18 Comments
Jul 31·edited Jul 31Liked by Mr Chips

Hi!

The current 'cost-benefit' conversation seems to be trading off VAT raised with cost of extra places for kids in state schools. It seem to be ignoring any long term benefits of private education... (probably because the benefits don't arise within the required 5 or 10 years which the treasury uses)

But - if we are trying to account for this all properly then this seems to be like the biggest effect to be considering (i.e. does private education result in greater tax paid to the state in 30 years time?)

I don't know of any good research here but if any existed I assume it have an effect an order of magnitude bigger than all the effects we're currently arguing about.

Cheers

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Aug 1·edited Aug 1Author

Hi PJ, you raise an interesting point so I'm giving a detailed answer, hope this is interesting:

Absolutely right. The Adam Smith paper points to the importance of quality investment in human capital - which is economically the reason for ANY state involvement in education, going back to 1870 Education Act which I touched on https://mrchips4schools.substack.com/p/in-need-of-history-lessons-as-well?r=rco7z

If we harm the private sector's willingness to invest (generally, and in education) it has a severe cost. The great debate in economics is whether that cost (generally, and in education) is justified by the "really terrific" improvements the government will provide instead. Thus far from Labour we see: (1) pay rises (2) a woke national curriculum re-write, mandatory even for "free schools" etc. that parents don't want (3) more tolerance of bad behaviour, which teachers don't want and (4) cancellation of the obligation for HE to uphold free speech. Not impressed.

Yes, independent school children earn more than state school children. A lot more.

https://www.bbc.co.uk/news/education-28125416

That implies a few things (1) definitely, they're paying a shedload more taxes. (2) debatably, they're either (a) creating more value or (b) capturing more value. I'm with (a)...it's quite amazing how the same people that insist "capitalist sods are only interested in making money" also fall for "capitalists are willing to pay inefficient rewards so that they hire posh/male/white/private school people that don't deserve it". Etc etc. Then (3) if creating value, they are contributing to the economy via their employers, employees and customers (which I also lifted from the Adam Smith paper, well worth a read); and (4) that value broadens the taxable base of the economy....winner winner chicken dinner.

Would private school alumni equally succeed without the schooling? Would those jobs even exist without those people? Or would other people take those jobs? Would other people do the jobs as well, or less well? Or would the same people do those jobs but less well? These questions are not answerable. So a conservative like me would say "people earning money, paying taxes, finding/creating/fulfilling highly-paid jobs in a global economy....FFS don't let's mess with that." A leftist would say "inequality, therefore unfairness, therefore level it down and let's throw the dice on what happens".

So why do they earn more? Obviously it's some complicated mix of family and early-years care, talent, education and training, delayed gratification, career choices, continued hard work, and luck. Again astonishingly, some leftists claim to have isolated the entire effect....to exclusive relationships and networking developed at independent schools. I could expand on this but, in short, it's entirely unproven, it's just a nostrum "what I read in the Guardian".

The right question to ask is: "what is the sauce in quality education that makes such a difference, and how can it most efficiently be replicated in state schools?" I don't see many people trying to answer that question other than my heroes James Tooley, whose book "The Beautiful Tree" is well worth a read, and Katherine Birbalsingh. Neither of these two is well-regarded by the Labour Party.

Also (to be fair) Starmer who was onto something with his oracy discussion, which has been dropped probably because the eduBlob didn't understand it or thought it was posh. I don't understand why all primary school kids aren't expected to learn and declaim poetry. But then I don't understand why all parents don't read to their toddlers / make them brush their teeth / wean them onto a healthy diet / potty train them by the time they go to school. I'm pretty confident none of the above costs money, and also that the lack thereof is not the responsibility of taxpayers, let alone the taxpayers that save the state £8-12k per child.

So if you've read this far, you might agree with me that the loathing of independent education is actually a loathing of family. When people say "everyone should have the same education" what they really mean, whether they know it or not, is "the state should control, undermine and replace family in bringing up children".

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I'm pretty sympathetic to the points that you raise and it does feel like some of the new policy from this new government doesn't even appreciate that there are trade-offs in the actions that they're taking, like more tolerance of bad behaviour having negative externalities.

I think the challenge (bluntly) is that its hard to disentangle the 'richer parents mean kids generally are more successful / pay more tax' effect from the 'richer parents are more likely to send their kids to private school' effect. If you had good empirics there it feels like it could really shift the debate.

I am a bit more skeptical than you that the private schools actually improve outcomes that much, just in the sense that people often don't seem to be very good at understanding what actually works in education. E.g. teachers unions convinced themselves that phonics wouldn't help based on their years of teaching experience (and I think they genuinely believed it wouldn't work, it wasn't just them being difficult) and frankly a bunch of what parents at my kids (private) school care about / want seems to be entirely orthogonal to 'stuff you need to do to enhance learning outcomes'

Also- there are real arguments here that what the government is doing will net raise aggregate outcomes- e.g. you can argue that pulling kids out of private schools into state raises state standards as their more engaged parents force the state schools to do better.

Or - if you assume a very concave relationship between education outcomes and spend then you would also be able to convince yourself that taxing private schools to subsidise state schools would improve outcomes.

I don't think either of these are right but without empirics we just don't know. Thus... if we had decent empirics I think it could make a difference. Just my 2c.

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Right, the empirics are lacking; the questions are not answerable. The mix is incredibly complicated, but it's telling that the author of the IFS paper, Luke Sibieta, cites two papers that he claims demonstrate the earning premium is "mainly" down to networks; once I click-through, because I'm that sort of person, I find those sources actually "mainly" point to education attainment, and that the authors speculate about the unmeasured role of leadership/extracurricular activities. There's no discussion at all of the role of, for example, bedtime stories or playing boardgames. That's the best he, as somebody who has spent 15 years researching education inequality, can offer.

Elsewhere in the literature, it is simply assumed that the "network" effect exists and is particular to schools, rather than being of people (like, rich people at catchment state schools don't also look after their own type? and snobbish people at ind schools wouldn't be snobbish if only they were at state schools?)...this is the sort of low-brow guff we're dealing with.

While you're right to question "what parents care about" as being necessarily "the best for learning", I don't see that's a case for undermining parents' choices.

Regarding your separate argument that forcing "engaged parents" into state schools, would transform the latter (which of course implies they can influence them, which they can't, and that they have some beneficial input into what's the best for learning), I'm afraid I violently reject that argument and would love to you read this one and share it very widely. If you like empirics, especially. https://mrchips4schools.substack.com/p/bright-kids-shouldnt-be-expected?r=rco7z

Finally, I don't assume a concave (do you mean convex? as in diminishing marginal returns to spending?). And even if I did, the effect of the Education Tax would still be subject to demand and supply. As the Adam Smith paper says, and it's the only analysis even to try to identify second/third order effects, displacement of 10-15% means no net revenue, and there are further risks to the downside. If no net revenue, then no benefit, and we still bear the cost of having screwed around 10-15% of children and families and their schools/teachers.

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Aug 1Liked by Mr Chips

I'm honestly surprised there aren't empirics. It wouldn't be that hard to do some sort of scholarship experiment (though I suppose these days it might be considered 'unethical' by a review board but that's a separate issue.)

A brief digression - I am strongly in favour of elitism (in the sense that I suspect that we as a society would have more GDP / more growth if we spent more money on developing the top students, there are some very extreme 'right-tail' people out there...) so I don't believe the 'concave' argument and I don't think the 'engaged parent' argument outweighs the right tail effects.

I read your linked post on engaged parents - I think it shows that the empirics suck, rather than that the effect doesn't exist.

Finally I meant concave, as an equation like in student outcomes = sqrt(spending).

Anyway - I think we're in rough agreement, good luck....

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thanks ... I think my post pretty conclusively, and empirically, disproves the "engaged parents" shtick... ;-)

There are 2 million empirical UQ data points, some of them doing nice things at their school, and mostly embracing catchment areas and tutors. The shtick assumes displaced independent school parents/kids will act unlike those 2 million.

Also, has to be said not all private school parents are terrific. We're all human. Some are pillars of their school / community. Most just turn up. Some are a right PITA. I can think of a handful for whom keeping them out of state schools might be considered a huge benefit to those schools. But that's another story.

Please stay tuned.

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Jul 31·edited Jul 31Liked by Mr Chips

Exactly Lord Pannick has covered this before , Labour are in the courts for a decade . Labour either abolish our membership to the ECHR or carry on in their chaotic first weeks, making Truss look positively Jedi in comparison to the shoddy commie roadshow that is labour

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Good stuff thank you for the resources Mr Chips. If it's helpful to any others to have a library of varied letters to pick parts from this is how I've put it to our constituency MP (for context, I'd set-out my concerns for the sustainability of the school itself in previous correspondence so deliberately chose to make this specific to our position)

+++++++++

Education Tax concerns

Dear Ms Fookes,

My congratulations on your election. I hope you are settling in at Westminster successfully. You may recall replying to my correspondence during the election. I was extremely grateful for you taking the time.

Since we corresponded, the treasury has produced draft legislation laying out a January 2025 start date. This is exceptionally hasty for any measure, especially one as novel and uncertain in both its national and local implications and for its revenue raising potential.

Our personal circumstances are such that I think we may not be able to afford to continue sending our children to Monmouth School but there is so much uncertainty about the government's other intended revenue raising measures that I just don't know. Changes to tax reliefs, changes to capital gains tax, changes to lump-sum pension taxation and lifetime allowances are all mooted for an October budget and all would have profound effects on our ability to finance the remainder of our lives independently of other taxpayers' assistance.

The timing gives me no realistic opportunity to source an alternative school place for my children. I may find myself failing to have my children in any school for being unable to afford the "discretionary" choice of an independent education.

By way of comparison, the Soft Drinks Levy (a clear negative externality and a fiscal measure with comprehensible consequences) was announced in the March 2016 Budget and came into effect 2 years later in April 2018. It was the result of the Childhood Obesity Strategy written over the preceding year and had valid international precedents of its effect. This is the normal model for doing government. That measure survived various accusations of lacking in evidence base, unfairness by singling out one industry, and being regressive, punishing the least affluent. So if Education Tax is a good idea it will survive proper consultation.

It's within the government's powers to do this right. I really hope you will advocate to make the government work out the effects, state them clearly and let it be judged on practical consequences not ideology, and introduced over a timeframe sympathetic to its effect.

Thank you for your time,

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That's an excellent comparison on Soft Drinks. thanks.

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my pleasure. Sadly I could only really find Conservatives that spoke against the Soft Drinks Industry Levy in the commons but I haven't read the whole of hansard. Would have been just lovely to be able to quote some current Labour front benchers opposing that one if any one has the time to do a trawl...

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i've just attempted to apply for a place at school for my daughter thru Surrey Council, as we're not sure we can afford to continue with Private Ed, and surprise surprise, the system isn't working.....

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Thanks Michael, can you explain further? Any response at all? This is gold dust.

My email

mrchips4schools@gmail.com

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I have a Tory MP so not a lot of point writing.

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Hello, there is ABSOLUTELY a lot of point in writing! Please trust me, I've been in touch with a dozen Tory MPs since the election and they all say this is massively valuable activity, for a just a few minutes of your time

Here's six reasons why, please please do write.

- you give them ammunition on the general arguments, and also your particular circumstances, both outlined in the two attachments

- you give them specific questions / challenges to ask the Government...which is their job....and gives your MP visibility internally and publically, so they like this stuff

- you bring this up their priority list

- you influence them as I've hinted in the letter; they WANT engaged, enthusiastic voters, and demonstrating / articulating your commitment / opposition to a policy position they share, is something they want to reward. In five years time, you might be (and you can promise to be) one of those donors, campaigners, influencers and all that.

- you ensure that the Tories don't slip into a state of "oh, well" on this tax; instead they can continue opposing it, and commit to repealing it in five years' time

- you put it on the map as a leadership election issue

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"Our response will be perfect, and all that is required, so could parents directly affected by this policy please stay out of it."

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PS, I'm not being paid for any of this. It's all "side-of-desk" because, as I keep writing in the blog (1) I think I pay enough tax (2) I think you, probably, pay enough tax (3) it harms education which is a merit good (4) it's no good for public finances or state schools (5) it's a distraction from what SHOULD be done to fix state schools (6) it's creating a horrible vibe in society, making out that all the problems in state schools are the specific fault of 6% of parents that pay for places we don't use.

And it's being done in a vindictive way.

And they are all full of shit.

So I'm very motivated by whatever your concerns are. Let me know what I missed.

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Hi Mitch. I don't know if it will be perfect but we will do our best. And I'm directly affected by this policy.

I have scars on my back from dozens of public sector consultations and will try for it to be evidence-based, comprehensive, detailed and representative of our general concerns and also specific concerns. And we'll share our working on the FB group so parents can input if/when we look like missing something.

There's also some benefit to the campaign in being "seen" to speak for parents...rather than being one of thousands of submissions...giving us some credibility with press and with Opposition MPs.

If you want to make another response, and it's going to be evidence-based etc....then please do. There is mileage in a short, sharp "this is how it affects me, this is why it's bad for society/local schools/the community, there is a lack of evidence, it contravenes Equality Act or whatever".

If you also just want to have a rant, I can't stop you, but I've highlighted the risks above that you may do more harm than good.

Best of all would be, since this amounts to a considerable volume of work....would you like to help?

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