Vince Cable: Labour's Tuition Fees Plan is "Fraudulent"

On the BBC's World at One on Friday, Vince Cable was interviewed by Mark Mardell. You can hear the interview by clicking on the box below, and the full transcript follows:

Mardell: Well, Vince Cable is the Business Secretary and the MP for Twickenham from where he joins us now. The current system isn't working is it, so it does need to be changed?

Cable: (The current system) is working very well and it doesn't need to be changed. It's working well on all different levels. We've got growing numbers of people want to go to university. We've got exceptionally large numbers of people from disadvantaged backgrounds going to university and applying to go to university. Universities are very well funded relative to other organisations that depend on the public sector, which means they can provide quality education. And we've got a repayment system, which Martin Lewis very eloquently described a few minutes ago, is effectively operating like a fair form of graduate tax where higher earning graduates are paying more and those that earn under £21,000 don't pay anything.

Mardell: And the Higher Education Commission said it was the worst of both worlds - everybody thinks they are getting a bad deal.

Cable: Well the Higher Education thing is one think tank with its own political agenda. If you get away from the politicians, and obviously we are going to criticise each other, and you look at a respected international body like the OECD who have done a comparative study of higher education across the developed world: Their conclusion was that Britain has the best in Europe - it is the only one that is financially sustainable, and it's achieving all our objectives of getting more people who want to into higher education, and particularly people who haven't historically been able to, and is generating good quality graduates and getting them to pay on a progressive basis.

Mardell: But we've heard that Labour's figures add up as an alternative to what you've got, there's nothing wrong with it, is there?

Cable: There is a lot wrong with it, and what is particularly - and I use the word carefully - but it is fraudulent about it….

Mardell: That's a very serious charge…

Cable: It is. Because this tax on pensioners will not go to universities, it will go into the treasury and we know from all past experience the treasury will pocket the money, it will be used to reduce the deficit. There is no guarantee that that money goes to universities. Under our current system the money automatically goes to universities. So that, under the student tuition system and the graduate contribution, universities benefit directly. They would not under Labour's system. It depends entirely on the discretion of future chancellors.

Mardell: Of course, your party has a tortured history in this business…

Cable: It has, yes.

Mardell: …and Ed Miliband said directly that tuition fees - the history of that - was one of the reasons that young people have such little faith in politics.

Cable: I think he is right on that particular point. And my party has a very tortuous history on it, and we've suffered badly - politically - as a result of making a pledge that we weren't able to keep. But we're not the only party that's been in this position…

Mardell: But I mean Nick Clegg said that he was sorry…

Cable: Let me just finish the point - the Labour party has twice made pledges on tuition fees they've had to abandon. The Tories also had a free tuition policy that they quietly dropped. So we've all been in this space. And the thing is, as Martin Lewis very eloquently said in his contribution, we should all grow up and all learn from experience. And Ed Miliband's just taking us and his party backwards.

Mardell: Nick Clegg said that he was sorry. You don't sound very sorry. You seem to be saying that the saying that the system is working and you're glad you changed.

Cable: Nick Clegg, rightly, and we all, apologised for the pledge. I certainly don't apologise for the policy we've now got, because it is a good one, and it is sustainable and it achieves our objectives.

Mardell: Vince Cable, thanks very much.

* Paul Walter is a Liberal Democrat activist in Newbury and West Berkshire. He is part of the Liberal Democrat Voice team and blogs at Liberal Burblings.