'Big idea' plucked from a bad old Tory ideology

The Conservatives' latest plan to win votes serves neither higher education nor society, says Margaret Hodge

Last week saw another bungled attempt by the Tories to recapture voters' confidence. As part of their fourth relaunch under the leadership of Iain Duncan Smith, the Tories attempted to use the controversial debate on university funding to enhance their popularity and to demonstrate their fitness to govern. Like all their previous "big ideas", this policy will quickly unravel.

The Tory figures do not add up. They want us to believe that they can fund the £430 million cost of abolishing tuition fees and the potential £700 million-plus future income stream from variable fees by cutting the projected increase in student numbers. Any economist worth their salt knows that you cannot make present savings by cutting future growth. What is more, the Tories have pledged to make 20 per cent cuts in public spending. So it is scarcely credible that they would ever increase funding for higher education. The only way the Tories can finance their plans is by cutting the number of university places. About 90,000 student places would go immediately, a figure confirmed by the Institute for Fiscal Studies. A further 150,000 would be cut over the next five years to make up for not being able to charge variable fees - in total a 20 per cent cut in the numbers studying at university.

So the middle-class voters the Tories are targeting might gain from not having to pay a fee contribution, but whether they will be able to get their kids into university is another matter. And those from poorer and disadvantaged backgrounds would lose twice over. They would gain nothing from the scrapping of fees as they do not pay them and they would have less opportunity to study for a degree. The Tories are putting a cap on the aspirations of young people. They are back to their old ways of favouring the few at the expense of the many. And the many who do not go to university will be asked to pay more for a smaller elite who still get a place. I am proud this government spends a serious amount on paying universities for the extra costs of teaching poorer students. The Tories will end the programme. At a stroke that will mean sacking about 6,500 lecturers.

The Tories' proposals also betray a fundamental lack of political coherence. While championing choice and the role of the market they are proposing to move back to universities being completely dependent on the state. It will not just be those on the Tory right who are unhappy with this proposal. Vice-chancellors remember that the Tories were the party that cut state support for higher education by 36 per cent in real terms.

The Tories are muddled. They are now advocating 100 per cent state control but only last year Duncan Smith was talking about selling Channel 4 to make universities more self-reliant. They want to cut the number of university places and increase the numbers receiving high-level technical and vocational training. But the cost of a modern apprenticeship is the same as that of a foundation degree. They say they support enterprise. However, their policy is not only socially unjust but economically inept.

Every country in the developed world is expanding the numbers going through university. All responsible governments recognise that future prosperity depends on a highly skilled workforce. Confederation of British Industry surveys and other labour-market studies suggest that 80 per cent of the new jobs that will emerge in Britain over the next decade will require the skills and competences that come through higher education. UK plc needs strong, growing and globally competitive universities to underpin our place in the world economy. That requires investment, not cuts.

We are starting to put that right with our 6 per cent real-terms increase in spending over the next three years. And by introducing a variable-fee income stream, we will enable universities to be properly funded to provide a first-class education to a growing band of students. Of course, we have to ensure that the introduction of variable fees reinforces rather than undermines our plans to expand access. That is why we are also bringing back the grant, getting rid of upfront fees, paying the first £1,100 of any fee for those from poor families and making sure that repayment is linked to income above £15,000, so that the less you earn the less you pay back. Universities that levy variable fees will also have to provide bursaries for students from low-income backgrounds.

The Tories are suggesting a populist alternative that rewards the better-off, caps opportunities for new students and will inevitably lead to universities closing and academics leaving. Theirs is a policy for opposition - ours is one for government. We have set out our policy in the white paper and that's what we intend to implement.

Margaret Hodge is minister for lifelong learning and higher education.