Tag Archives: Conservative Politics

Interns: The Whole System is Wrong

One of the more worrying American imports in recent years is the so-called ‘internship’. Nick Clegg launched an attack on them yesterday, and has opened himself up to ‘hypocrite’ charges as a result.

For anyone with no idea what a internship is – basically employers offer a program that gives students, new graduates or ‘gap-year kids’ the opportunity to get ‘work-experience’ for the company, unpaid, often for a University summer, sometimes for much longer. The argument goes that that the company is doing the kid a favour – these aren’t real jobs, really just admin – but it gives the interns a ‘foot-in-the-door’, a ‘network of contacts in the industry’, the chance to check it is really the right industry for them and most importantly the magic ‘experience’ to add to their CV. This helps escape the job-seeker’s paradox that you can’t get a job without experience and you can’t get experience without a job. The employers are often so impressed with interns that at the end job offers may be made. When presented like that it sounds like the company is doing a great social good. ‘Helping job-seekers!’. Very worthy. The reality isn’t quite so straightforward nor is it the win-win for all it first appeared.

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I am a huge advocate of the importance of both meritocracy and competition (see my philosophy page). Meritocracy is key to social mobility, which in turn is key to attaining social justice. As we drift to internships becoming a ‘cultural norm’ in the UK we’re creating a blocker to meritocracy. In the long run this will harm our economy and society.

When you listen to the work that interns really do they are typically not ‘work-experience’ in the sense of shadowing someone doing their day-job or having a go while the incumbent looks on. No, more normally they have interns doing ‘real jobs’. They’re expected to arrive and work set hours, and often kicked out of the program if they do not. They have set administrative duties to perform which keep the business going. To me this crosses the line from ‘work experience’ to outright exploitation. If the interns weren’t doing this work then somebody in paid employment would be. That person would then be off the unemployment register and paying tax and NI and pumping those earnings back into the economy. Instead we have them still on the dole whilst the student extends their debt and works for free with no guarantee of any reward at the end. I can only spot one real winner in the arrangement.

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We need to consider who has the means to take internships: Who can offer three months of their lives working without pay, living in a big city? Only people with alternative financial support. Straight away that excludes a whole chunk of society. The kids from the estates to who we’ve been preaching if they work hard they can achieve anything; who then put their heads-down, ignored the peer-pressure, worked hard, got the GCSEs and A-Levels, went to Uni and got the 2-1 or first degree’s now find themselves stuck in the old job-seeker’s paradox and flipping burgers, angry and disenchanted with society and saddled with university debt. Meanwhile, the well-to-do kid who scraped through their GCSEs and A-Levels thanks to the kind of one-on-one educational attention you only get at the best independent schools, who drank their way through uni but pulled their socks up just enough to get an OK 2:2 sails into the intern post because they can stay with Mum and Dad and have an allowance. They get the magic experience on the CV, they get the contacts and the reference, they get the end job. Now, they may well be ‘able’ enough to do the job, but the ‘better’ candidate has missed out. That stinks to me every bit as much as those well meaning, misguided affirmative action plans companies have in place. Both spit in the face of the idea of meritocracy.

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The trend is embedding. In some industries it is almost becoming a pre-requisite to entry that you have done an internship. We must level this playing field. It pains me to say it, because by nature I’m against regulation but to get proper meritocracy and competition working we should legistlate that if the internship has the characteristics of real employment then legally it must be treated as such with a formal contract, fair selection process, and at least a minimum wage salary. In the long run this will be a real win-win for every player in the economy.

Rather than wait for such regulation I hope the companies realise now that they are being short-sighted by saving pennies here which could cost them pounds later. The barrier to entry means they’re potentially missing out the very best, hungriest talent. The outlay of paying minimum wage for administrative support is minimal. The return on genuinely recruiting the best people into your firm for the long-run will pay back that tenfold. Meritocracy is not just good for society – it is good for business too.

[This is a rehash of an article on the subject I first wrote in Nov 2009]

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Filed under Economy, UK, UK Politics

Ed Balls: The Return of Brownite Economics

Let’s face it:  Ed Balls was to Gordon Brown as Laurel was to Hardy.  His return will no doubt lead to ‘another fine mess’.   This surprise reshuffle does change the calculus of Labour’s electability.   When Ed Milliband decided not to appoint Balls to the role in October it was a deliberate and calculated move.   It was possibly the only truly leader-like think young Ed has done since he got the gig.   The reasoning at the time was surely:

  • You would not want someone so intimately connected with the entire economic calamity facing this country back on point for economic policy
  • You could not want someone who has had an insider view (and leading role) in using the office of Chancellor to undermine and oust a previous leader, sitting there ready for another metaphoric stab.

Well, nothings changed.  Those reasons still stand.  Yet here Balls is.  He’s got the job he craved from the moment he realised he was out-of-the game for the last leadership shot, and young Ed will be feeling his breath on his neck from here-on-in.

To give him his due Balls is a bruiser.  A political big-beast.  From today George Osborne will be looking forward to his turns in Parliament with a tummy rumble.  Balls knows his stats and figures and will not be easy to trip up.  Worse, he’s more than capable of scoring some points through sheer statistical battery.   But that’s all just fluff in the Westminster village.   Balls fundamentally is the living, breathing embodiment of the leftish or centre-leftish vision of Big Government/Big State/Spend and Tax Labour.  As Shadow Chancellor he will push them more so.  Even with all the current national woes, when push comes to shove that positioning is simply electoral poison.   The ‘squeezed middle’ – the people who count – the very people who switched to Labour in 97 and switched away from them in 2010 – those floating voters just don’t drift in that direction.

And that is the reel rub for Labour.  The one man on the Labour front bench who could appeal to that ‘thinking middle’ was Alan Johnson.  He was simply impossible to dislike.  Even though he was struggling to catch-up with his brief, even though he talked rot – people, even me, warmed to him.   For a politician that curious ‘nice bloke’ charisma is the X-factor stuff.  It is priceless political alchemy.  Blair had it.  Johnson had it.  Brown didn’t.  Balls doesn’t.   And so the Labour party is a weaker party this evening.

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As I say, for reasons I cannot put my finger on I like Alan Johnson despite his politics.  I have no idea why he has stepped down.  I wish him well and sincerely hope that whatever the personal issues are they are the kind that can be put right and have a happy ending by making this move.

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Filed under Economy, Politics, UK, UK Politics

Put the armour on. 2011 is going to Hurt

Happy New Year.   Or is it?  The reality is that 2011 is going to be pretty miserable for the whole country.   Any honeymoon period for the Coalition (if there was one) is up.  The reality of austerity measures are kicking-in.  Turning the economy is like turning an oil tanker.  Things will get worse before they get better.  We will see more public sector redundancies, we will see more cuts to other services,  the VAT rise will trickle to the till,  we wont see pay rises in the private sector, even the employed will feel  -and actually be in real terms – poorer this April than April two years ago.  Health and education reforms will spook the Unions.   Protest will spread.

The Government has to accept this and hold its nerve.   It cannot do what it needs to do and be popular in the immediate or short term.  It needs, in the national interest, to do the right thing rather than the popular thing.  With eyes wide-open it needs to understand that its popularity will fall this year and it needs to carry on regardless.  The instinct and philosophy of this government is the right one.  The challenge now is to be competent in delivery.   The quicker we get the pain over, the quicker we start the recovery.  If we start the recovery then the short-term unpopularity will dwindle and we have a fighting chance of re-election in 2015.  Dither and spread the pain over the whole five years and even if the objective of shoring up the economy is met it will just gift the country back to Labour to mess up again.

Labour will blame the Coalition for the pain. They’ll say: “They’re in Government.  We’re not.  It is their choices, it is their fault”  This is a bit like blaming a doctor for making you ill with chemo rather than the fags you only gave up six months earlier.  Nevertheless, while the pain is there the public will buy their argument.  The Coalition needs to see its program through and see it through quickly.

The lessons are there in History.  Those who remember the 1981 budget may spot certain parallels with today.  For the whole period between of 80 and 82  it was inconceivable that the Conservatives would be returned to power.  Nerve was held.  The budget worked.  Britain, after the pain, prospered.   Thatcher would have won even without the Falklands.   But we must also learn from that period.  Nobody would want to see the likes of the Brixton or Toxteth riots again.  That’s why it is so crucial that we don’t just deliver on the miserable austerity side of the program –  but also on the social side – IDS has made his case well for welfare reform – he needs to be allowed to now get on and deliver .  This is the year to get moving.   It’s also critical that we strike the right balance in the way we police inevitable protests.  Get that wrong and the Government could doom itself.

So on that dour note, I say again:  Happy New Year.  Put the armour on, 2011 is going to Hurt.

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Filed under Economy

The Worrying Rise of Lefty Internet Activism

Tim Montogomerie’s reflections on Iain’s Dale’s departure from the blog world got me thinking.   Tim says the right previously enjoyed being in front on web campaigning but now risk falling behind if they haven’t already.  He points particularly at  ‘Movement Activism’.  This surge in leftist web-based ‘movement activism’ is something I’ve only recently started to worry about.  The Centre-Right (of which I count myself) tend to be quite individualistic beasts.  We don’t need, nor wish, to be led.  We don’t suffer fools gladly.   Gather too many of us together and you typically get too many Chiefs and not enough Indians.  Collaboration therefore tends to be loose, short , sharp and  limited to specific issues.   The discipline to slavishly follow a party line simply isn’t there outside of the General Election.     Meanwhile the left are getting far better at that ‘discipline’ and all the while are starting to create  a sense of being part of a real  ‘movement’ for those who use the net to  engage with them.

Does this matter?  Up until very recently I would have argued it didn’t.  Let’s face it, the people in the blogosphere endlessly retweeting the same political articles to each other would always have been died-in-the-wool supporters of whichever party regardless.  The political blogosphere draws-in political anoraks like moths to a flame.  The floating voters who matter simply give it a wide berth.   My gut instinct was just to let the left get on with their ‘Slacktivism’.  Those banal campaigns consisting of “click on this to express your rage at the cuts” or whatever.  They’ve confused bleating into the ether with meaningful action.  They’ve kidded themselves they’re doing good with empty gestures.  My attitude has always been if it makes them feel worthy, they’re doing no harm so let them get on with it.  Meanwhile, as they are retweeting each other, us grown-ups can go out and take real action to make our schools and hospitals or whatever else around us better.

Recently though, they seem to have reached a critical mass and realised that they were achieving little.  They are finally making the giant leap to real ‘action’.  Suddenly it is quite scary.  We have a single line in Private Eye hinting in its usual mischievous style that ‘Vodaphone owe £6bn in tax’, and then via a web campaign this leads to real direct action on the streets.  Not ‘action’ in the sense of working through the norms of society (investigative fact checking, lobbying, getting legislation etc.) but ‘direct action’ in the 1960s/70s “let’s have fun causing trouble” sense.

Folk self-select their fact sources from the internet – as they do with newspapers – to confirm their prejudices.  People who read the Guardian will also tend to bookmark ‘Left Foot Forwards’, ‘UK Uncut’, ‘False Economy’, ‘The Other Taxpayers Alliance’ etc.  You could make a similar self-selecting list for those who lean to the right.  The thing is that those who lean to the left are, by nature, happier to run with the herd.   Once a leftist feels part of ‘a movement’ they can be far more disciplined at toeing the party line.   ‘Solidarity’ and ‘Unity’ have always been more crucial to the left than ‘free thinking’ and ‘reason’.  Those who understand the power of all this seem to be gleefully manipulating it to edge the mainstream left even further left.  Once they’ve got their new foot-soldiers engaged – which they are doing well – they can wreak havoc.  That £6bn ‘tax-dodge’ figure for Vodaphone from Private Eye is a powerful example.   Clearly it is a dodgy figure based in little more than tittle-tattle – and yet it is accepted as an absolute fact by a whole ‘movement’ to the point that people are willing to commit criminal damage in outrage.   We have also seen the power of this ‘Movement Activism’ with the student protests.

I’m not sure what the proper response from the centre-right should be but  I do know what the wrong response would be:  The last thing we need is for the mainstream right to blindly drift further right as a anxious response to baiting.  My idea of how politics should be conducted remains through the normal channels and ballot box – not by violent confrontations with leftist thugs having a jolly day out at a demonstration/riot.   We are living in testing economic times.   Testing economic times have always created an environment to radicalise people.   New technology can be a real catalyst to that radicalisation process.  We need to watch it and keep level heads.


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Filed under Politics, UK Politics

Student Tuition Fees: The Weird Thing

When tuition fees were introduced in Labour’s first year in office I actually marched on Parliament in protest.  At the time I had just completed my Masters and was clinging on for one last year as my University’s Student Union President (still the most fun ‘job’ I have ever had).

Every press release I sent out, every letter of protest that was written, every person who gave me the opportunity to bend-their-ear got the same message.  It seemed to me to be self-evident that the introduction of student fees could only:

  • Lead to lower take-up of Higher Ed across the board
  • More worryingly – lead to even greater social exclusion for those from poorer backgrounds
  • Lead to University closures and a diminishing of Britain’s academic standing

The only crumbs of comfort I could think of was that if students were paying they would become far more fussy and demanding which would drive up the standard of tuition.

Here’s the weird thing:  I’ve never been more wrong with a set of predictions in my life.  The take up of higher education went up and up.  This includes an increase in take-up from people from disadvantaged backgrounds.  Far from closures the number of higher education institutions and overall capacity increased.  I was wrong on every count.  The anecdotal evidence I have is that even my certainty that tuition standards and one-on-one teaching time would improve was  off.  I still find just how wrong I was quite sobering.

I obviously mention this now, because with today’s announcement that fees will increase to between £6,ooo and £9,000 per year the current crop of Student Union Presidents up and down the land are making the very same points as the once fresher-faced me.

Despite being proved spectacularly wrong on this issue in the ‘90s, to be honest I am still as nervous this time around.  I can’t sit here all smug that I got through the system with fees paid for and a maintenance grant because  I now have to worry about how my own two kids will afford the opportunities I had.  At some point we surely must hit the tipping point?  There has to be a cost that will put people off?  The headline £27k for a degree before living costs does sound overwhelming.

This prompted me to dig a little deeper into the detail of what is proposed.  As is so often the case the reality of the detail isn’t quite as alarming as the screaming headline – but it is still scary.  The proposals have students only repaying their loans at 9% of their income at a real rate of interest when they earn £21,000, up to inflation plus 3% for those earning £41,000 or more.   Any outstanding loans are written off after 30 years.  If you don’t end up in employment, you don’t pay anything back.  In terms of the technicalities of repayment and pressure to repay these proposals are actually a step forward from the current arrangements – though of course the overall amount to be repaid is much higher – but a step forward nonetheless.  A kind of ‘no-win, no fee’ arrangement.

It is still a whopping burden though.  I really do pity the kids who start life with that kind of debt, on top of already silly marginal tax rates to pay for the excesses of their parents’ generation.

Of course, Labour will oppose these moves.  That’s the nature and job of opposition.  There is no need to put forward an alternative, you can just yell ‘nay’.  The media will ignore that it was the Labour Government (actually Mandelson) who commissioned the Browne Report in 2009 that led to these changes.  In many ways this is history repeating itself.   In 1996 the then Conservative Government appointed Ron Dearing to do an ‘independent’ report knowing full well the recommendations that Blair and Blunkett would inherit and which led to the first tuition fees.  This time Mandelson and G. Brown knew full well what would be recommended by Lord Browne and that whoever won would have to go with it.  One silver lining for the loser of this last election was always going to be not having to catch and deal with being lobbed this particular ticking grenade.

The Coalition have actually watered down Browne’s recommendations a bit.  There is a cap on fees (albeit a quite high one), and there is more money for bursaries for the poor and early repayment levies so that the richer folk can’t get out of paying their share by paying off their loan early.

It is what it is.  The choice was always either to revisit student funding or cut back on HE provision.  Access to Higher Ed benefits the whole of society and so it was the right choice to revisit funding.

The changes are necessary but still depressing.  All I can do is hope that the weird thing happens again and that effects of student financing policy continue to be subject to counter-intuitive economic freakery that prove me, and all those earnest fresh-faced student union presidents, totally wrong.

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Filed under Centre Right, Economy, Education, Uncategorized

Sir Philip Green: Great Report – Wrong Conclusion

We don’t need a Ministry of Paper-Clips, Open Data is the Answer.

Sir Philip Green’s report on government spending  is now online.  Unlike most Government reports it’s a succinct thirty page slide deck in big print that can be read in five minutes.   If that’s too much then I’ll give you the gist:  he finds the government wastes money then concludes we must centralise buying.

I’ve no issue at all with his findings.  The examples he cites confirm everything we already suspected about wasteful and lazy Government procurement.  Some of the examples are jaw-dropping.  I’ve also no issue with his central theme that the Government has failed miserably to take advantage of its scale or credit rating.  On that he’s right.  He  obviously knows a trick or two about keeping hold of money so I feel a bit cheeky calling him out here –  but  I have to:  The findings might be good, the theme sound, but his conclusion is wrong.

It is nuts to propose that a problem of poor or lazy administration will be solved by more bureaucracy.   The Coalition Government is rightly extolling the virtues of localism at the core of its agenda.  There is an obvious intellectual contradiction between pushing localism and enforcing centralised procurement.  The last thing we need to do now is set up yet another Government Agency that would literally be the ‘Ministry for Paper-Clips’.  No matter how well intentioned it would fail.   I’ve spent long enough working with big business watching the pendulum swing back and forth from localised  business models to centralised models to know that the prize of lower procurement costs will come at the expense of agility and innovation.  It is in this agility and innovation that the very biggest prizes lie.

The diversity of Government activity is not comparable with running a chain of identical Top Shops.  If the proposal goes ahead you can imagine the scenario – a nimble cost-cutting  government department identifies a new way to deliver a service at a fraction of the cost of the existing way.  The project to implement it will need new kit.  Being new stuff, the central agency doesn’t have it on its catalogue – cue a tedious process to get into the approved kit list, another process to approve possible vendors, another process to then raise the purchase orders.  All these no doubt delayed because the new ministry is dealing with back-logs from every department and school and council and prison in the country for their regular stuff.  At the same time you would also be crushing the ability of SMEs to tender for government business as there is no way they would have the scale to operate at a whole government level rather than at a smaller niche.  Hurting that part of the British economy is not something we should be engineering.  Instead, we’re supposed to be marching into a brave new post-bureaucratic age and Green’s proposal runs counter to that end.

No, the answer to all the issues that Green has identified can be solved by removing the veil of bureaucracy  and accelerating proposals for complete transparency of  Government data on-line.   Every single contract and purchase order for more than £500 should be there for everyone to see.   It is our tax money so the spend data is our data.  Arguments by vendors about contract  ‘commercial sensitivity’ are a sham ,they don’t want it exposed they are ripping us off.  The public has a right to see that vendors are not charging the government more than they charge in the high street.  Overnight, by publishing all this data you would free-up departmental procurement officers to see what is the going-rate or a fair price.  More importantly you would allow commercial competitors to see the price they need to compete with. This more than anything  would continually drive prices downwards.  Rather than a procurement officer going to a vendor and saying “I need 10,000 of x what is our agreed price?”  You would have vendors ringing procurement officers and saying “I see you bought 10,000 x and paid y – in future I can do it z cheaper”.   You would stop at once the procurement officer who buys the slightly more expensive stuff because he gets more air miles or because the vendor sent him on a nice day-at-the-races during the bid.  The armchair auditors (or the press) would not allow it.  Transparency is to everyone’s advantage.  It will retain our localism agenda and leave space for agility and innovation in departments.  It will also mean we don’t need to waste time or money setting up a Ministry of Paper Clips.

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Conference Day 2: The Child Benefit Anomaly

Every single cut is going to hurt someone.   And nobody likes the ones that hurt them.  I have a daughter and another child on the way.    At conference today we got the news that the Child Benefit of 80ish quid we get each month is going to be stopped.  We’re far from rich but as a top tax-band family we are certainly very comfortable – I couldn’t look anyone in the eye and say that we either need or deserve that money.  It’s one we’ll just take on the chin in good spirit.

I suspect I’ll be in the minority in my acceptance though.  The Government is living its promise to do the right thing rather than the popular thing – and I suspect that this will be wildly unpopular.

One genuine issue that people have been quick to highlight is that there is one group who this will impact more than others:   This is single income families who earn just over the threshold.  They lose the benefit whilst families with a double income of salaries just less than the upper threshold retain the benefit.   In the very worst case example a couple who both earn 43k and so have a family income of £86k will keep the benefit, the single income family earning a fraction more the £44k will lose the benefit.   This anomaly is manifestly not equitable.

That said, people who are getting on some very high horses about this need to take a step back and reflect – this same anomaly has existed for years (including the entire 13 years of Labour rule) in that marginal rates already led to the same unfairness via income tax.  In the exact same examples above the couple with the single income has already been walloped at 40% for every extra pound they bring in, while the double income couple have only been banged for 25%.   I make the point to give context rather than as a justification.  Two wrongs don’t make a right – and obviously this new anomaly adds insult to injury for those people.

The anomaly aside (and by very definition any anomaly is an exception to the norm) George Osborne has still done the right thing.  He was between a rock and a hard place – to correct the anomaly and move to a solution that took total house-hold income/means-testing into the equation would have added an administration nightmare  – more forms, more IT systems, more opportunities for fraud all of which would eat away at the savings to be made – and the savings after all are the whole point of the move.   The solution adopted is pragmatic rather than perfect.  It can be very easily be implemented with existing tax data.  Those people with double incomes  just below the threshold should think of themselves as accidental winners rather than single income families just above it thinking of themselves as targeted losers.  The principle that high income earners do not require welfare support from the state is sound.

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Filed under Center right, Centre Right, Conservative Conference 2010, Economy