Graduate tax will reward dropouts, say directors

Steve Dinneen
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A coalition plan to replace upfront university tuition fees with a graduate tax has come in for fierce criticism from company directors, who say it will reward failure.

The Institute of Directors said the levy, which would be applied to future earnings, would hit hard working students and encourage people to quit the UK to avoid the tax.

A separate survey of graduates also suggested the proposed tax would hit student numbers, with 62 per cent saying they would consider not going to university if the retrospective tax was introduced. Around 63 per cent said they would not go to university if fees rose to £6,000, rising to 80 per cent if they were faced with uncapped fees.

The news will be a bitter blow to Vince Cable, a champion of the tax, as he prepares for a speech this afternoon on funding for higher education.

The government is awaiting a review by former BP boss Lord Brown, who is expected to recommend fees rise by £3,290 to as much as £7,000 a year.