GAYE: incidental charity

27 05 2011

I was very pleased to read that David Cameron is supporting the roll out of charitable donations via PAYE; I call it “Give as you earn.”  I’ve been a supporter of this idea for several years now as I find the main objection to charity isn’t the amounts involved, but the hassle (opportunity cost) of signing up.  People have money, but they don’t have time.  I am of the general opinion that instead of bewailing people’s lack of consideration for one another, they should focus on how to get the most out of people the way they already are.  People are busy, they don’t necessarily want to know, they don’t want to be stopped in the street.  But they do want to help, if it’s not too much trouble.  Some might find that cynical, but I don’t see the problem with it- there are ways of leveraging that human nature to the advantage of millions of people in need.

Equally, I’m sure that for many people, giving to charity seems like it won’t achieve much.  The Oxfam “£2/month or whatever you can” ads certainly had a strong impact on me as a child, although whether that was the awesome music is another question.  Nonetheless, it’s getting people to buy in to the idea that if we all just give a little, just a little, then on aggregate that’s a huge difference.

I would like to see by law, in every PAYE contract, a tick box granting 1% of your salary (or 0.5%) to a standard group or a rotating group of 5 star charities each month (or a given charity of your choice).   1% of net income (i.e. after tax) is, for reference, £10/month to someone earning £1000/month.  In 2010 UK GDP was £1474bn; 1% of that would be £14.7bn/year.

Charities received £52bn in 2009/2010 [source – The UK charitable sector: a snapshot,], so we’re talking about increasing their income by almost 30%.  So 1% gives 30%, and all it would require is a change to employee contract law to include a tick box.

For reference, I’m already signed up to a scheme of this kind, via Bell Fundraising.  In order to run a scheme, a company needs to have an agreement with a PGA (Payroll Giving Agency), there are 3 main PGAs who all offer a similar service, CAF, Charities Trust and Charitable Giving.  If you’re reading this whether it’s as an employer or employee, I sincerely ask that you at least consider either signing on to this or a similar scheme, or emailing your colleagues and managers and asking that they do so.

This is a small change that makes a big difference, we’re talking about 1% less for you and me meaning 30% more for those in need.  As a Liberal, forcing people to give isn’t charity, it’s theft; but not including the option to give seems like indifference to the point of cruelty.

To be honest we’ll sack you

23 05 2011

I hesitate before writing this.  I don’t wish to convey, in the least, that I imagine a utopian society where lying is acceptable, encouraged or seen as inevitable.  It isn’t.  I also think we live in a society that is distinctly not a utopia.  To improve the world, you have to work with systems that are in place.  Societal norms must be used even as they are not accepted and work is done to change them.

It aggravates me to hear people complain about politicians lying to them, or if not lying, then being less than 100% honest about their views, when the merest slip of the tongue, no matter how valid, honest or accurate the opinion, will get them fired (or much flak to that effect).

I think people need to perhaps consider that it is their attitudes that, in effect force politicians to be less than wholesome with the truth.  I challenge anyone reading this to imagine a politician being totally honest and keeping their job.  To not evade a question, to give complete answers, to share both the negative and positive sides of their policies and political positions, and retain even a hope of re-election.

Would you trust a politician who lacked the sense to conceal elements of the truth given the current state of our society, the bias of the media and the unwillingness of people to do read behind the headlines?  I wouldn’t vote for someone who was so naive.  Would you?

Is it then the politicians who can’t be trusted, or we who in effect, with our vote, are asking them “please lie to us”?


Difficulties with evidence based policy

20 04 2011

I have been considering lately a significant barrier to those of us who strive for non-partisan, evidence-based decision making.  To wit: who do you believe?  Increasingly there is a survey, think-tank, nth study, countless headlines, magazines and blogs on either (or every) side of a given position.  As such, is it the case that all decisions must be ideologically motivated?  Not in the sense that they are made without reviewing the evidence, but more in the sense that the evidence reviewed is already biased.

As I have mentioned before, I think that independent bodies need to exist to provide neutral information to both the government and the public.  The leaders of these bodies need to have full bios providing insight in to their affiliations.  Perhaps also with these positions only being approved by cross-party committee approval.

I would very much like to see a source for information that has undergone serious efforts to vet it for neutrality, as well as providing (by law) all sources to be provided, in full.  Can you imagine a news site that was forced to quote officials in full?  Or a rating system for polls and surveys that includes (as part of its rating system): the breadth of the survey in terms of numbers, demographics, etc and also the historical bias of the originator of that survey.

I think people could have more faith in the information they receive if the different sources of information were striving for this “substantial” rating- where an A grade would mean they had policies in place and safeguards to ensure neutrality, that all their sources were provided, and that those sources were themselves A grade in quality & neutrality.

The trouble with education

9 12 2010

I guess it was inevitable that I’d have to write on this at some point, what with the furore over it.  It’s not something I was keen to write, since it’s closer to personal belief and opinion than a factual basis- thus open to potentially productive, but ultimately undecidable.  Equally, it’s an issue that lacks clearly defined boundaries, and many other factors come into play that are not directly involved (e.g. government spending on education compared to healthcare, military expenditure)

So let’s start with the most important point- I think education is the single most important public service.  I realise this is debatable, but as I said, this is an opinion piece.  I believe that education provides technological (and philosophical/sociological/psychological/ethical) advancement, greater societal cohesion, higher social mobility and increased happiness.  I would rather have these things at the cost of other areas of public spending, since I think it comes first.
Education is something I have always been very passionate about.  I used to think I wanted to be PM, now I think I’d rather be Minister for Education (although maybe not in this government!)  I think that the only real solution to humanity’s problems is better education.   I think educating people is a slow and gradual process, but I don’t see how we are to progress if people are not taught, early, the skills they need to grow, to better themselves, and to provide for themselves and others.

I hope that makes my position clear, as the last thing I’d want to hear from this is that I think education “isn’t important” or that some people “shouldn’t have it.”  I’d rather everyone as much of it as they could manage, and then some more- that would be ideal.

I’m an idealist, because I think you need to have ideals to aspire to, but I’m also a realist and a student of economics.  Economics is the study of allocation of limited resources- that’s the reality.  We, as a society, have limited resources and thus are forced to make trade offs between various “ideal” outcomes.  We thus elect representatives to choose a compromise on our behalf.

As I said, for the purposes of this piece I won’t get into which outcomes deserve more funding, but will talk about education as an area on its own.  It has costs and it has to be paid for.

It is clear that education provides a benefit both to the one educated and society as a whole.  Therefore it makes sense for both parties to contribute.  As an individual, you benefit from education via the skills & knowledge to engage effectively with society, increased employability and a sense of self-worth/personal achievement.  Of these, two are worth society’s investment, and one is not.  It’s true that if more people in society had high self worth society would almost certainly be happier and more cohesive.  On the other hand, this would also justify investment in any leisure activity that granted a sense of achievement.

So- the counter arguments.

People will say that people have the “right” to education.  As I explained in my article on the subject, I believe that what we call “rights” are privileges we collectively grant one another.  So how much education should society entitle people to?


“Education should be free!” <=> All education should have no financial cost to the learner.
So any amount of education is free (save only opportunity cost of learning as opposed to other options).
So the potential cost of education is infinite.


So the conclusion is that the premise (all education) must be incorrect.  Here’s my position:

“Some education should be free.”

The question then becomes: how much?

People need a certain level of education to fulfil their role in society- they need to be able to understand their responsibilities & entitlements as citizens.  Thus they need education in our language, in our legal system, our system of commerce, our system of government and not to mention the various career paths available to them and what will be useful qualifications to pursue to achieve those career goals.
This leads to my first criticism of our current education system- it does not teach citizens these fundamentals (as a prerequisite).  We learn mathematics & english, but not basic finance or law.  We expect people to follow the law and to engage in our economy, but we don’t perforce teach them how these things work?  I realise both are complex topics in their own right, but so is maths!  Career guidance is offered, but it should be compulsory and of much higher priority.  If people leave school with no idea of what career they wish to pursue, I think their school has not done them justice.

One of the most important things I learned from my teachers was he believed the purpose of school was to teach pupils how to learn.  That it was practice at the skill of learning- giving us the tools we needed to learn other things.  This then, I believe, is the second fundamental item to be delivered by education- the tools of learning- research, comprehension, extrapolation, summary, reasoning, argument etc.

Having delivered these basics, a given pupil is then capable of performing what society demands of them, as well as being equipped to learn other things (such as what their career will require).  These basics I believe should be covered to GCSE, at which point a diversification into academic/vocational/hybrid studies should be offered.  At 18 a given pupil should be equipped to enter the workforce full time.

Some professions, however, will always require more training than can be provided by 18.  Equally, within every discipline is the need for specialists, for expertise.  As such, higher education is an important stepping stone to achieving a certain standing in that field.  Society needs experts; it’s willing to pay for them.  How to know what society wants though?  I’d argue a review of how many graduates of various degrees gained employment in their chosen profession each year.  If a degree gets you a job in a relevant profession, it’s clear that society needs candidates with those degrees.  If people take a degree, whether it’s viewed as mickey mouse or not, and it means they are (as a statistical sample) no more employable than any other degree candidate, I would argue that is society’s way of saying “we don’t need this degree.”  This is an example of market forces.  Part of the problem with degree funding is that whilst market forces apply, they don’t affect the price of the degree.  Some degrees, whether by subject or by institution, are worth more to employers, but degrees all cost the same (on a per year basis).  Now I’m certainly not saying that a degree in a much-sought-after subject from a top university should cost more, but on the contrary, it is in those areas that more funding should be made available so that students are encouraged to study degrees that society requires.  Trends on degree prices should be available on UCAS so that potential students can see which degrees are becoming more (or less) valuable to employers.

One of my latest liberal ideas is that “people are free, but things are not.”  To paraphrase from open source: I believe people deserve to be free (as in freedom), they don’t deserve to have things for free (as in beer).
I believe that people should be free to study whatever they like.  I don’t believe that studying whatever you like should be free.  Ultimately, people need to accept the consequences of their actions- the choices you make have a cost that you must be willing to pay if you make that choice.  I believe that the government has a duty to ensure people have the knowledge to make informed choices, people have a duty to pay for the things they choose.  If a given degree will not improve someone’s chances at their chosen career, should they not pay for it themselves?  I don’t understand the logic that suggests that society should finance students studying anything they fancy with no thought to its use to society.  I don’t expect altruism- the usefulness of things to society has a direct link to how much society will pay for them.

“Massive debts will discourage students from attending university.”

Better to say “some” students will be discouraged- a massive debt isn’t a massive issue if, for example:

a) the repayment terms on it are highly favourable despite its size, you don’t have to repay it if you don’t achieve the higher income you were aspiring for & it doesn’t affect your ability to get further credit elsewhere or

b) it’s only massive relative to your current income, not relative to say, the income of graduates in your field

Certainly costs (financed by debt in this case) are a discouragement, but if someone does not believe that the cost of their degree is worth paying, then perhaps they should think twice before pursuing it?  I don’t think that putting a cost on something is a bad thing, unless that cost is not commensurate with that thing’s value.

I’ve heard a counter-argument that pupils from disadvantaged backgrounds are more debt averse than their peers.  This is then used to argue against higher fees.  Surely the argument should be used to validate greater investment in economic learning for pupils from such backgrounds?

If students were taught about debt, what it is, what it means, then perhaps they’d not see it as such a problem.  Debt is not a problem a priori.  Debt aversion a priori is a problem, since debt is a necessary part of our economy.  When buying a house, the price is generally much higher than the income or capital of a given buyer, so they borrow in order to finance the purchase.  This isn’t a problem if their income (or expected future income) validates their investment.  Indeed it may well be a good investment if house prices increase.  It’s ironic that students are now marching about being “saddled” with debt, when so many people were happily saddling themselves with debts that were actually a problem during the housing crisis.  Why were they a problem?  Even taking house price bubbles aside, or people living beyond their means, the real reason these loans became a massive problem was because the terms of the contracts were very unfavourable (e.g. very high rates of interest, lose your home if you default on a repayment etc.)  If those mortgages had had a clause saying “repayments are always a percentage of your income” then foreclosure wouldn’t have been an issue.  A better understanding of finance would (one can hope) allow more informed decision making with regards to debt.

Taking reforms to current education aside, currently students who have gone through school to A2 have a choice- they can choose to enter the workforce, progressing their career through developing experience and making contacts or they can choose to pursue higher education.  I think it is unfortunate that in recent years the former option has been given such short thrift.  The recurring theme from graduates in today’s job market is that employers are looking for valid experience more than “just” a degree- because so many people have one.  The drive for more university students has diluted the value of a degree (think of it as degree inflation), which is bad enough, but what’s worse is its effect on the employability of non-degree pupils.  A degree is increasingly pre-requisite for low-middle range administrative and clerical jobs- how is that a good return on investment?  Equally valid- many professions now offer career paths & training that do not require a degree- such as becoming a solicitor.  It is a shame these alternate routes are not given similar pride of place in discussions of education.  These days it is increasingly the case that candidates “need” a degree, but I argue that such is to conflate the idea of a degree with a “basic” education.

So in summary (tl;dr)- not all education should be free, not all debt is a problem & not all careers require a degree.  Society should subsidise education that returns value to society; people should be willing to accept the costs of their choices.  The introduction of a link between employability and the cost of education, whether higher or otherwise, should allow the value to society to subsidise the cost to the individual.

The problem with education is that people are asking, “How can make this [broken] system affordable?” instead of asking “what system would be [most] worth paying for?”

Wrongs & Rights

3 11 2010

I’m going to preface this article by explaining my thoughts on “rights” (as in ECHR).  I think it is unfortunate (but perhaps necessary in practice), that people refer to what are, in my mind, privileges that citizens of an ethical society grant to one another as “rights.”  Not because they aren’t right (as in right and wrong) to have, but rather because the language of “rights” is one of intrinsic, natural, “god-given” privilege.  Something that it would be wrong to deny a human being.

When I say they might need to be necessary in practice is because the defence of civil liberties is an ongoing and fundamental struggle.  To treat privileges as rights is to make them more resistant to encroachment, our “rights” are bastions of liberty, designed to keep people free.   When I say it’s unfortunate, it’s because it’s not true.  What we call “rights” are privileges we grant one another, by choice, as part of our social contract.  We have agreed (however implicitly) as a society, that members of that society deserve certain privileges; that to deny members of society these privileges  is to threaten society.  Without free speech, our society would not be safe.  Without the privilege of a fair trial, our society would not be safe.  Our society rests on the freedom of its citizens- from the power of government, and from one another.

We live in a representative democracy- people have a vote by which they influence the choice of their leaders, who act as representatives of the people when making laws for society (taking cynicism aside for the moment).  As such, people consent implicitly to be held accountable to the body of laws of that society.  We get our vote, we get our privileges and in return we follow the laws enacted by this mutually “agreed” body.

Part of the laws we have mutually agreed to be bound by include penalties for members of society who transgress those laws.  Some of those penalties include restrictions of privilege- such as freedom of movement.  We have agreed that some actions, if convicted by due process, deserve the sentence of temporary removal from society- prison.

Prisoners have had their rights (mistakes in the system aside for the moment)- they have had habeas corpus, the right to a fair trial, trial by jury, to not be tortured and so on.  They have the right of appeal, the right to privacy and security of person.  Nonetheless, the rule of law has, by due process, confined them to segregation, the intent of which is to prevent them from negatively interfering with law-abiding member of society, whose privileges they have infringed on.

Prisoners do not deserve the vote for two reasons-

1. They are separated from us to keep us safe from them- the vote gives them influence over our society, which they have been removed from by warrant of their actions.  They do not deserve influence over a society they are not currently part of- similar to how citizens of one country cannot vote in another.

2. Voting, like freedom of movement, is a privilege we grant one another as part of our social contact.  If you break that contract, why should you retain all of your privileges?  Punishment is a necessary disincentive to law breaking.


Taking the argument of prisoners to one side for the moment, and in light of the actual ruling of the Court (surprisingly not linked to in any of the news sites I’ve seen this discussed on </s>), it is pretty clear that argument (2) applies to all felons, regardless of imprisonment.  The Court took issue with the lack of proportionality of punishment (disenfranchisement), with the severity of the crime causing imprisonment (or in the original case, the reason for continuing detainment).  The amusing implication (for me), is that people are up in arms about prisoners voting, whilst I would argue that criminals should be denied the right to vote- in prison or not.

Debt costs money and the money debt costs, costs more money

20 10 2010

Cllr. Kitkat has written a post on his blog today entitled “Not worth the panic: This deficit is manageable,” in which he argues, in essence, that since on a couple of specific occasions the UK national debt (as % of GDP) was higher than today, that it’s nothing to “panic” over.  Since he prefaces his argument by implying that comparing figures “arbitrarily” can be misleading, I think his choice of example is somewhat ironic: relating our current deficit to that after two world wars isn’t really an appropriate comparison. I certainly agree we shouldn’t panic- but we should be taking action.

His other point is about interest payments- pointing out that the difference is that we have longer repayment terms than say, Spain.  This misses an important point- the longer we take to pay off our debt, the more the cumulative interest is that we will have to pay in addition.  It is misleading to suggest that if we pay our debt off over a longer time that this will cost the same.

To illustrate: currently, as Jason pointed out, the UK national debt is 71% of GDP, that is to say: one trillion pounds, and he quotes interest rates of “between 3% and 4%”.  Calling that 3.5%, we will be paying £35bn in interest this year.  Assuming interest rates stay the same (which I will expand on in my final point), the interest we would pay solely on the interest generated from the previous year would be £1.25bn.  So just because we can pay our debt over a longer period, doesn’t mean we should.

Finally, the entire argument is predicated on “the key issue with debt”- interest rates.  If they stay at their current levels then, ok, we’ll be paying off the equivalent of our education budget in interest each year, but perhaps that’s “manageable” in some people’s opinions (read: not mine).  However this is not a given- the interest rate on our debt has gone down recently as the money markets believe the government is making an effort to reduce the deficit.  Less fervent measures in this regard could cause the interest rate to skyrocket (EDIT: to illustrate: each 0.1% additional rate of interest is £1bn in interest per year, this means that any new bonds issued will be much more expensive for the government.  The government must perforce raise new debt because we are in deficit).  Equally, the current rates of interest on government gilts are being held down by the Bank of England buying them at cost (quantative easing), however this very policy (printing money to pay for debt) will inevitably cause inflation to rise.

The problem with inflation, is that it devalues the value of bonds, people will sell bonds, leading to higher interest rates on bonds and higher debt interest payments. If investors see inflation is getting out of control, people will not want to hold bonds. Foreign investors will sell their securities and this will cause a devaluation in the currency – Tejvan Pettinger

Ironically, Jason’s analogy about starving the family to pay the mortgage (whilst grossly inaccurate as I hope I’ve explained), is nonetheless an appropriate reason to pay the deficit off quickly- I’d rather tighten my belt than lose my home.  Wouldn’t you?

Points for recognising the inverse reference in the title!

[EDIT – For clarification:  inflation causes the future value of bonds to decrease in real terms.  As such, investors do not wish to hold them as they will take a loss.  They sell them.  In response, in order to finance itself, the government must issue new bonds at a higher rate of interest in order to encourage people to buy them.  This then increases the amount the government must pay on these “new” bonds.  Feel free to correct me if this is a misinterpretation].