This is a question for certain academics, economists and sundry lobbies. And its origins are simple:
• The state of short of money.
• The Exchequer’s budget deficit and debt remain substantial and worryingly so.
• Nobody from just about anywhere on the political spectrum says that government borrowing can or should be limitless.
• Whatever the colour of the government of the day, requests for extra funding on welfare, infrastructure, education will be insistently pressed.
• The demand for a modern, integrated and national social care programme for elderly people is as shrill as ever.
• The population requiring such care is bound to grow.
• The ability of the market to provide price-based solutions to human need here is heavily and transparently constrained.
Meanwhile, there are many economists, old and new, who will take platforms to insist that for the well-being of British (and every other) society GDP growth should be restricted and, were it to occur or re-occur, forever un-applauded. Usually, the argument that economic growth is retrogressive has two spines : a) that it comes with severe and potentially irreversible contamination of the environment and b) that it is a synonym for excessive and spiritually destructive consumerism. There are also some subsidiary arguments often to be heard : for example, that the underlying methods by which national output is measured are and always have been flawed, leaving GDP as a seriously unreliable witness to our socio-economic progress.
But the core point here is that many authoritative voices are shouting out loud for all concerned – governments, consumers, businesses – to recognise that economic expansion must simply be abandoned as a public policy goal. To them, this is just about the most worthwhile objective of our times.
Meanwhile, social care is, after Brexit, the hottest potato still burning Ministers’ fingers no matter how many times it is tossed in the air. By the close of 2017, HMG had well and truly kicked it into the long grass. Believing that they were on course for a decisive win in the General Election and could therefore take the slap of some incidental unpopularity, the Conservatives did try to bite the hot potato by way of a policy initiative that became dubbed and thus damned as the Dementia Tax : elderly people in need of local authority support would be (we over-simplify here) invoiced for their care until they had £100,000 of assets left to their name. Once it was realised in the country at large that this could mean that a care-home resident could in theory pay over the counter for their care until the day he or she died, the screech from Middle England could be heard in Tasmania. Something had to give.
In the fever of those days, the PM tried to find a new language by which to describe her plan (with, in the event, a reference to a possible cost ceiling) but the moment was, as it were, abandoned. Later in the year, the Chancellor was no longer talking about social care at all in his budget plans while the Minister for Social Care quietly (ie under the Brexit din) dropped what was by then the running commitment (drawn from the Dilnot Report of 2011) to restrict what an elderly person would have to pay for care to a sum of £72,000 by 2020. The long grass had become a pine forest.
Officially, HMG is now in a period of consultation on the whole subject. Well, as you look back, there have been so many White Papers on the subject of social care that it all closely resembles an explosion in an Andrex factory. In 2014, the Barker Commission told a totally unsurprised nation that the key feature of social care was that it did not enjoy its own national budget like the NHS; partly as a result, while healthcare was delivered according to generally agreed principles at the point of need, social care was brokered into play by local authorities and, under the inevitable variegation of local pressures and commitments, thus rationed and often severely so. Barker (like many before and since) sought an integration of social and healthcare with this outcome in view : the combined budget would rise to a hefty 12% of GDP by 2025. Barker had the guts to accept that this was going to mean a much more burdensome invoice for the taxpayer; she consequently recommended a) heavier prescription charges b) a rise in NI contributions c) concentrated wealth taxes and d) the removal of certain non-means-tested allowances for the over 65s. Guts indeed – but each single measure horribly difficult for any government to engineer into play. If I were a Minister, in office for only an ineluctably short period, I guess I would indeed find the long grass very inviting.
Now, down in the provinces and on the streets, it is simply unmissable that locally organised spend on social care has taken one hell of a hit since 2008. Let’s get our titanium-tipped point into the mouth: even since GDP growth stumbled so badly and fell so hard, the UK has found it difficult fully to subvent the social care that its citizens need. In 2017, the IFS reported that for the 2009 to 2016 “spending on adult social care fell by 6.4%, during a period when the population aged 65 and above grew by 15.6%”. Some local authorities have had to make some horrific cost-cutting decisions; according to the IFS, some council have cut social care spend by 25%. This is a direct result of much reduced grants as sent from Whitehall to Town Hall.
Of course, there will be those who argue that there is at work here an ideologically driven assault on the poor and the needy. Well, maybe there are indeed some people in public life who would prefer the UK to lower its tax take (qua GDP proportion) down to American proportions or even just encourage a lot more planning and thrift in lifelong household budgeting. But the blunt inescapable reality is that there is a structural frailty in the national accounts which cannot and will not be corrected – not at least for many years – by the swing of the electoral pendulum. No amount of dedication to or activism in favour of the needs of poor pensioners can occlude this fact.
Let me assume that 90% of those reading this blog agree that social care needs more money put behind it – and fast. HMG is aware that there will be 2 million more people over 75 around by 2027; in fact, we all pretty well know the demographic picture just as well as any Minister or civil servant. Equally, none of us can miss the warnings – warnings that can pierce our own family’s very soul – about the spread of dementia as, crudely, more people live longer and more people get it. Now President of Alzheimer’s Research UK, David Cameron openly deprecates the failure of his own Government to assemble a system of social care funding adequate to the needs of all those whose mental powers are in decline or are about to slip. Currently, the Government spends about 5 times as much on the healthcare as it does on social care. Nobody is calling for NHS spend to be reduced. Extra cash is needed. Where to get it?
OK, let’s get down on it. In the circumstances we describe here, all economists everywhere must be honest enough to accept that there is no programme of income or wealth re-distribution which could possibly be enacted quickly or comprehensively enough to make any serious difference to people’s lives (for the sense we mean here) in the short or medium term. To make a possibly immediate dent, the Government of the day needs to be richer now; it needs its tax receipts to swell; it needs to preside over annually compounding GDP growth of a scale and quality which would allow such an outcome to occur in a sustained way. Yes, it could well be right that individual taxes (income, NI, VAT…) should rise but inescapably HMG really needs to benefit from higher wages, expanding retail sales, higher corporate profits – all the features which confirm the presence of good old-fashioned GDP growth.
Politics in a social democracy will follow the money; or rather, specially good politics will tend to flow out from a bank-balance that is going from grey to black. In its essence, the state remains the most benevolent force in the lives of all those with few or only modest assets and even in the lives of the more prosperous folks living in the shinier neighbourhoods. No real, lasting good can come when a national economy like the UK is put on a course of calorific restriction. Surely the Nasty Decade, begun in 2008, has shown us this. The death of Lehmans must not turn economists into lemmings. For the concept of fiscal transfers may sometimes become in practice a ramshackle system, exposed to many inefficiencies and distractions. But it is the business-model and really the glory of the welfare state. Obviously, the whole contraption works best when the Chancellor has fat surpluses under his/her belt. This means growth.
As I write, there is no current expectation that the UK will grow at an annualised rate of more than 2% between 2017 and 2022; in fact, if 2+% is scored at any point, that will be taken as championship-winning performance and the Chancellor of the day will be carried shoulder-high across Parliament Square by delirious backbenchers. However, the Eurozone is currently performing at less than 2% and the global economy at less than 4%; the external conditions facing the UK are not rosy. It is utterly perverse of any economist or professor to see virtue in these terribly underwhelming but resilient-looking figures and prospects. In the early years of this century, the NHS enjoyed the greatest ever surge in year-on-year spend; is anyone seriously going to argue that this was in no way connected to contemporary GDP growth in excess of 2% and sometimes 3% per annum?
Contrary to trite assumption there is no orgy of shallow consumerism taking place in the UK. Average weekly earnings for those working full-time here in the sceptr’d isle come to less than £600. This known, it is the most stinking snobbery for anyone in academic life to complain about the proletariat’s desire to buy a plasma television or take a holiday in Portugal or find a nicely cut coat for each fresh Winter. One does not hear many people on a zero-hours contract opining that their pay is too high for the national good and wishing they could just get their nose out of the trough. And yes, of course, it is proving to be a hell of a struggle to hold to the terms of the Paris Agreement on Climate Change; nobody, except a dolt, is going to contend that our collective global failure to cool the planet is not extremely worrying. And every society / government must take responsibility, drive green-energy innovation, maximise recycling, compress waste of water and heat, broker a debate about the human diet and its impacts…. The social order must be continuously mobilised around such actions.
But contracting GDP will not help and nobody in a position of intellectual authority should commend any such thing. A shrinking economy will vex and not enhance the pursuit of valuable social and ecological objectives. The example of the NHS in the early 00s should stick out like a very un-sore thumb.
And social care? Well, this is something you cannot recycle. Those in such need demand attention and respect from other human beings every day. The people and the organisations caring for them require more money. Individual families cannot be expected to shoulder anything close to the principal burden here. The NHS should have a sister, a National Care Service. For this we need cash; for cash we need growth. GDP, QED. Nobody, no matter how many college certificates he/she has and no matter how much he/she wants the world to be a different place, has the right to stand in defiance of this equation.