Labour leadership hustings
I'd like to ask about Graduate Tax - my understanding is that all candidates bar David Miliband are pro, and I'm struggling to understand why.
Ed Miliband: I'm in favour of a graduate tax because I want Labour to be a party which helps people get on. I worry that people with a lot of debt find it harder to buy a house or start a business until the debt is cleared.
The truth about the current system is that despite improvements, such as grants to students from low-income families, it doesn't offer sustainable long-term funding for our universities. There is a financial hole in the system and if it isn't closed then kids will miss out on university and the quality of courses will go down.
Politicians don't like to talk about these kinds of tough choices, but there are really two options. One is to increase fees quite considerably and move towards a market in higher education. Some people favour that, but I think it would put too many people off university. I don't want 21-year-olds leaving University with maybe double the debt they have now or more. The second option is a graduate tax, so that you pay for education based on your later income, so a banker will pay more than a nurse. I want to be clear though – I've already said that a graduate tax will go straight to the Universities. Students have to know what they are paying for. I also don't think the tax would need to be paid for your whole life. Basically, it would be a small additional percentage of your income (between 0.2%5 and 2% for very high earners), paid over 15 to 20 years. I certainly think this is fairer than fees which might have to go as high as £7000 for each year you are at University.
Ed Balls: A graduate tax doesn't necessarily have to be paid for the rest of someone's working life. But I think the principle of it is right: that university students should make a contribution to the cost of their education, but in a fair way, after they've graduated and based on how much they earn. My sister left school at 16 and got a job and she paid her taxes so I could go to university for free – that doesn't seem fair to me. The problem with the current system is that too many young people from families on modest incomes, including in my own constituency, are put off from applying to university because they do not want to take on a debt. A graduate tax would solve that and make sure all young people have a fair chance of going to university.
Diane Abbott: I am opposed to tuition fees. The other candidates supported them at the time. But happily they have come round (belatedly) to my point of view. They are suggesting the graduate tax as an alternative. I think the graduate tax is worth looking at. But I worry that the money would not go directly to universities and some people might end up paying more than the value of their university education. I have never actually said I was in favour of the graduate tax. I was the only candidate that voted against tuition fees, as well as top-up fees, and I strongly maintain those positions. I did say that it was worth looking into. The situation that students currently face, and the shortage of places is abysmal. Therefore all alternatives should be explored.
The average debt on leaving higher education is £23,000 and rising. Although more people have entered university over the past few years, the number of people from poorer areas participating in higher education has dropped by 0.3% in 2008, since top-up fees were introduced. I certainly have my reservations that the graduate tax is simply an attempt to re-brand higher fees. My fear is that these new proposals will see a return to the days when a university education was reserved for the elite. The fact remains that debt is debt, no matter how it’s branded and no matter when you pay it back. The ideal situation is for higher education to be paid for by progressive taxation, not a tax on students.
Andy Burnham: As a Government, we made huge progress on opening up university education for all. Keeping those gains will mean looking again at the system of student finance to make it fairer. We rightly focused on getting 50 per cent of young people to university. I support a graduate tax to help fund our universities and because it is right that those who have benefited from higher education play a part in paying back in to the system, based on their salaries after university, so that the same opportunities are available for generations to come.
David Miliband: I'm interested in what you say. The words used in this debate have, I think, been confusing. Graduates already pay back loans through the tax system. That is right in my view. This is better than upfront fees on students, because participation in higher education should be based on ability to benefit, not ability to pay. Lord Browne is looking at the funding for higher education at the moment. I will be interested to see what his report says.