Michael Gove's amendments to the original EMA proposals were greeted by shrieks of "U turn" from the Labour Party. I find this regrettable. It would indeed be nice if governments always got things right at the first go, but when they do not and are prepared to listen and be flexible, in a grown up democracy that should be welcomed rather than mocked.
The arguments for and against paying some students to continue their education beyond 16 are complex. My initial reaction to the EMA was the “grumpy old man” one that no-one paid me to stay on into the sixth form and my parents were certainly not rich. Indeed it’s interesting how perceptions have changed. In my grandparents' day children were usually required to go out to work to supplement the family income. In fact one of my father’s sisters who won a scholarship to the grammar school (that would be in the 1900s) was forced to leave at 13 because the family “needed the money” she could earn in the mill (at which humble level she stayed for the rest of her working life.) Although, in the 1950s my parents never put any such pressure on me it was clear that they regarded it as a sacrifice on their part to allow me to stay on at school.
So what’s their problem today, when we are approximately four times richer? Even families on benefits are probably, in real terms rather than comparative terms, far better off then we were.
These allowances are available to all students where the family income is below £30 000 (though I suspect that the full amount is not available to those at the top of the range.) Maybe I’ve been retired so long (since 1988) that I’ve lost track of the way salaries have moved, but, since the average wage is around £24 000 a year, £30 000 a year doesn’t strike me as the bread-line.
Still on the "grumpy" tack, the evidence is that 90% if the recipients would stay on in education anyway, so there is a heck of a lot of what economists call “deadweight loss.” In an article by David Blanchflower in the Guardian on 21st Jananuary (“Cutting the young adrift”) he claims that the evidence on which this 90% is based is rather flimsy, but one interpretation would be that it’s only 88% - still a lot.
Finally on this tack, a friend who has worked more recently than I with the 16 -19 sector, and who seems to me to have generous liberal instincts, says that for most of them the EMA is just mobile phone money. I rarely use my mobile phone because I feel calls are far too expensive. Better to wait till you get home and use the land line, on which all internal calls are free with the Phone Co-op.
On the other hand, Polly Toynbee, in numerous articles, claims that for “many” studentsthe EMA provides invaluable money for transport and even food as free school meals are no longer available for post-16s (is that right, even if you’re in an 11 to 18 school?) It also provides an incentive to work hard because the allowance can be discontinued for absenteeism, lateness and lack of homework.
In addition to observaions and experiences in this coutry I cannot help comparing the experiences of young people in this country with those of the students in this age group whom I taught in Papua New Guinea. Many came from isolated areas with virtually no cash economy. They or their relatives often had to walk many miles week after week to the nearest market with their produce and then sit patiently besides tiny piles of potatoes or other vegetables which sold at 20c a time in order to raise the "token" $20 fee to attend Sixth Form College.
The new proposals seem more efficiently targeted and cater for the most needy cases. Of course, in theory I prefer universal rather than means tested benefits, but free school dinners etc are already means tested so this is only a development of an existing scheme. Free local bus and train passes for all in full time education would be a sensible universal benefit which would get around the travel problems without much "deadwigth loss, " since the offspring of the rich would use their motor bikes and cars. As with so many other "welfare benefit" propblems, a lot of the difficulties would disappear if the Green's proposal of a Citizens' Income were adopted. If everybody gets it then no-one can grumble.
Thursday, 31 March 2011
Wednesday, 30 March 2011
Two own goals in higher education.
Tuition fees were increased under the pretext that the allegedly parlous state of the public finances made this move essential. It was pointed out in this blog that, since the existing fees are paid “up front” by students (or their parents) and that under the new scheme fees would not be repaid until later, then the current fees would have to be paid by the government, thus putting the current public finances into even deeper deficit. This obvious fact was little commented on elsewhere.
Now that more universities than anticipated are to charge the “exceptional” £9 000 per year top fee, the government is alarmed that the new scheme is to cost them up to £1bn more than expected over a four year period. It is feared that this “unexpected” expenditure will be recouped by cutting university funding in other areas.
At the same time, by reducing the number of visas for foreign students in order to curb immigration the government is cutting down a valuable source of income for universities. Britain’s higher education still has international prestige and, as well as providing valuable funds for universities, is a valuable source of foreign currency earnings.
Now that more universities than anticipated are to charge the “exceptional” £9 000 per year top fee, the government is alarmed that the new scheme is to cost them up to £1bn more than expected over a four year period. It is feared that this “unexpected” expenditure will be recouped by cutting university funding in other areas.
At the same time, by reducing the number of visas for foreign students in order to curb immigration the government is cutting down a valuable source of income for universities. Britain’s higher education still has international prestige and, as well as providing valuable funds for universities, is a valuable source of foreign currency earnings.
Friday, 25 March 2011
The big society, 1960s
As part of some long-overdue clearing out I have come accross the log book of a hike I organised, with a female colleague and her husand, in the mid-6os during a very educative spell as a primary school teacher.
We took eight girls and eleven boys aged 10 or 11 for a five day walking holiday in the Yorkshire Dales during the Whitsuntide holiday (which in those days really was held at Whit and had not morphed into the Spring Bank Holiday which we're now thinking of abolishing.) We travelled by train (a first for several children) and bus, stayed at three diferent Youth Hostels, and the total cost was £3-10s-0, which included 10/- (50p) pocket money. Participants had to pay a 10/- deposit and a "bank" was opened for weekly payment towards the balance. A discount was arranged with a local shoeshop for the purchase of "stout shoes."
In all we walked 50 miles, inculding a one day 14 mile treck from Kettlewell to Stainforth which we had expected to do at least partly by bus, but everyone seemed in good heart so we walked. We had planned for a day of rest and recuperation in the middle but were enjoying walking so much that we climbed Great Whernside
(2 310 feet)instead. The children record our many "adventures" and, perhaps surprisingly, are very enthusiastic about the food. We went to church on the Sunday and outnumbered the regular congregation. We seem to have filled in our spare time and worked off surplus energy by swimming in rivers and innumeralbe games of rounders until the boy in charge left the bat left it in the middle of a forrest.
There are no photographs in the log book as none of us had cameras, never mind moblie phones, BlackBerries or other fnacy gadgets. We did have an emergency contact list for parents. Most of these were to work-places as few people had phones in their homes. Happily most families seem to have had at least one parent in a job: unemplyment was about 250 000 compared with 2 500 000 today(plus another 2.5m on disability benefits.)
Since my female colleague's husband was unable to join us until the the second or third day for part of the time there were only two adults in charge of 19 children, a ratio which would not pass muster today. None of us had any formal qualifications in mountaineering, navigation, first aid or life-saving, none of us was CRB checked as that hadn't been intrduced, and no one had invented risk assessments. There is no record of any allergies or special dietary needs. And, of course, the whole event took place in the holdiay and none of the adults was paid: fairly typical of school "adventure" events in those days.
I do not disupte the necessity of some of the regulations which have since been introduced but I do suspect they have curbed a lot of the initiative and fun. To transfer thes reflections to another context, when businesses complain about over regulation I tend to take the view that one person's "red tape" is another's health and saftey. But maybe there is a case for being a bit more relaxed, partiularly in the case of small businesses.
.
We took eight girls and eleven boys aged 10 or 11 for a five day walking holiday in the Yorkshire Dales during the Whitsuntide holiday (which in those days really was held at Whit and had not morphed into the Spring Bank Holiday which we're now thinking of abolishing.) We travelled by train (a first for several children) and bus, stayed at three diferent Youth Hostels, and the total cost was £3-10s-0, which included 10/- (50p) pocket money. Participants had to pay a 10/- deposit and a "bank" was opened for weekly payment towards the balance. A discount was arranged with a local shoeshop for the purchase of "stout shoes."
In all we walked 50 miles, inculding a one day 14 mile treck from Kettlewell to Stainforth which we had expected to do at least partly by bus, but everyone seemed in good heart so we walked. We had planned for a day of rest and recuperation in the middle but were enjoying walking so much that we climbed Great Whernside
(2 310 feet)instead. The children record our many "adventures" and, perhaps surprisingly, are very enthusiastic about the food. We went to church on the Sunday and outnumbered the regular congregation. We seem to have filled in our spare time and worked off surplus energy by swimming in rivers and innumeralbe games of rounders until the boy in charge left the bat left it in the middle of a forrest.
There are no photographs in the log book as none of us had cameras, never mind moblie phones, BlackBerries or other fnacy gadgets. We did have an emergency contact list for parents. Most of these were to work-places as few people had phones in their homes. Happily most families seem to have had at least one parent in a job: unemplyment was about 250 000 compared with 2 500 000 today(plus another 2.5m on disability benefits.)
Since my female colleague's husband was unable to join us until the the second or third day for part of the time there were only two adults in charge of 19 children, a ratio which would not pass muster today. None of us had any formal qualifications in mountaineering, navigation, first aid or life-saving, none of us was CRB checked as that hadn't been intrduced, and no one had invented risk assessments. There is no record of any allergies or special dietary needs. And, of course, the whole event took place in the holdiay and none of the adults was paid: fairly typical of school "adventure" events in those days.
I do not disupte the necessity of some of the regulations which have since been introduced but I do suspect they have curbed a lot of the initiative and fun. To transfer thes reflections to another context, when businesses complain about over regulation I tend to take the view that one person's "red tape" is another's health and saftey. But maybe there is a case for being a bit more relaxed, partiularly in the case of small businesses.
.
Thursday, 24 March 2011
The real big society
Last week I was flattered to be chosen by my U3A class to propose the vote of thanks to our lecturer at the end of our course. I should have liked to have been elceted to perform this imortant task by the Alternative Vote or some similarly sophisticated method but in fact was approached by "men in dark suits" (actually two ladies in black cardigans)and told "It's you", rather in the manner that leaders of the Tory Party used to "emerge."
Our classes were fortnightly and our lecturer produced for each one a fluent, searching and erudite accout of some aspect of 18th Century British social and economic history. He is a good friend of mine and I know for a fact that he has frequently missed atttractive social alternatives, partiularly jazz concerts, in order to spend time preparing materials outside his normal area of interest. Our whole class (some of whom were attending for the fourth year) agreed that he gave excellent value.
Of course, as with all U3A teachers, he received no money for his services. Actually, that's not stricly true: he was given £30 at the beginning of the session for "expenses." There are two things of interest here. Firstly the size of the payment: cetainly not millions, nor thusands nor even hundrends. Secondly, the fact that the payment was made at the beginning of the course, not at he end for reaching some artificial target. Our lecturer was trusted to do a good job and he did. And he'll do it again next year.
This is just one example, not only of the thousands of people who work voluntarily, as youth leaders, in drama roups, gardening clubs and the numerous other voluntary societies which make up our already existing "big" society, but also the millions in employment who do their best for an agreed wage without the incentive of performance bonuses. All of these simply "perform."
Perfomance bonuses distort because they reward the recipient for reaching targets which rarely reflect the over-all purpose of the function. Examples are legion: in secondary eduction the concentration on A to C pass rates which force more attention on the marginal C/Ds and less on the rest; inappropriate sales of insurance policies and mortgages because they provide a bigger commission for the seller, and most damaging of all to date, the bankers rewarded for short term profits rather than long term stabliity.
I should like to see all bonuses scrapped and all workers at whatever level engaged to do their best at their particular job for an agreed wage and trusted to get on with it.
Our classes were fortnightly and our lecturer produced for each one a fluent, searching and erudite accout of some aspect of 18th Century British social and economic history. He is a good friend of mine and I know for a fact that he has frequently missed atttractive social alternatives, partiularly jazz concerts, in order to spend time preparing materials outside his normal area of interest. Our whole class (some of whom were attending for the fourth year) agreed that he gave excellent value.
Of course, as with all U3A teachers, he received no money for his services. Actually, that's not stricly true: he was given £30 at the beginning of the session for "expenses." There are two things of interest here. Firstly the size of the payment: cetainly not millions, nor thusands nor even hundrends. Secondly, the fact that the payment was made at the beginning of the course, not at he end for reaching some artificial target. Our lecturer was trusted to do a good job and he did. And he'll do it again next year.
This is just one example, not only of the thousands of people who work voluntarily, as youth leaders, in drama roups, gardening clubs and the numerous other voluntary societies which make up our already existing "big" society, but also the millions in employment who do their best for an agreed wage without the incentive of performance bonuses. All of these simply "perform."
Perfomance bonuses distort because they reward the recipient for reaching targets which rarely reflect the over-all purpose of the function. Examples are legion: in secondary eduction the concentration on A to C pass rates which force more attention on the marginal C/Ds and less on the rest; inappropriate sales of insurance policies and mortgages because they provide a bigger commission for the seller, and most damaging of all to date, the bankers rewarded for short term profits rather than long term stabliity.
I should like to see all bonuses scrapped and all workers at whatever level engaged to do their best at their particular job for an agreed wage and trusted to get on with it.
Tuesday, 22 March 2011
Budget Obsessions
Although I have taught economics for nearly half a century, and media attention to the budget should have been a help in interesting my students, I have always been, and remain,embarrassed by the national obsession with it. The only important thing about tomorrow's budget is how it will affect the macro economy: will Mr Osborne take a Keynesian view and use public spending and cuts in taxation to stimulate the economy, growth and employment. We already know the answer: he won't.
Yet on Thursday the papers, the saintly Guardian being no exception, will be full of naval gazing tables telling us the gains and losses to the single young, the family with two children, the single and married pensioner etc. These changes will be minuscule: a few percentages here and there which are hardly likely to make a serious dent in the comfortable lifestyles of the overwhelming majority. And we already know that Mr Osborne, along with his Labour and Liberal Democrat counterparts, will lack the political courage to make the comfortable share just a little bit of our wealth so that those seriously affected by the recession are adequately compensated.
According to a news bulletin on BBC Radio 4 today, Reginald Maudling brought joy to the nation in his 1953 budget by increasing the sugar ration so we could all bake more cakes to celebrate the coronation. That should put today's alleged austerity into perspective.
From this pathetic self-obsession we need to lift our political gaze to the solving of the really difficult problems: the arms trade which facilitates death and destruction, global poverty and climate change, to name but three.
Yet on Thursday the papers, the saintly Guardian being no exception, will be full of naval gazing tables telling us the gains and losses to the single young, the family with two children, the single and married pensioner etc. These changes will be minuscule: a few percentages here and there which are hardly likely to make a serious dent in the comfortable lifestyles of the overwhelming majority. And we already know that Mr Osborne, along with his Labour and Liberal Democrat counterparts, will lack the political courage to make the comfortable share just a little bit of our wealth so that those seriously affected by the recession are adequately compensated.
According to a news bulletin on BBC Radio 4 today, Reginald Maudling brought joy to the nation in his 1953 budget by increasing the sugar ration so we could all bake more cakes to celebrate the coronation. That should put today's alleged austerity into perspective.
From this pathetic self-obsession we need to lift our political gaze to the solving of the really difficult problems: the arms trade which facilitates death and destruction, global poverty and climate change, to name but three.
Thursday, 17 March 2011
No to a No-Fly Zone
Coalition ministers are forever moaning that the economic situation, (created by Labour!) requires them to make "difficult decisions." In fact there are no difficult decisions to be made on the economy. Britain is a wealthy country, vastly richer than in the days of our parents and grandparents, and all that is needed is a bit of generosity on the part of the haves to compensate the have-nots who are bearing the brunt of the recession created by the greed and insufficiently regulated market forces. All that is lacking is a bit of political honesty and courage.
The question of a no-fly zone over Libya poses genuine difficulties. On the one hand it is callous to stand idly by while a murderous dictator slaughters his own people. On the other hand "Western" involvement on the side of the rebels will probably strengthen Gaddafi's hand by substantiating his claim that the uprising is inspired by foreigners anxious to get their hands on Libya's oil, and a no-fly zone will almost certainly be insufficient and lead to the involvement of troops on the ground, for which the precedents of Afghanistan and Iraq present a frightening warning.
Whatever the pros and cons, no "Western" military intervention should be made without a UN mandate. It is alarming to hear British politicians blatantly ignoring the lessons of Iraq.
In the short term the best solution is to persuade the Arab nations, probably led by Egypt, to take the intervention necessary to bring a cease-fire to the civil war. In the long term we should stop supplying such regimes with arms in the first place.
The question of a no-fly zone over Libya poses genuine difficulties. On the one hand it is callous to stand idly by while a murderous dictator slaughters his own people. On the other hand "Western" involvement on the side of the rebels will probably strengthen Gaddafi's hand by substantiating his claim that the uprising is inspired by foreigners anxious to get their hands on Libya's oil, and a no-fly zone will almost certainly be insufficient and lead to the involvement of troops on the ground, for which the precedents of Afghanistan and Iraq present a frightening warning.
Whatever the pros and cons, no "Western" military intervention should be made without a UN mandate. It is alarming to hear British politicians blatantly ignoring the lessons of Iraq.
In the short term the best solution is to persuade the Arab nations, probably led by Egypt, to take the intervention necessary to bring a cease-fire to the civil war. In the long term we should stop supplying such regimes with arms in the first place.
Wednesday, 16 March 2011
The Tax Gap
It used to be argued that death duties were a "voluntary tax" since those liable to them were rich enough to employ clever accountants who worked out ways of avoiding paying them. A report published this week indicates that much the same is true of Corporation Tax. The report suggests that something like half a million companies disappear from the register each year, and the total tax unpaid is probably in the region of £16billion. HMRC apparently lacks the resources to chase them up. Bizarrely, HMRC has shed some 30 000 staff in recent years and a further 15 000 are to go before 2014 under the coalition spending cuts.
According to the report, the annual cost of running HMRC £4.4billion. How crazy to further emasculate the goose which could collect the golden eggs.
A reminder that HMRC itself estimates that the total of uncollected tax from all sources in the last financial year reached £42billion, so 9% of all taxes. To be clear, that is uncollected, not including tax avoided or evaded.
It is shameful to live in a country which puts so much energy into hounding so-called benefits cheats, particularly the mentally and physically ill, and is so "relaxed" about unpaid taxes.
According to the report, the annual cost of running HMRC £4.4billion. How crazy to further emasculate the goose which could collect the golden eggs.
A reminder that HMRC itself estimates that the total of uncollected tax from all sources in the last financial year reached £42billion, so 9% of all taxes. To be clear, that is uncollected, not including tax avoided or evaded.
It is shameful to live in a country which puts so much energy into hounding so-called benefits cheats, particularly the mentally and physically ill, and is so "relaxed" about unpaid taxes.
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