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Laurie Penny: We need a retroactive graduate tax

Vince Cable’s plans are bold and progressive, but could go further to reduce inequality.

This morning, Vince Cable signposted his plans for a change in university funding, whereby graduates might find themselves repaying the cost of their degrees in the form of a tax based on earnings, as opposed to the current student loans system, which discriminates in favour of those who go on to more profitable careers. Cable said he would ask the former BP boss Lord Browne, who is leading an independent review into university fees and funding, to examine "the feasibility of variable graduate contributions".

This is a bold and progressive idea. But why not be a little more bold and a little more progressive, and apply the graduate tax to all graduates, not just current and prospective students? If tax can be applied retroactively, why not levy a fee from all working-age graduates, including those aged 30 and above who have used the benefits of free higher education to carve out high-paying careers for themselves?

Cable has a track record for sound ideas about higher education, including his observation that too many graduates are now going into jobs that were previously the province of non-graduates. This has implications for his cited figure of £100,000 as the average difference between the earnings of graduates and comparable non-graduates net of tax. The graduate earnings premium peaked in the 1980s; today, a university degree is a mandatory requirement for most lower- and middle-management jobs, rather than an optional educational extra to boost one's earnings.

Cable previously told the BBC that "if you're a schoolteacher or a youth worker you pay the same amount as if you were a surgeon or a highly paid commercial lawyer. I think most people would think that's unfair." Surely it's rather less fair to expect those over 30 to pay nothing at all? Surely it's not beyond the pale to ask those who enjoyed British higher education at its most lucrative and inclusive to give something back?

If Britain is to remain a world leader in research, innovation and education, our higher education system needs more money, and fast. But why should the burden of financing the necessary cash injection be placed solely upon today's young graduates, who have rather less chance of going on to high-paying careers than those who left university in the 1970s and 1980s?

The money that could be raised by taxing graduates across the board might well be enough to reduce the cost of university for young people from disadvantaged backgrounds, as well as solving the problem of higher education funding more fairly. If a variable graduate tax were truly based on earnings, there would be no reason for graduates of any age to pay more than they could reasonably manage. Parents of current students might even find themselves paying less overall, if their graduate tax liability offset the costs of contributing to higher tuition and maintenance fees for their children.

The new president of the National Union of Students, Aaron Porter, has said that while the NUS welcomes the graduate tax proposal, any changes to funding should be genuinely fair and progressive to win students' support. The core injustice of tuition fees has always been that they imposed a burden of debt on the young which rewrote the script for young adulthood in this country. And although there are indeed more young graduates now than there were 20 years ago, most are labouring under a double load of unavoidable personal debt and high unemployment.

Meanwhile, Vince Cable, George Osborne and David Willetts, along with nearly every other policymaker currently responsible for higher education funding, were financed through their degrees by a generous grants system, left university in credit, and entered a booming job market. A universal graduate tax would be a fair way of sharing out some of the proceeds of that extraordinary generational luck.

If the deficit must be paid for, it is not unreasonable to expect it to be paid for on the basis of equal sacrifice. If the principle of retroactive taxing is being considered at the highest levels of government, it is not far-fetched to suggest that the rich be taxed as well as the poor, the old as well as the young, on the basis of the services that they have enjoyed from the state.

I'd stop short at suggesting that Cable backdate the graduate tax to 1970, of course -- that would leave older people with degrees owing, ooh, tens of thousands, almost as much as an average humanities graduate in 2010. And nobody would stand for that.

Laurie Penny is a contributing editor to the New Statesman. She is the author of five books, most recently Unspeakable Things.

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Is defeat in Stoke the beginning of the end for Paul Nuttall?

The Ukip leader was his party's unity candidate. But after his defeat in Stoke, the old divisions are beginning to show again

In a speech to Ukip’s spring conference in Bolton on February 17, the party’s once and probably future leader Nigel Farage laid down the gauntlet for his successor, Paul Nuttall. Stoke’s by-election was “fundamental” to the future of the party – and Nuttall had to win.
 
One week on, Nuttall has failed that test miserably and thrown the fundamental questions hanging over Ukip’s future into harsh relief. 

For all his bullish talk of supplanting Labour in its industrial heartlands, the Ukip leader only managed to increase the party’s vote share by 2.2 percentage points on 2015. This paltry increase came despite Stoke’s 70 per cent Brexit majority, and a media narrative that was, until the revelations around Nuttall and Hillsborough, talking the party’s chances up.
 
So what now for Nuttall? There is, for the time being, little chance of him resigning – and, in truth, few inside Ukip expected him to win. Nuttall was relying on two well-rehearsed lines as get-out-of-jail free cards very early on in the campaign. 

The first was that the seat was a lowly 72 on Ukip’s target list. The second was that he had been leader of party whose image had been tarnished by infighting both figurative and literal for all of 12 weeks – the real work of his project had yet to begin. 

The chances of that project ever succeeding were modest at the very best. After yesterday’s defeat, it looks even more unlikely. Nuttall had originally stated his intention to run in the likely by-election in Leigh, Greater Manchester, when Andy Burnham wins the Greater Manchester metro mayoralty as is expected in May (Wigan, the borough of which Leigh is part, voted 64 per cent for Brexit).

If he goes ahead and stands – which he may well do – he will have to overturn a Labour majority of over 14,000. That, even before the unedifying row over the veracity of his Hillsborough recollections, was always going to be a big challenge. If he goes for it and loses, his leadership – predicated as it is on his supposed ability to win votes in the north - will be dead in the water. 

Nuttall is not entirely to blame, but he is a big part of Ukip’s problem. I visited Stoke the day before The Guardian published its initial report on Nuttall’s Hillsborough claims, and even then Nuttall’s campaign manager admitted that he was unlikely to convince the “hard core” of Conservative voters to back him. 

There are manifold reasons for this, but chief among them is that Nuttall, despite his newfound love of tweed, is no Nigel Farage. Not only does he lack his name recognition and box office appeal, but the sad truth is that the Tory voters Ukip need to attract are much less likely to vote for a party led by a Scouser whose platform consists of reassuring working-class voters their NHS and benefits are safe.
 
It is Farage and his allies – most notably the party’s main donor Arron Banks – who hold the most power over Nuttall’s future. Banks, who Nuttall publicly disowned as a non-member after he said he was “sick to death” of people “milking” the Hillsborough disaster, said on the eve of the Stoke poll that Ukip had to “remain radical” if it wanted to keep receiving his money. Farage himself has said the party’s campaign ought to have been “clearer” on immigration. 

Senior party figures are already briefing against Nuttall and his team in the Telegraph, whose proprietors are chummy with the beer-swilling Farage-Banks axis. They deride him for his efforts to turn Ukip into “NiceKip” or “Nukip” in order to appeal to more women voters, and for the heavy-handedness of his pitch to Labour voters (“There were times when I wondered whether I’ve got a purple rosette or a red one on”, one told the paper). 

It is Nuttall’s policy advisers - the anti-Farage awkward squad of Suzanne Evans, MEP Patrick O’Flynn (who famously branded Farage "snarling, thin-skinned and aggressive") and former leadership candidate Lisa Duffy – come in for the harshest criticism. Herein lies the leader's almost impossible task. Despite having pitched to members as a unity candidate, the two sides’ visions for Ukip are irreconcilable – one urges him to emulate Trump (who Nuttall says he would not have voted for), and the other urges a more moderate tack. 

Endorsing his leader on Question Time last night, Ukip’s sole MP Douglas Carswell blamed the legacy of the party’s Tea Party-inspired 2015 general election campaign, which saw Farage complain about foreigners with HIV using the NHS in ITV’s leaders debate, for the party’s poor performance in Stoke. Others, such as MEP Bill Etheridge, say precisely the opposite – that Nuttall must be more like Farage. 

Neither side has yet called for Nuttall’s head. He insists he is “not going anywhere”. With his febrile party no stranger to abortive coup and counter-coup, he is unlikely to be the one who has the final say.