Proposing the Business Education Tax

UCU launched its proposal for a Business Education Tax (BET) in the House of Commons on 3 March. The report is intended to re-open the debate on how we rebalance the contribution to university funding between, as Lord Dearing said, the state, the individual and the employer.

UCU was joined by think tank Compass in hosting the meeting which was chaired by Gemma Tumelty from the Compass management committee.

In a lively debate, UCU general secretary Sally Hunt, started by paying tribute to Michael Foot who had died that day. He was a tireless campaigner for social justice and for the disenfranchised. The case UCU was putting forward was very much focused on social justice.  Sally emphasised that the union believed that going to university should be based on a person’s ability, not their ability to pay. The tax would be paid for by raising the level of corporation tax to the G7 countries’ average – that would be enough to raise enough money to abolish all university tuition fees. That would still leave the UK’s main rate of corporation tax below that of France, Japan and the United States. 96% of companies, mainly small businesses would be unaffected by the change.

It wasn’t right or fair, that big companies who profited from a free supply of highly qualified graduates paid nothing. It was time for them to pay their fair share. Sally said that the prime minister had said that an extra seven million professional jobs will be required in the UK by 2020 and it is our colleges and universities that will educating and training people to fill those jobs. The UCU proposal would remove one of the main barriers to social and economic justice that stood in the way of our country.

Colin Burgon MP came along to add his support to the idea for a tax on business. Colin said he was proud to represent his Leeds constituency which was full of students. He commented that little was said to recognise how much higher education contributed to the wider economy. Higher education brought in about £60 billion to the UK economy – more than two and a half times its cost. So we should never be talking about the ‘cost’ of higher education – but rather about its benefits, not just to the individual but to the whole of society.

Colin was deeply concerned, as was UCU, to hear that the government was proudly proclaiming massive cuts to higher education – but that would ‘be alright because they will hit everywhere else soon’. How short sighted could that be? And how short sighted was it to cut public investment across the public services which would just lead to a ‘multiplier effect’ where every redundancy would lead to another as everyone’s spending ability diminished and the benefit levels soared. More higher education was what was needed not less, and increasing people’s chances to access it by business paying a fair share was a good start.

Sam Tarry, former chair of Compass Youth and current chair of young Labour followed Colin. Sam is a community organiser in East London and wanted to talk on a personal basis in terms of chances of getting into higher education. Sam spoke about his own experience of going to UCL where most of his fellow students seemed to come from privileged backgrounds where paying fees was no problem. They told him that if they went up it wouldn’t matter as they would have the money to pay.

Sam was shocked at their attitude and their ignorance of how difficult it was for him and his friends to get to university and later on pay back their debts. His brother had started a design degree but found the money pressures too much – even down to buying food – and had dropped out. He was now training to be an electrician but still had to pay back his fees even with no degree. Effectively his brother had had no choice whereas those with money never had to think about it. Sam felt UCU’s idea of a business education tax was liberating in that it showed a way forward where most of the burden would not be on the individual student – and it was a fair system.

Richard Murphy from Tax Research UK was the final speaker. He started off by saying his dad drove a horse and cart selling fruit and veg round the local streets, he lived in a terrace with an outside loo and his family was poor. Now, he was an accountant and had a decent salary. How did that happen? Because he had access to free publicly funded higher education. Free access to lifelong education, not just higher education, was the key to a decent society.

He was pleased with the UCU proposal as he had spent most of his time campaigning for fairer distribution of wealth in his working life. Richard said that fees were there to serve the market, allowing the commodification of education and the securitisation of student debt so that the outcome was financial profit. He went on to say research he had done showed how billions of pounds of uncollected tax revenue – on profit – was allowed to continue in sophisticated methods of tax avoidance. If big business in this country cannot afford to train the workforce they need then we have something very wrong with our priorities. This is just one of many issues where the right will demand more and more cuts but where we should instead be demanding the cash – clearly business is under-taxed right now, most people are over-taxed and we need spending, not cuts.

Richard was sure that we need it too as student education is part of the inter-generational contract: one generation when in work provides for the next so that the younger generation can keep the older generation when they are in old age. Like other speakers, he was clear it was time business paid up.

www.ucu.org.uk/BET