The dominating feature of the Coalitions response to the Browne Review is velocity. Ministers seem determined to move at speed to get stability on the financial questions. Consequently, the governments position has been evolving day by day as it has sought to build support among Liberal Democrat MPs for a compromise policy. All questions of substance have to be seen in the context of the political drive for an early settlement.
The high-tempo choreography was outlined in his speech to vice chancellors by David Willetts two weeks ago. The Coalition is aiming for a three step legislative process that, if things go badly for ministers (and universities), might end up being two steps.
Timetable
The first step is to bring proposals forward before Christmas on “regulation of graduate contribution levels”. This clearly involves the level of any cap on fees. Legislatively, there seem to be two options here. The government can push for a simple vote to raise the current fees cap, a procedure enabled by the existing legislation, and combine this with proposals (vague or detailed, soft or solid) for other aspects of regulation of fees that can be worked into the later legislative steps. Or it can push forward with primary legislation on this specific question.
The second step is to bring forward “early” proposals to change the rate of interest and repayment mechanism for loans, in line with Brownes proposals. Willetts language leaves open the possibility that this step could be at the same time as the first step above. But if so, all of this will be primary legislation, excluding the option of a simple vote on the fees cap.
The third step is to get a general higher education bill through at leisure next year.
There are powerful reasons for the velocity. The sooner there is a guarantee that student-based finance is available to replace cuts in government teaching grants, the sooner the Treasury and universities can relax. The Treasury can stop worrying that the spending settlement for the Department of Business Innovation and Skills will get reopened amidst a Coalition crisis. Universities can start to believe in and plan for higher fees. Never mind that it is the abrupt cuts at BIS that make the velocity necessary, student prospectuses are due at the printers in April.
Honeymoon
High velocity also provides political momentum. By keeping the pace up, ministers can try to stay a step ahead of opposition and use the lingering honeymoon with voters to complete their deals with a minimum of damaging media coverage.
Plan A for ministers must be to start with a simple vote on raising the fees cap. This is the one thing that can be done quickly. It is also the crucial hurdle, the hardest to muster the votes in the House of Commons for and the one involving the big reputational hit for the Lib Dems. If they can get this through, then the odd instability of the Coalitions situation on fees will have been neutralised. The potentially government-defeating Lib Dem rebellion will be history. Fees and Browne will just become another area of policy, to be dealt with like everything else. Velocity will have triumphed.
But it is also the riskiest path. A simple vote to double or treble the cap on fees inevitably paints the policy in a harsh light. Everything ministers want to say about the reforms being progressive will fade into the background. All that will be visible will be a number such as £9,000 a year that, to most families, will look expensive.
Betrayal
The harsh light will also cast a shadow of pure betrayal over any Lib Dem MPs who dont vote No. There could be no more stark way for these MPs to tell voters they are breaking their pledge to vote aginst a rise in fees, a point the National Union of Students is ready to reinforce. In addition, what makes this route attractive to ministers makes it unattractive to Lib Dem MPs who want to shift the reforms in a progressive direction. Once this vote is through, they have lost most of their ability to affect events.
For this reason, this route risks maximising both the number of Lib Dem rebels and, more importantly, the (seemingly receding) possibility that Lib Dem MPs – including ministers – will be whipped to abstain on the vote. On this point, Simon Hughes, the deputy leader of the parliamentary party, is the key figure among the key swing group of Lib Dem MPs. These are the MPs that are not either Clegg loyalists or committed to a No on a vote to raise fees.
Crisis
And this route also guarantees that Labour (and probably the minor parties) will vote unanimously against the proposal. So this is the route with the largest probablity of the government suffering a defeat. Hence, this route will bring the debate over higher fees, like a fever, to a rapid crisis. Either the Lib Dem MPs resistance collapses and they face a humiliation of honour. Or the government loses the vote and it suffers a humiliation of power.
Plan B presumably is to deal first with just the core financial questions listed by Willetts, ie the move to higher fees, real interest rates on loans and the repayment mechanism. This is the two-step approach. It requires primary legislation, but without all the subsidiary detail involved in the full range of reforms. This means no votes until 2011, though presumably by April when the marketing presses are due to start rolling. That looks tight in terms of drafting and committees. And by this point cuts will be biting, the honeymoon will be over, the papers may have become bored by saying how good Browne is and criticism based on detailed critiques of the reforms will have had time to build. As a strategy for winning tricky votes, it lacks velocity.
So much for timing. What about substance?
Expensive concessions
In keeping with a high-velocity strategy, the Coalition has already made a series of rapid – and expensve – concessions to Lib Dem opinion.
First, ministers agreed to lift the threshold at which graduates start repaying fees from £15,000 to £21,000. That ramps up the likely cost of loans that are never repaid in full. In turn, this ramps up the cost of the “insurance premium” required to cover that loss.
Then they agreed to scrap Brownes plans for a levy on high fees to pay the insurance premium.
Then they came up with £150m to pay for scholarships for poorer students.
Then they agreed to impose a cap on fees.
All thats in the public record, straight from ministers themselves. In addition, a £9k cap on fees with strings attached from £6k is likely to be announced. Along with a higher interest rate on loans, in order to cover the funding gap left by the abandonment of the levy. And Lib Dems have been pushing for a bigger scholarship fund and stronger provisions to widen participation. And early redemption penalties for wealthy students who want to pay off loans early.
Whatever Cable tells us tomorrow, hes already told us a lot of it.
See also our live blog of the governments response to Browne.