A level grades are a blunt instrument

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The report last week that the UK Government is being ‘forced’ to fund more places in English universities to train doctors and dentists as a result of ‘grade inflation’ raises more questions than it answers. At a simplistic level, the problem is easily understood – if pupils get higher grades at A level than would have been the case had they sat exams, then more people will meet the grade-based criteria for entry onto the courses. But if those people are suitable to become doctors and dentists under one system, what is it about sitting exams which would somehow have made them unsuitable? If Pupil X gets an A* when assessed by his or her teachers but ‘only’ a B in an exam, why is the same pupil, with the same knowledge and abilities, doctor material in the first case but not in the second? How do we ‘know’ that pupils with an A* grade obtained in an examination can go on to be successful doctors and dentists, whilst those with a B cannot?

Using grades obtained by an adolescent in his or her last year at school as an absolute determinant of his or her future career prospects seems almost designed to waste a lot of potential talent. Clearly, the grades obtained by pupils at A level tell us something about how much work and effort those pupils have expended, how much knowledge they have accumulated, and how likely they are to apply themselves to their work at university, but they aren’t – and can’t be – as definitive as the way in which they seem to be being used. Exams are in some ways a blunt instrument; they are not an assessment method which suits all, and the circumstances in which a pupil finds him or herself on one particular day may not be representative of that pupil’s general character and approach. And although all of us want those providing our medical care to have the necessary knowledge and expertise, it’s not at all clear that the precise grade obtained in A level Biology is a particularly good indicator of that.

We know that there is a shortage of doctors and dentists in the UK, and that the UK is simply not training enough to meet our needs. We also know that this is a problem which cannot be resolved quickly, given the length of time it takes to train people. But neither is it a recent problem: it is a long-running problem under successive governments, whether Tory or Labour, which share an ideological commitment to competition and markets. What this so-called ‘grade inflation’ underlines is that that shortage is not a result of a lack of people wanting to become doctors and dentists, nor is it a question of their suitability for the role. It is the result of decisions by successive governments to limit the number of places, largely on financial grounds. They have made a deliberate choice to train fewer than we need and recruit people trained outside the UK instead, in the process not only rejecting many of those who want to follow careers as doctors and dentists and have the ability to do so, but also depriving other countries of the benefits of their own investment in training. Any government which was serious about providing proper health care for its citizens would start by looking at how many people it needs to train to provide that care and then provide enough places to meet that need, rather than setting a financially-driven cap on the number of places and filling those places through market-style competition. It is yet another example of a government decision driven by ideology rather than need.

Failing to understand

Tweet From the outset, Brexiteers like David Davis have consoled themselves with the belief that the EU would roll over at the last moment and give the UK whatever it wants.  It’s a belief to which they are still clinging, alongside the fiction that no deal would hurt the EU more than it would hurt us.  The idea that the EU ‘always’ compromises at the last moment is a pervasive one, and not without some truth.  The reality, however, is that this generally applies only in internal negotiations between the member states, when compromise is required to get everyone on board.  And that’s natural enough – the interests of member states all need to be considered and allowed for as far as possible.  However, when it comes to dealing with ‘third parties’ – which is what the UK voted to become – the negotiating stance is much tougher, and the EU is quite willing to walk away without agreement.  The assumption that the Brexit negotiations fall into the former category rather than the latter is just another example of ‘cakeism’ – the idea that the UK can have the advantages of being treated as a member whilst avoiding any of the obligations.

It is, as a result, a serious mistake.  The Taoiseach, Leo Varadkar, has made it clear that anyone expecting that the EU27 is simply going to blink and change the withdrawal agreement is in for a nasty surprise.  That’s the ERG and half the cabinet then.  The assumption that it could be otherwise owes more to the Anglo-British not-nationalists-at-all sense of exceptionalism than to a hard analysis of where the EU sees its best interests.  And that latter point is key.  Perhaps it’s understandable after 45 years of membership during which the UK has become accustomed to trade-offs between fellow members, and has had no real negotiating capacity or responsibility of its own, but there has been a complete failure on behalf of the UK government to do something which is absolutely fundamental to any negotiation – understand the motivations and concerns of the ‘other side’.

May and her team – let alone the lunatic fringe of her party – have managed to give the impression (probably because it’s true) that they are completely deaf to what is being said to them, and lack all empathy with the EU27.  They hear what they want to hear and see what they want to see as though there is no possibility of any objective reality outside their own perceptions.  Even this week, we have May still saying that the talks are going well whilst the EU27 have stonewalled her and repeatedly stated that there is no possibility of giving her what she’s asking for (not least because she doesn’t really know anyway).  There’s a complacent assumption that they will budge eventually – the UK just needs to play a waiting game and hold its nerve.  The PM herself continues to pretend that it’s possible both to sign an agreement containing an open-ended backstop and at the same time find a form of words which says it isn’t open-ended.

The ERG members are unlikely to accept anything that doesn’t get rid of the legal commitment to the backstop, and I can understand why.  Any backstop is only intended by all involved to be only temporary, and it doesn’t really matter how many ways that is stated; the point is that getting out of it, no matter how determined all concerned are to do so, is contingent on getting a trade agreement which does not require the backstop.  The ERG and their friends have no intention – ever, in any circumstances – of agreeing to the sort of trade deal implied by that.  And it is that – the intransigence of those determined to seek a trade deal of a very different nature – which turns the backstop into a potentially long-term arrangement.  It’s not the Irish or the EU causing the problem; it’s the determination of Brexiteers to exit, completely and permanently, from the single market and customs union, interpreting the referendum result in a very specific way.

They claim that it is about free trade; that freed of the EU, the UK can negotiate its own bilateral trade deals across the world.  There has always been something very strange about the idea that the way to get more free trade in the world is to leave the world’s largest free trade area (an area which expands further as the EU pursues its goal of negotiating ever more agreements) and sign less favourable bilateral deals.  Whatever that is about, it isn’t global free trade.  I’ve suspected from the beginning that it’s more about ideology than trade.  At the heart of the EU’s approach is co-operation and agreement amongst the members to gradually expand the envelope of free trade across the globe.  At the heart of the Brexiteers’ position is the demand that countries should compete aggressively with each other by offering different terms of trade.  They believe (wrongly in my view) that the UK can do better by competing than by co-operating.  And that isn’t just about having a distorted view of the UK’s place in the world, it is also about an ideological commitment to competition.  Sadly, it’s a commitment shared by the leadership of the Labour Party.

Competition is ideological

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Economists can face difficulties in analysing what happened in the past before records became as detailed as they are today, and often depend on extrapolation from other data.  Despite that, there is a general agreement that India was responsible for around 25% of the world’s industrial output in 1750 and that the proportion fell to around 2% by 1900.  If the detail of the figures is inevitably subject to debate, the cause of the fall is even more so (there’s an interesting analysis of both the figures and the causes here).

But as the history of the British Empire shows, globalisation of trade is not as new as it sometimes appears, and the balance can swing from one country or region to another over time.  For India, the imposition of Imperial rule, at the same time as the Industrial Revolution in Britain, coincided with a switch of manufacturing from India to Britain as the Indian economy became one supplying raw materials rather than finished goods.  It's not hard to see a causal relationship there.

In short, India lost much of its industry and the key economic decisions leading to that were taken elsewhere.  It’s tempting to see last week’s announcement on the future of steel-making in the UK as a sort of mirror image of that process – de-industrialization of the UK as a result of decisions taken in India.  That’s a bit over-simplistic, of course, but there is a more general parallel.  In the 18^th and 19^th centuries, there was a flow of economic power from places such as India and China to Western Europe in particular – and that flow is now increasingly moving in the opposite direction.  And just as others seemed to be powerless to prevent the flow in the past, governments here seem to believe themselves largely impotent in the face of the reverse threat today.

Does it have to be so?  The rebalancing of the world’s economy, with wealth shared more equally, which is underway is certainly long overdue, and those of us supporting such a move have to recognise that any such readjustment is likely to involve a certain amount of pain.  But that pain is exaggerated by the insistence – shared by all parties – that the size of the respective shares must be decided by competition rather than by co-operation.  Our politicians seem mostly unable to conceive of a world where countries and peoples work together for a fair distribution of the world’s finite resources rather than a world full of cut-throat competition in which all participants seek to maximise their own share.  But that’s an ideological driver, not an economic one.

Competition and races to the bottom

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One of the reasons which have been given for not devolving Corporation Tax to the Assembly is the fear that it could lead to a ‘race to the bottom’ as the countries of the UK compete with each other to attract industry by lowering taxation.  And one of the arguments put forward by the Tories for devolving Income Tax to Wales is that it would allow Wales to compete with the other countries of the UK by lowering income tax rates.

I find it difficult to see much difference between a ‘race to the bottom’ and ‘competition’ in this context.  The potential effects certainly look very similar.  The point, however, is surely that for devolution of taxation to work, it has to include a sufficient range of taxes so that governments can raise money using taxes in different combinations to suit differing circumstances.  Picking on individual taxes seems almost guaranteed to limit the usefulness of the power, since reducing them simply reduces revenue, in the short term at least.

The Tories genuinely seem to believe that promising to reduce the level of income tax is a vote winner which will transform Wales from a country where the Tories have a respectable and fairly consistent level of minority support to one where they will somehow sweep the board.  I say ‘seem’; but I wonder.  If they were really confident that this approach was going to transform their fortunes, they would have had more sense than to make it dependent on a referendum which is unlikely to be called any time soon and unlikely to inspire much of a turnout if it does get called.

Perhaps it’s some sort of double bluff.  They know that the amount by which they could reduce income tax in isolation in Wales alone is very limited; they also know that the number of voters likely to be swayed by it is not large either, and they just want to sound like a party of lower taxes, knowing that they’ll never have to deliver on any promises.  But is talk of lower taxes really the vote winner that they believe?

The Tories’ pitch on taxation is based on the assumption beloved of economists which is that we are all, ultimately, selfish and will act in ways which maximise our own individual benefit.  Whether that’s a valid assumption is an open question; the evidence is mixed.  Opinion polls seem to suggest that many people would be prepared to see taxes increase if it meant that the money was spent on things dear to their hearts.  But there has also been some research suggesting that the way people talk when asked openly and the way that they vote in the privacy of the ballot box don’t always match.  Public altruism can sometimes hide private selfishness.

The Tories certainly believe that their take on the motivation of the electorate is valid.  Given the willingness of the Labour Party to accept the same assumption, much of the UK’s political debate is framed within the assumption that we are all motivated by selfish and competitive impulses.  It seems to me that that’s what some people mean when they refer to ‘post-ideology’ politics – but all it really means is that the main political parties now share the same ideology.

Right problem, wrong solution

Tweet In his New Year's message earlier this week, the Prime Minister said that the UK is competing against countries like China and India for jobs, and his implication was that those seeking the jobs need to bear that in mind and lower their expectations in terms of their pay and conditions. His statement demonstrated to me that he understands the underlying problem at some level, even if he's only dimly aware of that understanding; what he's unable to understand is that there is more than one way of responding to it.

The problem, which is implicit rather than explicit in his words, is that the current economic structures are simply unable to provide enough employment at a decent level for all those in the world seeking it. I agree; but it doesn't mean that the only response is some sort of a race to the bottom, that we have to compete with lower-wage economies for such employment opportunities as might be available.

If the pie isn't big enough to go round, fighting over the crumbs is far from being the only possible response. Indeed, whilst some might try to suggest that it is the only possible response, in the long term it's a response which helps almost no-one. Making the pie bigger would be a better response, and sharing the pie out more fairly would be a pretty good one too. Both are better than merely trying to redistribute the pie – particularly in the direction which Cameron seems to be proposing, whish is, on a global scale, from the have-nots to the haves.

Both of those alternative responses, however, require a co-operative approach rather than a competitive one towards the allocation of resources between people and countries. That's not an approach which we are going to see any time soon from politicians such as Cameron, unfortunately. Competition is almost a fetish for many of them; it's all that they understand. For the winners (and Cameron, like most politicians, is amongst life's winners), competition works of course. But it doesn't – and never can – work for everyone. A system based at its heart on allocating access to finite resources through a process of competition will always have more losers than winners.

And that's the problem with what Cameron said – his world view depends, ultimately, on most of us losing so that a minority can win.