A graduate tax is the fairest solution

As a sixth-former, I think a graduate tax would increase social mobility and maintain world-class hi

When hundreds of thousands of students take out their iPod headphones and tear themselves away from Call of Duty to rally in the streets, you know the government has done something seriously wrong. After all the pre-election talk of a fairer education system, why does the coalition think that increasing tuition fees and slashing the teaching budget by 80 per cent will achieve this?

Make no mistake, the steep rise in fees will stop huge numbers of bright, but less affluent students from applying to university. Coupled with higher interest rates on these fees, it creates a daunting prospect. As a sixth-form pupil, I can confirm that there is a growing attitude within our year group at school that university is becoming an unaffordable option. This is not only completely unfair, but crucially, it also reduces Britain's ability to produce a high-quality workforce. Surely the government cannot ignore the long-term problems of restricting university access only to those who can afford it? They wouldn't be making such important policies while only thinking ahead as far as the next election, would they?

It's fine to complain – and even to take to the streets in protest – but that is pointless unless solutions can be found. One alternative being explored is the introduction of a graduate tax, a policy endorsed by the Labour Party and the National Union of Students. It seems a good solution – allowing the abolition of upfront fees, replaced by the introduction of a heavier income tax on graduates (an additional 0.3-2.5 per cent) based on the type and location of the course. This tax would last for roughly 20 years and would be paid only if the graduate was employed and earning in excess of £15,000 a year.

This would be fairer than the current system, because lower-income graduates would bear less of a burden than if they paid a fixed price for fees. This in turn would create an incentive for students from a low-income background to strive for higher education, increasing social mobility. Of course, higher-income graduates might end up paying more under the system – but then, they can afford to.

The graduate tax also prevents huge debts in interest payments accumulating, making it an efficient way of funding higher education. And it would prevent the creation of a market in fees, which would force students to choose their university based on price. Admittedly, graduate tax would fall hardest on those whose education costs were high and salaries were low – this would include those in vital jobs such as teaching, social work and nursing. But this can be counteracted by reducing the rate of graduate tax in these sectors of employment. After all, such a tax would raise more revenue in the long run than the proposed fees system.

But would a graduate tax work in reality? When Vince Cable first hinted at the possibility, he described it as a "variable graduate contribution tied to earnings", cunningly avoiding the lead balloon that is the word "tax". It shows how clever wording and public image have become more important than policy.

Inevitably, there are criticisms of the graduate tax. Russell Group universities are opposed because they fear they would only get the same level of funding from the tax as less elite institutions. Yet this doesn't have to be the case – funding could be linked to how much tax revenue is gained from that university's graduates. For example, if Oxford students paid 10 per cent of the national total of graduate of tax that year, then Oxford would receive the same 10 per cent as their funding.

Admittedly the setting up of a trust fund to collect graduate tax, and funding the universities during the lag time between the introduction of a graduate tax and when its full benefits are reaped, would be a sizeable task – but a worthwhile one in the long run.

Call me an idealist, but an efficient graduate tax could completely remove the burden of higher education from the general taxpayer. Even so, a combination of graduate tax and government funding derived from general taxation should be the answer to funding a world-class standard of higher education. I still think that the taxpayer should contribute to higher education because of the benefits to Britain of having highly educated workers. After all, the next generation of workers will be the ones driving the economy – while those who have enjoyed heavily subsidised higher education in past decades sit back and draw their pensions.

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Air pollution: 5 steps to vanquishing an invisible killer

A new report looks at the economics of air pollution. 

110, 150, 520... These chilling statistics are the number of deaths attributable to particulate air pollution for the cities of Southampton, Nottingham and Birmingham in 2010 respectively. Or how about 40,000 - that is the total number of UK deaths per year that are attributable the combined effects of particulate matter (PM2.5) and Nitrogen Oxides (NOx).

This situation sucks, to say the very least. But while there are no dramatic images to stir up action, these deaths are preventable and we know their cause. Road traffic is the worst culprit. Traffic is responsible for 80 per cent of NOx on high pollution roads, with diesel engines contributing the bulk of the problem.

Now a new report by ResPublica has compiled a list of ways that city councils around the UK can help. The report argues that: “The onus is on cities to create plans that can meet the health and economic challenge within a short time-frame, and identify what they need from national government to do so.”

This is a diplomatic way of saying that current government action on the subject does not go far enough – and that cities must help prod them into gear. That includes poking holes in the government’s proposed plans for new “Clean Air Zones”.

Here are just five of the ways the report suggests letting the light in and the pollution out:

1. Clean up the draft Clean Air Zones framework

Last October, the government set out its draft plans for new Clean Air Zones in the UK’s five most polluted cities, Birmingham, Derby, Leeds, Nottingham and Southampton (excluding London - where other plans are afoot). These zones will charge “polluting” vehicles to enter and can be implemented with varying levels of intensity, with three options that include cars and one that does not.

But the report argues that there is still too much potential for polluters to play dirty with the rules. Car-charging zones must be mandatory for all cities that breach the current EU standards, the report argues (not just the suggested five). Otherwise national operators who own fleets of vehicles could simply relocate outdated buses or taxis to places where they don’t have to pay.  

Different vehicles should fall under the same rules, the report added. Otherwise, taking your car rather than the bus could suddenly seem like the cost-saving option.

2. Vouchers to vouch-safe the project’s success

The government is exploring a scrappage scheme for diesel cars, to help get the worst and oldest polluting vehicles off the road. But as the report points out, blanket scrappage could simply put a whole load of new fossil-fuel cars on the road.

Instead, ResPublica suggests using the revenue from the Clean Air Zone charges, plus hiked vehicle registration fees, to create “Pollution Reduction Vouchers”.

Low-income households with older cars, that would be liable to charging, could then use the vouchers to help secure alternative transport, buy a new and compliant car, or retrofit their existing vehicle with new technology.

3. Extend Vehicle Excise Duty

Vehicle Excise Duty is currently only tiered by how much CO2 pollution a car creates for the first year. After that it becomes a flat rate for all cars under £40,000. The report suggests changing this so that the most polluting vehicles for CO2, NOx and PM2.5 continue to pay higher rates throughout their life span.

For ClientEarth CEO James Thornton, changes to vehicle excise duty are key to moving people onto cleaner modes of transport: “We need a network of clean air zones to keep the most polluting diesel vehicles from the most polluted parts of our towns and cities and incentives such as a targeted scrappage scheme and changes to vehicle excise duty to move people onto cleaner modes of transport.”

4. Repurposed car parks

You would think city bosses would want less cars in the centre of town. But while less cars is good news for oxygen-breathers, it is bad news for city budgets reliant on parking charges. But using car parks to tap into new revenue from property development and joint ventures could help cities reverse this thinking.

5. Prioritise public awareness

Charge zones can be understandably unpopular. In 2008, a referendum in Manchester defeated the idea of congestion charging. So a big effort is needed to raise public awareness of the health crisis our roads have caused. Metro mayors should outline pollution plans in their manifestos, the report suggests. And cities can take advantage of their existing assets. For example in London there are plans to use electronics in the Underground to update travellers on the air pollution levels.

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Change is already in the air. Southampton has used money from the Local Sustainable Travel Fund to run a successful messaging campaign. And in 2011 Nottingham City Council became the first city to implement a Workplace Parking levy – a scheme which has raised £35.3m to help extend its tram system, upgrade the station and purchase electric buses.

But many more “air necessities” are needed before we can forget about pollution’s worry and its strife.  

 

India Bourke is an environment writer and editorial assistant at the New Statesman.