My nephew came to stay with me just before Christmas. His brother didn’t. I doubt that you have much interest in my nephews’ holiday activities. But you should. Because the decision to let Alex stay with me but to leave Harry at home is based on exactly the same thought process as Labour’s approach to public service reform.

When I asked Alex if he’d like to come to London, his brother asked: “Why can’t I?” Harry has a habit of asking awkward questions. This was one of them, because my decision was entirely arbitrary. On any logical grounds, I should have invited Harry to come, too. But I didn’t. So I couldn’t give any rational response as to why it was OK for Alex to come, but not for Harry.

To understand why it matters that Harry stayed at home, you need also to know what it is about the entry into the EU on Monday of Bulgaria and Romania that is problematic. It’s the same problem as when, on January 1, 2004, eight other new member states joined the EU: the people who gained access to the British labour market are too good. They either work too hard, or they are too skilled.

447,000 workers from that first new batch of member states applied to register under the Workers Registration Scheme in the first two years since their accession. Including the self-employed, the total working in Britain has been well over 600,000. And that excludes the illegal workers. Economically, this is good news. Jobs can be done better and cheaper thanks to this new pool of labour. But there is a downside: many British manual workers can’t compete with them.

The mistake that is usually made is to concentrate on the immediate cause of this problem: the rights of those workers to come here. The real cause of the problem, however, is nothing new and has nothing to with the EU. The real cause is our failure to manage the basic task of educating children properly.

After nearly ten years in office, Tony Blair’s pledge to make “education, education and education” his top three priorities is the dog that barked but didn’t bite. There has certainly been some improvement in standards. But when ministers celebrate the improved statistics, it’s akin to a football team that regularly gets a 3-0 hammering taking comfort from losing 3-1. The most recent Department for Education and Skills study, in 2003, found that 16 per cent of the adult population would fail to pass an English GCSE and 29 per cent of adults could not calculate the area of a floor, even with a calculator, pen and paper.

Instead of the necessary wholesale reforms, tackling the fundamental flaws in school structures and teacher training, the Government has introduced a piecemeal variety of initiatives and schemes. Last week we learnt of the latest, a £65 million plan to give 800,000 of the most able pupils an “e-credit”. The pupils will be allocated about £80 in credits, which their schools can use to buy extra lessons from companies, independent schools, universities or other academic bodies. It is a thoroughly sensible idea, which no one committed to excellence could oppose. So, naturally, it has been opposed by a number of Labour MPs and teachers.

But for all the plan’s merit, it is symbolic of the Government’s failure. By proposing such a scheme, the Government shows that it understands the benefits of competition and a variety of teaching options. Instead of acting on that understanding, however, it restricts it to the most gifted. And it refuses even to contemplate any wider extension of the voucher principle.

Why not? For the same reason that I said Alex could come but Harry couldn’t. To use the perennial phrase of parents explaining their illogical decisions: because I say so.

There’s a perfect example of a “because I say so” dismissal of a logical extension in a speech made by Alan Milburn, the former health secretary, in November. Intriguingly, he argued that: “To break the cycle of educational disadvantage we need to give parents in the most disadvantaged areas more than preference. They should have choice . . . The evidence suggests both that choice programmes (abroad) helped raise standards across all schools and that the most disadvantaged pupils benefited most.”

All good stuff. And to bring about that choice, he proposed a weighted voucher: “I believe that parents with children in those schools where performance has not crossed these thresholds (of success) for two or more years should be given a new right to choose an alternative school. They would be given an education credit weighted to be worth perhaps 150 per cent of the cost of educating the child in their current school. This would give a positive incentive to the alternative school to take them and to expand their intake numbers.”

Even better stuff. Mr Milburn clearly grasps the need for choice, and how the market empowers the most disadvantaged and raises standards. But then he shows how the only word that really counts in the phrase “new Labour” is “Labour”: “The credit . . . could be used in any state school.” At a stroke, Mr Milburn circumscribes the impact of his proposed voucher by limiting its application to state schools. And he offers no explanation why other schools should not be able to compete for the pupils’ custom.

Even when Labour sees the benefits of competition, it rules it out in any but the most limited form, for no reason beyond ideology. The same holds in health. Patients are to be given a choice of provider for treatment. But the choice will be from a limited list and there will be no wider application of the acknowledged benefits of competition. Why not? Harry may be only 7, but he’ll be able to give you the reason. Because I say so.

Stephen Pollard is president of the Centre for the New Europe.

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