Archive for juillet, 2011

Trust in MPs?

Mercredi, juillet 27th, 2011

Once trust has been lost it is difficult to regain it as MPs are discovering following the scandal over their expenses. Thus, the article by Ian Cowie writing in the Daily Telegraph of Friday 8th July questions why MPs should be exempt from a new law to block tax avoidance. He writes that after Budget promises to tackle tax avoidance, Parliament is passing legislation to block several loopholes – but an obscure clause specifically exempts MPs from these new restrictions. According to HMRC this legislation is only there to prevent tax avoidance but Section 554E(8) of the Finance Bill (No 3) in question specifically exempts members of the House of Commons and the Independent Parliamentary Standards Authority (IPSA) from the new legislation in situations where they fall within its scope.
In response to an MP who asked for clarification on behalf of a concerned constituent, the Treasury has responded that there is no question of this legislation providing MPs with a special dispensation from the new anti-avoidance rules. The issue it seems is that the scope of this new legislation is so broad that in addressing the use of third parties to disguise rewards to employees, the legislation has had to include a number of exemptions for arrangements which are considered as not concerned with attempts to avoid tax. One of these exemptions as it happens is a specific exclusion for anything done by the IPSA in relation to a member of the House of Commons. This is necessary because there is a legal requirement for the IPSA to administer payments to MPs to cover the necessary expenses they incur in their work, while also providing the necessary oversight to ensure the expenses of MPs are properly paid and that the public can be reassured that this is so.
The problem with this response by the Treasury is that it still does not seem to address the question raised by Mr Cowie and indeed distrustful members of the public, as to why MPs cannot rely on the same arrangements that every other employer and employee in the country will have to rely on to comply with the requirements of this Finance Bill. Is it just to avoid a further bureaucratic load on the IPSA for new rules on disguised remuneration which are really only intended to catch complex arrangements designed to avoid income tax through loans made to executives, typically via offshore structures?

Dilemma of Power

Jeudi, juillet 21st, 2011

David Cameron is faced with the dilemma of power of all Prime Ministers that he needs to court the media but not too closely, the latter the criticism levelled at the Labour government under Tony Blair. He made a mistake it now seems in hiring Andy Coulson, the former editor of the now defunct News of the World newspaper as his head of communications, and in only now going on the offensive before parliament to demonstrate his anger should the on-going police investigation reveal that Mr Coulson was more involved in the on-going phone-hacking scandal than previously believed.
However, this has allowed the Labour leader Ed. Miliband to score another tactical victory in the Commons, exploiting what the opposition believes is the weakness of a lack of attention to detail of the Prime Minister, as demonstrated not only in the current media scandal but also over the health service reforms. Previous incumbents such as Margaret Thatcher and Tony Blair both showed the benefits of better preparation and attention to detail, the latter for example with his training as a lawyer very involved in the Northern Ireland peace process and the intricacies of NHS budgeting.
Labour could undermine the government again with calls of economic incompetence if the current Euro-zone crisis further threatens the recovery of the UK economy, since British banks are still at major financial risk through the loans they have made to French and German banks more directly exposed to the terms of the second Greek bail-out being debated in Brussels today. The Euro-zone also represents around 40% and, together with the other European Union member states, some 60% of total British exports, making it critical to the success of the export-driven recovery plan of the government. As it is, total government borrowing for the financial year as a whole (following the unexpected rise in June) is now expected to be larger than the Office for Budget Responsibility predicted, its target based on an assumption that the economy would grow by 1.7 % instead of what is believed by economists as likely to be 1.4 % or even lower.
Luckily voters have longer memories of the role and responsibility of the previous Labour government in the current troubled state of the British economy, although they will progressively lose patience with those now in power if their everyday financial concerns about e.g. jobs, taxes, budget cuts, pensions, mortgages, inflation and declining real incomes, are not being competently addressed within a growing economy before the next general election. The Prime Minister also needs now to start raising his game as they say and start paying more attention to the briefing evidence presented to him by his advisors.

UK Elite Universities

Jeudi, juillet 14th, 2011

Further to the previous article on social mobility and the Sutton Trust Higher Education Report (see Categories/Chairmans Blog/Social Mobility/Higher Education Report in the right-hand index column), 40% of the 56,000 students who have gained A-level grades of AAB or higher are concentrated in only nine universities in England: Oxford, Cambridge, Durham, London School of Economics, Bristol, Exeter, Warwick, Imperial College London and University College London. These nine universities also have more than 60% of their students admitted with grades AAB, according to the Higher Education Funding Council for England.
Now a government white paper released last month will allow all universities (currently with their total numbers of students limited by the state) to attract as many students as they can with A-level grades of at least AAB. A competing market for such top grade students will result with e.g. some universities offering scholarships to attract students with the highest grades. On the other hand, others might decide not to increase class sizes in order not to erode the quality of the student experience. However, overall the reform is expected to further concentrate students with the highest grades in the above elite group of universities, depriving in turn mid-ranking but competing universities of such recruits and forcing them to lower their fees from the maximum £9000 per year. This could lead to a form of social sorting between cheaper and more expensive universities according to Martin Hall , Vice-Chancellor of Salford University(average fees £8,400 per year).
Sir Steve Smith, President of Universities UK and Vice-Chancellor of Exeter University (one of the elite group) also warns that this high grades policy could be in conflict with government attempts to promote social mobility if it deters some universities from trying to attract higher potential applicants with lower grades from poorly performing schools. However, the response of the government is that universities can still take advantage of bursaries and payments from the new National Scholarship Scheme to maintain their levels of students from poorer families.
Lord Patten, Chancellor of Oxford University and Chairman of the BBC Trust, is not in favour of what he calls such positive discrimination. Although he is in favour of the principle of promoting social mobility, he considers it perverse that plans to be published by universities on how they intend to attract poorer students, could make it easier for such students to go to Oxford or Cambridge rather than say a much less prominent university.

Sutton Trust Higher Education report, July 2011

Samedi, juillet 9th, 2011

The Sutton Trust is an educational charity and this just published report is the first detailed, school-by-school analysis of data on the higher education destinations of pupils for 2007-2009. Its author, John O’Leary, considers that its real value will be to allow parents to judge how successful schools are at getting their students into the 30 most selective universities, or indeed into any university.
The results show that 100 (84 independent and 16 grammar) schools accounted for 31% of Oxbridge admissions. Westminster School, Eton, St Paul’s School and St Paul’s Girls’ School in London and Hills Road 6th form College in Cambridge alone, accounted for 946 Oxbridge entrants and exceeded the total of 927 Oxbridge students produced by the 2000 lowest-performing schools.
For the highest attaining schools, 87% of applicants from independent schools and 74% of applicants from grammar schools obtained a place at one of the top 30 universities but only 58% of those at comprehensive schools.
However, the research has been criticised by leading universities which since 2006 have spent a lot of money on outreach work with schools to justify the major increases in tuition fees charged to their students. They say that it relies too much on the A-level points system and does not distinguish enough between types of subject or achievement of the high grades required to secure entry to their universities.
It seems that one reason for the disparity in achievements is that independent schools tend to teach the more traditional subjects that leading universities want, whereas many comprehensives encourage their pupils to take so-called softer or easier A-levels or more vocational qualifications, to increase their points (and relative positions) in the A-level league tables. Indeed over the past 15 years there has been a significant decrease in the numbers of traditional subjects studied in comprehensive schools and local colleges. There is also the question of choice of university made by able pupils at some comprehensives, as university destinations varied widely between such schools with otherwise similar patterns of results.
Whatever the reasons for this stark demonstration by the Sutton Trust report of the inequality of achievement within the higher education system, it should not make comfortable reading for the current Coalition government with its concern to improve social mobility.