The university fees row had a remarkably divisive effect on the political system, both within and between parties. The Minister for Education within what has hitherto been a fairly right-wing Coalition campaigned to improve third-level access for students from less-well-off homes by transferring resources from the better-off, writes Garret FitzGerald.
By contrast, the Labour Party, now led by a former Democratic Left Minister, and backed on this issue by Fine Gael, supported the Progressive Democrat position on the retention of free university fees for the better-off. How did our political system fall into such extraordinary confusion?
It is necessary to go back a bit to see where we have come from on this issue.
Traditionally in Ireland fees accounted for between 25 per cent and 30 per cent of university expenditure. Most of the rest was provided by the State - although up to the second World War, Trinity College financed much of its spending out of endowments. However, during the 20th century revenue from that source remained static, and State grants became the principal source of funds in TCD as elsewhere.
This system of State grants, designed to enable universities to reduce fees to a fraction of the actual cost of the education provided, suffered from an built-in inequity. For, in order to benefit from this 70 per cent to 75 per cent State subsidisation of the fees, parents of students had to be able first of all to fork out the other 25 per cent to 30 per cent of the cost of their children's higher education, as well as being able to continue to support them financially for three or more years after leaving school.
Less-well-off parents who could not afford this part-payment and/or further maintenance of their children while at university were thus totally excluded from State assistance. So, this system perversely assisted only the middle classes, and did so at the expense of the less-well-off - for the only role the other half of the community was allowed to play in higher education was to pay taxes to finance these middle-class subsidies!
(In that connection it should not be forgotten that because of the exceptional inequity of our tax system - Mary Harney's somewhat selective article on Thursday - the half of our households headed by manual workers or social welfare beneficiaries pay almost 40 per cent of all taxes, direct and indirect. Not much progress there! And an even more frequently overlooked point - the Household Budget Enquiry also reveals that one-third of all social transfers go to middle-class, not working-class, households).
In the late 1960s, an attempt was made to tackle the gross inequity of the third-level financing system by introducing means-tested student grants that paid for the residual fee element as well as providing some support for student maintenance. But the maintenance element of these grants was never adequate, and for long periods they were not adjusted to allow for price rises.
Their purchasing power today is no higher than it was 30 years ago. Even after the Minister's 15 per cent increase, the additional payment to parents who have to maintain a child away from home for nine months of the year will be only 44 per week for rent and higher food costs.
The result has been that most students have had to try to make ends meet by working during the holidays, either here or more often abroad, but latterly many have also found it necessary to work during term-time, in some cases at the expense of their studies and exam performance.
There is, moreover, an inherent bias in the system that favours the self-employed, who can set off against taxable income many expenses not allowed to PAYE taxpayers and many of whom can - and do - also hide part of their income from the tax authorities, and thus from those who at present apply the means test. Some are also known to spread their income in such a way as to minimise the amounts declared in years when student grants are sought.
The scale of these abuses, evident in the disproportion between grants paid in respect of children of generally less-well-off PAYE workers and grants for children of generally better-off self-employed people, has undoubtedly deterred politicians from improving these grants. Instead, in the past few years the emphasis has shifted to making modest special provision to improve access to universities for able students who come from seriously disadvantaged backgrounds, and who may be less well prepared, and in some cases technically less qualified, for third-level entry. Even though still on a very small scale, this attempt to address the problem of real social disadvantage is very welcome, but it has left unaddressed the more general problem of facilitating higher education for many PAYE families.
The decision by Niamh Breathnach some years ago that the State would in future pay not only its customary 75 per cent of the cost of university education but also the 25 per cent that had until then been borne by parents did nothing whatever to tackle the social injustice involved in the way we finance university education. On the contrast, it aggravated the situation further, by transferring to predominantly middle-class parents - almost 70 per cent of the total - even more resources derived from an already not very equitable tax system.
Why did a Labour Minister decide to shift so many additional resources to the better-off, at a time when students from less-well-off homes were being so inadequately provided for in respect of university education? Leaving aside the suggestion of political motivation, it seems to me that an important factor must have been Labour's ideological commitment to universal social coverage, as distinct from a resource transfer system requiring some kind of means test.
One can, of course, understand an aversion to means testing, and there are cases where in the absence of universal coverage many disadvantaged people fail to get benefits, simply because they are not well enough versed in the ways of bureaucracy to know what they are entitled to and to apply for it.
Indeed, this is precisely why our politicians in their clinics have to devote so much of their time to helping people get benefits they are entitled to, but only if they know how to apply for them.
The fact is that to combine a policy of very low taxation - our tax level is now the lowest in Europe as the OECD table in Thursday's Irish Times showed - with universal social coverage, is inevitably anti-social in its effects, because with such a system the extension of social transfers to the better-off uses up scarce resources that would otherwise have been available to those in real need.
I think the Democratic Left may have understood this reality, which is why they were critical of Niamh Breathnach's "free university scheme" when it was introduced. But clearly it would not have been easy for a new Labour Party leader drawn from the ranks of former Democratic Left to challenge this Labour "sacred cow" at such an early stage in his new role.
It is less clear why Fine Gael chose to follow him along this path which is out of line with that party's past strong but less ideological commitment to social justice: I recall that 30 years ago Fine Gael campaigned actively against unnecessary and perverse social transfers to the better-off through misplaced universalism.