John McDonnell has renewed the Labour Party’s promise to scrap tuition fees and cancel existing student debt in a speech to the Labour Party Conference.
Speaking to delegates in Brighton, the Shadow Chancellor stood by commitments made in the 2017 manifesto and called on the Chancellor to address “unsustainable” levels of student debt.
“The Tories have tripled tuition fees and allowed the Student Lonas Company to hike up interest rates. Young people are now leaving university with £57,000 worth of debt”, said the MP for Hayes and Harlington.
“Education is a gift from one generation to another – not a commodity to be sold.”
The Shadow Chancellor also signalled his support for writing off all outstanding student debt – an issue which has caused some difficulty for the Labour Party.
In July, Jeremy Corbyn was forced to deny he had broken a promise to write off all outstanding student loans, after saying he would “deal with” the debt burden on the Andrew Marr Show.
Speaking to conference on Monday, Mr McDonnell cited research produced by the Institute of Fiscal Studies, which found that the cost of writing off the debt was significantly cheaper than previously thought.
The IFS calculated that immediately scrapping the debt would add £20bn to government debt, but that delaying the decision until the end of the current parliament in 2022 would add £60bn.
Initially, it was believed the cost of writing of student debt would be around £100bn. However, the IFS said this figure was overstating the real cost, because a large portion of student is never repaid, meaning the government already effectively “writes off” some of this debt.
The Chancellor Philip Hammond is currently considering reducing interest rates on student loans and raising the threshold at which students begin repaying. The Shadow Chancellor said he would support these changes, but that they would “not go nearly far enough” in terms of tackling the debt burden.
It has also been reported that the Autumn Budget will contain measures to reduce maximum annual fees from their current level of £9,250 to £7,500.
Reacting to the speech, NUS Vice President Amatey Doku said: “Consecutive governments have been loading increasingly unsustainable levels of debt onto students. Today’s students will leave university with around £50,000 of debt.
“We are pleased that there is an appetite for undoing some of the recent damaging education funding reforms, but we need to be clear: cutting interest rates will not solve the problem.
“Students will still leave university with debt they can never repay, low and middle earners will still pay more with every batch of new graduates and the poorest students will still suffer the most. Only a full review of education funding can begin to undo the damage.”