Ed Miliband

I urged Tony Blair to adopt a graduate tax back in 1995 as it was/is a fair way of funding further education over time. Labour didn't listen to it's members between 1995-2010. I'm delighted that Ed is and I hope we make this policy ours and Ed wins in September.

Alan Mitchell. Feltham & Heston CLP

I completely agree with you on the Graduate Tax. The upfront fees should be scrapped. How about a one off lump sum tax for all those who paid no fees at all specially MPs.

ah what about this when people leave the country after graduating, or people from other countries. Isn't there a better way to do this? Are there any countries that do this already?

It strikes me that if we don't have enough money to pay for people to go to University then we have the wrong priorities and need to redirect spending from other areas. As others have said, there's a really nice simple way to pay for this that takes into account everything - it's called income tax.
The country as a whole benefits from an educated population. Where does this end? Why not ask people to pay for A levels too?
Finally - when exactly was this put forward before the election? The Tories, Lib Dems and Ed all agree on this do they? Would have been nice to know what we were voting for before the election. Disappointing Ed considering you wrote our manifesto.

I'm contemplating studying for an MSc Finance, if I had to pay graduate tax equivalent to the rates applicable to student loan repayments, this would be manageable. If they increase the repayment amount, I'm unsure if I would be able to study for my MSc as I would be worried about paying off my BSc loan!

Graduates already tend to earn more and therefore pay more tax.

How about an similar approach to a sportsman tax on the elite rich sportstars

How about an equivalent sportsman tax

Interesting but how does it work exactly? If you end up relatively low paid could you be asked to pay back effectlively less than the cost of your degree? Conversely if you end up highly paid could you be asked to pay back more? Do you have more details please?

Although I am not a Labour supporter and do not agree with Mr Milliband's politics, I have to say that this is a fantastic alternative to tuition fees.

There's absolutely nothing fair about a graduate tax. It assumes that a university degree increases the earning power of graduates, which may be true as a generalisation but is certainly not true of all graduates -- especially at a time when growing numbers of people are going to finish their university courses with degrees but no hope of a job at a time of very high unemployment. It has never been true of the many graduates who work for the not-for-profit sector or even many areas of the public sector. Many graduates are forced to take jobs for which they are over-qualified and therefore underpaid, with no extra earning power attributable to their degrees. But the even more serious objection to a graduate tax is that a university degree is only one of numerous factors that may result in avove-average incomes: high IQ, industriousness, unscrupulousness, good contacts through well-off parents or through having been to a 'public' school, an affluent upbringing and social confidence, good luck -- the list is endless. There's no possible justification or need for government to single out the beneficiaries of one particular advantage (such as a university degree) for an additional tax obligation: if the tax system is progressive, as one day a future Labour government might just possibly make it, then the higher people's incomes, the more tax they pay, regardless of the reasons for their relative affluence. Why should a graduate pay more tax on her income than someone with no degree but an identical income?

Other arguments against a graduate tax are: that the provision of university education to all those who can benefit from it benefits the whole of society in numerous obvious ways, including indirectly those who haven't been to university, so society should pay for university education collectively through the tax system; that the prospect of having to pay a graduate tax on top of income tax and other taxes would inevitably discourage many able young people from aspiring to a university education; and that a graduate tax, calculated to pay for the costs of university education, is in effect a hypothecated tax, whose proceeds would be earmarked for a specific category of expenditure; and that would be contrary to the basic principle that taxes go into the Consolidated Fund which the Chancellor of the Exchequer can use with total flexibility for whatever needs may arise.

The fair solution to the problem of funding university teaching is a general increase in the higher rates of income tax, on the principle that all those who can afford to contribute more to social goods should pay more tax, not just graduates. A future Labour government will need to be much less timid about taxing very high incomes -- and wealth -- on a steeply rising scale. The new 50% marginal rate (which incidentally doesn't mean anyone paying 50% of their entire income in tax, as many people seem to think) is a start, but there's ample scope for much more. Threats from the mega-rich to emigrate if their taxes go up are a bluff that should be called -- and if it's not a bluff, good riddance to them. To each according to his need....

Please think again, Mr Miliband. Tuition fees should certainly be abolished, but not to be replaced by a graduate tax. The arguments for financing state school education out of general taxation apply every bit as strongly to higher education. Grasp the nettle!

Brian Barder
http://www.barder.com/ephems/

This proposal is the only reasonable way forward for university funding in the UK. Lifting the cap on fees would be a disaster for universities and limit the access of students from less priviliged backgrounds even further.
We should all support Ed in campaigning for this.

To what extent do you still agree with the argument that the whole country benefits from a strong higher education system producing graduates, and that therefore some of the burden for funding that ought to come from the treasury's wider tax income?

It seems that a graduate tax does open the door to the possibility in future of changing the extent to which funding is collected from graduates, and the amount that's collected from the wider population. You talk about being able to raise more for universities than the current system - would that mean that you would be in favour of then passing the savings on to the general public through cuts in income tax?

I think this system would be lot fairer than the current hikes in tuition fees. The link to the ability to pay is also better - after all, many graduates already choose to share their education through teaching and other public services, which are not that well remunerated, so a graduated Graduate Tax would be fairer than the current loan system.

How does it work for students who have already graduated having paid full fees and who have, therefore already accrued considerable debts?

This comes across as a rather impractical idea. We all know that the tax collected would not be 'ringfenced' but just go into the general pot. What about people who come here to study and then return home? - they will not be contributing. Not all degrees lead to 'better' job prospects - and if a person's career and pay flourishes, they will pay more tax anyway. Will people be given the opportunity to discharge their 'debt' and not pay the tax if they want to?

Maybe I have misuderstood, but is the tax applicable at a blanket rate? For example, my son has just graduated from a four year course, having paid full fees and my daughter will be entering her second year in September. Does the graduate tax take into account the fact that they wil already have accrued considerable debts?
Regards,
Kathryn Twigg (Wrexham CLP)

Ed

I think that a graduate tax is the right and fair way to go.

With two children starting university in September, they have both already rationlised the repayment of fees as being the same as paying a graduate tax in any case. While this helps to reduce their fear of a graduate debt it does not remove the fact that the current system is regressive in nature as those who earn more are clear of the repayments sooner than those we earn less. They also pay a smaller proportion of their life time earnings. A flat graduate tax os say 2% on all income above the tax threshold would be reasonable indeed if the tax rate were to be say 5% for higher tax payers it might be possible to reduce the tax on basic rate tax payers even further.

No issue would be to consider if the tax funds raised should be directed into a seperate higher education pot to fund universities direct. It would also seem fair to back date the graduate tax to cover those students who are already paying back loans and hence save on the cost of the current administative black hole which is the Student Finance Agency.

One question though why was this not brought in under the last Labour government?

Its preferable to fees but still the lesser of evils. I'm nervous about hypothecated taxes. THere's a danger that our opponents will jump at this and do it for other services eg health - a "health Tax - to be paid only by people who use the NHS ? Or a schools tax only paid by parents whose children use state schools ? No !! In principle all education should be free - no tuition fees, and interest free maintenance loans for all. Repayments of loans could be adjusted according to later income. If we have to save then I would ditch all maintenance grants not a graduate tax. If we need a tax on top, why not a tax on larger companies whose future manpower depends on a supply of educated graduates?

I nearly asked you a question about this at the Q&A in Manchester, but you'd already answered it in your opening speech. The introduction of tuition fees was for me among many others the worst thing that ever happened under Labour's 13 years of power. I graduated from University 3 years ago and I'm still not earning enough to be able to pay off my student loan worth £7,000 plus interest. I also have one brother who's just graduated this year and another one who's due to start at Liverpool JMU in September and the debts we're all going to be burdened with, if not already do not bare thinking about. I'm sure though that the new graduate tax will be a breath of fresh air as it will be a new way of reducing financial hardship both for students and graduates.

You seem to be missing the point totally, how are you going to tax graduates if they dont have a job to begin with?

There are questions. Does this just apply to new graduates who start after this is introduced? A recent graduate I know has already got a debt of £26,000 plus, rising all the time because of interest, and not much chance of getting a job. Doesn't need any added pressure. A graduate can't be responsible for his own debt and also that of others. Some clarification is needed.

Ed - I see where you're coming from but worry more about the independence of our universities than about opening up a market for fees. Look at what the likes of Princeton and Harvard are able to do on fair access for disadvantaged students and how independence allows them to stand tall globally and set their own agendas. The best universities in the world are the freest, and Britain needs great universities. The State, of course, has legitimate interests in the tertiary sector - but these are best maintained through funding research in the national interest and by financial support where needed directly to the student, leaving universities free to recover through fees the costs of their courses.

I thought we already had this its called Income Tax! I got a degree, I got a better paid job and therefor pay more income tax. Why do I need to pay twice? I work in a University in the North of England, we are better off than most Universities but the cuts will kill education.

A graduate tax certainly seems fairer than raising fees Ed. However, the argument for asking graduates to pay back towards the cost of their education seems to be based on the principle that they earn more in their lifetime careers than they otherwise would have. If that's correct for any one person, then don't we already have a system for differentially charging them, called higher rate income tax? Why do we need yet another tax, with all its added admin costs, when higher earning graduates can pay back through income tax? I was lucky enough to get grants all through my education, but I've ungrudgingly paid back plenty in high rate income tax since. But we don't seem to be able to discuss income tax at all any more.

I fully agree with this idea. As someone who went to univsersity who had unemployed parents I can appreciate the argument you make. It seemed an injustice to me that even after graduating those from poorer backgrounds were still suffering as they were burdened with more debt because of fees; fees that people from wealthier backgrounds might have had paid by parents.

A tax such as this will ensure better funding for univeristies and just seems a lot more fair: everyone will have to pay it for 20 years regardless of background - true equality.

I recently read a proposal that medical students could have some of their debt written off by committing to stay in the NHS and not, for example, go abroad to work for a year as many young doctors do to broaden their experience before a long career in the NHS. I am the type of person such a proposal is presumably aimed to please but I actually think it is very unfair. How far into your life should your decisions still be goverened by whether or not you have wealthy parents? I worked in part time jobs throughout medical school and did my elective in the UK unlike most for purely financial reasons. Others were enhancing their CV with interesting projects overseas whilst others had to struggle to survive. So now this inequality of opportunity is to exist beyond medical school?

Ed, theoretically this could be a fairer system and less expensive than the enormity of tuition fees. Having two daughters who are of university age or approaching it I am aware that tuition fees and the potential of enormous debt is a real disincentive to university. I would understand that what you are proposing a sliding scale related to the ability to pay? And would this vary according to whether they are in employment or out of it (another scary reality of any employment these days). However I would also question whether we need to push as many through university as has been Labour's objective, rather than using more vocational courses, apprenticeships etc. As a former university chaplain at the University of the West of England I have seen far too many students struggling with their courses, a greater percentage than when fewer went to university. To propose the tax over a 20 year period would allow for a lesser impact in the short-tern than fees.

Yours, the Reverend Dougie Burnett, Redland Park Church, Bristol

Two questions about the graduate tax. 1) Would it be paid by the graduate as soon as they get employment after graduating or would there be an entry level as per the current student loan system, and 2) How would universities be funded in the period between the removal of the tuition fees and the beginning of funds being collected via the graduation tax.
I am also assuming each university would be funded based on their proportion of graduates compared to the total.
Overall it sounds like a fairer way of paying for further education once the details are ironed out

Will this tax be backdated to include those who have previously been been to Uni for free?
Also applying the same tax across all graduates is daft, do you not realise that those who have different degrees and go into different careers earn different salary levels!?!?

Can you please tell me how switching to a graduate tax of 0.5%-2% per year would raise more money than the current system, which takes 9% of a graduate's annual income?

A graduate tax would be a bad deal for students too. A much higher proportion of that tax would be interest accrued over the 20 years, so in the long run students would be slightly worse off.

The current system is already equivalent to a graduate tax. No student need worry about repaying SLC debt as long as it remains a proportion of income over 15,000.

Hi Ed,

I think the problem with the graduate tax is that it further erodes our sense of collective effort and collective reward.

On the whole, when someone is educated, the whole of society benefits. There are clearly some jobs where that benefit is more direct - if you do a vocational degree such as Social Work or Nursing or Medicine it's clear where society benefits, but it's also the case if you do business studies or maths or philosophy (or almost any other subject).

Citizens who truly understand statistics, and can recognise their misuse, are able to challenge both the government and the media when they use them to support their arguments. People who understand logic, or human nature, or can follow a complex process, are similarly beneficial in keeping our leaders on their toes.

So - I reject both the idea of tuition fees and of a graduate tax. Both are more daunting to students from less privileged backgrounds, and both obscure the collective benefit of education and promote a sense that individual benefit is central, and that the responsibility to pay for this benefit comes back to the individual... which in turn feeds the idea that the individual doesn't need to consider society in how they use their new knowledge and skills. It's corrosive.

Instead I simply favour graded income tax. Education is just part of a package of challenges and opportunities that a person receives in our society. We don't single out other challenges/opportunities for specific taxation - you don't get tax breaks for having lost a parent in your childhood, or pay extra taxes for having had the best primary school in the country.

We've lost sight of the purpose of education if we think it's about individual gain.

The problem with this post is it argues for a graduate tax in opposition to tuition fees only. That's all well in good, but there's a position 'on the other side' of the graduate tax that needs to be contested before you make up your mind.

The fact that you've not (in this post, or ever, as far as I can see) assessed this position, may say something about the way you're still making too many tacit assumptions about our political economy (within which I include the question of how to pay for the education system as a whole), rather than challenging the whol kit and caboodle. Remember you're supposed to be the candidate for change.

The 'other side' alternative to graduate tax is not rocket science. It's called general taxation, in which we take a collectivist attitude to the benefits of higher education, and in which we ask people on higher incomes to make their contribution to a 'higher education nation', irrespective of whether they got the indivudual learning or not.

As an extreme example, do you not think 'self-made' millionaire Richard Branson benefits from the higher education his accountants and legal advisers and design experts and plane engineers have?

I've written more at http://thoughcowardsflinch.com/2010/01/28/what-are-students-for-again/ if you or anyone in your team can be bothered.

I think this is a fair system as graduates would be earning more anyway for having a degree. would be much fairer than raising fees which may make it harder for people from less well off backgrounds from having the oppurtunity to a uni education!!!

My Ed!You have written a Concise Blogpost and Am very impressed with your Intellectual Instincts!And this makes you Victorious with your Principles My Ed!CONGRATULATIONS!!!

Would this be just for England or for the entire UK?