Where’s Osborne’s axe when you need it?

And so, as the government recoils in terror from a cut that might get some bad headlines, I notice another exemption to the age of austerity (via Catherine Bennett).

Andrew Lansley has replied to the Commons Health Select Committee’s (highly critical) paper on homeopathy. He says that funding of this practice is to continue, despite a mass of scientific advice to the contrary. And why? Simple: “the overriding reason for NHS provision is that homeopathy is available to provide patient choice”.

Yes, you can have homeopathy on the NHS not because it works but because you might want it. You can choose to waste my money on a piece of quackery. Super. So, can you ask for any useless ‘treatment’ at taxpayers’ expense? Well, no. It seems that the power of lobby groups comes into it. Lansley says: “Given the depth of feeling on each side of the debate, it is unlikely that this controversy could be resolved by further analysis of literature or research on the efficacy of homeopathy.”

The “depth of feeling”. Is that peer-reviewed depth of feeling? Have double-blind studies been used to measure how deep these feelings are? Oh dear, oh dear, oh dear. So it’s acknowledged that scientific evidence has no bearing on people’s tendencies to fall for the homeopathy industry’s PR, and in light of that, the government will boldly let them spend our money.

But how much money? Alas, we don’t know. The Committee urged Lansley to find out, but he replied that doing so “could well require a disproportionate amount of resource”.

This sits uneasily with David Cameron’s insistence [£] this weekend that “no detail and no sum of waste is too small to escape the microscope of efficiency… we are having a root-and-branch audit of recent public spending”.

Bah. And yes, Labour funded this crap as well. It’s cross-party pusillanimity.

“The Secretary of State may enter into Academy arrangements with any person”

So reads the first line of the Academies Bill, which the government is pushing through parliament with the kind of haste usually reserved for emergency anti-terrorism legislation. It’s expected to get passed into law early next week. And, as befits its opening, it does devote a great deal of attention to giving Michael Gove more power.

Why the rush to get it enacted? Of course a government that thinks it has a good policy on its hands wants to get it up and running ASAP, but you could say that about any Bill.

Gove has a useful political skill: he knows how to make empty bluster sound like the sharp, forensic workings of a keen intellect. In his recent interview on Today, he said that of course there has been ample scrutiny: the idea of allowing all schools to become academies had been discussed a lot over the last few years and the Tory manifesto proposal had been debated during the election campaign.*

This is vacuous tripe and he knows it. There’s a world of difference between forming an opinion on a policy in principle and the close scrutiny required to test whether a Bill will indeed achieve what it aims to and check it for unintended consequences. Parliament has just not had the chance to do this properly, and certainly the 232 new MPs hadn’t previously been able to debate it.

So, in the spirit of the big society, I’ve had a quick look myself. Of course, I have no particular expertise.

The desire to minimise consultation and accountability isn’t just a feature of the parliamentary process; it’s key to how the new academies will be set up. Under John Major, would-be grant-maintained schools had to hold a parental ballot before opting out of LEA control, but under Gove’s law, things will work differently:

(5) Consultation on conversion

1. Before a maintained school in England is converted into an Academy, the school’s governing body must consult such persons as they think appropriate.
2. The consultation must be on the question of whether the school should be converted into an Academy.
3. The consultation may take place before or after an Academy order, or an application for an Academy order, has been made in respect of the school.

There’s nothing to suggest any check on whom a governing body considers “appropriate” consultees. Themselves? Their friends? And there’s nothing to suggest that they need to abide by the views of those consulted. And what a wonderful idea to allow them to consult after the decision has already been made.

Gove himself is not required to check whether such consultation has taken place, nor to do any consulting of his own when deciding whether to approve an application, nor to make public the grounds on which he makes these decisions.

But he does appear to be a fan of consulting people after the event. The Sunday Times (paywall) reports that he is already writing to schools and approving their applications - before the Bill has even been passed.

If this is true as reported, then he’s acting illegally. I suspect that it’s not quite that stark, but rather that he’s told schools what decision he’ll make just as soon as he’s legally able to. Even so, there is still scope for the Bill to be amended, so neither he nor the applying governing bodies can know exactly what the deal will be, and no one can have been consulted meaningfully.

This Bill is not about ‘parent power’. It’s about Gove’s power to bypass local councils and parliament, and it’s about governing bodies being able to bypass parents.

Is it a good idea to change the academies programme from being a way to rescue failing schools into an optional upgrade for potentially any school? What will be the effect not just on the schools that go for it but also on the wider education system? I’m afraid I’ve not had the chance to think this through. I’m not sure who has.

* The Lib Dem manifesto pledged to “replace Academies with our own model of ‘Sponsor-Managed Schools’. These schools will be commissioned by and accountable to local authorities and not Whitehall”. Oh well.

Labour vs Tories on ‘parent power’

Here are two education policies (or the rough outlines, at least):

Tory manifesto:
Drawing on the experience of the Swedish school reforms and the charter school movement in the United States, we will break down barriers to entry so that any good education provider can set up a new Academy school.

Labour manifesto:
Where parents are dissatisfied with the choice of secondary schools in an area, local authorities will be required to act, securing take-overs of poor schools, the expansion of good schools, or in some cases, entirely new provision. Where parents at an individual school want change, they will be able to trigger a ballot on whether to bring in a new leadership team from a proven and trusted accredited provider.

These are both attempts to give parents who aren’t happy with their local secondary schools the power to do something about it, rather than just hoping that the government or council will take notice and get something done. The Tory policy has been around for a while; the Labour proposal, as far as I know, is new.

Three things have always troubled me about the Tory plan (even if we assume that parents in areas with poor schools will be up to the task of organising a new one). First, creating a new school from scratch to compete with one that already exists is going to cost a lot: the initial costs will be huge and then the resulting overcapacity will need to be funded unless and until the old school closes down.

Second, it takes time to establish a new school, and while this is happening, the failing school is not just going to be left alone to fester. If the latter can be improved in time, the efforts that have gone into setting up the new one will have been needless.

Third, if the new school does turn out to be much better than the old, then the process of shifting kids out of one and into the other will be slow and sporadic – disruptive in the short-term for the children whose parents switch them and demoralising for those that remain where they are in an increasingly unpopular sink school.

The Labour plan, while still letting local parents set the ball rolling, avoids these flaws. Replacing the leadership of a school, or making it part of a federation, can be done less expensively and more quickly than creating a new, rival school, and the benefits will be felt by all the children of the once-failing school without their parents having to decide when and whether to jump ship.

And so it’s a better plan. It may not be a sneaky way of undermining LEAs (which the Tories have long been in the business of), but it’s a better, faster, cheaper, more efficient way of overhauling the local choice of schools when parents think this is urgently needed.

Of course their bloody sums don’t add up

The parties are arguing, with desperate earnestness and pitiful fury, about whether each other’s ‘sums add up’. And they’re conducting this argument while all standing on a huge cloud made out of guesswork, evasiveness, ignorance, wishful thinking, secrecy and fiction.

There are two reasons for this miserable predicament.

First of all, Labour’s published plans (such as they are) contain a colossal amount of vagueness. However, because they’re in government, and can publish their numbers on Treasury headed notepaper, these count as ‘official’ and get treated as the baseline against which everyone else gets measured.

Look at this chart from the IFS, showing the government’s proposals for fiscal consolidation:


The green sections in the final two years represent ‘unknown’ changes to tax or spending to reduce the deficit. But there’s more doubt than that: Labour have not done much to explain in detail how the rest of the reduction will be done, other than to say what will be tax rises and what will be spending cuts (although they’ve been clearer on the former).

Then there are the Tories and Lib Dems. If they want to reduce the deficit faster than Labour, they thereby inherit all the uncertainty in Labour’s plans plus any extra uncertainty about the further work to be done. So they’d have even more to explain. They have given some details here and there, and indeed the recent bickering about Tory efficiency savings and National Insurance is to do with the moderate extra vagueness that’s been piled on top of the big underlying vagueness.

So we don’t really know how any of them would do this. Do they?

And none of them can attack the others for ignoring the scale of what’s needed, because of the Fart Principle: whoever raises this problem will be saddled with the burden of explaining their – painful – solutions first (or, in playground parlance, whoever smelt it dealt it).

The second reason that the ‘sums add up’ debate is a mutually convenient charade is that, as Helmuth von Moltke didn’t quite say, no fiscal plan survives contact with the economy.

Economic predictions rank somewhere between meteorology and astrology for their accuracy. As Chris tells us, even in economic good times, Treasury deficit forecasts for the year ahead are out by over £6 billion half the time (and by over £12bn a quarter of the time). For comparison, this week’s spat is about the Tories wanting to use £6bn of extra efficiency savings this year to cut the deficit.

For the year after, forecasts are out by over £15bn half the time and over £21bn a quarter of the time. And three years away? Four? Don’t ask.

So even if all the parties had reams of precise tax and spending plans, audited by the IFS and Stephen Hawking, they’d still be largely hypothetical. And, of course, no party wants to be the one to say they only have the dimmest idea of how their proposals would really work out. They need to project an image of certainty, and the media enjoy judging them harshly for failure – while mostly ignoring the impossibility of the whole enterprise.

Moody’s blues: social cohesion vs credit ratings

This week there was a commendably frank statement on the biggest political issue of the decade. It came from a credit-rating agency, and concerned public spending cuts.

There’s disagreement (recall those economists’ letters) about which is the bigger economic threat: cutting public spending and the deficit so fast that a still-feeble private sector can’t take up the slack and we fall back into recession; or letting borrowing stay so high for so long that the markets take fright, the government’s credit rating is damaged and public-debt servicing becomes much more expensive.

Both sides of the debate claim that their approach can achieve the aims of the other side: the cutters say that a lower deficit will improve business confidence and boost growth; the borrowers say that public spending will support a stronger recovery, which will lower the deficit.

FWIW my own view, at least at this stage, leans towards the borrowers:

• Private-sector weakness is likely to persist due to tight credit availability – the crunch hasn’t gone away, you know.
• Recessions caused by financial crises tend to have weaker recoveries, as do global recessions.
• The flipside of our relatively resilient labour market is the risk of a jobless recovery, at least for a while.
• Gilt yields are up, but despite the end of quantitative easing, they haven’t surged, so the cost of borrowing still isn’t anything like as much as in previous decades – and we’re pretty much getting to the peak of gilt issuance now.
• UK public debt is pretty long-dated, so we’re not needing to raise as much cash on the markets to replace expiring bonds as other countries with smaller deficits.
• And by international standards, our total public debt isn’t that large.

But timing matters. Last year, as the recession was raging, only crazy people were advocating immediate deficit cuts. Assuming continued growth, the economic case for cuts will become far stronger in the next year or two.

This year, as we’re just inching into recovery, the debate is more balanced. Neither a double-dip via over-hasty cuts nor a borrowing spiral is an outrageous fear, and any sensible approach will have to take both risks into account.

But there’s a third aspect to this, beyond any of the economics: spending cuts have social consequences. Let’s not imagine that deficit reduction on the scale that the IFS describes can be done via efficiency savings. Services that people – particularly but not exclusively poorer people – rely on will suffer.

And here’s where the credit-rating agency Moody’s comes in, this week grimly warning the UK and other countries:

Preserving debt affordability at levels consistent with AAA ratings will invariably require fiscal adjustments of a magnitude that, in some cases, will test social cohesion… the severity of the crisis will force governments to make painful choices that expose weaknesses in society.

Moody’s, as you’d expect, treats massive deficit reduction as the sine qua non and everything else as an unavoidable shame that we’ll just have to get through somehow.

But is that right? It’s a political belief, not a mathematical fact, that the government’s AAA rating needs to be protected whatever the social cost, whatever the sacrifice, by fighting to the dying breath of every last teacher, nurse and constable. A credit-rating downgrade is neither necessary nor sufficient for raising the cost of borrowing.

The quality of public services should be treated as a factor – a really important factor – to be weighed alongside others (the cost of borrowing, the enfeebled private sector), not a sad but inevitable piece of collateral damage in the War on Debt. Intelligence reports suggesting that the ratings agencies possess weapons of mass destruction are deeply dodgy. And so is the argument that we have to inflict the mass destruction on ourselves to appease them.

Teach to their own

The Tories say they want to improve the quality of teachers in state schools, and to raise the status of teaching by making it “the new noble profession”.

(The old noble profession, I presume, is medicine. And I guess the oldest noble profession would be high-class prostitution.)

Chris Dillow is sceptical about the efficacy of demanding higher qualifications for teachers.

One way to test this – as well as, presumably, a way to improve underperforming schools – would be to require all private-school teachers to spend parts of their careers working at comps in poorer areas. It’s the same sort of principle as having GPs do work for the NHS as well as running private practices. Then we’d be able to see what effect these super-teachers have.

Another good lark would be requiring private schools to take an entire schoolful (not just a few assisted places) of low-achieving kids from sink estates, just to put paid to the socialist lie that good schools are good mainly because they have a well-heeled intake.

(NB I’m sure all of us can remember some really crappy teachers we had at school. Thing is, I’m not sure the worst ones are necessarily the least academically able. The job requires a wide range of skills, and I’m in awe of people who can do it well. I myself have – ahem – a pretty decent degree, and I’d be a terrible teacher.)

‘Just a trim, please. I said just a trim!’

The Tories should be worried about the opinion polls.

It’s not voting intentions: they’re maintaining a comfortable lead, although I don’t think a landslide is in the bag. No, their problem is people’s expectations of what they’d do in power as regards the public finances.

Polls from ICM, Populus and YouGov find that people tend to be more averse to higher taxes than to public spending cuts, and that when people are asked how to deal with the problem of the deficit, they want the main focus to be on spending cuts rather than tax rises.

But how big a problem do people think the deficit is? Because of the general consensus in the political and media class, pollsters haven’t looked at this very much. Ipsos MORI, though, have gone into that territory.

Only 24% agreed that “there is a real need to cut spending on public services in order to pay off the very high national debt we now have”, while 50% disagreed. Note the wording, though: “spending on public services” isn’t the same thing as “public spending”. The former is much cuddlier and less cuttable. Thus the same poll found 75% agreeing that “making public services more efficient can save enough money to help cut government spending, without damaging services the public receive”; just 9% disagreed.

While the wording is “help cut” rather than just “cut”, which makes it technically obviously true, this very strongly suggests that a lot of people expect efficiency savings to pretty much do the job when it comes to reducing the deficit. We can just cut some waste rather than actually harming the quality of services. They may be in for a nasty shock.

What’s more, going back to the YouGov poll, people strongly reject the Tory line on timing (although they may not know it’s the Tory line). Only 18% thought that “public spending should be cut sharply very soon in order to get the government’s finances in order as quickly as possible”, while 70% thought that “public spending will need to be cut in due course, but if it is done too soon, Britain’s economy would be damaged and unemployment would rise still further”.

If people’s expectations and preferences about cuts stay as they are, then by voting Tory they’ll find that they’ve gone to the barber’s for a trim but then been scalped – and for a price.

As Danny Finkelstein regularly points out, saving money by cutting public spending (rather than raising taxes) takes time and can even cost more in the short term. If the Tories can get their heads round this, and if they intend to attack the deficit as quickly as they can (i.e. well before the following election), that will mean higher taxes early on. If they haven’t primed the voters to accept that – as well as cuts in real services – they’ll be in trouble.

David Cameron reportedly wants a ‘doctor’s mandate’ – to do whatever may be necessary to sort things out. At present, he’s coasting towards a barber’s mandate. He may have to choose between deterring voters now and alienating them later.

(Of course, you could say that Labour would face much the same problems. However, what looks likelier is that Labour will face the problems that come from being in opposition...)

Maths standards: 1976 vs 2008

These are only provisional results from a study, and I only have the media highlights to go on, but it’s dismaying all the same:

“The overwhelming conclusion is that there are far fewer changes in mathematical attainment over a 32-year period than might be expected, or which have been claimed," researchers said.
Academics from King’s and Durham gave 3,000 secondary school pupils a test in algebra, ratios and decimals last year. Pupils aged 11 to 14 were given the same independent exam as young people sat in 1976.
…
“There is no evidence for significant improvement, or significant deterioration, of standards between 1976/7 and 2008,” researchers said.
“Although performance in some areas has improved it looks as if, when all the results are analysed, there will be little evidence for the sort of step-change in mathematical attainment which might be suggested by the claimed improvements in examination results.”

That sentence I’ve highlighted is politically inconvenient for almost everybody involved in the perennial debate on standards – surely we all know that kids have either got commendably brighter or disgracefully dumber!

BMJ paper on waiting times

I can only access the abstract, but it sounds good:

Between 1997 and 2007 waiting times for patients having elective hip replacement, knee replacement, and cataract repair in England went down and the variation in waiting times for those procedures across socioeconomic groups was reduced. Many people feared that the government’s NHS reforms would lead to inequity, but inequity with respect to waiting times did not increase; if anything, it decreased. Although proving that the later stages of those reforms, which included patient choice, provider competition, and expanded capacity, was a catalyst for improvements in equity is impossible, the data show that these reforms, at a minimum, did not harm equity.

A league table of their own

The Tories like to talk about giving citizens more information about public services so that change can be driven from below, rather than by ministerial diktat. But their policies don’t always manage to resist the top-down lure of we-know-best. So in a spirit of bipartisan helpfulness, I’d like to make a suggestion about this:

The Conservatives are proposing to give more weight in the exam league tables to "hard" A-level subjects, such as maths and science. Nick Gibb, the party's schools spokesman, said: "The disappearance of core academic subjects in many state schools is extremely worrying. We need to reverse this trend and ensure more children at least have the opportunity to take these subjects at A-level. That is why we are going to change league tables so they give more weight to the most valued subjects, more closely reflect the priorities of universities and employers and therefore prepare young people better for the future."

What puzzles me is how it will be decided (and by whom) what the “most valued subjects” are. The implication is that the government will decide. Poor show. Why not publish separate subject-based league tables and ignore the overall rating? There could even be a website that lets you input which subjects you’re interested in (chemistry, psychology and double maths, if you're me in 1993) and then produces ratings for local schools personalised to your needs.

Of course, this won’t get round the problems of overly narrow ‘teaching to the test’, of schools encouraging weaker candidates to drop out halfway through, and of the fact that raw exam scores reflect the quality of the intake rather than of the teaching, but these are pathologies endemic to the standard league tables. (On the third point, value-added and contextual value-added ratings are also produced, but these seem to be scorned as a leftist plot to do down ‘good’ schools, i.e. the schools that better-off parents send their kids to.)

Attitudes to public healthcare

Liam quotes Michael Prell, a US right-winger, on public healthcare:

You should manage your health. You should have the power to choose whichever option serves you best. The power over your health -- your very self -- should be in your hands. … What we desire is liberty. The freedom to choose. Domain over our own bodies. Ourselves.

Liam doesn’t share this view, but he does wonder about the dominant UK attitude to healthcare:

I know lots of people who have bigger houses than I do. Nicer clothes, better cars and more exotic holidays. … I also know some who do considerably worse on all these things. As a society we’re largely comfortable with those disparities. …
The reason for that comfort, it seems, is that on all these fronts some sort of acceptable minimum is in place. … We’re comfortable with the lottery of life provided nobody falls too far…
So why are British voters so distinctly uncomfortable with ‘safety-net’ provision in healthcare? Why can’t the focus of our debate be the adequacy of that minimum level to which everyone is entitled regardless of their means? Instead our debate (and the language we conduct it in) is focused on the ‘top end’ of healthcare provision and discussions around why everyone can’t have the best available treatment.

Two thoughts: first, I think we all do actually accept that resource constraints mean that the NHS can never provide the very best care to everyone. In fact, it falls a good way short of that. Yes, there’s political rhetoric that suggests perfectibility (as there is in most policy areas), but that’s hard to take seriously other than as a gesture towards ongoing improvement.

Second, Liam does have a point. Nigel Lawson wasn’t far wrong when he called the NHS Britain’s “national religion”. The thought of a ‘basic minimum’ level of healthcare makes us fearful of how low that might be in a way that the thought of having a basic minimum level of material possessions doesn’t.

The reason can actually be found in the quote from Prell: your health is about “your very self”, so poor healthcare is an existential threat while relative material poverty, however damaging, typically isn’t seen that way. It’s not about what we have, it’s about who we are, and I think that explains a lot of the resistance to treating healthcare as a commodity. The British public are likelier than Prell to favour the state over the market in this case.

Voters aren’t convinced that cuts are imperative

This post is about opinion polls on the public finances.

Thank you both for reading on.

Last week I noted a couple of polls showing that more people thought the Tories could cut government spending without harming public services than thought Labour could. A bit of a blow for Labour, really.

Now another poll, by Ipsos MORI, heaps more bad news on Labour:

• 62% agreed (27% disagreed) that “there are many public services that are a waste of money and can be cut”.
• 79% agreed (13% disagreed) that “making public services more efficient can save enough money to help cut government spending, without damaging services the public receive”.
• 40% thought that a Tory government “would be most effective in getting good value for the public money it spends” against 25% for Labour.

This confirms the picture from the other polls.

But all this – along with most political commentary on the matter – took for granted that reducing public spending is both desirable and necessary. The earlier YouGov poll did touch on this, though; it asked:

Many economists say that either taxes must rise sharply, or public spending must be cut sharply over the next few years in order to get Britain’s public finances in to balance. If a choice has to be made which would you favour?

12% favoured higher taxes, 31% lower public spending and 48% a mixture of the two.

The 48% is where Labour’s implicit position is: there are tax rises scheduled, as well as – if you look at the Budget small print rather than Gordon Brown’s witless evasions – cuts in spending. The Tories have been pitching strongly at the 31% of spending-cutters. The 12% who favour higher taxes would, you’d think, prefer the mix to the focus on spending cuts.

Back to the new Ipsos MORI poll.

People were given the statement: “There is a real need to cut spending on public services in order to pay off the very high national debt we now have”. Only 40% agree but 51% disagree. This suggests that promising painful action to get the deficit down quickly may not be worth as many votes as it is opinion columns.

A couple of caveats: the question leaves the timing of cuts ambiguous – people may think there’s no need to cut right now but that there will be in years to come. And the phrase “spending on public services” rather than just “public spending” might bias some people against agreeing to cuts.

But this suggests that ‘reduce the deficit’ isn’t many people’s top priority – especially in light of another question asked, which specifically began by stating: “Government borrowing is now at record levels, and will need to be reduced in future.” The options then given were “Government borrowing should be reduced, even if it means spending on key public services is cut”, picked by 29%, “Spending on public services should be maintained, even if it means increasing the income tax I pay”, picked by 38%, and “Things should be left as they are”, picked by 31%.

The latter two groups – totalling 69% – may be more receptive to Labour’s position that to that of the Tories, other things being equal.

So, while many people may think that the Tories would be more efficient at cutting non-vital spending, a good many more are very wary of cuts at all. This may be a patch of ground on which Labour could stand firm against a Tory ‘bigger cuts, faster cuts’ position.

But that could only possibly work if enough people are prepared to listen with at least partly open minds to a deeply unpopular government. Can Labour achieve that with Brown in charge? Or even at all?

Cut it out

My suspicion that shouting ‘Tory cuts’ isn’t going to do Labour much good in the coming months is supported by two recent polls.

First, YouGov asked whether people thought is was possible “in principle” to reduce public spending by up to 10% "by running our public services more efficiently, and without reducing the quality of public services or the level of welfare benefits".

33% thought it definitely possible, 44% probably possible, 12% probably not possible and 3% definitely not possible.

In practice, though, the spending cuts that parties would actually make were judged less optimistically – but this finding won’t help Labour. YouGov asked whether the Conservatives could reduce public spending by up to 10% “while preserving the quality of public services and the level of welfare benefits”. 27% thought yes, 49% no. But for Labour, just 17% thought yes and 63% no.

Second, ComRes asked: “Which party do you trust most to decide where public spending cuts should be made?” 31% picked the Tories, 21% Labour and 14% the Lib Dems.

Labour is absolutely stuffed unless it can convince people that it will protect services while the public finances are squeezed. And there’s no way it can do this while hamstrung by the clumsily implausible Brown/Balls line that there wouldn’t be spending cuts under Labour. This slippery nonsense, to quote Talleyrand, “is worse than a crime: it’s a mistake”.

Cuts and priming: Labour prepares for 2014

Contrary to popular criticism, the Labour leadership isn’t re-fighting the last election; it’s anticipating the next but one. It may not be the intention, but the latest wave of ‘Labour investment vs Tory cuts’ noise may be less useful at the coming election than it would be to a Labour opposition fighting the election after that.

People are loath to listen to a deeply unpopular government, and unlikely to trust what it says when they do chance to hear. So almost anything that Labour tries now is going to struggle to get traction with the public. But it could lay down a few markers that will help to set the political tone in years to come.

The next government will become unpopular because of what it will do to reduce the budget deficit. This imperative will be a painful constraint on either a Labour or a Tory government. The parties still differ, though: Labour would almost certainly cut services less, raises taxes more and reduce the deficit less quickly than the Tories. It’s risible for Ed Balls to imply that Labour won’t have to cut spending and for George Osborne to imply that the cuts would be the same under either party.

A Tory government, which does seem rather likely, would let public-sector cuts take most of the strain. Many Tories will secretly be very happy about this. Many voters will suspect this.

A Labour opposition, after a couple of years, will find a much readier audience for denunciations of cuts – particularly if the groundwork for such a campaign has been laid, which the current ‘Tory cuts’ attacks may be doing.

There’s a parallel between this and one of the Tories’ recent tactics: as well as opposing short-term stimulus such as the VAT cut, they’ve urged immediate spending cuts. This sort of fiscal tightening mid-recession would have been madness, and it’s our good luck that they haven’t had a chance to do it. But this makes more political sense if the Tories, knowing that they’ll not be in power before the recession is over, are making such proposals purely to create a general impression that public debt is bad and that it needs to be brought under control. This would prime people to be more receptive to the cuts in services that would follow under a Tory government.

Conversely, while Labour attacks on ideologically driven Tory cuts may make precious little difference at the moment, they could prime people to be more resentful of such cuts once underway, and to be more inclined to agree that Labour had indeed warned them about exactly this.

It’s a bit like Tony Blair and spin: he got regular criticism for being slippery throughout the 1990s, which many people nodded along to even while they generally supported him. Then, with the presentational shenanigans around the Iraq war, people turned against him all the more because it fitted with what they’d always been warned about. They’d been primed to suspect that he was a liar, and so, when it mattered, the charge stuck all the more damningly.

Labour is now priming people to believe that David Cameron is a cutter. It could well work, but perhaps not yet.

Public services productivity in perspective

‘Productivity’ is how many bangs you get for your buck; it’s not production, which is the total number of bangs put out.

It’s much harder to quantifiably define productivity for public services than for a profit-making private firm (as Nigel Stanley and Andrew R note), but the ONS has had a go in a new report.

Just for argument’s sake I’ll accept its methods as flawless (though they certainly aren’t, as the report concedes).

The headline finding is that inputs and outputs have both risen, but the former more so: productivity in public services fell by 3.2% between 1997 and 2007. The biggest single contribution to this was from healthcare, which recorded a 4.3% fall in productivity.

George Osborne reacted thus:

These productivity figures tell the damning story of Labour’s wasted years of spending. Gordon Brown poured billions of pounds into public services but blocked any attempt to reform them. The taxpayer has been left with massive debts and little to show for it at the end of this wasted decade.

He doesn’t, to his credit, claim that there has been no improvement in services at all - just little to show, which we can compare with the damning, massive waste. So I thought I’d do that.

The blue line shows the rise in healthcare output, the gold line shows the rise in inputs (both based at 100 for 1997) and the widening gap between them indicates falling productivity:


Osborne thinks the bad news far outweighs the good; I respectfully take the opposite view. Productivity is down 4.3% but the actual output of the health service is up 52.5%.

Lefties for effective public spending

Tom P, in a comment at Stumbling & Mumbling, says:

I wouldn't mind seeing a left-wing TaxPayers Alliance. Something that focused on genuine waste and inefficiency at taxpayers' expense, without being refracted through a right-libertarian ideology and suggesting that anything done by the public sector is inherently shit.

He’s right. It makes obvious political sense for right-wingers who see the state – even in a democracy – as an illegitimate, alien imposition that shackles the economy and stifles society to want to sneer at its every (debatable) failure, inefficiency and overreach.

But left-wingers who think there’s real need for what the state does ought to be keen to cut down on waste and inefficiency. If we think the public sector is so vital, then we should view the taxpayers’ money that funds it as sacrosanct. (Tom might be interested in The Other TaxPayer’s Alliance, although they seem to be mostly about critiquing the original TPA.)

Despite the right-wing caricatures, we don’t – not even Gordon Brown, not even Polly Toynbee – believe in taxing for its own sake. We believe in what can be achieved with the money raised in tax, and so we should want the maximum bang for the public’s buck. This is very different from being generically anti-state and highlighting waste as ground for reducing the scope of the public sector. It’s about maximising effectiveness in terms of good outcomes rather than merely minimising inefficiency.

The only worry (at least, for Labour) is political: in taking up the cause of making ‘cost savings’ – as the government intermittently does – would we help to legitimate the small-state brigade or cut the ground from under their feet? A lot depends on language. Phrases like ‘trimming the fat from the wasteful state’ have very different overtones from ‘making our public services more effective’.

Then again, I’m a bit of a verbose pseud and probably not the best person to be devising slogans…

Intelligence tests

The secondary school admissions process in England is still too complex for many parents, research claims.
…
"Despite improvements, our research suggests that the system is still too complex, particularly for parents and carers who are not highly educated or proficient in English, and especially where there are schools responsible for their own admissions," says report author, Anne West.

Well, why go to the effort of marking all those 11-plus exams to select bright kids when you can just use administrative complexity to select bright parents? As long as it runs in the family, you’re laughing.

Nixon goes to Texas

John Rentoul thinks that the Conservatives are likely to win the next election, and that the state of the public finances will make life very difficult for David Cameron:

He would have to put up taxes, and not just by stealthy goose-pluckings here and there. He would have to put taxes up by enough to wipe out any growth in voters’ disposable incomes for every year of his first term and probably for every planning year into the future.

Could be.

Rentoul then offers two possible consolations for the Tories, only one of which I think makes sense:

Most people know that whoever wins the election will have to put up taxes, and most of them would rather the tax-phobic Tories did it than “active state” Labour. Most people also know that public spending will have to be restrained for years to come, and most of them will have more faith in the Tories to do that than Labour.

I get the first part: it’s standard ‘Nixon-goes-to-China’ logic. If something unpleasant has to be done, best give the job to someone ideologically opposed to it, because they won’t go too far. (This logic isn’t perfect, though: there’s always the chance that they won’t go far enough.)

But the second part flips this reasoning 180 degrees: if public spending has to come down, isn’t it actually quite risky to get a party with a deep distrust of the state to make the cuts rather than a party that defines itself largely by its support for public services? There are plenty of Tories quite cheerfully dusting off their wish lists of cuts.

Of course, my argument on this second point is as fallible as Rentoul’s on the first; I only note the inconsistency.

Perspective shift

I’m not a sub-editor at the Daily Telegraph. But if I were, I might have rephrased the start of its lead story today:

Children allocated school places on 'roll of a dice'
Schools in a quarter of council areas are allocating places by lottery or "fair banding" – in which the school uses test results to deliberately select a proportion of pupils of poor ability.
The move could cause difficulties for affluent families who have dominated successful schools by buying houses within their catchment areas, often paying a premium of tens of thousands of pounds.

I would have put it this way:

Children allocated school places on ability to pay
A majority of schools are still not allocating places by lottery or "fair banding", preferring to stick with the system whereby affluent parents can buy their way into good catchment areas.
The lack of movement could continue to cause difficulties for poorer families who have been crowded out of successful schools by their inability to pay a premium of tens of thousands of pounds.

Then again, I guess the nice people at the Telegraph know their readership better than I do.

Something has to give

The most important part of David Cameron’s speech was not any of the extended passages where he told us that he had character and judgement, but this bit:

But we need fiscal responsibility too. So we will rein in government borrowing. You know what that means. The country needs to know what that means.

What it means is that lower spending will be more important than lower taxes. This should disappoint both the slash-the-state core vote and all those who have only floated over in the Tories’ direction after much assurance that public services won’t suffer.

But more substantially, this principle seems very shaky when you judge against it those aspects of Cameron’s “plan” that he’s deigned to tell us about.

The proposal that groups of people can set up new state schools if they don’t like the local ones has some fairly hefty upfront costs, and the supposed benefits are very distant. Paying private firms to get welfare claimants into work will cost more in the short term, and only save money in the long term if there are enough jobs around to significantly reduce welfare rolls.

The inheritance tax cut is clear and unambiguous; the levy on non-domiciles that would pay for it contains much devilish detail, as Alistair Darling can testify from experience. And the council tax freeze will definitely cost money, while the cuts in bureaucrats, consultants and communications that will pay for this are – as are all such proposals from oppositions – uncertain aspirations.

Time after time, the cost savings are much less certain, or much farther into the future, than the tax cuts that they’re supposed to pay for. The so-called ‘sharing the proceeds’ idea can in theory work on all three fronts (paying off some debt, cutting some taxes, avoiding actual public spending cuts – although even just slowing the rate of spending growth is likely to result in services suffering), but unless you have strong economic growth, it takes time to have much noticeable impact.

So if Cameron and Osborne are truly serious about reducing public debt – and they’ve gone to some length this week to convince us that they are – then either tax cuts are going to have to wait quite some time or public spending cuts are going to have to be larger and faster than the ‘compassionate’ rhetoric has suggested.

Perhaps another quote from the speech gives a flavour of Tory policies to come:

I will be asking all my shadow ministers to review all over again every spending programme to see if it is really necessary, really justifiable in these new economic circumstances.

One possibility: they regularly promise not to abolish tax credits. But they’ve avoided, as far as I know, promising not to dramatically cut them.

But an equivalent post could be written about Labour, and how Gordon Brown intends to pay for reducing poverty further, expanding nursery provision, and so on. Whoever wins the next election is going to have less fiscal room for manoeuvre than they’d like.

Labour has been serially worried about being seen as the party of ‘tax-and-spend’; likewise the Tories about being seen as congentical cutters. Despite the many attacks they exchange, neither quite dares to engage the other openly on this central issue. But while the differences between the parties are neither as overt nor as large as in the 1980s, their opposing instincts are still unmistakable.