Clarke spells out graduate tax

Charles Clarke will unveil his plans later this month

Students will pay for university through taxation after they graduate, the education secretary has indicated.

Charles Clarke, speaking on BBC Radio 2, has given the clearest indication so far that all or part of student funding will be repaid through a lifelong graduate tax.

I think we're pretty clear that we'd be charging fees, unlike now, after university, and so you pay through the tax system later on in your life

Charles Clarke, Education Secretary

But what had appeared to be a move towards the end of all up-front fees was later played down by government spokespersons.

"I think we're pretty clear that we'd be charging fees, unlike now, after university, and so you pay through the tax system later on in your life," Mr Clarke had told Jeremy Vine.

But government spokespersons later said that postponing payment until leaving university did not necessarily apply to tuition fees - and might only apply to any additional "top-up" fees.

The government is set to unveil its funding plans for higher education later this month.

Variable charges

And this official interpretation of what the minister meant by "we'd be charging fees, unlike now, after university" means that up-front fees could still be maintained.

The fees would be dependent on what the individual was earning throughout life

Charles Clarke, Education Secretary

But it does seem to offer an unambiguous indication that there will be some form of graduate tax.

Since tuition fees were introduced by the present government, students have had to pay a fee at the beginning of each university year.

This has been attacked as deterring applications from students from less well-off families - even though the poorest do not pay the means-tested fees.

But Mr Clarke did not rule out the possibility that tuition fees could be increased or that there could be different charges for different courses or institutions.

Lifelong earnings

His comments suggested only that repayment would be deferred until after students had left university and were working.

"What you pay will depend on what you earn, so that if you're doing a very low-paid job you won't have to pay a very substantial amount.

"But if you get a lot more in pay ... you will pay much more," said Mr Clarke.

The details of such a deferred payment system are now under discussion, Mr Clarke indicated.

Students, who have campaigned against tuition fees and top-up fees, are against a repayment scheme which pays off a specific student debt.

They argue for a graduate tax in which former students pay an ongoing contribution through income tax.

And it would appear that Mr Clarke is leaning towards such an ongoing tax rather than a repayment, as he says the fees would be "dependent on what the individual was earning throughout life".

Mr Clarke also said that the amount of grant or loan provided would depend on parental income.

"We'd have particular arrangements for those who are from the poorest families to give them more money," he said.