Folly of trying to buck the market in university tuition fees
Capping tuition fees at British universities is leading to some bizarre outcomes. The government should trust the market.
The news that London’s South Bank University, ranked a lowly 113thin university league tables, is to charge tuition fees of £8,000 per annum – a mere £550 less than Oxford and Cambridge – demonstrates the folly of the coalition government’s decision to cap the fees at £9,000.
Instead of placating students who object to paying a fairer proportion of the cost of their higher education, the cap has simply made the increase in fees appear unjust.
Had Business Secretary Vince Cable and the Government allowed universities to set their own fees without limit, a genuine market would have developed.
The top universities would have been able to charge fees that would have helped them to compete against much better funded universities such as Harvard and Yale; lesser universities could then have improved their own standards by charging lower fees, encouraging more people to compete for places.
Yet again, economically illiterate politicians trying to play God have caused damage by thinking they know better than the market. Will they ever learn?
We have seen this time and again, from the Exchange Rate Mechanism - when John Major’s belief that he could buck the foreign exchange markets ruined the lives of millions of mortgage holders and businesses – to the current running crisis with the Euro, with taxpayers paying the price in money, jobs and democracy for the creation of a currency based on a political project rather than economic reality.
So many people praised Vince Cable when, from the safety of opposition, he posed as a man with the answers to the debt crisis. Now, in government, the incoherence of his position has been cruelly exposed.
Opinion polls have been suggesting that a majority of the public understands the need to reduce the level of public debt.
It’s time for politicians to treat the public in a more honest and more adult manner. Just as people realise that Britain’s ‘welfare’ state is both damaging to many of its dependents and excessively costly to the taxpayer, so too they understand that an Oxford University education should cost more than one at London’s South Bank University.
Attempts by interventionist politicians to shield people from reality do nothing but harm. They should leave as much as possible to the market and enable people to make their own choices and decisions, rather than trying to second guess them and distort that market in a damaging and counter-productive fashion.
Simon Richards is Director of The Freedom Association. Follow him on Twitter @simplysimontfa
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