The single most important factor determining Britain's long-term growth is the education that the next generation receives. Whether the Bank of England raises interest rates by a smidgen now or next year is all but irrelevant; education policy is economic policy for the long term. And here is where Britain fails. If your parents are poor, your chances of doing well in school are shockingly low. Around one in five pupils in England are eligible for free school meals—a standard measure of deprivation. But provisional results for 2009 show that 18.5 per cent of pupils in this category did not obtain five or more GCSEs (including English and maths). In a speech to Barnardo's two years ago, Michael Gove described the educational gulf between children from average and poor backgrounds as "tragic." It is—both for the children concerned, and for the rest of us. People who do badly at school are less likely to prosper. They generally pay less in tax, and receive more in benefits. And their children do less well at school, so the cycle of intergenerational poverty and economic underperformance continues. That is costly to well-educated, affluent people who make up Prospect's readership. Even if you care only about yourself, failing children from poor backgrounds is a very bad idea. The two coalition parties agree about the issue—and on the solution. Both had manifesto commitments for a "pupil premium," which also appears in the coalition agreement. The idea is that students whose backgrounds predict poor educational outcomes would be given increased funding. The Liberal Democrat manifesto identified £2.5bn of cuts to fund it, and in office—where money is always easier to find than in opposition—it seems clear that they would have funded it much more handsomely. The Conservatives, in contrast, were vague on the costings. This autumn, in the comprehensive spending review, we will see whether the parties deliver. Fortunately, Michael Gove, the pupil premium's strongest advocate in the Conservative party, is the secretary of state for education. But over the last two years he has had virtually no support from his own party on this point. His view of Conservative education policy was that "when it comes to helping the poorest we will stop at nothing." But Chancellor George Osborne has never made this issue a priority. On the Lib Dem side the policy is most strongly associated with David Laws, who is as passionate an advocate of the pupil premium as Gove. But since Laws was replaced as chief secretary to the treasury by Danny Alexander, it remains to be seen whether the treasury will deliver the money the policy needs. Make no mistake—the pupil premium will be expensive. Schools in places like Hackney are already much better funded than those in more affluent areas, yet their children still underperform. Since this result is consistent across areas with children from similar socio-economic backgrounds, innovations such as academies and free schools are not going to be the answer in themselves. If we really want a child's educational outcome to be no longer predicted by their parents' income and background, we need to hugely increase the amount we spend on educating the children of the poor. Realistically, we need those schools where pupils will overwhelmingly qualify for the full premium to halve class sizes. We need them to be able to attract the best teachers—including brilliant ones who are not in the profession at present—and that means raising salaries by 50 per cent. Since salaries dominate budgets, going from one teacher to two, and adding 50 per cent to their pay, triples the cost of education. So we need to be thinking of a pupil premium that is not a small percentage of current funding, but a multiple of current funding. Of course, this cannot be done overnight. But the coalition is doing well at identifying savings. The economy is doing a bit better than expected, and interest rates remain low, reducing debt-servicing costs. Gove has said that the educational failure of children from poor backgrounds is "an affront to our national conscience." This is his chance to put his rhetoric into action—and Alexander's to prove that the Liberal Democrats are a progressive party when faced with tough choices in government, as well as in the luxury of opposition. For the coalition to deliver, we need the comprehensive spending review to provide £2.5bn for the pupil premium in the first year, rising to as much as £10bn by the end of the parliament. And it needs to be from a proper baseline—it is no good cutting the schools budget and then adding a bit back and saying "here is a pupil premium." This autumn we will learn whether the cuts are the ideological, old-fashioned Tory and Gladstonian Liberal sort, that seek to pare back the state come what may, or whether they are ones that will create space for genuinely progressive policies that have the potential to improve Britain's long-term economic trajectory.
