It’s intriguing to watch when parties of government and opposition join forces to carry out a joint assault on some sacred cow or other. Take nuclear power. It’s now taken for granted Labour should be pro-nuclear, but in 2002 their White Paper declared that nuclear’s “current economics make it an unattractive option for new, carbon-free generating capacity” (pdf, p12). By 2006 they had changed their mind, and we had always been at war with Eastasia. Just the same with the Lib Dems. Less than a year before the General Election Chris Huhne was telling us “Our message is clear, No to nuclear, as it is not a short cut, but a dead end”, yet by last month apparently “there is an important place for new nuclear stations in our energy mix”.
In a couple of years no-one will really remember that either party used to be against nuclear power, and we’ll be saddled with a massive diversion from a low carbon future. The debate has “moved on”, and Government and opposition try to impart that fatalistic sense of fait accompli into the public consciousness. After all, if all three of the largest parties at Westminster want something, however insane, why bother resisting? Or indeed voting?
The boundaries of debate are now being closed down in another area – funding of higher education. In Scotland, the Lib Dems touted a change of name (from “tuition fees” to “graduate endowment”) and change in payment schedule (a delay) as abolition, a supposed achievement from their coalition with Labour. To be fair, when the political numbers stacked up for actual abolition came along in 2008, they voted with the Greens and the SNP to re-scrap them. Do it again and do it properly, as they say.
They then went into the 2010 UK General Election having given the NUS pledges not to raise fees – who have damning pictures ready should they sell out. I can see why NUS felt it necessary to extract this pledge, given their track record. This position, no increases, was already a substantial compromise on their outright abolition policy, but Nick Clegg had previously warned that he would ignore the party’s views on that.
Labour’s betrayal of students, of course, dates back much further, to those happy clappy early days of Blairism in 1997, when they not only brought in fees but also scrapped the residual grants for poorer students, an even more shameful decision and one with much worse consequences for equality. I was working at the time for St Andrews Students’ Union, not part of NUS and therefore free to campaign against Labour’s assault on equal access to higher education. Despite the reputation St Andrews has, in those days it was hardly the decadent administration some might have imagined. Again, against the stereotype, there were plenty of people there who counted towards the student poverty figures, and I ran surveys of them both before and after Labour’s changes were proposed. The demographics changed, the proportion working in term-time increased, and the anxiety about debt increased.
Now the UK government plans more changes as part of the cuts agenda, but the debate has been reframed. The choice now is between a graduate tax, we’re told, and the uncapped tuition fees beloved of highly paid university administrators. Even Jackie Ashley describes the former as “the only obvious alternative” to the latter, before urging Ed Miliband to back a hike in tuition fees instead of sticking to some supposedly principled graduate tax. Vince Cable’s rejection of the tax option is being portrayed as an inevitable move towards tuition fee increases. To be fair, given his current role, it probably is.
They’re trying to shut out those of us who think university tuition is a social good, that a good mix of arts and science graduates benefits the country enough to justify the investment. If you believe the intrinsic merit of education as well as the benefits it brings to the nation more than outweighs the expenditure, you’re an unrealistic, delusional “deficit denier” too. But neither fees nor a graduate tax can be regarded as acceptable. Fees simply do deter would-be students from poorer backgrounds, even where there are means-tests that can allow them to avoid paying. Above the poverty level, they are a factor in middle-income decision-making, but have virtually no impact on the wealthiest. And paying an additional tax after graduation on top of the debt incurred already will similarly skew admissions.
What’s more, a simple logical look at the situation shows graduates do pay more tax, but only where they earn more. It’s called income tax, and although it’s not particularly progressive, it does certainly ensure you pay more tax as your income rises. If a graduate gets a well-paid job in the City thanks in part to their degree, they pay more tax. If the same graduate decides to be a teacher instead, which their first degree will help, they’ll pay less, relatively. That sounds fair to me.
We can’t measure how much your income has been increased by education, but we can measure your income overall. Let’s just tax the latter, ideally more progressively (or look at charging business, given the way universities have come under increasing pressure to align with business’s interests). The total cost of UK higher education is currently just £7.8bn, not even a fifth of what we (largely) squander on so-called defence. It’s affordable.
Let’s be honest. Both of these measures, fees and a graduate tax, are rationing by price. Which means higher education will be disproportionately open for those able to pay, and it means a narrowing of access. Only if intelligence were somehow correlated to income would that perhaps be in the nation’s best interests.
We do need to ration, of course. We can’t afford for every school leaver and every would-be mature student to go to university, but the national interest is clearly aligned with taking the brightest and most committed. Rationing by ability, in other words.
There are problems with that too, most notably that the affluent pay for secondary education specifically designed to ensure that even the dim at private schools get university entrance-level qualifications, whereas the bright kids in poor schools have been failed long before they get to their Highers or A-levels. Those controversial measures to select students on more than just their exam results would have to be ramped up, no doubt to massive squealing from the Daily Mail. Or we could look again at Peter Wilby’s modest proposal from 1999 to admit students just from the top six in each school.
Choosing this alternative to a graduate tax or fees would incur another price. It would almost certainly mean a pause in, or even an end to, the long-term trend of rising numbers at university, the sacred cow that doesn’t get mentioned. So long as we’re looking beyond grades and taking the brightest from across the income levels, not just the pre-processed private school elite, that works for me. Even with organisation, unfortunately, it’ll probably require both Labour and Lib Dem MPs to grow a backbone. I fear a lot of damage will be to education done before that happens.
Update: yeah, Ian Bell made these points more concisely a month ago. Oh well.
#1 by commenter on October 12, 2010 - 11:37 am
Small point: It’s not a graduate tax if people who never went to university pay it.
eg “VAT is a graduate tax, because some graduates buy more stuff.”
#2 by James on October 12, 2010 - 11:47 am
But if a degree gives you a higher income, the tax on that marginal additional income is paid exclusively by graduates.
#3 by James Kelly on October 12, 2010 - 3:00 pm
But there are high earners (albeit a minority) who don’t have a degree, so it wouldn’t be paid exclusively by graduates.
I do agree with you in principle that higher education should be paid for through general taxation, but if it came down to a straight choice between tuition fees and a graduate tax, I’d have no problem supporting the latter. At least it would be relatively progressive, and it would get us away from the psychology of debt that deters potential students from poorer backgrounds. I’ve never been clear whether it would apply only to new graduates or to existing ones as well, but if the latter, it would also have the satisfying effect of pulling in money from the generation of politicians who tried to “draw up the ladder behind them”!
#4 by Jeff on October 12, 2010 - 4:01 pm
I subscribe to the notion that high earners, graduates or not, should accept higher taxes are a price worth paying for living in a country with an appropriate talent and knowledge mix.
So for me a pure graduate tax is out and just general higher top rate of tax is in so your point James K about there being high earners who are non-grads is a moot one for me.
#5 by James on October 12, 2010 - 4:11 pm
And that’s precisely the “straight choice” I don’t believe this is.
Not least because telling a student from a poor background they’ll have to pay more tax all their working life (or much of it) will be a massive deterrent.
However, I’m with you on the last bit. If they do it, they should consider going further and setting a higher rate specifically for sellout former NUS Presidents (Jack Straw, Charles Clark, Jim Murphy etc).
#6 by Alan on October 12, 2010 - 11:54 am
I too remember the old argument that graduates were more likely to get in to a better paid job, leading to more tax income. Hurrah.
#7 by Jeff on October 12, 2010 - 12:03 pm
I am solidly on board with you on this James, surprisingly so as it wasn’t long ago that I thought some sort of fee was appropriate.
But, as you point out, graduates already pay more tax through income tax and VAT and much more. The barrier to higher education should be personal application, not how big a loan you can or can’t afford.
I guess I’m one of those ‘City’ people you mention and, although there is no appetite for it, I am certain through looking at the disposable income of colleagues and those higher up the food chain where I work that there is plenty of scope for pushing income tax rates higher. The problem is the ‘appetite’. Most people who earn big bucks are doing so to further their individual wealth and comfort levels, not for ‘the greater good’. I fear that mentality is too deeply ingrained in the UK to fix the problem of universities.
For me, Britain is surely crying out for higher income tax rates in order to finance universal university access, not to mention many other worthy things that face Osborne’s axe. My only concern is that building more warships would be a higher priority than fair access for students if tax rates were to increase.
Once again, if it works in Scandinavia, it can work here (well, in Scotland at least).
#8 by Indy on October 12, 2010 - 5:58 pm
I agree but it’s not just about fees. The reason a lot of people from poorer backgrounds are daunted by going to uni is because of the costs of actually living and getting by while you are studying. Even with working part time it can be rough going. And if you are a bit older and especially if you have kids then it can be out of the question. I’d like to see us looking at how to expand higher education, rather than restricting it further, and make it more accessible as well as looking at funding. It doesn’t really have to be rationed. How about more options to combine study with working for example?
#9 by James on October 12, 2010 - 6:37 pm
I’m with you on the cost of living, absolutely. When I went to university I still got a small grant, which was enough to make a big difference when my diet was mainly cheese sandwiches and baked beans.
And I think flexibility to allow study alongside work makes sense too. But, as discussed, I think the numbers going is the bit that will have to give.
#10 by Aaron Crane on October 12, 2010 - 6:32 pm
I have grave problems with the very concept of a graduate tax. If the claim is that a graduate tax should be levied because higher education increases the statistically-expected income of its recipients, then why isn’t the same considered true of secondary and primary education?
#11 by blanco on October 18, 2010 - 9:00 am
http://www.telegraph.co.uk/news/newstopics/politics/scotland/8001781/Fewer-Scottish-university-students-from-poorer-backgrounds.html
Never mind the actual facts, eh?
#12 by James on October 18, 2010 - 10:50 am
Simon’s a good journalist, but the Telegraph’s unsubstantiated stories aren’t as good evidence as HESA’s actual stats.
Access is diminishing alongside the fee regime. The proportion of students from disadvantaged backgrounds is dropping. 10.1% of school leavers in higher education in 2008-9 compared to 13.3% in 2002-3 (both are .xls files).
The best you can say is that the increasing proportion of students from better-off backgrounds is unrelated to fees. After all, correlation ≠causation.