Published:

By Peter Hoskin
Follow Peter on Twitter

The
past week has been neatly bookended by two policy stories. One is about the very
young: last Sunday’s Observer reported
on the Commission
on Living Standards’
finding that it now barely makes sense for some
“second earners” to work full-time, thanks to the rising cost of childcare. And
the other is about the old: today’s Telegraph covers a government report which
suggests that, thanks largely to an ageing population, the state will find it
increasingly difficult to fund social care — with the result that more
pensioners will have to stump up for it themselves.

The
reason I mention both of these policy stories now is because they’re similar in
a several respects. To list them briefly:

i) They’re
both about affordability.
In terms of the government’s fiscal measures, pensioners have got
off relatively lightly from this period of austerity — but the combination of quantitative
easing
, low interest rates and persistent inflation will have had a shuddering
effect on retirement incomes nevertheless, and now there’s the prospect of
savings being excavated even further to cover the cost of care. As for the
parents of young children, we already know about the controversies surrounding
child benefit and all that.


ii) They
both threaten to provoke Coalition tension.
As I’ve pointed
out before
, the Liberal Democrats aren’t particularly enthusiastic about
all of Liz Truss’s ideas for reducing the cost of childcare, and are outright
concerned at her emphasis on deregulation in the child-minding trade. And when
it comes to social care, there is an increasing amount of blame being spread
about between the yellow and blue halves of the Coalition. The Lib Dem former
minister Paul Burstow recently claimed that the
Treasury — aka, George Osborne — would prefer to leave the matter of social
care, and the funding of it, “stuck in the long grass”.

iii) They
could both be defining issues at the next election.
One of the
most insightful columns of the past week’s was Mary
Riddell’s on Ed Miliband
. The Labour leader, she wrote, is eager to make
the next election the “living standards election”. The Milithinking is that,
even if the economy has improved by then, people will still be feeling the
pinch after years of meagre wage rises, high prices and fiscal frugality — and
it’s an analysis that’s more than supported by the full
report
that the Commission on Living Standards released this week. And so,
for instance, “it now
seems likely, if not certain that cheap universal daycare will be a central
plank of Labour’s bid for power.”

But
the final way in which these two age-related crises are similar is probably the
most important: if they’re to be solved, then it’s likely that the Government
will have to find to a lot of cash to do it with. Where — particularly with the
deficit lingering well into the next Parliament — will the money come from?

As
it happens, many of the answers we’ve heard to that question have involved cutting back some of the universality written into the welfare state. As the Commission on
Living Standards report puts it, “the
clear prevailing view of the Commission is that the government should
means-test universal non-pension benefits, as part of a mix of revenues to fund
new support for living standards.” While, in the case of social care, Andrew
Lansley once devised
a plan
to means-test people who receive care in their own homes.

But,
of course, these answers have not yet been welcomed by the relevant party
leaderships. Mary Riddell writes that “Mr Miliband has already privately rejected derailing the grey
gravy train by means-testing perks such as winter fuel allowance and television
licences.” And it’s said that Mr Osborne slapped down Mr Lansley’s
proposal by asking him “Why are you robbing Peter to pay Paul?”

You
do feel, though, that, given the scale of these problems — not to mention, the
deficit — someone will have to break from that convention soon. I hope you don’t
mind me reusing a tweet I wrote earlier,
but: the race is now on for
politicians to abandon universal benefits and use the savings wisely.

Comments are closed.