AGR opposes idea of ‘graduate tax’

The latest development in the ongoing HE funding debate is business secretary Vince Cable's proposal for a variable graduate tax.  But the idea has drawn swift opposition from the Association of Graduate Recruiters, among others.

At a speech delivered at London's South Bank University on the morning of Thursday 15^th July, Dr Cable suggested that a graduate tax could make England's student funding system fairer and more sustainable.  (This is a difficult area for the new coalition government, of course, with the LibDems traditionally opposed to tuition fees and originally committed to phasing them out altogether.)

The new tax would involve graduates repaying the cost of their tuition through taxation once they had started work, with higher earners paying more.  "By looking at how and when and at what levels contributions are made it may be possible for low earners to pay not more or even less, and high earners pay more," said Dr Cable.

He also called for a "radical rethink" of how universities are funded, and suggested that Lord Browne's independent review of university funding could "helpfully examine the feasibility of variable graduate contributions."  His ideas for reducing the financial burden on taxpayers and students also included the promotion of two-year degrees and an increase in flexible, part-time courses.

Dr Cable also called into question the previous government's commitment to getting half of all under-30s into higher education, describing the target as "artificial".  That said, he does not want to see a situation developing "where a combination of academic competition and reduced student support have the effect of making the top universities an exclusive preserve of the privileged."

And he stopped short of a full commitment to the graduate tax proposal.  "We are not announcing a graduate tax policy," he told the BBC.  "What I am doing today is asking Lord Browne to make sure this option is properly explored, and he has agreed to do that."

Opponents of the proposed tax were quick to voice their concerns.  AGR chief executive Carl Gilleard said "The AGR does not support the idea of a graduate tax.  There is no guarantee that this tax would find its way into higher education.  We believe that the removal of the cap on student tuition fees is the only way to fill the existing funding gap and to compel universities to demonstrate that their degree courses represent value for money.

"Dr Cable indicated that the coalition government may abandon the previous government's 50% participation rate for higher education.  This would be an important step towards driving up standards in our universities and enhancing the value of a degree.  This is an issue we identified as a high priority in our election manifesto published earlier this year.

"The 50% participation target has failed to increase social mobility and has only succeeded in damaging the quality of the student university experience.  Every student should have the opportunity to fulfil their potential and to participate in higher education on the basis of academic attainment, ability and determination to succeed.  It is essential therefore that the priority for higher education funding is to drive up the quality of teaching and learning, thereby enhancing the student experience."

The Universities and College Union also came out in opposition to the proposed tax.  General secretary Sally Hunt said "If the government thinks it can get the public to swallow higher fees as some sort of graduate tax, it is living in a dream world.  We need a proper debate on how to fund our universities, not an exercise in rebranding."  UCU head of public policy Paul Cotterell suggested that the system was also likely to be unfair, with poorer graduates paying a higher proportion of their earnings through the tax system and those in better-remunerated jobs paying less.

●  Universities minister David Willetts, who remains keen on student loan repayment as an integral component of HE funding, still hopes to announce measures after the Comprehensive Spending Review which is due in October.