Tax – with atwist

Nov 11 2009 by Rob Merrick, Liverpool Daily Post

WHO will join me in paying a “windfall tax” to save future students from the misery of debt that will take until middle-age to repay?

This week, ex-BP chief executive Lord Browne was picked to lead a review to examine when – sorry, I mean whether – to lift the current £3,225-a-year cap on tuition fees.

In truth, the only issues are when the cap will be hiked and by how much, as Labour and the Conservatives quietly agree fees must go up to rescue universities pleading poverty.

Vice-chancellors want annual fees of £7,000 – which would push average debts at graduation up to an eye-watering £32,400, according to Universities UK.

That will be a heavy price to pay for Tony Blair's 2004 blunder in introducing “top-up” fees in the first place, but a sadly predictable one.

Nearly six years ago, it was obvious that universities would come back for much more. It was only rebel Labour MPs who delayed it this long, by extracting the promise of a further review.

On the one hand, vice-Chancellors cannot be blamed. They have been told to find £180m savings over the next two years, despite modest funding by world standards.

Yet, who can doubt that the prospect of leaving £32,000 in the red will send shivers down the spines of would-be students and deter many from applying?

So what is the solution? Well, funnily enough, it is the one that I and many, many others argued for back in 2003 and 2004 – a graduate tax – but with an added twist.

Students would still contribute more for their passport to a better job but, crucially, would only be asked to pay back what they can actually afford.