Jeremy Hunt has promised to wipe tuition fee debt for young entrepreneurs who launch their own business after leaving university.
As part of his pledge to “turbocharge” the British economy after Brexit, the Tory leadership hopeful said he would waive tuition fee loan repayments for any graduate who launches a start-up employing more than 10 people for five years.
Just 1pc of graduates currently start their own business – a figure which Hunt says must rapidly increase if the country is to prosper after Brexit.
Hunt’s latest tuition fee pledge comes after previous announcements to do away with business rates for 25,000 high-street retailers in five cities across Britain, lower corporation tax to 12.5pc – a 4.5 percentage point decrease on the 17pc rate planned to be in place in April 2010 — and raise the income level at which employees start paying national insurance.
Public-spending arms race
In what appears to be an increasingly reckless public-spending arms race, Tory leadership rival Boris Johnson has also pledged to raise the threshold for national insurance contributions.
Hunt said: “If we are to turbocharge our economy and take advantage of Brexit, we need to back the young entrepreneurs who take risks and create jobs.
“I started my own business I still use the lessons that experience taught me – focus, drive and the art of negotiation – every single day.
“I want more young people to have the confidence to take the decision to start their own business, so we create wealth and start thriving as a country again.”
Hunt’s team believes that the cost of waiving the student debt would be offset by an increase in tax revenues. A company with 10 employees earning the average full-time salary of £30,000 over five years would generate £440,600 in income tax and national insurance contributions, they claim.
However, watchdog the Institute for Fiscal Studies has called Hunt’s plans to boost business “expensive” and points out that together his commitment to at least £40bn of tax cuts and public spending increases make him almost as profligate as Labour in the 2017 election. And that is without factoring in his latest pledge to waive student loans for graduate entrepreneurs.