The point is that even the Office for Budget Responsibility (set up by the Conservatives) is claiming that money is being lost to the Treasury. Corporation Tax is currently lower than income tax, so some small businesses are paying corporation tax rather than income tax. At the same time, they are avoiding paying National Insurance Contributions, which are an additional 23% (?).
I'm no accountant either, so I don't know how it works, but I do know that this is one ruse my ex-husband used to avoid paying me any maintenance for our children and to avoid paying back his student loan.
Richard Murphy, who wrote the article dj quoted, also admits in a reply to the blog, that low investment is a real problem in the UK and more needs to be done to encourage it.
I'm slightly ambivalent about higher education fees, because they do generally benefit only one sector of the population, but they are now at ridiculous levels. I believe they're amongst the highest in the world and I'm not convinced that the return is worth it for the individual. However, there is a need for graduates (probably not so many as we now have) at a national level. The UK is a country with few natural resources and without a manufacturing base, "intellectual" services are our highest earner.
I'm particularly annoyed that the means-tested non-repayable grant was stopped this year. OK, I'm biased, because my DS started uni this year and missed out on the grant, which his sister received. On top of the increase in fees, DS will owe over three times as much as DD - and there's only five years between them.