In terms of changes since his July budget, the basic story of the
Autumn Statement is that George Osborne has used more favourable tax
forecasts from the OBR to ease up a little on planned spending cuts.
The stress here is on ‘a little’. This is why my piece
for The Independent focuses on the big picture. (There are a number
of minor points that I think are interesting, and I’ll comment on
those in a later post.) We still have sharp fiscal tightening, with
the OBR’s estimate of the cyclically adjusted budget deficit
showing a turnaround worth 4% of GDP between 2015/16 and 2019/20.
(That is nearly as much as the contraction from 2009/10 until
2015/16. The turnaround in the actual deficit is slightly larger.)
While the US and Euro area ease off on fiscal consolidation, George
wants to carry on.
For regular readers there are two new points that I make in The
Independent article. The first is about the myth of ‘protected
departments’. It is classic spin: employ words which the media will
use endlessly that do not mean what most people think they mean. The
second is that if the goal is to reduce the size of the state, this
seems a remarkably incompetent way of doing it. Rather than look at
what the state does and strategically decide what we could do
without, the method seems to be to keep cutting until a crisis
becomes visible. I do not think enough is made of this government’s
incompetence. I want to illustrate both points by looking at health.
Let’s start with this nice chart from
John Appleby of the King’s Fund. It should be shown every time
anyone claims that NHS spending under this government has been
protected.
For reasons that are well known, the share of spending on health
pretty well everywhere has been rising steadily since WWII. Try to
reverse that and you get a crisis. Try to reverse that when you are
also slashing
local authority spending for community help, so that elderly patients
cannot
be discharged into local authority care, and you get a major
crisis.
But that is not the only sign of incompetence. Under the coalition
Cameron undertook a massive reorganisation of the NHS, which was
badly
conceived and used up precious resources. (Perhaps the biggest
political failure of the Liberal Democrats in coalition was to allow
this reorganisation to go through: see this
Institute for Government report aptly titled ‘Never Again?’) Then
before the last election the Conservatives thought it would be a
clever
strategy to establish a ‘7-day a week’ health service. To try and
justify that policy, health minister Jeremy Hunt made dodgy use of
data to argue that health outcomes were worse if you were admitted to
hospital at the weekend. Did no one tell him that this might
lead some to do themselves harm by trying to delay going into
hospital?
There is no money to fund this new policy, so Hunt has tried to
restructure junior doctors contracts to pay for it. With many junior
doctors already leaving the UK to work overseas, this was the last
straw and they have voted overwhelmingly to go on strike. (Watch this
video
if you think picking this fight is clever politics.) In 2012 training
places for nurses were
cut, so now hospitals have to use more expensive agency nurses. All
this indicates basic incompetence by those who ultimately are
responsible for the NHS.
It was this kind of thing that I had in mind when I wrote: “It is
difficult to know which is worse: duplicity to achieve an ideological
goal or pursuing that goal incompetently.”
