Patrick McLoughlin and Michael Gove are competent and well-thought-of Secretaries of State. As Conservatives, they presumably assert from time to time generalities about the virtues of competition in free markets. So why are both signed up to policies which award long-term monopolies?
Mr McLoughlin has inherited the West Coast line problem. Richard Branson is currently seeking judicial review of the decision to award the exclusive long-distance franchise to First Group. The question we ought to be asking is not who should get this lengthy contract, but why such contracts are awarded anyway. Mr Branson does not bid for an exclusive right for his airline to fly to New York, but has to compete for limited landing slots with other airlines. So why can we not have more than one company offering trains from London to Glasgow? There is no technical reason. There is some limited competition between Virgin and London Midland on part of the West Coast line, and similar choice between First Hull Trains, East Coast and Grand Central between some destinations on the line to Edinburgh. But there could be much more such competition, with the promise of innovation and greater choice for the consumer, if both Virgin and First Group – and other possible providers – could compete via a more liberal track access policy. Failing a more thorough privatisation of the rail network, surely this is worth trying?
If Patrick McLoughlin has inherited his franchise system, Michael Gove is creating one all by himself with the proposal to offer a long-term monopoly of his new ‘English baccalaureate’ (surely a nonsense title in international terms, incidentally) to one exam board. Clearly Mr Gove has been hoodwinked by his civil servants into believing the story that competition between exam boards has driven down standards, when the reason for this decline is the persistent interference of governments and a regulatory system that forced boards to set grade boundaries within narrow statistical tolerances determined by teacher predictions, student intake and other highly debatable indicators which gradually drift upwards over time.
Before governments started intervening so closely in schools examinations back in the 1980s, competition between boards was uncontentious and often highly creative, leading to innovative syllabuses and new methods of assessment (things like Nuffield Science, for example). Grade inflation was not seen as a problem, and governments, opposition and teachers’ unions did not feel compelled to treat each year’s educational achievements as a pawn in a politicians’ game about social mobility.
Giving a monopoly to one board in the most important school subjects will have consequences for other subjects, and in a few years’ time we could well see all schools examinations in the hands of one or at most two major providers, tightly regulated by government. Other models for educational assessment exist – for instance GMAT, the privately-owned international test for MBA entrants. We ought to be seeking similar types of external assessment, rather than relying, as with the railways, on yet tighter regulation of monopoly suppliers.