Friday, December 10, 2010

Income contingent civil liabilities

That is the term I heard one expert use for the new arrangements for financing undergraduate education at a university in England.

It is not at all hard to understand the fury which this government plan has unleashed- all those children tested to destruction throughout their school years, told that they must get educated for their own & the country’s good – only to be told that it will cost.

It is something quite deep rooted in all our minds – fairness means that the rich pay the taxes, the poor get the benefits. And, after a period of madness, it seems that granny was right all along when she told you never to get into debt. So asking those from less well-off families to take on a debt of £27,000 for their higher education is unjust.

In fact the poor pay taxes, possibly proportionately even more than the rich, & income tax long ago stopped being the only tax worth bothering about. And though the rich may claim few of the things which come with the label benefit upon them, they do benefit disproportionately from subsidised goodies such as London Freedom passes – and higher education for their children. In the latter case the benefit is so great that it has been worth paying school fees of up to £30,000 a year to get.

The coalition scheme does not really amount to a loan – something which must be paid back regardless or else the bailiffs will come & take away your telly or your car or force you into bankruptcy.

And a UK tax cannot be collected from people living abroad or even, in some cases, from those who live here.

I personally worry much more about the pressures on university finances – we kid ourselves if we think that our universities are second only to America’s as the envy of the world, something must be done to pump in more resources.

The coalition scheme seems like a very clever idea offering the benefit of an income tax (payable only if you have the income) but with an obligation on all beneficiaries to pay, even if they are not otherwise liable to income tax.

And it will, unlike any previous scheme, offer a way of financing part time students, many of whom missed out on the chance to go to university at 18 & are a lot less well off than many full time undergraduates.

The devil as always will be in the detail.