Graduate Tax

Mike Weatherley (Hove) (Con)
3.  What estimate  he made of the effect on public finances of the introduction of a graduate tax.

Mike Freer (Finchley and Golders Green) (Con)
6.  What estimate he made of the effect on public finances of the introduction of a graduate tax.

Mr Tobias Ellwood (Bournemouth East) (Con)
14.  What estimate he made of the effect on public finances of the introduction of a graduate tax.

The Chancellor of the Exchequer (Mr George Osborne)
A graduate tax would add billions of pounds to the budget deficit. That is just one reason why anyone in government, Labour, Conservative or Liberal Democrat, who has ever looked at the facts has concluded that a graduate tax is unworkable, unfair and unaffordable.

Mr Speaker
Before I call the hon. Member for Hove (Mike Weatherley), I remind him and the rest of the House that the supplementary question must be about the policy of the Government.

Mike Weatherley
A graduate tax would be less progressive and less fair than the proposals that the Government have brought forward. Does my right hon. Friend agree that if we scrapped our proposals and introduced a graduate tax, it would be a costly disaster for those entering higher education in the future?

Mr Osborne
I absolutely do agree with that. Interestingly, as I said in my opening reply, anyone who has ever looked at the issue in government, as we did over the summer and as the shadow Chancellor did when he was the Minister responsible for higher education, has concluded that it is unworkable. It destroys the independence of universities, and it is unfair, because some students would pay much more than the cost of their education, others would avoid it altogether by moving abroad, and millions of students on lower incomes than those specified by our proposals would be hit by a tax rise. It is also unaffordable, and as Lord Browne pointed out in the report that the previous Government commissioned, it would take until 2041 for the system to start paying for itself.

Mike Freer
Has the Chancellor, in developing our policy on a graduate tax, been able to bear in mind the policies of the Opposition?

Hon. Members
No!

Mr Speaker
Order. The Chancellor does not need to bear that in mind. He has explained his position very clearly, and we are grateful to him. I now call Tobias Ellwood, as his question is also in this group. He is not here. Oh, dear. I call Mr David Hanson.

Mr David Hanson (Delyn) (Lab)
Will the Chancellor confirm that in adopting his policy on tuition fees he has raised the Government borrowing requirement to £10.7 billion by 2015—a rise of £5.6 billion—in addition to cutting at least £800 million from the university budget and tripling fees, which will deter poorer students? Will he now for once confirm to the House that his choice on tuition fees is about ideology, not deficit reduction?

Mr Osborne
What we are doing is taking the report commissioned by the Labour Government and improving on it so that it is more progressive. [Interruption.] Yes, we are increasing borrowing to help students; that is part of what we are doing to fund our higher education institutions.

The truth is this, and the shadow Chancellor said it this month: it would

“be very difficult to make a graduate tax a workable proposition.”

That was the shadow Chancellor, who is now advocating as an official policy of the Labour party something that he says would be difficult to make a workable proposition. We have come forward with workable propositions on higher education, which the Opposition used to agree with when they were in government. They have now mistaken opportunism for opportunity.