Friday, 18 September 2009

Nick Clegg on the Child Trust Fund

Sunder has already commented very insightfully on Nick Clegg's recent pamphlet, The Liberal Moment. (See also the comments by Sunny Hundal and Anthony Barnett.) The pamphlet recycles a lot of material from Nick's speech earlier this year to ippr. Since I quite liked that speech, I also like this pamphlet. Clegg is a real liberal and scores some real hits against Labour in developing and applying his theme of liberalism as centrally about the redistribution of power.

Still, I am going to be a curmudgeon. As regular readers of Next Left will know I have particular axe to grind with the Lib Dems when it comes to their opposition to the Child Trust Fund.

I have posted here on the topic numerous times, including in February an open letter to Nick Clegg - which, I am afraid to say, he has evidently been too busy to respond to (well, I guess he does have a lot on his plate).

So I really didn't want to have post on this again. I mean, really, I didn't.

But I can't help it. Clegg's pamphlet contains one more example of dodgy thinking on the topic which needs to be made explicit. Let the Lib Dems persist in their opposition to the CTF if they like, but I am not going to let them get away with bad argument into the bargain.

So here is what Nick Clegg says:

'Crucially, if you want to increase social justice, you have to help children as early as possible in life. That is why we have committed to abolishing the Child Trust Fund - which puts a few hundred pounds into the hands of 18 year olds whose life chances have already been all but determined - using the money instead to reduce class sizes for the youngest primary school children.'

At first sight this is the usual Lib Dem argument. It has the usual defect: the arbitrariness of framing the choice as necessarily one of 'CTF versus more spending on young children'. (For a full explanation of this point, see here.)

Put aside also the somewhat misleading claim that the policy will only put a few hundred quid in the pockets of 18 year olds. If all families contribute to the maximum allowed, every 18 year old could have around £30,000 when their CTFs mature. Our society would look a lot different as a result. (Wouldn't parents save this money anyway? Not necessarily. There is some evidence that the CTF is prompting extra saving by parents in this area. Can all parents save equally into CTFs for their children? No. But this is a reason to help poorer families, e.g., with matched contributions, not for abolishing the CTF.)

The real interest in the passage I've quoted lies elsewhere.

Nick Clegg tells us that when people are '18 year olds' their 'life chances have already been all but determined', and that this is a reason for putting the money we use for the CTF into early years education instead.

In other words, he is resting the case against the CTF here on something like the following thought: 'Since life-chances are pretty much already determined by the time people are 18, its pointless spending money to expand their opportunities then when we could spend it on them earlier in their lives when their life-chances are not yet determined.'

Now, for the sake of argument, assume we believe this. What would follow? Well, we wouldn't just scrap the CTF. Consider all the ways in which government supports young adults with a view to enhancing and/or equalizing their life-chances. There's higher education subsidies and help with vocational training. There are initiatives to help tackle youth unemployment. If spending money on people at 18 is pointless, because 'life chances are already all but determined', then these programs are just as pointless as the CTF (insofar as they are also aimed at enahncing/equalizing the life-chances of 18 year olds).

Yet Nick Clegg does not call for higher education subsidies to be scrapped. Indeed, the last time I looked, the Lib Dems were rather in favour of more higher education subsidies as they wanted to scrap university tuition fees. And I suspect Nick Clegg and most Lib Dems support the general principle behind the government's efforts to mitigate youth unemployment even if they disagree on the details.

One must conclude, then, that Nick Clegg almost certainly doesn't really believe that spending money on 18 year olds, to enhance/equalize their life-chances, is a waste of time. The principle on which he ostensibly rejects the CTF is not one that he can credibly commit to, once its implications have been drawn out. (None of this is to deny that we would do well to redistribute public spending towards young children - but a general reorientation of this kind is consistent with thinking that spending on young adults also matters and that the CTF is one useful form of spending aimed at young adults.)

What we have here is just one more example of throwaway thinking by the Lib Dems on this issue - an example of reaching opportunistically for some sort of argument to support a position that has never had a solid rationale.

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