Ben Chu Profile picture
12 May, 21 tweets, 7 min read
Does Boris Johnson’s adult skills "revolution" really add up?

🪛📚👴💵👨‍🏫

A thread…1/21
...The rhetoric is certainly there from the PM.

And we hear about legislation for a “lifetime skills guarantee” in the Queen’s Speech and assume the action is following.

But is it?...2/21

gov.uk/government/new…
...First, it’s worth stressing why this matters.

The OECD estimates around 9m adults in England have low basic skills, with 5 million of them in work...3/21

oecd-ilibrary.org/education/rais…
...OECD research has also pointed to an alarmingly weak level of basic skills among young adults in this country relative to other countries....4/21 oecd.org/unitedkingdom/…
...It’s pretty obvious that weak basic skills is one of the drivers of our relative national productivity weakness.

Work by @ProBonoEcon suggests we could raise our national productivity by around 1% by tackling low basic numeracy...5/21

probonoeconomics.com/Handlers/Downl…
...Low-skilled workers are also concentrated in small firms and are usually in lower wage and less secure jobs.

So it’s also a driver of our national inequality problem.

So if you want to level up Britain, you *have* to sort out adult skills...6/21

oecd.org/education/boos…
...So why have we got such a problem?

Part of the blame probably should be put on New Labour’s overriding focus on increasing the number of people going to university & relative neglect of the half of young people who did not...7/21
...Yet, more recently, the prime culprit has been the Coalition and the Conservatives after 2010, who presided over severe cuts to adult education services in the decade of austerity.

Spending on traditional adult education was cut in *half* in real terms...8/21
...& the total number of adult learners collapsed from 3.2m to 2.1m.

Note too that the cuts to further education were much more extreme than to other parts of the education system...9/21
...A new apprenticeship system introduced in 2017, funded by a levy on employers, was a disaster, leading to a fall in the number of apprenticeship starts and a decline in overall employer investment...10/
...The new system was supposed to create 3 million new apprenticeship starts between 2015 and 2020.

It’s produced just 2 million.

"Failed on every measure" is the verdict of @CIPD...11/21
cipd.co.uk/about/media/pr…
...So is the Johnson government putting all this right?

Experts are sceptical.

Ministers are introducing a new flexible loan scheme for adult learners - yet the overall spending envelope for adult skills implies *continued* austerity...12/21
...Rishi Sunak’s £2.5bn “National Skills Fund” for the current parliament, announced at the 2020 Budget, might sound impressive but it implies only around £625m extra per year for four years...13/21
...The @TheIFS estimates that this would only reverse about a *third* of the cuts to adult education spending since 2010...14/21 ifs.org.uk/publications/1…
...And we can see the *consequences* of that lack of funding.

The government has restored the entitlement to free A-level-equivalent courses for adults without qualifications at that level but this is restricted to courses in “high priority” subjects...15/21
...the independent 2019 Augar Review adviser scrapping the “equivalent or lower qualification” (ELQ) rules, which restricts access to public financing for study for those who already have some qualifications at a certain level...16/21
gov.uk/government/pub…...
...Yet the recent skills white paper only said the government would “consult further” on this.

Does that really amount to a "revolution"?

Bear in mind that the IFS estimates that scrapping the ELQ might cost around £300m per cohort...17/21
...“The government has kicked the can down the road” is the verdict of Ben Waltmann of the IFS.

The view of analysts is that this is, as it stands, only a pretty sketchy and financially under-powered adult skills reform programme...18/21
...A final note on why this this matters *politically*.

Adult skills have traditionally been neglected by politicians (of all stripes) because it's less sexy than big infrastructure projects & less popular than more money for public services such as health....19/21
...The economic pay-offs of this kind of spending is gradual and long term – with any productivity and prosperity benefits likely falling outside the normal political cycle...20/21
But that's what makes it such a key test of a government's seriousness.

Delivery on adult skills (and funding) will be perhaps the acid test of Boris Johnson’s oft-repeated claims to be levelling up the UK.

More for @indypremium 👇

ENDS

independent.co.uk/independentpre…

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More from @BenChu_

14 May
European official data (Eurostat) and UK official data (ONS) have shown a somewhat different picture on post-Brexit trade patterns.

🚄🚚🇬🇧🇪🇺

What's going on?

A thread...1/11
...the Eurostat data shows a significantly larger fall in UK to EU goods exports than the ONS data

(Note: this comparison doesn't include March - Eurostat data for that month isn't out yet though ONS's is)...3/11

... Image
Read 12 tweets
13 May
The idea stronger growth this year means Sunak can cancel future tax rises seems confused to me - or at least an incomplete analysis.

Brief thread 🧵

Assuming no public spending changes, when it comes to pressure for tax rises to balance spending with tax revenues...
....what matters is the projected structural deficit *after* the recovery is complete.

And what determines *that* will be the scale of long-term scarring to GDP (i.e the level of GDP relative to pre-crisis expectations)...

The Bank is currently projecting 1.25% GDP scarring... Image
....A faster recovery to a lower (scarred) path of GDP doesn't change the size of the post crisis structural deficit & longer term pressure for tax rises.

For that to happen you need projections of lower scarring...
Read 6 tweets
12 May
BREAKING: US consumer price inflation for April comes in at 4.2% y/y - above average estimate of economists polled by Reuters of 3.6%

Core inflation 3% y/y vs estimate of 2.3%
👇
....Highest rate of inflation in US seen since Sep 2008...
...in response, 10 year US Treasury yields up a couple of basis points to 1.645%...

dollar index spikes...

Suggest markets pricing in possibility of Fed rate hike sooner than expected...
Read 7 tweets
7 May
In the wake of the Bank of England’s latest forecasts the media is full of talk of an economic “boom”.

💥💵📈

One headline this morning even calls it a *supersonic* boom.

What to make of that kind of talk?

A thread…🧵
...It’s true GDP growth of 7.25%, the Bank's latest forecast for 2021, would be the largest calendar year expansion since 1941 when Britain was still scaling up production to fight the Nazi menace...2/
...But, as we shouldn’t need reminding, this follows the worst year for the economy in three centuries in 2020...3/
Read 17 tweets
6 May
As expected, no change in Bank of England rates or QE target - but MPC has decided to slow the rate of its asset purchases so they stretch out to the end of the year

bankofengland.co.uk/-/media/boe/fi…
MPC now sees UK economy running 0.5% of GDP above capacity by Q2 2022 (up from 0.25% previously) - a hawkish signal
Sterling up in wake of MPC forecast - suggests a hawkish interpretation
Read 6 tweets
5 May
Biden Administration *is* backing vaccine patent waivers

Announcement here 👇
..It's a bold move - and many of the experts I spoke to last week were doubtful it would happen.

But will it actually help overcome the pandemic?

Thread here lays out the arguments for and against 👇

...Vaccine makers' shares have taken a plunge in the wake of the announcement
Read 4 tweets

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