Thursday, December 09, 2010

Tuition fees

So, as expected, the government narrowly voted to increase tuition fees for students. Now the average student will leave university with around £30,000 of debt hanging over their shoulders. Naturally the Lib Dems are taking lots of flak for breaking their pre-election pledge not to raise student fees, and once again people's anger is both misguided and predictable.

First: the Liberal Democrats are not the first party to break their election pledges. In fact, in 2001 Labour pledged not to introduce tuition fees, only to break that pledge in 2004. Yet people are now crying into their hankies and wishing Labour would come back into power. What short memories you have, people...

Second: the idea we should simply abolish fees and somehow pay for all of this out of existing taxation, is equally untenable. Oh, it might have worked when 1 in 20 people went to university, but now the figure is close to 1 in 2, coupled with a population at least 50 per cent higher than it was when I was born, it's simply wishful thinking.

The answer is simply to introduce a Graduate Tax. Labour have jumped on this bandwagon, but let's not forget that Vince Cable tentatively suggested it shortly after the coalition took office, only for it to be shot down in flames, no doubt by those people now bewailing the fact that tuition fees will have to rise.

How would such a tax work? First, there needs to be a high ceiling for when it kicks in: all graduates earning over a set figure (£21,000 is a favourite, but I'm open to setting it higher) would pay a small tax on all monies earned over that figure which would be ring-fenced for higher education: in other words, the income generated would fund the current higher education system. The more money coming in, the more money there is for higher education (you could even use the funds generated to work out how many university places would be available for the coming year).

And - even though it would be cutting off my own nose to spite my face - all graduates should be liable to pay this tax, even those who graduated decades ago. That ensures there's no perception of unfairness, and also means the money to fund next year's higher education system would already be in place. Any fees already paid by past students would be refunded (or set against future tax bills), so no one would pay any upfront fees for university education.

I'm sure there are plenty of holes in this argument, but for me it seems pretty elegant and simple: only those who had a university education are liable to pay, and only if they earn enough money to make it clear that their education benefited - or at least didn't penalise - them financially. You could even set a ceiling on what individuals pay, so when someone has paid £30,000 or some-such figure, they're no longer liable for graduate tax. And most importantly of all, people don't leave university saddled with debts the size of a small mortgage.

There's only one small problem: it's a tax, and we've seen that people don't like the concept of paying tax. Understandable when you think of the "green" taxes levied by the last Labour government, very little of which was actually spent on improving public transport or other such green themes. That's why this graduate tax would never become a reality: it doesn't fit with the brazen approach to politics adopted by all the major parties these days.

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