Peter Franklin is an Associate Editor of UnHerd.
Rishi Sunak is a trouble-shooter. Crashed economy? He’ll put it back on the road. Brexit shambles? He’ll sort it. Small boats crisis? He’s got a plan for that one too.
But while stopping things from getting worse is necessary, it is not sufficient. To win re-election, a government also needs to make things better.
It was the promise of positive change that persuaded the voters of the Red Wall to give the Conservatives a chance in 2019 (and also why the statement that “nothing has changed” was so damaging in 2017).
So, beyond fixing problems, what is Sunak’s big idea? Well, he’s told us: it’s education.
Last year, he made it a signature theme of his leadership campaign. Subsequently, Downing Street let it be known that if there were one public policy that could act as a “silver bullet” to improve lives, then education is it.
Sunak isn’t the first prime minister to make this his “absolute priority”. Tony Blair famously stated that his top three priorities were “education, education and education”. He hasn’t forgotten it. Last year, he said that the share of young people going to university should be increased to 70 per cent (currently, it’s about 50 per cent).
His argument is fleshed out in a report from the Tony Blair Institute, which claims that achieving the new target would “significantly raise the rate of productivity growth and boost the size of the economy by almost five per cent.”
But would it? A new study from the Harvard Kennedy School suggests that there are many things holding back the British economy, but a lack of graduates is not among them.
It’s an excellent piece of research, but the cherry on the cake is that one of the co-authors is none other than Ed Balls. It’s almost touching to see the Brownites and Blairites still butting heads.
The Balls report, if I may call it that, starts by identifying the UK’s fundamental economic problem, which is our abysmal record on productivity.
In particular, there’s the massive productivity gap between London and the South East and the rest of the country. The primary reason why this exists is that our big cities beyond London don’t perform the way that most cities do elsewhere in Western Europe.
Typically, cities are more productive than the national economy as a whole. That’s thanks to so-called agglomeration effects, i.e. the concentration and connectivity of workers, enterprises, infrastructure and other economic resources.
Unfortunately, this effect is unusually weak in British cities such as Birmingham, Manchester and Leeds. Something is stopping them from achieving their full potential.
If a lack of graduates is to blame, then we’d expect to see the evidence in a widening gap between graduate and non-graduate wages. But, as the Balls report shows, the trend since 1997 is in the opposite direction: a “large decline in the university wage premium” in almost every region except London.
Furthermore, there’s a significant net migration of graduates to London from the rest of the country.
Therefore, in the provinces, it’s not the number of graduates that’s in short supply, but the number of jobs for graduates.
Note that this is despite the fact that the old north-south gap in overall job creation has all but disappeared. There’s plenty of work to be had almost everywhere in twenty first-century Britain, but not necessarily work for the most educated individuals.
A lack of graduates is clearly not the reason for our productivity deficit, rather our productivity deficit explains the lack of graduate-level jobs. What, then, is the root cause?
If we compare our under-performing cities to their foreign counterparts, one thing that stands out is their unusually poor access to reliable public transport. The fact that a city as large as Leeds doesn’t have a mass transit system, such as an underground or a tram network, is a shame not just for West Yorkshire but for all of us.
Of course, most American cities are poorly served by public transport too. However, their extensive road networks compensate for the lack of trains, trams, and buses. Car-centric sprawl has multiple disadvantages, but it does keep urban America mobile and therefore productive.
In Britain, however, we have the worst of both worlds: congested roads and unreliable public transport.
This is of fundamental importance to productivity. Generally, the bigger a city the more productive it is. However, the effective size of any urban area depends on the speed and affordability with which one can travel into and out of its centre.
In theory, a British city may be the same size as an American or European equivalent, but if the distance you can travel within a given period of time is shorter, then, in practice, the city is smaller.
To put it another way, we don’t need to build a single new house to make a city bigger. If more people across a wider area can travel across it in the same time then, in effect, it has grown!
Investments that ease congestion and improve reliability in our paralysed cities are the obvious low-hanging fruit of pro-growth policy. Certainly, they hang a lot lower than our universities, which are already the best in Europe, and even our schools, which are much improved due to Michael Gove’s reforms.
In short, “transport, transport, transport” should be a higher priority right now than “education, education, education”. Certainly, it should be a lot higher than a further expansion of the higher education system.
To those who say we can do both, I have two words: opportunity cost.
As you may have noticed from the bills you’ve been paying lately, we do not yet live in a post-scarcity economy. Every million we spend on one project, is a million not available for another. Contrary to the impassioned pleas of Tom Harwood to “just build it!”, we cannot in fact build everything.
We can only build some things. So let’s concentrate on the best opportunities.
For instance, there are very few places in Europe where several big cities are located close to one another. Germany’s highly productive Rhine-Ruhr region is one of them, the North of England, from Liverpool to Sheffield, is another.
Therefore, as well as improving mobility within these cities, we should be upgrading the links between them. As the Balls report tartly observes, this “would suggest a different prioritisation of high-speed rail links than that adopted under the HS2 plan”.
As for education, instead of making it an “absolute priority”, it’s time to make better use of the resources we already devote to the sector. To his credit, the Prime Minister has identified the need to boost apprenticeships and for a “crackdown on poor quality degrees”.
But do we really need to teach maths and English to 18-year-olds? If pupils aren’t adequately numerate and literate by the time they’re 16, then I’d suggest that there are more urgent issues to address.
As for tertiary education, how about a long-term plan to reduce university enrolment rates to, say, 40 per cent, and redirect the savings into technical education?
Within our universities, we need a further prioritisation of resources towards the STEM qualifications for which there is evidence of unsatisfied employer demand. That, of course, will upset the humanities lobby and the education-for-its-own-sake brigade.
However, I’m not suggesting that these disciplines should be abolished – just that degree level study should be limited to those with a genuine talent for the relevant subjects.
Everyone else is free to read a book.