The ‘progressive’ argument for tuition fees doesn’t stand up to scrutiny

Politicians on both left and right would react with laughter if anyone suggested raising income tax on lower earners by 9 per cent was in any way progressive – yet they make an exception for tuition fees

The student loan repayment threshold kicks in far closer to the minimum than average wage (Getty)

Charles Clarke, the New Labour education secretary who brought in £3,000 tuition fees, is said to have angrily told a student who questioned his left-wing credentials that if he were “a real socialist” he “wouldn’t spend a penny on higher education”.

The progressive argument in favour of tuition fees notes that graduates earn more than non-graduates, and says it therefore isn’t fair for everyone else to pay taxes to subsidise their education. In fact, if you make graduates pay for it all, you’re being progressive – taxing the rich.

The problem with this argument is that it only works on average: yes, on average, graduates earn more than non-graduates. But by using ‘graduate’ as a proxy for ‘rich’ you end up charging a whole load of people who study at university and don’t end up with high salaries.

The fees system we have now is effectively a flat 9 per cent income tax over £21,000 on people who went to university. Is this really the most progressive way you can think of raising revenues for higher education – or for anything?

The average nurse earns around £23,000 a year, putting them below the national average salary, which sits at around £27,000 for full-time workers. But the only way to become a nurse now is to get a degree and face the 9 per cent income tax hike. Primary school teachers start on salaries of £22,000, but by the logic of tuition fees, you can give yourself a big, progressive pat on the back for slapping a 9 per cent income tax on them.

The £21,000 student loan repayment threshold kicks in about as close to the full time minimum wage (around £13,000) as it does to the average full time salary (£27,000) – it is a flat tax that hits workers with below average wages. Politicians on both left and right would react with laughter if anyone suggested raising income tax on lower earners by 9 per cent was in any way progressive – yet they make an exception for tuition fees.

There is a legitimate argument to be had about priorities: in any given spending envelope, scrapping tuition fees may not be as urgent as say, more money on early years, childcare, or greater investment in further education. But the idea that fees are a good thing in-and-of-themselves, and that free education paid for through the tax system need be a subsidy for the rich doesn’t stand up to scrutiny.

If you want high earners to pay for something, levy the tax on high earners – don’t find an imperfect proxy for high earners and forget about the collateral damage. Graduates who go on to earn a lot of money can pay more tax because they earn a lot of money, rather than because they are educated – and you won’t catch our teachers, nurses and social workers in the same net.