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All graduates should pay tax regardless of when they went to University, report says

Graduates queue in the quadrangle of the Sheldonian Theatre in Oxford - PA/CHRIS YOUNG
Graduates queue in the quadrangle of the Sheldonian Theatre in Oxford - PA/CHRIS YOUNG

Graduates aged in their 40s 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.

Students protest in College Green, Bristol, - Credit: Tim Ireland/PA 
Students protest in College Green, Bristol, Credit: Tim Ireland/PA

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.

The Chancellor is facing increasing pressure to ease the burden of student finances after Jeremy Corbyn promised to scrap tuition fees.

He has already hinted that he would like to find a way of forcing universities to charge less for courses that do not significantly enhance the job prospects of students that take them.

Britain's Chancellor of the Exchequer Philip Hammond - Credit: REUTERS/Adriano Machado
Britain's Chancellor of the Exchequer Philip Hammond Credit: REUTERS/Adriano Machado

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 altogether.

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

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

The report's proposals are likely to prove controversial with older graduates who may not take kindly to the idea of being taxed on their education decades after they left university.

A spokesman for UCL said: “This is not the university’s policy and we would oppose a graduate tax.”