University Funding

With the recent publishing of the Browne Report, the talk has all been about University funding. At least the argument that higher education is not comprehensive education was won sometime ago. Those that benefit from a higher education should in some measure pay for it, it is not a pure "public good" that should be paid for by all. I am also pleased that the idea of a "graduate tax" has been dropped. How would you devise a tax that would capture all the graduates, but only the graduates who had benifited from a university education in this country?
It is unfashionable to look to the US as a model. A few days ago on Radio 4 I listened to two experts earnestly arguing with each other on the merits of different approaches, yet both agreed that the UK should not follow the US and end up with a "two tier" higher education system. By this they meant the elite universities accessible only to the rich and a sub-tier of lesser institutions available to the rest. Having lived in the US for many years and with a son at university there I think this is a gross misrepresentation of US higher education. It is in fact a very broad continuum of options; by style of education, type of institution and price - from the famous (and very expensive) Ivy Leagues, through the large state universities (subsidised for in-state students) to small, private "liberal arts" colleges, city colleges etc. And it is not true that the top universities are only accessible to the rich. I have attended admissions presentations at many colleges and universities and all stress "needs blind" admissions policies. They encourage prospective students to apply for financial aid. They can do this because they have built up endowments over the years to provide scholarships, funded by contributions from alumni.
This will be no quick fix. There is not the same tradition among British universities to tap their alumni for fundraising or even to keep in touch with them. Cambridge University has shown the way with the incredible success of its 800th Anniversary fund - raising over one billion pounds. Cambridge now receives donations from around 11% of its alumni, compared with under 1% for other UK universities. The figure in the US is nearer 14%.
This isn't the only answer, but it has to be part of the answer - with government policy favouring institutions which strive to provide financial aid to allow any academically qualified student to attend. And we, the generation who benifited from free higher education, must now do our part to support the universities and colleges that gave us our start in life.

Ed Miliband

I've been watching the Ed and Dave show play out over the last couple of days, and it is impossible to suppress a comment... I am trying hard to avoid the "Bambi" epithet given to Tony Blair, but since winning the Labour leadership contest Ed Miliband has resembled nothing so much as a deer in the headlights - literally. Eyes wide, mouth open, ohmygodwhathaveidone panic. And he deserves it. What started out as yet another little jape to annoy big brother has come home to roost big time. The contrast between their speeches to the Labour conference couldn't have been greater. Ed came across as inauthentic and shallow - there just wasn't anything there. I don't blame Dave at all for stepping aside to let Ed get on with it (although if I hear one more protestation from either side about how much they love their brother I will retch). Why allow yourself to be associated with this train wreck? Much more fun to watch from the sidelines.

A simple, "elegant" proposal for a climate bill in the US? Kudos to Maria Cantwell.

Over the past few months recognition has been growing for a climate bill, the CLEAR bill, proposed by Maria Cantwell (Senator for WA). The proposal gets a lot of things right:

• It is simple - at under 40 pages it shows the current Waxman-Markey bill up for the many-headed monster that it is. The government will set annual limits on carbon emissions and the require fossil fuel producers and importers (upstream carbon emitters such as electricity producers) to buy permits. The revenues raised are returned to the taxpayer (75%) and used to develop alternative energy sources (25%). It avoids the trap of trying to regulate (and therefore measure) carbon emissions by every little industry.
• It sets a price on carbon, unlike the W-M bill which, ludicrously, gives 85% of the permits away. As the Economist neatly summarizes "The bill would raise energy prices of course and therefore the price of everthing that requires energy to make or distribute". THAT IS THE POINT. Without this price signal there is no incentive to modify behaviour, but the dividend should ensure that taxpayers are compensated without removing that incentive.

There has been so much rather depressing news on the climate change front recently - expecially when it comes to international action. It is encouraging to be reminded that actually so much is happening at local and in this case national levels. Maria Cantwell has also managed to get Republican support, her co-sponsor is Susan Collins of Maine. I assume there has been plenty of local buzz about this in Seattle, but getting noticed by the Lexington column in the Economist suggests that the bill is gaining significant momentum. Let's hope so.

http://www.economist.com/world/united-states/displaystory.cfm?story_id=15453166

Take a look at a summary of the proposal here;

http://cantwell.senate.gov/issues/Inside%20Energy%20on%20CLEAR%20Act%209%2021%2009.pdf

Also, look at The Grist

http://www.grist.org/article/cantwells-climate-bill-gathers-steam/

Tony Blair - the sequel

I don't think anyone expected anything different, especially after Alistair Campbell's unrepentant performance at the Chilcot inquiry, but Blair's smug self-belief (not least in his own ability to manipulate the arguments to suit his purpose)was galling. Steve Richards in the Times on Saturday hit the nail on the head; the inquiry members focussed on arguments that have been picked over ad nauseam (did he lie in the presentation of the intelligence, was the war legal) rather than focussing on the basis for his original judgement that it was Britain's role to side unwaveringly with the US, come what may.
For me, the moment when Blair became seduced by Bush was on the occasion of Bush's speech to Joint Congress on September 20th, 2001. It was a magnificent speech (kudos to the writer) containing the memorable sentence; "Whether we bring our enemies to justice, or justice to our enemies, justice will be done". Blair was watching from the gallery and positively puffed up with pride when Great Britain was singled out for specific mention and he was personally thanked for coming ("Thank you for coming friend") From that point on it was more important to Blair to stand shoulder to shoulder with the US than to act in the best interests of Britain. (The comparison with reality TV contestants competing to be BFF with Paris Hilton springs to mind) Unfortunately his initial judgement (that 9/11 changed everything regarding policy towards Iraq) was not questioned in detail, and it should have been. Blair's stock response that "it was a judgement that I took", as though that absolves him from all responsibility, is simply not good enough. What are we supposed to say - oh, that's all right then? When a CEO of a company makes an equivalent error of judgement he is usually fired. Why should the Prime Minister of Great Britain not be held to a similar standard?
There is so much to find disturbing in Blair's testimony. But for me, perhaps the most disturbing was his assertion that "It is important for a British Prime Minister to establish a strong and close relationship with the President of the United States". Based on his actions, what he meant by this was that it is important to reassure the President of the United States that we are always, unquestionably and unquestioningly in his camp. Again, how is this in the national interests of Great Britain? Much as I like and admire America and Americans it's time for British Prime Ministers to wise up and realise that Great Britain's best interests lie not in playing kid brother to the mighty US, but in acting like a grown up in the EU.

Please, please PLEASE give us a reason to vote Conservative!

I know I am not the only one who is underwhelmed by the Conservatve offering so far. The start of the "pre-election" campaign with the New Year was well heralded and we have heard about the weekly talking points etc. But where is the big idea, the radical policy proposals that are needed to inspire the thinking electorate to go out and vote Tory? They have got to go for more than simply not being Labour. There is a huge danger that key groups will simply not vote. I get the problem of coming out with policy proposals that just get nicked by Labour, but then stop with the phoney campaign! They need to stop drip feeding us drivel, or when they are ready to actually reveal the business end of the manifesto we will already have tuned out and be looking forward to Britain's Got Talent. So, in the interest of constructive criticism, here are a couple of ideas both related to tax, if anyone is listening!

• Dramatically simplify the tax system. Maybe not quite a flat tax, but moving in that direction would be a good thing. Making the tax system straightforward and easy to understand tends to have the effect of increasing the tax yield. By all means raise the tax threshold and look at measures to avoid the poverty trap. KISS should be the mantra - keep it simple, stupid
• Introduce a carbon tax. The Conservatives seem to be getting a lot of inspiration from Sweden, and that country introduced a carbon tax in 1991. The point is that this country needs to sort out its energy policy urgently. We are increasingly dependent on gas, and yet our own supplies are dwindling. Putting a price on carbon would allow industries, energy suppliers, everyone to make rational decisions about energy production and use. Of course it would also help to reduce carbon emissions. At the moment the subsidies for renewable energies, such as wind, are misdirecting resources away from solutions that might actually make more sense, such as nuclear energy.

OK, that's it for now. There is plenty to say on this subject, so more later!

The Best and the Worst - my Christmas Snow Experiences

Where we are it snowed twice before Christmas, on Friday 18th and on Monday 21st. On the Friday I was expecting an Ocado delivery; the biggest order I had ever placed with them. The days leading up to Christmas were going to be busy and I wanted to get food in early. That morning there was a good covering of snow, the first of the season, and my daughter's school was closed because of the weather. We live in a fairly rural area and I had real misgivings that my order would arrive. And yet it did; exactly within the hour delivery slot booked and with no items missing. I was impressed.
The next Monday the second fall of snow was well heralded. It was due to start late afternoon. I had to take our dog to the petsitter and I was due to drop him off at 4.00pm. That went fine, but it had already started snowing. The return journey, which would normally take 20 minutes took me over 6 hours. It is always difficult when snow falls during rush hour. But if there had been grit on the roads the volume of cars would have been enough to keep the roads clear. I didn't see a single gritting lorry out and there was no evidence that the roads had been gritted. I sat in my car visualizing all those council workers sitting in their nice warm offices churning out risk assessment reports or preparing for their diversity training courses. But of course, it was late afternoon and snow had been forecast, they had probably gone home early.

Bank Regulation revisited

Back on March 29th I wrote in favour of a return to something like the American Glass-Steagall separation of investment and commercial banking activities. Last week I was in the US and read an article in the New York Times which reported that Paul Volcker, a former Chairman of the Federal Reserve is advocating the same thing. http://www.nytimes.com/2009/10/21/business/21volcker.html?_r=1&partner=rss&emc=rss
On my return to the UK I found that Mervyn King, Governor of the Bank of England is also calling for such a split. http://business.timesonline.co.uk/tol/business/industry_sectors/banking_and_finance/article6888866.ece
OK, it is nice to be in such auspicious company, but the point is this: why, over a year since the banking crisis, despite all the government outrage on both sides of the Atlantic at the time, has nothing been done? Extra capital requirements, limits on pay and other layers of regulation are essentially clumsy and can eventually be circumvented. The simplest solution is almost always the best. Simple, but not easy. No government wants to be the first to act, so it will take the US and Britain to act together. Well I won't be holding my breath, but it would really be interesting to know where the Conservatives stand on this. Maybe time for a bold policy announcement?