Recent surveys have been reported to show that a majority of the British public wish Government to spend more and more on pensions, benefits, the NHS, social care and even to control prices affecting the cost of living. In effect, does the public want the Government to provide, provide and provide? Perhaps, continuous subsidies during Covid and since led people to believe it could and should protect the public from all problems.
When it comes to money, at some times, but not others, it seems that people largely understand that for government we should read “taxpayers”. Does a majority of the public really believe that the taxpayer should provide endless money to satisfy all wants? If it does, perhaps that is not surprising, when between 37% and 40% of adults pay no income tax at all. And even less surprising when, according to the ONS for 2020-2021, 36 million people (54+%) are in households receiving more benefits than they pay in taxes, and when 83% of all tax is paid by 40% of British adults? Should not this picture be drastically repainted, but how? The benefits bill is around £230 billion and the NHS bill around £150 billion.
Moving to net zero, even though it is essential, is uncosted and surely will require hundreds of billions; the EU and the USA are subsidising green technology and projects with hundreds of billions of dollars. The UK is not, but some suggest it should in order to compete. The developing world requires hundreds of billions from the developed countries to move to net zero, and the UK will have to contribute. The UK faces a rising benefits bill due partly to a generous, perhaps excessively so, benefit system for those unable to work through disability: a fast-growing number of those who have effectively withdrawn from work much earlier than normal retirement age could be claiming potentially disability benefit for life. Social care as a taxpayer cost in the future is unknown as the system has yet to be refixed.
Recognition that the NHS is a voracious money eater is now well established, but few dare challenge it to change fundamentally. Labour talk of the NHS having to reform “or die”. Concrete ideas for fundamental reform are few, and cash pours into the NHS hopper. The fact surely is that structures must change to bring in billions of private capital, perhaps insurance led funding, and it is time all politicians said so. That Conservative long-term NHS plans simply require more taxpayer money evidences the usual lack of courage on this topic. Future public pensions face an ageing population living longer and fewer and fewer taxpayers potentially to fund them, and so an unchanged pension system, triple-locked for now, seems unaffordable. With wars and their consequences further squeezing finances and disrupting all economic planning, and instability politically especially with big power countries disrupting others so nakedly across the world, security and defence have become even more expensive. Getting the State to pay for all this could well prove unaffordable.
Infrastructure needs new build and renewing. Energy aside, take HS2 as a giant illustration not just of unaffordability but of government departments’ ineptitude at estimating cost. The original HS2 budget was some £30 billion. Recently it was confirmed as between £64 and £91 billion – the range of uncertainty at £27 billion almost equals the original budget. The original cost/benefit analysis surely does not hold good at costs 2-3 times the original budget. It is reasonable and prudent to assume that the real ultimate cost would have been well north of £100 billion. That HS2 beyond Birmingham has been scrapped is perhaps the only sane decision.
On the face of things, as borrowing is extended close to possible limits, the only real source to fund the unaffordable is the taxpayer. That means largely middle-income households. Can they afford more taxes to really make a difference and still feel properly and fairly rewarded, given that so many other people are not net contributors? Something must give. A cultural mindset of reduced expectations is surely required, as well as a cultural mindset of greater work productivity. Moving to a higher wage society where people earn more and so can pay more tax is fundamental, much talked about but hardly being delivered by society. People surely cannot go on demanding more taxpayer money to be spent on them. Doctors and consultants rejecting offers of 8+% and 6+% pay rises to be funded by middle England need to rethink. And perhaps the Government should hire people who can budget and fire those who cannot.
Government needs to change institutional thinking so that the unaffordable becomes affordable. Its departments simply have to spend less and spend smarter. The idiocy of public and commentators demands for more Government cash whenever there is a problem must cease. The public/private partnership for funding NHS, Social Care, Infrastructure, Net Zero, Education and Defence at least needs real examination, as there is plenty of private capital available in the world.
