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Monday, 14 January 2013

Miliband's plan might actually make sense

Ed Miliband Andrew Marr Show
I think I'm getting it. I really do think at last I understand the direction Ed Miliband and Labour might be taking.

Asked on the Andrew Marr show by interviewer James Landale (covering for the host who is recovering from a stroke) to explain why he has led Labour opposition to the removal of child benefit to people earning over £60,000 and the mooted removal of winter fuel allowance for wealthy pensioners, Miliband managed to communicate a coherent ideology that if he can clarify over the next two years might just get ‘One-Nation’ Labour elected back into government.

He explained that in his mind there is no difference between means testing child benefit and the winter fuel allowance and means testing entry to an NHS hospital or a State school. This is linked to the concept that universal benefits allow the UK population to retain a link to the welfare state that is not just about the paying out of money to people, but also the provision of services and a safety net.

Part of that safety net is the provision of the needs of the population. In particular the ability to feed our children and heat the homes of our elderly – who let’s not forget suffer most from the cold.

Now, those who have lost child benefit and might lose their Winter fuel allowance are very likely to always be able to feed their children and heat their homes – and are most likely not to use state schools and NHS hospitals.

But that’s not the point of ‘One-Nation’ Labour. What Miliband wants is for schools and hospitals to be good enough to be used by the whole population. He also wants the whole population to receive some benefits too.

Challenged by Landale to explain how he could possibly justify the expenditure on child benefit and winter fuel allowance for the elderly given the financial state the country is in Miliband insisted on changing the focus to tax.

If, he said:

1)      Everybody paid their tax correctly rather than avoiding it (by adjusting tax laws, the way tax is monitored, closing loopholes and enforcing tax transparency)

2)      The government hadn’t cut the top rate of income tax from 50% to 45%;

3)      There was a proper cut to pension tax relief – so that it was capped at 20% in the pound instead of whatever is the highest rate of tax you pay

Then the UK would be in a position in which everyone was making the correct contribution, which could then make it more likely that universal benefits could be continued, without adversely affecting the nation’s finances.

Let’s look at those in order. Figures for the amount of money lost to the UK through tax avoidance and evasion range from £20 billion up to over £70 billion so that can make a difference. Clamping down on it may result in companies and people moving elsewhere or act as a disincentive to enterprise (reducing the tax take possibly). Despite it being politically popular, The Treasury estimate that the 50% tax rate brought in less than £1 billion a year and possibly less – they are convinced there were many negative behavioural outcomes from the policy. (see here for their report) .

The final policy is linked to one of those behavioural responses. Pension tax relief allows a person to pay into their pension before tax instead of after tax – which means that they are allowed to save money without having paid tax on it previously (not the case with most saving schemes). Those who pay the highest rate therefore claim 45% tax relief on their pension contributions (was 50%).

So when the higher rate of tax was put up to 50% - the most sensible thing to do if you are affected by that rate would have been to put as much as possible in your pension. Any macro economics student will know that this is a withdrawal from the economy, and an explanation of how the 50% tax rate brought in far less revenue than predicted. I imagine this has stayed the same with the 45% rate. People paid enough to be charged these rates of income tax can afford to put this money away.

By capping the rate for pension tax relief at the basic rate of tax (20%) this incentive to save may not be as strong. With less incentive to shelter income in a pension pot – there could be an increase in consumption – with all the attendant multiplier effects of that (more demand for goods and services leads to more demand for labour and then so on).

Miliband concluded this section of the interview by pointing out that before the government starts doing things like capping housing benefit, reducing the uprating of benefits, and means testing child benefit and winter fuel allowance they should be looking at their revenue collection policies. Some would suggest he is arguing once again for ‘tax and spend’ but he would say it’s more about making sure policies on contribution are fair before policies on what people receive are changed.

One Nation Labour is about the whole population taking responsibility as well as the whole population gaining. He wasn’t able to commit to policies for 2015 due to an inability to predict the financial situation we will be in (which allows him to re-emphasise his point that the Tories are making the financial situation worse). But at least he could give a sign that there may be some coherence in his message.

However, it is all very well an Economics and Politics teacher understanding his message. The electorate will need to as well. Will they be prepared to listen, and will they hear?

Saturday, 22 December 2012

Crazy people with guns kill people.

Talk about putting the cart before the horse. The response of the National Rifle Association (NRA) in the USA to the recent mass killing in Connecticut is to call for teachers to be armed. Wayne LaPierre, the Chief Executive of the 4.3million member lobby group - said that “The only thing that stops a bad guy with a gun is a good guy with a gun."

The NRA have always maintained that guns don't kill people, crazy people kill people. But in the USA, crazy people can get guns. Easily. They can show up at an arms fair and buy guns without any checks, due to a loophole in the laws. Also, in the case of Adam Lanza, who carried out the recent massacre, it may be that their parents own the guns they can use.

We have some crazy people in the UK, some harbour homocidal feelings. Yet we have had only three occasions in which a lone gunman roamed around trying to kill as many people as possible - Hungerford in 1987, Dunblane in 1996 and Cumbria in 2010. Why, because it is hard for our crazy people to get hold of guns. After every massacre the British public clamoured for, and got, more gun controls.

And yet in the USA, polls show that with each mass killing the population want LESS gun control, not more. This simply cannot be ignored. It needs to be explained, and then challenged head on.

There are 300 million guns in circulation in the USA, which is almost as many guns as people in that country. This can be linked back to the second amendment of the US constitution, which grants the people of the US the right to bear arms. This is constantly invoked by the NRA, who argue that they are fighting for the peoples' rights.

They ignore of course that the second amendment was created to make sure that the people of the newly formed USA could defend themselves against any attempt by the British to re-invade the country they had just been forced out of.

The NRA also say that their people should be allowed the right to use guns for hunting animals. The trouble is that some people use guns to hunt other people. You do not need semi-automatic guns that shoot 13 bullets a second to hunt animals.  The NRA, who after all represent gun companies who make a lot of money from the sale of these arms - take the line that the way to stop someone with a gun that wants to kill you is to have a gun yourself.

This is why there are democrats and even some liberals who are against gun control. They seem to have given up hope of being able to stop other people owning guns, so they are resigned to the need to own their own guns as a deterrent to other people committing crimes against them.

Isn't this sad? Isn't is obvious that the problem is that people own guns in the first place? Is it any surprise the population of the USA are more likely to kill each other when for many people the sole reason for people to own a gun is because other people own guns?

Worse, there is little proof if any that armed guards in schools will stop these massacres taking place. The Violence Policy Centre, a not-for-profit group which campaigns for a reduction in gun violence, pointed out in response to Wayne LaPierre's speech that Columbine High School, the site of the infamous massacre that left 15 dead in 1999, did in fact have armed guards on site when Eric Harris and Dylan Klebold opened fire. “[The guards] twice engaged and fired at Eric Harris in an effort to stop the shooting but were unsuccessful because they were outgunned by the assault weapons wielded by the two teens,” Josh Sugarmann, the executive director of the centre said.

The NRA are right in one way. We do need to work very hard on the causes of the killings. There needs to be a proper investment in mental health services - although these would have to be funded by the government - something many members of the NRA would be against. There would have to be a concerted programme to address the feelings of dispossession felt by many young people - although the likelihood that this would have to be state funded would again be something many members of the NRA would be against. Whilst we're at this line of argument - who would pay for the arming and training of school staff? The NRA?

The interesting thing about the Libertarian argument against the type of "government tyranny" that would be represented by any attempt at gun control is that their answer always comes back to the need to arm people in self-defence. This ignores that fact that to commit a crime you need to have an advantage in terms of force. Given most Americans own guns you wouldn't commit a burglary without taking a gun - it's a zero sum game. The irony of all this is that libertarians have little answer to why people commit some of these crimes....a market system that abandons all those who don't succeed in it can cause crime.

So yes, we need to work on the causes of homocidal tendencies. But we also need to work on ways to get guns out of the hands of people with these tendencies.  Looking at two countries gives us a clue on this.

1) Between 1978 and 1996 there were 13 mass killings during the time that Australia didn't have any gun controls. In 1996 they embarked upon a programme of buying back guns from people. Since 1996 there have been no (zero) mass killings.

2) In China since March 2010 there have been over 10 attempted mass killings, yet the death toll from those combined have been less than the death toll from Newtown, Connecticut. Why? Because you can run from knives. Simple as that.

That crazy people may kill people is not the problem, it's that crazy people have guns. Taking the example of Adam Lanza, you would have thought that someone who owned a gun could have stopped him killing them. Adam Lanza's mother owned guns. He killed her with them.

Sunday, 1 July 2012

O-levels and the Tyranny of the minority

I doubt his implacable enemies would admit it but Michael Gove does actually want to help children born with disadvantages to succeed. The problem is that he seems to only be creating policy to help children like he was (poor but gifted) whilst forgetting or ignoring those who are not academically bright. The role of those in opposition to his reforms should be to ensure the education system helps all pupils to achieve their aspirations, without throwing the baby out with the bathwater with knee-jerk oppostitionism to all Gove is trying to achieve, much of which is honourable.

The English Baccalaureate, the return of O-levels, the change of A-levels to a linear (exams at the end of the two years instead of every few months) system, the creation of free schools, the appointment of Michael Wilshaw as Ofsted Chief inspector, the focus on improving teaching...all are controversial. But all have an aim, to ensure that should you be academically smart it won't matter whether you were born into a well-connected middle class family or an unconnected poor family, you can have access to the same universities and jobs in the future.

But when I study the detail of these policies I see a vision of a future of a dispossessed majority - because that what they will be, of pupils born into poor families who are not academically bright and for whom the education system has little to offer, or drops them into situations where they are cast adrift of society.

The idea of a return to O-levels is based upon the premise that GCSEs are not challenging enough. Mindful of the maxim that 'the plural of anecdote isn't data' I can confirm that many pupils with A*s for GCSE find A-levels an enormous step up that GCSEs haven't prepared them for.

On a personal note I took GCSEs before A*s existed and you had to get 72% to get an 'A' grade. When I started teaching I found you had to get 63% to get an A grade and 72% would be an A*. I also found that too much of GCSE teaching is spoon feeding and rote-learning and not enough of the analysis and evaluation skills needed at A-level.

Given that A-levels are what gets a pupil into university this is important - because if GCSE level education isn't stretching pupils to be able to handle the jump to A-level then it takes an immense teaching effort to get them there in the two years you have for A-level. Given most state schools' main targets are for GCSE results not A-level results you can see why too many aren't motivated to prioritise A-level teaching. When the Office for Fair Access to universities (OFFA) responds to the obvious result of this (worse results in secondary schools) by suggesting universities make lower offers to state schools I get extremely frustrated. What happened to "levelling-up"?

Anyway - so the original plan was for O-levels to be brought back. Alongside that there was a suggestion that CSEs would be brought back for weaker pupils. At the moment those weaker pupils take a "foundation level" exam at GCSE, the highest mark for which is a C. CSEs allow them to achieve a "top grade" - but employers and universities will see them as second tier qualifications, which is why the Tory government in 1986 abandoned them for the GCSE.

So Gove then says all pupils will take the tougher O-level exam. But that could mean many pupils getting lower grades and finding 14-16 education much tougher. If Gove could come up with a policy that directly addresses the attainment of lower ability pupils as opposed to just those brighter ones he wants to stretch at 'O-level' then it would help. But he hasn't.

Something needs to be done about the diverse directions pupils go after the age of 14. There is a reason Germany has a higher GDP per capita than the UK yet far better income equality. It's their education system. It's not about what happens to brighter pupils either, it's about the less bright pupils. They take exams and assessments at 14 and then are encouraged to take the academic route or a 'technical route'. This means that whilst all learn the core subjects some start learning for a trade and others are learning for university. The better income equality comes from the lower ability students emerging into adulthood with the skills for a profession, rather than what happens in the UK, where they emerge into adulthood having stayed on the academic path competing with those much brighter and having taken qualifications that are unlikely to lead to a job. If Gove addressed this, then great. But he hasn't.

So yes, Michael Gove has identified a problem - key stage 4 (14-16) education. He has identified a solution for pupils like he was. But they are the minority. You don't have to be a foaming-mouthed leftie to identify that this country's education system has put us in a position where those who rule us are from a very small gene pool ('a tyranny of the minority' if you like. If Gove wants to expand that he needs to ensure that he includes as many as possible.

But he isn't.

Saturday, 30 June 2012

Bob Diamond - wilfully blind too?

Guess who said this: "Culture is difficult to define...But for me the evidence of culture is how people behave when no-one is watching". If you have followed the news this week (30/6/2012) you may guess it's Bob Diamond - the current CEO of Barclays and, importantly, former CEO of Barclays Capital - the highly successful investment arm of Barclays Bank.

Barclays have this week just come clean over an attempt by employees of Barclays Capital to illegally manipulate LIBOR (London Interbank Offered Rate), which is the interest rate at which banks lend to each other and that gives an indication of the financial strength they think each other has. Barclays aren't the only bank involved but the motivation for doing this is that the lower LIBOR is the more confidence the market in general has in them - so basically this action hid the weakness of the banks from shareholders and the financial markets and affected the products that you and I (normal customers) owned. It is criminal behaviour.

Many are calling for Bob Diamond's head. He was in charge at the time. His argument is that he had no knowledge about it and (do you recognise this argument from somewhere) it was the actions of some isolated rogue employees and it was more a failure of the control systems within his organisation, for which he apologises. He will appear before the Treasury committee this week to argue that he can't be blamed for it but I have a feeling that won't wash.

I have written here about the 'wilful blindness' (if there is knowledge that you could have had and should have had but chose not to have, you are still responsible) that allowed the Murdochs to encourage but not know about the criminal practices in their organisation and here about the unspoken culture that can be created in an organisation caused simply by senior managers putting pressure on their subordinates to 'deliver'.

When I was working in management consultancy I was told a story by a company that made refrigeration equipment for supermarkets. He alleged that during a negotiation with a supermarket buyer who was trying to force down the price he had warned the buyer that trying to meet their price would require the use of apprentice tradesmen and risk the equipment not being safe. The buyer said without a pause that with the money he was saving on it the supermarket could afford some compensation payments should the equipment collapse. I don't believe that buyer was told by his supermarket superiors to think in such a callous way, but I do believe a culture had been created that encouraged this type of thinking.

So, I predict that when this LIBOR issue is properly investigated we might hear the following story:

Bob Diamond presides over a meeting, sends an email, or has a conversation at the water cooler with his immediate subordinate. During this conversation he digs deep into the performance of that person's department and demands that they improve. This is actually good management, keeping your employees on their toes, and can produce good returns for shareholders.

It is then likely that the senior manager Diamond talks to has cascaded these instructions and this pressure down to their subordinates and through the organisation delivering above expectations is rewarded with bonuses, and underdelivering punished by either no bonus or at worst unemployment.

Now let's travel down to the other end of the organisation chart. You are young, ambitious, and know that untold riches are on offer if you can deliver the best results. So you do what you can to achieve that. At Barclays Capital, the organisation which perpetrated the manipulation of LIBOR, the employees are extremely clever (I've taken the assessment test they all sit and it's extremely hard!). At first, they may achieve this performance using legal means.

And so, up come the results to Diamond and he's able to report to the CEO and Chairman of Barclays (John Varley and Marcus Agius at the time) fantastic results. These are reported to the City. The problem is that if you report, say, a 10% growth in profits, you have to beat that the next year. Diamond would have told his subordinates that, and that would have been cascaded down.

At some point this is impossible to do legally. At some point those junior employees, under pressure to deliver, were having to find clever ways of doing so (hence LIBOR manipulation). Possibly, their managers knew how they were doing it, but as the results were reported up the chain, those it was being reported to were less and less interested in the how and more interested in the what. Eventually it gets to Diamond who has no interest at all in how it is being done. He may possibly have even said that to his subordinates if they tried to tell him.

So, it is possible Bob Diamond had no knowledge of what is going on. But it is also possible that he created and encouraged the culture in which people behaved criminally when  no one was watching and then was wilfully blind to how the results that led to his enormous bonuses were being achieved.

At some point (and given his resources it will probably go this far) a very high court in the land may have to decide whether that means he is as guilty as the 'rogue' employees he blames. What do you think?

Tuesday, 29 May 2012

The Hounding of Hunt and the Meaning of Impartial

The most interesting aspect for me of the hounding of Culture Secretary Jeremy Hunt over his links to News International is the way that the word "impartial" has been misconstrued. Rather than being a "principle of justice that suggests that decisions be based on objective criteria", the new definition of impartial appears to be that you are intent on blocking whatever Rupert Murdoch wants to do. This is dangerously cheapening the debate, and could cost the career of one of the country's most able government ministers.
It reminds me of a former tenant of my wife's old flat who left the flat in a terrible state and made his entire defence to the Tenancy Dispute Service based upon the fact that the independent assessor must have been 'biased' and can't have been 'impartial' based upon his judgement. Since when did 'bias' mean 'not making the judgement you want'?

That's not to say that Jeremy Hunt has done nothing wrong. To walk into the House of Commons as he did and insist he had had no contact with Frederic Michel (Head of Public Affairs for News International) other than official meetings and that he “made absolutely no interventions seeking to influence” the assessment of the bid whilst it was under the purview of Vince Cable (back to him in a minute) was at best badly briefed and at worst a lie. He should be heavily censured for that.

But to suggest that the contents of the memo that he sent to David Cameron on November 19th, even the contents of the original draft of the memo, which were released during the Leveson inquiry, proved he was not  "impartial" is to thoroughly and wilfully misinterpret the meaning of the word. Hunt had, unlike many in the media, taken in information and made a judgement on the bid, and had been doing his job when he did so. In fact, the irony of it all is that he has been accused of not being impartial because in his memo he called for the bid to be judged on "objective criteria". The trouble for most of those opposed to News International's bid to take over BSkyB fully is that the bid, judged on objective criteria, would almost definitely have been approved by the Competition Commission. Which is why objective criteria were the last thing they needed.

The most important point Hunt makes is that "we must be very careful that any attempt to block it is done on genuine plurality grounds and not as a result of lobbying by competitors." Let's look at some of this lobbying shall we? Mark Thompson, Director General of the BBC, had been publicly opposed to the bid, despite the BBC's obligations to be impartial. Thompson's company, which has expertly developed into an all-encompassing on and off-line presence, thereby inhibiting the growth of local news networks and many online businesses with their huge monopoly power, would prefer it if BSkyB didn't challenge that dominance. Hence it is no surprise that Thompson was one of the signatories of a letter to Vince Cable in 2010 opposing the bid.

But Thompson's behaviour in opposing the bid (and allowing BBC news to constantly refer to to Murdoch's "empire", with its pejorative Star Wars Death Star like overtones) has been described by media veteran David Elstein as “the most flagrant breach of the BBC’s impartiality obligations in its 90-year history." Why hasn't this been properly investigated? Because Thompson appears to be on the correct side of the new definition of impartiality - in that if you are opposed to Rupert Murdoch then you must be "fair and balanced".

Let's look at the supposed "smoking gun" more closely. In the memo to David Cameron - Jeremy Hunt says this:

“Essentially what James Murdoch wants to do is to repeat what his father did with the [Sun] move to Wapping and create the world’s first multi-platform media operator, available from paper to web to TV to iPhone to iPad. Isn’t this what all media companies have to do ultimately? And if so, we must be very careful that any attempt to block it is done on genuine plurality grounds and not as a result of lobbying by competitors. The UK has the chance to lead the way … but if we block it our media sector will suffer for years … I think it would be totally wrong to cave in to the Mark Thompson/Channel 4/Guardian line that this represents a substantial change of control given that we all know Sky is controlled by News Corp now anyway.”

What those who object to Murdoch's full ownership of BSkyB are really afraid of is the access that he will have to the enormous profits that company makes. I have already explained (click here) how the  reason they make those enormous profits is from the far-sighted leadership of James Murdoch 8 years ago. That's the point, even with 39.1% ownership of Sky, News Corp have controlled it since birth (the fact that 31 year-old Murdoch was appointed should be example enough). So in terms of who controls Sky, News Corp getting 100% of it wouldn't have made a difference.

So let's go back to those profits. The problem with those profits is that it is easy (should you have a vested interest in doing so or an irrational hatred of Murdoch) to mistake those profits for "control" of the news agenda. This is fascinating given we allow the BBC 47% of news viewership and Sky News only have 7%. People argue that Murdoch would force news provision to become more "partial" (we have strict rules in this country about broadcasting that it cannot show political bias) - but how on earth would this acquisition make any difference given it doesn't actually change control of the company? Also, they don't want another 'Fox News' in this country. Of course, the inconvenient fact is that Fox News has been run with barely any Murdoch interference by Roger Ailes for the last 15 years. So we are left with the biggest problem, and the one that would need to be closely guarded by the regulators, which is the effect on newspaper plurality.

The fear is that News Corp would use the profits from Sky to subsidise incredibly low prices on their newspapers, which would cause customers of other newspapers to switch to the Sun or the Times and cause the death of the wide range of newspapers we have in the UK. Firstly, tell a Guardian reader or a Mirror reader they could have the Sun or the Times for free and they would still pay for the Guardian and the Mirror. But secondly, Jeremy Hunt says very clearly in his memo to Cameron that "sensible measures" can be put in place to make sure that any abuses of monopoly power like this cannot take place. We do have laws in this country on predatory pricing.

It is interesting to note by the way that the full draft of Jeremy Hunt's memo to David Cameron cannot be found on the BBC website or the Guardian's website. Perhaps that's because anyone who reads the full memo instead of the reporting of it may find it makes perfect sense and shows the thinking of someone who is thinking about the future of the media in the UK and has reached a judgement that News International having full ownership of Sky might be good for that future. Just because the judgement is against the prevailing wind does not mean it is wrong. The Permament Secretary of the Department of Culture, media and Sport insisted that whatever his personal views Jeremy Hunt had, from the moment the brief was given to him, taken a proper step back from the process to ensure he did in fact take on as much of a quasi-judicial role as he could.

Yet Harriet Harman of the Labour Party to claimed that David Cameron should never have given the job of deciding whether to refer the bid to the competition commission to Hunt because "it is clear that Jeremy Hunt was not the impartial arbiter he was required to be". I believe he was. He just didn't agree with Rupert Murdoch's impacable opponents. Maybe, just maybe, he had an open mind....which on this issue would make a change.

As for Cameron's part in this....he is having fingers pointed at him regarding the appointment of Hunt - saying that he purposely appointed someone who was "pro-Sky". Cameron has rightly been quick to point out that he at first appointed someone who had been actively anti-Sky in Vince Cable, but Cable remember had had to have the decision removed from him because he had said he had completely compromised himself. To remind you of how read here, but in case you don't have time - Cable said:

"I don't know if you have been following what has been happening with the Murdoch press, where I have declared war on Mr Murdoch and I think we are going to win".

Given the EU Competition Commission had just signalled they had no problem with the bid on competition grounds at the time I wonder why it was OK for Cameron to have given the job of deciding whether to refer the BSkyB bid to Cable, but not to Hunt.

It's the naked hypocrisy of all this that really gets me.....

James Murdoch...when the agent was the principal

James Murdoch has given us much to write about this year, but in my view his most important contribution to economics teaching was eight years ago, when one of the most important speeches he ever gave as Chief Executive of BSkyB resulted in shares falling 24% whilst he was giving it despite it being generally regarded as a masterstroke in business strategy.

It is rare that within such a large company the principal-agent problem is temporarily solved and there is so little divorce between ownership and control but the story of Sky under Murdoch's stewardship gave us a chance to see what happens if a company is managed with the long-term in mind, despite the pressures of the short-term demands of the investment community, compared to a period in which the company was managed with short-term objectives in mind, not necessarily in the best long-term interests of the owners.

The divorce between ownership and control occurs because the majority of shareholders in a quoted company (plc) cannot exercise day-to-day control over the decisions of managers. Managers employed by a business may have different motivations than owners and may want to maximise their own "utility" (read: rewards, both monetary and not) from being in charge of a business. This may lead to decisions that are not consistent with profit maximisation or maximising shareholder value over time.

The Principal Agent problem is caused by the principal (the owner/s of a company), needing to hire an agent (managers) to perform tasks on theirbehalf but not being able to ensure that the agent performs them in exactly the way the principal would like. The efforts of the agent are expensive and time-consuming to monitor and the incentives of the agent may differ from those of the principal leading to a conflict of objectives.

¢A good example of this was how Sky had been run before Murdoch took over in 2004. Tony Ball had been Chief Executive and had generally been regarded as excellent. Profits had risen as customer numbers rose. The trouble was that Murdoch quickly spotted that this had been achieved through a series of short-term decisions which had kept costs down at the expense of the future of BSkyB's ability to serve their customers. This was most likely to have happened because Sky's investors demanded short-term profits (and no doubt Ball had a pay package that was linked to that too).

Murdoch's speech promised two things. One was that Sky would have 10 million customers by the end of the decade (2010) and the other was that to achieve this they would need to spend £450million on upgrading their infrastructure, including its call centres and headquarters, in order to meet customer demand with a high enough quality service.

The response to this speech was that shares fell by 24%. Eventually they fell by 50%. The reason was this. Financial analysts and journalists agreed without doubt that what Murdoch was doing was absolutely correct in terms of what Sky needed in the long term. But given that the increase in costs would cause them to take a short-term hit in profits, investors should sell their shares.

Anyone who wants to understand the problems that the financial community have caused themselves in the 8 years since should think back to that day. I thought at the time it was a dark day for the long term future of those businesses interested in investing in the long-term health of their company. To mark down the value of a company like that on such short term views is simply an incentive for companies to pursue strategies that do not make business sense in the long-term.

The fact that in November 2010 Sky reached 10 million customers. The fact that they are regarded as an excellent company to work for. The fact that they are now in a position where the company is so highly cash generative - given the need now only to retain customers (which costs one fifth of what it costs to acquire new ones) is a testament to what happens sometimes when someone is hired to manage a company who has the same objectives as the owners...because he was an owner.

No wonder News International have been so desparate to acquire the whole of BSkyB - although that's another story.......

Wednesday, 18 April 2012

In Praise of George Galloway

Never has Voltaire's quoted view that "I disapprove of what you say, but I will defend to the death your right to say it" been so apt as when I think about George Galloway. Galloway's  success is a great advert for our liberal democracy - and ironically a comment on those regimes which he is alleged to support...someone with his views on the established government in those countries would be dead long ago. Instead, the man has once again turned our election system on its head by winning the recent Bradford West by-election.

To be fair, this win is not as significant as his astonishing victory in the 2005 general election in Bethnal Green and Bow by virtue of the fact that this isn't a general election - so voters aren't thinking about who they want to be prime minister when they vote and the main politcal parties aren't dominating the airwaves. But, winning a constituency is still winning a constituency, and to do so he had to win more votes than all the others (known as a simple plurality) despite not having any sort of party machine behind him.

That said, Imran Hussain, the hapless Labour candidate beaten by a massive voting swing in that constituency, will also have felt that he didn't have any sort of effective party machine behind him. To try and win a by-election in a constituency that has a heavily muslim electorate just by putting a Muslim candidate in front of them, talking about your opposition to the cuts and hoping for the best was imbeclic and underestimated what Galloway was capable of and how well planned his campaign was.

Firstly, he mobilised people who wouldn't normally vote. He used social media to talk to the young in the area and involved them in spreading his word. He used Urdu speakers to talk to those who spoke mainly urdu and hijab wearing Muslim women to talk to Muslim women. All they had to remember was "Galloway number two" (his position on the ballot)

Secondly, he chose an issue that would actually affect voting behaviour. He did talk about the unemployment and the effect of the cuts, but vitally he could use the Afghanistan and Iraq wars to distinguish himself from the Labour candidate - given that they were "Labour" wars. Galloway knew that an issue was only important if the potential voter had an opinion about it (they did), they could distinguish the competing parties' positions on it (they could) and it was something they cared enough about to change their vote (it was). Classic basic A-level politics theory.

Thirdly, Galloway used a "judo" move, in that he took on what was supposed to be his main opponents' strength - that he was a Muslim, and turned it on him. Galloway claimed that "God knows who is a Muslim" and put it about that Hussain had alcohol issues whilst Galloway didn't touch the stuff (should this be found to be a lie then this result might end up being challenged in court but since it hasn't yet I doubt it will be).

Galloway's message didn't just get through to Muslims by the way, he also won in mainly white wards, so it seems that the Bradford West electorate just wanted him to be an MP again. 

So, this week George Galloway took his seat in the House of Commons again. He sits in the back row as far away from the mainstream parties as he can. The people of Bradford West are represented by one of the most colourful, controversial and divisive figures in politics. I say "represented" but given he congratulated the people of 'Blackburn' on the night of his victory and when last an MP only went to 8% of Commons sittings I'm not sure they will actually be 'represented' as you and I might call it - but an MP he is.

Despite his views on just about everything being almost entirely different from mine, George Galloway's victory brought a smile to my face. That's what growing up in a liberal democracy does to you!

Philanthropy debate...what actually is charity?

The debate over the Government's plans to reduce the amount of tax relief someone can get down to £50,000 a year or 25% of income is raging because so-called philanthropists are arguing that it will reduce the amount of charity donations they will give. I have a question - if they will only give to charity if they are given tax relief are they really a philanthropist?

Let's just take a step back and look at what tax is actually for. The idea is that it pays towards those items that society needs to make it work - such as the state education system, the NHS, national defence, policing etc. Without enough money to fund them these areas would suffer and society would suffer. If you like, you are 'donating' money anonymously for the public good. We don't get a plaque in our honour, nor a dinner to celebrate our generosity, or our picture in the paper, we just have to trust that we might be living in a more socially just society.

Should someone earning a large amount of money decide that instead of paying into this vital pool of money through their income tax they should be able to choose where it goes themselves? A definition of philanthropy is "he effort or inclination to increase the well-being of humankind, as by charitable aid or donations". 

In the Independent today, Mark Steel writes a coruscating critique of the current uproar (click here for this)
and puts it beautifully - "rather than funding the NHS through compulsory taxation, we get millionaires to wander round a ward and give a few pounds if they see a patient they think deserves curing."

If you look at it that way - this debate takes on a whole new meaning. The governing coalition - who are trying to deal with a crushing public debt, are trying to find ways to increase tax revenue. So, and this is a cynical example I know - if the Treasury are receiving less revenue because, for instance, a 'philanthropist' has made a massive donation to a top university that his children might not have the academic ability to get into - then the public surely have a right to question whether that should attract tax relief. 

Then think about the fact that 'philanthropists' donate to the arts - claiming that the government are cutting funding. But the government are cutting funding because they have to due to the deficit, which is partly caused by tax revenue falling which is partly caused by many people not paying their far share.

So, how about this can be called a philanthropist if you donate to charity....after you have paid your fair share of tax. If you demand tax relief before you will donate to charity, then society is possibly not receiving a net gain. 

So how about a about you get tax relief on £50,000 a year or 25% of your income? Oh, wait a minute...that's the new policy.

Sunday, 15 January 2012

Michael Wilshaw, Michael Gove and inadequate teachers - who will win?

I won't lie. I'm delighted that Michael Wilshaw has been appointed Chief Inspector of Ofsted and I'm delighted that Education Secretary Michael Gove is going to have a real go at raising teaching standards, particularly helping schools challenge inadequate teachers, as detailed in this article.

Those who believe in the comprehensive state school system should also be delighted. Because at some point the catch 22 situation needs to be broken.  If you want everyone to feel comfortable sending their children to state schools then there are issues that need to be dealt with in those state schools. Michael Wilshaw has proved he can do it at Mossbourne Academy, and if, through the inspection system he can spread the magic dust he evidently has across the state school system then we will really be onto something.With the help of Gove, he might well do.

That said, there will be some people who will be afraid. Very afraid. Wilshaw has had enough of inadequate teachers. Not just that, he says he has had enough of teachers who are what he calls "coasting along" - doing what they have to do to stay in their jobs but no more - more of those in my next article.

But I want to talk about the inadequate teachers. Nothing has angered and frustrated me more during my teaching careers than teaching alongside plainly inadequate teachers. It is believed that they cost each child they teach a full grade for every year they teach them. The danger is more long term than that though. If you get an inadequate science teacher in Year 9 (in many state schools science teachers teach all three sciences to the same class) a child may lose their love of science. They may choose not to take triple science for GCSE and may drop their idea of going into a medical career. Inadequate teachers can really make that much difference to a child's life.

But it's not just the children. Inadequate teachers make their close colleagues' lives hard too. If you teach A-level there will, on many occasions, be just two of you teaching it. You can either split up the units students are taking or you can try and teach them together, splitting up the content. Whichever way you do it, the students will not learn anything in the lessons with the inadequate teacher. This means you are given a choice. You can teach the content the inadequate teacher can't/won't teach, or you can leave the students to fail.

Think about what that choice means. If you leave the students to fail the units they are taking with the inadequate teacher you are effectively leaving them to..say.. miss out on university, massively lessening their life chances. As a professional are you really able to do that? It's really hard.

So, to teach the content the inadequate teachers can't/won't teach you need to either teach a lot more in the timetabled lessons you have or you need to teach extra lessons after school or in holiday times. You will need to also do extra marking of work and past papers. It's absolutely exchausting, incredibly stressful, and not something that can be kept up for a long time.

So, inadequate teachers can destroy the life chances of their students and the working lives of their colleagues. Yet, as Chris Woodhead, the controversial former Chief Schools Inspector said in 1999, there are about 17,000 inadequate teachers in the UK. Less than 20 have been struck off by the general teaching council. So, why the gap?

Well, it's actually quite complicated. When you try to deal with an inadequate teacher you are, first of all, telling a human being they are at risk of losing their job, their lifeblood, the source of food on their childrens' table. It is an extraordinarily sensitive issue and cannot and should not be rushed. You need to be prepared for accusations of bullying, and possibly discrimination.

Secondly, you are dealing with the teaching unions. Their job is to protect the interests of their members, and they must treat those members equally. Given the power of the teaching unions - in particular the amount of teachers they represent - you need to work WITH them. The teaching unions will appear to support inadequate teachers. In fact this is not true - like any good defence lawyer they make sure that should you be trying to rid your school of an inadequate teacher you go through the proper process.

The proper process involves 'competency' procedures - where you inform the teacher you are concerned about their teaching and you make an effort to support them. Many inadequate teachers may have training needs and they deserve to be trained and given every chance to improve. The onus should be on the school to prove this has happened. Some might well improve. But some have no intention of improving, or some can't. Some will simply not put in the work to improve. They are the ones who are most likely to bleat that they are being 'bullied'. The unions' argument is that as long as the school can prove they followed the correct procedure they will not stand in the way. But too often schools don't do that. Because they are afraid of what it does to 'collegiality' and 'morale'. Not dealing with inadequate teachers is more of a cultural problem than a legal one.

Yet I argue the most damage to 'collegiality' and 'morale' is done to those teachers doing a good job who are either having to carry their inadequate colleagues or watch them fail their students.

What Michael Gove and Michael Wilshaw will hopefully do is make the task of improving/removing inadequate teachers easier - and if that means using legislation then so be it. An example is that a teacher can only be officially observed for three hours a year. Three hours a year! If you ask most Heads of Department about that they will tell you that even the worst teacher in their department can put a show on for three hours in a year. They will then go back to ruining their students life chances and there is little we can do about it.

If I were the teaching unions - I would work with Wilshaw and Gove on this - AND be seen to be doing so. By all means protect teachers against actual bullying and actual unfair treatment - but those union chiefs who understand the big picture should realise that inadequate teachers hurt their own unions' reputation almost as much as they hurt their students.

Because let's just remember who the education system is being run for. The students. Right.......?

Sunday, 27 November 2011

Strike one to the Unions?

Both sides of the fence when it comes to Wednesday's proposed strike action by almost 2 million public sector employees are relying on the public not to understand the quite complex nuance of their positions. Both sides of the fence are using misinformation to get the public onboard (Ed Balls on Andrew Marr this morning using a teaching assistant on £15,000 as an example for instance when the fact is that those on £15,000 and under aren't affected by the changes) . Trouble is, as with many political issues, both sides are right. And both are wrong. To understand this you have to understand the role and responsibility  of unions and the role and responsibility of government, and how they are clashing so seriously.

First, I think it's important to explain why the strike is taking place. Please imagine yourself in the situation of a teacher. Central to your financial planning over the years you have worked has been the safety of your pension entitlement.
  • You are being told that you will have to wait until you are 68 (currently 60 for teachers) to take that pension. 
  • You are being told you must contribute 50% more each month into your pension than you were already contributing (9% of salary instead of 6%). 
  • You are being told that your pension payments will rise by inflation calculated under the far more anaemic CPI measurement instead of the RPI measurement (bear in mind the government, when it loans out money, expects payments back to it to go up by RPI). 
  • You are being told that instead of being calculated as a percentage of your final salary (likely to be pretty high) it will be calculated over a career average salary (so much lower). 
  • Furthermore, if you are a teacher in a private school you are being told that you are being removed from the teachers' pension scheme altogether, even though you were trained by the public sector and in a normal career ay switch from one to another.
So, just to clarify, striking workers are being told they will have to pay more to receive less and work longer to receive it. A triple whammy if there ever was one.

Now let's look at the government's position:
  • The national debt - which is how much we owe to our creditors, is approaching one trillion pounds. That's 1 followed by 12 zeros, or £1,000,000,000,000. Just to cut this down - it is about £15,000 for every man woman and child in Britain, and about £35,000 per employed person in Britain. We ARE going to have to pay this back at some point. 
  • The budget deficit - this is the difference between what the government receives in tax revenue and how much they are spending each year. This year it is projected to be somewhere in the region of £168 billion pounds. That's 168 followed by 9 zeroes, or £168,000,000,000. This amount is added to the national debt every year as the shortfall has to be made up by borrowing. 
  • This means that we as a country are paying debt INTEREST (the money it costs just to service the debt - not even pay it back) of £130 million pounds A DAY.  That's about £50 billion a year in interest payments. This is about £2,000 a year for each UK household just on interest payments. That's more than the entire education budget for the UK being just the cost of the debt we have.
The Coalition government has decided to try and get the budget deficit down to zero by 2015 - although it may now take until 2017 - and that deficit reduction plan has been endorsed by the markets to the extent that the UK now can borrow money at a cheaper interest rate than it has for the last 50 years whilst the likes of Greece and Spain are near default and having to impose drastic austerity measures the likes of which would make even the most committed of deficit hawks shudder. BUT the price of doing this is that many parts of the economy are having tocontribute to deficit reduction - and the pension proposals above are how teachers and other public sector workers are being asked to do that.

The government asked Lord John Hutton (a former Labour secretary of state for work and pensions) to look into the cost of pensions after the independent Office for budgetary responsibility (OBR) suggested the gap between public sector pension contributions and payments would double over the next four years to £9bn. Many of the government proposals you see above are drawn from the report that Lord Hutton produced.

Spokespeople for the teachers' unions make the following points.

1) The teachers' pension scheme at the moment pays for itself - in that under an agreement made with the previous government it is affordable and viable in the long term.

2) The changes mean, for instance, that on a modest teachers' pension of £10,000 an annum a teacher would lose abot £50,000 over the next 20 years

3) The public sector workers didn't cause the financial crisis, so why should they have to pay for it?

The government has come back with the following points:

1) They dispute these figures and argue that at some point unless these changes take place the teachers pension scheme will not be affordable. After all - when the pension age was created life expectancy was only 18 months past it - now it is around 20 years past it, and getting higher - and something's got to give.

2) The government argue that whilst they accept this will affect many key workers badly, it is correcting the gap between public sector pensions and private sector pensions where the taxpayer is funding too high of a percentage of a liability that is growing.

3) That the financial crisis was caused by the debts built up by the previous government.

The Unions' point 3 is related to the oft-repeated conceit that the debt was caused by 'the bankers'. Whilst there is little doubt the RECESSION was triggered by problems with the financial services, it came after a sustained period of growth during which a responsible government should have built up a budget SURPLUS - but as we know we went into the recession with a massive structural budget deficit (meaning it cannot be explained purely by the economic cycle of growth and recession). The spending that came after that - some of which was very neccessary - worsened the debt to where we are now. Many of those who will be marching in the rallies on Wednesday are in their jobs funded by the unsustainable debt the previous government took on. I have pointed out in many previous articles that this spending was partly neccessary, but models of voting behaviour suggest that a Labour government might increase the size of the public sector to deliberately raise the number of workers naturally inclined to vote for them. Fact is that if you take on an unsustainable mortgage to buy a house you can't afford, at some point you may have to sell that house and trade down. Do we blame the bank for making us do that or accept that we have to take responsibility for taking on those debts? This is the reality the country faces.

Furthermore, let's say it is all about bankers. What do we do then? If we taxed all the bank bonuses paid ou in the UK last year at 100% (in which case they wouldn't be paid so it's a moot point) that would bring in about £8bn. That leaves £160bn to find from raising tax revenue or cutting spending. Any solutions?

Then there is tax avoidance. Conservative estimates say this is about £20bn - the "Tax Justice network" say it is about £70bn. Let's use that figure then. That leaves £90bn to find just to get rid of the deficit and we haven't even started paying back the debt!

A question that has been in my head this weekend as I played with my young children is - what am I going to tell them if we don't deal with the debt now and in 30 years time the UK's debt is £2 trillion, IMF bailouts are required and massive austerity measures are in place? That even though I benefitted from the prosperity of the boom years, when the bust came and the finger pointed at me I shook my head and said "not my fault"?

The changes DO affect teachers in a serious way, and given the government is a monopsony employer (it has dominant market power) the unions are doing what they are set up to do, which is representing what they feel to be the best interests of their members. The trouble is that trades unions represent sectional interests - the interests of their members, however hard they try to argue they represent a cause (i.e. their action is in the vest interests of the education of this country's young people).

Those interests may clash with what is in the best interests of the country. If you believe that everybody has to contribute their bit to bring down the debt then one could argue the teachers should take their medicine and get on with it. Should you believe that they shouldn't be asked to pay to help reduce the debt then one can argue that they should all be out on the streets striking.

Freedom of Association is one of the most important freedoms we have in our liberal democracy. Members of unions have a right to strike  as long as they have been balloted correctly - which they have - regardless of the anaemic turnout for those ballots. We should celebrate the fact that we can have these debates and workers can take these actions (within reason). In many countries, unions are banned. You'll know those countries - they are where the people are denied most if not all other freedoms.

I have a feeling the government may relent on the removal of the TPS from private school teachers and possibly the change from RPI to CPI. Possibly they'll make the additional pension contributions more progressive (e.g. only for those on much higher wages). But as I've said before, the raising of the retirement age should have happened a long time ago, and we can't really be protesting about the advances in medicine and life expectancy can we? Any changes in the teachers' favour will be seen (rightly) as vindication for Wednesday's industrial action. Or maybe they won't change anything, and we are on the cusp of a series of general strikes.

The polls at the weekend show the public are split on this. Whether they will be by next weekend remains to be seen.

Thursday, 22 September 2011

Vote Yes to Palestine state - to save Israel

The next few days are vital for global politics. Either it works or it doesn't. If it does, the Palestinian people will have a state recognised by the United Nations by this time next week and Israel will have its status and security reinforced hugely. If it doesn't, I feel that Israel's security will be put at great risk from a people who have found that the diplomatic, democratic route to achieving their aims doesn't work, leaving them with little other option.

I've not commented on this blog before about the Middle East peace process because I feel I'm compromised by my identity and my past. I love Israel and have spent a lot of time there - including my entire gap year. I come from a line of committed jews, my brother is a Rabbi and my father a (almost) rabid supporter of Israel. 20 years ago, when I returned from my gap year in Israel, I was similar to many passionate teenagers - blinded to the other side of the story and willing to die to protect that beautiful country. So I felt that I shouldn't comment on this without pointing out my connection to one side.

Since then, as I have read more and more about the history and the current situation in the Middle East. I'm still a Zionist, but I believe Zionism has a limit. As things have developed, I have become increasingly uncomfortable about the behaviour of those who run the country. Yes, it is the only true democracy in the region, and its system of proportional representation gives an exact link between votes and seats which would be positive in many situations. The truth is though that I have recently begun to accept that criticism of Israel's behaviour isn't fuelled by anti-semitism, but anti-semitism is being fuelled by Israel's behaviour. My father believes that if jews don't support Israel, no-one will - but he is a child of the second world war, which showed what can happen when the Jewish people wait for anyone else to protect them. I'm not, and the global political reality has changed.

Looking at the constant broken promises about settlement building (which I believe to be illegitimate), I'm not surprised it has come to this. Being told, as they are by Barack Obama (I'll come back to him in a while) that they must allow the peace process to run its course, must feel to Mahmoud Abbas - the Palestinian President in the West Bank, like being told to wait until a sponge is nailed to a wall.

Also, the Arab Spring has motivated all of those who do not have sovereignty over their country to want to attempt to achieve some. Now is the time for the Palestinians. The 'unity agreement' between Hamas and Fatah shows that they might take this opportunity seriously.

Israel's issue is its security. Let us not forget they are surrounded by countries who do not believe it should exist and have plotted its destruction since it was created (by the UN, remember) in 1948. Hamas, the governing party in Gaza, still has in it's constitution the aim to destroy the Zionist State. Let's also not forget that the pre - 1967 borders, which are those Barack Obama has stated should be reinstated, will make Israel only 9 miles accross in places, which is very hard to defend should they be attacked.

The Palestinians also claim that refugees and their descendents removed from Israel in 1948 should be allowed a "right of return" to Israeli land, which of course would result in them forming an electoral majority that could overwhelm Israel's existence as a state politically.

But when Palestinians take their quest for UN membership to the Security Council, the council should vote 'Yes'. For three reasons.

1) The official recognition of a Palestinian State as part of a two - state solution is a reinforcement of the existence of the State of Israel. The UN cannot do one without the other. That is important, as it reinforces the political security of Israel.

2) Once the UN has recognised the Palestinian State, it commits itself to defend and protect Israel should any attack on it come from the Palestinians. It didn't have to do so before, as they were an occupied territory and theoretically it was an uprising. But if there is a Palestinian state, a UN state cannot attack another UN state and the UN has to intervene if it does. That is also important, as it reinforces the military security of Israel. Do you seriously think the UN, and in particular the US, would stand by in this age of global media coverage if Israel was actually attacked?

3) The Palestinian people need to see there is a diplomatic and democratic route to achieving their aims. If they don't then it becomes more understandable if they feel no option but to use more violent means. That is not a threat either, it's just that membership of the UN effectively enfranchises the Palestinians in the global political process. If they remain disenfranchised, then they may resort to other means, and it will point to a peaceful attempt to achieve their aims that was turned down.

Looking at a map of  Israel and the West Bank today, you can see that a return to 1967 borders would involve the dismantling of the settlements. Or, as Prime Minister Binyamin Netanyahu calls them - the "facts on the ground". Well, the settlements, in my view, shouldn't be there. They are an obstacle to peace. So if they need to be dismantled, so be it.

And this is where the USA come in. The USA has a veto on the Security Council, and says it will use it. Why? Well, there are numerous political pressures on Barack Obama, not least from the extremely powerful Israel lobby in the USA, which is far less capable of brooking criticism of Israel's behaviour than similar organisations in the UK. Worse, and more importantly, is that the settlements' main source of funding is from the Christian evangelical right (because they believe in the literal nature of every word of the bible and the occupation of the West Bank is apparently justified by words in the bible). Sarah Palin is a huge supporter of Israel. So is Michele Bachman. So are all of the Republican Presidential candidates. Should Obama risk such a vote loser a year before the next Presidential election?

Well, yes, he should. Barack Hussein Obama should have been the best hope the Arab world had of anyone to feel they are being treated fairly. It takes a lot for the Arab world to ever feel they are being treated fairly, but what I know is that if the Palestinians don't get a state under Obama's Presidency, then will they ever? President Perry? No way!

So Obama has the choice of doing the right thing for the world, or the right thing for his chances of winning the US election. Given he is able to choose whether or not to veto at the Security Council without the need for that to be approved by Congress or the Senate....this is his chance to do what is right. Why not use his power instead to demand the Palestinians get their state only if they drop the "right of return" demand?

I love Israel. I want Israel to thrive. It won't thrive until the Palestinians have a viable state.

So let's do it.

Friday, 16 September 2011

The solution to gender pay equality?

The problem with the many explanations being put forward today for the lack of pay equality between women and men is the attempts ignore the contribution of the past. This is particularly important for executive pay.

The Chartered Management Institute (CMI) found that it will take until 2109 for female executives to catch up to their male counterparts in pay parity. On average male managers are paid £42,441 compared to females in the same role who earn just £31,895, despite woman's salaries having grown by 2.4% and men's by 2.1% in the last year.

Attempts to explain this range from straightforward discrimination, to the effect of maternity leave, to women's lack of ability to negotiate better pay terms. But I would like to suggest that the pay gap at executive levels reflects the situation in higher education 20 years ago being reflected now. And a second piece of (less trumpeted) information released by the Chartered Management Institute seems to back this up.

To explain, allow me to take you back to January 2010, and the visit of Glenda Jackson MP to my politics classroom at my old school. A student had pointed out to her statistics showing that Labour's record on social mobility was poor. She argued that it was impossible to blame Labour for any current social mobility statistics. She then explained that social mobility is measured by whether someone is better off than their parents. Given that the main driver of that will be their education, and it takes 20 years to find out whether someone really has become better off, statistics on social mobility now would reflect the achievements of those educated (like me) in the 1980s, under (she was quick to remind us), Tory mismanagement of public services. She pointed to one of the students, who had had their entire education (from beginning of Primary school to that point, halfway into A-levels) under the Labour Party. "Now, YOU", she said "we will take responsibility for. Let's see where YOU are in 20 years time. THAT will tell you whether Labour achieved social mobility."

When you think about it, she was right. By the time the girl in question is 37, she would be settled in a career and probably at executive level. Or not. She would have come through a system which was truly equal. Where boys and girls had equal chances, equal opportunities to take GCSEs and A-levels, and degrees.

Only 20 years ago, that wasn't so much the case as it is now. Less girls did degrees than boys. Less girls did A-levels than boys. Less girls went on to futher qualifications than boys. Women were still having children at an earlier age, therefore not settling properly into a career and leaving climbing up the ladder until later.

Women do, however, earn more than men when in junior management roles. The CMI found on average junior women managers now earn £21,969, which is £602 more than men at the same level, but the gender pay gap as a whole is greater in 2011 than in 2010. But what that shows is that junior women managers, who are likely to have gone through school and our education system in the same numbers and at the same speed as males and are thus achieving equality. It is quite possible that those junior women managers might grow into the equally paid and promoted executives of the next 20 years.

Except for one problem. I'm going to predict that those junior women managers are in the mid to late-twenties, thus the majority have not gone through bringing up children, which is the time when pay equality really starts to bite. People have been trying for a long time to find a way to solve that problem, which has mainly consisted of maternity legislation. Much of that has been protective over women's pay and conditions, but you hear again and again of employers being wary of hiring women of child-bearing age because of the consequences of that legislation.

But we now have new legislation which could change this.  "Additional Paternity Leave and Pay" gives fathers of babies born on or after April 3rd 2011 the right to take 26 weeks paternity leave from 20 weeks after their child's birth. This could make an interesting difference because suddenly there is little legal excuse for mothers to be staying at home for the full year to take care of their children. If parents want to be at home with their children for the full year allowed, the mother and the father will be able to share it, legally. Yes, if the father is the main breadwinner this could be difficult to do, but in any other situation there is no reason why mothers can't return to work without feeling they are abandoning their children to the childcare system.

As Glenda Jackson might point out, this is going to take about 20 years to work through our system. But I'm willing to bet that if it works like I think it might, and if the changes in equality of education and aspiration that I feel New Labour achieved during their time in power work as I think they will, we might get to equal pay between the genders at executive level a great deal sooner than 2109.

Sunday, 11 September 2011

9/11 was more successful than often credited, but not successful enough

It was lunchtime, 11th September 2001. I was doing bicep curls in the Broadgate Exchange gym in London. Toby, a web designer colleague came over and tapped me on the shoulder. "Paul, you gotta come and see this, someone's flown a plane into the World Trade Center. It was 13:53 (8:53am in New York) and by the time I got to the treadmill in front of the TV one tower was burning. At the time it was thought (according to the scrolling commentary at the bottom of the screen) that it might have been just a massive misjudgement by a pilot. What happened 10 minutes later proved that in itself to have been a similar massive mijudgement of the situation.

I hadn't brought my headphones, so I wasn't able to listen to the TV, and I still remember the noise as the second plane entered the left hand portion of the screen and headed towards the other tower. It was essentially a strangled cry of amazement, combined with "Oh my G-d"s and other expletives reverberating around the gym. I think everyone knew the significance of that second plane. Due to a big meeting elsewhere in the country I happened to be the most senior person in the office that day, so I ran from the gym to get changed and get back to it. I'm not going to claim I knew that things would never be the same again as I made my way back. The shock was too great for that.

By the time I got back to the office, the TVs were all on and the staff were gathered around them watching in stunned silence. During the next hour I remember dealing with collegues exhibiting a range of emotions. Some of them wanted to go home, some of them were angry, some of them were terrified, some of them were bewildered. We heard that London might also be a target and Canary Wharf was being evacuated. I called my boss, the MD of the company, to ask if I should let people go. He insisted that we didn't panic. Given we were located in a non-descript, old building near Liverpool Street which I had already wryly concluded any terrorists flying around looking for targets would think had already been hit he was probably right.

But I do remember one of the girls who worked on customer service saying something in anger which was a sign of just how effective the attack would be in its aims. "I tell you what, if I see a bhaji on the train goin' home I'm gonna given him what for" was what she said. Putting aside the ridiculousness of using a pejorative term for an Indian to denote who she thought was responsible, this was exactly the reaction Osama Bin Laden was looking for. Not just in normal people either. He was hoping to goad the politicians who ran the Western World into wanting to 'give Muslims what for'. Or at least to be appearing too. I doubt even he could have thought he would be so successful. Maybe he knew George Bush and those around him better than many give him credit for.

Bin Laden had tried for years to rouse the Muslim community into action through his words, detailing the grievances they should have with the West. His actions, including the bombing of the World Trade Center in 1993, the US Embassies in Tanzania and Kenya in 1998 and the USS Cole in the same year, had been aimed at attempting to rouse Bill Clinton's USA government into precipitous action in revenge. Bin Laden's ultimate aim was to goad the Western World into actions against the Muslim community which would in turn goad the Muslim community to rise up in defence of itself  - a "Holy War" or "Jihad" as he called it. But it hadn't worked.

9/11 was different. 9/11 worked. 9/11 got the over-reaction he wanted, and then some.

Going into Afghanistan without a credible exit strategy or understanding of the unlikeliness of there ever being one was the first. We forget now but the Taliban were given 30 days to hand over Osama Bin Laden and other Al-Qaeda fighters they were harbouring, at the end of which the USA and many other countries went in, backed, remember, by the United Nations, to find them. But you have to really understand Afghanistan to know the extent to which it is a collection of disparate tribes with little to bind them together. Suddenly there was a common enemy to bind them together against. That was what Osama Bin Laden wanted.

Meanwhile, on the streets of the USA, hundreds of Arab Americans, Muslims and, lets not forget, turbanned Sikhs were targetted in revenge attacks. A man has only recently been executed for killing a convenience store clerk during a 'revenge rampage'. That was what Osama Bin Laden wanted, mainly because had it carried on without being stopped by law enforcement, the Arab American community would have had to defend itself.

Then there's Iraq. I have written about the Iraq War in previous blogs. I remember trying to use international relations theory to try and explain it and finding it just about impossible. It will probably remain an anomaly in global political theory because in 100 years politics teachers without an agenda will still struggle to explain to their students why it happened. I imagine in his wildest dreams, and I imagine he DID have some pretty wild dreams, Osama Bin Laden never thought he would be handed such a propaganda coup on a plate. From that point, every swivel-eyed idealogue had one word to speak to prove to those they were trying to radicalise that the Western World were against them.

It certainly helped motivate those who planned the 7/7 bombings on tube stations in London. You can still see their videos now as they talked of the reasons behind their plans. Previously, particularly before 9/11, there was a list of spurious excuses for actions. Remember, around the time of the 1993 bombing of the World Trade Center there was a peace accord between Israel and Palestine and the USA's army were not involved in any muslim country (in fact over the next few years their involvement was to save the Muslim community in Bosnia. Now though, you could just say 'Iraq' and you had a holy army form.

On 21/7 , which was the failed bombing of the Underground, only a fortnight after the successful first, I have to admit Bin Laden nearly got me. What I mean by that is that for about 2 minutes, when the thought entered my head that we might be dealing with bomb attack after bomb attack and I decided that it might be better if the country had no Muslims in. 2 minutes. That's all it was. I'm not proud of it, in fact I'm very embarrassed, but I understand how it happened. By constantly trying to catalyze these actions, Bin Laden was trying to get the British people to attack Muslims around them, thus causing a backlash. But, to the credit of the British people, it didn't happen.

Because, and let's never forget this, the atrocities I talk about were carried out by people who say that they are doing so in the name of the Muslim people, but actually they besmirch the name of those they claim to represent.

Bin Laden's aim was to make us forget that. Bin Laden's aim was to draw the Western World into a Holy War. He came very close. But as long as sensible Westerners remain proud of the liberal democracies we live in, he will fail.

Saturday, 20 August 2011

Would the riots have happened if there was such a thing as society?

As some of you will know, I was in the Question Time audience last week for the special recording of the programme to discuss the London riots. I wasn't able to make a comment as so many people put their hands up (although I did get to ask my 5th choice question on whether there are any circumstances in which vigilante behaviour is acceptable - my answer to which is absolutely not, but it is understandable when the police seem unable or unwilling to do their job).

But the most important conversation I had in terms of my own ability to make sense of what had happened was with a man who had grown up in Liverpool and had been 18 during the Toxteth riots in 1981. He made an interesting point to me. "The whole focus of government policies since 1979 - and I include Labour governments as well as Conservative governments in this - has been to disentangle people from each other, to divide us, to give us no reason to feel part of society and our community, to make us literally climb over each other to 'win', with there being no reason not to act in our own self-interest. This country was rebuilt after the 2nd World War by making us want to work together, live together, even BE together. Then it all changed, and these riots are the results of whatever 'society' we are left with."

He couldn't have put it better - which is why I wrote down on a piece of paper everything he said. As I've said in a previous article (click here), nothing should be left off the table in our attempts to solve the root causes of these riots. But ultimately we may well need to have a fundamental reassessment of how we are governed and the macro-incentives (i.e. the reasons our economy gives for people to act in a certain way) that influence our behaviour.

I have written before on my blog about the extreme poverty that some children in this country are brought up in. I have written this month about a boy in my old school whose brother thought that the prison he was in for six months gave him a better life than at home. At the same time I have written about a hedge fund managing director who decided to buy a harrier jet with his spare money. Look at MTV and the "entertainment channels" and you can see programmes like "cribs" or reality shows featuring the children of the extremely rich. Get the Financial Times on Saturday and you get a magazine called "How to spend it" free with it. We genuinely need to think about whether it is OK and acceptable that there are such massive inequalities in our society, and in particular how they came about.

Some people, for instance, have got rich by lending money to people they knew couldn't pay it back. Some people have got rich by packaging up those loans that were never going to be paid back and selling it to other people. Some people stay rich by avoiding tax to such a massive extent that they pay a lower rate of tax than their cleaner. People have complained over the last few weeks over the rioters' just being happy to take from society without giving to it. Well, they aren't the only ones.

Another question people were asking was why the rioters were causing so much damage to their own community. They were smashing in and looting the shops on their own high street. They were setting fire to shops and home on their own streets. We need to consider why the rioters might feel in fact that they don't actually have a community.

Of course, the politicians don't set the greatest of examples. One of the reasons that they might find it so difficult to argue that it can be no excuse in court to say that the only reason someone looted a shop was because 'everyone else was doing it' is because that was the exact excuse so many MPs made during the expenses scandal. The fact is that wherever young people look today they can find examples of people taking from society as much as they can whilst seemingly giving much less.

There were many attempts to interview some of the youths taking part. Lines like "we're showing the rich that we can do what we want" suggested that the speaker felt that this country had allowed the rich to be an example to the them. Then there was "we're getting our taxes back". Now, leaving aside the possibility that most of those involved in the riots were not taxpayers, the inability to understand the purpose of taxes in terms of building society is also telling.  Is that because the 'society' that is being built and maintained by those taxes doesn't seem to include the speaker of those words?

The problem with all this is that I don't know an answer to it. Those who are ideologically rigid will have had their say already, but as I have said before, the answers will come from all angles. I know what I would like to do with our education system, but that's for another article.

What I do know is this: Something has to be done to make everyone in the UK feel part of each other's country. Something has to be done to change "us and them" into "we".

The fact is, we had 18 years of Conservative Party Policy followed by 10 years of New Labour,  followed by a financial crisis that has effectively made the tide go out to reveal the population of our country separated from each other in so many ways.

Those of us who study politics will know, as did the Liverpudlian whose thoughts I began this post with, that after the second world war we rebuilt Britain together, based upon a 'social democratic consensus' that helped a country still riven with class differences, to see itself as a society and community that worked together. 

Given we lack the money to solve this problem , we are really going to need to use our brains, because we could do with that consensus again. 

Wednesday, 10 August 2011

Punish them? Yes. But if we don't listen to them we punish ourselves.

 There has got to be a process over the next few weeks of getting those who have looted, burned and destroyed our cities to talk. They need to explain to us not only why they thought they could act in the way that they did but, more importantly, why they thought they should act in the way that they did. The long-term solution to what I would call the greatest sociological crisis this country has seen in many years lies in making everyone feel like society and community has something to offer them. Because they don't at the moment.

My personal feeling is that these riots have been gestating for years, and I would like to run through how. Regular readers of my writings will attest that I am no bleeding heart liberal and I am also no foaming-mouthed conservative either. The reality is though that we need to look at ideas from all parts of the ideological spectrum. At the moment, too many people I am seeing in the media, on social networks and just talking to are closing their ears and singing "la-la-la" as loud as they can when certain arguments are aired. I think this is dangerous.


It was one of the most haunting conversations of my life. I was in the internal suspension room at my old school and a by was telling me about his brother's release from Feltham Young Offenders' institute. I asked him what it had been like and he said "seriously Sir, my brother loved it." "Loved it?" I asked. "Get this right, it was the first time in his life that he didn't have to worry about where the next meal was coming from and there was always stuff to do. It was so much better than home." This made me really rather sad. What is our society coming to when life is better in prison than at home for some of it's members? If you think about the conspicuous consumption of those who have come into large amounts of money (by whatever means) you can see why people are insisting that we have two options to solve this problem - punish those who riot or try to find a way to share the proceeds of society more equally.

That said, there is little doubt that some of the behaviour we have seen has been caused by some outrageously lax parenting. I've seen it myself - the parents who treated my old school as a state babysitter, the parents who told me when I called to talk about their child's behaviour that "it's not my fault you can't control my kid." Police and politicians asked on monday for parents to contact their children if they were on the streets and ask or order them to come home. At what point was that going to work? The rioters may have been kids but if we are going to solve this problem we need to look at the conditions in which they are brought up, and the skills of their parents.

For instance, many students in Years 10 and 11 (15 and 16 year olds) at my old school had baby brothers and sisters. We need to look at the effect this has on them - their mother's time and attention is neccessarily taken up with a tiny baby and so the young people look outside the home for attention and a "family life" (read 'gangs').

Education system

Of the many things said to me on the day I told my old school (a state school) I was leaving to join my current school (a private school), the one that stuck most in my memory was this from an assistant head. "I can't believe you are taking your skills away from young people who need them and giving them to people who don't need them." In one sense, this was hyperbole, because all young people need a teacher's skills, albiet in different ways. But in another sense she had a point about the students at my old school. They need teachers, not just to teach them academic subjects, but to help them engage with life.

An amusing article I read once described a conversation a new teacher had with an old mate. "He asked me what this PSHCE was and I went through it in detail, how it teaches about sexual health, drugs, alcohol, relationships, citizenship skills and all that. There was a pause.....and then he said 'Oh, right, so it's basically doing what parents should do'."

The education system needs to be looked into, because every single person involved in the riots has been through it at some point in their lives. Yes, some of them may have truanted. Some will have left at 16. But even if schools haven't caused the problems, they can be involved in the solution.

We need to look at making sure the education system inculcates the right values and behaviours to ensure young people can get on in society. It also needs to be offering them opportunities to learn subjects that help them get a career and feel there is some hope in the future. We need to look at other education systems around the world. Let's start with Germany, for many reasons, but not least this one:

Britain's Gini coefficient (a measure of equality that puts an entirely unequal society at 1 and an entirely equal one at 0) is 0.36, France’s 0.32 and Germany’s 0.28. Germany's economy has recovered very strongly from the recession, but they also have an education system based upon matching their young people to appropriate educational pathways, and the result is higher equality.

Rights without responsibility

This is where something has, in my opinion, gone rather wrong in society. Somehow or other our young people are very cognisant of their 'rights' but far less accepting of their 'responsibility'. I still recall with a shake of the head what Ramzi Mohammed (one of the failed 21/7/2005 London bombers) shouted as he cowered behind a door as the police tried to break in..."I have rights! I have rights!"...this from a man who had attempted to murder hundreds of people.

It is the ultimate expression of a perfectly honourable attempt in the late 1990s to ensure that everyone was aware of their rights to make sure that they didn't accept ill-treatment and got what they were entitled to. New Labour made it very clear at the time that these rights - enshrined in the 1998 Human Rights Act - were to be given in return for citizens being responsible too. But it led to a distortion of the 'rights-culture' into what we have now.

As a teacher, I have heard many times that the school has "no right to have my kid in detention" from parents, perhaps in response to a detention for not doing homework or something nasty said to someone else. The problem is that those same parents never quite understood that not only did the school have a right to discipline their child, but it was our responsibility to do so, for their own good.

An interesting extension of this has been seen in the term "respect". Young people these days are constantly on the look out for respect. Interestingly, they feel they have a right to respect and they have no responsibility to earn that respect. I was listening to an interview with  a girl the other day saying something I have heard quite a few times along the lines of "they are disrespecting me so I'm gonna disrespect them. When they respect me I'll respect them." Trouble is, it is never clear what this 'respect' entails, and it may appear to some that 'disrespect' actually means 'trying to stop me committing crime'.

I prefer to look at it another way. As a society we should find out what would make young people feel they are being "respected" and try to offer it. Maybe it's feeling listened to. Maybe it's feeling cared about. It might actually be something we can do. But when we do it, we must insist on reciprocal responsibility.

Relations with the police

The middle class tend to look at relations with the police like they do immigration. Because they don't feel the negative side of it they think it isn't a problem for others. Immigration has been only good for me - I get cheap food from around the world and cheap cleaners and builders etc and a wonderful diversity of pupils to teach in school. But many people have seen themselves marginalised in society in favour of immigrants in terms of both jobs and housing, and we middle class intelligensia seem to brush those feelings aside as racism instead of empathising with the genuine frustration some people feel. It's the same with relations with the police. We in the middle class - not experiencing the constant hassle from the police that many in society do, never subject to constant stop and search and constant suspicion in the course of what the police will regard as just doing their job - just brush aside these claims with an "if you're doing nothing wrong you've got nothing to worry about." Well, as I talked about in point 4 of a previous article (click here), some people in society do nothing wrong and still have to worry. We need constant dialogue and understanding between the police (who are supposed, after all, to have a 'monopoly on power') and the policed. Some, of course, see the police as an impediment to them committing crimes, and hide that behind complaints of brutality and bias, but that is a very small minority.The police have made so many positive strides since the horrors of the 80s and the institutional racism laid bare by the McPherson report in the 90s in terms of their engagement with communities. But they are not there yet, and the alleged refusal to communicate with the family of Mark Duggan after he was shot dead shows that.

Restrictions on the police

The Met Police have admitted today that they gave strict orders to those on the street to "stand and observe" rather than go on the offensive against the rioters. This was because of the risk of legal challenge to their actions in the light of the ongoing court cases related to the policing of the G20 protests and the student fees protests. I have written about this (read here) and pointed out that the rioters will have guessed that this might happen and will have taken full advantage of it. By yesterday, there seemed to be a public consensus that the police should be allowed to do their job properly. Through the media the plans to use plastic bullets was aired and water cannons discussed and given that there wasn't the usual backlash to these ideas they would have probably gone through with it should there have been serious disturbances in London. BUT we need to have a debate about how it came to this. The police effectively admitted that the constant legal challenges to their actions have made them fear doing their job and the result was looting, arson and violence. Have we, in our attempt to be a liberal society, gone too far? Have we now got the police force we deserve? The vigilante groups set up yesterday and out in force all over London certainly think so.

What they see as acceptable in society

Many of the youths involved in the rioting see a society that has excluded them from 'having'. They see footballers exhibiting vast wealth and even minor celebrities flaunting their possessions. They will also have been told by some of the ringleaders that looting is OK because the rich are looters too. Tax avoidance is seen by many as stealing from society. Causing a financial crisis then rewarding yourself with 'a bonus in order to retain talent in a global employment marketplace' is also seen as looting as well. Too many people, in the eyes of the marginalised in society, have taken from us without giving. Now it's their turn. There was an interesting stand-off in Clapham where a group of residents blocked off their road to be confronted by a group of youths shouting   "you are rich, we are poor" and "we rule London tonight, not you." Others, talking to the press said that "we're going to show the rich that we can do what we want, just like they can". This, to most people, seems like a shallow excuse, but in their minds, they may believe that our current society rewards those who take what they can - but only legalises some of the methods.

"The cuts"

Ken Livingstone was called an "opportunist" for saying on Newsnight that "if you are making massive cuts, there's always the potential for this sort of revolt against that".  He talked about the social divisions created by the government's austerity drive and also the effect of the cuts in police that are taking place - pointing out that he raised the number of police by 7,000 in his time as mayor. No doubt this is electioneering by Livingstone, and, as is always required by those on the left wing, it ignores the £1 trillion of debt this government inherited from Labour but to call it 'opportunistic' is, welll, 'opportunistic' too. Because Ken is right, we do have to look at the effect of the cuts as part of looking at the causes and solutions to the current crisis in our society. From Sure Start to other children's services through to youth clubs and the like, we need to be careful what is being done away with, because the effects will be in the long run. It seems to me that the government is happy to attack the entitlements of those who don't or can't vote (the young) whilst leaving along the entitlements of those who do (the old) even though many of the older recipients of bus passes and fuel benefit are very wealthy and don't need it. I would like to see, as part of whatever inquiry arises from these riots, a closer scrutiny as to who is being affected negatively by the austerity drive. I believe in the reasons for the austerity drive, but that doesn't mean I neccessarily agree with how it is being done.

Lack of opportunities

And here lies the nub of this crisis. Many of the rioters just didn't care. So what if they got arrested? So what if they got sent to prison? Arrest and prison are a badge of courage where they come from. It doesn't make a difference to them anyway. We might say - "if you go to prison you'll find problems getting a job". To which they might legimately answer "well I didn't have any chance of getting a job before this so what difference will going to prison make?"

No, we need to get together as a society and work out how to make all young people feel they have opportunities to be successful in life. But we need to make sure their targets are actually attainable and realistic. Through help with parenting, education, sensitive policing, ensuring they learn the importance of the responsibilities of a citizen as well as the rights we can see that there are benefits from being part of a community, from being part of society.

Or we can just hang-em and flog-em.

I think I know what is more likely to work.