best. Full disclosure of executive pay may well lead to execs saying, “why aren’t I getting as much as he/she does?” Shareholder voting on pay rises is largely irrelevant when most shareholders are vast, impersonal pension funds. Having employee representation on pay committees is a nice idea, but hinges on the concept that execs wouldn’t have the cheek to vote themselves massive increases when faced by their lowest ranks across a table. As we’ve seen time and again, execs have this much cheek and much more besides.

Other ideas, though, seem rather better – and sadly less likely to happen. The Lib Dems’ proposed ‘mansion tax’ on properties above £2m in value is quite a good one – after all, you can’t shift your house to an offshore haven. Trouble is, it’s likely to be shot down by their Tory partners in the interests of fairness –after all, Mr Cameron and his Chipping Norton friends do have VERY big houses.

Then there’s Land Value Tax – again, you can’t move land out of a taxation regime. To some extent, countries like Australia do this already. Perhaps by coincidence, Australia’s economy is doing rather well. However, despite some Lib Dem fondness for the idea, nobody else seems to want this one either.

Then there’s the rather more bonkers idea espoused by a few left wing commentators recently of a one off 20% ‘wealth raid’ on the assets of the tiny proportion of the hyper-rich. This, the commentators argue, could raise £800bn at a stroke – more than enough to pay off the £149bn deficit, and start making a dent in the national debt itself. Trouble is, I can’t see how this would work realistically, when so much of that wealth is based in property or moored anonymously offshore.

As with so much of economics, there are plenty of proposed remedies floating around at the moment, and it’s hard to see which are workable, realistic or fair (there’s that moral judgement again). But the only thing that is clear is that the current system is unsustainable. CEOs aren’t going to sod off overseas if you deny them the contents of Scrooge McDuck’s Money Barns – somehow Mervyn King manages to run the Bank of England on a mere £300000 a year, and he’s not clamouring for a giant increase. No, this whole thing needs more comprehensive debate than this long ramble can cram in, but it’s a debate that shouldn’t be shut off because we’re sated with the sacrifice of two of the small fry villains of the tale.

We can’t afford no education

“No doubt when we have perfected a method of  killing Russians by dropping Pope and Dryden on their heads, the English department will enjoy equal research funding!” – A Very Peculiar Practice, 1988

So, not entirely unexpectedly, the coalition’s whopping increase in tuition fees has (narrowly) passed the Commons vote. As one of a large number of people who are finding their Lib Dem votes taste like ashes in their mouth (dreadful mixed metaphor, I know), I’ll be writing a much longer blog post soon about my feelings towards the coalition and my generation’s relationship with politics as a whole. But in light of today’s shaky victory for the coalition, I thought it worth going in to my problems on this policy in particular.

There’s a very telling story recalled by Stewart Lee on Youtube regarding Mrs Thatcher’s views on liberal higher education. Apparently, when told by a student that said student was studying Ancient Norse Literature, her only comment was, “what a luxury”. And that’s the Conservative view on Higher Education in a nutshell, and the real ideology underpinning a policy that’s been grossly misrepresented by almost all concerned – even, on occasion, its opponents. Education, the argument runs, is only of value if that value can be quantified monetarily. As Stewart points out, if you struggle to justify an Arts degree by pointing out that theatre tours make money, you’ve already lost the argument, because you’re seeing it in precisely those terms. By that argument, the study of Shakespeare that Michael Gove holds so dear would have been abandoned centuries ago. No money in it, you see.

But let’s start, in fairness to the policy’s apologists, by wondering if they’re right when they say it’s an improvement over the current system. So, despite a potential threefold increase in tuition fees, most students will end up paying less. This is actually true. When the word ‘progressive’ is bandied about, most of us disagree. But it is progressive, in the economic sense of the word – that is to say, the more money you earn, the more of your debt you’ll pay back. Consequently, unlike the fixed payments under the current system, it could be seen as fairer. Plus, as Vince Cable seems to be constantly trying to tell us, the threshold by which you’ll pay it back has been raised from £15k a year to £21k a year. So you’ll not pay anything for a greater length of time than now. And thirty years after you graduate, any money you haven’t paid back will be written off as a bad debt.

Put like that, it’s hard to see why anyone should find it a problem. But the reason they’re rioting on the streets of London tonight is that most young people going to university don’t necessarily do Economics. You can break it down all you like, but to a 17 year old contemplating Higher Education, the prospect of a £40,000 debt hanging over your head for the next thirty years is a pretty fearsome one, no matter how favourable the repayment rates. If that had been around when I went to uni, I’m pretty sure I would have had very serious second thoughts. No matter how much Clegg and Cable bang on about social mobility, the pure fact is that the very prospect of that debt is going to put the less well off seriously off going into Higher Education.

And the basic issue where I disagree with the coalition – and the Labour Party – entirely is that in my opinion, more money should be being put into Higher Education. I managed to go to university, despite being from a less than well off background, because the State funded it. Neil Kinnock, in 1983, made a speech where he was rightly proud of being the first one in his family to go university – because of the Welfare State his party founded. And what we’re seeing now is yet another nail in the coffin of that Welfare State, something the Conservative Party have been trying, albeit surreptitiously, to dismantle almost since its inception.

The State used to provide a full grant, by which the less well off could have all of their university education funded. Not just the tuition, but the living expenses too – there were no student loans necessary unless you bought too much beer (I did). The dismantling of free Higher Education for all was actually started by that nemesis of the left Margaret Thatcher, who froze the grants in 1990, to a level at which they remain now, twenty years of inflation later. Her spiritual child Tony Blair continued the chipping away by introducing Tuition fees, and it’s no surprise that the current Conservative government (face it, it is one) would want to carry that on.

I’ve had a long chat with my friend James, who finds my views incomprehensible. Surely, he argues, if prospective students did the sums and were committed enough and well-informed enough, they’d see that the new policy is no kind of disincentive. I’d agree with him – if it weren’t for the fact that tens of thousands of young people don’t see it that way. A 17 year old wanting to study English Literature probably can’t do a cost/benefit analysis and might (hopefully) not even know what one is. I’d say the massive demonstrations against the policy show that people don’t see the benefits. All they see is a giant debt for the next thirty years. And that’s enough to disincentivise those who aren’t that good at sums – like, say, the ones doing Arts subjects.

An argument I’ve heard many times now – most recently from an MP on Radio 4, though I forget which one – is why taxpayers should foot the bill for other people to attend university. This is what I believe should be called the ‘screw you Jack I’m all right’ policy. The obvious subtext is that nobody should pay for State services they don’t personally use, and has often been pointed out, its logical extrapolation is that nobody should pay for the National Health Service unless they’re ill. Although David Cameron would probably love that – it’s called private healthcare, and it’s what the Republicans in America are fighting tooth and nail to defend. From my point of view, as a childless man, I could use this to justify not paying the part of my taxes used to fund schools. But I won’t, because I genuinely believe that a morally responsible state has a duty to provide certain things for its citizens and that all those citizens should be responsible for paying for them , regardless of whether they personally make use of them.  Interestingly, nobody ever disagrees with that about the NHS. It’s when you have to prioritise what else a morally responsible State should provide that the arguments begin. I see an opportunity for Higher Education as one of those priorities. Clearly others would rather spend the money on State-sponsored Botox treatment.

But the coalition have been given a golden excuse to carry out these draconian reforms. The buzzword is ‘deficit’. Most people, and I count myself among them, find economics a baffling, abstract topic. All we know is, there’s a deficit between how much we make as a country and how much we owe. It’s big, and it needs to get smaller. Consequently, the government can do more or less what it likes, providing it reduces the deficit. And this has been the biggest argument for the cutting of university funding and the increase in tuition fees.

The trouble is, at least as far as I can see, that this is what’s technically known as ‘bollocks’. The increased fees aren’t due to start until 2012, and will in the majority of cases, be funded by student loans from government coffers that won’t be paid back for many years, if at all. How this can have any impact on the current deficit is impossible to fathom. My friend Richard, normally a defender of the coalition, has done the sums and found the policy pretty unjustifiable on his blog – check it out, he’s far better at Economics than I am.

And that’s what really gets my goat, more than the Lib Dems reneging on campaign promises or the Conservatives trying to dismantle the Welfare State. It’s underhanded and dishonest. What they’re really doing is using the deficit as an excuse to carry out ideological policies long held by the Conservative Party, propped up by the increasingly foolish Lib Dems. Yes, the policy won’t prohibit the less well off from attending university. But it will put them off. Meanwhile, the rich can attend with impunity, as they always have. In practice, as a social measure this is returning us to the pre-1946 era when the only ones with degrees were the wealthy.

Don’t get me wrong – I know there is a real problem with the proliferation of university degrees. Labour’s target of having 50% of the populace attend university has cheapened the value of a degree to such an extent that the jobs market is flooded with Media Studies graduates flipping burgers, and anyone with no degree at all is seriously disadvantaged no matter how suitable for the job they may be. But attacking this problem by favouring the rich at university, while typical Conservative policy, is morally indefensible. Instead, perhaps we should try and re–engineer the education system as a whole, so that only the most qualified can actually get to university. Without wanting to seem like a grumpy old man, that’s how it was in my day – plenty of people wanted to go to university but didn’t get the necessary grades, regardless of the State funding. In contrast, my friend Sam – 19 years old – has a university place despite pretty poor A Level grades. Doing, I think, some kind of Media Studies course. An overhaul – a massive, fundamental one – is needed for the education system as a whole. And not just Michael Gove banging on about returning the nation’s children to the three ‘R’s.

But what it really boils down to is that the students are being asked to foot the bill for an 80% cut in University funding, massively disproportionate to the other cuts carried out in the name of the deficit. And, in the spirit of Maggie Thatcher’s opinion of Ancient Norse Literature, what funding there is is being reserved exclusively for Maths, Science and Engineering. So those much vaunted Humanities subjects that form part of Gove’s new English Baccalaureate count for precisely sod all at university level. Plainly, the coalition are happy to have rote knowledge of Shakespeare drilled into children, but heaven forfend they get paid money to actually think about it.

So it’s bigger than tuition fees, bigger than the selfish political aims of the National Union of Students. The whole University system is under attack, its value judged solely in terms of its profits. And that’s not, and never has been what universities are about. Regardless of your views on how irresponsibly the protestors have acted, regardless of the poor, hard done by Prince of Wales and his sadly damaged Rolls-Royce Phantom, the issue here is one of civilisation. Tuition fees are the tip of the iceberg.