Cable student tax plan will increase lifetime cost of university says UCU

The cost of a university degree would rocket under proposals from business secretary, Vince Cable, to tax university graduates, according to figures released today by UCU.

The union has analysed different models to make graduates pay for their university education based on future earnings. Teachers, nurses, doctors and social workers would pay considerably more back than under the current system. Under a model where graduates pay a tax of 5% over 25 years, doctors would pay back over £100,000 (£105,564) and teachers close to £50,000 (£46,046).

The findings will make particularly embarrassing reading for the business secretary after he said that teachers and social workers would benefit under his plans. The analysis prompted fears that introducing a graduate tax without protecting those on lower incomes or in professions such as teaching, social work and medicine could lead to shortages in these areas and a brain drain as graduates move abroad to avoid higher costs.

UCU general secretary, Sally Hunt, said: 'Parents and students will judge proposed changes to student finance on whether they make university more expensive or not. Whatever scheme is proposed to replace fees, the government must ensure that studying for key professions remains attractive and that the prospect of prohibitive costs over a lifetime will not put off the next generation of innovators and public servants.

'We urge Vince Cable to look again at the idea of taxing big business for the substantial benefit it gains from a plentiful supply of graduates, rather than merely looking to penalise students further.'

The full report is available below. The findings show how much people in different professions would pay back under a variety of tax models. Someone earning, for example, the national average full-time salary (for graduates and non-graduates) of £31,916 would pay the following amount pay under the different models: