Lib Dem fees u-turn on cards

Tax rejig could prompt a rethink on higher education policy- but not in Scotland

New Liberal Democrats' tax policies could mean an end to their opposition to tuition fees, senior party members said this week.

Vince Cable, the party's Treasury Spokesman, made it clear that the £1.2 billion previously set aside to fund the policy would no longer be ring-fenced or hypothecated.

The Liberal Democrats are currently reconsidering their taxation policy, which proposes a rate of 50p-in-the-pound for those earning more than £100,000 a year. The party has always argued that the £1.2 billion cost of waiving tuition fees would be covered by this tax revenue.

But Mr Cable said that if the party decided to abolish the 50p top rate of tax while retaining its anti-fees stance, it would have to make tough decisions on how to afford the £1.2 billion cost of the fee waiver.

"We will be proposing a tax system to our party conference this autumn that is fairer and greener but will not involve a higher overall tax burden," said Mr Cable.

"MPs will have to make cuts elsewhere if they wish to keep this (tuition fees) policy."

He said that he expected this to trigger a major debate on the party's tuition fee stance, particularly on how redistributive it is.

Julian Astle, director of CentreForum, an independent liberal think-tank, has already stimulated debate with the publication in May of a report called Open Universities.

He argued that rather than opposing tuition fees, the party should raise them to £5,000 and abolish the interest rate subsidy to all but the poorest students.

"Some of the billions of pounds saved in the coming years could be recycled within the higher education system to provide more generous grants, bursaries and scholarships," he said.

He added that a more radical approach would be to spend some of the savings earlier in the education system, "where the real battle for access to higher education will be fought".

Mr Astle said: "There is no question that funding the abolition of tuition fees out of revenues from a new 50p top rate of tax is a deeply progressive policy. But should this 50p rate go, as looks likely, this will clearly raise serious questions about the sustainability of the policy."

Stephen Williams, the party's Higher Education Spokesman, said: "We will be reviewing our higher education policy before the next general election.

Should the Government lift its cap on tuition fees in 2009, then clearly that will considerably change the ball game."

If the Liberal Democrats did drop their policy on tuition fees, they would fall in line with the Conservatives - who quickly abandoned their opposition following the election of David Cameron as leader.

The policy change would be highly controversial, with opposition to tuition fees credited with winning the Liberal Democrats key university towns, such as Cambridge, in the last election.

claire.sanders@thes.co.uk