back to article Cable lays plan for graduate tax

Vince Cable today laid out the ground rules for debate on funding higher education and strongly hinted he favours a graduate tax. But he stressed this was the start, not the end, of the debate. Cable, an ex-lecturer at the University of Glasgow, said that after 50 years of expanding universities the UK now had to accept that a …

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FAIL

My plumber

My plumber earns more than me and I'm going to be taxed because I chose the route of a ^better^ education. So, they're going to disincentivise better education. Way to go.

Tax everyone for a better society.

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Paris Hilton

Good Point

However, you are looking at the personal incentive. That may not be what Vince Cable is looking at.

If the universities funding is tied up to the economic contribution of a graduate the number of bogus degree programs is going to decrease and the number of degree programs that teach the high ROI subjects will increase. This will also increase the competition between them.

So while bad for the individuals, the overall economic effect may actually be positive.

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WTF?

But...

...your plumber also is self employed, may go days / weeks / months without work and wasn't funded by the tax payer.

Why should he pay for your higher education?

I've know people that have been in University for years (by that 10+) and never paid a penny in.

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Anonymous Coward

But

How much did the taxpayer contribute towards your plumber learning his trade?

How much did they contribute to you going through Uni?

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Perhaps you sholuld have tried harder?

Or done a better course at a better university?

Your plumber didn't get funded by the tax payer for three years of extra education.

The only point in getting a "better education" is to make you a more productive member of society or make you rich -- you should decide which you want to be the case before you get your education.

Lawyers generally get paid more than teachers, for example, it may be sad but both chose their career knowing that -- and the teacher will likely get a lot more piece of mind and a lot more leisure time.

Apologies if I don't sound sympathetic, I am, but the real world is a harsh place and it's not the government's fault that you didn't choose to become a plumber.

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Anonymous Coward

But:

How much did your plumber's education cost; and who paid for it to start with?

I think that university fees should be nominal, for all the usually supplied reasons. But I'm not sure how valid your plumber/graduate comparison is.

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Way to go indeed

The fact your plumber earns more than you is testament to how ridiculous New Labour's notion that as many people as possible should be going to university (or re-branded polytechnics) - many getting mediocre degrees, dropping out, or reading pointless subjects - was.

If this discourages people from going to university, then great as far as I'm concerned. We have plenty of graduates already, what we're severely lacking are people trained in skilled trades like plumbing, electrical wiring, construction, pipefitting, welding, etc. etc. All of which generally pay much higher incomes than your average office Dilbert graduate earns.

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Bronze badge

Plumbing the educational depths...

"and I'm going to be taxed because I chose the route of a ^better^ education"

I didn't read anything that claims this would be retrospective (if it is, then it's going to be fun finding all those graduates froim 40 or more years ago).

However, on a more general point, then I see Vince Cable also questioned the value of many of the degrees and that there might just be more appropriate training and education than just joining an ever growing pool of graduates with inappropriate degrees for the current workplace. Might one suggest that many would be more usefully, and cost effectively, engaged in vocational training that might make them more emploiyable and economically useful? Indeed they might want to consider plumbing as a lucrative career.

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FD

:D Here's a man that bought his lesbian teacher's lies when he was 14.

're-branded polytechnics' have always offered degrees...the difference is they now award them too. You are one of these cretins that gets 'Polytechnic' confused with 'FE College'. Contrary to your ilk's beliefs, polytechnics didn't do courses like hair dressing and surfing, but courses like biology, chemistry, applied maths, applied physics and engineering.

We need as many graduates as possible (have you ever worked with non graduates?).

Plumbers, electricians (I take it that's what you mean by 'electrical wiring'), welding etc are ALL covered by apprenticeships or FE colleges (which have been scrapped and raped of funds by sucessive governments).

Oh, and take your 'mediocre' degree from whichever 'old' university you went to (a 2:2 I don't doubt) and shove it up your quasi middle class arse, only the city really cares where a degree is from...everyone else can see further than their own colon.

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Silver badge

Nulab?

okay so when did john major lead Nulab??

cos i'm sure that he was the dickhead responsible fo staring the 50% of kids should go to uni debacle.

which anyone with a brain could see would lead to disaster

especially as the tories had spent a good few years well and truly fucking up the school system by then. - the rise of the meeeja studies \modern english BA was inevetable.

Then come the workers revolt of '97 (whaaa!) reversing the ludicrous position looked too much like voting against apple pie and mom for Nulab to countanance. Uni was a middle class preserve and Nulab were oh so middle class, there endeth the debate.

Apart from that, way to go, though there is an arguement that runs that as a grad with a proper degree in a proper subject, from a proper college I earn a hell of a lot more than the arts grad that flips my burgers, ergo i pay more tax anyway. Not to mention the fact that i am coming closer to fulfilling some sort un spoken of quid pro quo deal with 'society' along the lines of 'they pay for me to go to school, I make society a (infitesimally marginal) better place to live.

surely a better plan would be to sell all the useless feckless arts grads for medical experiments? see a return for societies investment, and the beagles/bunnies/monkees/rats/ released from research would enhance out kudos as a nation of animal lovers.

I guess i'll have to go elsewhere to get a burger then, but it's a small price to pay.

whatever, loads of stuff needs paying for, and it is only fair that a larger share of the burden land on those more able to carry it (comrades)- which is a bit of a surprising message from a tory govt

intesting times indeed

lol

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Re: Perhaps you shoud have tride harder?

"Lawyers generally get paid more than teachers... and the teacher will likely get a lot more piece of mind and a lot more leisure time."

More peace of mind an leisure time? Most lawyers I've ever met have complete peace of mind given their general lack of conscience and leisure time? I'd wager most good teachers spend a fair amount of their free time grading papers, revising teaching plans and spending extra time with students meanwhile the good lawyer is off playing racquetball down at the club or swilling gin at the pub and the paralegals are doing all the real work. As for the bad teachers, lawyers and I'll add doctors, meh, like bugs there are too many to count.

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Alert

D

Please tell me you're being ironic Naughtyhorse.

If you're what "proper college[s]" churn out then god help us.

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Stop

Ahem

"'re-branded polytechnics' have always offered degrees" - I don't recall saying they didn't.

"Plumbers, electricians (I take it that's what you mean by 'electrical wiring')" - Yes, that's what I meant as it's the correct term of usage since there's not such term as an "electricianing".

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Ahoo?

The implication was that 'rebranded polytechnics' are somehow substandard (despite always being focussed on providing engineers and scientists to industry) and that it is not a good thing that more people go to university to provide more skilled graduates to industry.

The implication is that somehow people should be put off going to university and become plumbers and electricians...why should they? You act as if there isn't a market and someone can't elect to do this already. Are you suggesting oiks should know their places and instead of going to university they should be fixing your crapper? Also, if the market was flooded with electricians and plumbers, the rates would go down and they would be earning oik salaries instead of the quoted 60k a year (why do you think all British trained electricians and plumbers whinge about those Poles tekin' their jerbs).

As for your "electrical wiring", electricians tend to do a lot more than that. 'Electronics' would have been the correct 'term of usage'.

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Stop

Does your boss tolerate with this level of incompetence?

"As for your "electrical wiring", electricians tend to do a lot more than that. 'Electronics' would have been the correct 'term of usage'."

No, that's the department of an electrical engineer - which is a different profession from an electrician.

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WTF?

The only problem is...

A while ago, the BBC basically proved that the "average" graduate, if there is such a thing, already pays something along the lines of £500,000 more taxes over a lifetime than a non-graduate, through increased income tax due to higher average salary, buying more therefore paying more VAT etc.

So graduates ALREADY pay more tax than others, and they want to tax them again?

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Headmaster

@ TheRobster

Hear Hear. A lot of the blame lies with universities who have ceased to be seats of learning and have fancied themsleves, like schools to being a private company ( I know a lot all ready are) and as such want to generate lots of cash and pay silly salaries.

This country doesn't want to end up like Japan with suicides if you don't make it on to a dregree course. We need max 20% of the pop. to go through uni. The rest we need to do more import work - training to be plumbers, builders, metal workers etc. Why you ask? Because the numbers in those trades is severly lacking and they tend to hold the infrastructure together. No disrespect to teachers but I have been there ( at Uni) got the t-shirt and learned a damn sight more in work then I ever did in school.

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FAIL

Then your plumber is paying more in taxes

Did you do media studies?

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odd...

a decent plumber can make a shit load more than a high end IT guy. almost all trades can expect to earn £60k+

i work at a flooring company as the IT manager. plenty of our subbies earn loads more than me.

some of them earn thousands per week.

in fact my boss who started our company was making £4k a WEEK fitting floors.

i would never tell my kids to go to uni.

also, you have to remember that so many mickey mouse courses around. fine art, media studies, drama.... all have about a 1% chance of getting a job in those areas.

how about (not fair i know but since when has life been fair?):

let all courses that are needed be funded by the tax payer. if you pass well (2.1 and 1st) you dont pay the fees etc.

if you fail you pay the costs.

any courses not deemed necessary should have to foot the bill themselves - why should a tax payer pay ANYTHING to people doing a frikkin degree in klingon or fine art? loads of my mates at unit did fine art, what massiv percentage have anything to do with fine art in their careers? a big fat zero!

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WTF?

re:Odd

"a decent plumber can make a shit load more than a high end IT guy. almost all trades can expect to earn £60k+"

I'm not even a high-end IT guy and I earn just under 150k per year. Doubt there's many decent plumbers earning that. Plumbing business owners maybe but then you'd compare them to IT business owners.

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Unhappy

@ mark65

If you're not a contractor I am well and truely in the wrong F*** company.

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Anonymous Coward

already done

Commonly known as progressive income tax.

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FAIL

Don't they pay more if they earn more?

Apparently, graduates earn £100,000 more over their lifetime than "comparable non-graduates". So they already pay £30,000+ more in income tax (assuming lower rate early in their careers, then higher rate). Shouldn't we be simplifying the tax system, not complicating it?

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Pirate

Will HMG...

refund monies paid if the expected income does not materialize?

If he wants after-the-fact payments, he should offer a money-back guarantee as well.

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FAIL

The icon sums it up

A tax is a bad idea, it has no limits and can be abused by future governments who think that graduates are cash cows. At least with a loan you know you've paid it off and the government isn't going to screw you for even more.

Get your degree and emigrate, avoid the tax altogether.

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@Number6

My sentiments exactly. This will just hasten any brain drain from the UK. Why stick around to pay a shiteload more tax when you can just sod off elsewhere and reap the rewards?

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incentive

Isn't this just an incentive to get a degree then skip the country and go and live somewhere else?

New Zealand is really lovely you know.

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A Graduate Swap?

This is exactly what happens here.

NZ Varsity Grads leave the country, often to the UK, to avoid paying their student loans.

Or at least earn at three times the rate and pay it off sooner.

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Higher earners pay higher tax

He seems to have missed that higher earners already pay higher tax. A doctor pays substantially more tax than a call centre worker.

AC's example of the high earning plumber is a good one too. The plumber earns well because his clients earn well. They benefit indirectly from their client's education and resultant jobs.

A well educated workforce benefits everyone, therefore everyone should contribute through the normal tax system.

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Shut it, Vince

What do economics graduates like Vince contribute? Hot air, seemingly. GLOBAL WARMING DENIALISTS!

Seriously, he needs to quit vaginafooting around the issue and point at the elephant in the room: the engorged public teat that feeds so many graduates with no marketable skills.

The State educates yoof in order to make them productive. If you're paid by tax money - surviving off the sweat of MY brow - then you wasted your time, and more of my money, arsing around doing Social Anthropology for 3 years.

The solution isn't to nob around with the tax code, it's to get rid of the non-jobs that these parasites end up in, like the BBC, Diversity Empowermentisers, and political office. Without these cosy no-risk job-for-life bolt holes to burrow into, the next generation might be inclined to actually do real degrees, or learn a trade instead.

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FAIL

@Rogerborg:

Wrong forum. The Daily Fail's forum lives at: http://www.dailymail.co.uk/debate/index.html

As you clearly failed to comprehend the article: Vince was *kite-flying*. It's a common trick in politics to see how the public feel about an idea. But that's all it is at the moment: an idea.

(The LibDems are entirely *against* fees in any form. But they're not the ones actually running the show; they're the straight men to Cameron's clowns. But feel free to blame the LibDems for having to compromise with the *Tories*—you know, the worthless bunch of tossers who ran this country prior to New Labour, and who taught the latter everything then knew.)

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Better solution

Drop funding for Media Studies, American Studies, and all the other crap that no-one really needs, and which really exist as courses only to reduce the unemployment figures. Provide free tuition in science, engineering andother subject that will benefit the country. Raise the bar so that not everyone can get a degree without reasonable effort, so that degrees aren't devalued in the way they currently are.

OK, fewer people will have letters after their name, but they can still get the same jobs they would have done with the nonsense degree - because they're rarely relevant to any real job anyway.

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FAIL

A

Another man who has clearly never worked with non graduates.

The amount of shit work I have to look at/review/ amend because a "raised by the university of life" manager has written YET ANOTHER poorly structured technical document which makes no sense would change your view of so called "useless" graduates.

Any graduate who comes out of university understanding how to structure a piece of work has a skill worth using in the workforce.

Christ. When will people learn that ALL degrees are relevant to the job market. I WANT a better educated, intellectually developed workforce. If that means they read Media Studies for 3 years GOOD! At least they'll be able to write a fucking report!

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@ PirateSlayer

Wrong. It is the quality of teaching below university that needs to be looked at. If someone can't produce a properly structured piece of work by the time they leave compulsory education then something has gone wrong. How did they they manage to get through English Language or Literature essays without being able to organise them properly? Or write a proper report after a science experiment?

Universities (and sixth forms) are not there to remedy a lack of basic skills in people who didn't pick them at school. That's what adult education colleges are for.

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FAIL

"I WANT a better educated, intellectually developed workforce."

Then you're going the wrong way about it. Western education systems are outdated, anachronistic and flat-out *wrong*. It's cranked out people with Bachelor degrees who can't even spell. Some of the degree-owners I've worked are genuinely intelligent, but a shocking number think "grammar" is someone who visits once or twice a year, along with "grandpa".

The Victorians, who invented this travesty of an education system, sincerely believed that learning should be a chore. Unfortunately, the science clearly proves otherwise. Learning shouldn't "be" fun. Learning *IS* fun. They're one and the same thing. Homo Sapiens evolved a biological reward system for learning new stuff. It rewards curiosity and is what gives you that fist-pumping rush of joy when you solve a particularly difficult question or puzzle and learn something new.

Buggering about with tuition fees won't make the slightest bit of difference. Until our education systems are fundamentally rewired to reflect this, they will continue to fail future generations. Guaranteed.

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Flame

Good grief...

Not even Labour tried to tax people based on their *potential* income. What if they never amount to anything?

Injustice piled on injustice. If this were France they'd be swinging ropes over lamp-post about now.

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just use income tax

Graduates who earn more will end up paying more tax anyway. And a graduate tax will completely miss the undeserving rich (Bill Gates)

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Unbelievable

I was one of the lucky ones. I went to university when fees were still reasonable (I think about £1000/yr max, less based on parents income).

There were 2 points I heard on the news this morning: First was this "Graduate tax". This is not a fair idea. We already pay income tax, which is linked to how much you earn. If graduates earn more, they pay more tax already.

Add to this the student load system, which "taxes" (IIRC) you at 9% on earnings above a threshold (16k ish?) until the loan is repaid, and you already have a fair system. This tax would, if what I hear is true, be paid for life, not until the "loan" is repaid.

I do not think it is a good or fair idea.

The second point was bringing in 2-year degrees. I think this is a mistake too. There are only 2 options with this: Teach less or teach quicker. Teach less and you devalue, even further, the degree. Teaching quicker is, IMHO, nigh on impossible.

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crap

"Payments should be variable and tied to earnings"

So two guys do a medical degree, one goes on to become a surgeon and the other doesn't like it so goes to work in Tesco. Now the surgeon has to pay off the other guys education?

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Thinking failure

Me thinks something is a bit adrift here.

Have a grant, graduate, get "graduate" taxed - understandable

Pay all costs, graduate, get "graduate" taxed - eh? wot?

Fail for the obvious reason - failing to think!

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Unhappy

Isn't this a double tax?

I thought I already paid tax relative to how much I earn.

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Studied once, taxed twice.

I saw this guy being interviewed on BBC1 this morning. One remark he made was that graduates on average, over their working lives earn about £100k more than non-graduates. So since this 100k will be from taxable income, grads are already paying at least £20k in extra tax - and even more when NICs (employees and employers, which has no upper limit) are taken into account. If they get any sort of decent job probably far more when they hit the higher tax band.

Now, it seems that on top of all this tax, he expects graduates who work hardest to get the best jobs to pay even more for the privilege than those who choose their course unwisely or go into further education and decide not to work afterwards. How do you spell "perverse incentive"?

Maybe the best ploy is for the brightest and best is to get their degrees and then go to work in another country - one where they won't have to pay UK income tax. That way they get the benefits but avoid the punishments - as well as contributing to the wealth of the country they move to, rather than the one that educated them. .

Alternatively, spend 2 or 3 years goofing around, complete the course but don't take the exams. That way you get the education, but not the degree certificate that will penalise your earnings.

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Unhappy

How much?!?

> graduates, on average, over their working lives, earn about £100k more than non-graduates.

So that's about £2-3k per year. Wow, Vince, you've sure found a goldmine to tax there then.

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Unhappy

Student Loans?

If a specific graduate tax is introduced, will student loans be annulled? I can see people being upset at paying both simultaniously!

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Unhappy

Fair?

So how come it's fair to pay a fortune for my arty-farty degree because I then started my own successful business versus what the guy over there paid for his expensive law degree when he then decided to spend his career in the voluntary sector? Or the biochemistry graduate who bailed out and moved to California and thus pays no UK tax at all? Or that anyone taking a career break for whatever reason - VSO, having children, working abroad for a period - inherently pays less than those who stay plugging away?

There needs to be an element of minimum/maximum even if there's a large variable element. Or is it simply that earning more means you should always pay more - and why not charge 40% taxpayers more for bread and petrol as well just because they "have the money"?

Hrmph.

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FAIL

"Like a poll tax"

And in this case, it makes sense.

Yes, arts graduates don't generally have a definite job at the end of it. Which is why if you've got any kind of brains in your head you'd think long and hard about whether an arts degree is going to help you in your post-uni career - or at least, whether it's going to help you to the tune of however much tuition fees cost.

The biggest problem are courses like forensic science or music technology. In theory these look like there *will* be jobs at the end of it - after all, the police need forensic scientists and studios need sound engineers. The problem is that the police and studios have 99% of the people they need already, and the number of new jobs is hardly hitting double digits in the whole country. There are plenty of other examples of this too - journalism, for instance.

What Vince fails to acknowledge is that whilst there were barely two dozen unis in 1960, there were hundreds of colleges offering vocational courses and hundreds of employers offering on-the-job training in skilled jobs. In other words, skilled manual work was seen as an integral part of education's purpose in providing a skilled workforce to build the economy. But this was comprehensively depthcharged, first by Maggie when UK manufacturing was blown away, and then by New Labour when all polys were changed into unis and all apprenticeships and training courses were dropped in the cack and left to drown.

There's a reason all brickies in the UK are Polish. Money certainly helps - but the fact that there's damn few Brits going into it in the first place is a lot more significant. Meantime, good luck finding anyone in a skilled trade (plumber, chippie, brickie, plasterer) who's under 40. Most (at least the good ones) are in their 50s, and there's no buggers coming down the line to replace them.

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FAIL

Again you fail.

'Polys' did not offer FE college training. FE colleges have always offered courses like plumbing, catering etc. 'Polys' always offered degrees in subjects like engineering and the sciences...always! The only change was the power to AWARD the degree.

FE colleges have been systematically underminded by nob ends like Gordon Brown (everyone must get a degree). Nobody gave a shit.

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Unhappy

Um

I have graduated, and am in the position where I have approximately £24k worth of debt (although, admittedly 8k of that is to Barclays for my Masters degree). Will I get burdened with the tax AND have to pay my loan(s) off?

Sounds like a bum deal to me...

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FAIL

Hold on Vince...

"Graduates with medical degrees for instance can expect a higher lifetime income than male arts graduates."

And medical degrees cost more in the first place, which lumps these graduates with MORE debt than those who studying a degree which benefits society far less. There's a reason we have the NHS and not some sort of National Arts Service.

Maybe we should be taxing the arts graduates more, as a disincentive to doing pointless degrees, then we might reverse the trend we have for universities to shut down science departments, for example:

http://www.rsc.org/chemistryworld/News/2010/June/09061001.asp

As a bonus, we might end up with more than a trickle of technically literate graduates, as opposed to those who can't even grasp the most basic rules of grammar and scientific methodology.

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I don't understand

Doesn't income tax already tax you according to how much you earn?

I'm not sure I'd even recommend anyone goes to university these days. New Labour's stupid target of getting 50% of people to go to university can only have resulted in one of two things- either the population magically gets more intelligent, or you lower standards.

I was told in secondary school that going to university was my path to a successful life. When I graduated I realised that everyone had done the same thing, and we were all back to a level playing field. A lot of people went on to do a Masters, simply to differentiate themselves from the pack. It's a shame that crippling debt also comes along with that.

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