So today, the BBC reports, in an astonishing piece of investigative journalism, that one of their shadowy “senior Conservative sources” has tipped them the wink that…
…there are plans to keep the payment link between students and individual universities.
As such a “pure graduate tax” is described as an “unlikely” option.
But… Vince Cable said the other day he wanted a graduate tax, didn’t he? So surely this is an affront to Lib Dem influence in the coalition! Quite appalling!
Well, hold on a moment. What did Vince actually say?
We currently have what is misleadingly called a system of ‘tuition fees’. Many people believe, wrongly that when students arrive at university they or their parents are required to get out their chequebooks, or wallets, and pay more than £3000 for a year’s tuition.
The idea that students are repelled from higher education by fees owes much to this erroneous belief.
In reality of course most students meet these costs by taking a student loan, payable direct from income after graduation when earning a reasonable salary. In this sense, we already have a form of graduate tax. The problem is that it is a fixed sum – a poll tax – regardless of the income of the graduate. It surely can’t be right that a teacher or care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer or surgeon or City analyst whose graduate premium is so much bigger.
The current system has the further disadvantage that it reinforces the idea that students carry an additional fixed burden of debt into their working lives. Yet, most of us don’t think of our future tax obligations as ‘debt’.
I am interested in looking at the feasibility of changing the system of financing student tuition so that the repayment mechanism is variable graduate contributions tied to earnings. I have spoken to Lord Browne about this and he has assured me that he is looking at this issue as part of his review.
By looking at the periods of time over which contributions are made, the level of thresholds that trigger the contribution, the rate at which contributions are paid, and the other key variables, it may be possible to levy graduate contributions so that low graduate earners pay no more (or less) and high earners pay more.
He only uses the words “graduate tax” once, in the sentence “In this sense, we already have a form of graduate tax.”
Well OK, but the media discussion about this all said he was suggesting a “graduate tax”, and Vince didn’t do much to disabuse us of this illusion, did he?
Actually, yes he did. On the same day he made the speech, which in itself was quite carefully worded, he went on Newsnight to talk to that nice Gavin Esler about it all. At 28:40 (or thereabouts) into that night’s programme, the following exchange took place:
ESLER: Surely any graduate tax, which would be centrally distributed and centrally collected, is exactly anathema to what this government’s supposed to be about, which is devolving power, letting people compete, letting universities compete perhaps, which you can do with a tuition fee system but you can’t do with a graduate tax.
CABLE: That’s correct. No, I emphatically don’t want to see a centralised system. There are versions of the so-called graduate tax – and you know, we have to be careful about the -
ESLER (interrupting): Can you decentralise a graduate tax, though?
CABLE: Absolutely, I mean the present system is a form of graduate tax. You take a fee, you take out a loan, you repay it at 9p in the pound, that’s how the current system operates, except it’s not related to your earnings, and those fees come back to the university, and I want to maintain that element of the system. Certainly I do not want a centralised system, I do believe in universities’ independence. I want to see universities changing, actually, to be much more responsive to students, but they’ve got to change.
So… to sum up then: A “senior Conservative source” has today told the BBC something that… Vince Cable told the BBC on the SAME CHUFFING DAY AS HE MADE THE SPEECH, which is now nearly a week ago.
I leave it as an exercise for the reader to assemble their own final sentence, which must include the words “political journalists”, “find”, “arse” and “both hands”.