Economists slam Tory calls for cuts

The Keynesians strike back.

So, after last week's letter to the Sunday Times from 20 economists, supporting the Tory demand for the government to begin cutting spending this year, it's the turn of the Keynesians to strike back.

Today's Financial Times carries not one, but two letters from 67 economists in total, warning that early spending cuts could tip the economy back into recession and rebutting claims that the deficit is "out of control".

The second, written by Lord Skidelsky and signed by 57 others, including Joseph Stiglitz and our economics columnist, David Blanchflower, is the more significant.

Here are the key passages:

In urging a faster pace of deficit reduction to reassure the financial markets, the signatories of the Sunday Times letter implicitly accept as binding the views of the same financial markets whose mistakes precipitated the crisis in the first place!

They seek to frighten us with the present level of the deficit but mention neither the automatic reduction that will be achieved as and when growth is resumed nor the effects of growth on investor confidence. How do the letter's signatories imagine foreign creditors will react if implementing fierce spending cuts tips the economy back into recession? To ask -- as they do -- for independent appraisal of fiscal policy forecasts is sensible. But for the good of the British people -- and for fiscal sustainability -- the first priority must be to restore robust economic growth. The wealth of the nation lies in what its citizens can produce.

George Osborne's claim that the economic consensus favours the Tories has been exposed as false.

The decision to send the letter to the FT (it was originally rumoured that it would appear in this week's Sunday Times) was a canny one. It lends the letter a far greater degree of authority; and it appears in a title that also argues against the deficit hawks. The paper's leader today concludes:

Friday's letters are an embarrassment for the Tories, above all, who sought to capitalise on the first letter. They must learn -- soon -- that their desire for simple political messages is no excuse for nuance-free policy positions.

The FT is often mistakenly assumed to be a cheerleader for the free market, but it has actually endorsed Labour at every election since 1992. And it would be foolish of the Tories to count on its support this time round.

What is surprising is that this letters war has started at a time when the differences between the parties on trimming public spending have ostensibly narrowed. David Cameron has promised that a Conservative government would avoid "swingeing" cuts and Alistair Darling has insisted (against the wishes of Ed Balls) that any windfall from lower than expected unemployment must be used to reduce the deficit, not for a pre-election giveaway.

But with the economy as fragile as it is, the Tories' plan to begin cutting spending from this year remains deeply irresponsible. Any hope George Osborne had of presenting himself as a credible chancellor-in-waiting has evaporated.

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George Eaton is political editor of the New Statesman.

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Is it really hypocritical for lefties to send their kids to grammar schools?

Both sides now.

The year is 2030. Half the developing world is under water. The US passes a constitutional amendment allowing President Ivanka Trump to stand for a third term. The Labour right is increasingly confident that, this year, it might finally remove Jeremy Corbyn.

You, however, don't care about any of this because your mind is on other things. Your eldest is turning 11, and Theresa May's flagship education policy has been a success - there is now a grammar school in every town, as well as rather a lot of secondary moderns. And so, you need to decide what matters to you more: your egalitarian left-wing principles or your determination to get the best possible education for your kid.

Let's get one thing straight before we get too far into this - bringing back grammar schools would be a terrible education policy. There's no evidence for the contention that they create social mobility – they tend, in fact, to be dominated by the most prosperous families, who have the sharpest elbows and find it easiest to fund tutoring for their kids. What's more, while the kids who attend grammar schools tend to do pretty well, the majority who don't do worse than you'd otherwise expect.

As a result, overall education standards are higher in comprehensive areas than they are in selective ones. (The BBC's Chris Cook has written several excellent pieces on this topic; here’s one of them.) One of the few things that can unite both everyone in education policy, and everyone in the Labour party, is that grammar schools are terrible.

Neither of those groups are in charge of the country right now, however, and Prime Minister May – not a woman who's lacking in intellectual self-confidence at the best of times – seems particularly committed on this one, so grammar schools we shall have. For middle-class lefties, then, the question seems very likely to become: is it hypocritical to send your kids to one?

There are, it will stun you to learn, two schools of thought on this.

One denies that it's even a question: of course it's hypocritical. Selective schooling will do untold damage to education standards, the economy and social fabric, not to mention the self-esteem of the vast majority of kids who get told they're a failure at the tender age of 11. How can you possibly claim to care about disadvantaged kids, even as you expend time and money that other parents don't have on coaching your kids so that they don't have to go to school anywhere near them?

The other school of thought is more nuanced, and – one can't help but noticing – more likely to be expressed by those whose age is closer to 30 than to 18.

Selective education is a bad system, it concedes – but it is not a system that will go away just because I, personally, refuse to take part in it.

Obviously I'd prefer to send little Timmy to a comprehensive school. But in the selective world of 2030 there won't be comprehensive schools, merely grammars and secondary moderns. Someone's kid is going to get that place in a grammar school. By not pushing for it myself, all that I'm doing is disadvantaging my own child, without actually making the world better.

The first lot, in other words, think it's immoral to buy your place in a lifeboat while the kids in steerage drown. But the way the second group sees it, prioritising abstract principles over the life chances of your child is immoral. (You could call it the Jeremy Corbyn vs Claudia Bracchita argument). And so, whenever this topic has reared its head, people tend to end up shouting at each other, if not filing for divorce.

At risk of looking all wussy and liberal, I genuinely can't work out where I stand on this one. On the one hand, there's something quite persuasive in the argument that one can fight against grammar schools, but still send your kids to one - there's nothing inconsistent about wanting to change a bad system, but still trying to make the best of it. (I'm still imagining a 2030 selective education dystopia, of course: arguing against grammar schools, then deliberately moving to Kent so your kids can attend one, is rather harder to defend.)

One the other hand, there is something inherently uncomfortable in left-wingers finding theoretical justifications for their own selfishness ("Of course, taxes should be higher. But since these loopholes are there, well..."). I also, by the by, went to private school (sorry), and suspect that the 7 per cent of the population which did the same sticks its oar into the state education system far too much already, so maybe I should shut up.

Before I do though, here's one last cynical thought. At the moment, Labour is united on grammar schools - they are obviously bad, we obviously shouldn't create any more of them. If selective education were to become national policy again, however, that unity could plausibly crumble. And one of the few issues that can unite the entire Labour movement simply wouldn't be there any more.

I'm not saying this is the motive behind Theresa May's obsession with grammar schools, but it would be a helpful side effect.

Jonn Elledge edits the New Statesman's sister site CityMetric, and writes for the NS about subjects including politics, history and Daniel Hannan. You can find him on Twitter or Facebook.