Graduate tax, we shouldn’t tax things we want to encourage

I’ll lay my cards on the table, I am at heart a low tax Tory but I recognise that there does need to be taxation and public spending. My contention is that where possible taxation should be orientated towards things that we want to discourage and reduced in areas we want to encourage and stimulate.

We are in an increasingly competitive economic environment and we a commercial sector which can stand up to the fast growth economies of the world, we need entrepreneurs, business creators and highly skilled employees. I cannot see that any of these would be encouraged by a graduate tax.

Our university sector is struggling to make the books balance, the massive increase in the sector made the grant funded model I grew up with untenable. There is no doubt that the fear of significant debt will put some bright and talented young people off of going to university while children from wealthy families can have their places subsidised by the parents. I would hate think that we have created a system where university selection is at some level dictated by wealth rather than aptitude.

We push so many people towards university because we still have not created a valued and effective technical /vocational educational stream. Over the last few decades we have pushed more and more young people to a university education whether appropriate or not and then charged them for the privilege.

When I joined the army it was felt that “proper” officers went straight to Sandhurst and did the non-graduate “Long Course”. This was a non-university vocational course yet still carried with it a huge amount of kudos and opened doors when you left the forces. You also got paid while you were there. Now it is almost unheard of for army officers to be non-graduates, somehow we have completely devalued non-university education no matter how excellent it was, that is a retrograde step.

I’m not even sure how a graduate tax would work. If the tax payments end once the cost of the course has been covered then it is the same as a student loan, if it continues throughout the graduate’s working life then it is just another income tax. Indeed an income tax focused on the very pool of people we should be encouraging and supporting and reinforcing the impression that graduates are different and somehow better or more valuable than everyone else.

How do we square this particular circle? I recommend that we have a smaller and more focused and better funded university sector which produced graduates who are genuinely world class. Running in parallel to this we also need a vocational education system that is respected, taken seriously and supported by the industries that will benefit from its graduates.

2 responses to “Graduate tax, we shouldn’t tax things we want to encourage

  1. Graduate tax is a pathetic idea which penalises knowledge and academic success. It will reinforce the belief in young people that the only way to become rich is to win the lottery or become a 'celebrity'. This takes the cult of ignorance to a whole new level from a privately educated government.

    Why should a footballer pay less tax than a teacher?

    What this will lead to is more students (those wealthy enough) choosing to study abroad where they will only have to pay back the cost of their education once rather than for the rest of their life. They may choose to continue to live abroad. What will remain in Britain is the remenants of a once great university system turned into a vocational education system with no further academic merit (except for a few universities which will educate the elite of other countries rather than our own).

    And all this because the government feels it is more palatable to have a 'graduate tax' rather than adding a penny or two to the higher rate of income tax.

  2. I think that we need to look hard at the needs of employers, as well as the purpose of a university education. Are universities simply the means to an end of a better job, and the supply of capable young people with the willingness to adapt to choice in jobs that may change several times throughout their career, or are they to provide a wider and deeper experience of learning that an A level syllabus can not provide? Furnishing the mind can be done in may different environments, and I think that schools are channeling their pupils to think far too narrowly that their next stage must be going to university, as that is how they are seen to be measured by many.

    I agree that there are far too many “graduates” today who are subsequently provided with so called “graduate” entry jobs which are no such thing. Job inflation is rife. 40 years ago young people could qualify to be a barrister, solicitor, accountant, surveyor, even dare I say it an investment banker, indeed most of the professions without a university degree. I do not believe that “raising the bar” has made any difference to the quality of the professions that we have today.

    It is difficult to know in many cases what World Class universities are other than the obvious Oxbridge and some Russell Group, so where do we draw the line? I do believe that society benefits as a whole if we a re genuinely producing world class graduates to compete with other economies, so to burden them with still more taxes seems to me unfair.

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