28/09/2011 15:38 BST | Updated 28/11/2011 10:12 GMT

Ed Balls Hints At Labour Graduate Tax

Shadow chancellor Ed Balls has indicated that Labour would still prefer to introduce a graduate tax rather than adopt the Government's policy of higher university tuition fees.

He described Labour leader Ed Miliband's proposal to merely cut fees from £9,000 to £6,000 as a "downpayment", adding that the party had "more work to do" on the issue before making manifesto commitments.

Mr Balls was responding to young Labour activists concerned about any move towards co-opting the coalition's highly controversial new limits on tuition fees.

He said the idea of cutting the limit back to £6,000 - paid for by cancelling a corporate tax cut for the banks and introducing higher interest rates on loans for graduates earning more than £65,000 - was "not a commitment for our manifesto".

"That is something George Osborne could do right now, here and now," he said, adding that it would still be "entirely open for us to look at what we can do" in Labour's general election manifesto.

Mr Balls went on: "Ed and I have both always said we would rather get to a system where people go to university and then pay a graduate tax afterwards, and think we can make that work."

He said the Government's policy was "increasingly that kind of system" only it was not "progressive" and was perceived as a "barrier" for families unsure about the benefits of university.

The shadow chancellor insisted it was "not sensible" to try to detail Labour's manifesto so many years out from the planned 2015 election.

"Simply promising to reverse everything they've done unless we can show how we would pay for an alternative - at this stage in a parliament, four years out, we've got more work to do on the issue," he told the Young Labour gathering on the fringe of the party's annual conference.