It’s UK Budget Day and George Osborne has been strutting his stuff, playing to his party and to the world stage. Amongst the usual increases to Duty on cigarettes, beer etc. one of the small, but possibly important points is the removal of maintenance grants for students from September 2016 onwards. These were available to households earning under £42,000 a year and provided up to £3,387 a year (for a household earning below £25,000) to help towards the cost of going to University. Without wishing to get caught up in the politics of what is a low income household etc. I thought some of the reasoning behind this change deserves comment, the following is from the BBC website:
More than half a million students in England receive a maintenance grant from the taxpayer, worth in total £1.57bn a year.
Mr Osborne said the cost of this was set to double to £3bn in the next decade as the cap on student numbers was lifted.
There was a “basic unfairness in asking taxpayers to fund grants for people who are likely to earn a lot more than them”, he said.
Take a moment to re-read that again before you move on…
Yes, our intellectual and economic giant of a Chancellor believes it is unfair for current tax payers to fund education for future tax payers because they are then “likely to earn a lot more than them”. Now, you can call me old fashioned, but isn’t the point of a decent education to increase the earning potential of the population, allowing them to earn more, which not only increases the countries economy, but increases the amount of tax the government receives, giving it more money to fund things, such as education, health and pensions. Pensions that will be paid to the tax payers who currently fund education, but will be paid for by those now (hopefully) high earning University educated ex-students. I think George deserves a C- for this one so far.
To add to this, George Osborne added:
“So from 2016/17 academic year, we will replace maintenance grants with loans for new students, loans that only have to be paid back once they earn over £21,000 a year. And to ensure universities are affordable to all students from all backgrounds we will increase the maintenance loan available to £8,200, the highest amount of support ever provided.”
The solution to removing grants from those who might struggle to afford University is to ask them to borrow more. It’s OK though, because they won’t have to pay it back until they are earning over £21,000 – bear in mind the maintenance grant kicked in under £42,000 and the full grant was available for less than £25,000.
The only response I can think of to a solution of “if you are poor, it’s OK, just borrow some more, it’ll all work out in the future” is:
Greece.
For this combined with the above, I award George Osborne an overall mark of F (that’s a Fail by the way George, in case you are unsure).