Big changes to HS2 and education will prove a real test for Rishi Sunak

Rishi Sunak made two big economic announcements last week. One was scrapping the Manchester leg of HS2 and instead supposedly committing to a slew of other transport projects across the north. The second was a broadening of the A-level curriculum, an increase in the hours of teaching in sixth forms and the integration of vocational qualifications into the new “advanced British standard”, as he christened the new qualification for 18-year-olds.

I have a lot of sympathy. There was never a strong economic case for spending tens of billions on HS2 if the alternative was to spend a similar amount on smaller but crucial transport infrastructure. Your eyes may have glazed over as he ran through the list of projects he now wants to see go ahead — upgrading roads, increasing rail capacity and cutting times between Manchester, Liverpool, Sheffield, Bradford and Hull — but you’ll likely get a bigger bang for your buck spending £36 billion on those than on HS2. Or, to put it in economists’ speak, the benefit-cost ratio will be higher. Of course, it would have been better not to start from here, but he’s probably right. It’s brave to recognise when a cost is sunk and to stop pouring good money after bad.

We also know we need to reform the curriculum post-16. We have been stuck with an absurdly narrow set of A-levels for generations. Review after review has called for something more like what the prime minister has proposed, with maths and English taught to all and a broader set of subjects to be studied. We also are an outlier in how few teaching hours our sixth-formers get. I was rather less enamoured of the idea that vocational qualifications should be rolled into the same structure in an effort to net that chimera, “parity of esteem”.

So, a biggish tick from me? Well, yes. And no. Looked at in isolation, these were reasonable propositions, good for growth. Looked at in the broader context of UK policymaking, they were yet more of the same old failings. Policy by announcement, from the centre and with a complete lack of consistency.

The lack of a consistency and certainty on HS2 has been evident for all to see. On the education front, it was perhaps even more extraordinary that Sunak appeared to announce the demise of T-levels, the newest-version vocational qualifications aimed at 16 to 19-year-olds, before they have been even half rolled out. Whatever their pros and cons, they are the newest, shiniest kids on the vocational qualifications block.

We know we have a problem with further, adult and vocational education in this country. I don’t know exactly what the answer is to that, but I do know two things: big cuts to funding, as implemented over the 2010s, doesn’t look wise; changing the system of delivery and the qualification structure at least once a decade, decade after decade, is probably even worse — and not merely tinkering but uprooting the entire system time and time and time again.

I’ve just made a programme for BBC Radio 4 (on tonight at 8pm) about growth and how to get more of it. We know the basic recipe — higher levels of government investment, better vocational education, tax reform, reform of the planning system, easier trade especially with the European Union. That sort of thing. What I hadn’t expected to come out so strongly from pretty much every person I interviewed, be they business people, academics or policymakers, was also a strong belief that basic levels of consistency in economic policy and institutions were crucial. The CBI was more concerned about stability in corporation tax policy than the rate of tax. Education experts more concerned about avoiding continual upheaval than precise design of the system. Businesses were adapting to Brexit, at a cost, but had suffered years of blight because they had no idea of where policy would go from one moment to the next. The planning system is a huge problem and it’s the complete lack of any certainty over costs and timescales that is especially damaging. Our low levels of public investment were explained, by a former permanent secretary to the Treasury, by the short-term focus of politicians and the electorate, who always prefer the jam to arrive today.

Paradoxically, that lack of focus on the future can involve too little change as well as too much: too much, as we’ve seen in vacillating over investment projects, forever reforming vocational education and changing the direction of tax policy twice a year; too little in areas where the short-term cost is high for the few even if the long-term benefits are big for the many.

The obvious issue here is planning. The benefits of making it easier and cheaper to build roads, rail, housing and other infrastructure are huge. But the costs to some voters have resulted in decades of stasis in a policy that we know could yield economic growth. Tax reforms that would hurt some but make the system overall more growth-friendly are also eschewed. Cut stamp duty and raise council tax, even up tax treatment of earnings and other forms of income, for example. Instead, we get policy bouncing all over the place with no sense of direction. To Sunak’s credit, reform of the A-level system has been something most of his predecessors knew was needed but were too timid to make happen.

I’ve written here before about the costs of the way we have two big fiscal events every year in which policy announcement is layered upon policy announcement. Party conference speeches contain the same risks. Too many announcements, not enough evident strategy, no basis for any belief that today’s headline will even be remembered tomorrow, let alone implemented.

This article was first published in The Times and is reproduced here with kind permission.