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  1. Politics
9 August 2010

Graduate tax under fire from the left and the right

Tory MPs and trade unions attack Vince Cable’s plan to replace fees with a graduate tax.

By George Eaton

So it looks like Vince Cable will get his graduate tax after all. With David Willetts suggesting that a tax is the coalition’s preferred option, it seems reports that the idea had been blocked by No 10 were premature.

This is a big political victory for Cable, although, of course, his party went into the election promising to work for the eventual abolition of fees and made no mention of a graduate tax.

But, in a sign of things to come, the coalition has been attacked from the left and the right over the policy this morning.

The left warns that low earners, including teachers, social workers and nurses, would be obliged to pay thousands more under a graduate tax, while the right warns that a tax will create an unwieldy, centralised system in which Whitehall bureaucrats, rather than students, decide where the money should go.

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From the right, here’s the influential Conservative MP Douglas Carswell, writing on his blog this morning:

Taxing graduates more for being graduates is a great idea. If you want to induce economic stupor. In an age of unprecedented labour mobility, taxing productive, entrepreneurial young people is hardly likely to boost our little island’s ability to produce wealth. If serious about The Big Society, politicians need to quit reaching for the high tax/big government option each time they are confronted with a policy problem.

The ease with which the coalition gets the measure through parliament may yet depend on who wins the Labour leadership. Alone among the candidates, David Miliband has defended the present system and argued against a graduate tax.

Either way, the coalition’s decision to introduce what the press will depict as another “middle-class tax” is a big political gamble.

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