Mel Stride
One of the reasons for Labour’s better than expected performance in the General Election was that there was a high turnout of younger voters who have on average a greater propensity than older voters to support them.
A key driver of this was a pledge to scrap student loans for those wanting to attend university – something that would have cost around £11 billion – or the equivalent of employing many tens of thousands of additional nurses, teachers and police. The cost of this change would have been picked up by all taxpayers of course, including those who were not going to benefit from the typically higher lifetime earnings that a degree brings.
Scrapping loans (something that the Lib Dems u-turned on when they got into government in 2010, accepting that it was unaffordable) was though, not to be the end of the offer. Mr Corbyn went on the record with the youth focused magazine NME to suggest that the loans taken on by students to date (ie all those in the past as well as those to come) would be written off too. His precise terminology was ‘I will deal with it’. What seemed pretty clear therefore to hundreds of thousands of students with loans to repay was that here was a man who was going to pay off the money they had borrowed. Only there was one little problem – after the election when Mr Corbyn’s pledge was given greater scrutiny (something which I freely admit the Conservative party campaign was appallingly weak on) it transpired that this pledge had a price tag of an eye-watering £100 billion which is getting on for the total amount that we spend on the NHS each year.
Angela Rayner, Labour’s Shadow Education Secretary, appearing on the Andrew Marr Show after the election, admitted the colossal cost but still said that abolition of accumulated debt from student loans remained an ambition.
Such profligacy in the face of an economy which whilst well on the way to a zero deficit — this has been reduced by 75% since 2010 — has still not fully recovered is recklessness of the highest order. A bankrupted economy hits the very people who Labour profess to care about the most, namely the poor who are typically the least nimble and well resourced to get out of the way of the damage that follows from turning on the spending taps and living beyond our means. Then there are the young themselves who end up having to pay extra taxes for years on end to pay back the lenders.
The independent Institute for Fiscal Studies assessed the last Labour Party manifesto as requiring levels of taxation that would be higher than at any time in our peacetime history. There are many issues facing our country and for which there will be a call for more spending. But as with student loans, we must now focus these debates on what proposals cost as well as what they might promise to deliver.