Shrinking the state

What would it mean if George Osborne succeeds in cutting public spending to its lowest level since the 1930s?

The scale of the cuts for the rest of this decade implied by the deficit reduction targets in the Autumn Statement takes us into territory uncharted since the war. Many people believe Osborne has moved from the realms of the unlikely to the realms of fantasy and it’s not hard to see why. If the chancellor missed the deficit targets he set out in 2010 by a wide margin, why should we accept what he says in 2014? Especially when he says he can cut taxes at the same time.

Osborne must have hoped that all the headlines would be about stamp duty reform. Instead, news coverage has instead been dominated by the Office for Budget Responsibility’s projections of what further austerity would mean for the public sector. This graph on government consumption as a proportion of GDP sums it up:

1930s

Read the rest of this entry »

Advertisements

Happy birthday welfare state

This Friday marks the 65th anniversary of one of the greatest moments in British history. With some justification, it has been called ‘our second Finest Hour’.

But as the welfare state and the National Health Service reach retirement age are both of them being pensioned off by a government intent on austerity and endless rounds of welfare and public sector ‘reform’?

Monday, July 5, 1948 was known as The Appointed Day. It marked not just the start of the NHS but also full implementation of the Beveridge plan for social security. A comprehensive system of national insurance now complemented earlier measures including family allowances and industrial injuries compensation.

NHS-Launch-Leaflet

The NHS launch leaflet, July 1948

Personal testimonies of the time range from the touching to the gruesome and the comical to the romantic. One young GP remembered going to see a family where he’d left medicine for a sick child. As he was leaving he heard coughing and asked the mother if she wanted him to go up. ‘I’m sorry, doctor, we can’t afford it,’ she said, explaining that it was another child who was ill. ‘Today, July 5th, it’ll cost you nothing, I was able to tell her,’ he said. ‘And I’ve never forgotten it.’

Read the rest of this entry »