Monday, 26 October 2015

Happy fifth birthday to 'Public Policy and the Past'!

So it was exactly five years ago that this blog creaked into existence, during the ferocious political storm that attended the tripling of English universities' tuition fees to £9,000 (above). And ever since, we've been trying to do two things: first, apply a long-term view to public policy problems; and second, comment on and deploy data and statistics (with all their weaknesses) to the problems of collective decision making. It's been a long five years, and all the time the political weather has got worse and worse for such rational and reasoned approaches. But we've been here the whole time, looking backwards and forward as the scene has darkened and the days have got shorter. And we're going to be here, too, as the days lengthen and the season warms - as sense and progress grow again. Eventually. Some day.

But how have we done? Have we been a good guide to public policy and events, or a poor predictor of what's going to happen? Have we been accurate, precise, to the point - or got everything really, really wrong?

The record's mixed. But that's as it should be. And at least we've been showing our workings, plodding, pedestrian and difficult as they may have been, when we're wrong, we say so. And we expose the reasons why. That's how learning happens.

On the credit side? Well, we started - all those years ago - with a warning that it was the affordability, rather than necessarily the social effects, of tripling those university fees that we should worry about. And as the amounts to be recouped from students have fallen and fallen - as future wage projections have dropped and dropped - our views have been borne out. In fact, things are worse than we feared. Quite a lot less than half the money given to universities by the Government for tuition will never come back from student fee repayments. The whole 'reform' has shifted this spending from the red 'debit' side of the Government's balance sheet to the black 'credit' side (since these are now debts that will flow back in at some point). But the taxpayer's going to be no better off - and may well, if fees rise in the future far beyond £9,000, indeed be paying even more than before. Okay, that's probably what would have happened anyway had Her Majesty's Government just stumped up the cash: but students wouldn't have been left £30,000, £40,000 or £50,000 in debt as a side-effect.

Then there was the whole question of how well Labour would do in the 2015 General Election. We held Labour to a high bar, and we noticed, in local elections, by-elections and national (Scottish and Welsh) contests that the party was doing much less well than previous Oppositions that had gone on to wield actual power. We never thought that Labour would win. We thought they were overstretched, organisationally and intellectually. And we were right. Now, like everyone else clued up on the numbers, we thought that would mean that the Conservatives would be the largest party in a Hung Parliament, and be able to go on governing with the Liberal Democrats - not that there would be an outright Conservative majority. But Labour's defeat jumped out of every statistically-informed and historical look at the numbers. And so it proved.

Next there was the vexed question of Scottish independence. Here, though the ambition is a noble and admirable one, we were very worried about the economic gamble that this would represent. Hold on, we said: Scotland's economy, though richer than most, is quite narrowly focused on oil, gas, tourism, financial services, and whisky. What if one went awry? What if one was knocked away? What would happen to the value of any new currency, or to fiscal transfers within any shaky currency union cooked up with England and Wales? Well, although no-one and nothing could have allowed us to predict what did in fact happen, this happened with a vengeance when the bottom fell out of the oil market from exactly the moment of the referendum, with oil prices more than halving since the autumn of 2014. This meant that the Scottish people, in voting to stay part of the UK, avoided a potentially catastrophic implosion of their welfare state - of which all British citizens are (for now) rightly proud - and massive cuts to all types of social provision. What did we say then?
Because North Sea oil and gas prices have been falling - even further and faster since this referendum campaign began. Were we to experience an oil price shock downwards on the scale of the mid-1980s, Scotland would be in deep trouble indeed. And although estimates of reserves quite properly vary (and therefore the tax take will be different depending on who you listen to) the key point to take away is that this is a highly unstable and moving target.
Exactly, to the letter, what did then happen, which would necessitate £6bn of government cuts just for an independent Scotland to stay still as against any rump UK's (rather better) fiscal position. We can't really claim foresight here with too much confidence, because we were just pointing at a balance of risks, but when the risk explodes right at the moment you write it up, it's something to have at least said that the danger was there.

Oh yes, and today of all days, let's just remember: we said back in July that the Conservative Government's cuts to working tax credits could turn into a political disaster. Thank you very much, yes, that was quite prescient, wasn't it?

Now it's not always been seer-like accuracy. We thought that Greece would leave the Euro, and we thought that the United States Presidential election of 2012 was going to be a bit closer than it actually turned out to be (though, again, we predicted the winner fairly accurately, if just going along with the best commentators and statistics gurus can really be called 'predicting'). Even here, though, we learned something. In the first instance, we learned that even Leftist Greeks, when it really came down to it, weren't prepared to leave the Euro and re-establish their own currency. They would rather wait for a very unclear and half-promised further debt writedown than gamble everything on busting out of 'austerity', that great but over-used watchword of the Twitter commentariat. For they knew that an even greater austerity might await if they did leave the Euro, and lost all support for their banks and re-issued Drachma. And in the US? Well, we learned that the chaff fired off by those who questioned the polls showing President Obama narrowly ahead was just that - obfuscation and wishful thinking. In the end, disassembling what you see in the samples and then rebuilding it all to suit your own worldview is not a good look. Not at all.

The lessons? From both success and setback, when we tried to look ahead? Take the long view. Use data. Follow your evidence, rather than your prejudices. Look at what policies have and haven't worked in the past. Think about risk. Be cautious. Inch forwards, rather than leaping in the dark. In short? Don't forget your policy history - a view we're going to continue to write for and speak for, day after day, week after week, month after month, and year after year.

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