Thursday 14 April 2011

Cable is right: Cameron's kneejerk immigration policy is bad for business

Vince Cable is in many ways the biggest disappointment of the Coalition. He is a shadow of his former self, showing little sign of the sparkling wit that brought forth the cruellest jibes against Gordon Brown when he was the Lib Dems' stand-in leader. But today, in criticising David Cameron's knee-jerk approach to immigration as 'very unwise', he has redeemed himself a little. The coalition's ludicrous immigration quotas are a threat to British business.

Labour had, rather more sensibly, developed a points system which meant that skilled people could be recruited where they were needed. But by substituting a quota system, the Government has tied itself in complete knots.

Universities are a good example. Higher education is big business for the UK, worth almost £5bn a year in fees and spending by overseas students. While there are bogus private colleges that operate above chip shops, there are also hundreds of thousands of legitimate degree-level students who can choose to study in Australia, Canada, New Zealand or Malaysia rather than Britain. Labour rightly expanded their numbers and actively recruited in countries like China and India. Instead of focusing its clampdown on the bogus colleges, the coalition is using a blunt axe as part of its migration policy to make recruitment, including in private degree providers that might provide real competition (alongside FE colleges) to keep fees down. And it is reducing incentives for overseas students, denying them the chance to use their skills in the UK after graduation (something Sir James Dyson has criticised).

The truth is that immigration made and makes a real contribution to economic growth, so long as migrants pay taxes and contribute their skills. Both are surely useful attributes to a government with no obvious growth strategy. Of course we need to improve the skills of British youngsters, but to pretend that having more skilled or paying migrants is bad for Britain is simply bad economics. Any business secretary who didn't recognise these facts wouldn't be worthy of the title.

Why I'm backing AV

I will be voting in favour of the Alternative Vote on May 5th for one very simple reason: it is far better to have an MP who has got the support of 50% of their electorate rather than one who may represent just a third of them. That's it. It isn't complex. Sun readers should surely be able to grasp even if the newspaper's editors find it too difficult.

But instead of a straightforward argument about whether or not this is a good principle, we have been subjected to an awful lot of rubbish on both sides. Perhaps this is always the case with referendums - in Ireland, where they are almost an annual event thanks to the strictures of the Constitution, one divorce referendum was lost over the supposed threat to family farms. Even so,  the sheer fatuousness of the current AV debate would give the Irish a run for their money.

The cost of AV was said to be depriving us of nurses (no, that'll be down to Lansley's new bureaucracy and his 'efficiency savings') while AV was apparently going to get rid of nasty crooked MPs (only if a majority of people vote against them). The broadcasts by both sides must rank as among the worst ever shown in recent times. Yet, in truth, this is a modest measure that will make our voting system a little fairer. Nothing more, nothing less. And I'll be voting Yes.

Monday 4 April 2011

Changing the NHS changes

Readers of this blog will not be surprised that David Cameron and Nick Clegg are being forced into full-scale rescue mode for Andrew Lansley's health 'reforms' this week. The attempt to force GPs to become NHS managers was always bonkers, however good the more entrepreneurial GPs may be at managing local healthcare budgets. While Cameron clearly should have known this, he was clearly adversely affected by Francis Maude's decision to deny him a reasonable level of politically-savvy advice within No. 10. The removal of the quasi-accountable role of the Primary Care Trust clearly ran directly counter to Liberal Democrat policy (even if the latter sought to bring local authorities into the picture). It was also inevitable that their initial attempt to create a market based on price rather than quality would have to be reversed, given all the Cameron guff about the 'NHS safe with us' before the election. And the removal of waiting time targets (despite 'guarantees' in the NHS constitution) was always going to affect patients adversely - and it has started to do so.

So, the conjoined coalition twins have a chance to reverse Lansley's mess before the legislation is torn apart in the Lords. But they should not pretend that all they are doing is minor tinkering if they are making the more significant changes that are required. If they really want to win back public support, they need first to apologise for the changes, which were a clear breach not just of the coalition agreement but also of the solemn promises (there were a lot of those, weren't there?) made by Cameron and Clegg before the election. They then need to spell out what they will do and what they will not do, as a result of their U-turn. That should mean at the very least voluntary participation in the fundholding scheme, a residual role either for PCTs or local authorities and competition based firmly on quality. They need also to be rather more honest about the extent of improvement since 2000 - which is pretty obvious to anyone who has experienced the system before and after - as well as the extent to which it still needs to improve. And finally, they need to restore the maximum waiting times until such time as they genuinely are no longer needed, with any Tory who says that they 'distort clinical priorities' being forced to wait on a trolley in A&E on a Saturday night without being seen for a minimum of 10 hours. Only then will they start to convince the public. Anything less is (not very good) spin.

Friday 1 April 2011

University challenges

I really don’t understand the logic of the Government’s higher education policy. I have supported the need for increased fees, and recognise the good sense of having more bursaries at the same time. Having a higher repayment threshold for graduates also makes tactical sense coupled with higher interest rates on the loans. I can also the merit in encouraging access schemes from summer schools to places guaranteed to the ablest students in particular schools (though not some of the madder quotas suggested by Simon Hughes). However, it is the economics of the policy – and the approach of other government departments – that just doesn’t add up.

The first problem is that the Government has cut the teaching budget by far too much at the same time as allowing higher fees. Of course, universities might have been expected to bear a 15or 20% cut, but an 80% cut is absurd, and it makes it inevitable that most will seek to compensate by increasing fees as far as they have.

The second major problem is with overseas students. The clampdown  on bogus colleges may focus on the right targets, but there is a danger that differential practices in consulates overseas sees many overseas students taking their studies - and their money - to Australia, New Zealand, Canada, Europe or the new Asian universities instead. More importantly, as James Dyson has said this week, the decision to limit work opportunities for recent overseas graduates is wholly self-defeating. Once again, the ideological self-certainty of the coalition - this time on the Conservative side - has been allowed to triumph over a more nuanced position that was much more clearly in Britain's economic interests. This could cost us all £2 billion a year, with nothing to show in return.

And lastly, the government has let the universities off the hook on loans. It is the same with the decision to lift fees to a £9000 maximum but not properly to cost the likely effect of scrapping a large swathe of teaching grants: of course, most universities will try to charge the top rate. It is wholly bizarre that the Government didn't simply require them to develop their own loans schemes for fees above £6000. After all, that is what many vice-chancellors had been expecting.

The government is right to want to encourage colleges and other lower cost providers to enter the market - and bidding for funded places seems a reasonable mechanism, so long as a quality threshold is met - but it needs to think through rather more carefully how its higher education policies will interact with each other. If it doesn't, not only will it fail to improve social mobility, it will greatly
reduce the competitive capacity of English higher education.

So, as it rewrites its long-delayed Higher Education white paper, it needs a fundamental rethink of its model. Given that it is unlikely to restore teaching grants – and if it did so, it would probably raid FE budgets to pay for it – there are three things it could and should do.

On access, it should actively encourage merit-based access programmes, including those that offer places conditional on slightly lower grades to the ablest students in disadvantaged neighbourhoods. The focus needs to be on access for the poorest, not state school students who don’t need an extra leg up. On overseas students, while continuing to clamp down on bogus colleges, it needs to craft an attractive package for genuine students that tells them they are welcome rather than tolerated – and that includes access to skilled jobs in the two years after graduation. The Home Office should not be allowed to kill this vital export industry.

And finally, the Government should require universities that wish to charge £9000 a year to bear some of the liability for the loans that this will lead to, rather than trying to micromanage the market any further. By all means, auction some funded places to the lowest bidder and encourage FE and private alternatives, but do so by allowing more rather than less of a competitive environment to develop, where students can make informed choices. Getting this right is vital for students and universities.