He always sounds so reasonable, like your favourite if slightly patronising professor. And he has this glow of intelligence in his reputation from his time as BPs chief economist. So if you’re like me, you will naturally be inclined to trust Vince Cable on almost anything. But, hard as it may be to credit, it appears that Cable doesn’t actually understand the policy he is selling on student fees.
Heres the exchange on 5 Live this morning on the question of whether that figure of £21,000, the threshold at which graduates start paying back their loans, is £21,000 in 2012 or 2016. This makes a big difference to the finances both of students and the government. For if its 2016 money, then thats equivalent to about £17,600 in 2012 money and about £16,100 in todays money (if you take the governments assumption that earnings will rise at 4.5 per cent a year).
In other words, if it is 2016 money, then most graduates will start paying as soon as they get their first proper job. If its 2012 money, then it might be the second job before they start paying.
The Browne Review set the threshold in 2012 prices, but suspicions have been gathering that the government has quietly shifted the goalposts by changing it to 2016 prices. And the BBC wanted to get to the bottom of it.
Victoria Derbyshire: “Is that 2012 prices or 2016 prices?”
Vince Cable: “No, thats at current prices.”
Repeat: thats not even 2012 prices, according to Cable its 2010 prices.
And it gets worse. He goes on like this:
Vince Cable: “We could conduct the conversation if you like in 2016 prices, but then wed also have to talk about the cap on fees in 2016 prices.”
So hes not only convinced the £21,000 is not in 2016 prices, he actually thinks it would be misleading to use 2016 prices. (Hes right of course. As any economist will tell you, it is misleading).
Well, I know Cables got form on mixing his numbers up so I checked with his department. Heres their po faced reply:
“The repayment threshold will be £21,000, based on 2016 prices. We anticipate reviewing the threshold around [my italics] every 5 years to reflect earnings.”
In other words, his partys in meltdown and yet Cable simply cannot master his brief.
But thats no surprise to scientists because in the summer, he caused a storm when he blundered over another set of figures and managed to tell scientists (wrongly) that 45 per cent of their work was poor.
[Note: The exchange on 5 Live starts about 17 minutes in]