How can the Scots Tories capitalise on their success and win power at Holyrood?

How can the Scots Tories capitalise on their success and win power at Holyrood?

by Tom Miers
article from Tuesday 19, February, 2019

SCOTLAND’S CRITICAL WEAKNESS lies in its public services. In particular the evidence from international studies shows that Scottish healthcare and schools underperform by Western European standards. 

This has a profound impact on society. The weakest are the worst affected. Too many of our fellow citizens suffer from poor health outcomes and low educational standards. And the whole of Scotland is held back by the divisions this causes and the drag it places on economic growth. Educational attainment is a key driver of prosperity in developed economies such as ours.

Scotland is not unique in this malaise. All of the UK suffers from weak public services. But there are two critical differences between Scotland and England in this respect. First, Scotland enjoys much higher levels of public spending than England, thanks to the Union Dividend that ensures a spending premium north of the border. 

Second, after a long, painful but ambitious series of reforms south of the border, English education (and also to a certain extent healthcare) have started to improve in recent years. The available evidence shows that schooling in many parts of England is now superior to Scotland’s, despite the lower spend. Our neighbours are on an upward trend.

We in Scotland have started to be affected by the paralysis caused by our constitutional obsessions. Politicians at Holyrood have not been willing to grasp the nettle of public sector reform because of the risk of alienating voters on the existential questions of identity. The public spending cushion has encouraged this complacency by allowing the Scottish Government to stave off the worst effects of failure by throwing money at the problem. Spending per school pupil, for instance, is 11 per cent higher here than south of the border.

This offers an opportunity for Conservatives borne of necessity. It is their duty to Scots to offer alternatives to a failing system. And in doing so they can break beyond the electoral limits of opposition to nationalism. A compelling agenda on public services can win over sensible mainstream Scots whose primary interest is not unionism or hard-line nationalism but a successful Scottish society.

What is the right approach on health and education?

One of the enduring problems that plagues debate about the welfare state in Britain is one of perception. For the most part the argument is stuck in a false dichotomy, between state-run public services and ‘American’ style private provision. The simplistic assumption is that we in the UK are part of a ‘European’ group of countries that enjoy proper public services run equitably by the state.

This is far from the truth. In fact many European countries run systems that are largely private, with the state’s role limited to ensuring equity and affordability. Meanwhile in the US, while healthcare is largely privately run (though again often publicly funded), education is run along the same centralised lines as our state-run model.

The British media is plagued by articles blindly praising the NHS as if everybody else wanted to follow our lead. Discussion on education presents a binary choice between public and private. We seem oblivious to the fact that our cosy social democratic continental neighbours typically do not have state run health or education services in the way that we understand them. Instead they achieve both far higher standards and equality using a mix of private and public delivery.

This indeed was the inspiration for the Major / Blair / Cameron reforms – not the US model (as the left would have us believe) but fluffy Scandinavia and the Low countries. Even the SNP is now proposing a watered-down version of the same agenda in schools.

But it is not enough to copy the English reforms. Instead, I would suggest a much more ambitious approach by Scots Tories that, in emulating the best models of northern European mixed provision, is both politically centrist and also draws on authentic conservative principles. In other words a consciously ‘Christian Democrat’ approach.

One of the crucial features of social welfare systems in Northern Europe is that many direct taxes are actually lower than in the UK, while spending on public services is higher. How is this possible? The gap is made up by compulsory contributions to personalised health and social security accounts. So while the government ensures equity between rich and poor, individual citizens retain a sense of ownership over the their contributions, because much of the money that they spend on health, pensions and other forms of social insurance is held in individual accounts. These in turn fund a variety of different providers that are chosen by the taxpayer (or an intermediary such as their employer).

This is why the great hostility that many in the UK feel towards higher taxation is not felt to the same extent on the continent. Instead of paying general taxes to an unaccountable and inefficient bureaucracy, our neighbours contribute to their own provision. They are therefore willing to pay more.

Scottish Conservatives could offer a similar grand bargain. Higher spending on public services in return for fundamental reform. A radical programme anchored firmly in the centre ground of politics. Impeccable European social democratic credentials underpinned by tory principles of mixed provision and a trust in the individual, markets and the big society.

For health, education and social security work so much better in Germany and the Low Countries not just because of more generous funding, but because the providers of public services are often independent of central government. They are run by a mix of institutions, some private, some municipal, some mutual and some charitable. They compete with each other, both by example and by seeking customers. The public benefit from this variety by being able to choose the best provider (often using intermediaries such as mutuals or employers who can deploy economies of scale and specialist expertise to get the best deal). Meanwhile the government regulates the system to ensure equity and the same level of service across the board. The results speak for themselves: higher quality services across the board, less social deprivation, and higher economic productivity.

The Scots Tories would need to think carefully which countries’ models to emulate, and how reform could be introduced with a minimum of disruption to existing institutions within the devolution settlement. But the transition in Scotland would be supported by the fact that public spending is already so much higher than in England. Adopting a ‘Christian Democrat’ European style approach to public services makes sense both politically and in terms of outcomes.

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