Plan to tax all graduates who benefited from free education

GRADUATES aged 40 and above who benefited from a free university education should pay a retrospective tax to help fund the current generation of students, a new report has suggested.

Researchers at the UCL Institute of Education have set out proposals for a new “all-age graduate tax” that could be used to bring down tuition fees that currently cost students up to £9,250 per year.

It comes amid reports that Philip Hammond, the Chancellor, is considering capping annual charges at £7,500 instead of the current level of £9,250, saving students at least £5,000. The Treasury has denied the reports.

An announcement could come within weeks as the Tories try to appeal to younger voters at next month’s party conference and the autumn Budget in November.

Hammond has already hinted that he would like to find a way of forcing universities to charge less for courses that do not significantly enhance job prospects. The UCL report suggests that a tax on all graduates would be a happy medium between the current fees and loans system and a general election pledge by the Labour Party to scrap tuition fees.

Prof Andy Green, one of the authors who complied the report at the Centre for Research on Learning and Life Chances, said fine details of the scheme would need to be worked out.

One suggestion is that a graduate tax could be graded, with those who paid nothing for their university education paying one level of tax, while those who paid tuition fees at a much lower level than today would be asked to pay less.