Top-up fees

Is it fair to charge students top up fees? Absolutely not, and I will vote against Tony Blair’s tax on learning.

Everyone agrees universities need cash. They suffered 40% cuts under the Tories, and a further 7% real terms cut in Labour's first term. The UK is 22nd out of 30 OECD countries for the share of national income spent on tertiary education.

So what’s the best way to raise the extra £1 billion net proposed? Through fees or general taxation?

With Labour’s fees, graduates will be saddled with average debts of £33,000 by 2010 - when the system’s fully in place.

Worst still, with repayments of 9% on income, students will effectively pay a marginal income tax of 42% - even when they’re earning below average income. Just as they start careers, families and mortgages.

When they earn more than £35,000, and start paying 40% income tax, their effective marginal rate will be 50%.

I believe it’s fairer to introduce a new top rate of 50%, but only on income above £100,000 a year. Nearly everyone with incomes that high are graduates after all.

That raises £4.7 billion – and would allow Government not only to fund universities without a student tax, but also abolish fees for personal care for the elderly and cut taxes for those on modest and low incomes. Fairer taxes, not higher taxes.