Centre Forum, having run the slide rule over Ed Miliband's new student fee proposals which cap them at £6000, now reckon that over half of the gain to former students goes to the richest 20% of graduates: those with lifetime earnings of over £2m in today’s money. The winners are also disproportionately old. Less than 1% of graduates will gain from this proposal within 10 years of graduation. The typical winner will have graduated 28 years earlier, and will earn £72,500 at the point at which they benefit from this proposal.
In addition, there is a significant gain to students with well-off parents who pay their fees upfront, rather than borrowing from the government. European students also benefit, as they must make repayments under the loan system but would not be liable for UK tax.
The proposal is therefore clearly regressive, being aimed to benefit the richest 20%, those with the wealthiest parents or foreign students paying no tax at all.
Back to the drawing board Mr Miliband.