Tag Archives: graduate tax

Has David Willetts really thought through his pro-tuition fees argument?

I really am starting to wonder if the Tories get economics at all (on a related note, see my latest article on the Social Liberal Forum). In a fascinatingly revealing intemperate rant to the Guardian, David Willetts has described students as a “burden on the taxpayer” and that “the so-called debt [students] have is more like an obligation to pay higher income tax”.

Let’s leave to one side for one moment the idea that investment in HE is little more than a “burden” (so much for the learning economy), or the fact that Willetts is the author of, um, The Pinch: How the Baby Boomers Took Their Children’s Future – And How They Can Give it Back. What is fascinating here is that he seems to think that it is news to people that tuition fees are a tax on students. That’s what the Lib Dems have been saying consistently since they were introduced in 1997!

If we are finally now allowed to start calling a spade a spade without being accused of scaremongering, then great. If tuition fees are a tax, they aren’t a particularly progressive one. People who land into profitable jobs in the private sector will comfortably pay off their fees quickly and subsequently cheaply. Meanwhile, people who choose to do more socially responsible jobs end up paying off the fee for years. In short, the less of a “burden” you are to society, the more you pay. How can Willett’s support that logic?

Since, despite Willetts’ ill-judged comments, it is unlikely the Tories will accept the argument that the best way to pay for higher education is to simply raise the higher rate of income tax itself, it is perhaps time the Lib Dems bit the bullet and accepted that if scrapping the regressive tuition fee system is ever to be affordable we will have to accept the case for a graduate tax. That would ensure that all graduates earning above a certain amount would make a contribution throughout their working lives with the ones who gain the most benefit making the greatest contribution. No longer would graduates start off in life with a mountain of debt to pay off and the wider benefits of the higher education system to society would be better reflected.

In retrospect I fear that my generation botched the chance to change HE funding for the better in the late 90s, getting distracted as we did by tuition fees at the expense of maintenance. Is there a chance we might learn from that mistake now?