A question of education

There has been much discussion about university fees and the recent Browne report proposing that the present cap should be removed (and, by-the-by, once they increase by a particular amount then a substantial proportion would be paid to the government as tax).

I have been a full-time student twice. The first time around, at Imperial College, was so long ago that the tuition component was fully covered and a maintenance grant was available to all. In my case the maintenance part was reduced because of my parent's earnings but, thankfully, they gave me the difference. In order to have some spending money I worked each summer and took a part-time job during each term. I left college with a small overdraft.

Twenty-five years later, for my second time I studied with the Open University's Business School, where I had to pay the full tuition costs up front — some £10,000 or so. There were no grants, and I had to cover my own living costs.

The world had massively changed between those eras though; In the 1970s there was no expectation that lots of people would go to university; there was an understanding that undergraduate study was related to academic capability, to educate 'the best that schools turn out'. Others would go to a polytechnic, into on-the-job training, or an apprenticeship.

Now, it seems, that every schoolgirl and boy expects to go to university, no matter that they might not be capable of studying in that manner (many universities complain that new arrivals do not have the basic skills they used to expect) or, indeed, intend to study a course which is actually meaningful for study at 'university' level. Like school sports the race to find the best has become a non-competitive 'let everyone win'. It has become a rate of passage for all rather than a preparation for later life, and no longer benefits the country as it did in the past. Instead of targeting education to those who might make the best use of it we appear to be using some sort of scatter gun, often missing the target yet destroying the supporting structure.

So then, about those fees. Post-course student fees were, of course, first introduced by the Labour party under Tony Blair and, like income tax, now appear to be here to stay. The same Tony Blair who said he wanted everyone to go to university who wanted to. Not — I would suggest — because it would be better for the country, but because it gave the appearance of doing something about the poor state of tertiary education. And, of course, it would also delay the anticipated increase in the unemployment rate.

People seem to have little problem with purchasing a home with a loan. There is even a special name for that type of loan — a mortgage. To get this loan they have to agree to pay it back over an extended period, start those payments immediately, and agree to make them every month no matter what their income or change of personal circumstances. Yet there seems to be no reduction in the desire for people to take out mortgages.

And just as a home is an investment for your future so, I would argue, is a good education. And unlike the repayment demands for a mortgage that for a university degree is only repayable when you are earning above a particular income and, indeed, stops if you are not working.

The dropout rate at universities now is massively higher than it ever was in the past. Many students are failing to reach the end of their courses, let alone pass their exams and get their desired qualifications. That rising cost needs to be covered somehow.

There are three options to pay for higher education if one rules out paying for everything up front.

• Fully covered by the government - all taxpayers pay for those who go

• a 'Graduate tax' - all graduates pay a higher income tax no matter how their own education background or income level

• Student fees - paid by those who benefit directly and only after the event.

Just as I noted previously about how having children should be a cost on those responsible, so I feel that student fees should rightly be charged on those who benefit and who made the choice to go onto further education.

All in the Family

I've just listened to an interview on PM with a man who has — with his partner — a total of eight children; four were hers before they met, one of the subsequent four was planned, the remaining three weren't. I note this because he was being asked about the Government plans for a cap on child-related benefits.

Unsurprisingly, Labour have added it to their list of things they are annoyed about (despite the high probability that had they been re-elected they'd have had to undertake very similar actions) but I am in whole-hearted agreement with the plans, indeed I might even go a little further.

Yes, through circumstances, I have no children but (as the saying goes) lots of my friends do so. Having a family is — in large degree — a matter of choice. There are many mechanical and chemical means to prevent pregnancy meaning that to have a child is, in most cases, a positive choice to do so. Just as you would only buy a house or car or clothes which are within your budget so, surely, is the decision to have one or more children.

To have a child is to decide to have a financial and social 'burden' for 18 years to life. To choose something is to be responsible for that choice and the subsequent effects of that choice. And it shouldn't be for someone else to pick up the tab for that choice.

If I'd like a new house (and, frankly, I'd love something larger than the studio flat I've lived in for the last 24 years) it is up to me to finance such a change. It isn't for me to pick one out at the estate agent's and say "the taxpayers of the UK will pay for it, don't worry".

Children should be no different. You layed in your bed, now make it.

Whatever happened to Purdah?

Once upon a time a British Chancellor wouldn't let on what might — or might not — be in his forthcoming Budget. But tomorrow the present Chancellor appears to have lost the habit of purdah and leaked like a sieve on the likely content in his 'pre-Budget statement'. There is also that corollary of 'What goes up, must come down' in that if there are temporary reductions in VAT, for example, then that means they will go up even further afterwards. I was speaking with a friend of mine who owns and runs a small bookshop earlier today and she was telling me that this reduction — of itself not likely to bring shoppers flocking to the tills because its effect will actually be so small — will cost her substantial money in creating new tax rates within the business accounts along with calculating and publicising the new cost of each item. The strong rumour that a new higher-income tax rate will be introduced — 45% on earnings of £150,000+ or thereabouts — breaks Labour's election commitment that it wouldn't raise the top rate of tax although, to be strict about it, they aren't amending the current 'higher' rate just adding a new one on top. One which, personally, I'm in favour of. I was looking at new laptops yesterday in the stores down Tottenham Court Road, London's electronics centre, and am rather glad that I didn't make a purchase then. I'll probably save myself a 'massive' £15 or so by purchasing it on Tuesday instead.

The banks are just making complete monkeys of them.

The Guardian is reporting that the Royal Bank of Scotland, having received £20 billion from the UK tax-payer, has set aside £1.79 billion to pay six months' worth of discretionary and other bonuses to staff in its investment banking division — the same staff who required a £5.9 billion write-down of the Bank's profits.

Vince Cable (LibDem shadow Chancellor) has noted that "The government said they would attach strict conditions on bonuses and it is very clear they are doing nothing of the kind … The banks are just making complete monkeys of them."

In my humble opinion, Vince is the best UK Chancellor we haven't had — yet. You have your opportunity to elect him at the next General Election though!

Executive contracts

"François Barrault, who has been chief executive of Global Services [of BT] since April 2007, has resigned with immediate effect - although he is expected to receive a year's pay." (source ) Isn't it nice for him that he can quit without any notice period yet get paid for another twelve months when he has reduced the value of BT to below that at which it floated in 1984. Nice for him maybe, but not for the many thousands of shareholders (including my mother, as it happens) who have lost out by mis-management at the company resulting in today's profits warning. In any other 'normal' job where you had so dismally failed at your tasks you'd either be fired or someone would micro-manage you while you corrected the position; you certainly wouldn't be able to walk away with an effective bonus of a year's pay. No wonder people complain that CEOs of major corporations do not live in the 'real world'.