Free Education Campaign’s Immediate Response to Vince Cable’s Call for a Graduate Tax

Today Vince Cable has said that the Coalition government is looking at charging students more for higher education via a graduate tax.

Any system that sees higher charges should be opposed.

The Free Education Campaign agrees with UCU response that new plans for university funding should be judged on whether they “increase the overall cost of getting an education or reduce it.”

We also share the UCU’s view that Cable’s moves to support a graduate tax instead of fees are “an exercise in rebranding.”

In making clear opposition to a graduate tax that burdens students with even higher debts the Free Education Campaign believes it is important to note that:

• Since 1998 – the year tuition fees were first introduced - the UK participation rate for higher education fell from 7th in the OECD countries to 15th. That is the dismal record of charging students for higher education since 1998.

• Since the introduction of top up fees in 2004 despite there being an increase in the number of people attending university the number of people from poorer areas attending has dropped by 0.3% (figures from 2008).

• The current failing system is already some form of gradate tax, as Vince Cable rightly points out. Students currently pay back their fees upon graduate (though they can choose to pay in advance if they desire). The Student Loan Company “expect students to repay 9% of annual income over £15,000.” This effectively means that graduates currently pay a higher tax rate because they went to university.

• A Graduate Tax could result in the unjust and ridiculous situation where graduates on lower incomes pay a higher rate of tax than higher earners who happened not to have attended university.

• It undermines the basic principle that it is those most able to pay who should contribute most to public services. Instead it is a step down a dangerous path towards a "user pays" principle which could also be applied to other public services.

• David Willetts recently remarked that university students are “a burden on the taxpayer”, ignoring the net contribution universities make to the economy. Far from a burden, the higher education sector as a whole is of huge economic benefit to Britain. According to the previous government the £23 billion annually invested in higher education produced an economic return of £60 billion. In addition to this immediate return there are also long term benefits through higher productivity and a more skilled population. Ways that restrict access - as charging students even more would - will only undermine this.

• Greater state investment in free higher education would be good for students, society and the economy. The ongoing review into higher education funding should recommend lowering the financial burden on students, not increasing it.