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Business leaders oppose graduate tax

Richard Garner
Wednesday 15 January 2003 20:00 EST
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Company finance directors overwhelmingly oppose the idea of a graduate tax for students because it will put many off going to university, according to a survey published today.

Company finance directors overwhelmingly oppose the idea of a graduate tax for students because it will put many off going to university, according to a survey published today.

A poll of more than 300 UK finance directors reveals ministers will have their work cut out selling the plan to business leaders as three out of four oppose it.

The poll comes on the eve of the publication of the Government's higher education blueprint, which is expected next week.

Charles Clarke, the Secretary of State for Education, has already indicated students will face bigger repayment bills on leaving university so the Government can put a limit on the level of fees paid upfront.

One option floated has been a cap on the tuition fees to be charged by universities of £3,000 a year – with the bulk of the charges being payable after graduation.

However, the finance directors believe the scheme will put thousands of students off going to university – with 74 per cent opposing the idea and only 19 per cent believing the Government should make graduates pay higher taxes.

Richard Post, the managing director of Reed Accountancy Personnel which jointly carried out the survey with the magazine Accountancy Age, said: "There is obviously strong feeling amongst UK finance directors over the issue of a graduate tax."

Nick Watkins, the finance director of Contisteel Ltd – one of those who responded to the survey, added: "It is robbing Peter to pay Paul and will create a further tax administration burden."

Many directors said a graduate tax would put students off going to university. Others said it would place companies under an administrative burden to work out the tax their employees should pay.

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