English universities: the ongoing funding debacle

The ongoing debacle of English higher education funding is like watching a man trying to cross a road made only of banana skins. In slow motion. Wearing ice skates. You get the idea.

There's some bright spots amidst the gloom, of course - and David Willetts (above), the Higher Education Minister, will happily take credit for if he can. Applications are up this year, after last year's huge slump. Students deferred going, worrying about the costs; some delayed their gap years. Now slightly more are taking the plunge. Numbers won't cave in. But that was never the real worry anyway, for the demand and aspiration to go to university leaves thousands hammering on the doors, unable to gain a place: they'll be no empty seminar rooms any time soon.

No. That wasn't the problem. Rather it was the fact that this administration's leaky old set of Heath Robinson compromises bids fair to bankrupt the entire system. By allowing university costs to rise, and paying for that up-front, the Treasury moved student funding off the balance sheets showing a still-deteriorating deficit. But that can't hide the fact that it'll cost the Exchequer more than the old system for at least a decade.

Here's the technical stuff: the rate of return on the Government's loan money is still sinking. It's likely to sink further. They used to say they'd 68 per cent of the cash back. Now they say 66 per cent. Later they'll say more like 60 per cent - as predicted here all along - and then impose further cuts to pay for their own lack of foresight. Students will move out of the country; others will disappear; more will earn low wages than thought, and pay back less.

Want to know how this can turn out in practice? Look to New Zealand, where huge numbers of students disappear off to Australia after graduating - leaving governments there with the massive headache that they might never see the majority of the cash they've given out ever again. The student loan debt mountain now stands at something like £6-7bn, with £200m of that in arrears.

Who really thinks that Whitehall and Westminster will avoid the same fate? Anyone? No hands up. I didn't think so.

The Government has created a system that will cost both the taxpayer and the student more - without delivering many appreciable improvements in productivity and performance. It's a rum old deal, policymaking.

Can a Chancellor admit defeat?

Britain's loss of its triple-A credit rating is no surprise. This has been coming for many months - perhaps for many years. And it would have been difficult to avoid, whoever was in power. Only Canada and Germany, riding high on cheap oil and gas in the first case, and cheap and well-built Eurozone exports in the latter, still have tip-top credit ratings. The United States, held up so many times here as possessing a rather more sensible economic stance, lost its top credit rating way back in 2011.

No. It's not that we've lost that rating - decided on by completely-discredited agencies that used to tell everyone how reliable the American banking system was.

It's these standing facts: as this column has argued for years, the UK's budgetary stance is all wrong. It front-loads too many cuts to answer the questions it's flunked anyway; it has always depended on completely unrealistic assumptions about what can be achieved; it's fetishised debt rather than growth. It's been a mess from start to finish. And the final proof of the pudding is in the eating. It hasn't worked. The Conservatives may well win the forthcoming Eastleigh by-election. They will probably avoid the opprobrium invovled in a triple-dip recession. It is more than just possible that they will be the biggest party after the next General Election, especially if some sluggish growth gets going during 2014.

Never forget: the Chancellor (above) bet it all on black. And it came up red. Very red. He lost his great big gamble, pushing his political credit to the brink and - what is still worse - helping to make Britain's whole strategy look pretty threadbare. Our debts are rising, not falling; they are way off target on any measure; the Chancellor has already pushed back his targets once, and probably will have to do so again. Many times. The fact that 'Public Policy and the Past' predicted every detail gives the present writer little comfort, given all the damage that's been done.

Now the Chancellor should move on - to another job in government, perhaps, but away from No. 11 Downing Street. That's what happened to 'Rab' Butler after his ridiculous two Budgets in 1955; and to James Callaghan after devaluation in 1967. Both swaps did the UK's credibility no end of good, Harold Macmillan and Roy Jenkins presiding over rather more sober and successful regimes inside the Treasury. Callaghan even ended up becoming Prime Minister after that awful humiliation, so a change of job should not even end Mr Osborne's ambitions. It would do the United Kingdom good to have such a new start.

But will it happen? No, probably not - yet another example of not learning from our past.

The doesn't-workfare programme

The news that MPs have today rubbished the UK Government's Work Programme should come as no surprise. It's been malfunctioning for months, and it was clearly never to get into gear as quickly as Ministers wanted. But the scale of the debacle is surprising. As the Chairman of the Public Accounts Committee notes, 'of the 9,500 former incapacity benefit claimants referred to providers, only 20 people have been placed in a job that has lasted three months'. Overall, the figures for placing people in jobs are worse than if there'd been no intervention at all. I could create more jobs with a billion pounds by walking down any High Street and just spending it on new electronic gadgets. I'll give it a go, anyway.

It's the last in a series of blows to an agenda that's now an acute embarrassment to the Coalition. It comes just a few days after Cait Reilly and Jamieson Wilson's recent legal victory in their case against the Government, proving beyond doubt that you can't yet be forced to work at Poundland. What did the judges say? Ah, yes, that's right. The regulations involved weren't approved by Parliament. So they are null and void. Until the regulations are legally written up and embodied in a vote, no-one can be forced to take part. No wonder Iain Duncan Smith (above), the Programme's boss in the Department of Work and Pensions, sounds so angry.

To be fair to these ideas, paying companies by results to get workers placed isn't necessary a crazy course of action. It was worth a try, despite the Keystone Cops-style implementation. Experience in North America and elsewhere shows that marginally more people can get themselves into long-term jobs than if they'd been left to moulder - though that depends on the existence of a robust labour market that's doing some hiring. There's absolutely no evidence whatsoever that tring to lever people into jobs 'works' on the macroeconomic scale. And the public is in general very strongly in support of claimants either having to accept jobs they're offered, or at least having to do some form of community work, in return for their benefits - a form of imagined and collectivist social contract that decades of neo-liberal governance has failed to wipe out.

But be in no doubt: actual success with this sort of plan depends on creating some jobs to place the unemployed in. And the UK labour market's not been doing as badly as we once thought it might. But without stronger growth (or, er, any growth), all this talk of 'workfare' is really a bit academic . Recently 1,700 people applied for just a handful of jobs at Costa Coffee. No amount of supply-side tinkering will get over that fundamental reality.

I'd go further, too. Having to work where you're told cuts the efficiency of the labour market. It can trap people in jobs they're not interested in, do badly and then leave. It reduces worker mobility and prevents people looking for work. And the real hard core of unemployment is among those on long-term disability benefits, who often require a lot of specific, tailored help that just doesn't seem to be on offer under the Work Programme. It's too early to say it's a complete failure yet, but we're starting to get the hammer and chisels ready for its gravestone.

What did we say on this blog, almost exactly one year ago? Well, this is what I said, and today's news is confirmation:

Two things are for sure and beyond dispute: rates of labour force participation among those who have and haven't been on these schemes are very similar a few months down the line. And without macro-economic growth and [some] stimulus, the job market will continue to get worse for the next year or two, meaning that all these programmes are swimming against the tide. Experience in the USA and Canada leads us to one conclusion: these types of programme need the provision of proper training, and a buoyant labour market. Conclusion? They will probably never meet their UK targets.

Don't say you weren't warned.

Horsemeat and the quality of governance

Do you like to know what you're eating? Yes, I bet you do. The last few weeks have been pretty depressing then, haven't they? The revelation that there's horsemeat in a lot of low-cost British and Irish (and some continental) beef is a nasty shock (above), though perhaps one that's been brewing for some time.

Because this crisis tells us four things about the neo-liberal state that we'd rather not see.

Firstly, regulation has been too lax. Again. The Food Standards Agency has been subjected to a confusing command-and-control structure, and had to implement cuts like the rest of the public sector - including to its meat hygiene service. That's allowed a mix of ingredients to flood around the system without adequate checks at each stage. That turns out not to have been such a good idea. Yes, and the sky is blue.

Secondly, our supermarkets are too powerful. I like Sainsbury's. You might like Asda. Some other people might like Tesco's (though I struggle to understand why). We all go to them. They're cheap. They're easy to navigate. We can throw everything into the car in one go. But they're also a deadly trap if we buy their processed goods, because they've been ramming their influence and market power down farmers' throats for so long now that they've perverted the entire food chain. Think your beef comes from a nice red-faced man's single farm in Somerset? Think again. The supermarkets are a rapacious economic machine, and they're willing to shred and mechanically reconstitute everything they can get their hands on - on a continent-wide scale.

Thirdly, our supply chains are too complex, too disaggregated and too difficult to understand. You know what? No-one really knows where all the bits of food on your plate come from if you're eating processed food. Chunks of it can come from across the European Union and beyond, as manufacturers desparately try to please supermarkets and a number of market players bargain each other down on price. If  that's not a worrying thought, then I admire your sangfroid.

Fourth and last, blaming everybody else for your problems is a nice-and-easy way of feeling good about them. But it solves nothing. You can point the finger all you like at Romania - and any number of pony-and-trap pictures in the newspapers and on TV made that point vividly enough. Oh, are horses not needed on Romania's roads now? Maybe they're ending up in your burger. A mix of sentimentality, racism, over-confidence and fear meant that the 'Other' got blamed. Nastly Eastern Europeans were adulterating your meat. Except it might well not be true. The poison might be in Western Europe, or here in the UK. No-one knows yet. And if it isn't true, blaming stereotyped villains won't have stood up to much as an investigative strategy.

It's a pity, because I thought we'd learned from the terrifying 'mad cow' saga, in which BSE in the beef herd was transferred to humans as the deadly illness vCJD. To an unknown number of people - perhaps many thousands in the UK. Firstly, to make sure that each part of the food chain is monitored, not just the end points; that cheapness isn't everything; that moving arnimals and meat about isn't he best idea in the world; and that often there's no-one to blame but our own greed and our own governments.

But it appears that, no, indeed we haven't learned from history after all. What a surprise.

Why are we so bad at judging risk?

Last week the Earth had a narrow escape. The small near-Earth asteroid 2012 DA14 (above) slid by the planet, inside the orbit of the moon and of many satellites. It just shot by us, avoiding potentially cataclysmic damage to whichever unfortunate country (or region) might have happened to be in its way. Had it hit, it wouldn't have meant the end of life on the planet - it was too little for that - but it would have been a hell of a thump. Millions, perhaps tens of millions, might have died.

Still, we got lucky this time. Or did we? It's probably more accurate to say tht being hit by such a small object would ahve been really, really unlucky. Because we're on a tiny rock, in the vastness of space, and DA14 is like a speck on dust on that scale. Bringing the two together? Nearly impossible - and very, very, very (and very) unlikely for all those other dangerous objects out there. Since you're asking, that includes Apophis, once thought of as a danger on a 2036 flyby, and 2011 AG5, which has a tiny (and diminishing) chance of slamming into us in 2040.

But yet there were plenty of us sweating away about dying in a Seeking A Friend For the End of the World-style fireball.

We're pretty bad in general at judging risk. This blogger has never been thought of as a lowly-strung kind of individual, and threw himself to the ground in despair recently at being bitten by a dog in a park. 'Oh no, it's Rabies' - that was the first thought that attacked my fevered brain. Never mind that this happened in Devonport, a suburb of New Zealand's capital, Auckland - a lovely spot, to be sure. And New Zealand? Not only is it officially rabies-free, it doesn't even face you with the risk of bats spreading it, almost uniquely in the whole world. There has never, ever been a single case of rabies there. Ever. Even though it's a dog attack hotspot, with nearly 12,000 unfortunates attacked by canines every year - in a very small country. So, the risks of getting rabies there then? What do you reckon? You've got it: zero, or as close to zero as makes no difference. Yes, you're right. But it made no difference to the fear and anxiety. For a few hours, anyway.

It's a bit like flying. We got the news last week that it's now safer than ever before to fly on a scheduled civilian airliner. It's now been four years since the last fatality on a scheduled civilian flight in the US. But still we're terrified of the things: about 40 per cent of us experience really serious fear of flying.

Why are we so bad at being rational? Well, it's partly that the risk of something happening in these cases may be low, but the consequences if things do go wrong are very, very bad. But it's partly the sensationalist version of what we know, and our inability to fix onto plainer, clearer, more humdrum facts. You're basically going to die of a stroke or cancer, if you're reading this in the developed world. But still your fear of accidents or unlikely contagious diseases blights your life, doesn't it? Have a look at what Daniel Kahneman says about this in his recent best-seller about human psychology, Thinking, Fast and Slow:

Estimates of cause of death are warped by media covetrage. The coverage is itself biased toward novelty and poignancy. The media do not just shape what the public is interested in, but also are shaped by it. Editors cannot ignore the public's demands that certain topics and viewpoints receive extensive coverage. Unusual events (such as botulism) attract disproportionate atttention and are consequenctly perceived as less unusual than they are. The world in our heads is not a precise replica of reality; our expectations about the frequency of events are distorted by the prevalence and emotional intensity of the mesages to which we are exposed.

That's why this sort of tabloid coverage of our near-miss asteroid experience is so unhelpful.

It's what Kahneman means when he talks about an 'availability bias'. What you're told about risk is pretty far from the truth. You've got more chance boring yourself to death in a nursing home than dying in a fireball as an asteroid hits the planet: that's many millions of times likelier, in fact. Do you really think, in your heart of hearts, that you'll experience a similar 'risk event' to winning the lottery and the pools in a single week? Thought not.

I think I'd add 'buoyancy' to this mix - another well-attested psychological attribute that makes us pretty self-centred, but helps us get through the day. We think we're the centre of the universe - we're the centre of our universe, of course - and it makes us resilient. Although that means we usually think we're more invulnerable than others to really nasty stuff, it also means that, in the dark recesses of our minds, that something really dramatically terrible might just hit us. It's the flip side of our human courage and dauntlessness.

But don't worry. Your demise will be pretty tedious, rather than really dramatic. I hope that's of some help to you.

Signs of life in the fight to save our oceans

Anyone who knows anything about our oceans knows that we're over-exploiting them. On a global scale. We fish too much; we take out the wrong things, at the wrong times; we scour the ocean beds; we pay developing countries to do our dirty work for us; we are warming the planet, to dangerous levels that threaten the very existence of some types of marine life. 

So anything that's designed to raise public consciousness about these facts, and that might help change these depressing facts, is very welcome indeed.

That's why the creation of a Global Ocean Commission, on which will sit a former UK Foreign Secretary - David Miliband (above) - is so welcome. And so, on a different plane, is the second series of Hugh Fearnley-Whittingstall's Channel 4 series Fish Fight.

You can never over-estimate the importance of media impact and publicity. The Global Ocean Commission contains some quite big names, and it will hopefully produce a report that will be highly influential inside the European Union and the United Nations - increasingly the forums in which world governance of fisheries is conducted. It will report in three years, though such is the emergency before us that one or two years might have been better: its interim reports will have to be insightful and populist at one and the same time, while still containing concrete proposals that governments can actually act upon. It's quite a tall order: but it's better than nothing.

The power of TV is probably great. Jacques Cousteau made such an impact all those years ago by showing viewers around the world just how multitudinous and how beautiful life in our seas really was. So did David Attenborough's Blue Planet in 2001. It can be done. Hugh Fearnley-Whittingstall's original Fish Fight series recently helped to have the disgraceful and disgusting practice of by-catch banned from EU waters. So fishermen will no longer be forced to throw perfectly good fish over the side. But we can go further. We need to extend British-style Marine Conservation Zones to the high seas, or they're going to end up raked up like a suburban garden. We need to declare whole areas of the ocean off-limits to fishing. We need mixed judicial commissions to manage that process. And we need them now.

In the long run, what's required is a much more rigorous, structured, integrated and above all tough-minded approach to oceanic and seabed regulation outside of states' territorial waters. In their very different ways, Mr Miliband and Mr Fearnley-Whittingstall are saying exactly that. And they're contributing their time and efforts to fighting for those ends.

More power to them.

Events, dear boy, events

Regular readers might be interested to know that I have contributed one of my now semi-regular blogs to the online site of The Independent (above), that model of tough-minded centrism in an extermist world.

My argument? That we shouldn't worry too much about inflation. And yes, I do know that world food and commodity prices are high, and likely to remain so. I do know that increased Indian and Chinese prosperity, along with a relatively high world birth-rate, are likely to keep those costs up for some time to come.

But I also know that there's a crater where effective demand should be in the UK economy. Recovery is coming - there are glimmers of light on the horizon. But we're by no means out of the woods yet, as today's consumer spending figures illustrate. We're likely to crawl out of recession, very slowly, and there's going to be a squeeze on real wages and spending for some years to come. I know that government spending is going to stabilise. There'll be no more Keynesian stimulus for some time to come.

And if you still think inflation's going to be a real and present danger, I would invite you to look at the likely future trends in energy policy. The United States is about to have a big old party with lots of very cheap oil and gas - a problem, of course, if your main worry is greenhouse gas emissions and climate change, but not so much if you're worried about rising prices.

The most exciting thing about writing the article wasn't coming to these rather obvious conclusions. Oh no. It was the announcement on Wednesday, just after I'd filed, that the Bank of England's Governor was apparently saying the opposite to what I'd written: that inflation would remain high for some time to come. Okay, what he really said was that it would remain above the Bank's target of two per cent, and might rise to three per cent and stay there for a while. Excuse me while I don't shake in my boots. But it still made the story look strange.

So I had to amend. I had to rewrite, in a hurry. The article now had to say that 'while there'll be some inflation', and 'while there'll be some prices rising', that wasn't our real problem. Three per cent isn't the five per cent of the late 1960s, or the terrifying 26 per cent of the mid-1970s, or even the near-double figures of the late 1980s.

It's interesting, this exposing our workings. It doesn't change for a moment our principles, intellectual superstructure or (I hope) our credibility. But it does show us trying to adapt our views in rapidly-changing times, and during a sometimes-chaotic news cycle. I hope this is honesty enough!

Hope in Christchurch

Now your correspondent is often accused of being a bit of a doom-monger, and there is perhaps some truth in that. There was some criticism (registration required) of my first book, for instance, in that it might have gone too far in accepting that governments can't do much to reshape the economy or society. That wasn't the intention, of course. As I said at the time:

...this work [has not] attempted to detract from planning techniques in all circumstances. Given widespread political support, vigorous leadership, the potential for extensive growth and a need for structural investment, government-led planning can succeed.

The city of Christchurch, on New Zealand's South Island (above), is a good example. In September 2010, and much more grievously in February 2011, it was struck by a series of earthquakes that left many dead, especially after the collapse of a poorly-designed and badly-built television building. The city was shaken to its core. The spiritual damage - the Post Traumatic Shock, the depression, the anxiety - might be nearly as bad as all those fatalities. It looked like Christchurch - on the most beautiful and blessed cities in the Southern Hemisphere - might never recover.

But I've just been there, and the overwhelming feeling? One of tentative hope, and of defiant rebuilding. The Re:Start shopping area, in particular, might stick in many minds as a symbol of human ingenuity in the face of crisis. Shipping containers have been stacked against and on top of one another, painted in bright colours, surrounded by flags and flowers. It looks great. It was, admittedly, a beautiful day, and in the midst of the World Buskers Festival, but there was a sense that the city might well be on the way back.

It's an enormous achievement for a small country, and a relatively small city, that's isolated in the Pacific, not all that populous, and not all that rich. It's a testament to what collaborative planning, and collective effort, can really do.

Yes, history is full of entropy. Things fall apart; all-too-fallible humans get confused; men and women retreat from their aims.

Cities fall. But cities rise, too. Cities rise.

Michael Gove's EBacc-Track: Conditions of a Policy Disaster

Michael Gove's U-Turn on the abolition of England's GCSE examinations (above) brought to mind famous policy disasters of the past. For we should be a little bit more systemic about the reasons why some policies fail, and some succeed. It's not about how clever or able a minister is. For all his many enemies, Mr Gove is able, energetic and highly motivated. It's not even about party political support, or at least not all the time - although that can play a key role.

No. Your correspondent believes that we can be a little bit more mechanical, and perhaps a little bit more analytical, than this.

Partisanship. Michael Gove speaks in a courteous manner. He is always keen to seem urbane and to be polite. That's admirable. But behind the scenes, his mind works in a highly partisan manner that sees the Labour Party, and to a lesser extent the Liberal Democrats, as a bunch of well-meaning but misguided statists who are holding back 'able' but 'poor' children. He's wrong about that. But he left his coalition allies, and still less the Opposition, with absolutely no reason to help him.

Doing things too quickly. Was it really realistic to get to an entirely new exams system by the time of the next General Election (May 2015)? To take everything into account - study groups, textbooks, A-Level takeup, the knockon effects in vocational studies and Higher Education - was always going to take more like five to ten years. This was just all too much, too soon. Someone should have told the Cabinet.

The risk of chaos. A 'core' list of subjects would have come in, first, forming the hard centre of Mr Gove's E-Bacc. Then others would follow, unpredictably, at the same time as a complete National Curriculum overhaul. Was that likely to lead to certainty, and confidence, while GCSEs remained alongside the new 'Gove-Levels', and while Wales kept the old system? Er, no again - as Ofqual had already warned at the end of last year. Sorry.

Over-confidence. Michael Gove always spoke in the House of Commons to the effect that no-one could challenge his plans with good will and a clean conscience. He said he was restoring elements to our educational system that no-one could really object too: 'rigour'; 'discipline'; 'difficulty'; 'the big picture'. He should always have accepted that his opponents wanted similar things, but that they were coming at the problem - with good will - from a different angle. He didn't. He's paying the price.

Leaking. Every plan and every concept was leaked to the press before it was announced in the House of Commons. The initial proposal, a madcap and almost unbelievably crass plan to bring back a two-tier examination system at 16, was leaked to the Daily Mail, only to be shot down by Mr Gove's Liberal Democrat allies. Maybe that 'fight' was choreographed. But it helped to sour the atmosphere around the whole idea of reform - bitter fruits that the Education Secretary has now been forced to eat.

Lack of expert allies. How many teachers thought it was a good idea to abolish GCSEs? How many policy experts and educationalists? Well, not many. And nor did Mr Gove's sometimes confrontational language - still less his employment of ideologically-engaged and aggressive Special Advisers - recommend his plans to many. When he ran into trouble, there was no-one left to speak up for his ideas.

This is a good old recipe for disaster: over-claim, as Labour did on the NHS in 2001-10, or on the efficacy of economic 'planning' in 1964-67. Refuse to listen to experts, like Mrs Thatcher over the poll tax. Run straight into administrative difficulties and face the risk of chaos, as Mr Heath's government did over the Negative Income Tax in 1970-74. Tell everyone who'll listen that your ideas will wipe the floor with others - like the Labour Left in the late 1970s and early 1980s. There's a big list of lost causes and discredited rhetorics there, and the Education Secretary has just walked into not one trap but many.

England's schools are all the poorer for it.

Can you 'greenwash' an entire country?

New Zealand. I know I'm banging on about it, but hear me out. It's got a clean, green, eco-friendly image that most countries would die for. Its tourism sector trades on, and partly depends on, just those clean-air imaginings.

But how much of that is justified? Less than you'd think.

Not only are New Zealand consumers greenwashed all the time in the supermaket - confused by 'eco' this and 'green' that on the packets of otherwise pretty toxic material, while their farmers go on spraying pesticides on their crops. It's worse than that. Because they are in the middle of the ocean, and there are so few of them, the air and the sea seem pretty clean.

But per capita, they're busy polluting away like very few other countries in the OECD. The Kyoto Protocol on carbon emissions? The New Zealand government has ripped it up, a decision that has appalled environmental groups such as the World Wildlife Fund. Carbon trading? The price of polluting gases has crashed on the government's own official exchanges. Sea pollution? Even effluent discharge from New Zealand's cities isn't all that clean.

The truth is that Kiwis drive a lot in a rural country, they are partly dependent on a not-particularly-clean agricultural sector, their mines are anything but environmentally friendly, and even their domestic environmental standards are a lot laxer than they like to tell themselves. A visit is a bit like driving into one of those BP garages with a great big light green flower symbol above them (above, all rights reserved). You know they're busy heating up the world - to potentially unsustainable levels - but somewhere, in some recess of your unconscious, you think, 'ah, they must be doing something to make their fuels cleaner'. Which they are - a little bit. But not enough, that's for sure.

It's the same in New Zealand - which is a shame, because the country is one of the world's most beautiful and friendliest places.

New Zealand's stunted public sphere

New Zealand (above) used to be thought of as a social democratic paradise. A bit boring, perhaps. Maybe stultifyingly controlled. But even so, it seemed to be an example of how to combine economic controls with individual freedoms - a lesson that all Europeans wanted to learn between the 1950s and the 1970s. The British Liberal MP, David Goldblatt, rhapsodised about this place where 'the practice of neighbourliness is most strongly developed' in his 1955 book entitled Democracy at Ease. There are any number of good articles and PhDs on the subject, by the way, showing just how early, and just how prevalently, Europeans thought of New Zealand as a type of social paradise.

No longer. Or at least not since the radical liberalising 'Rogernomics' of the mid-1980s, launched on a rather unsuspecting public by a Labour government determined to shake the economy out of its perceived lethargy. Tariffs were lifted; spending reduced; taxes cut. All in the name of efficiency and global competitiveness. Ever since, despire some rises in public expenditure and especially in investment during Helen Clark's years as Prime Minister, the New Zealand state has been kept down, remaining below average within the OECD.

The results are everywhere for the modern visitor to see. A very small and rather slow rail service, that's gone through one failed privatisation, had to be bought back by the public sector, and which is still shrinking. A postal service that seems to be mulling over the end of daily deliveries.

The macro-economic and social results are also clear. There's no controversy about them. New Zealand has seen large and consistent rises in relative poverty, which have gone further and raced ahead faster than anywhere else in the OECD. It's a rather different picture from when the country was hailed as an example of how to make people more equal. Levels of inequality are now at an all-time high.

Now all this 'restructuring' probably has helped New Zealand retain its competitiveness in the region, signing the first free trade treaty with China and boosting its exports. It's a tiny country, floating on its own in the middle of the Pacific. It's a rural country, in which many services must be manned by volunteers. There simply aren't enough people, and there isn't enough cash, to do otherwise. But no-one should pretend - least of all 'Big Society' advocates in the UK - that you can make the state smaller without painful consequences. The destruction of New Zealand's image as a modern social nirvana is the least of those problems.