Tuesday 29 March 2016

McPravda - Get in the Sea

Someone at The National has obviously developed a bit of an obsession with the Scottish Liberal Democrats. It's really kind of cute. For a paper that makes The Beano look like the pinnacle of hard-hitting journalistic integrity, whose main party-pieces are a Twitter account with a beret, a talking dog and a guy that writes in a register that has more in common with Klingon than Scots, it really is quite an achievement for them to have hit a new low.

The latest front-cover is attempting to smear the Lib Dems over a series of grants made by the Joseph Rowntree Reform Trust to Lib Dem politicians. Here's the front-page:


Now let's clear-up a few things. The Rowntree Reform Trust is not a "Quaker trust". It is a political trust that is very clear about its purposes and completely transparent about the grants it makes to individuals and organisations. On their website home-page, they state:
"We fund political campaigns in the UK to promote democratic reform, civil liberties and social justice."

They are transparent

They also publish information about every single grant that they make, and there is an open applications process. There are thirty-eight pages on their website clearly listing grants awarded, the purposes for which they were awarded, and a categorisation to reflect the different range of trust purposes. Grants range from democratic engagements groups like OpenDemocracy and Operation Black Vote, to issue campaigns like CND and the Rainbow Project in Northern Ireland. They also have a dedicated category of donation called "Raw Politics", which is about as transparent as you could really hope for when it comes to political donations.

This isn't a coup

The idea that the Rowntree Reform Trust has been taken over by the Lib Dems for political purposes is faintly absurd. The organisation has been making substantial contributions to Lib Dem parliamentarians, local parties, devolved parties and the UK federal party for well over a decade. Before the 2005 General Election, for example, they made £500,000 of contributions to the Lib Dems to help with fighting that election.

The idea that it is some sort of secret that the Rowntree Reform Trust helps the Lib Dems is equally absurd. Even a cursory glance at its donation history would show that it has close ties both to the Liberal Democrats and to the Alliance Party of Northern Ireland and is a substantial contributor. No doubt Electoral Commission donor registration would have flagged this up to any half-observant journalist. It would appear, especially in their efforts to smear Tim Farron and Willie Rennie specifically, that The National didn't even bother to look beyond the first few pages of donations. In both cases, donations were given clear reasons for being made, specifically on policy development in housing and social welfare. It has also donated to politicians like Ed Davey, Susan Kramer, Julian Huppert and Kirsty Williams.

They don't even just donate to the Lib Dems

It's not even as though the Rowntree Trust donates exclusively to the Lib Dems and Alliance Party. It is a fairly regular contributor to the Labour-aligned Compass and Fabian Society and has also donated to Bright Blue (a Conservative moderate reform group), the Jersey Democratic Alliance, and even the Jimmy Reid Foundation, which had been closely connected to pro-independence circles at the time. In the past, it has also donated to a Federation of Green Parties in London. It makes lots of donations to democratic and liberty-promoting pressure groups like Liberty, No2ID and others, for sure, but it has never hidden its intentions to use its resources and profits (on which it pays full UK tax) for political purposes.

This is better party financing than the alternative

The important thing to emphasise here is that the Rowntree Reform Trust is not a charity. It is a profit-making trust. There is a separate body from which donations that can be deemed charitable are processed. None of the party-political donations have been processed through the charitable trust.

Anyone naive enough to think that an organisation connected to the Rowntrees isn't going to, in some way, promote Liberal and liberal causes with its political campaign resources must have been living under a rock for most of British democratic history. It's even less controversial than Labour-affiliated unions allowing their members to make voluntary contributions to their political funds.

The only reason this story has been brought up is because of a recent grant made by the society to Alistair Carmichael to help him meet his costs in the successful defence against the election petition to have him removed from Parliament over Frenchgate. The Trust has been very clear about the reasons behind this donation, and released a statement a clear 4 days ago giving their reasons for it.
"Thanks to the perversities of the UK’s electoral system the 50% of Scottish voters who supported unionist parties at the General Election are represented by only three MPs. Had nationalists succeeded in their case against Alistair Carmichael, they would have worsened further the current misrepresentation of Scottish voters’ views in Parliament. Worse still, the effect on case law would have been to subject many more legitimately elected Members of Parliament to the risk of personal bankruptcy in defending themselves in court against vexatious and highly political claims."
Now you can disagree about the merits of this particular grant, but it is one the Trust is entirely entitled to make. It is no different from any other private organisation that decides it wants to provide financial support to political campaigns or representatives. It is surely, if anything, preferable that politicians be receiving money from organisations with transparent political motives than organisations with more covert, corporate, quid-pro-quo motives. It's also worth pointing out that £35k of the £50k was actually advanced to Carmichael in January, before he would have known either whether his costs were recoverable or what their total amount would be.

One might draw parallels with the large donations made by people like Brian Souter, owner of Stagecoach, to the SNP and Yes Scotland campaigns, for example, or even the historical influence of Big Tobacco, or Goldman Sachs in US Presidential campaigns. This Trust is, at the end of the day, just an organisation set-up to manage some of the wealth of a deceased prominent liberal campaigner, by investing that money and making distributions to causes connected with liberal values.

A wasted opportunity

If it were any newspaper other than The National, I'd suggest that their obsession with the Lib Dems indicated that they were in possession of some information from SNP insiders that the Lib Dems were actually posing a threat in constituencies like Edinburgh Western and that this was an effort to knock that campaign off-course. Because it's The National though, I doubt the journalistic or political nous for that even to be the case. It's just a sad little obsession to make-up for the fact that it's not a real newspaper and it hasn't anything actually insightful to write. It's a chronic shame that McPravda has given up any serious pretence of being an objective or balanced or fair contributor to Scottish public debate.

As it stands, they're a bunch of hacks that give even Scottish journalism a bad name. All that's left, to be honest, is to tell them to get in the fucking sea.

Saturday 26 March 2016

The Myth of the Squeezed Middle

One of the biggest frustrations of Liberal Democrats in the 2015 General Election was the manner in which the Conservative Party tried to claim credit for tax cuts they opposed in 2010. The Lib Dems had a policy of increasing the "personal allowance", which is the amount an individual is allowed to earn free from income tax before they have to start to pay the basic rate. The Coalition delivered on this promise, raising the personal allowance from £6475 in 2010-11 to £10600 for the tax year 2015-16.

This wasn't a cheap policy. It cut-into the tax-base of the UK by taking some people out of tax completely and drastically reducing the tax liability of everyone on low and middle incomes. It amounted, for almost everyone in full-time employment, to an £825 cut in their annual tax-bill. If the threshold had only kept-up with RPI inflation, it would only have risen to £7490 over this period, which would have only cut basic rate payers' taxes by £203. To have a tax cut of over £600 in real terms for the overwhelming majority of workers in the UK clearly wasn't nothing.

Paying for It

There were two steps the Coalition government took in relation to income tax that were intended to defray the cost of this policy. The first was to introduce a "taper" on the personal allowance. When you started to earn over £100kpa, you would lose £1 of your personal allowance for every £2 you earned above that. This created, it should be acknowledged, an anomaly whereby the marginal rate of tax paid by someone earning between £100k and £120k was actually higher than the rate paid by those earning more than that.

The other step taken was to cut the threshold above which higher rate tax would become payable. Higher rate tax is levied at 40p in the pound, and was paid on income above £43875 in 2010. As of the tax year 2015-16, this threshold kicks-in for income over £42385. This has the effect of increasing the amount of income taxable at 40p instead of 20p by £1490. This, in and of itself, increases total tax liability by up to £298.

Effect on Tax Paid

The combined effect of the changes to the personal allowance and the size of the basic-rate band is that basic rate-payers got a cash-terms £825 tax cut, whereas higher rate payers got a tax cut of £527. If both the zero-rate (personal allowance) and the basic-rate bands had expanded in-line with inflation, higher-rate payers would have expected a £1375 or so tax cut. If inflation is your standard, therefore, it's absolutely true to say that higher-rate and upper-basic-rate income tax-payers saw "fiscal drag" increase their tax liabilty in real terms (2015 prices), to pay for a substantial tax cut for everyone else.

A £622 tax cut represents about 4.6% of a full-time minimum-wage-earner's annual income. For someone on £20k, it represents 3.1%. If you earn the median household income, about £27k, that's a 2.3% cut in your taxes as a proportion of your gross income. These are very real gains which, although clearly not the whole story when you take-into account tax credits and benefits, have in themselves significantly helped most working people.

By contrast, higher-rate payers saw a maximum real-terms (2015) increase in their taxes of £803. This would apply to those earning over £50k or so, which is where the higher-rate threshold would have been had both the personal allowance and basic-rate-band been indexed to RPI inflation. That means a hike of 1.8% of their gross income. In effect, therefore, their tax hike, at its worst, is still much smaller than the tax cut everyone else got.

Is this fair?

Let's be clear who this higher-rate tax band affects: HMRC estimates show that if you are a single person and you earn over £40kpa, you are among the top 10% of household earners in the UK. For an adult with a working partner and two children, this would typically place you in the top 20% of household earners. Put more bluntly, the lowest earning four in five of adults do not and most probably will never, pay this tax.

If you put it in those terms, I suspect most people would be content and say that as a tax-priority, the lowest 4/5 of earners being given tax cuts off the backs of very small tax rises for the top 1/5 was fair.

The counter-argument, and an argument that has reared its head now that the Scottish Parliament is going to get the power to set thresholds and rates of income tax, is that over-time lots of people who would never have paid higher-rate tax in the past have now been pulled-into this category and that this is unfair. We hear the classic invocation of nurses, firemen and teachers in support of this. An audience-member in the BBC's Scottish Leaders' Debate on Friday said the very same. This rate was meant for rich people not for good and honest public-sector workers.

Never mind, of course, that a nurse has to reach band 8 of 9 on the standard pay-scale even to get close to the level of income necessary for higher-rate tax. Almost all of the positions at that pay-grade are managerial and consultant-level positions. Your conventional understanding of even a senior nurse on a hospital ward is going to be no higher than band 7, who earns less than the higher-rate threshold. In teaching the position is similar: in the public sector schools only senior management and principal teachers earn more than the threshold, and of those who do, most earn on or around the threshold. The extra tax they pay is barely if even off-set by the personal allowance tax cut they have already taken to the bank. Presenting the threshold cut as an attack on typical public sector workers is, frankly, deceitful diversion or brutal ignorance.

"Things were better in my day"

It does not even follow that levels of taxation have especially risen for middle-earners in the last 25 years or so. Let's take 1990-91, the tax year immediately before I was born. The personal allowance was £3005 (£6161 in 2015 value) and the higher-rate kicked-in at £23705 (£48601 in today's money). You'll notice this isn't too far away from the thresholds in 2010 once you've taken inflation into 2015 money into-account, and if anything both the personal allowance ends and the higher-rate threshold kicks-in at a slightly lower level of income than both at inflation adjusted 2010 rates. But all of this ignores the fact that the basic-rate of income tax was 25p, not 20p, in 1990-91.

That 5p extra means every higher-rate-payer was paying more than £2100 more in basic income tax than they otherwise would, an amount which is not-offset by a higher threshold for higher-rate tax, which cuts their taxes by just over £800, assuming a basic rate of 25p applied. If we applied the 1990-91 tax code in terms of rates and bands and adjusted for inflation, these high-flying nurses and teachers would be over £100 a month worse off!

Current Proposals

The Conservative Government at Westminster proposes to raise the 40p threshold ahead of inflation, to £45k and eventually £50k, in order to try to "remedy" this "unfairness", whereas the SNP Government have (in my view, correctly) chosen only to raise the threshold to account for inflation in Scotland. The reality of the Conservative policy especially is that in cash-terms the top 10% of earners will essentially get a bigger tax-cut than the lowest paid 90% in this country.

Even the SNP policy is imperfect, however. If Scotland is to be serious about ending austerity, we should not just be looking at the thresholds at which taxation applies. We should also be looking at the rates at which taxation applies. There are perfectly reasonable areas for disagreement about the Scottish Rate of Income Tax (SRIT), which the SNP refused to use to raise revenue on the grounds that it would also be levied on basic-rate payers. I covered the flaws of their reasoning on this in a previous post a while back. But when the Scotland Act 2016 powers come into force, there is the choice to raise revenue by raising the higher-rate of tax without raising the basic-rate, or not raising it by as much.

If the SNP were to slightly lower the higher-rate threshold (rather than to increase it with inflation) and to introduce a higher-rate of between 41 and 42p, they could have asked the top 10% of Scots to pay what they would have been asked to pay with an increase in the SRIT, without asking for a penny more from the rest of Scotland. It would not have raised as much, but it would have made something of a dent in the austerity cuts they claim not to like that are coming from Westminster. When the Scotland Act 2016 comes into full effect, they could have even used this slight increase in tax on the wealthiest Scots to protect and even supplement the welfare policies they think the Conservatives are bearing-down too hard upon.

The Live Election Debate on Tax

This would have been a more meaningful debate to have than the false one that's taking place between the SNP and Scottish Labour about the 50p rate in the Holyrood election campaign. Amusing as it is to call Sturgeon a Tartan Tory for parroting George Osborne's lines on a 50p rate, she's probably right: Scots earning significantly over £150kpa probably do have significant incentives to arrange their affairs so as not to be designated a Scottish taxpayer. As a side-point, it's also difficult to see how an independent Scotland's tax code would vary so much that they could painlessly prevent that reality. Those earning less than that, however, probably don't. You're more likely to raise more revenue from the top 10% of earners through adaptations to the higher rate than you are through the additional rate of income tax.

If the SNP cannot explain why they won't cut the threshold and levy a 41-42p higher-rate, it rather calls the bluff of the public reasons they gave for not supporting the rise in SRIT. If Nicola Sturgeon wants to run Scotland as a country with taxes not significantly at variance with those of the United Kingdom as a whole and largely in conformity with George Osborne's fiscal envelope, that's fine by me, but she should at least be up-front with the Scottish people that she's no social justice warrior in doing so. One of the big arguments made by the SNP about independence is that our current fiscal gap would not be a problem because we would totally change the dynamics of the way we tax in our state. The evidence increasingly suggests that the more tax power the SNP get, the more obviously centrist, cautious and happy to dovetail HM Treasury they become. Perhaps they're the best kind of Unionists after all.

Alas, in the heat of an election campaign, having a debate about policies that actually affect people's lives and can make a difference tend to fall by the wayside. I doubt Sturgeon or Swinney will ever need to have, let alone give, an answer to these obvious questions.

Monday 21 March 2016

Flying a Kite - Some thoughts on education inequality in Scotland

Education has long been held-up as a sacred cow in Scotland. Arguably even more so than the National Health Service. For decades Scotland has lived-off its reputation for comprehensive, broad, inclusive education and the pedigree of the Enlightenment and the contribution of its Universities sector to philosophy, economics, law, the sciences and medicine.

This reputation is one that ignores an underlying reality: that Scottish education, at all levels, has stagnated since devolution. Secondary school pupils are presented for fewer qualifications, on average, than they were before, primary and early secondary school literacy, numeracy and science education rates have fallen behind international competitors (not helped by our withdrawal from PIRLS and TIMSS monitoring) and access to our Universities for the most disadvantaged, despite larger intakes and state-funded-tuition, are appalling. Budget decisions in recent years have also narrowed the scope for adult learning and vocational support, with a cut of over 150,000 college places.

Perhaps most importantly, the people that are being most disadvantaged by these various problems are those from the most disadvantaged backgrounds. St Andrew's University has come-in for some flack over this, but others also perform poorly in this respect. A recent Freedom of Information request, for example, showed that a teenager living in Easterhouse was more likely to end-up in a young-offenders' institute than gain a place at the University of Glasgow.

Part of the response from Universities and the Scottish Government has been both to expand very specific and dedicated forms of maintenance support towards the most disadvantaged, and to adjust minimum admission requirements for those from more deprived backgrounds. Whilst these schemes are welcome, they are very limited in their scope for success and, financially, have actually been off-set by the Scottish Government's withdrawal of maintenance grants in favour of making student support more loan orientated.

In truth, though, to blame the Universities slightly misses the point. Scotland's education problems begin far earlier than we like to admit. The discrepancies are well-entrenched by late secondary school and arguably begin significantly earlier than that.

In Glasgow, the city I live in, this is incredibly stark. Govan High School, a secondary school in Nicola Sturgeon's constituency, saw within the margin of error of zero percent of its pupils achieving five Higher passes, the "gold standard" for those seriously contemplating going to university in Scotland. Looking down the list, other similarly disadvantaged areas, with a couple of exceptions, achieve similarly depressing results. The trend is similar in other local authority areas, with Northfield and Torry Academies in Aberdeen getting fewer than one in twenty pupils up to the 5 pass standard. Even in local authorities with generally very good records on schools and attainment, like East Renfrewshire, there are schools with weak results. Barrhead High School, for example, though punching above its weight, only secures 5 Higher passes for one in four pupils.

This isn't to denigrate the efforts of the teachers, pupils and parents in these schools; quite the opposite. They work exceptionally hard in a system that is failing to provide them adequate or fair support, of both financial and non-financial kinds. What is so damning is how badly the life prospects of children in these communities are affected by the post-code lottery.

It wouldn't be so bad, from an equality perspective, if the reason for these low pass-rates was that the exams are far too tough. But they're clearly not. In Glasgow you are one and a half times as likely to leave school with 5 Higher passes if you go to Jordanhill School than you are to leave even with one Higher pass if you went to St Thomas Aquinas School, which is barely 350 yards away, or Knightswood Secondary, 1000 yards in the other direction. In East Renfrewshire, if you go to St Ninian's, a similar pattern emerges compared with your counterparts that go to Barrhead.

These differences are too large simply to be attributable to the quality of the learning environment of the schools in isolation. Focusing more resources, whether through targeted school-specific funding or by way of a pupil-premium that tracks free-school-meal kids, might help hire an extra handful of support teachers and slightly reduce class sizes, but it is not going to change fundamentally the position of those schools. We need instead to be more radical and to ask how demographics, and especially how primary and early secondary school education, stratifies Scottish society so spectacularly.

The big successes of the London schools in narrowing attainment gaps has come through a willingness both to invest, but also to experiment. We should be cautious of directly implementing ideas that may work there but would be inappropriate to Scotland's system. Nevertheless, I think there are three areas, largely untouched by Scottish education reformers, that need to be given serious thought in the next few years. They are: the problem of the urban-rural divide; the structure of secondary schooling; and the pitfalls of catchment-based primary schooling.

1. The Urban-Rural Divide

Schools often face very similar problems in terms of being under-resourced and unable to provide a full curriculum and adequate support to their pupils, regardless of whether they are an inner-city school or serving a number of village communities in the Highlands and Islands. But the solutions to these problems are unlikely to be the same beyond the rudimentary fact that there is a greater need for resources. What works for Glasgow and Edinburgh may not be suitable for Aberdeenshire, Dumfries and the Highlands and Islands.

This is not a reason not to experiment more radically with the way we provide schooling in one type of area to the exclusion of another. Local authorities need both more freedom, but also to be given greater encouragement, to try something new. Instead of having a blanket opposition to changes, like experimentation with academies and free schools, we should be prepared to look at other countries, not just England, to see what they have tried and how we might adapt that to see what impact giving head-teachers and parents more direct control over financing and management decisions in a Scottish context would have.

2. Secondary Education Structure

One way we might be able to overcome the problem of narrowed availability of courses in our cities and large towns' schools, would be to rethink how we divide primary and secondary education.

One of the most unsatisfactory states of affairs at the moment relates to how pupils end-up being bussed from one school to another just so they can take their preferred Highers or Advanced Highers, at not inconsiderable expense, inconvenience, and disruption to the school day. We should think about whether the introduction of or experimentation with a "junior high" and "senior high" set-up in Scotland might better address this allocation of resources problem, especially in our cities and towns.

This would more cleanly bring together a critical mass of students taking the same courses and allow teachers, if they wish, to specialise or focus on teaching either the younger or the older age-group. Given that the Curriculum for Excellence framework now places more emphasis on generalist learning up to and including S3, this would arguably also make more sense now than before.

This would also allow for the "pairing" of advantaged and disadvantaged areas and schools, and encourage more sharing of best-practice and resources between schools in a local authority area. If a schools "group" that contains a high-performing school knows that its overall results are likely to be dragged-down by less good results from a paired school, they are more likely to focus their resources on improving approaches and resources for the "junior high" servicing that more deprived area.

Clearly, an approach like this would be less suitable for rural areas. That is not a reason at the very least not to try it in Glasgow, Aberdeen, Edinburgh and Dundee.

3. Primary School and Catchment Areas

In a system where all, or almost all, schools are organised on a comprehensive basis and run by a local authority, the secondary school you go to is almost entirely determined-by the primary school you went to. That in turn is almost entirely determined by your post-code. Placement requests can be made, but are disproportionately used by families who are already relatively prosperous, or who have a strong background of education and high levels of awareness of how best to "game" the system.

England does not have as stringent approaches to catchments. One of the biggest criticisms of their system, where among other things, selective schools existed, was that the system of applying for places at secondary schools is skewed in-favour of the most affluent families.

A lot of educational research shows that the greatest impact on educational attainment in later life is determined by the levels of support in early-years education. It also intuitively makes sense: if you don't leave primary school able to read, write and count, you will be severely disadvantaged in secondary school where almost all of your learning will depend on a minimum standard being achieved in one or more of these areas.

These discrepancies clearly emerge in primary schools. One of the advantages of primary schools being much smaller than secondary schools is that they are more intimate and are often very well-integrated into their local communities, not least in rural or smaller town areas. I know this well, having attended a village primary school in Auchtertool, Fife, from P1-3 as a youngster. One of the major disadvantages, however, is that when places for primary schools are determined by catchment areas, they bunch-together children from very similar backgrounds, economically and socially. This is arguably more extreme than it is even for secondary schools.

Local authorities seldom change catchment areas either for primary or secondary schools, for fear of the massive backlash, usually from middle-class parents that have bought expensive houses to get their children into a good state school. Though my liberal instincts tend towards localised control, I wonder whether what Scotland needs is a national review into how school places are allocated, and an independent commission to look at diluting catchment areas or otherwise altering admissions rules and incentives.

One of the major advantages of the "pupil premium", the idea that additional state support should follow disadvantaged pupils rather than schools, is that it, theoretically at least, encourages schools to take-on children from disadvantaged backgrounds. This mitigates against reluctance to do so, that might otherwise have been motivated by the impact on school league tables. This especially means that the best schools are more incentivised to take-on kids outside of their traditional catchment areas who have a less good attainment profile, and to maximise their chances, rather than just cherry-picking the brightest kids and taking them away from those already struggling schools.

Having more diverse primary schools, especially in our cities and towns, would be an altogether good thing, and again, would encourage much closer cooperation between schools, both between primary schools and between them and secondary schools, whether or not divided along the lines described above. In any case, we need to find a way to overcome the practical obstacle of pushy middle-class parents trying to protect the existing system for their children's benefit to the exclusion of others.


These are not yet fully-formed thoughts, but they represent the kind of more "out-of-the-box" thinking I believe Scottish education needs if it is to give a fair chance to everyone going through it. Some of this will involve doing more to empower local authorities. But some of it also means asking them either to take a genuine political risk or to cede control and let someone else have a go at improving the chances of Scotland's most disadvantaged kids.

This is in-part why I sympathised with the SNP government when they decided to bring back national testing. The Scottish Lib Dems were quick to criticise this move, but I think that is a mistake. Standardised testing, if not as-such public league tables, seems to me to be an important part of the Scottish Government's armoury if it is to measure the impact of different policies and different local authority's efforts and approaches towards narrowing gaps in attainment and improving attainment in absolute terms. This includes policies like the flagship one, adopted in England and Wales that the Lib Dems now want introduced in Scotland, the "pupil premium".

It is hyperbolic to suggest that four or five formal assessments (prepared in consultation with teachers and curriculum designers) a year represents an unconscionable administrative burden beyond the ken of our teaching profession. These kids will have to sit exams when they are 16-18 years old anyway, so acclimatising them to formal assessment is likely actually to help them later-on. What we really need to be doing is looking at how teaching methods interact with assessment, and how well assessment measures actual ability and meeting of learning outcomes by pupils. The argument that some pupils do better in certain types of test than others isn't a reason not to conduct the tests; it's a reason to look more carefully at what the tests are in fact testing and what teaching behaviours they are encouraging.

So what do you think? I would be interested to hear people's thoughts especially on the questions of the structure and admissions factors in primary and early secondary education. I'm sure there will be those within the teaching profession who can find problems with these ideas, but I suspect the conversation about them is arguably just as valuable and important in advancing the debate about education reform in Scotland. More of the same and tinkering at the edges seems to me to have run its course.