Higher education: Dr Cable's taxing lecture
Elite universities will nag to be able to levy their graduates' pay at a higher rate - they should not be allowed
In a hushed lecture theatre, Dr Vincent Cable let his professorial glasses to slip down his nose and set out to convince the assembled great and good of the university world that he was one of their own. It is just as well that he did that spell as a lecturer in the 1960s, because he went on to say things that only a member of the family could. Making full use of that detached, frank and apolitical manner which has proved a political winner, the industry secretary talked of cuts that would lead not merely to consolidation but outright contraction, while also warning that the average student would have to cough up more. For good measure – just in case anyone was still feeling complacent – he headlined his address "the looming crisis".
Dr Cable, however, added an extra ingredient to what has become the coalition's trademark brew of blood, sweat and tears – namely, fairness. While he took care to fox-trot away from the toes of the ongoing Browne review, which until yesterday had looked like a process designed to provide the cover for higher top-up fees, he plonked a new option on the table. A graduate tax (or, in the inevitable euphemism, a "graduate contribution") marks a progressive departure from the current mish-mash of loans and fees. First, and most importantly, it requires graduates to repay their due in line with what they can afford – with the repayment period being fixed instead of the cash amount. That, as Dr Cable relished explaining, might mean social workers paying back less, and investment bankers paying back more. Second, as a consequence of doing away with flat-rate bills, it also removes the upfront debts which increasingly hang round the neck of university courses, price tags which are a particular psychological deterrent to students from cash-strapped families investing in their future.
So far, so fair, but there is a legion of questions which bear on the principle as well as the practicalities. The industry secretary steamrollered through the obvious technical quibbles about how tax receipts in the distant future could rescue cash-starved colleges in the here and now. He rightly senses that a solution ought to be possible; he must now strain every sinew to find one, or his proposal will disappear into the black hole of public debt. He must also decide whether elite universities should be able to levy their graduates' pay at a higher rate. Although they will press for the right, they should not get it. Funding an academic premier league by a super-tax would put off the poor, and since the alumni of the ivory towers command such high salaries, charging these at the ordinary rate should bring in considerable cash. Dr Cable must also find a way to soothe the nerves of his party, whose manifesto made the rash promise to ditch tuition fees – not to replace them with a graduate tax, but in order "to save students £10,000 each". Having snapped up student-rich seats, such as Manchester Withington, with the help of the proposed giveaway, the Lib Dems will not enjoy explaining to young scholars why most will now have to pay not less, but more.
The party, however, would be well-advised to give serious consideration to the deal that Dr Cable is trying to broker. Yes, there are Conservative parts to the package – the encouragement of private university provision – and Lib Dem activists will rightly be anxious not to create an educational architecture that could unravel into an American-style educational market. Until the government gets a grip on rising graduate unemployment, students will also have every right to resist demands to stump up even more for qualifications that provide a passport to nowhere in particular. But billing for learning on the basis of earnings is not something the Tories would have come up with alone. It had been starting to seem as if the coalition was yellow on liberty but blue on anything involving hard cash. It was Dr Cable's achievement yesterday to defy that caricature.
Source : http://www.guardian.co.uk/commentisfree/2010/jul/16/graduate-tax-universities-vince-cable
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