Friday, 15 October 2010

University Fees: Driving Down House Prices in the Long Term

Righty-ho: as widely prophesied, it has come to pass: the state isn’t simply cutting stuff, it’s withdrawing from whole areas. Specifically it is withdrawing from funding most undergraduate tertiary education.

Frankly, this is a surprise to me - in its' sequencing at least. I thought they’d first go for Social Care for the elderly. But the same three card trick is likely to be played in that field as well: first issue ominous but anonymised threats of financial Armageddon; then set up a commission or special study to look into creating opportunities for creating individual debt obligations to cover the gap; and then sit back and wait for the providers to conclude that their only hope is to persuade the ‘consumers’ that the only serious game in town is to take on additional financial risk personally. Bingo! You’ve re-defined the boundaries between the obligations of the state and the basic social finance requirements of individuals. Something similar happened in pensions and housing a generation ago.

& therein lies the problem. Well, therein lies the problem if, like me, you’re 52 year old father of two kids who’ll go to Uni in the next seven years and also the son of a 88 yr old in a registered care home. Oh, and did I mention that the mortgage doesn’t get paid off till I’m 63? Don't talk to me about the 'squeezed middle' matey, I got there some time ago...

I can pay my mortgage. I can make a contribution to Mum’s care home fees. I can even give the kids a bit towards their Uni costs (crossed fingers). But, fuck me, I’m going to struggle to do all three things. & I got an essentially free tertiary education, and Mum does qualify for quite a bit of public subsidy in that care home.

So how is it going to be for the next generation up - the people who’ll enter working life with huge debts from tertiary education, increasingly ageing parents (that’ll be me, I suppose) and the need to somehow acquire a mortgage and a home in their late twenties or early thirties? Not so wonderful I’d guess. In fact I really doubt that people in my position in 20 years time will be able to bear such a triple burden of debt. So they’ll box and cox, like we all do. They’ll not be willing to risk quite so much in any particular debt obligation.

So: who’s volunteering to tell the Daily Mail that this move to cut Higher Education funding is going to drive house prices down?

P.S. 'Course, if I were one of those bug-eyed Marxist wallahs,I might make some point about the way unproductive (aka finance) capital constantly seeks to re-order the world to create more opportunities for it to reproduce itself. But that would just be extremism of a most old fashioned stripe and hardly welcome in today's Big Society. I'll leave that to the entirely non Marxist Richard Murphy.


  1. Great post, Charlie, welcome back.
    I've quoted it on a punch up I'm having at Richard Murphy's Tax Research UK

    I hope it doesn't bring too many wingnuts gatecrashing your party

  2. Hi Charlie and Strategist,

    Glad your back, although it's a pity it's under such a cloud of despair. But cheer up, perhaps our kids will do us a favour and wind up in prison instead of going to university.