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Public policy failure

By Alex Chatham
June 19th, 2015 at 2:30 pm | Comments Off on Public policy failure | Posted in Economics, Public Sector Reform

Lord Bob Kerslake, the author of a report in housing in London, has said that the failure to build enough homes “has been the biggest public policy failure of the past 50 years”. It is refreshing to hear someone admit that public policy can fail. Normally, commentators and policymakers talk about market failure. This is normally a cue to proposal State intervention. Lord Kerslake appears to be thinking along these lines, which is a shame. It would be better to admit that public policy has failed and that it is time to let the market function properly.


Competing for a better Capitalism

By Sara Scarlett
May 3rd, 2013 at 5:43 pm | Comments Off on Competing for a better Capitalism | Posted in Economics, Poverty, Public Sector Reform, UK Politics, Welfare State

What do rich people have that poor people don’t? I imagine that ‘money’ is the first answer that comes into your mind. Well, yes, but let’s break this down. What does money give you? It gives you choice.

Farmers began co-ops in the mid-19th century because they were being sold expensive, rotten food by private food sellers. Because co-ops were providing better produce at cheaper rates, other private food sellers had to up their game. Farming co-ops weren’t non-profits; they were a different type of capitalism. The free-market doesn’t just mean the consumer wins because they have a choice of products to buy; they have a choice between outlets which are structured differently. Different forms of capitalism compete to create better capitalism.

At the time of the financial crisis, I remember seeing very little analysis about how the Co-operative Bank fared in comparison to it’s shareholder counterparts (although, to be fair, the Co-operative bank is not a true democratic co-operative).  If we had a greater mix of co-operative banks and shareheld banks, with co-operative banks being perceived as being more ethical – the theory goes that a greater amount of customers choosing to bank cooperatively would signal to the shareheld banks that they wanted more ethical banking. The shareheld banks would have to get more ethical in order to compete. On the other hand, if a greater number of consumers perceived the shareheld banks as more efficient/cheaper, the co-operative banks would have to get more efficient/cheaper in order to compete. Thus, the pendulum would swing, increasing the efficiency, cheapness and the ethical credentials of banking.

What I’m arguing for is a greater plurality in the structures we interact with. In order for this to come about the State must recede. The main argument against greater marketisation of public services is the perception of capitalism as being unethical. A greater plurality could mean adding a dimension to capitalism that means organisations/outlets have to compete with each other on grounds of their ethical credentials as well as with prices, quality and providing shareholders with dividends. Most people don’t think about this dynamic between capitalist organisations when they think of the free-market.

The sector I fear for most is education. Classrooms don’t look that much different than they did in the 1930s. Even though almost every other area of our lives have changed our schools still look the same. Children don’t all learn the same, but we teach them all the same. Education does not seem to be moving with the times at all. I know no one who makes their living as a fine artist. I know a great deal who make their living using Adobe Creative Suite. Yet, I was taught fine art in school and I was not taught how to work any part of the Adobe Creative Suite.

Ultimately this rot is due to a lack of plurality ergo a lack of incentive to change and innovate. In my ideal world there would be three different types of school structure – schools run by private shareholder capitalist companies, schools run by cooperatively owned capitalist companies and schools run by private charities/non-profits. There would also be three types of funding – private funds, charitable donation and government vouchers. Vouchers give poor people what rich have. Choice. Were this the case education would look different in a very short period of time and unrecognisable after a long period.

This lack of choice is precisely why social democracy sucks. It sucks flexibility and plurality out of the system. The NHS, state schools and other public services are as good as they’re going to get. If that’s good enough for you, fine. But it may not be good enough in 50 years time. Changes in structure and competition change the game for the better, both ethically and efficiently. Embrace it.

A strike against children

By Andy Mayer
June 30th, 2011 at 7:54 am | 8 Comments | Posted in Pensions, Public Sector Reform

Today’s strike action, principally by members of the NUT (teachers) and PCS (public sector workers) unions, is a strike against children in defence of privilege.

It is strike against children in the small sense of depriving many of a day of the education their parent’s taxes have paid for.

It is strike against children in the deeper sense that what the Unions demand is for future generations to carry the burden of their  privileged pension commitments today.

There are many detailed points of due process and politics that contribute to this dispute. Underlying it is a battle over two very simple point of principles.

Whether or not those of us who can afford to fund our retirement should do so.

Whether or not there should be equivalence between public and private sector provision.

In the private sector principle one is settled. Final salary schemes are being replaced by defined contribution schemes.

In the public sector there is still a pervading sense of unreality that the trillion pound gap between promises and payments can be bridged without reform.

On question two old arguments dishonestly claiming public sector are particularly poorly paid or that the work is radically different to the private sector are deployed by the same people who argue for fairness and equity in many other areas of public life.  

What reform is proposed is not even equivalence with the private sector (bar retirement ages), just a less generous form of defined benefit based on career average earnings. It is a modest, generous, and reasonable reform, around which discussions are still in process.

Public sympathy in that regard, which is currently fairly balanced, is unlikely to warm to the Union cause.

They deserve to lose. They will lose.

If they don’t our children, and theirs, will pay the price. 

The government should hold their nerve.

Danny Alexander is right on pension reform

By Andy Mayer
June 19th, 2011 at 12:36 pm | 11 Comments | Posted in coalition, Public Sector Reform

Trade Unions are organisations committed to getting the best possible deal for their members. Public sector pensions have been a sensational deal for some time, funded as they are by committing future taxpayers to the bill.

The politics then pit a constituency with no votes against one that can mobilise thousands in mass protests and impact millions through economically damaging strikes.

For politicians to resist that movement, instead standing up for the rights and living standards of our children, is extremely brave and should be supported.

The coalition proposal  to  raise contributions and the retirement age is right. Chief Secretary to the Treasury, Danny Alexander, summarises the challenge well:

“(it is) unjustifiable to ask the taxpayer to work longer and pay more so that public sector workers can retire earlier and receive more themselves. This is not an assault on public sector pensions but an attempt to protect them for the long term.”

Economist captures national mood

By Andy Mayer
April 29th, 2011 at 10:20 am | Comments Off on Economist captures national mood | Posted in AV referendum, Public Sector Reform, Social Mobility

The Economist Magazine, in a rather shameless piece of ‘decision-making following the polls’ has plumped for ‘No‘ in the AV referendum, promoting instead a hybrid FPTP+. Something that’s not an option in the referendum and would be supported by even fewer people.

More refreshingly in other news they note

“A young man and his fiancée were expected to get married in central London on April 29th. Millions of Britons took advantage of the opportunity to take a foreign holiday.”

Meanwhile, we strongly urge those remaining, to spend, spend, spend, on wedding tat, we need the VAT to meet the £39m bill.