Archive for October, 2012

Urgent: Anti-Progress volunteer(s) needed

October 29, 2012 1 comment

This is my call for a London-based volunteer or two to attend this Progress meeting at 7.30pm [Edit: sorry, 6pm] tomorrow (Tuesday) 30th October in Westminster.

The meeting’s called Real choices for Labour: What would we give up to pay for universal childcare? and that pretty well tells you what the problem is.

The meeting will take as a given the idea that, if we are to achieve universal childcare (a good thing in itself), we’ll have to cut other stuff from the broad welfare budget.  This is wrong at several levels. 

First, even if the £6-7bn per annum needed to achieve universal care (actually I calculate it at less but let’s not quibble about that here) needed to be found from somewhere in government expenditure, that somewhere doesn’t have to be from welfare.  It could, just for example, come from Defence – you know, big rockets and stuff.   To suggest that child benefit etc. will have to be cut – as will be suggested tomorrow – is illogical even in terms of Ed Balls’ own commitment to a ‘zero-budgeting’ exercise.

Second, the meeting will seek to reaffirm the notion that it is now Labour policy NOT to deficit spend.  This needs to be challenged, especially in this area where we know that spending will lead directly not just to better early years development, but to economic growth.

Overall, the Left needs to challenge, at every opportunity, the idea that all policy will be costed within the austerity framework imposed by the Tories.  It’s not enough to be grumpy about it in the direction of Ed Miliband at big rallies; we need to stand up and be counted in meetings like this, where the policy decisions are ‘firmed up’, such that as we proceed towards 2015 those policies are increasingly presented as givens.

So who can make it? I won’t be there, as I can’t get down from Lancashire, but as an aid to people who can I am copying and pasting below my submission to Labour’s Childcare Commission (written as an email to Sharon Hodgson MP); this covers both some technicalities which will be covered tomorrow by the IPPR speaker (I had a small hand in their Double Dutch report), but also sets out in some more detail how Progress’s line – set out in the meeting title – must be contested (as well as offering a compromise solution).   Please see below.

My submission to Labour Childcare Commission

Dear Sharon

I am writing to you in respect of the Labour party childcare commission. I am a Labour party member/activist, previously labour leader on West Lancs Borough Council till my retirement from elected local government, and – more pertinently – a very hands-on Director of a childcare social enterprise in Lancashire ( Oh, I also wrote that post at Though Cowards Flinch you retweeted, for which thanks.

I am sorry I was unable to attend the EIG fringe meeting that you spoke at at conference, but I did catch both Graeme Allen and Stephen Twigg’s views, so picked up a general sense of emerging policy around childcare, and how it might differ from the Conservative approach which – if Liz Truss’s recent ‘research’ is anything to go by, will NOT be helpful. On that basis, I wanted to make a few comments.

For completeness, I’m copying in Graeme Cooke at IPPR, whom I know you have met on this subject, and whom I met yesterday; Graeme will be publishing what amounts to a rubbishing of Truss’s ‘findings’ (though he is too polite to call it that) in a couple of weeks, and I’ve had the opportunity to make a few comments on the draft, which also includes so,e views on how childcare policy might be taken forward (by an incoming Labour government).  As an experienced practitioner, I agree with a great deal of what Graeme says in his report, and urge that it be considered a key document in your policy review.

My own comments, based on what I’ve heard this week at the Labour fringe, are as follows:

‘Red tape’

The emergent Truss idea (likely to emerge as policy soon) that the childcare industry is being stifled by ‘red tape’, and childcare will suddenly become affordable,  is nonsense.

There is a fairly general agreement amongst providers of all sizes – and this was expressed at the fringe event chaired by Graeme Allen – that firm regulation is still needed, including around adult: child ratios, not least because this is the main barrier to a race to the bottom in terms of quality, with the more unscrupulous providers, motivated by their Private Equity shareholders financial returns, leading the way on slashing prices, but slashing staffing and safety quicker.

There is one specific area of Ofsted ratio regulation, however, that does bear review, and this is also picked up very well in the forthcoming IPPR report. This is the difficulty providers have with the ‘bumps’ in the ratios, where different age groups need different adult: child ratios. This quite often leads to difficult decisions for providers over whether to provide extra staff in one age group where that extra demand takes you ‘over the limit’ for your current staffing, but not sufficiently to make it viable in its own terms, at least until other demand follows. This can lead to situations where parents do not get the hours they want and would pay, and nor do providers – a lose/lose situation. The obvious remedy is to smooth the bumps by having a common ratio for all ages, but backed by rigour in the quality assurance processes.

In general though, I would urge that the ‘red tape’ removal calls be discounted; some regulation is needed and welcomed by the industry, and while improvements are always welcome, it is not a major impediment to what we do.

OECD comparisons

The Truss report makes great play of OECD country comparisons, claiming that they show the UK offering poor value for money and thus backing her claim that slashing red tape expenditure will do the trick. This is mostly rubbish, and the IPPR does a good job demolishing it, but it is important to note that it is not just Truss who uses OECD data for dubious ends. Almost any report you care to mention on childcare in Europe provides the caveat that, because childcare means different things in different places etc., meaningful comparisons cannot be made, before going on to make just such comparisons…..

In particular, goes the claims, Finland/Denmark must be doing something remarkable (or the UK something very wrong) because they offer such high quality care at such reasonable cost while coming only a little above the UK in terms of value for money/unit cost etc.. This is doubtful, to say the least. The more prosaic reality, were it to be researched properly, would probably reveal that unit costs are as low as they are in Denmark/Finland because a lot of what counts to costs in the UK are quietly picked up by the state in those countries, and don’t appears as costs in the OECD data. Thus, while the UK nursery business pays a significant % of its overall expenditure out on property costs – both mortgages/rental and running costs, the % for same in Denmark/Finland are almost certainly much smaller.

Scale and location

One of the big issues affecting quality is the economies of scale needed to make childcare provision viable. It is pretty well-established that none of the larger providers will even look at taking on/creating provision in a setting below 50 places and at 50 places you’re talking of a total number of registered children well in excess of 100 for most providers. These settings are often being quality controlled by one or two staff with the necessary level of experience/quals in pre-foundation and foundation stage child development, and it is difficult to see how these staff can spread themselves this thin and still keep a wholly child-centered service intact (in terms of real quality as opposed to child file tick boxing). We wouldn’t expect a primary school teacher to oversee the meeting of individual development needs for 100+ children, even with the assistance of TAs, but that is effectively what is happening ion nurseries, with the issue only becoming more acute in the wake of reduced Ofsted requirements for level 3 coverage in settings.

The answer to the problem, I suggest – and I think this is central to what Labour should be doing with its proposed childcare reforms – must be around the support of smaller, more local nurseries. Put simply, a nursery where all children are properly known by the senior quality manager is likely to deliver higher quality care & education than a bigger one where such resources are stretched.

There is of course one other key reason for Labour to develop its childcare policies in a way which supports the financial sustainability of smaller settings. This is simply that large settings, of the type needed to achieve financial viability at the moment, won’t happened in small towns, villages, or distant edge-of-town estates, because there is not enough demand for that scale. I often feel that Labour’s previous childcare/Children Centre policy was overly city-centric, and it will be good if our new policies can be more open to the needs of where lots of millions of non-city people live. As rough guide to this, if nursery settings need, in order to survive to have more registrations than the number of children who progress onto the local primary school(s), then the supply side support policy is wrong.

Paying for it

While, I think Graeme’s IPPR report is great, and provides an excellent platform for an innovative Labour childcare policy, there is one area where I disagree fundamentally (in a friendly way). Graeme frames the whole report with his ‘In the Black Labour’ assumption that development of childcare can only happen if it is cost neutral to the public purse overall. I think this is not only wrong, but dangerous to the overall project, and it was very worrying to hear Stephen Twigg reflecting this thinking at conference, where he said Labour’s childcare policy “might not cost any more money” (indeed this could be read as even more restrictive than Graeme’s ‘it must come from other savings line’.

I certainly accept that transferring money from the tax credit system into more direct service provision might be more effective for provider cashflow and consequent sustainability, and there may be savings from reduced complexity in the tax system (though I think there’s a valid argument that any such savings should be redirected within HMRC so as to collect more tax!). There are other possible redirections of money to be made as well not mentioned in Graeme’s report but discussed with him e.g. phasing out Childcare Information Services, which are less useful in a Google age, and pushing that money into the development of local nursery trade associations concerned with quality devt etc..

But in the end, such savings and redirections will only scratch the surface. If Labour really is to commit itself to both increased provision and increased quality of provision (as it did in the late lamented 10 year childcare strategy in 2005, and as Prof Nutbrown now urges in the report ignored by Truss et al), then it is going to cost additional money. There is simply no evading that fact. Conversely, continuing to pretend that a paradigm shift in childcare and early years development can be achieved within current budgets is dishonest, and because it is dishonest, electorally disadvantageous.

My maths (which I won’t bore you with at the moment) is that in order to do what we need to do re: both coverage and quality of affordable childcare (let’s say 6 hours a day free for 46 week of the year with graduate level skills/employment moving towards 50% in five years), we need to find in the region of an extra £4-5bn a year. That’s a lot in itself though of course it remains tiny in the context of overall expenditure given its overall importance.

So how will the extra money be found? I’m a sensible post-Keynesian who enjoys the benefit of Modern Monetary Theory insight, and so I understand better than IPPR appear to that the best way to invest is through deficit spending. That would, well, just work.

Nevertheless, I appreciate that this is politically difficult, because Labour, with a little help from In the Black Labour, has boxed itself into a ‘fiscal credibility’ corner of its own making, and will be forced to ‘say where the money is coming from’ as the election approaches. Stupid to have done it, especially when Labour will be outflanked from the ‘economic left’ by a resurgent populist Tory party under a Gove/Truss combo, but it’s done now/for now.

Given this, the best way to release the investment needed may be through the financial engineering methods which have become known as social impact bonds (though they are not in fact bonds).

To create the narrative space for this, we need to talk in terms of childcare/early years as a vital ‘social infrastructure’ – as vital in its own way as the new bridges and rail lines that Osborne talks/talked of when he announce similar financial engineering plans last October, on the premise of pension fund/insurance fund buy-in (you will note that the planned £40bn investment in these schemes appears as distant as ever).

There isn’t space/time here to go into the full workings of how this act of Osborne rug-pulling might work, and further work will be needed, but surely the idea of funding long-term educational/employment outcomes from childcare/early years excellence, via Pension Fund backing and via the political consensus so lacking in Osborne’s plans (hence the lack of investment in his) must be attractive to both investor and investment recipient. Amongst Local Authority Pension Funds, for example, there is clear and increasing appetite to see its £140bn under investment used strategically, and a clear display of political will to ensure that the correct ‘dividends’ are paid back on the basis of lower welfare bills and remedial education savings, would move the debate on very quickly (see the Association of LA Pension Funds report released at conference for details of where they are now, and perhaps set up the right people to look into how the PF’s fiduciary responsibility (non)obstacle might be overcome/pushed to one side).


I’m pretty sure I’m teaching you to suck Grandma-eggs when I say that Labour’s childcare policy is one of the most vital bits of its post-2015 programme to get right, not just electorally but as a step forward for the country as a whole. It is not beyond the bounds of probability that within five years we can create an early years/childcare set up which matches Denmark’s, but we have to be brave in order to do so. If we don’t, and if we don’t commit to the immediate reversal/remedying of the deregulation plans that Truss will announce next month and implement within 12 months, we will have only ourselves to blame.

I have told the Tories much of what I’ve said to you, in my organisation’s response to their childcare commission. It’s here.

They will ignore it in favour of Truss’s Dutch imbecility. I hope you’ll listen.

I’m available if you want to meet, or want your officials to meet with me.

Categories: General Politics

Winterbourne View: a trade union failure?

October 26, 2012 4 comments

So the Winterbourne View Eleven have been sentenced.  Six are starting prison sentences, and the over five have been given suspended sentences.  None will ever be able to work in care settings again, assuming the current CRB system remains in place.

The reaction of the Left to the horrific abuses, both when it was uncovered and when the Serious Case Review was published in August, has been much as you would expect.  Some of the left lay the blame squarely at the door of capitalist excess, suggesting that if the profiteers were driven out, everything would be just fine.  Others, operating in the New Labour managerialist tradition, say the problem lies in the Care Quality Commission’s regulatory failures.  Polly Toynbee, to her credit, manages to cover both:

Cameron’s privatising zeal looks even less enticing in the wake of this week’s two care home scandals [Castlebeck was the other]. The “dead hand of the state” looks rather more welcoming than the grasping hand of private equity….

Anger at abuse at Winterbourne View hospital landed harder on the regulator, Care Quality Commission, than on Castlebeck, the company that took £3,500 a week for hiring cheap thugs as carers. The CQC confessed that ignoring a whistleblower was unforgivable – but the regulator should long ago have blown the whistle on itself and warned its task was impossible on its current resources….

If standards of care in England are to rise to a premium standard, then the CQC requires a radical overhaul. At present, it is underfunded, understaffed – even if its current high level of vacancies are filled – and its inspections are neither frequent enough nor sufficiently detailed.

All fair enough, but it still misses the main point: eleven otherwise law-abiding people chose to engage in the sadistic abuse of very vulnerable people.  The venture capitalists didn’t make any additional money out of that abuse, and while the CQC’s might have stopped the abuse before it got going, that doesn’t alter the fact that these eleven people wanted to abuse those in their care.    

Taking care homes back under state control, while it may be a good idea for other reasons, won’t ensure that such abuse never happen again.  Nor will restructuring the CQC, welcome though that is too as one small means of improving care.

What will stop such abuse, I contend,  is a definitively socialist approach to public service quality – an approach that starts with the people who deliver those public services, which empowers them to stand up for those they are serving, and makes them want to.

For socialists, workers claiming control of the quality of public services – in a manner integral to the defence of their terms and conditions – should lie at the heart of the labour movement’s agenda.

We could do worse than take GDH Cole’s advice from 90 years ago, when he dreamed of a society based on self-regulating guilds, focused not just on worker conditons, but on the quality and social usefulness of work produced:

It is upon the Trade Unions that the brunt of the struggle will fall. It is upon our success in laying the foundations of the Guilds even under capitalism that the chances of Guild Socialism really depend, and the problem of the transition to Guild Socialism is therefore primary a problem of trade union development (my emphasis).

Cole’s dream of a Guild Socialist Britain may have been just a dream, but today’s public sector labour movement could do worse than aspire to his vision, by:

1) Acknowledging that, while it’s perfectly legitimate to defend the public sector as best we can from Tory attack, this doesn’t mean what the public sector provides is perfect, and that we also have a responsibility to ensure that the kind of abuse seen at Winterbourne View ceases; arguments about the ‘logic of capital’, and the consequent alienation of workers, are strong and valid, but they must be countered by equally strong and valid displays of solidarity, public service ethos and ‘professional pride’ (the idea of the creation of a Royal College of Teaching is interesting in this regard, though I’m not sure the ‘Royal’ bit is needed);

2) Seeking to persuade the ‘powers that be’ in the labour movement (the party and the unions) to develop clear strategies for the development of self-regulating codes of conduct (the NUJ’s code is a good example), which in time become more effective as a guarantee against inadequate public service than anything the state can impose.

3) Taking concrete steps at local levels towards the establishment or revitalisation of Trades Councils, which task themselves not just with the business of co-ordinating resistance and mitigating the worst effects of the current assault by current (and probably) government, but also with the creation of new class-conscious agreements between service provider and service user. In other words, labour activists should be seeking to develop, for a new age, the civic guilds envisaged by Cole:

The [Trades] council would exist to make articulate the civic point of view, the vital spiritual and physical demands of the people, and to coordinate with the various guilds which would have entrusted to them the task of supplying these demands.

To date, the trade union movement has been notably absent from the debate about Winterbourne View.  This is understandable, when terms and conditions of its members are its main agenda (I would also hazard a guess that very few of the eleven convicted abuses were union members).  But if public services are to be defended in their totality, there’s a bigger job to be done that looking after the public servants; we need to ensure that those they serve are looked after too.

Categories: General Politics

Cameron’s mathematically impossible Energy Bill

October 18, 2012 4 comments

Of course the back-pedalling is going on furiously, but this is what Cameron said about the forthcoming Energy Bill:

I can announce, which I am sure the hon. Gentleman will welcome, that we will be legislating so that energy companies have to give the lowest tariff to their customers….

Leaving aside the question of whether such legislation will actually raise or lower prices overall, it does amuse me that Cameron is proposing mathematically impossible legislation.

There simply is no such thing as a lowest tariff. 

A simple example might help Cameron get that.

Take an energy bill of £1,200 for the year.  If that is paid off quarterly at £300 per quarter, and the money not paid stays in a customer’s deposit account at 2%, then the customer will earn around £16 in interest (I’ve done the quick maths).  

That’s £16 in interest the energy company could have had, if it had all the cash up front, as opposed to the £8 it does get by getting the money in quarters (in the rather unlikely event that its interest rate on its deposit is also 2%). 

So the energy company offers to knocks £4 off the overall bill in return for an upfront payment. 

Q: Which is cheaper? The £1,2oo quarterly bill or the £1,116 upfront bill?

A: It depends. 

Life is complicated, and what’s cheapest for a customer depends on the opportunity cost, with the amounts at stake significantly higher than in the simple example enough.  Will taking a higher price in total allow other purchases to be made before those prices rise? Will deferring payment allow the steepling credit card bill to be managed better, even though that makes the energy cost bigger? 

But Cameron’s statement seems to suggest that he understands none of this.*  Nor does he appear to be any good at maths. 

In the end, I don’t think we will get a mathematically impossible Energy Bill, but Cameron had a go, and I imagine the fun the lawyers would have had.

* This isn’t to defend the energy companies’ apparently deliberate use of a confusing number of tariffs, but it is to suggest that the government might be better employed tackling the root cause of high energy bills (and the deliberate targeting of high tariffs at pre-payers, which is a perversion of the example above) rather than pussy-footing around the edges with stuff it doesn’t even appear to understand.

Categories: General Politics

Mehdi’s misconceptions

October 16, 2012 1 comment

I’ve followed the ‘twitterstorm’ following Mehdi Hasan’s Being pro-life doesn’t make me any less of a lefty article with interest; I can’t say I’ve read all the response posts and all the tweets, but I’ve got the gist. 

But I think there are two main omissions from the debate:

First, in nothing I have read is there any real critique of Mehdi’s understanding of what being leftwing actually means. 

Here’s how he boils down the distinction between left and right, before jumping into the debate:

[M]y motive for writing this column is not merely to revisit ancient arguments, or kick off a philosophical debate on the distinctions between socialism (with its emphasis on equality, solidarity and community) and liberalism (with its focus on individual freedom, autonomy and choice).

As a leftwinger, though, I don’t accept that distinction, because by its very duality it  suggests that leftwing political practice is not concerned with individual freedom, autonomy and choice.  

To accede to such a distinction is simply to echo the message of the right.  The point about (good) leftwing political practice is that it seeks to ensure freedom and choice for all, through an emphasis on equality, and via means of solidarity. Conversely, liberalism may talk a good game about freedom and choice for all, but its political practice is such that real freedom and choice are denied to all but the few who wield political and material power.

And it is this unfortunate caving into the dominant right-wing narrative which leads Mehdi directly towards the sentence for which he has received most criticism:

Abortion is one of those rare political issues on which left and right seem to have swapped ideologies: right-wingers talk of equality, human rights and “defending the innocent”, while left-wingers fetishise “choice”, selfishness and unbridled individualism.

While Mehdi has apologised subsequently for the use of the words “fetishise” and “selfishness”, he sticks by the principal claim:

Now, some on my side of this argument might say that the dictionary definition of “selfishness” – i.e. “concerned primarily with one’s own interests” – makes the word relevant to this debate, on an abstract, ethical level, but that is beside the point

But if, as I’ve suggested, this argument that left-wingers are in some way behaving like right-wingers dissolves away in the face of the reality of women’s reproductive rights – that the rights of individual women were won through the solidarity of women (and some men).

Second, it appears to have come as a surprise to Mehdi that people should seek to deny the validity of his views, or his right to express them:

It slowly dawned on me, at about 5pm on Sunday evening, that no matter how politely, gently and sensitively the anti-abortion case is expressed in the future, people on the ‘pro-choice’ liberal-left will never want to hear it…….Or as one commenter on Twitter put it: “One thing that really gets on my nerves about @mehdirhasan’s comments is that there isn’t even a debate to be had about abortion.”

Yet framing political debate in your own terms, and securing the material means to continue to do so, is what all of politics is. Laclau and Mouffe express this in term of the creation of boundaries, beyond which “otherness” lives, and they see that struggle for control of the boundaries as the essence of the political.  It’s what right-wingers do, and it’s what left-wingers do. It’s just that right-wingers tend to do it better, because they have more resources at their disposal. 

This normal political process of boundary setting happened to me when I set out the argument for supporting Labour councillors who have to make cuts; like Mehdi, I was called all sorts (“scum” was the term of choice), and my argument was twisted to suggest that I supported the making of cuts (the bad headline didn’t help!); that process was really just about ensuring that my minority (for now) position did not gain validity.  I lacked the resource to combat that process effectively, so I lost the battle.  Heh, that’s politics, and it’s up to me to garner more resources should I wish to re-engage (I will)

So why is Mehdi so shocked?  First and foremost, I think it’s because he’s been taken in by the right’s hold over what debate is legitimate.  That is, he thinks about political debate in the terms imposed on him by the right: ‘mature’*, ‘rational’ debate is ok, as long as its within the limits prescribed by authority.

Compare, for example, Mehdi’s reaction with right-winger Phillip Blond’s instinctive response to the twitterstorm:

Greatest error in the left is social libertarianism i.e. inability to question or even rationally debate issues like abortion.

I responded to Blond somewhat snarkily:

As opposed, say, to Theresa May’s keen desire to look rationally at the determinants of the 2011 riots? You do make me smile. [I had been at a conference with Blond at which Theresa May had refused to acknowledge that their might be merit in understanding these determinants]

In response, Blond revealed his true authoritarian colours:

Well I agree with you on this we need a wider approach to the riots than just condemnation but we also do need condemnation.

For Blond, it is clear from this, debate is valid as long as it’s preceded by a closing down of the terms of that debate.  His side holds power over what is valid as debate and what its outcome should be, and that is ‘as it should be’.  Yet he can’t see that this is also what women, who have struggled to wrest power of the debate from men in just one area, are seeking to do; that’s just ‘social libertarianism’ gone maaaad.

 I’m not saying that Mehdi is as cynically (stupidly?) disingenuous as Blond about the nature of political power. I’m just saying that, as an experienced political commentator, he needs to get to grips with the essence of the political.


*I am indebted to Dave Semple for reminding me forcefully of this, when I used the words “mature debate” in a way which, in hindsight, was a little too liberal:

When I hear words like “mature” it triggers alarm bells in my head, as the maturity of statesmen is a liberal trope often compared to the demagoguery of revolutionaries, and in reality it is simple code for siding against the “immature” (substitute also “uneducated, ill-informed”) rabble. The Decent Left against the anti-war Left. And so on. If we present our conclusions most openly – that we believe in equal access to justice – the practical measures needed to ensure that are not going to sound mature. They are going to sound extreme. They are going to be castigated by the Hang ‘em and Flog ‘em brigade.

So my personal preference is that I would rather not bother competing for terms like mature. The people we aim to convince don’t care if we seem mature, they simply care if we’re on their side. Which we – you and I – are. So my issue here is more of style than substance – but it’s with one eye on the style influencing the substance somewhere down the road.


Categories: General Politics

Liz Truss’s lies on childcare

October 16, 2012 3 comments

Yesterday, with her Telegraph piece on childcare,  the new Education Minister Liz Truss broke the embargo (to 1pm today) on IPPR’s Double Dutch report, which is a total dismantling of her earlier ‘research’ paper Affordable Quality: new approaches to childcare

This clear breach of protocol, whereby IPPR sent her the report in advance of its publication to allow her to digest it, reflects her desperation to get the first word in, and to apply one of the golden rules of spin: if you don’t like the news, try to make sure it looks like old news.

Truss’s ‘research’ (and I do use the term loosely) focuses on the model for funding of childcare developed in Holland in the 2000s, and the recommendations reflect the free market ideology she espouses, in particular the deregulation of adult:child ratios and the development demand-side funding (subsidies to parents, not providers).

The IPPR report debunks Truss’s work rigorously, showing how her ‘findings’ about how the  very high cost of childcare in Britain compared with other OECD countries is flawed, how she fails to assess the very clear failures of the Dutch model, and how much better lessons might be drawn from Denmark rather than Holland. 

I can’t hope to do the IPPR work justice* here, but it’s worth picking out a couple of factors in both Truss’s report and her Telegraph face-saving piece, since both reflect her willingness to be flexible with facts when it suits her ideological aims to be so.

First, there’s this from Truss:

The UK childminder ratios are particularly restrictive, with a 3:1 ratio being required for childminders looking after under fives. In the Netherlands that ratio is 5:1. For children under one the ratio in the UK is 1:1 whilst in the Netherlands it is 2:1.

This is IPPR’s rejoinder:

The regulations in England governing who childminders can care for is actually more flexible than the Truss report implies. The Early Years Foundation Stage makes clear that childminders can look after up to six children under the age of eight at one time, so long as no more than three are under the age of five and no more than one is under the age of one.

That’s very polite from IPPR, as befits a think-tank, but I can be less polite. Truss is simply telling lies, so desperate is she to prove her ‘red tape’ theory.

Then there’s this in her Telegraph follow-up:

There are, however, some encouraging signs that childcare is becoming a more attractive profession for graduates. The percentage of paid staff holding a higher level qualification rose from 65 per cent in 2007 to 79 per cent in 2011.

Here, her purpose seems to be to reassure her readers us that quality of provision will be just fine, and that all that needs doing is a bit cost-slashing (and actually the reverse of Professor Nutbrown’s findings in a report on qualifications and training commissioned by the government and supposedly “welcomed” when it was delivered in March 2012).

Unfortunately, she’s lying again.  She’s taken the figures from this Department for Education publication, which says (p.91):

Amongst paid staff in group based childcare settings, there were similar increases in the proportion holding at least a level 3 qualification, rising from 65 per cent in 2007 to 76 per cent in 2010 and 79 per cent in 2011.

There are actually two lies here.  First, she elides the distinction between ‘childcare’ in general, and the ‘group based childcare settings’, conveniently ignoring the fact that childminders – the providers she wants to promote most – have much lower levels of level 3 qualifications (59% in 2011, from the same report, two paras higher).

Second, and more seriously, she says that childcare is becoming more attractive to graduates, and then deliberately uses the term ‘higher level’ instead of ‘level 3′, in a tawdry attempt to imply that 79% of paid staff are graduates.   In fact level 3 is an A level equivalent, and Truss’s usage of ‘higher level’ to describe this is even contradicted on p.92 of the same DfE report:

Focusing specifically on high level qualifications, the proportion of all staff qualified to at least level 6 has increased at a slower rate in absolute terms, rising from 11 per cent in 2007 to 15 per cent in 2011 (my emphasis).

Taken together, this paints a very worrying picture of a new Education minister prepared to follow in her new mentor’s footsteps, and use deliberate lies to push her extremist policy agenda.  

On this occasion, thankfully IPPR have been rigorous enough to debunk her, and force her into underhand tactics.  It is little surprise that she declined to take part in a radio 4 piece with IPPR’s Nick Pearce today.  


* I don’t agree with the broad framework for the IPPR report, which suggests that childcare improvements must be brought about without any further public investment (not possible, frankly), but that’s not for today.








Categories: General Politics

Totally made-up cohort of families to be punished for being poor, in new government clamp down on sane social policy.

October 14, 2012 Leave a comment

So Britain’s 120,000 “most troubled families” stand to have any benefits they receive provided in the form of a smartcard rather than in cash, which they will only be able to use at a few approved stores, and which won’t allow for purchases of alcohol and tobacco.

Let’s leave aside the stigmatising effects and consequences, obvious and well researched though they are.

Let’s leave aside the “thin end of the wedge” implications of such a change in the law.

Let’s just focus on the fact that this 120,000 cohort of “most troubled families” doesn’t actually exist:

 [T]he figure of 120,000 families derives from an analysis of 2004 survey data. This estimated that about two per cent of the families in the survey had five or more of seven characteristics:

  • No parent in the family is in work;
  • Family lives in overcrowded housing;
  • No parent has any qualifications;
  • Mother has mental health problems;
  • At least one parent has a long-standing limiting illness, disability or infirmity;
  • Family has low income (below 60 per cent of median income);
  • Family cannot afford a number of food and clothing items.

We cannot even be sure that there are 120,000 families with these difficulties. Since it is a sample survey, the actual figures may be substantially lower or higher, possible as high as 300,000. But the main point is that the characteristics of these families are radically different from those targeted by the Troubled Families programme.  These are households experiencing multiple deprivation, with no evidence that they are involved in crime or anti-social behaviour. There is no evidence that there are 120,000 families of the kind the government is targeting.

That is, it’s quite possible that the government will soon remove a basic right from families – to buy what they want where they want – because they are poor and/or ill.

Words fail etc. etc.




Categories: General Politics

Will our jails cope with Thatcher’s passing?

October 11, 2012 3 comments

Someone has been jailed for four months for:

wearing a T-shirt emblazoned with offensive comments about the police hours after two officers were murdered.  [He] was jailed for eight months after admitting a public order offence by displaying writing with intention to cause harassment, alarm or distress.

As the law stands, the conviction is probably sound, given the deicsion to prosecute.  I have little doubt that, in the context of that day’s events, the T-shirt wearer did cause distress to some people, and the fact that he spent time putting the words on the T-shirt does suggest he meant it.

But  the decision to prosecute surely provides a worrying precedent.   In the next few years, an ex-Prime Minister, reviled and adored in more or less equal measure across the country as a whole, is likely to breathe her last.  It will be big news. 

The internet is already full of calls to celebrate her passing*.   There will no doubt be acts and words used which might be considered as intending to distress others, and there will almost certainly be complaints to the police.  

Perhaps, in the interests of keeping down the prison budget, the CPS might advise people how they intend to react.

* Personally, I think such calls are silly.




Categories: General Politics

The IMF multipliers: some maths, and Labour’s chance to get it right

October 10, 2012 Leave a comment

Hurrah! Fiscal multipliers are back in the news. 

The IMF has, as Duncan points out in his excellent post, revised its assumptions about the impact on GDP of austerity measures:

[T]he Fund initially thought that the multiplier was around 0.5 (i.e. £10bn of spending cuts will reduce GDP by around £5bn) whilst it now thinks they are between 0.9 and 1.7 (i.e. £10bn of spending cuts will reduce GDP by between £9bn and £17bn).

The really interesting bit for the UK, Duncan concludes, is whether the OBR will do the decent thing and revise its own projections, given that its earlier ones were based on the very assumption the IMF has now accepted was wrong.  If the OBR does do the decent thing, then the government’s Plan A pig-headedness will be even further exposed.  It won’t do anything to change government policy, but honesty from the OBR might make for a further nail in its electoral coffin. And if the OBR obfuscate (and I think that’s very likely), that will look and feel like political maniplation of a body set up with the express promise of independence.

So Duncan having done the job I planned to do (and much better than I would have done), I’ll content myself with rehearsing the maths behind the concept of the fiscal multiplier, and especially how it works best when several countries at once adopt sensible Keynesian policies when recession hits. 

To do so I cut and paste shamelessy from a post I wrote 3 years ago, in which I filled out Paul Krugman’s rather elliptic analysis (in fact Krugman comes out with a possible 2.23 multiplier if EU countries adopt a co-ordinated fiscal package). 

So if you’re sitting comfortably….


1) c = the marginal propensity to consume i.e. Krugman uses an assumption of half (0.5) additional money coming into the economy through increased public spending will be spent rather than saved.

2) m = the share of ‘marginal’ ’consumption that is spent on imports — initially for individual county, then for the EU as a whole.

3) t = the share of an increase in GDP that accrues to the government in increased taxes or reduced transfers.

4) Y=GDP, dY=change in GDP,

5) D=Deficit, dD=change in deificit,

6) G=Government purchases and dG=change in Government purchases.

The workings

If government purchases (dG) increase through public spending, this will raise GDP directly, to the extent that domestic goods and services are bought, and indirectly, as the rise in GDP induces a rise in consumer spending.

We have then in algebraic terms: dY = (1-m)dG + (1-m)(1-t)c dY

Or, fiddling around with both side of the equations, we can have: dY/dG = (1-m)/[1 - (1-m)(1-t)c]

That is, the ratio of the increase in GDP (the country/EU ‘wealth’) to the additional deficit incurred is calculated from the marginal amount not spent on imports divided by the increased taxation level staying in the system multiplied by the amount of money not spend on imports then factored to take account of what’s really spent and not saved. Sort of.

He then factors in how much the budget deficit is increased by an increase in government spending. This is not one-for-one, because higher spending leads to higher GDP and hence higher tax revenue.

This is written as: dD = dG – tdY

The ratio of the increase in GDP to the increase in the deficit is dY/dD. Taking the above into account, the first equation above can be filled out to:

dY/dD = (1-m)/[1 - (1-t)(1-m)c - t(1-m)]

According to Krugman, the average EU country spends about 40 percent of GDP on imports, and collects about 40 percent of GDP in taxes. (Krugman assumes for convenience that the marginal rates will be are the same as the average). That sounds about right overall.

He also assumes, as noted above that the marginal propensity to consume is 0.5.

So, in algebraic terms for an average EU country m = 0.4, t= 0.4, c = 0.5.

He then represents a coordinated fiscal policy by looking at the numbers for the EU as a whole. The only difference is that m falls to 0.13 (ie. one third of m = 0.4), because about two-thirds of the imports of EU members are from other EU members.

And he gets the following results:

FISCAL EXPANSION IF ONLY ONE COUNTRY DOES IT (and imports therefore make up 40% of additional spend)

dY/dD = (1-m)/[1 - (1-t)(1-m)c - t(1-m)]

dY/dD = (1-0.4)/[1 - (1-0.4)(1-0.4)0.5 - 0.4(1-0.4)]

dY/dD = 0.6/[1 - (0.6)(0.6)0.5 - (0.24)]

dY/dD = 0.6/[1 - 0.18 - 0.24]

dY/dD = 0.6/0.58

dY/dD = 1.03

Ratio of the increase in GDP to the increase in the deficit = 1.03

COORDINATED FISCAL EXPANSION ACROSS EU (and imports reduced by two thirds)

dY/dD = (1-m)/[1 - (1-t)(1-m)c - t(1-m)]

dY/dD = (1-0.13)/[1 - (1-0.4)(1-0.13)0.5 - 0.4(1-0.13)]

dY/dD = 0.87/[1 - (0.6)(0.87)0.5 - (0.348)]

dY/dD = 0.87/[1 - 0.261 - 0.348]

dY/dD = 0.87/0.391

dY/dD = 2.23

That is, the ratio of the increase in GDP to the increase in the deficit = 2.23


Of course, there are countervaling views, like this:

Proponents of discretionary fiscal stimulus hope for a Keynesian multiplier effect. It follows from the national accounts spending identity when combined with the textbook Keynesian consumption function. The latter has current income as the main driver of consumption spending. A government-induced increase in total spending then raises income and boosts private consumption, which in turn raises total spending further.

Does the multiplier work? The recent debate in the US indicates quite some disagreement even among Keynesian economists. President Obama’s advisers Christina Romer and Jared Bernstein estimate that 1% of government spending would generate a 1.6% increase in GDP……………

Our analysis suggests government spending quickly crowds out private consumption and investment, because forward-looking households and firms will consider eventual increases in future taxes, government debt, and interest rates.

In a recent paper, Tobias Cwik and I assess the magnitude of Eurozone stimulus and construct a range of impact estimates……..

Our findings confirm the earlier analysis with models of the US economy. Once you allow for a significant role of forward-looking behaviour by households and firms, there is no multiplier. The expectation of future tax increases, or rising government debt and future interest rate increases leads to a reduction in private consumption and investment spending…………

Leaving aside the difference between the 1.6x multiplier effect on the US economy suggested by Obama’s economists and Krugman’s 2.23x effect (in Europe), the essential thing to note here is that the Keynesian algebraic formulations are called into question on the basis of a missing independent variable – the ‘forward-looking behaviour by households and firms’ and’ the expectation of future tax increases, or rising government debt and future interest rate increases.

This is the core of the matter – the Keynesian stimulus works best if there is a wider Keynesian environment in which it can operate; in circumstances where households and firms are uncertain about the effects of national debt and interest rates, it doesn’t work (I’ll leave aside the notion that tax rises damp down investment, save to note that I have spent time disputing that here).

Conversely, surely goes the argument, if households and firms are sanguine about government debt, on the basis that it’s not that big really, and sanguine about interest rates, then investment will take place, and growth will occur.

It seems to me that this is a classic example of the importance of political context for economic policy making and implementation, which I set out in this post, and in which I quoted Massimo de Angelis:

Keynesianism is defined in terms of an expansionary strategy of growth. Embedded within a social and institutional framework that enables the different interests in society to remain on a dynamic balance within a regime of capitalist accumulation…..Keynesianism was never just an economic theory, it was also a form of social practice – it needed institutions that allowed the theory to work, and it implied a vision of power relations amongst classes in society.

In other words, the success or failure of economic policies depends upon who has political power, and who has the dominant ideological narrative.  To date, the neoliberal discourse of the need to balance national debt holds has held sway. 

Maybe, just maybe, the IMF’s revisions are starting to change that.  It is, as noted earlier, too much to expect that the Conservatives will be able to reverse out of the economic cul-de-sac they drove into three years ago; Cameron’s conference speech today, in which he delivers the same tired old rhetoric about Labour and borrowing, is confirmation enough of that. 

But the IMF’s revised stance may come at a time when Labour can still distance itself from the all too persuasive urgings of its own financial illiterates, and instead engage confidently in planning for an investment-led recovery from 2015, by which time the country really will be in a mess.

Vince Cable: not a man to be hurried

October 4, 2012 Leave a comment

Great news from Vince Cable:

Well today I will be speaking at the annual conference for the Community Development Finance Association (CDFA) to show how Government funding is supporting their members to meet the growing demand from small business for alternative sources of finance.

The association will receive £30m from the government’s Regional Growth Fund (RGF) which has been matched with a further £30m by the Co-operative Bank and Unity Trust Bank to provide lending to small, micro and social enterprises.

Erm, except that this RGF grant was allocated, and announced to great fanfare, some 18 month ago, in April 2011:

The Community Development Finance Association (CDFA) has been awarded a £30m grant, and a £30m loan from two high-street banks, as part of the first funding round from the government’s £1.4bn Regional Growth Fund scheme.

18 months – quite a long time when there’s no economic growth.





Categories: General Politics

Gove’s fascist schools

October 3, 2012 6 comments

I’m on a a bit of a blogging break while I get a load of pressing stuff done, but couldn’t resist this quick response to those who think my calling Gove an emergent fascist was a bit OTT*

In that post I pointed to one small aspect of an “emerging aesthetic of [Gove's] new fascism”, in the broader context of what I suggested was the quite deliberate “development of a full-blown ’decadence’ narrative about modern society, the only remedy for which is strong central control of societal behaviour”.

Rubbish, said my detractors. You have no evidence and you’re clearly deranged.  Then I read this:

Curves are to be banned in a new generation of no-frills school buildings, according to a government crackdown on what it believes is wasteful extravagance in educational architecture.

Non-curve architecture by a government keen to crackdown on extravagance, eh?  What, a bit like this?

Fascist buildings were generally very large and symmetric with sharp non-rounded edges. The buildings purposefully conveyed a sense of awe and intimidation through their size, and were made of limestone and other durable stones in order to last the entirety of the fascist era. The buildings were also very plain with little or no decoration and lacked any complexity in design. These generalities of fascist architecture contributed to the simple aesthetics the edifices display. All these aspects helped the fascist dictatorships exhibit absolute and total rule of the population. Hitler and Mussolini used fascist architecture as another source of propaganda to display to the world the strength, pride, and power their regimes had.


*Yes, I know I owe a proper response to those who were kind enough to comment on the original post. It is in the pipeline.




Categories: General Politics

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