George’s Autumn Statement – far from right

George Osborne

George Osborne

I am disappointed by George Osborne’s Autumn Statement.  The last General Election gave the Conservative Party enough seats to form a government without have to box and cox with the Liberals or any other grouping.  They were elected on a manifesto to eliminate the structural deficit, to slim down public spending and to reduce the client state.

Osborne’s climb down on the reform of the tax credit system, following the rebellion in the House of Lords quite contrary to a long-established convention on the supremacy of the Commons on fiscal matters, is particularly disappointing.  It is inevitable that people who have been led to expect a generous hand out from the state will grumble when it is proposed to take it away but I think we have lost a sense of perspective in this debate.  There was a time when hunger was a real issue and the state needed to provide support to many poor people.  I am afraid our conception of “poverty” has changed significantly and I think we have lost track of reality.  We now seem to be looking at the ability of families to have regular holidays, for their children to enjoy lots of out-of-school events and for them to be dressed in expensive, fashionable clothes and to have mobile ‘phones and all the latest social media kit.  The argument seems to be that other children with wealthier parents can have them and children from “poor” families feel deprived and disadvantaged.  Not to mention their parents’ need for what many would think luxuries. Well someone has to pay for these state hand outs and it is hard working individuals who have managed to rise above what is now called a “poverty” level.  They did this through hard work and determination and I doubt so many would have done it if they had been offered a state-funded supplement to their family income.

I don’t doubt there are some hard cases that deserve some short term support until they can lift themselves out of the present high marginal rate tax trap that Gordon Brown invented to increase his client state and I am sure he thought would persuade them to vote for a Labour government generous with other people’s money.  I wish Osborne had found a way to support those in real need while clawing back from those who need to re-prioritise their family spending towards essentials rather than peripherals.

The real, long-term need has to be to lift people out of the poverty trap that Gordon Brown created along with a state education system that comprehensively fails to meet the needs of many  children in disadvantaged areas.  Until we raise the skills base of our working population substantially, we will continue to have a potential under-class unable to earn a decent living wage because they do not have the skills required in a modern economy.  This seems to be increasingly true of white working class boys in sink estates who face a future framed by hopelessness not to forget black youngsters on crime-filled sink estates.  Michael Gove started down the right road, taking on the education establishment (the “blob”) and moving us cautiously but definitely towards a more market-based education system that rewarded good schools and closed down bad ones.  I am not sure his successor has the courage and vision to continue battling the “blob”.  It is important that education is funded by the state but I have never believed it should be run by the state.  Academies and free schools were a slow move in the right direction.  Education vouchers would have been braver but not even Margaret Hilda had the stomach for these!

I am also disappointed that yet more money is being thrown at the NHS.  I know this is a sacred cow that dare not be challenged but I think it has to be.  We all know the NHS is too large, too monolithic and in thrall to the power of the medical and nursing unions.  In fact, we have another “blob”.  Jeremy Hunt has fallen foul of the junior doctors who now threaten an unprecedented national strike but I suspect he is right in what he is trying to do and I deeply suspect the medical unions have worked a massive PR flanker on him and on the general public who believe doctors can do no wrong!

However, the real issue that Osborne has ducked is the preventative issue of social care.  Because of the ring fencing of overseas aid, education, health and defence, the cuts fall disproportionately on the remaining areas of public spending of which local government is a major casualty and it is local government that is responsible for social care – the county councils in two-tier areas and unitary councils elsewhere.  Their biggest area of spend and of demand is social care, the number of old people is rising and the available cash is being squeezed.  The result is too many old people in hospital beds they should not need when more cash for social care should keep them active and happy in their own homes for longer.

In short, George Osborne has selected the short-term, popular measures over the longer-term needs of the population. If you have ambitions to be successor to Cameron, I guess you have little choice unless you have the courage and far sightedness of a Churchill or a Thatcher.

 

 

About Keith R Mitchell CBE

Qualified as a Chartered Accountant in 1967. Pursued a successful career in financial training and publishing until selling his interests in 1990. Elected a County Councillor for the Bloxham Division in 1989. Leader of Oxfordshire County Council 5 November 2001 to 15 May 2012. Chairman of the South East England Regional Planning Committee July 2002 to July 2005. Chairman of the South East England Regional Assembly July 2005 to July 2008. In HM the Queen’s 2007 Birthday Honours, appointed a Commander of the Most Excellent Order of the British Empire in recognition of services to local government.
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