Latest news: Grad tax could lead to 'brain drain'

A proposed graduate tax could lead to an exodus of heath and social service graduates, according to claims from the main lecturers’ union.

The University and College Union (UCU)  believes that the cost of studying in key professions like medicine, teaching and social services will soar under new tax proposals by the coalition government.

The Union tested the scheme by using a model of 5% tax over 35 years on salary levels used by the Office for National Statistics (ONS) . It found that a typical doctor could expect to pay £105,564 in graduate tax, with a teacher eligible for £46,046.

Such large tax payments could lead to a ‘brain drain’ in graduates moving abroad to avoid the contributions, says the UCU.

‘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,’ said Sally Hunt, general secretary of the UCU.

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

Business secretary Vince Cable proposed a system of variable graduate contributions tied to earnings in July, stating that the current fees system equates to a poll tax that is paid ‘regardless of the income of the student’.

‘It surely can’t be right that a teacher, care worker or research scientist is expected to pay the same graduate contribution as a top commercial lawyer, surgeon or City analyst whose graduate premium is so much bigger,’ said Mr Cable.