The Queen’s Speech is next week. This is the first of five articles on what a Social Justice Queen’s Speech might look like. David Burrowes, convenor of the Compassionate Conservatives Caucus, also writes on the site today.
The NHS. The state pension. Defence. Schools. Overseas aid. All these budgets are ring-fenced, as our readers well know, to rise in the line with inflation. There are two important consequences of this. First, public spending is harder to restrain – not a good place to be in when the deficit remains at about £90 billion with the economy growing and a downturn due. Second, the net effect of much of this squeeze is to protect richer older retired voters at the expense of poorer younger working ones, since the latter don’t receive the state pension and are less prone to use the NHS. These items together constitute about a third of public spending.
This arrangement is politically understandable – retired richer and older voters tend to vote more than working younger poorer ones, and are more likely to vote Conservative into the bargain – but it is ultimately unsustainable. To its credit, the Government has acted at the margins (by raising the age at which the state pension is gained, for example). But if this huge slice of spending isn’t steadily reduced as a proportion of the whole in a deliberative way over time, it is horribly vulnerable to being reduced in a rushed – and perhaps absolute – way in the event of another banking collapse or sudden war, perhaps in the middle east, that slashes growth and sends deficits soaring.
In the ideal Queen’s Speech that isn’t going to happen, the Government would announce next week that the ring-fencing is to end. Since manifesto commitments decree otherwise and Ministers have boxed themselves in, they are either going to have to find a way out for the future, perhaps through an Affordability Commission, or simply dump the problem in the laps of their successors – admittedly not an unusual course for governments to take, but one which voters should object to. But the shift in spending is going to come sooner or later, unless governments raise the retirement age to the point where people “work till they drop”, or else resort to even higher levels of immigration.
Stopping the ring-fencing could – and should – be a social justice plus, because it would enable Ministers both to reduce the growth in public spending and to shift where the money is spent. Iain Duncan Smith’s resignation was avoidable, but there was a logic to it: the then Work and Pensions was objecting to way in which the Treasury kept coming back for more savings from his budget while boondoogles for better-off older voters (free bus passes, the winter fuel and, up to a point, free TV licences) were protected. There is a limit to the degree to which social security support for younger voters can be squeezed.
The solitary exception to ending the ring-fencing is defence spending. The hostilites in Ukraine show that this is not a good time to be taking a risk with Putin – especially since one of America’s two main Presidential candidates is not clearly committed to NATO. We must presume that Donald Trump could be elected, since we are told repeatedly that he won’t win whatever electoral tussle he is engaged in, and yet he somehow keeps on winning…