It feels from the party manifestos that there is an agreement that the state needs to do more, especially to reduce inequalities. The conservatives wish to use capital assets for domestic/home based care in the same way as assets are used for Nursing Homes now. ( Down to £23,000 ) NHSreality sees nothing wrong with this approach – it has the virtue of being honest and open rationing. Methods of saving for a demented old age do not appeal – after all most of us pretend we are going to live for ever, and if we go, hope we die suddenly. A mutual fund for elderly care can only work if it is universal….
All parties in this election share a belief in big government. If that becomes blind faith, it will be bad news for the economy and public finances
Modern British history is often carved into periods of consensus. The postwar consensus venerated the state. For 30 years no party seriously challenged Clement Attlee’s nationalisations, universal welfare or the heavy regulation and union power established by a war economy. Then came the Thatcherite consensus, and it venerated the market. Privatisation, low tax and deregulation were, in time, accepted even by Labour. The manifestos released this week were in some ways as different as any set in decades. Yet there were whispers of a new consensus, too. All parties emphasise the role of the state. They should be careful not to forget what is good in Mrs Thatcher’s legacy.
Nobody expected a swashbuckling treatise on the virtues of economic liberalism from Jeremy Corbyn. His manifesto was true to form. Proposals for new taxes on income, profit and financial transactions were accompanied by promises of public ownership for Royal Mail, the railways and water, along with the higher spending on public services. The Liberal Democrat manifesto was less economically radical, but not much more economically liberal, its hefty spending promises financed by a mixture of tax rises and borrowing.
If the parties are converging on a new consensus, however, it also warrants scrutiny. The Times supported Mr Cameron’s programme of austerity not only because it was needed to sustain market confidence, but also because too unwieldy a state apparatus chokes the private sector and wastes money. Public spending as a proportion of GDP has fallen in the past seven years, and Britain is now at near full employment. That should be celebrated.
Yet public debt is still high and rising. Cost pressures in the NHS and welfare budgets will put more pressure on the exchequer in the coming years. Despite this no major manifesto has dared question the principle of an NHS free at the point of use. The main parties in this election have defined fiscal prudence as the ability to finance a big state. Any bigger than the present one is too big.