Labour pledges to cut tuition fees to £6,000
Ed Miliband has today announced that the next Labour Government will cut tuition fees from £9,000 to £6,000, and provide additional grants for students from lower and middle income backgrounds. This will be funded by restricting Pension Tax Relief for those on the highest incomes.
Labour will build a country where the next generation can do better than the last, with tuition fees reduced to £6,000, an apprenticeship for every school leaver who gets the basic grades, and smaller class sizes for 5, 6 and 7 year olds.
The current system is bad for students and bad for taxpayers.
- The decision by the Tories and the Lib Dems to increase tuition fees to £9,000 means that the average student will now graduate with £44,000 of debt. And almost three quarters of students will never pay their loan back in full – having tens of thousands of pounds of debt hanging over them for 30 years.
- That's bad for the public finances, because the taxpayer has to meet the cost of writing off the debt. By 2030-31, the current student fee system is set to add £281 billion to the national debt.
Labour's better approach is fairer for students...
- Labour will tackle spiralling student debt by cutting the tuition fee cap from £9,000 to £6,000 for all undergraduates from September 2016, and providing additional grants for students from lower-income backgrounds.
- Cutting the tuition fee cap will reduce graduate debt by nearly £9,000. Labour will also increase student grants by £400, so that the full grant increases from around £3,400 to around £3,800, benefiting all students with a household income up to £42,620. More than half of students will benefit.
... And because our policy is fully funded, it is fairer to universities and taxpayers too.
- Universities will not lose out because we will increase the teaching grant they receive by around £2.7 billion, the same amount that their fee income falls.
- Our plan will reduce government debt by £40 billion by 2030-31. Over the next Parliament it will mean over £10 billion less debt.
- Our pledge will be funded by restricting Pension Tax Relief by £2.9 billion for those on the highest incomes.
- At the moment, people with incomes over £150,000 get tax relief on pension contributions at a rate of 45 per cent – more than twice that of basic rate taxpayers. This means that although they are only the top 1 per cent of taxpayers, they receive 7 per cent of all Pension Tax Relief.
- We will reduce the rate of relief for those with incomes of over £150,000 to 20 per cent – the same as basic rate taxpayers. And we will reduce the annual and lifetime allowances to cap the amount that people can put into their pensions tax free: £30,000 a year, or £1 million across a lifetime. This is far more than most people can ever afford to put into their pension pots.
Labour has set out a new plan for Britain's future, a plan that works for ordinary families, rewarding the hard work they do and saving the NHS they rely on.
The Tories can't build a better future for working people because they stand up only for a privileged few. With the NHS going backwards and a recovery which works just for a few, working people can't afford five more years of David Cameron.
You can't trust Nick Clegg and the Liberal Democrats. They broke their promises and have been too weak to stand up to the Tories.
UKIP can't stand for working people: they're more Tory than the Tories, a party made up of Tory people, promoting Tory policies, bankrolled by Tory donors.