John Watson was a partner in a City legal practice and formerly edited the online magazine Shaw Sheet.
Whether Rachel Reeves adds betting expertise to her ‘undoubted’ skillset – she was of course a junior chess champion – the budget represents a giant wager.
We all know that the key to national revival is an increase in GDP.
Will measures such as the increase in the minimum wage achieve this by making work more attractive or will the combination of French style changes to employment law and the increase in employer’s national insurance stifle any economic revival or, even worse, push us further into the doldrums?
As one who once sat at the feet of the great JK Galbraith – no I do not pretend to be his intellectual disciple. I sat at his feet literally in an overcrowded chamber at a Cambridge Union debate – I would like to be able to give you an answer but in truth I have no idea and I’ll bet that Rachel the chess champion is beset by doubt too. What she really cannot welcome is things which skew the battlefield against her and clearly the VAT and business rates to be suffered by private education fall into this category.
The logic is alarmingly simple. To prosper as a country we need a highly educated workforce. At the moment the private sector is as a whole the most successful engine of education we have. Mess it up and the national score for education must fall unless by doing so you replace it with something else. “Aha” say our friends on the left. “Apply the tax in spending more on the state sector and there is your compensation.”
We have seen that argument before when the grammars were abolished and the saving was invested in comprehensives. It was piffle then and it is piffle now.
To penalise something which is first rate in the hope of building up something which often is not, seldom adds to overall quality. Add to that the fact that a major reason for the success of private education is that parents who pay demand quality from the school and effort from their offspring whereas the state system misses out on those levers and you can see why these measures carry an economic cost.
I don’t suppose that Rachel misses this for a moment but then as Chancellor she is part of a government which has to please its MPs and supporters. Private education is seen as unfair which indeed it is – and that, to many, is more important than producing the national wherewithal to support the less fortunate. How her teeth must gnash as she sees the recovery by which she will be judged being jeopardised by this obviously political decision.
But for all this, the current split between the public and private sectors is not satisfactory. If the private sector contains institutions which form the cream of our educational sector, would it not be more sensible if the benefits were available to the most able children and not just those whose parents can pay the fees? Why not exempt from VAT those schools which offer above a certain proportion of scholarship places?
Of course that would not be enough to fund scholarships by itself. Funds would have to be found elsewhere. The state could come in with a subsidy equal perhaps to the average costs of education in a state school and charities exemptions could be adjusted to divert gifts from new buildings to scholarship endowments. Of course it would all be complex but the result of better educating the nation’s top brains is well worth playing for.
That still however leaves us with a divide.
An elite which had been privately educated split away from the main system is not particularly healthy. And yet if you focus on the success of private education as being largely down to the fact that parents make a contribution you begin to see a solution. What about a whole lot of intermediate schools where either the parents make a contribution less than for the fully private or the children themselves have to earn their place by passing exams? Either would ensure that the education provided was valued and would obtain that “leverage of commitment” which is the foundation of success.
As a new reforming government Labour should be thinking about all this and seeking for ways of preserving the best features of the private sector and making use of them for the benefit of the country as a whole.
But will they? Will they, hell? The dinosaurs of the left would rather “challenge unfairness” than see the overall wealth of the country increase, would sooner see the poor left in the gutter than make the best of a system which will reward talent, would sooner stack the deck against Rachel’s project than risk creating a new elite. Yet these dinosaurs are the activists to whom even chess champions have to listen.
“O brave new world that has such people in it”
