John McTernan: High time we re-educated ourselves

But, here critique certainly stands - and applies to all parties - if one looks at the Scottish Parliament. For all the ambition to forge "Scottish solutions to Scottish problems", the sad truth is that devolution has manifestly failed to generate new ways of thinking, new styles of working. In health, education, regulation, the economy, it's the same old same old.

Far too often policy discussion simply amounts to significantly less sophisticated expressions of the statement: "I don't like your idea..." And depressingly, the reason is commonly that the proposal involves working with the private sector. Shameful in a country which was the second in the world to industrialise. Ridiculous in one in which only 24 per cent of employees work in the public sector - are the other 76 per cent amoral knaves?

That's why last year's initiative by the Scottish Conservatives was so welcome. They hosted a conference on education to which they invited outside experts to set out dispassionately and clearly what the facts were and what the policy options were. It provided a platform for Professor Lindsay Paterson to observe that, contrary to passionately held political beliefs, the evidence showed that testing, competition and diversity in provision did seem to be raising standards in England.

Unfortunately, the Scottish political classes gave a collective polite cough, muttered 'Is that the time, I must be going' and shuffled off vowing never to mention this stubborn and difficult fact again.

Undaunted, the Scottish Tories are marking the beginning of the final session of this Parliament with another attempt to jump-start policy thinking - this time on Higher Education (HE). It's today, and they have surpassed themselves in terms of inviting outsiders to speak - they've got me as a keynote speaker.

Now I'm not kidding myself that Annabel Goldie is about to out herself as a convinced Blairite.Nor should my army of cyber-fans shout: 'Aha, proof he's really a Tory, just like Tony'.

I am speaking because I like the idea of a policy discussion that starts with the question - what are the facts, is there a problem? And then asks - what are the options, which should we choose? That approach allows that policies are contestable and that evidence as well as ideology should be brought to bear.

So, what am I going to say this morning? First, we do have a real problem with higher education. In a global economy increasingly driven by knowledge universities are an engine of growth. Unfortunately, if you look at any international league tables Scottish institutions are falling further and further behind.

This is not merely a matter of pride. This is also a matter of national economic importance. The spin-offs from academic research can be massive. The industrial applications are substantial, but it's an export industry too. In Australia, for example HE is the fourth largest export. This is an industry in itself as well as having industrial applications. We have to get it right.

Since the fall of the Berlin Wall and the rise of the Chinese and Indian economies around one billion workers have joined the global workforce. We can't just work harder, we've got to work smarter. So we face a twin problem: how can we get enough of our young people into universities, and how can they attract the best international students.

This leads directly to our second challenge - how do we finance a university sector that matches the best internationally? To restore the reputation of our best universities will demand substantial investment. In the best of times that would have been challenging - given the choice between elite institutions and funding schools, police and hospitals. Where we are now, with big cuts coming - whoever is in government - it's impossible to privilege universities.

So, who's it coming from? Only two choices - the taxpayer or the consumer (the student.) Is the Scottish taxpayer willing or able to pay more tax so that middle-class students (already privileged) get a free education. Or should, perhaps, we think of making the consumer pay?

This takes you to the third question. What are the underlying principles? Is it right that a dustman who left school at 16 should work extra hard so that a duke's daughter can have a free education, given the lifelong economic benefit of a university education, calculated by economists as between 200,000 and 400,000 across a lifetime? This is the real choice - should all taxpayers pay for the benefit of some. When you agree that that's not fair - as you should - your only choice is how to make the consumer pay. Tuition fees or graduate tax? This is where it will bite. The graduate tax seems the obvious answer.

Those who gain will pay more and pay more promptly. It's more redistributive. It's plain fairer. Simple. Except if you're a university.It keeps you under the thumb, or the boot, of the government, they control the tax-take and they allocate it.

Of course, if you trust the government then you'll get a fair share - in time. A more direct relationship between student and university is the direct payment of tuition fees - you get the money immediately, and if you are a poor provider, you lose it quickly as young people switch universities.

This is policy in the raw - real term trade-offs. Who wins, who loses? Or more importantly - who pays, who benefits? Short-term versus long-term, national interest against individual gain.

It's also the beginning of a really interesting debate about Scotland's future. Can we put aside partisan pre-conceptions and think and talk about the fundamentals?

I, for one, buy the talk about long-term thinking - but equally, I want an honest discussion about how progressive we can be within real constraints - both externally and internally imposed. I want a genuine national conversation about this and so any other questions. Anyone else up for it? Surely 'Here's tae us, wha's like us' applies in the murky world of politics, just as it does in bars and football matches?

• John McTernan is a former political secretary to Tony Blair.