The Cornerstone Group

Last February the NAO found that the Government had overpaid £6 billion of tax credits. Not only was this an all-too-frequent example of incompetence by government bureaucracy, but it was compounded by the requirement on many of the country’s poorer families to pay back money they had already spent. The Ombudsman has upheld many complaints by families who have suffered in this way.

Yet this is not the only way the budgets of poorer families have been hit by the Prime Minster’s ham-fisted machinery for helping them. His predecessor Tony Blair said in 1995 that Labour “cannot be morally neutral about the family” - but once they were in power, he abolished the married couples’ allowance, diverted funding from pro-marriage groups to supporters of “anything goes” relationships and targeted benefits irrespective of family structure.

Result: single mothers on low incomes are better off living apart than staying with the fathers of their children.

Given the overwhelming accumulation of evidence regarding the effects of father-deprivation and family break-up, especially on boys, can we be overly surprised by the rash of stabbings that have taken place recently in many parts of the country?

Not content with undermining the family - one of the few things that the state can neither provide nor completely control - the Government has also, in thrall to its egalitarian doctrines, effectively destroyed many of the best schools, creating huge underperforming comprehensives. Children in these institutions, without the stimulus of competition from academically selected classmates, still condemned to “child-centered” learning ideas and channelled into the easier of the dumbed-down subjects by teachers desperate to meet government targets, are lucky if they leave with a handful of ‘C’-grades at GCSE. Many are functionally illiterate and innumerate.

The Government must stop churning the benefit system through tax credits. It would be far simpler to raise tax thresholds. Instead of recycling money people have already earned and paid to the Government, that would let people on very modest incomes keep more of their own money.

We could start with the recommendation made by Lord Forsyth in his tax review, of raising thresholds significantly. For part-time workers - many of whom are single mothers - it would lift them out of tax altogether. It would be far simpler than the current cumbersome system.

It would also be morally right. As would making marriage pay again. Of course I am not suggesting that people will get married purely for the sake of a little more cash, but at a time when all but the richest are having to tighten their belts, it is one less thing for those who want to start a family to worry about. It also sends a signal about the importance of marriage - a “nudge” - in the latest political language.

When it comes to the increasing violence on our streets, in the short term, a policing strategy similar to that adopted by Rudy Giulani as mayor of New York is in order. There must be no pussyfooting around when it comes to reclaiming the streets from the gangs. Dedicated neighbourhood teams of properly armed police, freed from their desks, must have the mandate to reclaim the streets for the law-abiding.

David Cameron’s recent speech in Glasgow used terms I unreservedly applaud. He was brave enough to say:

“We as a society have been far too sensitive. In order to avoid injury to people’s feelings, in order to avoid appearing judgemental, we have failed to say what needs to be said. We have seen a decades-long erosion of responsibility, of social virtue, of self-discipline, respect for others, deferring gratification instead of instant gratification.”

“Instead we prefer moral neutrality, a refusal to make judgments about what is good and bad behaviour, right and wrong behaviour.”

Nothing could better illustrate the aptness of his words than the statement by police after a mob attack last Thursday in Croydon on two policemen whose only provocation was to ask a fifteen-year-old girl to pick up some litter she had dropped:

“Whilst we would never use the term ‘mob’, which is an inflammatory word, we can confirm that eye witnesses have discussed their initial fears that officers were going to be seriously injured or killed.”

The policemen concerned were beaten and bitten by a mob of up to 30 youths - supported by adults. It happened at 3 pm in the town centre.

Enough is enough.

“The discoveries of healing science must be the inheritance of all. That is clear. Disease must be attacked, whether it occurs in the poorest or the richest man or woman simply on the ground that it is the enemy; and it must be attacked just in the same way as the fire brigade will give its full assistance to the humblest cottage as readily as to the most important mansion… Our policy is to create a national health service in order to ensure that everybody in the country, irrespective of means, age, sex, or occupation, shall have equal opportunities to benefit from the best and most up-to-date medical and allied services available.” [1] 

When I attended the service celebrating 60 years of the National Health Service in Westminster Abbey, I couldn’t help but reflect on those stirling words. I was there to celebrate the extraordinary achievement of the men and women of our National Health Service. Whether they be doctors or nurses, porters or cleaners, managers or secretaries, they perform an extraordinary job in often the most difficult of circumstances, often working harder and longer than they are paid for.

However listening to the Prime Minister and other speakers, they were there to celebrate the system - the centralised, bureaucratic, restrictive system that this Government has accentuated.

The opening quotation is from Winston Churchill as he looked forward to a new National Health Service on 2^nd March 1944.

More than 60 years on from that vision, we can only conclude that the National Health Service has failed to live up to those original ideas. Clearly today’s patients are not able to benefit from the most up-to-date medical and allied services available. Around the world, new drugs and treatments are introduced quicker, treatments are made available immediately and outcomes are better.

When I grew up, as a child the National Health Service was the best in Europe. It has now tumbled down the league tables. The index of European Health services published in October 2007 by Health Consumer Powerhouse shows the UK as 17^th out of 29 countries - the EU 27 plus Norway and Switzerland[2]. The countries ranked below Great Britain are almost entirely from the poorer Eastern European states.

What’s gone wrong?

If it was funding, then after more than 11 years of New Labour our health service would have been transformed. In 1996/97 spending on health in the UK by the Government was 42.7 billion pounds or 54.6 billion pounds in today’s money. It took about 14% of public expenditure.[3] 

Last year the Government spent 107.2 billion pounds of taxpayers’ money on UK health, nearly 20% of public expenditure.[4] With such a massive increase in expenditure, health treatments should have been transformed. Yet this has not happened.

Health outcomes are measured by Finished Consultant Episodes (FCEs). In England, the latest figures available from 2006/07, showed that there were 14,784,581 FCEs.[5] In 1998/99 there were 11,983,893 FCEs [6] - an increase of 2,800,688 which is an increase of 23.37%. Yet in the same period, Government health expenditure in England increased from 36.6 billion pounds to 80.6 billion pounds [7] - an increase of 44 billion pounds, a cash increase of 120.2%. When adjusted for inflation, an increase of 81.66%.

So we have taxpayers paying in, in real terms 82% more and getting in return for it a 23% increase in outcomes. Only in a massive, centralised, nationalised organisation could that be considered an achievement. Pumping taxpayers’ money into the NHS under New Labour has been inefficient and disastrous for the patient.

History has shown that any large nationalised organisation is inefficient and a black hole when it comes to expenditure.

If we look at the cost of healthcare for last year, the average cost per household in England for all healthcare whether it be through taxes, charges or insurance premiums came to just under £5000. [8]  This year it is likely to exceed £5,200 per household. Healthcare in this country is both expensive and inefficient.

At the same time, NHS staff morale has hit a new low. In the NHS Staff Survey by Incomes Data Services published in August 2007, 61% of NHS staff reported that their morale and motivation was worse than a year ago. [9]

Much has been made of Labour’s reduction in waiting times and its target culture. In November 2005 the then Prime Minister Tony Blair claimed that nobody waited more than six months for an NHS inpatient operation. Despite Ministers regularly repeating this claim, it has never been true, even using the Government’s own bogus criteria.

In the National NHS Patient Survey Programme 2007, 21% of adult inpatients surveyed said that they had to wait more than six months to be admitted to an NHS hospital. Clearly, the Government’s claim that no one waits more than six months is false. In 2006, 16% of adult inpatients reported a wait of over six months so waiting times are getting longer, not shorter. [12]

But there is an even greater scandal involving waiting times. Although long waiting times have been reduced in the last 11 years, short waiting times have increased significantly. To meet the Government’s target of six months, patients who would have been seen within weeks are now having to wait five and a half months for admittance to hospital. The median wait for an NHS inpatient operation is now longer than it was in 1997.  

The average NHS waiting time today is 49 days. Under the Conservatives it was 41 days. [14]

I spoke recently with a very senior liver consultant who is one of the best in the country. He told me that he is having to see patients who could be seen by a junior doctor but because of central government targets patients had to see him. At the same time, people who are very seriously ill with liver problems are having to wait longer to see the top consultant because he also has to deal with minor cases.

Another scandal in our health service is that when new drugs and treatments are developed, there is an extraordinary delay in getting them approved for use on the NHS, if approval is given at all.

Over the last year I have worked hard lobbying the Government and the National Institute for Clinical Excellence (NICE) to approve sight saving drugs on the NHS for the treatment of Wet Eye Age Related Macular Degeneration (Wet AMD).

People all over the country who suffered from Wet AMD were told to either pay thousands of pounds of their own money to buy these proven drugs or lose their sight. Only a centralised, nationalised health care system, the likes of which Stalin would be proud of would allow people to go blind unnecessarily.

New treatments once developed, must be approved quicker for use on the NHS.

The uptake of new drugs in the NHS is half that of Germany and a third of that in France. The Wanless Interim Report produced a table of both the adoption and diffusion of new technologies. The NHS came bottom.

(10.13, Wanless Interim report) [15]

What needs to be done to improve things?

The Government is slowly beginning to recognise that by giving organisations local independence, they run much more efficiently.

Foundation hospitals are certainly a step in the right direction. Because they are allowed to keep their efficiency savings for future patient care, they have bothered to make efficiency savings. 1.7 billion pounds is being held in foundation hospital accounts for future investment in patient care.

However dinosaurs in the Labour Party want that immediately handed back to the Government. If that was done, there would be no incentive to make the efficiency savings in the first place and the savings just would not be made.

Another vital issue to improve the NHS is that Whitehall-set targets must be abolished. We have seen that after 11 years of a Labour Government, targets do not work. We have seen plan after plan, report after report and reorganisation after reorganisation. It is like the old communist system - five year and ten year plans. One consultant said to me recently that the only good thing about NHS 10 year plans is that we know we can ignore them because we know that they will be scrapped or changed in two years. What we need in our health service, is clinical judgement, not politicians in Whitehall dictating in a most extraordinary, prescriptive way what our doctors and nurses do. 

The Conservative Party should be praised for its radical new thinking on health provision and making it its number one priority. Andrew Lansley has produced a whole series of health initiatives for improving health outcomes. Concentrating on health outcomes rather than targets must be right.

David Cameron in a speech to the Royal College of Surgeons on 24 June 2008 detailed how a Conservative Government would improve health outcomes by halting the constant re-organisations of the NHS; by giving GPs real control over their budgets so they can re-invest savings and negotiate contracts with service providers to deliver the best deal for their patients; by letting patients choose any provider that meets NHS standards and delivers at NHS costs; and most importantly by publishing the details of healthcare outcomes so that the patient is fully informed of their options. [17]

Taxation and the funding of healthcare needs to be transparent. We currently pay for the NHS through our taxes each month but how much of this taxation actually goes on healthcare? We do not know. Taxation which goes towards the NHS can not be identified under the present fiscal system.

Expenditure for healthcare is just paid out of the consolidated fund and not hypothecated to any tax.

The system could be much more transparent if taxation to fund the health service is isolated from other taxation. We need a hypothecated tax system for health funding. If some of our monthly tax contributions are called National Insurance Contributions, why not use these contributions as the sole funding for the NHS?

Last year the Government spent 107.2 billion pounds of UK taxpayers’ money on total health spending[18]. In the same year, the amount of revenue raised in the UK through National Insurance Contributions was 97.4 billion pounds. [19]

Given that National Health Service spending is only a proportion of overall health spending by the Government, it would be very easy to adjust the National Insurance Contributions rate to match that of NHS spending each year. It would show individual employees how much they were contributing each month towards the health service and also how much their employers were contributing each month to the health service.

And why not run the system as it should be? National Insurance Contributions should be exactly that - an insurance programme as envisaged by Sir William Beveridge in his 1942 Report on Social Insurance and Allied Services. Patients should have the right to be treated where they want whether it is in a NHS or independent hospital. It is their money and they should be allowed to use it at any healthcare facility. If you were able to do this, it would bring in new independent providers and force NHS providers to become more efficient.

One of the more sensible policies from the European Commission is to give patients of EU countries the right to shop around Europe for the best and quickest medical treatment. If the purpose of the European Union is to be a large free trade area in services as well as goods, then this is a natural and sensible progression. However, the UK Government has opposed this move because it does not compute with the regimented, nationalised health service. It is ironic that when the European Union comes up with a free-market policy, this Euro-fanatic Labour Government doesn’t want to know.

People should not be penalised for seeking private treatment. In fact, in the present climate it should be encouraged because if a patient goes private, they are freeing up the NHS for someone else. If a desperately ill cancer patient chooses to pay privately for treatment not available on the NHS, how on earth has the Government got the right to say that further treatment will not be paid for by the National Health Service?

It is morally evil and financially stupid. The cancer patient would have paid their National Insurance Contributions like everyone else. How can this Labour Government then deny them NHS treatment? This is the sort of action you would expect in a communist state of the 1960s, not a British Government in the 21^st Century.

And let us not forget, the NHS is not free at the point of need. People have to pay prescription charges; dentist bills - especially in a time when NHS dentistry has become virtually privatised in many areas; optician charges and they also have to pay for treatments that are not available on the NHS. Our National Health Service has never been free at the point of use and this myth must be dispelled.

It is nonsense that we do not involve the private sector more in the NHS. If you look at all the countries in the world that have a first class health system, they successfully use the private sector to provide innovative new treatments, first rate health care facilities and have no waiting times.

Independent sector involvement would ensure competition. Our health system would be delivered on a demand basis rather than a supply one. The inverted balance of supply and demand in the NHS today is one that is endemic of its top-down management. We have today a nationalised system of health rationing.

I am not advocating the abolition of the NHS but instead ways to improve it.

My proposals of a transparent taxation policy, independence for clinicians, the removal of state controls, the increased use of independent health providers and more choice would all strengthen the National Health Service.

It would be a health care system fit for the 21^st Century.

Disclaimer:

The views expressed above are those of the author alone and intended to provoke discussion and debate. They do not necessarily reflect the views of other members of the Cornerstone Group.

Peter Bone is Member of Parliament for Wellingborough, Member of the House of Commons Health Committee and a Fellow of the Institute of Chartered Accountants England and Wales.

Winston Churchill, Speech 2 March 1944

The Guardian, 2 October 2007

Health Committee, Public Expenditure on Health and Personal Social Services Questionnaire 2006, HC 1692-1, 26 October; HM Treasury, Public Expenditure Statistical Analyses

Ibid.

Hospital Episode Statistics, DH

Ibid.

Health Select Committee, Public Expenditure on Health and Personal Social Services 2007, Table 1: DH, Departmental Report (various years); HMT, PESA 2008, Table 1.12

HMT, PESA 2008; DH Departmental Report 2008; OECD, CLG household projections

Incomes Data Services, NHS Staff Survey; A Research Report for the Joint NHS Trade Unions, August 2007

Hansard, 30 November 2005, Column 264

The Healthcare Commission, National NHS Patient Survey Programme Survey of Adult Inpatients in the NHS, 2007

The Healthcare Commission, National NHS Patient Survey Programme Survey of Adult Inpatients in the NHS, 2006

Daily Mail, 5 March 2008

Ibid.

REFORM, A Better Way, Commission on the Reform of Public Services, Chapter 2

Health Committee, HC 833-I, Uncorrected Oral Evidence: Foundation Trusts and Monitor, 3 July 2008

David Cameron, Speech to the Royal College of Surgeons, 24 June 2008

Health Committee, Public Expenditure on Health and Personal Social Services Questionnaire 2006, HC 1692-1, 26 October;

HM Treasury Budget 2008 Table C6

I have blogged elsewhere about having one of the very highest levels of immigration casework of any MP in Britain and some of the effects of our chaotic immigration administration, its impact on our society and on the applicants themselves, like HERE http://conservativehome.blogs.com/centreright/2008/05/is-our-immigrat.html HERE http://conservativehome.blogs.com/platform/greg_hands_mp/index.html and HERE http://www.order-order.com/2007/11/security-confusion.html . I have also highlighted cases where our authorities have been needlessly severe on people who are here quite legitimately, like the case of the Bulgarian banker just a few months before that country’s accession to the EU, which I mentioned in the Commons HERE http://www.publications.parliament.uk/pa/cm200708/cmhansrd/cm080116/debtext/80116-0009.htm#080116103002426

Very often a case comes across my desk where one can’t help but ask - why is this man in the UK? This letter (ATTACHED) reached me a few weeks ago. I have deleted the man’s name and address, but hopefully one can still follow the line of argumentation from the Home Office. The man concerned is not an unusual case in its description, but the magnitude of asylum applications and appeals is certainly extreme. Amazingly, this man had SEVEN asylum applications or appeals dismissed over a two and a half year period, 1999 - 2001. Twice, it was deemed that “his appeal rights were exhausted”.

Surely, he should have been deported, any reasonable observer would ask? But no, two years after the second time that his appeal rights were “exhausted”, and five years after his arrival in the UK, this man was given leave to remain for three years on “compassionate grounds”. Now, I don’t know what the specific compassionate grounds were in this case, but typically they might be that the man had gotten married and/or had children. The children might well have reached the age of full-time education. I don’t blame the individual concerned. Most failed asylum seekers were or are in their 20s, and it’s almost inevitable that many would settle down as their various applications and appeals are considered. That should increase the onus on the Home Office to determine their cases more quickly.

Under Labour, this hasn’t happened. In fact, there are today around 450,000 “legacy” asylum cases in the UK still unresolved. That’s a lot of people in a country of 60-odd million people. The backlog is being worked off rather slowly, so the incoming Conservative government will be faced with a huge problem - how many of these cases do we seek to deport, and what do we do with the thousands who have now settled here with families? There will be some tough policy choices for a new Conservative Home Secretary.

Our town and city centres lie at the heart of our communities and are as vital to their health as the heart is to the body. Yet over the last thirty years or so, the centres of many of our communities have suffered a gradual but persistent decline. Ring roads have isolated them, parking charges have depleted them, out-of-town development detracted from them, poor planning undermined them and anti-social behaviour made them less safe and less attractive places to visit.

Whilst many of the individual factors might in themselves not seem to cause major harm, their combined effect over many years can be to put once-active and robust community hubs into seemingly interminable decline. This naturally has an impact on the pride and sense of belonging people feel towards their own communities, but also their country too. Too often I hear people say their town centre is a mess, and in the very next breath add that the country is going downhill, almost as though the two were directly linked. And perhaps they are.                   

The most obvious symptom of this decline is the near disappearance of the independent small retailer from our high streets. They provide diversity, charm, interest and a level of personal service that is becoming all too rare in today’s town centre, and their loss is keenly felt by many. The boarded-up shop fronts, the graffiti, the absence of visitors, all pay sad testimony to the decay of so many of our towns.                                                       

However the trend is not irreversible; restoring small shops to our town centres can be as iconic as restoring salmon to the Thames.

The Conservative Party Enterprise Group has produced a strategy for restoring the ability of local communities to act collectively to rebuild the health of their community hubs. It suggests a new framework together with possible options which are by no means prescriptive and through which new local ventures can be mobilised to support a new wave of community revitalisation, be it in satellite areas around big cities, in smaller cities, towns or in the village high street.

With people in local communities acting together to revitalise our high streets, the Group believes we can create a renewed sense of well-being which will impact upon the health of the nation as a whole and they recommend the report to the Conservative Party as a positive framework for a new Conservative Government.

Should you require a copy of the report please contact Mr Binley’s office by emailing binleyb@parliament.uk

Introduction

The failures of our current education system are too numerous and familiar to bear repetition. Suffice it to say we all know that something is rotten in the state of British education. After 11 years of a Labour government, too many children leave school functionally illiterate and innumerate, and too many, fed through the sausage-machine of our current system, drop out of university. If money were the solution, the problem would surely have been fixed by now. In the current year the Government will spend 5.6% of GDP on education (from primary to university), as against 4.7% in 1996-1997 - an increase approaching 20%[1].

In spite of this largesse with our taxes, a recent poll shows that nearly three in five (57%) of parents would send their children to an independent school if they could afford to. That is the biggest figure since Labour came to power, and more than 20% up (nine percentage points) on the previous poll four years ago.[2]

With this in mind, I have a few ideas for improving the situation.

One plank of my proposal, regarding independent schools, is similar to the (Labour-dismantled) assisted places scheme - but with minimal state intervention. Another is that all state schools should be grant-maintained, as an essential basis for any worthwhile liberation of the state sector.

Building on current Conservative party policy

Head teachers have always said that they need to have the absolute right of decisions over expulsion resting with them, so I am delighted to see that Michael Gove has announced that this will be restored by a Conservative government. Too many children’s education suffers from disruption by reinstated troublemakers.

Michael will also reduce bureaucracy in planning and building; increase the organisations that can set up Academies; give parents control of £5,000 + per pupil to take child out of a school they are unhappy with and apply to a new Academy; provide extra capital funding for new Academies in the poorest areas, and give them ‘greater autonomy’ over the curriculum.

This all takes us further in the direction of the relative freedoms established by the Government through the Academy schools. Michael’s plans are an excellent foundation for a future Conservative government. Here are a few ideas for building on his superb work.

For instance, he says that all Academies will be non-selective. But why shouldn’t all schools - not just Academies - have freedom from local authority control, freedom over the curriculum, freedom to set their teachers’ salaries and freedom to select their pupils? Some may prefer to become more academically selective, others not; I would not force any school to select. Currently almost all comprehensives can select 10% of their intake on what one might call quasi-academic grounds[3], so even the Government has grudgingly conceded a little ground.

Who benefits from preventing selection?

But while the Government’s opposition to full academic selection may please doctrinaire egalitarians, it does nothing but damage to the prospects of children - especially those the egalitarians most want to help. The ‘surplus places policy’ does not officially exist; nonetheless, it is a grimly established fact. It means that if a single place is vacant at the direst of state schools in a particular area, the local authority will permit neither a popular school to expand nor a new school to be opened.

No wonder nearly a fifth of children don’t get their school of first choice; in parts of London, as many as half are disappointed. No wonder atheists have their children baptised to get them into good church schools.

We accept selection in most other parts of life, as in choosing candidates for jobs - though even here egalitarians are keen on quotas based on criteria other than qualifications and suitability. The Government’s latest plans to legalise ‘positive discrimination’ for employers on grounds of sex and race as a ‘tie-breaker’ where two candidates are of equal merit is a case in point.

When it comes to education, for most children, a highly academic school would not serve them best, but for those who would benefit from such, it should be made available. I have never been in favour of recreating the educational apartheid of the 1950s between grammar schools and secondary moderns, but I do think heads should be able to run their schools as they please.  Very few schools in such a case would ever become super-selective. Why should they? Why can’t schools in the state sector be given the same freedom as those in the private sector where there is an infinite variety of type of schools? Most independent sector schools are effectively all-ability.What a pity that people on ordinary incomes find it so difficult to access them.

In many other walks of life we give people a leg-up; why not in education?

Meanwhile Michael Gove’s emphasis on streaming is a very welcome first step in helping children move forward at their own pace. I fully agree with him that we should not be obsessed with creating a few more grammar schools. Equally, it would be wrong to rule out the creation of a few more if heads think they are needed

All schools should be able to find their own level. This can only happen when head teachers are allowed to manage their budget, control their curriculum, hire and fire their staff and have in their schools the pupils they want.

The restrictions which currently prevent these common-sense freedoms from being exercised should be lifted forthwith. Only then will state education be able to flourish so that most children’s’ time at school becomes not an ordeal issuing in failure, but an experience in which their self-confidence is built up by acquiring a solid grounding in the knowledge essential to success.

Our motto should be: ‘Get Whitehall and politicians out of education.’

The Education Tax Credit: how it works

This new take on school choice is an idea from the USA and Canada - the ‘education tax credit’.[4] Noticing the widespread availability of tax allowances for schooling in Europe, I have adapted it to the British situation. This is not a voucher in disguise; it is an altogether different mechanism, a variation on the assisted places scheme. Although the Treasury is involved in an administrative role, in essence the credit is a private contract between parents and schools. No “Government money” - really taxpayers’ money - is involved. Hopefully, this could overcome some of the understandable resistance to previously proposed schemes from the independent schools, who are ‘once bitten twice shy’ from the abolition of the assisted places scheme.

The basic principle of the credit is that it gives parents a pound-for-pound reduction in their income tax liability up to a sum equivalent either to a proportion or, perhaps, the full amount, of that spent in the state sector for each child they have in private education.

I am not being prescriptive as to the best approach, but rather tentatively putting forward two alternative ideas for debate. Below are some essential points:

• The credit could be EITHER not means-tested and worth £6,000 per child (equivalent to about the full cost of state school expenditure).
• OR means-tested, against a figure for maximum family income yet to be decided, given the number of variables.
• It should put no limit on family size.

Advantages of the education tax credit

• Encourages more parents to choose independent education.
• Increasing competition lowers cost of independent schooling.
• Stimulates increase in number of suppliers.
• Increases innovation.

How to introduce it: various options, not an exhaustive list

• 1) It could either be introduced piecemeal - i.e. starting with a credit of £500 or £1,000 and increasing the amount incrementally - over the first 5 years of a Conservative government, but, importantly, with its ultimate goal declared from the outset.
• 2) Or piecemeal from the second term of what one hopes will be at least a 3-term Conservative government.
• 3) Or it could be introduced in the first term of a Conservative government, but starting with a credit of £1,000 and escalating gradually by £1,000 again up to £3,000 by the third year.

What will it cost the Treasury?

This depends on how many taxpayers use the credit. Yes, every pound spent on the credit is lost to the Treasury - but by encouraging parents to transfer children to private schools, this saves the cost of funding those children in state schools, so even a £500 tax credit would have a dramatic impact in savings to the Treasury. It would bring about 55,000 new pupils into private school (c. 10% of the current number) - so enabling the creation of about 100 new schools. Net Treasury savings: £115m+

With a credit of £1,000, you double those figures (though one cannot simply extrapolate upwards on a simple pro rata basis thereafter). That means you could increase the number of children in private education by c. 20%, with net savings to the Treasury of up to £177 million.[5]

I propose an eventual credit either without means-testing and equivalent to the full cost of state education per child, currently around £6,000; or, if means-tested, available up to the full £6,000 to low earners and at a maximum of £3,000 to high earners (definition of high and low earners to be determined in due course, given the number of variables in the foreseeable future).

Preventing abuses

To prevent possible abuse of the credit, it would be restricted to named individuals who were not currently at an independent school.

Answering objections

• In answer to the old ‘deadweight cost’ objection - the cost that would be incurred if the credit applied to pupils currently at private schools - only new pupils not currently at a private school would be eligible. Although this seems restrictive, it has the advantage of rolling out the credit very gradually, so that it becomes fully effective over 2 or 3 parliaments. Alternatively, one could argue that those with children already at private school would feel understandably resentful if they couldn’t use the credit; as with almost all policies, there is no way to please everybody.
• Some fear middle-class ‘white flight’ from state schools will necessarily result from giving parents more choice; all the evidence is that this has not been the case in Sweden[6].
• I acknowledge that in the current tax credit system put in place by Labour, a means-tested education credit would entail an excessive increase in the already high marginal tax rates faced by many poorer families. A typical household on tax credits with children earning an extra pound over £6,420 has to pay an extra 20p in income tax, 11p in national insurance and lose 39p of tax credits, meaning that they only get to keep 30p out of every extra pound that they earn. To means-test the education tax credit as things stand would make their effective marginal tax rate even higher and so make work pointless for many households. To prevent this consequence, it would obviously be necessary to reform the current system. This paper is not the place to go into detail about how that would be done, but a reform of current tax credits is any way long overdue.

Encouraging the rich to help the poor

• Combined with the tax credit, I would like to suggest that donations to private school scholarship funds and bursaries, which currently benefit from the gift-aid scheme, should be completely tax-deductible up to 20 per cent or less of your gross income. This is currently the case in America, where all donations to not-for-profit schools enjoy this benefit. As almost all private schools in the UK are run as charities, the same could apply.

Conclusion

Effective promotion and implementation of the tax credit would require a sea-change in public perception - but wake up! It has already started to happen. Witness the polls I cited above. Some people are yearning to give their children a private education; others would be happier within a liberated state system.

The way to satisfy both constituencies would be to get these schemes up and running, stage by continuous stage, presenting the focus groups with a fait accompli.

Finally, let me emphasise that I am not myself committed to a particular position in this area. I simply propose these ideas for wider debate.

http://www.hm-treasury.gov.uk/spending_review/spend_sr04/press/spend_sr04_press08.cfm

[2]Ipsos MORI poll February 2008 http://www.ipsos-mori.com/content/home-page-news/ipsos-mori-survey-shows-record-demand-for-independ.ashx

[3] Commons Hansard 28 Apr 2008 : Column 228W

Jim Knight: A school may select up to 10 per cent. of its intake by aptitude in prescribed subjects if the school considers it has a specialism, whether or not the school is a designated specialist school….a child with aptitude is one who is identified as being able to benefit from teaching in a specific subject, or who demonstrates a particular capacity to succeed in that subject. Such selection is limited to subjects where there are recognised tests for aptitude which do not inadvertently identify high academic ability….Prescribed subjects are modern foreign languages, performing or visual arts and physical education or sport. Schools may continue to select 10 per cent. by aptitude in design and technology and ICT if they already had such arrangements in place prior to the 2008 academic year.

[4] Adam B. Schaeffer, December 5, 2007, The Public Education Tax Credit, Policy Analysis, no. 605, Cato Institute,

[5] James Stanfield et al., The Right to Choose: Yes, Prime Minister!, Adam Smith 2006 http://www.adamsmith.org/images/uploads/publications/Road_Map_Education.pdf

[6] ‘Free to choose, and learn,’ The Economist, 3 May 2007

Gordon Brown needs the Unions financial support and of course the Unions are demanding a price.

So what does he do??

He tries to look hard by rejecting their demands to reintroduce secondary picketing rights but says he will push ahead with more family friendly flexible working practices.  Sounds good when you first read it but you only have to dig a little deeper to recognise that it could well include more rights for parents to take time off to look after sick children or to help them during exam time, and both could apply to children up to the age of 16.

Now, I am all for parents properly looking after children in case of real sickness but as an employer, I can tell you it will be abused enormously.  As for time off to support children doing exams, surely there are other ways support can be given by parents without neglecting their jobs. 

You wouldn’t think we faced a massive global challenge but the real concern is that small business will be made to suffer in order to appease Labour’s paymasters.  Big of you Gordon!

Two thirds of the primaries at the top of recent league tables were Anglican, Catholic or Jewish. Faith schools outperform secular schools so much that atheists are happy to submit their children to the font.

At a reception in Parliament earlier this month Education Secretary Ed Balls praised Catholic schools, saying they were “leading the way” in many areas, including - contrary to the attacks often made by their opponents - encouraging community cohesion.

Indeed, that is true of any faith school that is doing its job.

So what are we to make of the points raised in a report last Monday by the Centre for Policy Studies which reminds us that the Government Mr Balls represents has banned these schools from interviewing families? There is no hard evidence that interviews are a tool for keeping out poorer children.

And what about the further rule imposed by Labour that schools can no longer ask for proof of the employment, educational background or marital status of parents?

If schools believe such information is useful, I would rather trust them than the person in an increasingly micro-managing Whitehall.

Yet Minister Jim Knight says that faith-based schools ‘are assured a secure future in the state system under this Government’.

One can only say that actions speak louder than words.