Andrew Lilico: The key reform needed in the welfare state

In my view, the British welfare state suffers from two key failings. One is that it fails properly to reach or address the needs of an important class of the socially excluded.  This is an important issue, discussed for example in Iain Duncan-Smith’s Breakdown Britain and Breakthrough Britain reports, but I shall not discuss it further here.

The other key failing is that the way the welfare state works offer very little scope for working class and middle class people to prioritise their spending and saving so as to choose to receive more-than-average amounts of public services.  I have a relative who, in a foreign country in the 1960s, had her daughter go to a good school and later to university.  To help fund this she used to rise each morning at 5am and chop wood.  Other well-known practices include the jam jar into which savings were placed to pay the doctor if someone fell sick.  Throughout the ages the idea that parents might sacrifice something so that their children might have more opportunities — better health treatment, better education, and so on — than they did has been rightly seen as a definitive element of good parenting.  Similarly, providing the best care in old age that we could manage ourselves or otherwise afford has been seen as a key duty of children to their parents.

But the current welfare state offers very limited opportunity for these expressions of love and social bonding.  Indeed, there are many people that would argue that the point of the welfare state is to eliminate this — they don’t want some children to be better educated or some people to receive better healthcare because those that loved them were more prudent or more prepared to engage in self-sacrifice.  This even extends to the Conservative Party.  The worst element in David Willetts’ well-known speech earlier this year was his suggestion that a weakness of the current system — which he considered particularly amplified in the case of grammar schools — was the scope it gives for middle class parents to enable their children to do better by focusing more effort and resources on them.  He did not, of course, as some commentators at the time rather crassly implied, criticize the parents themselves for doing this.  But he did, squarely and unambiguously, consider the education system weaker to the extent that it granted more opportunity for this.

I suspect that this was a momentary aberration in David Willetts’ case, but in general it reflects a wider error, common now in Conservative circles: the belief in the mantra of “equality of opportunity”.  I shall not beat around the bush: I consider the concept of equality of opportunity ethically wrong and practically destructive.  It is among the worst policy visions ever developed.  Understood properly, it is the idea that each of us should succeed or fail purely on the basis of his own biological merits.  If you are beautiful, clever, witty, and healthy, you will get ahead in life.  If you are ugly, stupid, bad-tempered, and unhealthy you will fail, and no-one is allowed to help you.  The normal bonds of human compassion and love, whereby we try to get our children a better education, or our nephew a first job, to accommodate the blinded former soldier in our amateur dramatic production — these are all rejected in the Nietzschean dystopia of “meritocracy” (a word invented by Michael Young, author of Labour’s 1945 election manifesto, for his 1958 satire “The Rise Of The Meritocracy” attacking the concept).

No Conservative should favour such a society — for Conservatives value family, Church, philanthropy and community.  Our picture is one in which people are encouraged to help those they love, not forbidden from doing so.  Despite the unfortunate statements made in the recent past by certain prominent Conservatives in their more “Thatcherite” moments, and despite David Cameron’s recent claims that promoting equality of opportunity characterized his own programme, true equality of opportunity cannot be a goal of a Conservative.  (Surely David Cameron cannot have intended us to take his claim literally!  Presumably he meant something like “equally, all shall have opportunity” rather than “all shall have equal opportunity” — unless there is some plan I haven’t heard about to introduce swingeing inheritance tax rises and abolish private education?)  We are all familiar with the supposed contradiction between equality and liberty.  But I believe that the more important contradiction is that between equality and love.

If I am right, then it should be clear that our welfare state presents a significant problem.  Under the current system it is very hard for people to help those they love to get ahead when it comes to public services.  Expressed more mundanely than the overwrought rhetoric above, a practical form of what I’m talking about comes down to the problem of additionality: it is very difficult to buy additional healthcare or education or pension or unemployment insurance or sickness insurance or additional amounts of any of the other state welfare benefits and yet only pay the incremental cost of that additional provision.  What the wealthy do is, for example, to buy their children private education.  But they still pay the taxes that would fund their children for state education.  So their private education fees do not merely cover the additional cost of the higher quality of education they purchase — instead they pay the whole education cost, “paying twice” for state-standard education plus the additional cost for the incremental value.

One well-known mechanism to enable people to pay only the incremental cost for additional service is a top-up voucher.  In such a system people are able to port the funding they would receive for the state-provided service and spend it, adding their own money as they see fit, with private providers.  The Conservatives have proposed such a system for education in the recent past, though with the wholly misguided restriction that topping up with one’s own money was forbidden (thereby destroying the main merit of the scheme and rightly making it seem ludicrous in the eyes of the media).

However, vouchers also have another function — that of changing the basis of state support for public services, so that the state is funder but not necessarily provider, and giving people choice of product provider as well as choice of type of product.  This creates a “horizontal” dimension of consumer choice — between providers of nearly the same service — as opposed to the “vertical” choice between fundamentally different levels of service that I believe is essential.  For certain public services increasing horizontal choice may be a useful reform — and indeed Labour itself accepts this principle now in health and education.  However, I believe that at a fundamental level it is a separate type of reform from that I have argued for above.  It would be perfectly possible to have the state as a funder and monopoly provider of public services that, nonetheless, offered scope for people to purchase above the state’s own minimum level of provision.

Here is an example: Suppose that a Conservative government were to specify precisely what one is entitled to in the way of healthcare — including standard of hospital care, drug availability, waiting times for appointments and operations, and so on.  Then one would buy that level of healthcare from the State — a contracted legal entitlement.  If one wanted shorter waiting times, access to drugs not on the state’s formulary, and so on, then one could purchase a more expensive grade of care — all from the State.  Similarly, there would be no problem in principle with having the State provide more expensive schools that parents could pay extra to send their kids to.  And, again, the State could provide the facility to purchase higher levels of unemployment insurance, sickness insurance, or pensions — from the State, without having to start again from scratch.

I value choice over provider — as I have argued in a previous column, the presence of such choice benefits everyone, not just those that exercise their choice.  But I consider it a more fundamental problem that ordinary hard-working people lack choice over type and amount of public service than that they lack choice over provider of the same near-universal-standard product.  I hope that a future Conservative government will make it a high priority to correct this.

Comments

[David Belchamber]

A very interesting and thought provoking thesis, Andrew. I share your views on several of the points but I am not entirely convinced by your argument about "equality of opportunity", especially where education is concerned.

I would say that, in practical terms, we should be aiming for "greater opportunity for all", rather than "equality of opportunity". Blair got rid of the Assisted Places Scheme which helped pupils from poorer backgrounds to get into independent schools. These are building up their bursary funds partly to replace that loss.

Grammar schools, whatever DC might say, are established and have for centuries provided a ladder for advancement for intelligent pupils from poor backgrounds.

These days there are just too few of them to be really useful (164 in the whole country); in Germany over 2M children are educated in their equivalent. A similar provision in this country would raise standards enormously.

The best we can hope for is that the tories will bring back Grant Maintained schools which did improve standards for the 1100 or so that adopted GM status.

[Ken Stevens]

Oh you are disappointing me this week, AL!

How on earth can equality of opportunity in education be unethical and unfair to the less well-placed members of society. At my State grammar school half a century ago, a few kids were enabled to win awards of scholarships to Oxbridge through their ability, despite limited parental means. That equality of opportunity had absolutely no deleterious effect on the prospects of the rest of us dunderheads. I just can't see how you can describe equality of opportunity in that respect so starkly as unethical and destructive (except to the extent that the year above me produced a Labour minister!).

"If you are beautiful, clever, witty, and healthy, you will get ahead in life. If you are ugly, stupid, bad-tempered, and unhealthy you will fail, and no-one is allowed to help you." That seems a reasonable statement of the facts of life - if you exclude the last phrase ".. and no one allowed to help you". On what basis do you make that contention? Are there no ugly, stupid, bad-tempered people who achieved success as politicians, for example?

As for advocating an extension of State involvement in education and health provision, selling varying levels of service according to ability to pay, hey, why not just go the whole hog and nationalise the likes of BUPA and Eton!

Go on Andrew, admit that you're a closet socialist ;-)

[Henry Mayhew - Ukipper]

Andrew,

You really have showed up David Cameron, David Willetts and all the 'non-delusional' Tories who backed David Willetts' speech on grammar schools.

I hope that readers of your superb and very moving piece will come to their senses and tell DC, DW, and their fellow-travellers to belt up. It must be worth having that fight now that the banking crisis is going to make GB more vulnerable. There is plenty of time before the next election to work through these absolutely critical issues. For the sake of the children of this country that opportunity must be taken.

Many thanks for your articulate and very important piece. Another classic CH article. Dave, are you reading this?

[Account Deleted]

This is a bold, well thought out article.

I thought that the Willett’s speech was awful in parts (and I like him in general), reading along the lines that, some people don’t help their children, some do, so we must level down to make things ‘fairer’… Completely Socialist thinking.

But back to the topic – I agree up to a point with this article. There is no reason why pure equality of opportunity should be aimed for (on the other hand, like equality or individual responsibility, I think it is something which should be balanced against other objectives as a good outcome). To pursue such ideological purity would and is harsh and uncaring of the real world we live in (as Andrew outlines).

But back to the real world.

Allowing top up vouchers is probably a good idea in the long run. At present there would be a huge cost to any proposed ‘top-up voucher’ as all those currently paying for private health and education took up their vouchers. All those paying for private education would, in effect, get a £5,000 (or whatever) rebate. This would be, in effect, a huge tax refund to the upper middle class.

To balance this some tax cuts for low earners (doubling the income tax threshold is a favourite and enduring idea) would have to be thrown into the mix.

Currently however I think both are about as likely as a flying piggy bank over Northern Rock…

[Stephen Warrick]

I was really with you up to a point....

I loved the horizontal versus verical choice based system, ie via vouchers.

The melon-heads who regularly winge on here that David Cameron is the new anti-christ and such gibberish, fail to appreciate that our only problem as a party is one of communicating our principles and governing ambitions in a postive and relative fashion.

I fervently believe that voucher based choice, and level-of-service choice will be the same "gut appeal" policy to the present 20/30/40-something generation that St. Margaret's Council House Sales & Share privatisations had a generation ago.

Sadly you lose me though by appearing to advocate increased state intervention in services already provided by the market.

The state should be funder and/or service gauarantor rather than monolopy service provider.

To paraphrase PJ O'Rourke:

".....If the Government ran deserts....there'd be a shortage of sand
within 6 months!!!"

[Opinicus]

Two separate points
I agree that equality of opportunity is not a very Conservative philosophy but it is the best possible cover for a very conservative philosophy - inequality of outcome. It is very difficult to sell the latter in 2007 without holding out the prospect of the former. EoO is necessary not necessarily desirable. The problem with equality of opportunity is twofold. It has nothing to do with discouraging parental care. Firstly, if EoO is rigorously applied you will create a second class of perpetual failure who will have to watch through the window at the beautiful and clever disporting themselves and who know they *deserve* not to be there. This is far harder to bear than assuming its down to Them or Fate being beastly, which has been possible up to now. Secondly, EoO has to be seen to work properly. Where you have quotas for public school entry to Oxbridge or more insidiously where you have excellence defined so loosely that EoO becomes a lottery eg 25% A grades at A level.

Where I disagree is your second half. Why would one want to buy extra from the State. It cannot provide basic services properly why ask it to complicate the process. As you say in your first half, it is far better that the State should fund equally these services through vouchers - for health and education - and allow people to decide what and where they buy services.
What i think would be a good idea is to allow local top up vouchers (as well as personal top up). Local communities should be able to vote for the voucher for people in their area to be higher than the national voucher and pay for the excess out of local funding, raised locally. Of course this requires local income tax but I am letting by LibDem side show!

[Simon Newman]

"Equality of Opportunity" is a principle to limit the State's interference in the life of its citizens, by not privileging one class of people (eg aristocrats, whites) over another (eg commoners, blacks). It is not supposed to apply to how individuals behave towards each other - preventing parents from seeking to benefit their children is clearly totalitarian.

One of the great tragedies of modern life is that many such principles, developed and articulated as limitations on State power, have been abused to extend State power into every nook and cranny of our lives. Another example is the privacy right in the ECHR - it was developed to prevent the State snooping into our lives; now thanks to its misapplication by judges it's used to regulate our lives and limit our free speech.

[Letters From A Tory]

The state should fund but not provide health and education. The welfare state is certainly skewed in terms of who it provides for and what it provides, but will take a bold Prime Minister or even opposition leader to start restructuring it.

[Andrew Lilico]

Ken@10:24

I'm sorry to be a disappointment to you! I must try harder in future!

I don't believe for one moment that you actually believe in equality of opportunity, for all your protestations to the contrary. You favour grammar schools. My guess is that you favour them because they give an opportunity for talented children of poor backgrounds to make something of themselves through their talents. Am I right? Now I ask: Would you, for *one second* consider taking away that opportunity from those children based on the argument that not everyone had the same (equal) opportunity? My guess is that you would think it *utterly ridiculous* to suggest removing opportunity from people because they had more opportunity than others - am I right? If I am, then you don't believe in equality of opportunity - you believe in opportunity (which is almost the opposite idea).

Next, Ken, to your comment "On what basis do you make that contention? Are there no ugly, stupid, bad-tempered people who achieved success as politicians, for example?" You are right, but that is partly because in our own society opportunity is (mercifully) not even remotely equal in all kinds of ways. People leave money to their children, help the disabled, favour their friends, and do all kinds of other loving things that equality of opportunity would prohibit or negate.

To others of you, that have expressed a "moderation in all things, even equality of opportunity" thought, I put the following: I believe that a society in which there is extensive opportunity is a good society. But I do not believe that having lots of opportunity available is a stepping stone on the path to equality of opportunity (a "moderate degree of equality of opportunity") any more than I believe that having lots of wealth is a steeping stone on the path to equality of wealth.

There should be opportunity. And it is also right that we try to provide mechanisms of opportunity for those that are not loved. But love must be allowed to have its effect - those that are loved and helped must be permitted to do better than those that are not.

One other thing. Some of you have expressed dismay that I would suggest state involvement in public services. Although I do believe that this would be the best mechanism, at least initially, for delivering certain of the examples I mention (e.g. unemployment insurance), my comments in the article are intended only to demonstrate the conceptual separation of horizontal and vertical choice in public services - there can be horizontal choice without vertical choice (as Labour favours), and there could be vertical choice without horizontal choice (as in the thought experiments I mention).

[Ken Stevens]

Andrew Lilico | 03:00 PM
"..I must try harder in future!.."
Jolly good; looking forward to it!

"..You favour grammar schools.."
Not specifically & exclusively. I seek the attainment of the true objective of comprehensive schools: to facilitate the achievement of excellence in whatever field a child shows aptitude and interest for, whether that be traditional grammar-style academic or vocational at various levels. Whether such an ideal is now realistic is moot, given the tendency towards levelling down, both institutionally and as regards the seemingly insoluble problem of peer pressure within many schools that clever is uncool.

I'm certainly not suggesting that those who scrimp to pay for additional tutoring, can afford private education or a more expensive house within the catchment area of a very successful State school, or whatever, should be in any way hindered from deploying such advantages. It is simply that a kid with motivation and ability should not be denied access to a better standard of education because of lack of means. It is in the national interest to maximise available potential. Upon completion of that equally opportuned education, it is then up to the individual to seek to make best use of it. Subsequently there may well be, to pinch Jonathan's phrase, inequality of outcome. Maybe I mean "equality of access to opportunity", if that isn't too tautologous.

Incidentally, I presume that "..those that are loved and helped must be permitted to do better than those that are not" means that they should not be hindered from doing so, rather than that you would make such advantage compulsory ;-)

[The Culture Warrior]

I agree entirely that equality of opportunity is not a viable reality. Instead of equality of opportunity, we should push for upwardsly increasing standards. Afterall, voucherisation (which I support whole heartedly) would not create an equal quality of education, but it would push quality upwards for all. Indeed, the very notion of voucherisation is inequality, insofar as each education institution will be independent and different. Diversity is a good thing...sometimes.

I very much disagree with your strange statist solution though. I don't see why it's necessary to involve the state as a compulsury producer at all. That surely defeats the original point? 'Yes, you can have vouchers, and you can have a wide choice of schools to choose from. The only catch is, we own all the schools.'

[Henry Mayhew - Ukipper]

Andrew,

Great stuff from you. It is typical that most of the small range of comments are nit-picking irrelevancies to your central message.

Maybe some day the Tories will take ideas seriously again and actually get behind some. In the meantime it is back to looking at Lembit in Hello. Why do we bother?