Johann Hari: Listen to Clegg on schools and immigrants

A thick kid from a wealthy family will overtake a clever child from a poor family by the time they are seven
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Tomorrow, we will discover the name of the new Liberal Democrat leader. OK, I know that isn't a sentence to make your heart pound and the adrenaline leech out of your eyeballs with excitement but it matters. The man picked by the Lib Dems may well get to pick the next occupant of Downing Street.

The British opinion polls are yo-yoing at a more violent rate than at any time since the formation of the Social Democratic Party in 1981. One week Gordon Brown is 10 points ahead; the next David Cameron is 10 points ahead. The chances of a hung parliament where the Lib Dems hold the balance are rising rapidly.

That's why Cameron's men were desperately angling yesterday for the Lib Dems to begin to form a "progressive coalition" with them. (Ah yes a progressive coalition to hammer single mothers, strip part-time workers of their rights, end help for poor sixth-formers, and trigger a renegotiation of our membership of the EU. That'll work: Progressives for Redwood!)

So the Westminster horse-race watchers will for once be on to something that matters as they track the political sympathies of Nick Clegg, who seems odds-on to win. Whether Clegg chums up to Brown or Cameron will count, and we'll be hearing more about it as an election nears.

But for now, I want to look at one of the more subtle powers a Lib Dem leader has: to push a handful of ideas on to the national agenda, and help them slowly accumulate public and intellectual support. Paddy Ashdown did it by talking endlessly about independence for the Bank of England and ground troops for the Balkans. If you pore over Nick Clegg's career, you'll find that he has pushed forward a range of genuinely interesting ideas with two in particular that real progressives need to urge him to push into the public consciousness.

Let's give the first the unsexy title "Dutch-style school funding". One of the most appealing things about Clegg is that he is both totally British and genuinely European. He speaks five languages, and chose to be a Member of the European Parliament before migrating to Westminster. He is happy to look at what they do right on the continent and try to bring it home.

When researching a pamphlet on Britain's schools in 2002, Clegg started with a stark fact: the UK's schools have the widest variations based on class in the developed world. Our rich kids do better than almost anyone; our poor kids do abysmally. A study by the London School of Economics published last week showed this starkly: a thick kid from a wealthy family will overtake a clever child from a poor family by the time they are seven and the skint-but-smart kid will never catch up.

So Clegg looked around Europe for a country with low class disparities, and intimately linked the best overall results. He stumbled on to The Netherlands. How do they do it? There was a mixture of factors local control, a high degree of autonomy for Dutch teachers but one factor stood out above all else: their funding formula.

Whenever a child starts school in the Netherlands, she is given a score. If her parents are wealthy professionals who speak fluent Dutch, she is given a score of one. If her parents are unemployed or have poor educational achievements themselves, she is given a score of 1.7. If her parents are recent refugees who can't speak Dutch, she is given a score of 1.9. The higher the score, the higher the funding for the school.

In Britain, schools wriggle and writhe to get out of taking in problematic poor kids, narrowing their catchment areas and setting up bogus tests of academic skill or "faith". This means these kids pile up in the worst schools, where they become unteachable. In the Netherlands, by contrast, this funding system ensures schools have a built-in incentive to take the hardest kids. It works: the Dutch have a far lower proportion of innumerate and illiterate people than us, because they defuse class inequalities from the nursery on.

Of course, Clegg knows this would be a hard sell. The right-wing press would shriek it was an "assault on the middle class". But this formula is actually in everyone's long-term interests. One of the reasons the Dutch have much lower crime rates and a more attractive society is because they don't write off great chunks of their population to sink schools and sunken lives. Extreme inequality scars us all in the end, and the Dutch have discovered the best educational balm. Clegg is right to try to bring it back to Britain.

The second policy is a harder sell still but Clegg was brave and right to push it forward this summer. We share this country with half-a-million people who live in an immigration netherworld, here but not-here. You pass them on the street and sit next to them on the bus, but when these unpeople are beaten or raped, they cannot limp to the police for protection. When they are offered jobs for 1 an hour in dangerous circumstances, they cannot protest. (Remember the Chinese cockle-pickers?) They are Britain's illegal immigrants and Clegg wants to offer them a path to citizenship.

Even if we wanted to, it's logistically impossible to track down half a million people and forcibly deport them with anything like our current police numbers. No democracy with a civilian police force has ever expelled that proportion of its population in peacetime. So do we leave all these people in a dire situation where they can't report crime (leaving their abusers free to attack you and me) and do not pay taxes?

Nick Clegg has suggested instead a system of earned amnesty, where illegal immigrants who could demonstrate they were contributing to society would be given a legal path to citizenship. A study by the Institute for Public Policy Research found that this would bring in an additional 1bn in extra tax revenue for schools and hospitals. And that, ultimately, is the choice: do you want half a million illegals paying nothing back and unprotected in the black economy, or paying taxes and protected after an amnesty?

Of course, Clegg could be bullied into silence by the right. The first time he mooted amnesty, he was savaged so suddenly he backed off. He has been persistently reluctant to advocate higher taxes on the wealthy: the Lib Dem's decision to drop their call for higher tax rates for the wealthy were a depressing piece of rebranding. He could drift to the right to out-bid the Tories in some seats. But if he continues to call for these two bold progressive policies, it will be impossible for him to form a coalition with the not-so-secretly blue David Cameron. And Clegg just might if he fights for them long and hard enough help to change the increasingly lop-sided and ugly face of British politics.