Budget 2013: where are the ideas?

Stumped for inspiration.

The spotlight is firmly on George Osborne. In 48 hours, he’ll deliver a budget amid economic flatlining and public volatility which, if it fails, will result in calls for the Chancellor’s head as he’s only created 0.7 per cent growth during his entire 34 month tenure.

That’s alarming as there’s a frightening lack of ideas in Wednesday’s shenanigans. The leaks so far suggest that Mark Carney targeting growth or unemployment is the most revolutionary policy that we can expect; yet isn’t creating a Deputy Chancellorship more about spreading the blame come the 2015 election than sparking a second industrial revolution?

As a British citizen, I find the whole episode deeply disappointing. The country’s back is against the wall and so the public are desperate for a politician to try something new. Yet all the House of Commons offers is supply side economics versus demand side economics, a yawningly repetitious argument which isn’t simply Osborne’s fault: it’s Cable’s, as Business Secretary, it’s Balls’, as Shadow Chancellor, it’s the mandarins’, it's academia’s, it’s all of our fault.

Yes, the next few days will be marked by political manoeuvring – Labour will, for example, scream about Osborne playing to the rich by chopping corporation tax from 28p to 21p and giving 13,000 millionaires a £100,000 tax cut – yet the focus should be on the failure in the collective imagination.

The UK is crying out for fresh ideas and so more news time should be given to the likes of Douglas Carswell MP, who, in the Guardian, is quoted as calling for a dramatic reduction in Whitehall which would allow for £26bn in tax cuts, including cutting corporation tax to 11 per cent and capital gains tax to 0 per cent.

You may think the policies are barmy, but at least they’re different. Given the established thinking has produced little more than an economic murmur, pungent debate is needed.

This article first appeared on Spear's.

Photograph: Getty Images

Freddy Barker writes for Spear's.

Photo: Getty
Show Hide image

Sooner or later, a British university is going to go bankrupt

Theresa May's anti-immigration policies will have a big impact - and no-one is talking about it. 

The most effective way to regenerate somewhere? Build a university there. Of all the bits of the public sector, they have the most beneficial local effects – they create, near-instantly, a constellation of jobs, both directly and indirectly.

Don’t forget that the housing crisis in England’s great cities is the jobs crisis everywhere else: universities not only attract students but create graduate employment, both through directly working for the university or servicing its students and staff.

In the United Kingdom, when you look at the renaissance of England’s cities from the 1990s to the present day, universities are often unnoticed and uncelebrated but they are always at the heart of the picture.

And crucial to their funding: the high fees of overseas students. Thanks to the dominance of Oxford and Cambridge in television and film, the wide spread of English around the world, and the soft power of the BBC, particularly the World Service,  an education at a British university is highly prized around of the world. Add to that the fact that higher education is something that Britain does well and the conditions for financially secure development of regional centres of growth and jobs – supposedly the tentpole of Theresa May’s agenda – are all in place.

But at the Home Office, May did more to stop the flow of foreign students into higher education in Britain than any other minister since the Second World War. Under May, that department did its utmost to reduce the number of overseas students, despite opposition both from BIS, then responsible for higher education, and the Treasury, then supremely powerful under the leadership of George Osborne.

That’s the hidden story in today’s Office of National Statistics figures showing a drop in the number of international students. Even small falls in the number of international students has big repercussions for student funding. Take the University of Hull – one in six students are international students. But remove their contribution in fees and the University’s finances would instantly go from deficit into debt. At Imperial, international students make up a third of the student population – but contribute 56 per cent of student fee income.

Bluntly – if May continues to reduce student numbers, the end result is going to be a university going bust, with massive knock-on effects, not only for research enterprise but for the local economies of the surrounding area.

And that’s the trajectory under David Cameron, when the Home Office’s instincts faced strong countervailing pressure from a powerful Treasury and a department for Business, Innovation and Skills that for most of his premiership hosted a vocal Liberal Democrat who needed to be mollified. There’s every reason to believe that the Cameron-era trajectory will accelerate, rather than decline, now that May is at the Treasury, the new department of Business, Energy and Industrial Strategy doesn’t even have responsibility for higher education anymore. (That’s back at the Department for Education, where the Secretary of State, Justine Greening, is a May loyalist.)

We talk about the pressures in the NHS or in care, and those, too, are warning lights in the British state. But watch out too, for a university that needs to be bailed out before long. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.