On “Newsnight” 15 July 2010, the Business Secretary, Vince Cable, seemed quite incapable of grasping the fantastic impracticability, destructiveness and partiality of a so-called graduate tax favoured by his party, the Liberal Democrats.  As usual, for all but one of those on the programme, the moralism of free-on-demand university education completely swamped the realities of paying for it.

The first part of the proposal, believe it or not, is for undergraduate fees to be abolished, at an immediate taxpayer cost of around £3 billion, rising very rapidly by a further £3 billion to meet the estimated current short-fall in university funding.  This additional £6 billion per year would be on top of the present £8 billion currently paid by the taxpayer to universities for undergraduate courses, making £14 billion per year or nearly 10% of the deficit which the government will struggle to reduce significantly over the next 5 years.

The second part of the proposal is for the cost of the students’ fees to be recovered by an additional income tax to be levied on the graduates’ income – possibly for life (such a practical detail was not even mentioned).

How could such a scheme work?  The taxpayer is cast in the role of a mad banker lending huge sums, possibly £140 billion over ten years, hoping to service the debt and recover this from additional income tax on a minority of the population.  (Total income tax currently raises about £140 billion per year.)

Probably only about half to two-thirds of graduates (say 200,000 per year) would actually pay the tax, given the inevitable exemptions for low salaries and unemployment – especially in the Arts and Media sectors – plus the EU non-payers.  This would mean an average annual additional tax burden for an individual of £10-14,000 per year for an indefinite period of time.

Why should any British graduate stick around to pay such an incredible impost?  What could be more destructive of our industries than positively to encourage our highly mobile Science and Engineering graduates to leave their native land?

On top of this insanity is that many more EU students (from a population pool of 430 million people – nearly half India’s population) would do what many do now.  They would enrol in British universities, pay no fees, take out loans for maintenance on the same basis as British students, except that 70% of EU students don’t repay them and the Student Loans Company has no means of recovery from people who simply disappear back to their homelands.  Thus they would get free board and lodging (something no British student has) plus free university tuition.

There have been 112,000 EU students studying here in Mugland in 2009/10.  Under the LibDems’ scheme you can expect that number to rise very rapidly to further displace British students.  What is it with Liberal Democrat activists?  Are they born stupid, or is it something they catch from other activists?  Why do their mad proposals in whatever field always work to the disadvantage of the British people?

For a scheme for university fees and admissions which is both entirely practical and fair to all British young people and ensures that EU students pay the full cost of their British education, see “University Admissions and Fees” by Prof Stephen Bush, published in March 2004 by the Campaign for Real Education (ISBN 1 872953 30 1).  Also see the full version of  Produce and Prosper, Section 9.1 Post-18 Education and Training: Citizen’s Voucher, pages 19-21, on this website.

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