Heseltine's wisdom exposes Osborne's limits

The former Conservative deputy prime minister condemns the government's lack of a growth strategy.

When George Osborne commissioned Michael Heseltine to produce a review of economic policy, he must have known that the results would not be entirely favourable to the government. The former deputy prime minister, a one nation Tory, has long favoured the kind of state interventionism that is anathema to the modern Conservative Party. Even so, it would be surprising if Osborne wasn't having at least some regrets this morning. Heseltine's 228-page report (which must be the first to feature a cartoon of its author on the cover), entitled No Stone Unturned in Pursuit of Growth, is a searing indictment of the coalition's approach.

The above cartoon appears on the front of Michael Heseltine's report.

"The message I keep hearing is that the government is that the UK does not have a strategy for growth and wealth creation," Heseltine writes, and he appears to agree. In an attempt to fill this void, he urges the government to establish a Prime Minister-led National Growth Council (rather like the National Economic Council abolished by the coalition), to transfer £58bn in funding to Local Enterprise Partnerships, to review "regulations relating to immigration policy", to "clarify urgently" its solution to the problem of aviation capacity, to outline a "definitive and unambiguous energy policy" (not much sign of that), to block foreign takeovers if they damage national interests, to hand a legal role to chambers of commerce to encourage local support for businesses, and to continue to "promote the British interest in Europe" (Heseltine is a reminder of the days when Tory MPs were more pro-EU than their Labour counterparts). But with the Treasury already briefing against him last weekend, it remains to be seen how many (if any) of these proposals become government policy.

The recurring mantra of the report is that an interventionist state is an essential precondition for growth. Having once believed in "the simplest of notions of the role of government. Get off our backs, cut the red tape, deregulate, lower taxes", Heseltine has come round to the view that "there are some things that only government can do to drive growth". At a time when the Tory party is increasingly dominated by crude Thatcherites, it is profoundly refreshing to hear such words from a Conservative.

Elsewhere, in a welcome blast against the supply side fanatics, he writes: "I reject the notion that regulation in itself hinders growth. Good, well-designed regulation can stop the abuse of market power and improve the way markets work to the benefit of business employees and consumers." And he warns that tax cuts, the right's other favoured solution, will "have only a limited effect", "the principal void in today's investment climate is confidence".

Heseltine's report is a reminder both of his enduring wisdom and of the paucity of the government's economic vision. Osborne did the country, if not himself, a fine service in commissioning it.

Michael Heseltine said that he kept hearing that "the UK does not have a strategy for growth". Photograph: Getty Images.

George Eaton is political editor of the New Statesman.

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Tuition fees uphold socialist principles - the left should support them

The amount of disadvantaged students applying for university between 2005 and 2015 went up 72 per cent in England, which was bigger than all other countries within the UK, including Scotland.

Since their introduction under the Blair Government, tuition fees have been a contentious issue amongst the British left. Under the leadership of Ed Miliband, Labour adopted a compromise position of reducing tuition fees – a seemingly inoffensive concession from his original position supporting free education within higher education.

Whilst they may appearing to promote educational inequality, research has shown that tuition fees have actually had the opposite effect within education. Political Scientist Martin Robbins wrote in the Guardian that “in 2015, application rates of 18 year olds living in disadvantaged areas in all countries of the UK increased to the highest levels recorded”. Though it is unlikely that the increase of fees and their reinvestment within education would have had a large effect on that crop of students, it does demonstrate that tuition fees are not the educational barrier some present them to be.

In fact, the amount of disadvantaged students applying for university between 2005 and 2015 went up 72 per cent in England, which was bigger than all other countries within the UK, including Scotland.

The largest drop-off between the least and most deprived children within educational attainment is between the ages of three and fourteen. Despite this, the higher education budget is around double that of pre-school education, which is where the inequality of education begins to kick in. A more adept way of solving the inequality within education would be a tuition fees system where a set percentage of a student’s fee is retained by their university, and a set percentage put towards pre-school education, to set the taxation of education into a progressive context.

In the latest government White Paper on tuition fees, the Universities Minister Jo Johnson lays out the idea of a teaching excellence framework (TEF). In theory, this is not problematic. Rather than raise the chargeable rate of fees (as done in 2012) the TEF would allow universities to tax above the chargeable rate on account of good teaching. This would mean for the vast majority of university students, rates would be unchanged. However, as tuition fees are currently at the chargeable rate of £9,000, the policy within the current climate is too objectionable.

Jo Johnson’s TEF model is an example of a reasonable concept which would be ineffective in practice, due to the difficulty in ranking the quality of teaching at the point of use, rather than through the means of a policy such as a graduate tax, based off earnings. If the British left championed a version of the TEF with a lower base rate, or instead just a graduate tax, it would mean Labour would be able to once again control the narrative with a sensible but redistributive policy on education. This would not only regain Labour credibility amongst the electorate on financial matters, but could be used as a base to build on, as a positive case for wealth redistribution - whether it be to pre-school education, or through increasing grants for those at university, or via restoring EMA.

Taxation of further education is one of the few issues which can boast a large level of bipartisan support across the political spectrum, and is one of the few viable ways to ensure a fully-funded but regulated further education system, as tuition fees make up over half of many universities budgets. In fact, many political commentators have stated that tuition fees are the only example of taxation upon the middle class that Labour has got the Tories to agree on, albeit if it is a pre-emptive form of it.

Whilst tuition fees are not ideal, they ensure the safeguarding of much university funding, the freeing up of the educational budget to close educational inequality between younger students and to help move towards a meritocratic system of education - which is a thoroughly socialist principle.

Ben Gartside is the Under 19s Officer for North West Young Labour and founder and chair of the Young Greater Manchester Fabians.