Conversation with My MP: Part 3

Here is the third instalment of my debate with my Tory MP:

ME:

I live in your constituency but work in Cardiff University.

I trust a right-thinking man like yourself will be voting against the proposed cuts to the funding of, first English, but ultimately all UK Universities?

HIM:

Thank you. It is important that Universities are put on a sustainable funding foothold. Hence, the rise in the cap and the coalition's plans iaw the Browne report on HE funding.

ME:

Thank you for your reply. In reply I feel I must point out that University funding has proved sustainable for quite some considerable time now. If it looks like there is less money in the economy at the moment, this is because of an unjustifiable bail out of the putatively 'free market' institutions of the banking system by the Labour Government. Why not redress their reckless actions? It should after all be the banks who repay what they owe to the nation, combined perhaps with simple acts of tax collection from the straightforwardly illegal situation of tax evasion by large companies such as Vodaphone. Furthermore, I am far from alone in noting that addressing what is historically speaking a relatively small budget deficit cannot constitute grounds for implementing socially destructive policies that will denude public services and education for decades to come. So I trust you will act in accordance with what is best for a sustainable future by voting against the proposed cuts to public funding.

HIM:

Yes but how will the banks do that since they are only now able to re-capitalise? It is a historically high budget deficit. The universities say their funding isn't sustainable, that is high enough, and that they're falling behind compared with those of other countries.

ME:

Thank you again. Leaving the banking system aside for the time being, could you perhaps support the proposals published in today's Telegraph, forwarded by a very prominent and lengthy list of esteemed academics? This is a call for caution, reserve, debate and review. Here is the link:
http://www.telegraph.co.uk/comment/letters/8166244/Deep-unease-in-universities-at-dangerous-haste-of-supply-and-demand-reforms.html?sms_ss=facebook&at_xt=4cf4c7eb77d7e473%2C0
I understand that you do not want to undermine the Coalition Government, but might you at least call for calm and systematic reflection and review, rather than rushing through potentially disastrous cuts?

HIM:

Thank you. I regret that I don't share the view that the cuts are not necessary. We have long been spending above our means. Early action has meant that our economy is now less likely to join Europe's list of the vulnerable.

ME:

I concur entirely. But I think we need to ask *which* cuts, on what rationale, and with what consequences. The Universities have been funded successfully for decades, and through all manner of crisis. The argument that the cuts are a necessity as opposed to a political decision does not hold water.

HIM:

If we don't find money through cuts or transferring some of the burden to consumers where will the money to reduce the deficit come from? Higher education is a major cost-driver and needs to be part of the picture.

ME:

The simplest economic solution is to privatize the debt and nationalize the surplus. There have been numerous (eminently reasonable) proposals for a quick fix of this sort, most of which can be categorized as one or another version of the so-called Robin Hood Tax. This need not be as drastic as it sounds: The best of these solutions are those which realise that not all of the debt needs to be repayed immediately; it is merely the interest on the debt that needs to be picked up. This is the solution that I would argue for. But, even without instituting a new tax, the deficit could be removed in one fell swoop by simply advocating the law and collecting the much publicised tax that has been evaded by major companies in the UK for years.

HIM:

I don't think the sums are sufficient, much as we would wish them to be for the purposes you suggest. Your pursuit of companies that have engaged in historically quite legal tax mitigation (as opposed to avoidance) would see a smart exit of those that could move I suspect and decisions not to invest here on the part of others.

ME:

This may be so. However, not all assets are liquid or moveable, nor necessarily connected to future investment or lack thereof. I am referring, of course, to the proposals for a Robin Hood Tax. Here is one good account of how it might work:
http://www.youtube.com/watch?v=Pmmf-cLnuq0
Do you not see some validity to this sort of solution?

HIM:

Prof Philo wants to appropriate the assets (the pejoratively named Robin Hood tax which is for practical purposes a death tax since it relies in part on equity in homes) of the wealthiest 10% which will include the value of public sector pension pots (when explained at this point, standby for much huffing and puffing). The bulk of donors will necessarily be at the lower end of the bracket. In other words head teachers, senior local government officials and GPs as well as folk like high street solicitors and small town business people. The more mobile will leg it. That's probably why Labour decided against.

ME:

Thanks again for this. Maybe this might be a time to reintroduce the question of the banks. It strikes me - and very many others - that the essential problem here is that the government bailed out the banks and that they are not going to have to pay that back, even after they (as you put it) 'recapitalize'. Instead of the failed banking system repaying its debts, the proposal is that those who have to pay are future generations of students and what we can still for the time being refer to as 'pensioners' (although many will lack a meaningful pension). Does this not strike you as warped and obscene logic? I find it terribly immoral. Why can't the banks repay the deficit that they caused and/or subsidise the government funding of university education?

HIM:

They will and those in public ownership will have shares sold when the refloat. As things stand this may well generate a profit for the taxpayer. Recapitalizations isn't my term, it's the technical term for what has happened, and had to happen. I don't see how you can make the banks pay up if they can't and remain going concerns. If there is a way that we've missed please let me know!

ME:

The banks need only pick up the interest on the deficit while they recapitalize. Then they can repay the deficit caused by bailing them out. (It is heartening to hear that the banks are going to repay the public money that was used to bail them out. I have not heard this before. Can you confirm this, or direct me to a url, as I have not seen or heard about this plan?) But, in the meantime, given that you regard sustainable funding the Universities as such an urgent priority, I trust you will be voting against the proposed cuts to university funding on the basis of the Higher Education Policy Institute report on the plans, which concludes that the Coalition funding proposals are more than likely to end up being *more* expensive than the current arrangement and not less. According to your own logic and values, the proposed plans must be scrapped if there is even the outside chance that the new system could prove more expensive. Otherwise, it would seem that you were prepared to risk throwing the universities and the public coffers into a terrible downward spiral. And, while we're on the subject: if this is about funding, then wouldn't it make more sense to scrap all funding for the teaching provision of Science, Technology and Medicine degrees? These seem terribly costly.