David Willetts (above) talks with panel members Phillip Blond, Hamish McRae, Ed Howker and Jean Seaton. All photographs by Mark Allan
THE PROSPECT PANEL
David Goodhart (chair) is Prospect editor
Phillip Blond is director of the think tank ResPublica and author of “Red Tory: How Left and Right Have Broken Britain and How We Can Fix It” (Faber)
Ed Howker is a journalist and the co-author of “Jilted Generation: How Britain Has Bankrupted Its Youth” (Icon)
Hamish McRae is a financial journalist and an associate editor of the Independent
Jean Seaton is professor of media history at the University of Westminster
HAMISH MCRAE: The last government had a clear social strategy: by spending lots of public money, directed by a host of targets, it thought it could improve our society. Leaving aside whether it worked or not, there is now no money left to do that. So what’s your coalition strategy?
DAVID WILLETTS: The strategy has got three elements. One is the “power shift”—decentralisation and cutting back on some of the thicket of legislation, which is partly what the constitutional reform bill is about. The second is the “horizon shift” and is about valuing the long-term and recognising the interests of future generations, something I have written quite a lot about. You will hear more of that in the months to come, and it’s one of the arguments for tackling the fiscal crisis. The third thing is growth. On the one hand times are austere, and people don’t want fake optimism. But in the end we do want a stronger economy that is balanced away from financial services towards high-value manufacturing—one of the things that we’re working on in my department.
PHILLIP BLOND: Strikingly for a Conservative, your last book, The Pinch, accepted the importance of tackling inequality, especially asset inequality. But, in light of the new austerity, what has happened to the “progressive right” agenda on assets?
DW: Yes, I have come to the view that what people have relative to others does matter. It’s no good arguing—as I did in 1986—that an unemployed man was receiving in benefits the equivalent of average male earnings in 1946. What mattered was what others were consuming in 1986 and how excluded from that he would be. Now let’s look at the two main forms of asset wealth that people have. First of all, pensions. With the last government’s Turner reforms and our team at the department of work and pensions, we can achieve a big reduction in the means-testing of pensioners because of the increase in the value of the basic state pension, so that saving—and most saving is for retirement—doesn’t face a means-testing penalty. The other big form of wealth is housing. There is cross-party agreement that we need to build more houses. But we’ve had a decade where the model for doing it has been top-down instructions. We want to change that to favour local decisions, but with strong incentives for local councils to build. They will have more freedom to raise money and will keep a big slug of the revenues that flow. It’s early days, but if we can change the incentives for saving for retirement and the incentives for building houses, that should spread asset ownership.
DAVID GOODHART Why abolish the child trust fund? That was spreading assets.
DW: I understand the argument for it, and I liked the policy in many ways but it was a universal payment, and in tough times I don’t think you can justify sending out a £250 cheque to everyone when they’re born. Incidentally, on means-testing and universalism: one of BeveriDGe’s great insights was that if you define the category of benefits recipients carefully enough it can be quite well targeted without means-testing. That is the holy grail of a well-designed benefits system.
PB: But a lot of people on low wages don’t have enough money to save. What about mutualisation, building on the idea of creating ownership, particularly through housing, and housing benefit, for those at the bottom? We can’t have popular capitalism if the poor don’t have capital.
DW: Well, you’ve come to the right department for that. One of the responsibilities of my ministerial team is co-operatives, mutuals, and employee share ownership. We are looking closely at how far the John Lewis partnership model can be spread.
PB: One of the damaging things about the British economy is that it’s shaped like an hourglass—lots of small businesses and some very big ones, but a lack of medium- sized enterprises. One of the reasons for the squeezed middle is that we don’t have local banks that are able to deliver the right sort of credit in the right sort of way. And the other is that, unlike the Germans, we’re no good at association among small and medium-sized businesses.
DW: I agree. On the banking side, Vince Cable and George Osborne are both very interested in this issue. And the current banking review is also looking at how to encourage local financing—there’s a debate resurfacing about local stock exchanges. I come from Birmingham and remember the Birmingham stock exchange. I’m also keen to encourage small businesses to co-operate over things that are not economic for one business to do alone—apprenticeships, for example. One reason the apprentice system is in a mess is that only large companies can handle all the red tape that has been imposed over the decades for taking on apprentices. I’m a fan of group training associations, where a group of local plumbers, say, come together and between them take on an apprentice. We’re trying to put some money into kick-starting more such associations.
HM: Can I turn to the fiscal crisis? We’re on the glide path to a radical spending review on 20th October—we don’t know the detail, but we know the big numbers. And the scale of cutbacks in public spending seems to be close to the limit at which you could do it. That raises two questions. One is macro. Is there a danger that you are taking a lot of demand out of the economy just when there might be a pause in the recovery—even a double dip? There’s also a micro question, which is, if you do things fast you tend to do them badly—I’m as worried about the second as the first.
DW: Look back to the circumstances we were in on election day—it could have been very hairy indeed. There had been a catastrophic loss of trust in politicians, not least because of the expenses scandal, and there was the possibility after the election of a failure of the political system to address the fiscal crisis. I’m not going to say we would have gone the way of Greece, but our long-term interest rates were not that different from Greece or Spain. And the fact that we smoothly put together a coalition government, with £6bn of savings immediately and a commitment to bringing the deficit down swiftly—that immediately moved us off the “at risk” register. I hear now the arguments—from Ed Balls [see Ed Balls, p21] and others—that it’s terribly risky doing the fiscal tightening, but they are ignoring the fact that it would have been terribly risky not to. And, yes, there are fears about “double dip” but the main thing driving that is what’s happening in America. You worry that it’s happening fast? That’s partly the fault of the outgoing government which left no long-term fiscal plans. Our credibility has been earned by a commitment to deliver fiscal tightening—you can’t then back away from it. And when you’re borrowing as a percentage of GDP as much as we were at the time of the election—the highest in the G20—the risk of losing control is real, you can’t just say “Well, the risk has now been dealt with.”
HM: And what about the point that if you do things fast you’ll do them badly?
DW: Well, don’t forget that the big figures floating around—cuts of 25 or 40 per cent—are over several years. So a 25 per cent cut might in fact be 5 per cent a year over five years. And when you look at universities—we’re going to have the Browne review on student funding and the overall spending review both in October—the earliest that you could bring in changes in the financing of universities is probably 2012, which is hardly a helter-skelter process [see Jean Seaton, p42.]
PB: What’s the coalition’s growth agenda?
DW: It is partly just having the right macro environment: long-term interest rates and a simpler corporation tax regime so somebody sitting in an HQ in America can roughly work out how much tax they’ll have to pay if they come to Britain. I am also a believer in our research base, and that is a big asset when companies are trying to decide where to locate.
DG: You mentioned rebalancing earlier, and that has big implications for the role of the state in the economy—how laissez-faire or interventionist you are. Rebalancing requires quite an active state doesn’t it?
DW: Let me give you an example from a meeting I had this morning. One of the sectors where we have had an historic advantage is the life sciences industry. But over the past ten years we’ve been losing our competitive advantage, and as soon as you look at the sector you discover that at every level of the value chain there are things public policy can do. For example, we have now a very cumbersome system for clinical trials and as a result we’ve gone from Britain having something like 6 per cent of all patients enrolled in trials to about 2 per cent. If you’re a company doing medical trials in Hungary or China you might as well put the research labs where you’re doing the trial.
I also co-chair the Space Leadership Council. Should government have a role in space? You soon discover it’s unavoidable. When Nasa is talking to us about collaboration on kit they say “We’re a public body and we want to deal with another public body,” so if I want to help a British company sell its services—we’ve got an interesting company in Guildford, for example, that can clear up space debris—telling them to go and deal directly with Nasa doesn’t help them. So there is a role for smart public policy. It’s not old-fashioned “government knows best,” but in sector after sector you find you are entangled with a whole host of public policy issues.
ED HOWKER:That is interesting politically for the Tory party. Are you saying you no longer believe in the neoliberal neutral state, but you support a more interventionist state without it being a big state?
DW: Yes, that’s right. It was free-market economics that first got me into politics. There is an issue of how I reconcile that with what I am doing now to support the life sciences industry or the space sector. But I’m not trying to pick winners or hand out grants. And I think there is some intellectual convergence here—whether it is the civic conservatism that I used to write about, David Cameron’s big society, or even Frank Field’s claims for non-statist socialism—it’s about achieving social ends without a big state.
DG: Can we return to the issue of inter-generational justice that you have made very much your own with your book The Pinch. Can you just tell us why there is such a problem with the baby boomers?
DW: The baby boom generation had it particularly good in various ways. When they were young, the wages of young people were high relative to the middle-aged, and when they became middle-aged, their wages were higher relative to the young. They had generous public services when they weren’t paying taxes, and when they became taxpayers, taxes were held down by Mrs Thatcher. They bought houses when they were cheap and then house prices rose. The prospects for the younger generation of building up the two types of asset that we were talking about earlier—a funded pension or a house—are much less good than they were. So there are lots of ways economics has worked to the advantage of the baby boomers. I don’t think it’s because they’re a bad cohort, but because we just weren’t thinking intergenerationally. We’re incredibly sensitive to differences of social class, income or ethnicity, but...
JEAN SEATON There’s been a big gender shift too—one consequence is that middle- class women have entered the universities and professions in large numbers, restricting opportunities for working-class men.
DW: Yes, I think that’s also true. But the intergenerational issue has been neglected and you will hear a lot more from us about it. We need to value future generations. The buDGet deficit is an issue of generational fairness. When we issue 30-year gilts to finance the debt today we’re saying the services we need now are going to be paid for by taxes, and some of us around this table may not be taxpayers by the time the full debt becomes due.
EH: But surely the “horizon shift” to a longer-term view is harder to pull off with a more free-market public policy outlook?
DW: I don’t think that’s true. Economists used to assume that a “big” generation like the baby boomers would have it tough because of greater competition for resources when there are a lot of you of the same age. One reason the boomers have in fact done so well is by using their democratic muscle to vote themselves generous public benefits. A more free-market outlook can mitigate that effect to an extent.
DG: If you really want to help younger generations you should ringfence education from cuts, not health. Health is consumed disproportionately by the elderly.
DW: When you look at the growth in the number of older people who need the most healthcare then our policy, which is to allow it to grow in real terms, is surely right. But I also want to link this agenda to the conversation that you [David Goodhart] and I began a few years ago about the “progressive dilemma.” As society becomes more diverse, how do you hold it together and support transfers through the welfare state? Part of what I tried to do in The Pinch was promote the most fundamental, natural types of exchanges that people—regardless of religion or cultural background—can understand. And I think arguments about fairness between the generations are arguments that have a universal appeal even in a diverse society.
DG: But doesn’t intergenerational justice presuppose a strong sense of national identity? If we become too diverse then the danger is that our affinities shrink—you want to hand down only to your own family or some sub-national group that you identify with. Perhaps that’s exactly why we have neglected intergenerational justice and become so short-termist?
DW: There’s this thought experiment. You invite a group of volunteers to imagine they are the board of directors of a forestry firm, and you say to them you’ve got a patch of woodland and you’re planning to cut it down. Then you give them three reasons why they shouldn’t. First, because it’s going to have a higher value in the future; second, because the local community enjoys having the woodland; third, because previous generations left the woodland for you, you have a similar obligation to pass it on in the state in which you have enjoyed it. The latter is the argument that most gets through to people, and my view is that too much political debate has been about the first two arguments—economic rationality or horizontal equity in the here and now, rather than vertical, cross-generational equity. We’ve enjoyed the woodland and therefore have an obligation to pass it on. I think that helps us to break out of the progressive dilemma. Another Tory insight that can help with this is our stress on the importance of institutions, rather than the abstract statements of principle that were Gordon Brown’s approach to Britishness.
JS: Turning to the universities. We are in the middle of a debate about the future of higher education and there seems to be a strong push from government to create more diversity in the system, or acknowleDGe more clearly the diversity that exists. But there are some dangers. One seldom discussed issue is the fact that world class departments do not always live in world class universities. Another issue is how you can make universities engage with public purposes better. Much of the most vibrant intellectual life now happens elsewhere.
DW: I agree, but one of the biggest issues for me is teaching in universities. We have some sharp incentives for research and no comparable incentives for teaching. There are a significant number of students whose experience of being taught at university is not good enough. I want to change the incentives for universities to encourage that mission of passing on knowleDGe from one generation to the next.
JS: Yes. We produce lots of research that nobody is ever going to read, and we need better teaching—and that means promoting scholarship, not research.
DW: That’s a very important distinction to make. Some people think teaching means a sort of intellectual fossilisation, but I’m a great admirer of how liberal arts colleges in the US treat it. The teachers there often don’t do research but they are engaging in scholarship—they have to be up with their subject and contribute to its development.
DG: So you want more universities that only teach, that don’t do research?
DW: Yes. I have proposed that it should be easier for new colleges to set up as teaching institutions with degrees externally awarded by another body, such as the University of London—which is how higher education expanded from about 1850 to 1950. It’s a way of bringing in new providers and giving students greater choice.
JS: There’s also a tension between today’s higher education system and what we might call the needs of our national culture. Foreign students are wonderful. Universities are addicted to them because of the money they bring. But that pushes universities away from some of the key subjects such as English and history, which we need as part of our national glue.
DW: Yes, that is an issue. You get the same problem in business schools where too much of our research is dominated by the interests of American academic journals. [for more on this see Jean Seaton, p42.]
DG: Are there now simply too many people going through the university system when other forms of education might be more appropriate? That’s what some of the employers’ organisations seem to think.
DW: Sometimes the people who say they want fewer students are also the ones who do graduate-only recruitment. I think that after this period of rapid expansion we have ended up with the false belief that there is one route to a successful career and a well-paid job and that involves going to university. It was rather horrifying listening to some of the conversations on results day with 18 year olds who thought their life chances had been shattered by the fact that they were one A-level grade off what they needed to get to the university that they wanted to study at. We have too many of our eggs in one basket. That’s why we’re very keen on apprenticeships and proper vocational qualifications, part-time courses that enable people to start work at 18 if they wish, and study with the Open University, perhaps leading to a campus university later. One of the things I want to bring back is City & Guilds, HNCs, HNDs and BTecs—they are valued by employers and have still got historic weight. So we need other routes as well, but you’re always going to have a lot of people who want to go to university.
DG: And more private universities? [See a case made for these on p24.]
DW: Yes, there will be more. If new providers come forward, especially if they are strong on teaching. I gave the BPP business and law college university status in July—the first independent since Buckingham in 1976. And 1,000 places in clearing this summer were at BPP. If there’s more we can do to bring greater diversity into the sector then I’m up for it.
DG: What about the internationalisation of elite institutions like CambriDGe University. Are you happy to have a large chunk of students and the faculty being non-British at the places that have in the past helped to shape our national culture? Already more than a third of the student body is non-British. Is there some sort of cap, dare I say, one would want to apply?
DW: It’s called “Wimbledonisation”—you are the host but you never win the prizes.
DG: We provide porters but not students.
DW: You are suggesting that Britain will have lots of nice places where American professors educate Chinese students. Well, academia has become more mobile, and it’s hard to imagine a national protectionist model. But British universities are not like Wimbledon. Even in places like CambriDGe the majority of undergraduates are British. In any case, I would like to encourage more British students to study abroad. There are something like 34,000 Indian students studying in Britain every year and there are 500 British students going to study in India. I think that a bit more internationalisation is probably in the interests of British students.
DG: Thank you.
THE PROSPECT PANEL
David Goodhart (chair) is Prospect editor
Phillip Blond is director of the think tank ResPublica and author of “Red Tory: How Left and Right Have Broken Britain and How We Can Fix It” (Faber)
Ed Howker is a journalist and the co-author of “Jilted Generation: How Britain Has Bankrupted Its Youth” (Icon)
Hamish McRae is a financial journalist and an associate editor of the Independent
Jean Seaton is professor of media history at the University of Westminster
HAMISH MCRAE: The last government had a clear social strategy: by spending lots of public money, directed by a host of targets, it thought it could improve our society. Leaving aside whether it worked or not, there is now no money left to do that. So what’s your coalition strategy?
DAVID WILLETTS: The strategy has got three elements. One is the “power shift”—decentralisation and cutting back on some of the thicket of legislation, which is partly what the constitutional reform bill is about. The second is the “horizon shift” and is about valuing the long-term and recognising the interests of future generations, something I have written quite a lot about. You will hear more of that in the months to come, and it’s one of the arguments for tackling the fiscal crisis. The third thing is growth. On the one hand times are austere, and people don’t want fake optimism. But in the end we do want a stronger economy that is balanced away from financial services towards high-value manufacturing—one of the things that we’re working on in my department.
PHILLIP BLOND: Strikingly for a Conservative, your last book, The Pinch, accepted the importance of tackling inequality, especially asset inequality. But, in light of the new austerity, what has happened to the “progressive right” agenda on assets?
DW: Yes, I have come to the view that what people have relative to others does matter. It’s no good arguing—as I did in 1986—that an unemployed man was receiving in benefits the equivalent of average male earnings in 1946. What mattered was what others were consuming in 1986 and how excluded from that he would be. Now let’s look at the two main forms of asset wealth that people have. First of all, pensions. With the last government’s Turner reforms and our team at the department of work and pensions, we can achieve a big reduction in the means-testing of pensioners because of the increase in the value of the basic state pension, so that saving—and most saving is for retirement—doesn’t face a means-testing penalty. The other big form of wealth is housing. There is cross-party agreement that we need to build more houses. But we’ve had a decade where the model for doing it has been top-down instructions. We want to change that to favour local decisions, but with strong incentives for local councils to build. They will have more freedom to raise money and will keep a big slug of the revenues that flow. It’s early days, but if we can change the incentives for saving for retirement and the incentives for building houses, that should spread asset ownership.
DAVID GOODHART Why abolish the child trust fund? That was spreading assets.
DW: I understand the argument for it, and I liked the policy in many ways but it was a universal payment, and in tough times I don’t think you can justify sending out a £250 cheque to everyone when they’re born. Incidentally, on means-testing and universalism: one of BeveriDGe’s great insights was that if you define the category of benefits recipients carefully enough it can be quite well targeted without means-testing. That is the holy grail of a well-designed benefits system.
PB: But a lot of people on low wages don’t have enough money to save. What about mutualisation, building on the idea of creating ownership, particularly through housing, and housing benefit, for those at the bottom? We can’t have popular capitalism if the poor don’t have capital.
DW: Well, you’ve come to the right department for that. One of the responsibilities of my ministerial team is co-operatives, mutuals, and employee share ownership. We are looking closely at how far the John Lewis partnership model can be spread.
PB: One of the damaging things about the British economy is that it’s shaped like an hourglass—lots of small businesses and some very big ones, but a lack of medium- sized enterprises. One of the reasons for the squeezed middle is that we don’t have local banks that are able to deliver the right sort of credit in the right sort of way. And the other is that, unlike the Germans, we’re no good at association among small and medium-sized businesses.
DW: I agree. On the banking side, Vince Cable and George Osborne are both very interested in this issue. And the current banking review is also looking at how to encourage local financing—there’s a debate resurfacing about local stock exchanges. I come from Birmingham and remember the Birmingham stock exchange. I’m also keen to encourage small businesses to co-operate over things that are not economic for one business to do alone—apprenticeships, for example. One reason the apprentice system is in a mess is that only large companies can handle all the red tape that has been imposed over the decades for taking on apprentices. I’m a fan of group training associations, where a group of local plumbers, say, come together and between them take on an apprentice. We’re trying to put some money into kick-starting more such associations.
HM: Can I turn to the fiscal crisis? We’re on the glide path to a radical spending review on 20th October—we don’t know the detail, but we know the big numbers. And the scale of cutbacks in public spending seems to be close to the limit at which you could do it. That raises two questions. One is macro. Is there a danger that you are taking a lot of demand out of the economy just when there might be a pause in the recovery—even a double dip? There’s also a micro question, which is, if you do things fast you tend to do them badly—I’m as worried about the second as the first.
DW: Look back to the circumstances we were in on election day—it could have been very hairy indeed. There had been a catastrophic loss of trust in politicians, not least because of the expenses scandal, and there was the possibility after the election of a failure of the political system to address the fiscal crisis. I’m not going to say we would have gone the way of Greece, but our long-term interest rates were not that different from Greece or Spain. And the fact that we smoothly put together a coalition government, with £6bn of savings immediately and a commitment to bringing the deficit down swiftly—that immediately moved us off the “at risk” register. I hear now the arguments—from Ed Balls [see Ed Balls, p21] and others—that it’s terribly risky doing the fiscal tightening, but they are ignoring the fact that it would have been terribly risky not to. And, yes, there are fears about “double dip” but the main thing driving that is what’s happening in America. You worry that it’s happening fast? That’s partly the fault of the outgoing government which left no long-term fiscal plans. Our credibility has been earned by a commitment to deliver fiscal tightening—you can’t then back away from it. And when you’re borrowing as a percentage of GDP as much as we were at the time of the election—the highest in the G20—the risk of losing control is real, you can’t just say “Well, the risk has now been dealt with.”
HM: And what about the point that if you do things fast you’ll do them badly?
DW: Well, don’t forget that the big figures floating around—cuts of 25 or 40 per cent—are over several years. So a 25 per cent cut might in fact be 5 per cent a year over five years. And when you look at universities—we’re going to have the Browne review on student funding and the overall spending review both in October—the earliest that you could bring in changes in the financing of universities is probably 2012, which is hardly a helter-skelter process [see Jean Seaton, p42.]
PB: What’s the coalition’s growth agenda?
DW: It is partly just having the right macro environment: long-term interest rates and a simpler corporation tax regime so somebody sitting in an HQ in America can roughly work out how much tax they’ll have to pay if they come to Britain. I am also a believer in our research base, and that is a big asset when companies are trying to decide where to locate.
DG: You mentioned rebalancing earlier, and that has big implications for the role of the state in the economy—how laissez-faire or interventionist you are. Rebalancing requires quite an active state doesn’t it?
DW: Let me give you an example from a meeting I had this morning. One of the sectors where we have had an historic advantage is the life sciences industry. But over the past ten years we’ve been losing our competitive advantage, and as soon as you look at the sector you discover that at every level of the value chain there are things public policy can do. For example, we have now a very cumbersome system for clinical trials and as a result we’ve gone from Britain having something like 6 per cent of all patients enrolled in trials to about 2 per cent. If you’re a company doing medical trials in Hungary or China you might as well put the research labs where you’re doing the trial.
I also co-chair the Space Leadership Council. Should government have a role in space? You soon discover it’s unavoidable. When Nasa is talking to us about collaboration on kit they say “We’re a public body and we want to deal with another public body,” so if I want to help a British company sell its services—we’ve got an interesting company in Guildford, for example, that can clear up space debris—telling them to go and deal directly with Nasa doesn’t help them. So there is a role for smart public policy. It’s not old-fashioned “government knows best,” but in sector after sector you find you are entangled with a whole host of public policy issues.
ED HOWKER:That is interesting politically for the Tory party. Are you saying you no longer believe in the neoliberal neutral state, but you support a more interventionist state without it being a big state?
DW: Yes, that’s right. It was free-market economics that first got me into politics. There is an issue of how I reconcile that with what I am doing now to support the life sciences industry or the space sector. But I’m not trying to pick winners or hand out grants. And I think there is some intellectual convergence here—whether it is the civic conservatism that I used to write about, David Cameron’s big society, or even Frank Field’s claims for non-statist socialism—it’s about achieving social ends without a big state.
DG: Can we return to the issue of inter-generational justice that you have made very much your own with your book The Pinch. Can you just tell us why there is such a problem with the baby boomers?
DW: The baby boom generation had it particularly good in various ways. When they were young, the wages of young people were high relative to the middle-aged, and when they became middle-aged, their wages were higher relative to the young. They had generous public services when they weren’t paying taxes, and when they became taxpayers, taxes were held down by Mrs Thatcher. They bought houses when they were cheap and then house prices rose. The prospects for the younger generation of building up the two types of asset that we were talking about earlier—a funded pension or a house—are much less good than they were. So there are lots of ways economics has worked to the advantage of the baby boomers. I don’t think it’s because they’re a bad cohort, but because we just weren’t thinking intergenerationally. We’re incredibly sensitive to differences of social class, income or ethnicity, but...
JEAN SEATON There’s been a big gender shift too—one consequence is that middle- class women have entered the universities and professions in large numbers, restricting opportunities for working-class men.
DW: Yes, I think that’s also true. But the intergenerational issue has been neglected and you will hear a lot more from us about it. We need to value future generations. The buDGet deficit is an issue of generational fairness. When we issue 30-year gilts to finance the debt today we’re saying the services we need now are going to be paid for by taxes, and some of us around this table may not be taxpayers by the time the full debt becomes due.
EH: But surely the “horizon shift” to a longer-term view is harder to pull off with a more free-market public policy outlook?
DW: I don’t think that’s true. Economists used to assume that a “big” generation like the baby boomers would have it tough because of greater competition for resources when there are a lot of you of the same age. One reason the boomers have in fact done so well is by using their democratic muscle to vote themselves generous public benefits. A more free-market outlook can mitigate that effect to an extent.
DG: If you really want to help younger generations you should ringfence education from cuts, not health. Health is consumed disproportionately by the elderly.
DW: When you look at the growth in the number of older people who need the most healthcare then our policy, which is to allow it to grow in real terms, is surely right. But I also want to link this agenda to the conversation that you [David Goodhart] and I began a few years ago about the “progressive dilemma.” As society becomes more diverse, how do you hold it together and support transfers through the welfare state? Part of what I tried to do in The Pinch was promote the most fundamental, natural types of exchanges that people—regardless of religion or cultural background—can understand. And I think arguments about fairness between the generations are arguments that have a universal appeal even in a diverse society.
DG: But doesn’t intergenerational justice presuppose a strong sense of national identity? If we become too diverse then the danger is that our affinities shrink—you want to hand down only to your own family or some sub-national group that you identify with. Perhaps that’s exactly why we have neglected intergenerational justice and become so short-termist?
DW: There’s this thought experiment. You invite a group of volunteers to imagine they are the board of directors of a forestry firm, and you say to them you’ve got a patch of woodland and you’re planning to cut it down. Then you give them three reasons why they shouldn’t. First, because it’s going to have a higher value in the future; second, because the local community enjoys having the woodland; third, because previous generations left the woodland for you, you have a similar obligation to pass it on in the state in which you have enjoyed it. The latter is the argument that most gets through to people, and my view is that too much political debate has been about the first two arguments—economic rationality or horizontal equity in the here and now, rather than vertical, cross-generational equity. We’ve enjoyed the woodland and therefore have an obligation to pass it on. I think that helps us to break out of the progressive dilemma. Another Tory insight that can help with this is our stress on the importance of institutions, rather than the abstract statements of principle that were Gordon Brown’s approach to Britishness.
JS: Turning to the universities. We are in the middle of a debate about the future of higher education and there seems to be a strong push from government to create more diversity in the system, or acknowleDGe more clearly the diversity that exists. But there are some dangers. One seldom discussed issue is the fact that world class departments do not always live in world class universities. Another issue is how you can make universities engage with public purposes better. Much of the most vibrant intellectual life now happens elsewhere.
DW: I agree, but one of the biggest issues for me is teaching in universities. We have some sharp incentives for research and no comparable incentives for teaching. There are a significant number of students whose experience of being taught at university is not good enough. I want to change the incentives for universities to encourage that mission of passing on knowleDGe from one generation to the next.
JS: Yes. We produce lots of research that nobody is ever going to read, and we need better teaching—and that means promoting scholarship, not research.
DW: That’s a very important distinction to make. Some people think teaching means a sort of intellectual fossilisation, but I’m a great admirer of how liberal arts colleges in the US treat it. The teachers there often don’t do research but they are engaging in scholarship—they have to be up with their subject and contribute to its development.
DG: So you want more universities that only teach, that don’t do research?
DW: Yes. I have proposed that it should be easier for new colleges to set up as teaching institutions with degrees externally awarded by another body, such as the University of London—which is how higher education expanded from about 1850 to 1950. It’s a way of bringing in new providers and giving students greater choice.
JS: There’s also a tension between today’s higher education system and what we might call the needs of our national culture. Foreign students are wonderful. Universities are addicted to them because of the money they bring. But that pushes universities away from some of the key subjects such as English and history, which we need as part of our national glue.
DW: Yes, that is an issue. You get the same problem in business schools where too much of our research is dominated by the interests of American academic journals. [for more on this see Jean Seaton, p42.]
DG: Are there now simply too many people going through the university system when other forms of education might be more appropriate? That’s what some of the employers’ organisations seem to think.
DW: Sometimes the people who say they want fewer students are also the ones who do graduate-only recruitment. I think that after this period of rapid expansion we have ended up with the false belief that there is one route to a successful career and a well-paid job and that involves going to university. It was rather horrifying listening to some of the conversations on results day with 18 year olds who thought their life chances had been shattered by the fact that they were one A-level grade off what they needed to get to the university that they wanted to study at. We have too many of our eggs in one basket. That’s why we’re very keen on apprenticeships and proper vocational qualifications, part-time courses that enable people to start work at 18 if they wish, and study with the Open University, perhaps leading to a campus university later. One of the things I want to bring back is City & Guilds, HNCs, HNDs and BTecs—they are valued by employers and have still got historic weight. So we need other routes as well, but you’re always going to have a lot of people who want to go to university.
DG: And more private universities? [See a case made for these on p24.]
DW: Yes, there will be more. If new providers come forward, especially if they are strong on teaching. I gave the BPP business and law college university status in July—the first independent since Buckingham in 1976. And 1,000 places in clearing this summer were at BPP. If there’s more we can do to bring greater diversity into the sector then I’m up for it.
DG: What about the internationalisation of elite institutions like CambriDGe University. Are you happy to have a large chunk of students and the faculty being non-British at the places that have in the past helped to shape our national culture? Already more than a third of the student body is non-British. Is there some sort of cap, dare I say, one would want to apply?
DW: It’s called “Wimbledonisation”—you are the host but you never win the prizes.
DG: We provide porters but not students.
DW: You are suggesting that Britain will have lots of nice places where American professors educate Chinese students. Well, academia has become more mobile, and it’s hard to imagine a national protectionist model. But British universities are not like Wimbledon. Even in places like CambriDGe the majority of undergraduates are British. In any case, I would like to encourage more British students to study abroad. There are something like 34,000 Indian students studying in Britain every year and there are 500 British students going to study in India. I think that a bit more internationalisation is probably in the interests of British students.
DG: Thank you.
