Yes, there should be a graduate tax - but just for the 'charmed generations' aged between 45 and 70

5th November 2010 at 00:00

The problem with the prospective and uncertain cuts outlined recently is that we all are so busy working out how to deal with them that we haven't stopped to ask the obvious question: "Is there really an alternative way to reduce the deficit?" Moreover, it is only natural that we focus on cuts to school, college and early year education, with the result that we pay less attention to other sectors.

Yet right on the edge of our school worries looms a cut that ought to both concern us and offer the opportunity for some divergent thinking. I refer to the report by Lord Browne on the funding of higher education and student finance.

When I first read the Browne report I was puzzled, as I am sure we all were, by the false logic. The cuts are governed by a general desire not to pass on our current debts to future generations, yet this report is apparently happy to load some of it on prospective young graduates. How can we explain that to our teenagers?

My second response when reading the report was to feel unusually guilty and ashamed. It should have the same effect on anybody aged between 45 and 70, for we are the "charmed generations", as we often privately admit to one another.

We were showered with all manner of blessings: we missed the Second World War; we didn't give up two years of our lives to national service; and we enjoyed the benefits of the newly created welfare state. If we own a house, for many years we enjoyed tax relief on mortgage interest payments. And to cap it all we either have or can expect reasonable, and in some cases generous, occupational pensions, which succeeding generations will not.

Most important of all - and this is where the Browne report comes in - the fortunate few in our charmed generations who attended college or university, unlike our successors, enjoyed free tuition and were given grants to live on as undergraduates.

In my case, in 1958 it was #163;300, which is equivalent to #163;12,000 today - more than half the starting salary of a teacher. In today's money that is about #163;50,000 over the four years it took me to complete my degree and PGCE, and the state paid for the tuition at about the same cost, amounting to #163;100,000 in all. No wonder some of us felt we owed the state - and future generations - something in return.

That is why reading the report left such a bad taste in my mouth. I realised he and his panel were proposing to shift almost all these costs of learning to the shoulders of present and future students in the form of loans and debt. But if it embarrasses me, how much more it should embarrass the members of the panel itself? It includes two university vice chancellors, a bank CEO and a partner at management consultant McKinsey, who all enjoyed the same privileges as undergraduates that I did.

Like me they have proved the point that in those days a degree was a passport to higher earnings. Some of us have earned it trying, perhaps to no avail, to make the world a better place, while others - for example those in banking and finance - have marched to a different drum and ultimately brought our country to its present pass.

This brings to mind an alternative. We need a graduate tax and the Browne report's proposals for student fees and loans. But the graduate tax should be for those presently aged 45 to 70 who are in the 40 per cent tax band and enjoyed higher education in their youth. We should be charged an extra 5 per cent graduate premium until we die - our contribution showing, as David Cameron and Nick Clegg remind us, that "we are all in this together" and are determined "not to let future generations shoulder the debt we created".

Of course, this would not apply to those in the same age bracket who are graduates but are not liable to higher rate tax, nor to those who are but did not go to university. I would probably exclude those older people who made their contribution by completing national service, although there are some 70-somethings who opted for university and deferred national service, knowing that it would be abolished by the time it came for them to do it. It would represent a kind of "intergenerational solidarity or equity tax", not unlike the tax introduced on German reunification to bring the standards in East Germany up to those in the West.

It wouldn't lead to any brain drain, because members of the generation in question have established lives and careers here. It would be easy to collect, for it would require a simple one-line question and answer on an income tax return form.

My proposal would catch almost all members of the cabinet, all those captains of industry and people like me shaped by Atlee's generation, who have always been happy to pay our taxes with a smile. Moreover, it raises an important principle, which is that each generation should surely be trying to make the lot of the next one better. I see precious little evidence of that in all the clamour of the present cuts.

Must stop now. I'm off to use my free bus pass to enquire when I shall be entitled to my free TV Licence.

Sir Tim Brighouse is a former London Schools Commissioner and chief education officer for Oxfordshire and Birmingham.

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