Politics is fundamentally competitive. The competition between politicians to achieve political success, standing and power. The competition between parties to gain political power. The competition between political ideas and projects to gain currency, and secure support and power, in order to be implemented.
And another dimension of the political process is the work of those who are not political actors as such, but who seek to influence political debate and decision making in order to further their own aims. Probably not a sufficient description, but essentially the lobbying of those in power.
Higher education is no different.
lobbying
Sector bodies and groups. Alliances of universities and individual universities. The great and the good of the sector. All compete to influence government in order to advance what they have identified as their interest.
Sometimes this is a competition between the sector and other parts of the economy and society. For example ‘spend money on higher education rather than X’, often expressed more implicitly than explicitly. Other times, ‘don’t listen to that party’s/think tank’s criticisms because this is all the good stuff universities do’. Sometimes it’s a competition within the sector: ‘spend money on our institution/group, not that institution/group’.
And the nature of this competition is usually attritional. A small gain here; a small loss there; with these gains being minor victories and losses in an ongoing, pehaps never ending, campaign.
The time and effort the sector, its organisations and its institutions put into this activity is significant. I’m not aware of any data to demonstrate it, but my instinct is that this lobbying has increased very significantly over the course of my time working in higher education. The sector’s work to influence politics and politicians now even has its own fortnightly email newsletter.
It’s a moot point how effective the sector is in this competition to influence political developments and decisions.
For every successful campaign, there’s an unsuccessful one. And sometimes the same campaign is both at the same time. The sector’s successful campaign to address shortcomings in home undergraduate student financial support, is of course to be funded by an international student fee levy that excavates a significant amount of additional soil from the financial hole in which the sector is in. And replacing direct government funding for undergraduate education with increased student fees from 2012 has proved over the medium-term to be anything but the stunning victory for higher education and its influence that its advocates in the sector were (hubristically) claiming in the early 2010s.
Listening to the analysis of last week’s first budget by our (sort of) new government, led me to reflect that it was that 2012 funding reforms that has resulted in perhaps the most significant recent instance of the interaction between the sector and the political sphere. Though not, perhaps, in the most obvious of ways.
the economic challenge
These funding reforms were the result of a combination of the then government’s decision to slash public spending, the recent Browne review and lobbying by the sector, and they paved the way for the current financial crisis in the sector. It is now (I believe, and have argued) too late to expect any reversal or alleviation of the chosen funding model; while also being so difficult not to recognise the catastrophic consequences of that decision for the sector as to be almost impossible (though of course former Conservative ministers for higher education continue to argue against that continue to do so).
And while the 2012 reforms were to some extent the result of lobbying by the sector, so that the sector influenced the politics, the longer term significance is perhaps the way that the sector’s new funding model have in turn influenced current and future political realities. In systems thinking terms, the feedback loop.
With the fiscal pressures on the UK government now ratcheting ever higher, one of the most frequent political discussions is about the level of taxation. This is most frequently heard in commentary about the way that the tax lock in the current government’s election manifesto prevents it from addressing the multiple significant challenges it faces, and the interaction of this with current and future demands for public expenditure.
Central to the tax lock, of course, is the commitment not to increase income tax rates.
Many of the reasons for such a commitment are frequently talked about. No political party would be able to go into an election without such a tax lock, as to do so would be to expose it to the ‘tax bombshell’ attack. No government has increased income tax rates since the 1970s. There are easier (though still controversial) ways of raising income tax through freezing tax thresholds. All of this is true, but the possibility of increasing income tax rates is still discussed – often but not always in respect of rates for higher earners.
However, I suspect that the last nails in the coffin for the case of raising income tax rates has been hammered in by the 2012 higher education funding settlement.
the political reality
Almost all English students who have entered undergraduate education since 2012 face paying an additional 9% of their income towards the fee loans they have taken out. Rather than facing income tax rates of 20%, 40% and 45%, these graduates have income tax rates of 29%, 49% and 54%. For those who also took out postgraduate loans, this rises to 35%, 55% and 60%. And, of course, in a country where c.50% of young adults are entering higher education this constitutes a significant and growing electoral bloc paying much higher rates of income tax than many outside that group realise or acknowledge.
Over the last year there has been a significant amount of attention to the political impact of these post-2012 graduates. This has focused largely on arguments around generational fairness, mis-selling of student loans, the potential for debt remission or reducing the burden of the loan terms. These are all important issues, with electoral and political consequences. I can’t help but think, though, that the most fundamental impact of the 2012 settlement is on the current and future debate on taxation and through that the nature of public services and the wider state.
Any room for increases in income tax rates has been completely removed by the reality of the already high tax rates faced by post-2012 graduates. A key issue in the political economy of the country has been critically influenced, if not settled, by a piece of higher education policy, in a way that was little discussed (if at all) at the time that it was approved and implemented.
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