The economics of Bob Crow

Frying down in Rio: Union baron Bob Crow soaks up the sun on Copacabana beach

Bob Crow, 1961 – 2014

The reactions to the sudden death of RMT leader Bob Crow from friends and foes alike were unanimous about one thing; he was good for his members. Indeed, most of those who ride London’s underground can only dream of the tube drivers’ basic salary of £44,000 and 52 days holiday a year. But how much of this was due to Bob Crow?

A private enterprise will not pay a worker more than it thinks that worker will add to turnover, if it did it would be losing money on the employment. The private sector enterprise has only three sources of funding; debt (bank loans, corporate bond issues), equity (selling shares), and income. If it loses money and exhausts these sources by paying workers above a level commensurate with their productivity it will go bust. No matter how determined or skilful the union representative, the workers’ marginal productivity sets a cap on their wages.

But the situation is different for public or government backed enterprises, such as those Bob Crow faced across the negotiating table. They have a fourth source of funding; the taxpayer. In these circumstances unions can push pay claims ever higher. If a union seeks to push wages above a level commensurate with worker productivity and the public enterprise exhausts the funds it can raise from debt, equity, or income, it doesn’t go out of business; it receives taxpayer support. For the public enterprise, unlike its private counterpart, on the other side of the bottom line isn’t bankruptcy, it’s a bailout funded by taxpayers. This is why trade unions continue to thrive in the public sector but are largely absent in the private.

Indeed, despite their extravagant remuneration the productivity of tube drivers, what they add to output, is actually rather small. The big value adding inputs into the production of tube travel are mostly capital inputs; boring machines, trains, track, IT systems, ticket machines etc. It is quite possible, in fact, for tube trains to run without drivers at all. Indeed, as far back as the 1960s the Victoria line could have been built to run without drivers. It was only the insistence of trade unions that saw a role created for drivers to sit in the cab and press a couple of buttons – drivers who could become their paid up members. To avoid union headaches Margaret Thatcher built the Docklands Light Railway to run without drivers in the 1980s, which it has ever since with a safety record comparable to manned tube lines. If a factor of production, in this case labour, is being applied to production needlessly it is wasteful and unproductive. It should not be receiving high wages.

If Bob Crow was aware of the economic possibilities for his members offered by recourse to taxpayer’s money he was also acutely aware of the politics of the situation. He knew, as a former RMT employee put it to me, that “Boris wants to get re-elected as mayor and/or become PM. If he screws up the tube his chances of either are lessened. He has to balance the damage caused by, on the one hand ‘giving in to the unions’ and, on the other, chaos on the underground. The fact that he has to balance those factors makes the union’s position a strong one.”

Such was Bob Crow’s terrain and, like a Wellington, he understood it well. But it did not make him a labour relations genius any more than the Mediterranean coast and Qattara Depression made Montgomery a military genius. His membership prospered not so much because of his skills as a leader, but because of their status as public or semi-public employees whose pay claims were underwritten by the taxpayer. Bob Crow played his hand well but he had a strong hand to play. Those hoping for a more emollient approach from his successor ought to remember that they will inherit that hand.

The left hated Thatcher because she thrashed them

Margaret Thatcher, 1925 – 2013

On Gee Street in London there is a Stafford Cripps House named after the post war Labour Chancellor. In Fulham there is also a Stafford Cripps House which contains a Clement Atlee Court named after his boss. In East London there is the Kier Hardie Estate, named after the first Independent Labour MP. In Clapton there is a Nye Bevan Estate named after the former Labour minister.

So I was baffled when, today, my various inboxes, feeds, and walls were swamped by left wing friends asking how bothered I was by the passing of Margaret Thatcher. One or two seemed rather put out when I responded that I wasn’t massively. As someone who could be considered a ‘Thatcherite’ I believe in the individual not an individual. I’ll leave the veneration of Dear Leaders to the left with their crumbling municipal buildings.

At 87 Margaret Thatcher lived a long life. Insofar as we can tell about the private life of this most resolutely political of people it was also a rather happy one. The daughter of a provincial, middle class shopkeeper, born during the Depression, she went to Oxford, became a chemist, and then became a lawyer. Elected to Parliament in 1959 after a decade of trying she rose against incredible odds to become the first female leader of a major British political party in 1975 and Britain’s first female Prime Minister in 1979. She was accompanied every step of the way by her beloved husband Denis.

Her period in office was marked by internal division and conflict of a degree not seen under any other prime minister of the century. Thatcher took on the Labour Party (three times), the Argentines, the National Union of Mineworkers, and crushed them all. By the time Thatcher left office even the Soviet Union and its miserable communism were history.

But in 1988 Thatcher gave her famous Bruges Speech in which she stated “We have not successfully rolled back the frontiers of the state in Britain, only to see them re-imposed at a European level with a European super-state exercising a new dominance from Brussels.” For the European federalists, including many in the Conservative Party close to Thatcher’s predecessor Ted Heath who had never forgiven the grocers daughter for beating the grocer, this was a step too far.

In 1990 Thatcher was finally brought down, not by a bunch of troublemakers rioting in Trafalgar Square, but by her own Europhile backbenchers, angered by her refusal to sign up to a single European currency. History has proved Thatcher emphatically right.

She brooded on this betrayal in retirement but, judging by her memoirs, she was fully aware of just what she had helped achieve, even if she was typically modest about it. She had taken Britain from an increasingly chaotic, sclerotic, and socialist place, to a place which was on the up again. Internationally she had restored some of Britain’s old standing and seen off the communist threat.

Both in Britain and abroad, with the help of her great ally Ronald Reagan among others, she had shown that the inevitable, onward march of socialism was nothing of the kind.

And, perhaps most uncomfortably for her detractors, she was popular and remains so. She won three elections on the trot. In 2011 a YouGov poll for The Sunday Times placed her firmly at the top of a list of post-war British prime ministers with a whopping 27 percent, more even than Winston Churchill.

The sainted Clement Atlee, architect of the welfare state, nationaliser of industries, and namesake of a court in Fulham, limped home with just 5 percent of the vote behind Tony Blair and, mysteriously, Harold Wilson. The much-vaunted street parties celebrating her demise might be rather more thinly attended than the guests have convinced themselves.

Those who profess to hate Thatcher have committed the error of taking something they believe (or claim to, I’m not convinced many of them are actually serious), repeating it loudly and often to other people who also believe it, and assuming from this fusillade of confirmation that everyone else thinks it as well.

These people can often give you a list of reasons they hate Thatcher, lists which are often so suspiciously similar that you have to question how many are the product of original thought and how many are just being parroted to feign an opinion. Most of them, from the mass unemployment to her supposed destruction of Britain’s industry, are easily dealt with.

But the truth is that she would have been disliked intensely no matter what she did. Owen Jones wrote recently that “Thatcher hate is not kneejerk anti-Toryism, after all, there will be no champagne corks popping when John Major dies, and there was no bunting on display to celebrate the deaths of Ted Heath, Alec Douglas-Home, Harold Macmillan or Anthony Eden.”

But remember that in 1948 Nye Bevan, one of the most venerated and overrated figures in British political history, said, “No amount of cajolery, and no attempts at ethical or social  seduction, can eradicate from my heart a deep burning hatred for the Tory Party.  So far as I am concerned they are lower than vermin.”

Remember also that Bevan didn’t say that about a Conservative Party containing right wing ideologues like Thatcher, Norman Tebbit, or Keith Joseph. He said it about a Conservative Party which contained such Keynesian, welfare-state-loving, consensus-supporting politicians as Harold Macmillan, R. A. Butler, and Alec Douglas-Home.

The left disliked Thatcher because she was a Conservative. It hated her because she thrashed them.

Margaret Thatcher is one of only two British prime ministers to coin an ‘ism’ and unlike the other, Blairism, Thatcherism actually meant something. This is why whether alive or dead she will live on. Her ‘ism’ will be a much more permanent monument than the grey, decayed concrete boxes named after various Labour no marks.

This article originally appeared at The Commentator

Thatcher’s achievements will long outlive the spite of Sheffield’s sons and daughters

You want a lump of cole rather than a welfare payment? 

“When Thatcher dies they’ll have to build a dance floor over her grave for all the people who want to dance on it.” When I was told this in a pub some years ago it wasn’t the sentiment that struck me but that fact that the unimaginative fellow speaking might have thought it was the first time anyone within earshot had heard that rib tickler.

I was born in Sheffield in 1980 and through family and support of an underachieving football club I retain ties to the place and its people. I have heard Sheffielders, some quite reasonable folk, say that they wish the Brighton bomb attack had succeeded; I have heard them joke frequently about Thatcher’s dementia.

One told me that if there was a God he would believe in him if Margaret Thatcher died. But, if there is a God, shouldn’t he believe in him anyway? And unless he was ascribing to Thatcher powers of immortality, her death is a certainty and, thus, so is his eventual embrace of theism.

You won’t find logic where none exists. The visceral hatred of Margaret Thatcher isn’t based on anything resembling rational thought. As one Sheffielder once put it to me “I dont understand all this stuff about GDPs, Taxes, RPI etc etc. All i know is that growing up in Sheffield in the 80s. Thatcher demolished a once proud city & left alot of its inhabitants pennyless, jobless & without hope. You can argue about stats all day. But that was the reality of it all. People loosing their, jobs, homes & pride.” (sic, sic, sic…)

That’s why people in places like Sheffield will be celebrating Margaret Thatcher’s death. There’s just one problem. It’s wrong.

For starters, feel the parochialism. Thatcher was bad for Sheffield ergo she was bad. Never mind the rest of the country. Never mind the GDP growth of 23 percent or the increase in the median wage of 25 percent during her time in office. For most people the Thatcher years were ones of prosperity. That’s why she regularly tops polls of most popular Prime Ministers.

This is not to say that this person’s view is worthless. But it is to say that an opinion formed simply by looking up and down your street might not be too useful.

Then, just how proud actually were places like Sheffield before Thatcher came along? How proud can any city be when it is, essentially, a vast welfare case getting by on the wealth transferred to it from other parts of the country?

That was the truth of the industrial situation in these areas. Take coal. Just before the First World War the mines employed more than 1 million men in 3,000 pits producing 300 million tonnes of coal annually.

By the time the industry was nationalised in 1947 700,000 men were producing just 200 million tonnes a year. To improve this situation, in 1950, the first Plan for Coal pumped £520 million into the industry to boost production to 240 million tonnes a year.

This target was never met. In 1956, the record year for post war coal production, 228 million tonnes were produced, too little to meet demand, and 17 million tonnes had to be imported. Oil, a cheaper energy source, was growing in importance, British Rail ditching coal powered steam for oil driven electricity, for example.

Jobs were lost in numbers that dwarfed anything under Thatcher. 264 pits closed between 1957 and 1963. 346,000 miners left the industry between 1963 and 1968. In 1967 alone there were 12,900 forced redundancies. Under Harold Wilson one pit closed every week.

1969 was the last year when coal accounted for more than half of Britain’s energy consumption. By 1970, when the Conservatives were elected, there were just 300 pits left – a fall of two thirds in 25 years.

By 1974 coal accounted for less than one third of energy consumption in Britain. Wilson’s incoming Labour government published a new Plan for Coal which predicted an increase in production from 110 million tonnes to 135 million tonnes a year by 1985. This was never achieved.

Margaret Thatcher’s government inherited a coal industry which had seen productivity collapse by 6 percent in five years. Nevertheless, it made attempts to rescue it. In 1981 a subsidy of £50 million was given to industries which switched from cheap oil to expensive British coal. So decrepit had the industry become that taxpayers were paying people to buy British coal.

The Thatcher government injected a further £200 million into the industry. Companies who had gone abroad to buy coal, such as the Central Electricity Generating Board, were banned from bringing it in and 3 million tonnes of coal piled up at Rotterdam at a cost to the British taxpayer of £30 million per year.

By now the industry was losing £1.2 million per day. Its interest payments amounted to £467 million for the year and the National Coal Board needed a grant of £875 million from the taxpayer.

The Monopolies and Mergers Commission found that 75 percent of British pits were losing money. The reason was obvious. By 1984 it cost £44 to mine a metric ton of British coal. America, Australia, and South Africa were selling it on the world market for £32 a metric ton.

Productivity increases had come in at 20 percent below the level set in the 1974 Plan for Coal.

Taxpayers were subsidising the mining industry to the tune of £1.3 billion annually. This figure doesn’t include the vast cost to taxpayer-funded industries such as steel and electricity which were obliged to buy British coal.

But when Arthur Scargill appeared before a Parliamentary committee and was asked at what level of loss it was acceptable to close a pit he answered “As far as I can see, the loss is without limits.”

Source: The BBC

Falling production, falling employment, falling sales, and increasing subsidy; that was the coal industry Margaret Thatcher inherited.

She did not swoop in and kill perfectly good industries out of spite. Industries like coal and steel were already dead by the time she was elected. Thatcher just switched off the increasingly costly life support which had kept these zombie industries going.

When Margaret Thatcher dies the streets of Sheffield will flow with ale. But the next day the revelers will wake up with headaches and Margaret Thatcher will still have crushed Arthur Scargill, will still have helped win the Cold War, and will still have shown the supposed inevitability of socialism to be the dimwitted sham it was. And those achievements will last longer than the hangovers.

This article originally appeared at The Commentator

Public sector strikes: Unaffordable and unfair

Hands off my wages

And so the world keeps turning. An estimated two million public sector workers have gone on strike and the nation has kept ticking along.

The false argument about public sector pensions is put rather well by this which is going round on Facebook

“Remember when teachers, nurses, doctors, lollipop ladies and disabled people crashed the stock market, wiped out banks, took billions in bonuses and paid no tax? No, me neither. Please copy and paste to your status for 24 hours to show your support for the strikes against the government pensions”

It is hugely dishonest to try and make out that these reforms to public sector pensions are simply a result of the financial crisis. They aren’t. There were threats of strikes over the issue in 20042005 and an actual strike in 2006. Yes, the dire state of Britain’s finances has made dealing with public sector pensions more pressing, but the simple fact is that the current arrangements aren’t affordable after the credit crunch and weren’t affordable before it.

The issue of pensions is about the worst one public sector workers could choose to strike on. According to figures from the Office of National Statistics, reported in the Telegraph

“The calculations show that a mid-ranking teacher on £32,000 a year will receive a final salary pension that is the equivalent of having built up a £500,000 pension pot.

This is 20 times higher than the average private sector scheme, according to figures from the Office for National Statistics. Private sector workers would have to save more than 20 percent of their salaries for 40 years – more than £500 a month for a similarly paid person — to amass the same amount in a defined contribution pension”

This state of affairs was, just about, sustainable when it could be passed off as the reward for lower wages in the public sector. But the last Labour government richly rewarded its loyal clients in the public sector and, as a comprehensive report by Policy Exchange found

“On an hourly basis, the typical public sector worker is now 30 percent better paid than the typical worker in the private sector. On top of this, public sector employees have better pensions. The difference is worth an extra 15 percent of their salary. Over their lifetimes, people in the private sector work 23 percent more hours (equivalent to 9.2 years of a public sector employee’s working life) – where their public sector counterpart will either be on sick leave, holiday, strike or in retirement”

Union leaders like Mark Serwotka have derided George Osborne’s claim that “we’re all in this together”. As well they might, another Policy Exchange report found that

“Since the start of the recession, the hourly pay premium for the typical public sector worker has increased. After taking into account differences like age, experience and qualifications, the hourly pay premium for a public sector worker was 8.8 percent as of December 2010. This almost doubled from 4.3 percent two years earlier”

The public sector hasn’t been in anything at all yet.

The strikers have argued that the terms and conditions of their employment are being changed. So they are. But consider what happens to a private sector company which can no longer fund its pension commitments; it defaults and its members don’t get a penny. Renegotiation is a pretty good deal by comparison.

Of course, the private sector company defaults because it has run out of money. Governments, it is believed despite mounting evidence from the eurozone, don’t.

But this reveals the central fallacy and the central issue which lies behind this strike. There is no such thing as ‘government money’. There is only taxpayer’s money. When public sector unions say the government should pay more they mean the taxpayer should pay more.

The unions at least used to make a show of supporting things like ‘fairness’ and ‘social justice’. They are now, quite brazenly, simply trying to protect the privileges of a public sector labour aristocracy supported by the galley slaves in the private sector. They are worked until they drop to pay for these generous pensions and then thrown overboard.

This is not only unaffordable, it is unfair. That is what today’s strike is about.

This article originally appeared at The Commentator

Bob Crow vs Ronald Reagan

Students new to London ought to get used to this. On the evening of Monday September 6th London Underground workers headed out on strike. London ground to a halt and was not back to normal until Wednesday evening. Similar strikes are expected to continue for another few months.

Tube union leader Bob Crow (as close as London has to Public Enemy Number 1) claims the strikes are in response to the proposed reduction of ticket office hours at outlying tube stations which will lead to the loss of 800 jobs. He claims this will affect tube safety.

Crow’s safety concerns can be doubted. Back in 2004 he shut the network to protest the sacking of a number of maintenance workers who had been caught boozing on the job. So much for safety!

In truth Crow is simply indulging in the age old union trick of cloaking sheer self-interest as concern for the public, the very public he and his union plan to screw next week.

It needn’t be like this. It would be entirely possible for Crow and the RMT union to turn up to work as normal and simply open the gates; hit Transport for London in the pocket but leave the rest of us out of it. What Crow calls ‘industrial action’ is, in fact, industrial inaction.

Crow complains about the effects of coalition cuts on the London economy but his strike is estimated to cost London £48 million pounds. But, as Crow once said, “I’m not one of those union officials who continually say they regret the inconvenience caused by industrial action”.

Indeed, it needn’t be like this. In 1981 the American air traffic controllers union went on strike looking for higher pay and shorter hours. President Ronald Reagan gave the 13,000 controllers 48 hours to get back to work. When they ignored him he sacked them.

It worked. With help from military air traffic controllers Reagan kept the skies open, broke the union, and freed the average American flyer from their whims.

Perhaps this points a way forward in London? First, see if the RMT will agree to limit its industrial dispute to the disputing parties; itself and the RMT. Failing that, bring in trained personnel to operate the Underground network so that a resource we all pay for cannot be turned on and off by workers who earn around £30,000 a year and get 35 to 40 days holiday (the average in London is £26,000 and 20 days each).

So, as you fight your way onto a bus during a tube strike, lets hope the capital’s answer to Reagan isn’t far away. In the meantime, welcome to London.

Written for Caerulean, October 2010

Myths and the miners strike

Which side are you on?

The miners strike of 1984 – 1985 remains as controversial as ever. Being a Conservative from the mining heartland of Sheffield (we lived just the other side of the Sheffield Parkway from Orgeave) Ive always seen the need to square the circle.

Generally criticism of Margaret Thatcher and the handling of the strike breaks down into two propositions; That the Thatcher government and its lackeys on the National Coal Board destroyed a perfectly viable industry and, secondly, that they did it out of “vindictiveness”. How do these claims stack up against the facts?

Claim 1 – The Mines were perfectly viable when Thatcher came along

A bit of context is needed here. Just before the First World War the mines employed more than 1 million men in 3,000 pits and produced 300 million tonnes of coal annually. British coal accounted for over 10% of the world market. This was the peak of the coal industry. In 1923 employment peaked at over 1.2 million.

In 1947 only 958 pits remained to be nationalised and they employed just 700,000 men (on the back of a wartime recruitment drive) producing just 200 million tonnes a year. To improve the situation, in 1950, the first Plan for Coal pumped £520 million into the industry with the aim of achieving a production target of 240 million tonnes a year. This target was never met.

In 1956, the record year for post war coal production, 228 million tonnes were produced but this wasn’t enough to meet demand and 17 million tonnes had to be imported. Oil, a cheaper energy source, was growing in importance and British Rail ditched coal powered steam for oil driven electricity. 264 mines closed between 1957 and 1963.

Technology improved. In 1955 only 9.2% of coal was power loaded, by 1969 this had risen to 92.2%. Jobs were lost in numbers that the Thatcher years never got close to. 346,000 miners left the industry between 1963 and 1968, in 1967 there were 12,900 forced redundancies. Under the prime minister during that period, Harold Wilson, one pit closed every week yet there are few people planning trips to his grave with their tap shoes.

Mining and quarrying jobs in Lancashire

1969 was the last year when coal accounted for more than half (50.4%) of the UK’s energy consumption. By 1970, when the Conservatives were elected, there were just 300 pits left – a fall of two thirds in 25 years. By 1974 coal accounted for less than one third of energy consumption in the UK and NUM membership was down to 200,000.

By 1977, when Tony Benn published ‘Coal for the Future’, the previous predictions of production hitting 150 million tonnes a year had been scaled back to a target of 135 million tonnes.

As the above graph shows, output fell by 33% under Thatcher and by 45% under the three prime ministers who preceded her

In 1981 an attempt was made to impose cash limits on subsidies to industry. The NUM called for strike action and the Conservatives gave in. £50 million was given to industries which switched from cheap oil to expensive coal, early retirement payments were upped to £36,000 and £200 million was injected into the industry. Companies who had gone abroad to buy coal, such as the Central Electricity Generating Board, were banned from bringing it in and 3 million tonnes of coal piled up at Rotterdam at a cost to the British taxpayer of £30 million per year.

The industry was, by now, losing £1.2 million per day. Its interest payments amounted to £467 million for the year and the NCB needed a grant of £875 million from the taxpayer.

The Monopolies and Mergers Commission found that 75% of British pits were losing money. The reason wasn’t hard to find. By 1984 it cost £44 to mine a metric ton of British coal. America, Australia and South Africa were selling it on the world market for £32 a metric ton. Productivity increases had come in at 20% below the level set in 1974 Plan for Coal.

We were subsidising the mining industry to the tune of £1.3 billion a year. This figure doesn’t include the vast cost to taxpayer funded industries such as steel and electricity which were obliged to buy British coal. When Arthur Scargill was called before a Parliamentary committee and asked at what level of loss it was acceptable to close a pit he answered “As far as I can see, the loss is without limits”.

So the industry had been in decline for decades and was haemorraging cash. The idea that the Conservatives did anything other than remove life support is just not true.

Claim 2 – The Conservatives acted out of vindictiveness

Some claim that Thatcher and the Conservative party wanted revenge on the NUM for the defeat by the miners of the previous Conservative government in the early 1970’s. Many of these same people make the loopy claim that Thatcher deliberately provoked the Flaklands War so as to guarantee victory in the 1983 election so you have to wonder what they wont accuse her of. Even so, its a strange argument given that the miners strike of 1974 toppled the Conservative government of Edward Heath and brought Margaret Thatcher to leadership of the Conservatives.

In fact Thatcher wanted to avoid a conflict. On the eve of the strike, in March 1984, her energy minister Peter Walker who handled the strike (is a party being planned for when he snuffs it?) put together a deal which offered miners at pits slated for closure a choice of a job at another pit or a voluntary redundancy package and another £800 million ploughed into the industry. He put this deal to Thatcher, unsure that she would accept. He told her “I think this meets every emotional issue the miners have. And its expensive, but not as expensive as a coal strike”. Thatcher replied “You know, I agree with you”.

Scargill turned the offer down and the strike began.

Why would he do this? Well, if were looking for vindictiveness and desire for confrontation then we should be looking not at Thatcher, but at Arthur Scargill, open admirer of one of the 20th century’s greatest mass murderers and pal of the killers of WPC Yvonne Fletcher.

Scargill had been after a row for years. In late 1981, almost as soon as he became President of the NUM, he called a strike ballot for a 23% pay rise. The membership rejected it. After Thatcher won the 1983 election in a landslide Scargill said he would not “accept that we are landed for the next four years with this government”. So much for democracy.

“I do not believe compromise with the capitalist system of society will achieve anything” – Arthur Scargill

Educashun, Educashun, Educashun innit?

“Sorry Braithwaite, Im on strike”
In the Guardian this week, Philip Beadle came out with a priceless line; “The issue with importing the views of the private sector is not so much with the structures they might implement, but with the fact that they know nothing about our core business – teaching”. Bearing in mind the fact that our teachers have succeeded in turning out a generation of illiterates, you would have thought that they would be desperate for all the help they can get.

According to a working group chaired by Sir Claus Moser in 1998, the adult rate of functional illiteracy in Britain is a staggering 20%, that is 1 in 5 adults who cant read or write after 11 years of state schooling. For numeracy the report claims that “Some researchers suggest that nearly half of all adults in Britain have numeracy skills below the level expected of an 11 year old”. Science teaching is as bad. According to one report “both school students and science graduates have a considerably lower age-specific average science attainment than did the smaller and more elite cohort of thirty-plus years ago”. Likewise, history is a total washout. When I was at school we were taught about World War One, then Indian Independence, then how the Romans built roads, a bit about the Industrial Revolution, a little bit of the Vietnam War…there was no idea of history of a constant flow which has brought us to how the world is today.

You might think that such underperformance would result in radical structural reform, sackings or pay cuts, certainly that would be the case in any private sector enterprise. But no, teachers have been awarded pay rises and seen their generous pension arrangements left untouched. The average teacher earns £26,460 after five years while the national average is just £22,411.

How is it that the providers of such an obviously useless service manage to get away with it? More than that, how come they are rewarded for it? Well, on the surface the results look impressive. In 2005, no fewer than 97.8% of students who sat GCSE exams passed with 61.2% of them getting grades A* to C. A level results the same year saw the 23rd consecutive increase to a whopping 96.2%.

However, there is very good reason to believe that these children are not passing exams because they have been schooled particularly well but because the exams themselves have become so much easier. According to a report released in 2005, some candidates who got an A grade at A level would only have been awarded a C or D as recently as 1988. A science GCSE is now a multiple choice test and GCSE examiners are told not to mark a paper down “solely because of the existence of an error”. A survey by the Russell Group carried out in 2004 found that “A survey of 100 academics…found that 90 of them believed that an A grade at A-level was worth less than it was 10 years ago.” When presented with the three propositions that A-Level standards were falling, modular A-Levels were easier to pass and examination papers are less demanding, one teacher respondedthat “As an A-Level teacher of some 16 years experience, I have to give a resounding Yes to each and every one of these hypotheses”. Faith in the rigour of exams and the worth of the qualification has been so badly shaken that, according to the report by Reform quoted above, 43% of 18-24 year olds think exams have got easier to pass.

Not surprisingly those who benefit from being so well rewarded for doing such a bad job are reluctant to see the gravy train hit the buffers. Take a look at Tony Blair’s pretty modest education reforms. Not only are teaching unions opposed but so are the Labour backbenchers who owe so much of their support to unions such as the National Union of Teachers and National Association of Head Teachers. Blocking every type of reform, these unions must be some of the most reactionary forces outside of Saudi Arabia. And it is the ill educated children who suffer.

This is not to lay the blame at the door of the rank and file teachers. They may well strike to get more money from the taxpayer and preserve their generous pensions but who wouldn’t in their situation? The syllabus wasn’t degraded by teachers but by ‘educationalists’ who believed that teaching was somehow oppressive to pupils and various socialist tinged governments who do not like the idea of failure. The fact that schools are such violent and anti social places was, again, not down to teachers but the parents who cannot bring their children up and the same socialist tinged governments who didn’t think that crime was something to be punished but ‘understood’ and ‘empathised’ with.

The blame for the abject failure of state education lies at the door of the government and teaching unions and their symbiotic relationship. Unions bank roll the Labour party and so, in government, Labour will do little to anger them. If it tries to enact necessary reforms, as we have seen recently, the unions will call in their support and scare enough Labour MPs into rebelling. By this simple mechanism any real reform of state education is still born and it is the children of the poor who suffer, the children whose parents can’t afford to send their children to public schools unlike the expensively educated offspring of the Labour elite.