Union tells Starmer: tax big business to fund British universities

The union, representing 130,000 education workers, said students must not be loaded with even more debt because of previous Tory governments' failure to invest in education.

The call comes on the opening day of Labour Party conference, as UCU releases data showing a 4.3 percentage point increase in corporation tax would raise £17bn. This could be used as an education levy to provide universities with much needed extra funding and end its tuition fee-based system, while still leaving corporation tax below (29.3%), the rate at which Tony Blair set it (30%).

Such a levy would replace the £11bn in fees English domiciled students pay each year with publicly funded teaching grants. The levy is only focused on England, as fees are devolved in Wales, Scotland and Northern Ireland. It would also provide an additional £4.58bn to the higher education sector, equivalent to an increase in tuition fees of up to £13k that university employer body, Universities UK (UUK), reportedly suggested earlier this week.

UCU's levy would see only profitable businesses pay for the UK's university system, with those making the most profit paying the most. Whereas UCU estimates that an increase in tuition fees would see each cohort of students graduate with £5.1bn more in debt and leave around six in 10 never paying their loans off, even after 40 years of repayments (around 100,000 additional students per cohort - English-domiciled students only).

The Office for Students has warned some English universities are at risk of going under with two in five facing budget deficits. Earlier this week UCU attacked vice-chancellors for making reckless financial decisions after universities slashed budgets, cut jobs and offered staff a pay uplift of just 2.5%.

UCU general secretary Jo Grady said: 'Labour must use the autumn Budget to increase public funding for universities and secure their long-term future. Keir Starmer and Rachel Reeves should realise there will be no decade of national renewal if the decline of our great universities goes unchecked. After the state the Tories left us in there is a material risk of a university going under unless the Government acts.

'But university employers now want students to bear the cost by taking on yet more debt. Graduates already face up to 40 years of repayments and staggeringly high effective marginal tax rates. Rocketing fees would mean one hundred thousand more per cohort would never pay their debt off. The tuition fee model has become unworkable, it leads to yearly cycles of job cuts, hurting staff and damaging student provision, and, by accelerating the decline of our universities, it ultimately harms us all.

'Education is a public good that enriches communities and strengthens society. It should be publicly funded. Big business reaps private profits from the graduates it employs, which is why we are calling for an increase in corporation tax of 4.3 percentage points.

'The Tories ran Britain into the ground and Labour's victory has now given us a chance to rebuild, but this cannot be done on the cheap: if Rachel Reeves won't borrow to invest then she will have to tax private profit and wealth to fix universities and the broken public sector.'