15 February 2022

As long as politics prevails, policy is paralysed

By Madsen Pirie

At a time when a battered UK is desperately in need of bold initiatives, very little is being done. There is quite an eerie atmosphere within the Westminster bubble at the moment. We seem to be in a bizarre twilight zone of partisan struggle and policy stasis. Events, many of them trivial, have put policy into a kind of limbo.

The Prime Minister’s fortunes dominate the news, and everything else is lost amid the commotion. Everyone is waiting for something to happen and no-one is sure what it might be. Meanwhile politics prevails and policy is paralysed.

The gossip is of who has resigned or will resign, of who has written letters and who might write them. Instead the talk should be of action to be taken if war breaks out in Europe, or of how the energy shortage might be resolved. It should be of how affordable housing to buy or to rent might be made available, of how the tax system might be overhauled to let the economy boom. It should be of ways to combat rising living costs for most UK families, and how to devise a long-term plan to ensure adequate funding for social care. We could be coming up with ways to put UK healthcare into better shape, or of alternative BBC funding to replace the antiquated and unjust licence fee tax. We could be accessing all of the benefits that Brexit makes possible.

The Chancellor should be planning tax cuts, not tax increases, using borrowing to finance the shortfall. Borrowing is cheap and doesn’t stifle growth as tax increases do. Instead, he has been captured by the mind-numbing blob of orthodox Treasury bureaucracy wanting to balance the books. Borrowing can be repaid out of the surging economic growth that tax increases will stunt. And the rising cost of living could be tackled by pulling back on proposed tax increases, including April’s National Insurance rise.

We should be accessing the treasure-trove of natural gas that lies beneath us by setting reasonable limits for barely detectable tremors instead of absurd ones. We should be devising householder compensation schemes for anyone affected by tremors that exceed them. We should use that gas to bridge the energy gap until renewables such as solar, wind and nuclear are sufficient to fill it themselves.

The NHS could be improved no end if doctors and hospitals were paid according to the procedures they do, and if both groups were given freedom from the vast bureaucracy that holds back the service. Plans could be made to have the BBC financed by earnings, advertising and subscriptions, as other channels are.

The solution to affordable houses and rentals is to have more of them, so measures should be devised to axe or weaken many of the regulations that currently prevent that. We should be preparing to set up individual social care funds that people could build up over their working lives, and which could pay for the social care of those unfortunate enough to need it. The funds would be an investment boost as they were being built up, and unused ones would be property to be passed on to heirs and successors.

We could be preparing to make a success of Brexit by sweeping away the encumbering regulations that Brussels imposed on our businesses. Ludwig Erhard’s postwar ‘bonfire of restrictions’ set off the famous German economic miracle. We should now be making plans for our own bonfire to launch a British version.

These are but a few of the policy initiatives that should be being developed. They are not because we are in a rut where plotting takes place instead of planning. We could, if we wanted, break out of this with bold plans for a renewed Britain. Or we could allow things to go on as they are and drift slowly into a mediocre oblivion.

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Madsen Pirie is President of the Adam Smith Institute.

Columns are the author's own opinion and do not necessarily reflect the views of CapX.