Ouch, VAT hurts! Students will suffer from tax rise


George Osborne's emergency budget gave little hope for hard-up students. Photo: Prime Minister's Office

VAT will rise to 20% on January 4th, 2011, meaning hard-up students already struggling to fund living at university will be squeezed even more.

The increase was announced by George Osborne, chancellor of the exchequer, today, June 22nd, in his emergency budget.

Bursaries at the University of Lincoln are gradually being cut, meaning fewer students benefit. Coupled with a rise in VAT, the cost of living for some students may be too much to bear.

The emergency budget gave nothing away about higher education funding, leaving universities, their current students, and people considering university unsure about the future. Fees may yet rise. David Willetts, minister for universities, recently said that students are a “burden on the taxpayer“.

A private owner for the student loans book will also be sought, a policy the coalition shares with the previous Labour government.

Osborne told the House of Commons that this budget is “tough but fair”. He said: “When we say we’re all in this together, we mean it.”

However, a new levy on banks also announced will raise just £2bn a year. Corporation tax is being cut by 4% over the next four years, and the civil list, which is money handed to the Queen by the state, has been frozen at £7.9million.

One small bonus for students, though, is that the proposed increase in duty on cider has been binned.

Comments are closed.