For the last 50 years in Britain we have been living with the Attlee government welfare settlement, in which public services were to be free at the point of delivery and financed out of general taxation. The goal was to transform Britain's political democracy into a social democracy, and it was partly successful.
Tony Blair came to power promising to rethink the Attlee settlement. He said that in place of the tired old debates on incremental improvement and a bit of extra cash something more radical was required. Nearly five years on, the public services are under the microscope as never before but the brief flickers of new thinking seem to have been snuffed out. With precious little ideological or class commitment to bolster it in bad times, Labour could lose the next election if it fails to deliver the promised improvements to the NHS, state education and the other main services. It may not even matter how awful the Tories are.
But there is an idea-applicable across many of the public services-which has not been tried: top-up the income the services receive from general tax by charging the better-off people who use them according to their means. This would give the services a lot more money, tie the better-off into a single system, and encourage them to lobby for improvements. The system would also remain relatively equitable.
I focus here on education because it is the service I know best. As everyone knows, state education is struggling. I am reminded of this every week when parents turn up at my (private) school pleading with us to take their children because they are not being taught properly at state schools. There is no more serious divide in Britain than that between the state and private sectors of education. The divide has grown steadily over the last 30 years. Private schools dominate the top of the league tables, the entry to top universities and access to the most powerful positions in Britain. Of the 100 schools at the top of the league tables, 85 are private.
The 7 per cent of the country's children at private schools are having at least twice as much, and in some cases five times as much, spent on their education as the average amount spent on children in state schools. Thirteen per cent of the country's teachers are in the private sector, which also absorbs a high percentage of the most skilled teachers in shortage subjects including mathematics and modern languages. Class sizes in private schools are roughly half that of state schools and the teacher: pupil ratio in private schools is also half that of state schools. Teachers are leaving state schools in large numbers, many of them to private schools, where they are better paid and better looked after. Above all, they say that they are able to teach in private schools relatively free of the administrative and child-control chores of state schools.
All of this is well documented but no government, whether of the left or right, has done anything to narrow the gap. Tony Blair has pledged himself to increasing expenditure on state schools to match that of independent schools. He will not achieve it. Current promises of increasing expenditure by 5 per cent per annum will not even keep pace with the expected 6 per cent per annum increase in expenditure envisaged by private schools. Much of the government's cash will be swallowed up in recruiting and retaining teachers to meet the current crisis in teacher numbers.
Surveys show that most people would opt for private schools if they could afford them. Those who can afford to contribute to their children's education but cannot pay full fees for private schools, find ways of getting their children into desirable state schools, through living in the right area and/or paying for extra tuition to help pass exams.
Labour since 1997 has done more than any government since 1950 to improve the quality of state education, especially at primary level. Its partnership scheme to bridge state and private schools is the most important initiative to have appeared since the war to encourage meaningful interaction between the sectors. But there is little in its spending plans, or in its recent White Paper, to suggest that it is fully facing up to the widening gulf between the two providers of education.
The solution is to means test all parents, as occurred before the 1944 Education Act when parents made contributions to their children's education. Parents whose income is above a certain figure should contribute to their children's education: the higher the income, the greater the contribution. Parents would, however, pay far less for less popular state schools, with less social capital, than for sought-after state schools. A doctor with a working wife, for example, could expect to pay the full cost of a place at a grammar school but only a fraction of the cost at a run-down comprehensive school. The money raised via means testing, which would be on top of the money raised already from tax, would be targeted disproportionately at the less successful and less popular state schools. In this way, the gaps between popular and unpopular state schools, and between private and state schools, would gradually be eroded.
Parents who pay also take far more interest in what is happening at the school. As head of a private school, I must heed what my parents are demanding. There is an umbilical cord between payment and the service provided which does not exist if the service is simply rendered free.
Small class sizes are now the biggest single reason why parents opt to pay for their children's education. The extra cash coming in would allow classes to be reduced. It would reward teachers better, and pay for better resources. It would also pay for more staff to teach sports and the arts, and extra-curricular enrichment.
The government needs to take other steps too. It should move towards reducing the overall size of schools, it should grant greatly increased autonomy to school heads and it should undertake a serious analysis of what it is that has made our private schools world class, with children from all five continents flocking to them.
The Attlee settlement was predicated upon people being happy with a uniform service of a basic standard. As people have become richer and less deferential they have demanded better services. They are even keen to spend more money on services such as health and education-but they remain reluctant to hand the state much more of their income in tax. Combining public and private money in imaginative ways that raises the quality of services while holding on to an underlying idea of fairness is the elusive goal. My plan is one step towards it.
As with all forms of means testing, there would be problems with earnings thresholds and tapers. But Labour has an opportunity to establish a settlement which could last for 50 years or more. Number 10 looks to the Attlee government as the only successful Labour administration in history. Can it emulate that achievement?
