Labour endorses graduate tax

Labour is to endorse a graduate tax as its official policy after Ed Miliband overruled Alan Johnson, the shadow Chancellor, who has expressed grave doubts about the idea.

In a speech yesterday, Mr Johnson prepared the ground for a personal retreat by saying that Labour disagreed with the Coalition Government's decision that graduates should pay all the cost of their university education under plans to allow tuition fees to rise to £9,000 a year from 2012.

"This is the central issue now and it's why the Shadow Cabinet has agreed to look at whether a graduate tax can be a fairer and more sustainable alternative to the current mess as part of our policy review proposals," he said.

Mr Johnson, who introduced top-up fees as Higher Education Minister during the Blair government, is the first senior Labour figure to suggest the Opposition will come out in favour of a graduate tax since Mr Miliband became party leader in September. The issue has been discussed by the Shadow Cabinet and one member said: "We will go for a graduate tax."

Mr Miliband backed the move during Labour's leadership election but the party is divided over it. On the day after Mr Miliband was elected, Mr Johnson advised him in an article in The Independent on Sunday: "For goodness sake, don't pursue a graduate tax. We should be proud of our brave and correct decision to introduce tuition fees. Students don't pay them, graduates do, when they're earning more than £15,000 a year, at very low rates, stopped from their pay just like a graduate tax but with the money going where it belongs: to universities rather than the Treasury."

Vince Cable, the Business Secretary, considered a graduate tax but concluded that one would not bring in revenue for many years.

Yesterday, Nick Clegg admitted he "should have been more careful" over his pre-election pledge to scrap tuition fees. He told ITV's Daybreak programme: "I guess the easiest thing for me would have been to say I've signed this pledge, I'm going to put my head in the sand, I'm not going to come up with a fair sustainable solution to universities and simply refuse to deal with it. I don't think that would have been the right thing."