Labour’s new gimmick: an education lottery that has nothing to do with one’s postcode

This lunchtime BBC London reported the latest idiotic wheeze planned for education. Apparently, the government is to do away with the “postcode lottery” (a misnomer for what is in fact a postcode auction) by replacing it with a real lottery!

Schools will be encouraged to offer places not based on local catchment areas but on a simply lottery basis: parents put down the name of their children and names are randomly selected.

There is no doubt that the current system is unfair. A friend of mine in Muswell Hill once pointed to a street where the houses on one side of the road were worth £100,000 more than those on the other side, because one side of the road was in the catchment area for a highly rated state school. This new system would, by comparison, be more equitable because access to good state schools would not be decided by wealth, with only the richest parents able to move into the catchment areas of the best schools. Instead, every child would have an equal chance of “winning” a place in the school of their choice.

This raises its own problems, of course. Children would not now be guaranteed a place in their local school but may have to travel for long periods each way for an education. This would be costly – a cost that would probably fall on the local authority and undoubtedly in the end on the taxpayer – and would expose children to stress and risk.

More to the point, however, it represents a complete U-turn by the government that only two years ago promised parental choice. While parents may now have the choice whether to participate in a particular school’s lottery or not, clearly the ultimate decision is now to be taken not by parents, teachers or administrators, but by chance. There seems something strangely fatalistic in a government admitting that a random process is better than a rational decision taken in the interests of a specific child (though I am confident that a random process could be no worse than a decision made about an unknown child by a faceless bureaucracy).

The real problem, though, is that it fails to get to the heart of the education problem – a problem that leaves a quarter of school leavers functionally illiterate, innumerate and without any decent qualifications. The reforms needed to improve educational standards and so enhance both children’s opportunities and our economy’s future are those that would raise standards across the board and tailor education to the pupil. In practice the only way to improve standards is by rewarding success and eliminating failure in education, which can only be achieved by injecting competition into the system. If schooling is to meet the specific needs of individual children it must enable parents to exercise real choice about both the school to which their child goes and the content and balance of the curriculum. In addition, both goals would be served if schools were free to innovate and so explore new methods of teaching.

This will never come about as long as education is provided by a state monopoly and children are allocated schools irrespective of their or their parents’ needs or desires. The solution is to establish a voucher system whereby parents can exercise choice about (for example) whether their child should attend the local school or a particularly good school far away, and whether they should attend one that specialises in science, the arts or language. As the cash would follow the pupil, good schools would expand and bad ones wither; eventually successful providers would take over failing establishments to improve and rejuvenate them – just as the failing Skoda car company was bought out and saved by Volkswagen and is now a successful provider of cars far superior to anything that Czechoslovakia’s state monopoly provider could produce.

A voucher scheme would represent a real revolution in provision that would enable all parents to access good schools and provide the best for their children. By comparison, this new government gimmick is a disgraceful effort to replace an unfair system with a system where nobody bears responsibility. It is the sign of a government devoid of ideas.

Reform in Europe should be at core of Liberal policy

Sir Menzies Campbell (I can’t bring myself to call him “Ming”) has given an interesting speech to the Centre for European Reform in which he calls for a rebalancing on Britain’s relationship with the US and reform in the EU.

I have written elsewhere of the need to be an honest friend to the US, supporting them when they are right but telling them frankly when they are wrong. It is Sir Menzies’s comments on the EU that I wish to examine here, for they mark an important shift in emphasis which I think the Liberal Democrats should note and adopt more widely.

His main point, that “The EU would better reflect its peoples’ priorities if it stuck to legislating only when necessary”, is one with which I agree wholeheartedly. At Harrogate last year I attended a fringe event where Nick Clegg asked what the EU would need to do to better reflect the needs of its citizens. My one-word answer was “Less.”

The European Commission exhibits a tendency common to like all bureaucracies, and especially those also granted executive power: a drive to expand its powers. This is catagorically opposed to what we, as liberals, believe.

There is no need for the EU to interfere to regulate individual member-states’ labour laws, VAT rates or manufacturing standards. Indeed, Sir Menzies is wrong to suggest that “Harmonisation” to set common standards on cocoa solids in chocolate and the volume of lawn mowers are welcome policies that allow British goods to be sold abroad. Rather, they undermine the point of competition, which is that all products are different and consumers make informed choices. Perhaps a Parisian has a taste for Cadbury’s, or an Italian is prepared to put up with a noisy but cheap fly-mo. Bureaucrats in Brussels do not need to regulate at this level; consumers will regulate for them by eschewing products that do not meet their needs.

As for that excrescence know as the CAP, if farmers need subsidising that should be a decision taken by national governments. Those that wish to prop up inefficient farms should be free to do so at the expense of their own taxpayers. Those that would rather let their farmers struggle – and in many cases thrive – in the market should equally be free to liberalise their markets and cut their taxes. There may be a single-market/competition issue here, but basic liberal economics tells us that the main benefits of trade come from imports rather than exports; frankly, I would be happy to see French taxpayers subsidising my Brie and Bordeaux.

So I welcome Sir Menzies call for a Powers Audit to decide what should and what should not be decided at a European level. Had this been the aim of the European Constitution I would have been all in favour of it (though sadly it looked more like a means of extending Brussels’ powers rather than limiting them, which is the proper role of a constitution). In fact, I would urge Liberal Democrat colleagues to go further. While championing the opportunities that Europe offers, we must be honest about its failings and unstinting in our call for reform. Indeed, rather than allowing our opponents to paint us as “Pro-Europe” we should make the point that we are pre-Britain, and what is best for Britain is a liberal Europe.

So we must be at our most voluble when we are calling for reform, just as we are within our own nation. Let the electorate hear us demand not just a stronger Europe, but a more humble one; a Europe that trusts individuals, devolves decision making to the lowest possible level, frees markets rather than binding them in red tape, and so thrives through diversity.

The myth of the postcode lottery belies the awful truth

Last night on Channel 4, John Snow presented a Dispatches on Britain’s Healthcare Lottery. According to Snow, healthcare is applied differently in different regions and as such a “postcode lottery” applies across the UK. He cited a gentleman in Wales who was not able to get treatment that was available to English patients across the border, and an arthritis sufferer who was denied treatment that was available to a women with a similar condition only a few miles away.

This concept of the postcode lottery is a fallacy. While there is no doubt that different Strategic Health Authorities and even NHS Trusts have different priorities, this is not a lottery. A lottery, were it to apply, would at least be fair, for the totally arbitrariness and randomness of such a system would mean that every patient had an equal chance of “winning” treatment, irrespective of other factors.

What we have instead is a postcode auction, with houses near good public services worth significantly more than houses where provision is poorer. I well remember an evening walk in Muswell Hill, when a friend pointed out that the houses on one side of the road were worth £100,000 more than those on the other side, because one side of the house was in the catchment area for a highly rated state school whereas the neighbouring school was far less well regarded.

This is a disgrace that points to the heart of the current Government’s public services failure. What both John Snow and the Labour Government seem not to understand is that differences in provision are unavoidable: schools and hospitals will always vary in quality – uniformity is a pipe-dream – and there will always have to be differing priorities in different areas. As long as citizens are parcelled up by district and told which health provider or which schools they may access, house prices will reflect the quality of public services and the rich will be able to access better services than the poor.

Where schools are concerned, this is probably one of the main reasons why social mobility has fallen in recent years; where once bright children from poor backgrounds could access good schools, they are now stuck with whatever school their parents can afford to live near. Thus poor people are obliged to send bright children to underperforming schools.

It is time decisions about services were taken away from bureaucrats and handed to citizens. Rather than public services being allocated by postcode, they should be selected by the user. The Government’s “choice” agenda is a nod to this, but it does not go nearly far enough. The Government should get out of direct provision of services. Education should be provided by a voucher scheme that allows poor parents to buy their way into good schools: as the money follows the pupils and the pupils follow success, failing institutions will be replaced by successful rivals and the overall quality of education will improve. This already happens in havens of Social Democracy such as Sweden.

As regards healthcare, Government should use the tax system to fund individual health insurance for every citizen, rather than try to provide health through a state monopoly. Thus patients would be able to access, through their insurance providers, whatever treatment they required, rather than being at the mercy of state planners who have decided that in a certain region a certain treatment does not meet the bureaucratic requirements.

The tired old phrase about “a postcode lottery” is a myth that belies the truth: a postcode auction that enables rich people to buy access – through higher house prices – to the best public services. This travesty is the inevitable outcome of state planning. It is time to move to a system for providing essential services that is truly fair. Power over their own health and over their children’s education must be returned to the people.

Welfare is a product of state failure. It is time for Reform

Independent liberal think-tank Reform have today launched an excellent report on Reforming Welfare. Britain faces a ballooning welfare crisis. A shocking 5.4 million working-age Britons (14 per cent of the working age population) rely on state aid, over two thirds of them for longer than a period of a year. The UK spends £79 billion on non-pension social security: more than we spend on Education, which Labour promised would be its priority and which in the long-run is the best hope for reducing poverty and benefit-dependency in the future.

The Government is currently failing. Unemployment is falling more slowly since the New Deal has been launched. The number of people on sickness benefits has nearly quadrupled in 25 years, so that 5 per cent of men aged 25-49 are now ill or disabled. Tax credits are now paid both to the unemployed, which was never their purpose, and to those on high-incomes: a third of tax credit spending is paid to those with above average incomes. Despite a 400 per cent increase in welfare spending under Labour, the UK has the worst poverty trap in the OECD.

The state-monopoly approach has not worked. Fortunately, and perhaps at first glance surprisingly, the market offers the solution. The report notes that “paying independent agencies on results is more effective at getting people back into work than paying official agencies flat rates no matter what they do (or don’t) achieve. It has also unleashed a wave of innovation and of flexibility.” Reform offer six recommendations:

• Abandon the state monopoly of provision – the state should put welfare out to tender and invite private and voluntary bodies to bid for the contracts
• Job schemes should be about finding work rather than training, and the unemployed should be required to look for work if they want benefits (this includes those on Incapacity Benefit)
• Reset the benefit levels and tapers to reduce the poverty trap that results from people seeing massive drops in benefits as they work so that they keep little or none of the extra money they earn
• Simplify the system by merging some of the 51 benefits, 26 of which account for less than 1 per cent of spending
• Raise the personal allowance so that somebody working full-time on the minimum wage pays no income tax (a proposal I have made several times before, most recently on 21 November)
• Transform part of National Insurance into a form of unemployment insurance so that individuals who lose their jobs have ownership of a fund to help them during their period of unemployment.

These reforms are urgently needed. Unemployment is rising under the current Government and one in seven adults now rely on state aid. The current system squeezes ever more money out of the hard-pressed middle classes while failing to address the crushing poverty that afflicts the poorest in our society – it is those just below the “poverty line”, and not the chronically poor, that are the focus of this Government’s efforts.

Rather than continue with the state-centric solutions that have been characteristic of this Government, it is time to employ market mechanisms and the innovativeness of enterprise to address this costly and tragic disaster. This report could not come soon enough.