Why protesters need a reality check

 
Allister Heath
IT is a tragic day when the headquarters of a political party in a democracy are stormed by a lawless mob. That is what happened yesterday to the Tory HQ in Millbank; it almost happened at the Liberal Democratic base in Cowley Street. A minority of thugs in the crowd – possibly professional agitators of the sort that caused havoc at the G20 meetings in 2009 – turned violent; regrettably, the police failed to contain the violence properly, for reasons which remain unclear but which must urgently be investigated. The authorities need to be better prepared to deal with this sort of thing in the future and ensure that people and property are adequately protected.

Student fees were first introduced by the Labour government. The £3,290 the universities are allowed to charge UK students ensures that virtually every institution loses money on every British student they accept. This makes no sense: graduates earn around £100,000 more over a lifetime than non-graduates (and often much more). The reforms to the original system proposed by the present government are hardly radical and include numerous safeguards to help the poor and those whose parents are from less well-off backgrounds (crucially, Labour’s fees didn’t discourage the poor, with demand for places from the less-well off continuing to rise). Unfortunately, even fees of £9,000 a year – the maximum allowed under the reforms – won’t be enough to allow the top UK universities to compete globally with the likes of Harvard, MIT and even now the best Chinese universities. In this area, as in others, the UK is in relative decline.

It would be nice if tens of billions of pounds of free money could be conjured up out of thin air. As rational, grown-up strategies for plugging the budget deficit go, however, magic isn’t exactly what most economists would recommend. There is no such thing as a free lunch, which is why hard choices are now having to be made about public spending. Reasonable people can disagree about what the priorities should be; but nobody can deny that the government is spending close to 20 per cent more than it is collecting in tax. Countries that go on like that for too long eventually go bust.

Mindsets must change in Britain: higher education needs to be seen as an investment, not as an opportunity to have a good time at taxpayers’ expense. That will mean that students will have to face more of the costs – and not merely enjoy the benefits – of their education. It also means that they will have to consider more carefully which degrees they wish to study. In return, they will be able to behave more like consumers, forcing the system to evolve. There will be more two-year degrees and more distance learning; for-profit companies need to enter the market, which is currently controlled by charities. More innovation and experimentation is needed. Students should embrace, not fear, the current, tentative moves towards the commercialisation of higher education. It is a shame yesterday’s protesters couldn’t see this.

ECONOMIC HORROR STORY
If you like the sorts of arguments presented in this column, you will enjoy a brilliant polemic on Channel Four at 9pm tonight. It is called Britain’s Trillion Pound Horror Story and makes the case that to put Britain back on track we need to radically rethink the role of the state, stop politicians spending money in our name and introduce a flat tax. It’s great stuff. allister.heath@cityam.com