Don't consult: govern

The moment Tony Blair won the vote on a neutered but still desirable bill on university top-up fees, political commentators observed that the thinness of his majority demonstrated, in the words of Tom Happold of the Guardian:

Whatever the rights and wrongs of the argument, Mr Blair has been weakened by tonight's vote. To rebuild his authority and reunify his party he must take on board at least part of the rebels' critique. If he wants to carry on with his plans to reform the public services he must learn to consult and explain more. Otherwise the fate of Mr [Ramsey] Macdonald and Mr [James] Callaghan awaits.

I cite Happold because he's an astute commentator - as is the BBC's Andrew Marr, who said much the same thing - rather than an inveterate oppositionist, yet his advice to Tony Blair is exactly wrong. If Blair wants to continue with the reform of public services then he must learn to pay less attention to those critics. If he builds up a minimal reform as a vote of confidence, then his critics will be encouraged in their erroneous belief that public service reform is an extreme position that needs to be tempered if not thwarted.

According to Professor Nicholas Barr on Newsnight last week, the government's proposals on top-up fees would mean that one-sixth of the current cost of a degree would be borne by the student, if and when he was in a position to pay. To raise this money from general taxation when 82% of taxpayers are not graduates is an overt case of sectional interests triumphing over the public good. The only possible case for objecting to this reform, given that poor students do not pay tuition fees, is that education is - in economists' jargon - a public good that generates positive externalities. But as Alison Wolf, Professor of Education at London University, has pointed out, there is no clear link between student numbers and economic growth:

[W]ithin developed countries there is no clear link between student numbers and growth rates, GDP per head or productivity. For example, Switzerland, at the top of the income tree, has the lowest university participation rates in the OECD; while the US, also near the top, has the highest. Big increases in university numbers are at least as likely to follow periods of rapid growth as they are to precede them: Japan is a prime example.

So when a minister asserts that "We need more young people to go to university because it is an economic necessity," he or she would be hard pressed to back up the claim.

Education is not obviously a public good - or rather, it is a hybrid case where the primary benefit of education accrues to graduates themselves, and who thus ought to pay for that benefit themselves if they are in a position during their working lives to afford it. This isn't a counterintuitive proposition attractive only to the affluent and privileged: it's an integral part of what I would take to be liberal beliefs. Professor Wolf's article is well worth reading in full (as is her book Does Education Matter?); while only tangentially mentioning party politics, it does make a telling observation:

Politicians, too, have the interests of core supporters to accommodate. The Liberal Democrats have campaigned consistently against university fees: their website trumpets that "Liberal Democrats in Scotland abolished tuition fees completely", and urges people to vote Lib Dem as a "vote for scrapping fees". Bear in mind, though, where the greatest beneficiaries of that policy are to be found. It is in the Liberal Democrat heartlands-the Guildfords and Newburys, the Kingstons and Cheltenhams, not in Peckham, Govan, Gateshead or Merseyside.

Tony Blair should deal with these intellectually bankrupt critics, inside and outside his party, by showing them no respect whatever. The examples Tom Happold gives of the Macdonald and Callaghan governments - both of which were divided and incidentally lost votes on the second reading of a bill - do not demonstrate the case he wishes to make. The critics of Macdonald and his Chancellor, Phillip Snowden, had no idea how to manage the economy through the Depression; with the crucial exception that they ought not to have defended the Gold Standard (an exact modern equivalent would be the system of currency boards pegged to the US dollar that some South American countries with histories of high inflation adopted), Macdonald and Snowden were among the most effective politicians of the last century and whose reputations ought to be much higher in Labour circles than they are. Likewise, if James Callaghan's Treasury team - Denis Healey, Joel Barnett and Edmund Dell - had compromised with their critics during the 1976 crisis, the sensible and necessary step of securing the IMF loan contingent on cutting public spending would not have been possible, and the alternative stratgies promoted by Tony Crosland and (much less seriously) Tony Benn would have caused immense economic hardship and needless diplomatic disruption.

The proper model for a reforming Labour government is New Zealand in the 1980s, when the Finance Minister Roger Douglas established an economic framework of rules in place of a highly protected and ossified economy. (Among Douglas's reforms was the exact precedent for Gordon Brown's later adoption of the policy of central bank independence.) In a useful account of these reforms a few years later, Donald Brash, Governor of the Reserve Bank of New Zealand, observed:

The comprehensive nature of the economic policy failure in New Zealand demanded a correspondingly comprehensive reform programme. As well, the first stage of the reform was carried out at high speed. It was probably the world's first example of a `big bang' approach to reform. The case for fast and comprehensive, as opposed to gradual and piecemeal, action was cogently argued by Roger Douglas in a remarkable speech to a meeting of the Mont Pelèrin Society in Christchurch in 1989. Douglas rejected the conventional view that reform can succeed only if political support for it has been established beforehand; this, he said, merely compromised the quality of the reforms, thus adding to their eventual cost and sowing the seeds of opposition. Instead, he said, consensus 'develops progressively after the decisions are implemented, as they deliver satisfactory outcomes to the public'.

It's an example that Blair - whose instincts are right and whose willingness to put up a fight is discernible but not yet militant enough - would do well to emulate.

Comments

[Brownie]

I broadly agree with one caveat. Blair should indeed push ahead with his public service reform program, but there does need to be a more inclusive approach to the policy-making process if, as one wag put it yesterday, "legislation by nervous breakdown," is to be avoided.

This is not to say that those blind to the Blairite vision should be afforded an opportunity to dilute reform, but that such people should be encouraged to believe that it was their idea all along. Currently, a select band making up the Policy Unit meeting in No.10 with curtains drawn, doesn't do the trick.

That said, it is truly heartening to see a Labour government being radical in all the right ways. Whatever happened to that populist PM who trod the middle ground, gripped by a policy paralysis that demanded, above anything else, the Shires were soothed and Middle England was mollified?

It's not so long ago that this is what most offended the rump of the parliamentary Labour party.

There's just no pleasing some people.

[David Duff]

Reading your post, two thoughts occurred.

First, Blair's travails are another example of history repeating itself. Once I had realised what Margaret Thatcher was about, it dawned on me that she was no Tory and that, as the nearest modern equivalent to a 19th C. liberal, she had in fact 'nicked' the Tory party from under their silly noses. It was obvious that they too had woken up to this unpleasant (to them) fate and their hatred of her and all her works was only checked for a few years by their cowardice and ambition.

It is equally obvious that Blair despises his own party and the feeling is now mutual. Unlike Thatcher, alas, he does not possess a tried and tested philosophy to guide his actions otherwise, surely, he would have attempted his so-called reforms of public services very much earlier. At least now that the pretence and artfice of 'New' Labour is gurgling down the plug-hole and we can see the traditional, true face of Old Labour.

Second, as a Uni-of-Life man myself, I am ill-equipped to comment on universities but it seems to me that all this tinkering with who pays what, when, misses the point. I helped put my son through university and I don't think I ever wasted so much money for so long. Their 'working practices' (please don't laugh!) are beyond parody. Instead of listening to various vice chancellors bleating for money, it's time we took a long, hard look at how they conduct their business. Does it really take three whole years to qualify for a degree in non-technical subjects?
David Duff

[Andrew Duffin]

I note your comment that the bill is "...still desirable...".

The Telegraph comments that one result of the bill would be that two people with identical incomes would end up paying different rates of income tax simply because the parents of one of them were richer than the parents of the other, at some point in the by-then distant past. The Telegraph calls this "discrimination by class origin", something of which I think Marx was very much in favour.

It seems to be that such a result would be completely indefensible.

Do you think it's a desirable outcome, or did the Telegraph get that wrong?

[Dave Collins]

A majority of five - LUXURY !!!

Down in Cardiff, since May, we have had 30 Labour Assembly Members and 30 opposition.

Rhodri's Government has yet to lose a vote. This is largely due to the fact that Nationalist AM Dafydd Elis Thomas felt unable to turn down our nomination of him as Presiding Officer, but it is also due to the discipline of Labour AMs who can clearly see the consequences of self indulgence. The same phenomenon was apparent in the 1974-79 Labour government, where despite huge ideological divides the PLP remained amazingly united. In Wilson's 66-70 administration on the other hand, despite having a huge majority the government regularly faced major rebellions and had to ditch key policies (Lords Reform, In Place of Strife etc.) because the Whips couldn't deliver the votes.

Finally it is nonsense to say that this policy will not have a significant impact on Scottish Universities. Scots, Northern Irish and Welshg MPs have an absolute right to vote on this, just as English MPs have the right to vote on legislation that only directly affects Wales and Scotland. For 300 years before devolution English MPs made Scottish laws (Scotland having a seperate legal system). It would be ludicrous to create a system where one party could pass legislation of foreign affairs (treaties etc.), defence, trade and social security, whilst another party commanded a majority on anything connected with Health, Education, Housing etc.

Also Oliver is right about MacDonald and Snowden. The end of their careers was a sad spectacle given their previous eminence. It is no suprise that Labour politicians at the time felt compelled to demonise them, but the time is surely right nowadays for a revisionist interpretation to win back some ground.

Dave Collins, Cardiff

[Richard]

How are the figures for "cost of a degree" calculated and how do they break down?

[Johnh]

the rebellions keep getting bigger and bigger. Brown may have thought he had the power to stop this one but I don't think he did. He had to sacrifice the 'credibility' (a relative term) of Nick Brown and it was still tight.

The party is splitting - to not move to the centre of the party and to push ahead would be to accelerate the split. This bill was badly mauled, as was the foundation hospitals bill. If Hutton hadn't chosen today to report then there would have been every chance the bill would have failed.

[GrimReaper]

The Telegraph is right; we have been saddled with a system that will tax people according to their class origins. University admissions will also be skewed on the basis of class origins, by the "access regulator".
Perhaps Tony Blair is really a Marxist after all.

[Matty]

"Once I had realised what Margaret Thatcher was about, it dawned on me that she was no Tory and that, as the nearest modern equivalent to a 19th C. liberal"

I'm amazed you wrote this, David. Thatcher was nothing of the sort. All she owed to the Liberals of the 19th century was a belief in free-market economics (and it's debatable whether she subscribed to the Smithian idea that they should enrich everyone in a nation or whether she just wanted to dismantle everything British socialism had achieved and was looking for a way to reduce taxes for the Conservative's wealthy supporters). Thatcher's social authoritarianism and nationalism were entirely removed from old fashioned Liberalism and had been associated with rightwing Conservatism for decades. She was no more a Liberal for believing in a free-market (and her belief in that was probably down to nationalism as much as anything else - American market economics have long been associated with anglo-saxons, and Thatcher is a great believer in the "bond" between what she euphamisitically describes as "the English-speaking peoples") that Blair is a socialist for believing in the National Health Service.

[David Duff]

Matty,
I am happy to be corrected but I think that the main philosophical thrust of 19th C. liberalism was:
1: Free trade
2: Small government
3: Pro-active foreign policy (including miltary power) in defence of states under threat from tyrants.

(For what it's worth, I agree with 1 and 2 but unlike our host, Oliver Kamm, I do not support 3.)

In the real world, statesmen must duck and dive in specific situations but on the whole I think my description fits Gladstone's Liberal government and Thatcher's (so-called) Tory government. I do believe that the Tory party's support for free trade is luke warm and goes very cold, very quickly at the behest of special interests centred at the CBI. No Tory government (except Thatcher's) ever *reduced* the size of the State. She was out of power but in favour of action against Serbia whilst that grand panjandrum of the Tory party, Douglas Hurd, did everything he could stop any intervention - rightly, in my view.

As for what you call " Thatcher's social authoritarianism", I would be glad if you could furnish an example. Personally, I never noticed any!
David Duff

[Simon]

Section 28?

[waf]

Funny, I thought S. 28 was the opposite of authoritarian. To prevent schools introducing homosexual propaganda in schools. As I recall it was much needed at the time.

[waf]

Funny, I thought S. 28 was the opposite of authoritarian. To prevent schools introducing homosexual propaganda in schools. As I recall it was much needed at the time.

[PooterGeek]

Ah yes, waf, I remember the state school playgrounds back then. Every healthy young male indoctrinated by the waves of pro-gay Lefty propaganda was fighting to be thought of as more homosexual than his friends. Lucky Thatch stopped it in time or the British population would have died out.

Here's a more serious example: a Thatcher government refused to fund research into UK sexual habits. Scientists wanted to predict the possible spread of HIV infection, and needed this data to build proper models. To quote the British Medical Journal:

Kenneth Baker, then Chancellor of the Duchy of Lancaster, wrote in his memories [sic] that he and other ministers opposed the survey, claiming that it would show only that "Britain had become a more promiscuous society - which we knew."

[waf]

But at least it's consistent ! ( not authoritarian ). If the story is indeed true, Baker is to be applauded. The state has no business prying into peoples' 'sexual habits'.

[PooterGeek]

Asking people to volunteer---anonymously and in confidence---information relevant to the control of the spread of fatal diseases is something even the most "minimal" government could reasonably consider its responsibility. It's quite possible you aren't dead now because of continuous UK and international government surveyance of influenza victims. Alternatively you could take your chances and live unmolested in the sort of country where everyone knows that sex with a virgin will cure you of HIV. Individualistic, private sector epidemiology has a long and glorious history that shames all that ideologically suspect, nanny state stuff.

Not "prying into peoples' 'sexual habits'" wasn't Baker's motivation and it wasn't Thatcher's. Baker's comment is unusually stupid for him: "Sorry, Newton old chap, all those experiments with billiard balls will just show that bigger balls roll faster. Can't fund you. Show in that Hooke fella."

[WAF]

But the emphasis on one particularly trendy STD is hardly helpful. At a time when research funding for this one STD dwarfs the total spend on cancer research, for example, we should be asking questions.

In this context, we have to choose between more funding for an already lavishly-funded area of research, versus funding for, say, kids with leaukaemia.

[PooterGeek]

For those who aren't bored yet:

1. The "time" is 2004. We are talking about 1989.
2. Spending on cancer research "dwarfs" spending on HIV research.
3. Most "kids with leukaemia" get better as a result of that spending. All kids with HIV die.
4. Less money might be wasted on bad and expensive laboratory HIV studies if relatively tiny sums were spent on more getting better data on sexual behaviour.

Following on from that last point, Waf, your comments are a neat example of the foolhardiness of proceeding on the basis of ignorance and prejudice rather than on the basis of cheap and simple research.

When the study Thatcher refused to authorise was finally funded independently by the Wellcome Trust, I'm willing to lay odds it cost an order of magnitude less than, say, the mystifying prime time submarine-and-icebergs TV ads she did stump up for.

None of this changes the basic point that it was "moral" squeamishness---prudery, I suspect---that drove the original decision rather than any practical, ethical or scientific consideration.

[waf]

This article makes the point quite forcefully in respect of Aids funding in Africa versus funding (lack of) for diseases that kill loads more people.

This shows the complete disregard given to real killer diseases like Malaria and TB, which are many, many times more deadly than aids, and which we in the rich countries don't give a damn about.

http://www.spectator.co.uk/article.php3?table=old&section=back&issue=2003-12-13&id=1

You need to justify the 'prudery' remark. That sounds very judgmental. Seeme to me the only authoritarianism on display comes from the usual source - interfering, nosey busy-bodies

[Richard]

Back to the orignal argument. I would like to make the following points which need to be addressed.

1) Cost of degree. All the statistics quoted by Vice-Chancellors and others in favour of top-up fees are quite happy to include anything they can pin as adding to the 'value' of a degree, which the students do not already pay for. Even assuming they are particularly justified (most of any new money generated by fees will not go to undergrads, rather into Research) they do not include
Accomodation, food, books, clothing, cost of participating in clubs and societies (consistently rated as very important in employer surveys), loss of earnings, future taxes paid.

2) The progressive tax system - if there was one area of public spending above all else which is justifiably funded by a progressive taxation system it is education. You can have arguments about whether university education should be funded by general taxation but I would like to hear the case put against charging the student for actual value gained rather than theoretical. (Perhaps a graduate tax charged on anyone earning over £20K in the ten years following graduation, and over £35K beyond - or something similar and tailored to meet the genuinely independently verified needs of the university)

3) Comments on the selling of Government Policy. I apologise if I've misunderstood but to hear one more minister claim that a graduate earning £15K a week will pay a mere £5 a week will drive me mad. A graduate earning £15K will still have to pay Income tax, NI ... (and inevitable bank overdrafts). By all means sell the policy but don't try to consciously deceive about the implications.