The focus of debate around the proposed changes to universities funding and student fees has been much more on the latter than the former. But in reality the Coalition’s policies are much more focussed on universities and the student finance issues is more of a means to and end – the effective privatisation of universities and forcing financially-based competition between them.

This becomes apparent when you try and figure out why the Coalition has rejected a graduate tax but keep saying that their solution is more or less like a graduate tax. To paraphrase a current TV advert, “it’s like a graduate tax, but it’s not a graduate tax?” And as the advert continues, why buy something else when you could have a graduate tax?

Our Universities are considered by just about everyone (except the Office of National Statistics)* as public bodies. Certainly most of my colleagues who work in them think we are part of the public sector, as do most of out students. Whatever their formal status, universities are a significant part of our history, are a great national institution and make a huge contribution to our modern economy.

The aim of the current proposals is to do two things – shift the major part of funding universities from the public to the private purse and to create a financial competition between universities along US lines. The first is achieved by cutting the teaching funding to universities by 80% – a far greater cut than is justified by any consideration related to the general public debt problem.

The second is achieved by the consequent hike in fees to up to £9,000 a year. The assumption is that some universities will be forced to differentiate themselves on price, or cost – by offering cheaper or shorter degrees. Make no mistake, this is all about creating a financially-based multi-tiered higher education ‘market’ in the UK.

This is why the government rejects a graduate tax – because it would have to be set at a single national rate and payments to universities per student would have to remain at an equal level.

The fact that we already have a multi-level system without financial incentives seems not to matter – everyone knows that studying or working at some institutions is better than others, even without price differences.

Nor are policy-makers apparently deterred by the fact that the last time this was tried nearly all universities ended up charging the same fees, because no-one wanted to hang out a sign saying “McDegrees available here”. It is not impossible the same could happen again, but the aim of these dramatic changes is to try to force universities into a differentiated market.

The real inequality then will be not only be between those who go to university and those who don’t, but also a much greater differentiation amongst those who do make it to ‘Uni’. How this can be defended as ‘progressive’ takes the breath away.

The risk of fundamentally undermining what is widely recognised as one of the best HE systems in the world is also apparently a ‘price worth paying’ in the ideological pursuit of markets as the only solution to every problem in society.

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PS – good to see that even Sunday Times columnists are converting to the cause of a retrospective graduate tax – see Jenni Russell’s excellent column in today’s edition (and that’s not because she quotes me, honest!)