Photographer: Getty Images

U.K. Labour Would Raise Corporation Tax to Fund Students

The U.K.’s opposition Labour Party said it would reverse cuts to student funding made by the incumbent Conservative administration if it wins power, paying for the policy by raising tax on companies.

Labour would restore student grants and maintenance payments for 16-to-18-year-olds who want to stay in education, after they were scrapped by the Tories, the party said Tuesday in an e-mailed statement. To do so, Labour would increase corporation tax by less than 1.5 percentage points, it said. The next general election isn’t due until 2020.

“While the Tories continue to burden our young people with debt, the Labour Party is committed to investing in our young people,” the party’s education spokeswoman, Angela Rayner, said in the statement. “It is only by investing in education that we can ensure that all of our young people, whatever their background, are able to succeed in whatever they aspire to.”

Labour Leader Jeremy Corbyn, facing a challenge to his position as party chief, on Sunday set out plans to create a so-called National Education Service that would work along the lines of the National Health Service, providing education free at the point of use for everyone. It would include universities and adult education, which currently charge fees. He argued the new policy would help close a productivity gap that costs the British economy 96 billion pounds ($125 billion) a year.

“Without a proper explanation of how all Labour’s education proposals could be funded in full, they amount to little more than warm words,” the ruling Conservatives said in an e-mailed statement. “This government is committed to making sure this is a country that works for everyone, and education lies at the heart of this ambition.”

The government’s changes to student grants and payments to 16-to-18-year-olds will ensure increased support for the poorest students, the Conservatives said.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE