Tuition Fees: harpoon gun in our hand, harpoon in our foot...

The Browne Report, and the Government's response to it, has come as a major blow to those of us who believe that education is an investment in our young people, and in the future of our country. It has also possibly signalled an end to the innocence of Liberal Democrats in government, as a beloved policy has been exposed as being as full of holes as a piece of Emmenthal.

The principle of 'no tuition fees' has always been a reasonable one, whether or not you agree with it, but with an ever-increasing student population, the contrary pressures of student finance and university funding have become ever more irreconcilable. More students means more cost, and all the economies of scale cannot avoid our having to answer the question, "How much education can we afford?".

And, in truth, we never really faced up to that end of the equation. We never argued that sending more and more young people to further education merely created 'qualification inflation', whereby students were encouraged to gain more qualifications to differentiate themselves from the herd. More and more graduates means that the idea that a degree leads to higher income in later life is becoming less and less true, and therefore, for many, the investment committed in gaining that degree brings lower returns than ever before. I suspect, indeed, that the salary differential between graduates and non-graduates is dropping significantly.

There are some unexpected aspects to the position we find ourselves in. The increasingly international market in education means that any policy decided upon will need to offer a menu of choices in terms of payment - flat fees for foreign students and something different for home students - some of which will challenge the notion of fairness. Our membership of the European Union means that we have to address issues of reciprocity. We will also want to avoid, as far as possible, introducing funding arrangements that are not progressive.

We need to be realistic though. Funding for further education must come from somewhere, as the golden goose that is foreign students is a vulnerable edifice upon which to base a long-term funding package. Our aim, therefore, should be to hold tight to the principle of free education where we can, whilst striving to protect the underlying notion of equality of opportunity.

So, here are my thoughts on how this should work;

• If there is a pupil premium for school pupils, couldn't a similar concept apply for universities?
• The government should subsidise those degree courses which will turn out the types of graduates the economy needs - if they think that they can judge the demand for skilled migrants, it should be possible to do it with graduates.
• We need a proper student market, potential students should have access to the sort of information that will enable them to invest wisely in the best course for them.
• The cap on tuition costs, regardless of who pays them, should remain. A brusque transition to a US-style market in education will cause serious damage as universities fight over students.

In the short term, I'm comfortable with the prospect of a series of our MPs voting against the proposals. If you sign a pledge in public to oppose tuition fees, you can hardly back down at the first challenge, unless you're really able to justify such a change in stance. And, had I signed such a pledge, I'd be standing right beside them.

In the medium term, we have an opportunity to lead the debate on a long-term funding framework for our universities, looking not just at student finance and university funding, but at the whole aim of the exercise, to educate young people to take leading roles in society, in industry and in government.

And it matters. We took a very strong line on student finance, and we are honour bound to stick to it for as long as we can. However, we have to face the reality of our position, in that there is no money left for social re-engineering, and everyone is going to have to tighten their belts for a fair while yet.

The long-term objective is to construct world class educational establishments, capable of attracting the brightest students, the best intellects and nurturing high level research and development. How we do that will do more than anything to persuade young voters that we weren't just promising the Earth, we might just deliver it...