Graduate tax is not the way to go

By Jack Evans

The first memory I have of the Labour party is a wholly negative one. It’s the year 2003 and Blair is trying to ram through tuition fees and his appearance on Question Time is met with incredulity by the audience. To some, tuition fees summed up the excesses of New Labour; it was introduced with very little dialogue with party members, in the eyes of the younger generation it destroyed the idea that the Labour party was the party of fairness and it disincentivised lesser paid jobs in the public sector. In the words of our new secretary of state:

“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”.

Upon his return to the office Dr Cable then signed off the cutting of 10,000 university places in the next academic year.

The coming of the graduate tax policy has been met with what appears to be rapture by the Labour party leadership candidates, and silence when it comes to the accompanying cut of 10,000 university places. Ed Miliband claims that he embraced the idea first, a whole twenty five days ago. Ed Balls, another candidate who was working closely with the chancellor in 2003, now claims that he was for a graduate tax all along. The only serious candidate who appears reluctant to raise the graduate tax banner is David Miliband, who appears to oppose the graduate Tax, and the accompanying coalition cut of 10,000 university places.

This isn’t where Miliband stops, however – he actually argues for the expansion of university participation to 60%. His resistance to jump on the graduate tax bandwagon is to his credit. Under no circumstance, when world economies across the world are pushing for university attendance at 50%, should Britain stand alone at 40 – especially as we trail behind Australia, Finland and New Zealand. Barack Obama has pledged that by 2020, America will once again have the highest proportion of University graduates in the world. The UK figure currently stands at 45%. Miliband’s embrace of a 60% target shows a progressive, aspirational socialism which Andy Burnham hasn’t come close to enunciating. This pledge is in the true spirit of the Labour Party, and an aspiration which, along with the abolition of child poverty, we should never concede to.

However, it isn’t just radicalism in terms of targets that we should go for when discussing higher education, but also in how we fund people through university. The graduate tax, embraced by the NUS and my own students’ union OUSU (Oxford University Student Union), does appear to be the consensual solution to a very sticky problem. However, to me, the tax stinks of timidity, rather than the real radicalism we need in our higher education sector.

Despite the rhetoric of Cable, a graduate tax would be less redistributive than the existing system. Currently tuition fee grants and bursaries are means tested; meaning students from poorer backgrounds contribute less to their fees than students with high earning parents. In other words, the current system is an indirect tax on the wealthy, with the rich paying more for their living standards across university than students from poorer households. The graduate tax would be the same rate regardless of household income. Another problem with the graduate tax is that it never ends. The money returned to Whitehall , rather than the university, goes on, and on, and on. The poorer families who currently pay less will simply have to pay more – for longer. Hardly living up the rhetoric that we are “all in this together”.

What we need to focus on is making more bursaries available within the current system, perhaps allocating research grants by the government in relation to the amount of support the individual university gives to their students. Oxford University currently has an amazing bursary scheme which has 2,500 students on its roll book, giving an average £100-£300 to each student per term. Institutions which do allow bursary schemes to fund, say, 10% of their student intake would then be given the right to remove the £3,500 cap on tuition fees. This would be a meaningful solution to the spending crisis – helping universities now when they need it (rather than a generation down the line) – rooted in the progressive idea of bursary schemes, which in the early 1990s helped people like my mother, then a single parent, to be the first person in their family to attend University.

The previous Government was right to implement tuition fees to expand access – but no-one can claim the current system is perfect. However, unlike the graduate tax, it has the capacity to come close. With an expansion of university funded bursary schemes we have the ability to help people like my mother attend University, and really make headway in making the United Kingdom a more equal and progressive society.

Jack Evans is the Co-Chair Elect of the Oxford University Labour Club.