Government outlines plans for graduate tax system

Vince Cable, the Business Secretary, has outlined plans today for a new graduate tax system. The new system will abolish tuition fees, which are payable after graduation. Students in England will repay the costs of university through taxation once they begin working.

The amount paid when a graduate has started working will depend upon earnings, compared with the current system which expects a fixed amount to be paid back.

Cable said that his plans are the “only possible way forward” for higher education.

Speaking at London South Bank University earlier today, Cable continued: “The reality is we are going to have to develop a model in which the balance of funding for higher education in England combines less public support and more private investment from those who benefit most from it.”

The NUS have said today that they welcome Cable’s backing for a graduate tax to replace student top-up fees, but warned that “any proposed alternative must be genuinely fair and progressive to win the support of students.”

Speaking after the announcement, NUS President, Aaron Porter, said: “Vince Cable’s support for the principle of a graduate tax is to be welcomed as is his recognition that those who earn most after university should contribute more back as and when they do so. He is right to ask why, under the current unpopular and regressive top-up fee system, a care worker or teacher is expected to pay as much as a corporate lawyer or banker.

“The fair solution is to abolish tuition fees and ensure that graduate contributions are based on actual earnings in the real world, rather than sticker prices in prospectuses, which are based on guesswork.”

The plans set out today could also see university degrees condensed to two years, a scheme said to “sound great on paper but are in effect education on the cheap,” according to the University and College Union’s general secretary, Sally Hunt.

She continued: “They would be incredibly teacher-intensive and would stop staff from carrying out vital research and pastoral duties.”

Porter added that students and families won’t be “fooled” by a simple re-branding or “marketing drives”. He believes that some “radical ideas” and “progressive thinking” were put forward today.

The plans also aim to get more students living at home and to expand private institutions, which would then allow students to be awarded their degrees from more established institutions.

A review of tuition fees and student finance is due to report in the autumn.

David Garner has given Nouse a brief statement regarding the University of York’s stance on the issue: “We would wish to know a lot more about the detail of the Graduate Tax proposal before commenting further. We are awaiting the outcome of the Browne Review and this is clearly another interesting input to that process.”


  1. 15 Jul ’10 at 4:32 pm

    Flabbagastered Liberal

    The witless red parrots of the NUS’ remarkable volte-face is amusing, to say the least- particularly considering how long they railed against what was, effectively, a graduate tax in the first place- albeit one that you could actually get rid of in the long run.

    From the Lib Dems, though? Whenever one of the Orange Bookers has brought anything along the lines of removing the opposition to tuition fees up, they’ve been quite rightly crucified by the majority of the party. Were this to pass with Lib Dem assent, it’d be a terrible betrayal of their student support.

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  2. 15 Jul ’10 at 5:57 pm

    Unflabbagastered liberal

    It’s better than tuition fees, though it’s still a betrayal of the Lib Dem anti-taxing-students policy. But since the Lib Dems basically have no power at the moment, it’s about the best we could have hoped for.

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  3. what does everybody think about the idea of condensing degrees down into two years? i know it’s the smaller story of the two, but honestly curious.

    i think that it depends on the course, obviously. a lot of courses, say law, don’t require any prior knowledge so i suppose the initial year is fundamental in establishing a knowledge upon which more advanced stuff can be learnt. but for stuff like maths, where the subject is clearly known beforehand and the candidates are AAA-calibre, is it THAT necessary?

    i don’t feel like i’ve really learnt much in my first year, tbh. i’m not a maths or a law student before any one assumes and has a go. i almost feel as if i’ve just been set a load of assignments to do which haven’t really furthered my knowledge overall but provided me with marginally more knowledge on 20-odd niche areas of the subject. maybe i’m naive and will find my first year invaluable in the second and third?

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  4. Labour grass roots plan makes the ConDem front bench.

    This plan was originally concocted by elements of the Labour party grass roots and has been proposed by the Labour party NUS group, finally making NUS policy this year. Interesting to see a ConDem government copying the policies of the opposition, the age of New Labour, it seems, never ended.

    This, is a massive U-turn for the LibDems calling for general taxation to fund HE. What’s more I doubt the Tories will like it, they probably consider it ‘outrageous social discrimination’.

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  5. 16 Jul ’10 at 3:30 pm

    all over again

    @dddd you clearly don’t study maths or a science degree. considering that science students have the most contact hours out of any degree how exactly could you condense this down into two years. Also there are lots of different courses which have different syllabuses so knowledge is not standardised. However i believe some arts degrees could be condensed into 3 year courses!

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  6. i’m studying for a BSc (won’t name the course there’s about 30 of us on the dual hons one, I’m the only one beginning with d), so yes I am a science student!

    My contact hours are intense, but I’m not suggesting that they teach ALL the same material they do now, but in 2 years. We’d have to invest in time turners for us all, unfortunately, and I know that I don’t need double the assignments I’ve had this year in one, I would actually die of sleep deprivation.

    I was more focused on the “worthiness” of our first year content than trying to combine it into a second year degree programme. A lot of it seems like A-level review, with a tiny bit of expansion upon the foundations of the subject, and the primary aim seems to get everyone up to the same level rather than to make any progress on your degree. Surely, by tightening requirement subjects we could all enter on the same level anyway thus deeming first year redundant? This would also need to be supported by higher quality A levels (please don’t mistake this for harder a levels…), and perhaps more standardisation of course content between exam boards which may be really difficult to implement.

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  7. 18 Jul ’10 at 11:35 pm

    all over again

    i understand the point you make but it was my understanding that this first year of bringing everyone up to the same standard is because for any given subject there are many different courses offered by varying examinations board. i think your idea is good however it would need a very large overturn of the whole 6th form and university system. Which isn’t very likely.

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