Businesses should pay for students’ fees, says UCU report

The 5p increase in the pound for businesses could end tuition fees. Photo: Mark Bridge

A “business education tax”, where taxes on business subsidise tuition fees, is the way forward in higher education, says a new report by the University and College Union (UCU) and Compass.

The tax would see large scale businesses who benefit from graduates paying an increased corporate tax of 32.87p in the pound, which is the G7 average, up just under 5p from the current 28p in the pound.

That increase would generate almost £3.9billion for higher education according to the report, which is “more than enough to abolish all tuition fees”, while still maintaining corporate tax well below the rates that are imposed in France, the U.S and Japan.

The report highlights six “main problems” with tuition fees: “[Fees] are expensive to maintain; they increase student debt; they act as a disincentive to study; they reflect an oversimplification of the economic benefits of having a degree; they create real individual hardship while raising relatively small sums of money; and they are unpopular with voters.”

Businesses are accused of milking the higher education system: “UCU believes that while employers benefit enormously from the plentiful supply of graduates, they will not willingly contribute to the infrastructure that creates this supply.”

Critics may say that while we are still in a recession, businesses will be reluctant to take further cuts in their profits and could use the tax as an excuse to cut further jobs, leaving more graduates out of work.

An alternative to the report’s findings is ensuring that degrees are worth the fees paid, by making courses industry-led. With more business involvement in the structure of relevant degrees, they can be tailored to the needs of the industry – ultimately making graduates more employable.

However in terms of benefits for students, universities and businesses, a tax would provide a stable flow of money entering universities yearly, meaning they wouldn’t have to rely so heavily on funding from the HEFCE.

Students would be able to attend university without the debt concerns. Poorer young people who perceive university to be unaffordable may also be encouraged to go.

The Government and the Tories both remain committed to top-up fees, so it’s highly unlikely the report’s suggestions will be taken on as policy by the two main parties.

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