Letter: Equity and affordability in the debate over graduate tax

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The Independent Online
Sir: Your advocacy of a graduate tax (leading article, 24 June) reminds me (Official Secrets Acts notwithstanding) that, almost 30 years ago, as a young principal in the Treasury, I was called upon to analyse proposals, already current, for student loans as a way of cutting government net spending on education.

I demonstrated that, once appropriate remissions etc were arranged for those who could not equitably be expected to repay at the planned rate - missionaries, non-working graduate wives, the sick, for example - the loan repayments would become a form of graduate super-tax.

This self-evident reductio ad absurdum needed no elaboration in those more intelligent days; and I note from Nigel Lawson's memoirs that the Treasury remained opposed to student loans until he overruled them 10 years ago on the grounds that 'graduates have higher lifetime earnings than non-graduates, and a subsidy to them from the general taxpayer is perverse'.

He appears not to have addressed the objection that there are many other forms of advantages provided by the state to some, but not to all - such as good health, education and training beyond 16, subsidised public transport, motorways in the right place, public honours - which confer, on average, higher earnings potential on their recipients without anyone suggesting that they should be super-taxed. If the Exchequer is that desperate for cash, why stop at academic degrees and not tax degrees of health, training, geography and aristocracy?

Yours,

PETER JAY

London, W6

24 June

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