This presentation was made by my friend Sean from Warwick SU and gives a pretty good summary of the issues related with Higher Education funding in the England.

Are fees necessary? It would seem that the very notion of a free higher education has disappeared from the minds of the English. Simple phrases like graduate premium indicate that. There's some resentment against Scottish students who don't have to pay for their degree. So whether in form of graduate tax or front-up fees, students would seem to be expected to pay for their education.
From a French perspective, this is nigh on ludicrous. Fees for higher education? No, education should be free for all, only admin fees should be covered etc. Hidden costs are a shame. University independence is fought against and there are even student strikes (those imply blockading lecture theatres, rather than just not showing up). There are tuition fees, mind, but they're around €300 per annum. Might as well say negligible when compared with the £3k+ or even £11k+ English and international students pay to study in the UK.
But look at the state of British universities and compare them with their French counterparts. The Warwick experience is one of the best things that ever happened to me. There is some student support, including counselling services, support from the international office, and probably the best Student Union ever (this year in particular!). The buildings are in a nice state, there are ties with local schools, businesses, industries and communities. The graduate is quite desirable on the job market (although that's debatable). There's no question of just doing a degree for the kicks (well, ok, there might be, but you wouldn't stay in education for ages if you weren't motivated).
Basically, British students want value for money. This leads to a completely different atmosphere in lectures. Unionism is actually defending the students rather than the unions. And, true enough, British students won't strike or blockade lectures, or try to put some pressure on the universities but providing a service to the students is back at the heart of the university's policy, as they wish to attract more students.
Yes, I am viewing British universities in a very good way, quite probably better than what they actually are. But whilst the differences between France and England have been heightened in this account, they are real. And no, things aren't all great in England. For instance, the interest rates on student loans are shambolic in any respect - they should be equal to inflation, not a penny more.
Fees that are real for the student who comes in are a good thing. But £3,000 is more than enough to reach the desired social outcome. Bringing the cap up to £7,000 will make university unaffordable to many (regardless of extended loans). A graduate tax, as advocated both by Mr Cable and the above presentation, has the double inconvenient of looking less real and of allowing students to take free rides, i.e. go for a degree just for the kicks and then work in a non-graduate job and not paying back.
What I would probably advocate for is a mixed system of capped front-up fees (with a £1.5k p.a. cap, inflation-adjusted on a yearly basis), and graduate tax with a cap on total tax paid of 150% of the actual cost of their degree. Said graduate tax should be obviously ringfenced to serve only higher education. In parallel, alternatives like apprenticeship should be encouraged rather than being the option left to those not good enough to go into university.