London: Ed Miliband was warned he risks opening a “credibility gap” over his spending plans as it emerged Labour has not agreed how it would pay for a cut to university fees.
The Labour leader is expected to announce details of the party’s key policy to lower tuition fees from £9,000 to £6,000 within days, but has yet to reach agreement with shadow chancellor Ed Balls on how this will be funded.
Lord Mandelson weighed into the row yesterday, admitting the policy was not yet finished and insisting Labour must say where it will find the money.
Otherwise, he said, it would face a “credibility gap” over its plans to cut the deficit.
Lord Mandelson, who as Business Secretary under Gordon Brown was in charge of universities, said it was “inconceivable” that Labour could cut funding to the sector.
He told an audience of academics and university administrators in London: “If any reduction in fees is announced, and I’m not assuming that it will be, it’s absolutely vital that replacement funding from taxation is identified and announced at the same time.
“Not in a generalised way, but in a specific way. Because that will ensure that no credibility gap is opened up either around university funding or the Labour Party’s commitment to reducing the fiscal deficit.” He supported Government claims that the rise in fees to £9,000 had not led to a fall in university applications, pointing out that even the poorest students were now more likely to apply.
Lord Mandelson also said cutting fees for UK students could increase the rate at which universities recruit from abroad to plug the funding gap — potentially “at the expense” of home applicants.
When he campaigned for the leadership of the Labour Party, Miliband proposed a graduate tax as an alternative to tuition fees.
But Labour is yet to agree on its stance ahead of May’s election. Lib Dem Business Secretary Vince Cable said cutting fees to £6,000 would be “foolish”, costing the exchequer £10 billion over five years. [It] would be a populist gesture which would achieve nothing and do a lot of damage,” he wrote in a letter to Miliband. Critics of cutting fees point out that the benefits would mainly go to the highest-earning graduates because they would end up paying less.
A Labour Party spokesman said its policy on university fees would be “set out shortly”.
A PACT between Labour and the SNP would be “the ultimate nightmare” that could break up and bankrupt Britain, David Cameron warned on Friday.
He accused Miliband of betraying the Union for refusing to rule out an election deal with the SNP, who are on course for a landslide in Scotland.
Speaking at the Tory conference in Edinburgh, he said it was “appalling” that Labour wrapped itself in the Union flag last year and is now willing to “work with a bunch of people who would rip up that flag”.
