Funding gaps and outrage

Tweet The howls of outrage from those more interested in having a stick with which to beat the government than they are in either statistics or education are hardly a surprise.  The Lib Dems, in particular, have been obsessed for years with the alleged 'funding gap' between schools in Wales and schools in England (although both Plaid and the Tories have been known to join in from time to time as well).

The lack of information this year can hardly have come as a surprise to anyone, however - not if they'd read beyond the headlines last year, at any rate.  Because last year's report (available here) clearly stated:

What happens next year?
If England are able to provide education outturn expenditure for 2010-11 on a comparable basis with the new local authority responsibilities removed then the outturn data could be compared.
The position of comparability of budgets for 2011-12 is not yet clear due to further changes in the way education is funded in England but we will be exploring this with the Department for Communities and Local Government.

I would have hoped that the absence of a meaningless high level comparison of the Welsh average and the English average might lead people to start to concentrate on the substance of the education problems in Wales instead.  Hoped, but not expected.

Graduate premiums

Tweet This report from an investment advice company makes for interesting reading.  It’s long been claimed that possession of a university degree leads to a boost in lifetime earnings, but the level at which this report sets that boost is much higher than previous estimates.  Government ministers have talked in the past about the premium being around £100,000, but this report suggests that it’s at six times that level – a cool £600,000.

Now, assuming that the recipients of this extra salary manage to avoid higher rate tax throughout their working lives, and that the whole amount is therefore ‘only’ to be taxed at the UK basic tax rate of 20%, that means that the average graduate will pay £120,000 more in income tax over his working life than the average non-graduate.

One of the main arguments for tuition fees is precisely that graduates earn more and should contribute more as a result; but these figures show the extent to which they already do that through the tax system.  Those of us who’ve argued that from the outset will feel vindicated by such a finding; why charge them an extra £27,000 on top of the extra £120,000 they’re already paying?

There’s a sting in the report as well though, because the figures I’ve used so far are based on averages over a working life.  The report also says that, unless a graduate starts his or her working life on a salary of at least £50,000 (and the average first year graduate salary is a mere £19,653 by way of comparison), then the terms of the student loans are such that the graduate is unlikely to earn enough to pay off the loan and added interest, and the government will end up writing off the greater part of the debt.

So, after saddling graduates with debts for the first 30 years of their working life, the government will end up writing off somewhere “between £30,649 and £64,935 for every full-time university student who graduates in 2015”.  That’s more than the three year cost of fees at £27,000, because of the interest added.  Far from transferring the cost of Higher Education from the state to the individuals, the Government will, to a significant extent, merely have deferred the expenditure for 30 years.

This isn’t so much reducing the deficit as putting part of the debt off balance sheet; hiding it away as an unstated liability for the future.  It may not be on the same scale, but it’s not too far removed from some of the accounting practices which Greece used to hide the true extent of its deficit.

I’ve never been convinced that the policy made sense educationally, or that it was fair; and I’ve also been concerned that it would deter bright students from less privileged backgrounds from studying.  If the figures in this report are anywhere near accurate, it suggests that the policy doesn’t even stack up in economic terms either.

Internal funding gaps

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I’m always a little wary of any newspaper stories where the lead-in uses the words ‘we can reveal’.  It’s usually followed not by any great revelation of something secret, but by a story on a widely-available report.  So it was with this story in Monday’s Western Mail.

It shows that the differences in amounts per pupil passed to different schools in Wales – even within the same authority – are bigger than the headline gap between the Welsh average and the English average.  But this is no revelation; it’s not even a surprise.

It’s a point that I made on this blog some months ago; the obsession with comparing overall Welsh averages with overall English averages in order to score a political point has been blinding people to the much greater internal differences, although at that point I didn’t have figures to the same level of detail.  It also underlines another point that I’ve made a number of times on this subject – there is no obvious causal link between amount spent per pupil and the level of educational success achieved by a school.

Looking at the detail of the figures, they do suggest that smaller schools spend more per head than larger schools; some might see that as economies of scale, others as an urban/rural split in the cost of providing education reasonably close to home.  They certainly do not suggest that simply increasing the amount of money passed to schools across the board is going to solve any of the problems facing the education system in Wales.

That’s not to say that schools couldn’t do more with more money; merely that it doesn’t necessarily follow that they would.  If we want to sort out education in Wales, we need to do a lot more analysis than simply dividing budgets by numbers of pupils and highlighting the ‘gaps’ which result.  That is just a diversion from getting to grips with the real problems.

Terms of the divorce

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Whilst the laws and unwritten constitution of the UK clearly support the view that Scottish (and the same applies to Wales) Independence is a matter which the UK Parliament would have to ‘allow’, I’ve never been in any doubt that the decision belongs to – and will be taken by – the people of Scotland.  Ultimately, ‘sovereignty’ can never be withheld from a people who wish to reclaim it, no matter what any law may say.  (I suppose that the use of military force might provide an exception to that, in the short term at least; but it’s not a realistic option in the UK context.)

Some have tried to compare independence to a divorce, arguing that that makes it a matter for both (or even all) parties.  It’s not a wholly unfair comparison; but those using that argument should bear in mind that whilst the terms of any divorce are indeed a matter for negotiation – or even acrimonious argument – the fact of the divorce can be decided by one partner acting alone.

Clearly, those opposed to independence have every right to seek to persuade the people of Scotland that divorce is a bad idea.  They even have a right to be awkward and petty about the terms of the divorce, although I’m not sure that it would be the wisest thing for them to do.  But arguing about the right to a divorce is an irrelevance; it’s missing the point.

If we start from the premise – as I do – that ‘sovereignty’ belongs to all of us, individually and collectively, rather then being bestowed miraculously on the head of state, then it follows that we can change the way that we choose to exercise that sovereignty.  We can choose how much to share or pool at community level, at national level, or at international level; and we can change those decisions as and when we like. 

It’s a very different model from that under which the laws and constitution – and those who enjoy power under them – currently operate; but those laws and constitution only operate as they do with the consent of the governed, even if we don’t always realise that.  (Perhaps if we did realise it more often, the governed might withhold consent more often as well.)

Thus far, I suspect that most nationalists would agree with what I’ve said, even if ‘unionists’ (perhaps ‘constitutionalists’ would be a better term here) might disagree.  How far do we take it though – because I’d go a lot further.

Part of my difficulty is that I find it hard to define a ‘nation’ in terms that are not, in the final analysis, based on subjective self-identity, which also means that I reject the idea that people can have one and only one ‘nationality’ in an exclusive and neatly packaged way.  For me, Wales is a nation because sufficiently large numbers of Welsh people believe it to be so.  For sure, place of birth, history, territory, descent, community, family and language all come into the process of arriving at that self-identity, but nobody can have that self-identity forced upon them.

It follows from that that I’d challenge the idea that ‘sovereignty’ is something which can only be exercised at a ‘national’ level.  What if the people of Ynys Môn (I pick on them because of their neat island status – I could equally have picked on the ‘down-belows’ of Pembrokeshire, or even the inhabitants of Upper Cwmsgwt) were to decide that they wanted to exercise full sovereignty – independence for Ynys Môn?

I can think of lots of reasons why it might not be the brightest idea ever, but I cannot think of any reason why anyone else should be able to refuse it, if it was what the people wanted.  And that has surely to be the driver for what power we individually and collectively cede to which institutions at the different levels – the will of the people.  If sovereignty truly belongs to the people, there can be no argument against them exercising it at whatever level they choose.

There is another side to sovereignty though, and that’s about accepting the consequences.  The relationships between sovereign states can only be decided bilaterally or multilaterally; not unilaterally.  It’s back to the question about the terms of the divorce.  Scotland, Wales – even Ynys Môn – can become independent if they wish, but there are consequences to that.

To date, those consequences have often been discussed in axiomatic terms.  For as long as it was little more than a theoretical possibility, it’s been possible to make sweeping statements about the economic consequences with little solid basis in fact.  The developing situation in Scotland will inevitably shed more light on the detail, and lead to more rigorous challenge of some of the underlying assumptions and high level numbers which have been thrown around – on both sides.

That can only be a good thing.  I remain as convinced that ‘small is beautiful’, and that the advantages of exercising more power locally outweigh the disadvantages, as I was in the 1970s.  The trend to increasing globalisation since then has only served to reinforce that view.  Welsh self determination is a step along that route rather than an end in itself, but it has often felt as though devolution has diverted attention from consideration of that step.  The debate in Scotland brings it very much back into focus; we need to have the courage to follow where they lead, not continue to hold back.

The time isn't right...

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I heard it argued again last week that, at a time of economic difficulty, people are only interested in economics, not in constitutional change.  In the sense that people whose jobs are under threat aren’t queuing up to demand independence, it’s true, of course.  It doesn’t follow, however, that debating constitutional change at a time when people are only worried about their jobs is the ‘irrelevance’ which some claim it to be.

Presenting the constitutional debate and economic policy as though they are alternatives, only one of which can be discussed at any one time, is a false choice.  I can understand those who do not want more fundamental change arguing this way, but it seems completely incongruous to me for anyone who claims that they want to see fundamental change in the long term to be trying to argue that such change is irrelevant in the shorter term. 

There are three major flaws with such an argument.

The first is that, if independence for Wales does nothing to address the economic problems faced by Wales then what is the point of Independence?  There would be little point all in having independence if it is not part of the solution to those economic problems.  I certainly would never have advocated it as the way forward for Wales unless I was convinced that relocalising the economy and taking the decisions ourselves was more, rather than less, likely to resolve the issues.

And if it is part of the solution to those economic problems, then times of economic difficulty are precisely the times when the case for more fundamental change should be put more forcibly, not kicked into the long grass.

The second, and probably more serious, flaw is that any politicians who argue that constitutional change is not relevant to the immediate economic situation are of necessity constraining themselves to proposing solutions to the economic problems which can only be implemented under current structures – which effectively means in Westminster.  And it means that the solutions which they propose are never going to sound – or be – very different from those put forward by HM Government and HM Loyal Opposition.

The third flaw is that the proportion of people holding the view that we need change in the way we are governed, not just change in the policies being followed, will never increase if the argument is not put.  I’ve never known any argument to be won by avoiding it.

Boundaries and protests

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The howls of protest from some quarters about the proposed new constituency boundaries were entirely predictable, and had probably been rehearsed for weeks if not months.  That doesn’t mean that they’re entirely unjustified, of course.  Some of the boundaries look highly artificial to me, and seem to ignore geographical and community links.  It’s not a problem unique to Wales, though; merely more acute because of the greater proportionate change here.

The outcome is a more or less inevitable result of giving primacy to the argument that MPs should have, as nearly as possible, equal numbers of constituents.  It’s a difficult argument to counter, but it does depend to some extent on what we see as the primary rôle of MPs.

If they are there, first and foremost, to make laws on behalf of the UK as a whole, then the argument for parity of constituencies is a strong one.  But if they are there, first and foremost, to be representatives of the people and communities in their constituencies, then the extent of geographical spread and homogeneity (or lack thereof) in constituencies becomes a more important one. 

It’s clear which of those two drivers is uppermost in the government’s mind – MPs are there to support (or oppose) the government’s legislative programme, and do as they are told.  But the reality is that we expect them to do both.  In a sense, the second element has become less important in Wales and Scotland as much of the representative work is now done elsewhere, so perhaps we should be less worried.

There is another aspect, though, and it is the extent to which Wales’ voice is lost in a parliament where the overwhelming majority of MPs come from English constituencies.  There are still plenty of issues of concern to Wales being discussed and decided in London, and the size and clarity of the Welsh voice is important in that regard.

Whether the difference between 30 and 40 out of 600 is really significant is another question entirely; and the inability of most of Wales’ MPs to find a specifically Welsh voice rather then being simply the Welsh wing of their UK parties undermines their argument for Welsh over-representation.  The argument for deliberate over-representation of the smaller nations in the UK Parliament is, in essence a ‘nationalist’ argument.  It is rooted in the idea that Wales is a nation which needs to have its voice heard, rather than a region to be treated on the same basis as the regions of England.

It’s fascinating to hear that argument, albeit not in quite those terms, being put by politicians in the UK parties.  The problem is that given their track record it simply sounds like an altruistic cover for protecting their own personal and party interests.  Labour, in particular, have long had a tendency to conflate their party’s interests with those of Wales, but it’s no more credible on the issue of constituency boundaries than it is on a host of other issues.

It’s also fascinating that some nationalists at least seem to be welcoming the reduction in Welsh representation.  If I could be certain that it is just another step on the road to independence than I might be tempted to join them.  But there is no guarantee that it is, and as long as Wales is part of the UK, I really don’t see why anyone would argue against the idea of maximising our representation.

Preparing for the next step

Tweet From a UK perspective, the one part of yesterday’s announcement on HS2 that I don’t really understand is why the Government has decided to terminate HS2 at Euston, rather than at St Pancras which is virtually next door, and which would allow through-running to continental Europe without having to change train.  Even if through-running were not to be an immediate feature of services, it should certainly be a longer term objective.  After all, it was what we were promised right at the start of the building of the Channel Tunnel.

From a Welsh perspective, the proposals are far from ideal, with a danger that we will be left behind in a world where reliable high speed surface transport is increasingly seen as the norm, and preferable to aviation.  It’s time, though, to stop arguing about the detail of HS2 and start the debate about HS3.  Continued argument about HS2 will only further delay the Welsh connection.

HS2 will initially connect London and Birmingham, with connections to Manchester and Leeds – and a possible spur to Heathrow – seen as being phase 2 of the scheme.  The timescales are lengthy, and if we wait until HS2 is finished – or even well under way – or if we try and continue the argument, rather than widening the issue out, we run the risk not only of further delaying HS3, but also that the ‘competition’ will get there first.

There are two obvious candidates for HS3.  The first is to continue HS2 north to Glasgow and Edinburgh, and the second is to build on westwards from Heathrow to Cardiff and Bristol. 

I’d prefer that we didn’t have to be in competition with our Scots colleagues, but they should gain significant benefit from HS2.  There is no inherent reason why the rolling stock purchased to run on HS2 cannot continue over existing rail infrastructure, albeit at slower speed, all the way to Scotland once HS2 is completed.  This is exactly the approach taken by the TGV services in France, which serve many more towns than are actually on high-speed lines, providing direct rather then merely connecting services.  It just requires foresight and commitment.

We need to make sure that it’s our turn next.  A far sighted, strategically-thinking Welsh Government would now stop all whingeing about HS2, and start lobbying and making the case for an early decision on what follows.  And on getting the right decision.

Losing territory

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I’m sure that Cameron is technically and legally correct to say that only Westminster can organise a binding referendum on Scottish Independence.  But being technically correct isn’t always good politics, and in this case it seems to show a certain disregard for a clear electoral mandate.

There’s an element of gambling about his approach, of course.  I can’t believe that he doesn’t understand that trying to take control of the timing and the question will probably increase the size of the vote for independence, but I’d guess that he takes the view that the result will be a ‘no’ vote to independence whenever the vote is held. 

And in contrast to many other nationalists, I suspect that he’s right on that point, no matter how much I might wish otherwise.  Whilst there is clearly an appetite in Scotland for a further significant transfer of power from Westminster to Holyrood, my own gut feeling is that the Scots are not ready, as yet, to vote for moving to independence in a single step.  Time will tell.

Cameron’s biggest misunderstanding, however, seems to me to lie in his use of the words ‘settle’ and ‘binding’, as in his suggestion that only a ‘binding’ referendum can ‘settle’ the issue. 

In the first place, I’m not convinced that any referendum at this stage actually needs to be binding.  Even if the Scots voted for independence, there would be a period of negotiation and discussion over the detail before the final shape of the divorce settlement was known, and it is not inconceivable, surely, that a further referendum would be considered necessary at that time.

But more significantly, I’d challenge the idea that any referendum can ever ‘settle’ any issue finally, or be ‘binding’ for any longer than it takes for public opinion to change.  We’ve seen that in relation to the devolution referenda in the past – and in relation to membership of the EU.  The losing side will continue to argue for another referendum at any time when they believe that they can win it; the probability that they’d just say ‘oh well, that’s it then’ and go away is vanishingly small.

In the case of independence, there’s an asymmetry, certainly – a ‘yes’ vote will be harder, much harder, to reverse than a ‘no’ vote.  Whilst a ‘no’ vote would unquestionably not settle the matter ‘for ever’, even a ‘yes’ vote wouldn’t necessarily do so either.  Institutions and structures built by humans can always change, and always will.

Cameron, though, is talking and behaving as though there is a symmetry about a decision; an expectation that nationalists will quietly accept a ‘no’ vote and shut up.  It’s a quaint perception, which I have as much difficulty understanding as he seems to have in relation to Scottish nationalism.

I was reminded of the gulf in perception that sometimes makes it hard to establish a basis for rational argument by the piece that Rhodri Morgan wrote in the Western Mail just after the death of Vaclav Havel.  Rhodri said that one of Havel's regrets would be that, during his presidency, he lost a third of his country.

Now I had thought that it was one of Havel's triumphs that he had presided over the largely amicable divorce between two countries which had been somewhat artificially stitched together in the first place in 1918, as older nations re-emerged from the collapse of the Austro-Hungarian Empire.

Two very different perspectives on precisely the same event.  I hadn't really thought about it in quite those terms before but perhaps I should have.  Perhaps when the UK Prime Minister says that he’ll fight for the union with every fibre there is, he is motivated, at least in part, by not wanting to 'lose' part of ‘the country’.  (English history would presumably see it that way; I’d guess that Scottish history would be written from the ‘amicable divorce’ standpoint.)

Perspective is all.  To some of us, it seems that Cameron is being naïve, stupid even, in his approach to Scottish politics.  But it must seem entirely rational to him, and leave him struggling to understand why we can’t simply agree with the logic of his position. 

The gulf in perception is probably unbridgeable, and the two sides will continue to talk at, rather than to, each other.  There will be a vote, and the Scottish people will make a decision.  It's unlikely to be the 'final' one though.

Drains and brains

Tweet I found last Thursday's headline story in the Western Mail, about the “brain drain” from Wales both confused and confusing.  The academic report to which it refers was a complex one highlighting a number of different factors, not all of them necessarily bad, and it seemed to me that the Western Mail was having some difficulty in distilling that complex report down to a simple headline story.  I thought the report deserved a more analytical and in depth approach to coverage than the newspaper gave it.

The one common thread seemed to be that "something must be done", although what that "something" is was pretty vague and undefined - largely, one suspects, because there was no clear agreement on what the problem really is; only on the symptoms.

I thought the approach in Dylan Jones Evans's blog was more incisive, highlighting as it did one of the key issues which the Mail seemed to have completely missed, namely that where people choose to study is a key determinant of where they go on to live and work after graduation.  Dylan goes on to highlight the Welsh government's tuition fee policy as a key factor in that decision.  I was with him on the first part but thought that he was stretching the point a bit on the second.

The tuition fees policy pursued by the One Wales government between 2007 and 2000 was much more focused on encouraging students to stay in Wales to study, and there was, as Adam Price forcefully pointed out at the time, some indication that it was having precisely that effect.  Sadly, the then Labour-Plaid government scrapped the policy on grounds of affordability, only to replace it with what looks like a much more expensive policy a year later, after the change in government in London finally allowed Labour in Wales to disagree with the policy of the UK government.

There are a number of issues which drive Welsh students to study in England rather than in Wales, but they go well beyond the tuition fees policy.  Students take into account their perceptions about comparative "quality" (although whether those perceptions are justified is another matter entirely) of universities in Wales and England.  There are also questions about the range of subjects available – the sheer number of universities in England compared with Wales makes it all but inevitable that there will be a greater range of subjects available.

There was an assumption underlying the way that the story was presented that it is inherently a “good" thing that Welsh domiciled students stay in, or return to, Wales after graduation.  That's certainly a point with which I would agree; as a nationalist I want to see a Wales where young people wish and are able to live and work and enjoy rewarding and fulfilling careers in their chosen fields.

(In pure economic terms, however, it isn't as simple as that.  If Welsh students studying and then living elsewhere are replaced by English students studying and living here, the economic effect of the so-called brain drain is far from clear-cut.)

That in turn raises the perennial question of what higher education is for.  Is it to provide the right number of graduates in the right disciplines to meet the current and future economic needs of Wales?  Such an approach undervalues the idea of more abstract learning having an intrinsic value in its own right, but it did seem implicit in some of the comments being made.  Concentrating simply on meeting the economic needs of Wales is surely an inadequate mission for our universities.

One other point struck me as being relevant, and it’s to do with the “internal” brain drain. 

Concentrating merely on net loss from Wales to England ignores the significant net movements happening regionally within Wales.  Areas such as Dyfed and Gwynedd lose a high proportion of their most well-educated young people to Cardiff and the south-east every year.  A concentration merely on the net movements between England and Wales completely loses sight of this fact.

Far from being the dry and irrelevant issue as which some want to paint it, I see greater autonomy for Wales and greater devolution within Wales as being key issues in developing a more balanced and dispersed economy internally.  Re-localisation is what will provide opportunities to young people to live and work in their own communities.  It doesn't guarantee of course that they take them, but giving them the choice would be a good start.

Reward and Punishment

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There was an interesting juxtaposition, time wise, of two stories around the New Year, which highlighted for me the different standards applied to different groups and interests in society.

The first story was about the plans of the UK Coalition to crack down on council tenants who sublet their houses, by making it a criminal offence.  The detail was a bit hazy – I can’t see what’s wrong with taking in a lodger, for instance – but I think that they were really targeting people who move out of their council houses into alternative accommodation and then rent out the council house at a profit.  It’s a way of using someone else’s property to make a profit.  ‘Our’ property, in a sense, because the houses are publicly owned.

It was accompanied, of course, by a lot of guff about how council rents were subsidised by the rest of us (not really true these days), and how council houses were really only ever intended for those who could not afford their own homes (again, something of a re-writing of history).  It will have struck a chord, however, with those not entirely familiar with the details of the financing of social housing, and striking a chord is what such announcements are all about.

The second story was about the New Year Honours list, and more specifically about the honour given to the head of a hedge fund who had donated large sums to the Conservative Party.  He’d made large sums of money by betting that Northern Rock would collapse.  The techniques used by hedge funds, though, are a little more nuanced than gambling – this is the sort of gambling where the act of betting influences the outcome, if only you can bet enough money.

And, of course, the short sellers didn’t have enough money or shares to cause a collapse themselves, so they borrowed other people’s, and bought and sold things that they didn’t own.  Some might see that as using other people’s property to make a profit.  ‘Our’ property in a sense, because many of the shares ‘borrowed’ for the casino were owned by pension funds and other large financial institutions, usually on behalf of many of us.

But here’s the point.  In principle, the two actions seem to me to be quite similar, and there is no obvious argument that one is somehow more moral than the other.  So why do we criminalise the small scale abuse but honour and reward the large-scale abuse?  Which one causes the greatest misery for the greatest number?