Thursday 5 February 2009

An Open Letter to Nick Clegg

Dear Nick,

A report in today's Guardian tells us that the Liberal Democrats plan to spend an extra £2.75bn on the education of disadvantaged children aged 4-6. While I welcome this proposal, as a progressive measure to increase social mobility, I am afraid that the way you plan to raise the money for this initiative will only work to entrench class inequality.

You plan to raise £2.25bn by reforms to the tax credit system and £500m by abolishing the Child Trust Fund (CTF).

The first risks greater means-testing lower down the earnings scale which will act as a disincentive to workers to move to higher paying jobs. The second will deprive millions of future young adults of vital capital to launch, creatively and ambitiously, into their adult lives.

It's not as if there aren't other ways you could pay for the proposal. For example, you could choose not to cut income taxes as much as you propose to do, or aim at a lower overall tax 'burden'; you could make a modest reform to inheritance tax so that it raises more money. You could raise money for early years initiatives by cutting spending on HE which disproportionately benefits children from affluent families. And so on.

As it is, the burdens of your proposal will fall most heavily on precisely the group you say wish to help: society's most disadvantaged. It is they who will face reduced incentives to move up the earnings scale by the harsher means-testing implied by 'reform of tax credits'. And, of course, it is the children of the most disadvantaged families who will end up with no capital of their own at 18 if the CTF is abolished.

Your proposal gives to the disadvantaged with one hand only to clobber them with another.

Why does your party continue to insist that the only way to pay for a decent education for all children is by taking assets and opportunities from the hands of the poor?

Yours sincerely,

Stuart White

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