Elegant equation?

Figures released this week finally give the government some positive news on the economy, as employment has risen by 166,000 over the past quarter. The Coalition’s stance that the private sector would take up the slack of any public sector job losses appears to be correct, as a fall of 39,000 public sectors jobs – as the cuts to public services kick in – was offset by an increase of 205,000 jobs in the private sector. Alan Downey, Head of public sector at KPMG is positive about the figures, stating: “The big challenge for the government … is to ensure that private sector employment increases at a pace that more than compensates for the decline in public sector. These figures suggest that the equation is working.” However, others are more cautious with, surprisingly, Employment minister Chris Grayling commenting: “I wouldn’t put too much store on this month’s figures, even though they’re clearly a step in the right direction” – an unusually sensible outlook, given that this trend would need to be maintained for a longer spell to fully justify the government’s policies. More worrying figures suggest that long-term unemployment and youth unemployment figures remain high, which could lead to serious, long-term economic damage to the country.

Learning curve

Leaked documents from Education Secretary Michael Gove suggest that the government is planning to revive the O-level and CSE to replace the discredited GCSE system of examination. Last seen in 1988, O-levels could be brought back for pupils from Autumn 2014 in what would be the biggest shakeup of the exam system for a generation – albeit only in England, as education control is devolved throughout the United Kingdom. The O-level system enabled the top 25% to take the exams, while the rest took Certificates of Secondary Education (CSEs); a two-tier system that enabled students to take academically-appropriate qualifications. The proposal appears to be a response to criticism of the “dumbing-down” of GCSEs, pass-rates for which have consistently risen year-on-year. The introduction of a new exam could be an opportunity to raise the difficulty level. As part of the proposal, the O-level would be set by one exam board rather than the six competing bodies that currently write GCSE papers: a system designed to lure teachers eager to maximise pupils’ grades that has almost certainly contributed to the falling difficulty level by fostering easier questions. In a leadership-related side issue, it has emerged from website PoliticalBetting.com that Boris Johnson could be in the process of trampling on Gove’s toes by forming a management structure for education in London that contradicts everything that the education secretary hopes to establish nationwide.

Funny money

Prime Minister David Cameron has launched an attack on the tax affairs of several people – including comedian Jimmy Carr – who are using the Jersey-based K2 finance scheme, which is reportedly keeping £168m a year from the taxman. In addition, a separate arrangement run by Icebreaker Management Services – which utilises investments in the music industry to obtain tax relief, and numbers Take That among its clients – is also under investigation for facilitating major tax avoidance. While K2 substitutes salaries for loans, which are not subject to tax, Icebreaker uses the government’s own incentives to wealthy people to invest in the arts to create an unintended (at least from HMRC’s point of view) tax break. Cameron has specifically described the arrangements of Jimmy Carr as “morally wrong”: a dangerous comment for someone who has close dealings with the likes of Vodafone – which has weathered far more speculation over its tax affairs – to make. Ed Milliband has taken a more measured stance, blaming the law and suggesting that it is not a moral matter, but merely requires the correct legislation. He said: “I think what the politicians need to do is – if the wrong thing is happening – change the law to prevent that tax avoidance happening.”