Tax sweetener sour for employers

May 19, 1995

Am I alone in finding Dominic Cadbury's arguments on funding (THES, May 12) lacking logic? He says that employers pay twice for higher education; through contributions to general taxation and "through the premium on graduate salaries". Therefore they should not additionally be asked to pay "a user charge". Well, he would say that, wouldn't he?

But how does the "premium" pay for higher education? The only part of a graduate's salary paid to the exchequer is the tax on it, and it seems odd to claim this is an employer's contribution to higher education. Most people would say the tax was the employee's contribution. That is the argument the CBI uses to justify graduate contributions.

No, employers pay the "premium" because they need good quality employees. They employ graduates because non-graduates are less-suited to their purposes and so that their businesses are competitive at home and abroad. Employers pay the market rate, and to claim that as their contribution to higher education is frankly incredible.

Indeed, why would the CBI (rightly) want to increase the percentage of graduates unless it were (among many other things) good for business? Mr Cadbury has made the case for an employer levy far too well. It is a much better case than increasing the financial burden on students or holding down the salaries of university staff. (I would be delighted to pay more for higher education through my taxes if my salary were increased.) Mr Cadbury has certainly convinced me that an employer levy is a genuine possibility.

PETER BREEZE

President, Association of University Teachers

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