Thursday, 19 May 2011

Sefton Labour vote for tax cut for high earners

Now please enlighten me as to how Labour came to support this Tory motion. Let us recap on the scheme which supports low earning students by taxing those with higher paid jobs:

  • Everyone pays 9% of their income over £21k.
  • This means every graduate will pay less per month than they do now. 
  • They make payments until the cost is met or 30 years has passed. Our models show 40% of graduates will have to repay the full amount.
  • Graduates who do particularly well and go on to be high earners will contribute the full cost of their tuition and pay a higher interest rate.  Around 20% of graduates will pay back more than they borrow and the top 30% of earners are likely to pay back more than double the bottom 20% of earners. This allows us to offer protection to those who do not go onto earn high wages or have period out of employment.   
  • Ending upfront fees for part-time students. Anyone studying at more than 30% intensity will have access to the same system as full time students and be able to repay the cost when they are earning.
  • No one starts making monthly payments until they are earning more than £21k, increased from £15k today
  • We will apply an interest rate of up to 3% above inflation dependent on earnings. At £21k the graduate accrues 0% real interest; at £41k the graduate accrues 3% real interest. Between these points the interest rate increase related to earnings.

Notice of Motion by Councillor Sir Ron Watson

To consider the following Motion submitted by Councillor Sir Ron Watson:

“That the Council in response to the consultation process on Tuition Fees for Students indicates its strong opposition to any moves to impose a financial penalty on those students who find themselves in a position to repay the loan in advance of the normal maturity date."

Even David Willetts got the point as he showed in a parliamentary question to which he replied saying:

Mr Willetts: The Government are committed to the progressive nature of the repayment system. It is therefore important that those on the highest incomes post graduation are not able unfairly to buy themselves out of this progressive system by paying off their loans early. .........

Sadly Bootle Labour are against this element of progressive taxation. They were of course not thinking of the issue as one of policy but displaying a tribal response-don't bother me with issues of principle or policy I just want to be angry and anti..............

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