The NHS is slowly suffocating British conservatism – and Sunak knows it

 With the Tories refusing to fix the public sector or go for growth, Britain is now stuck with higher taxes

Source - Daily Telegraph ,- 26/10/22

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Some prime ministers are forgotten almost immediately after they leave office; others haunt their successors from beyond the grave. Clement Attlee passed away 13 years before Rishi Sunak was even born, but as the creator of the NHS and the Green Belt, the post-war Labour hero remains Britain’s most influential politician, and is directly responsible for two of the most pressing crises facing our new Prime Minister.

Almost uniquely, this country has virtually socialised the whole cost of population ageing: the NHS, unlike other, better-designed universal health systems, is entirely taxpayer-funded, and the state is about to take on even more liabilities by underwriting the costs of elderly care. Like all nationalised industries, this one was ruinously expensive and wasteful – while delivering a scandalously sub-par service by international standards – even before Covid and lockdowns made it implode. Britain is being made to work for the NHS, rather than the other way around, a shocking state of affairs that explains why Mr Sunak is about to increase our taxes yet again.

At the same time, a deliberate shortage of new homes relative to our fast-growing population (propelled by high levels of immigration) has helped push up prices, forced millions of younger buyers to borrow too much, made it much harder to break our addiction to ultra-low interest rates, crippled economic and productivity growth, and triggered a debilitating generational war.

The interaction between Attlee’s two flagship policies is now suffocating conservatism. The Tories rely more than ever on older voters, and are under huge pressure to keep increasing spending on the NHS and triple-locked pensions, paid for by higher levies on those of working age, destroying the very foundations upon which low-tax conservatism is built. They are equally terrified to allow the building of more homes, apart from high-rise urban blocks. Not surprisingly, the young, squashed into small flats, deprived of assets, too worried to have children and seeing their taxes handed to the old, are embracing collectivist ideologies. Attlee’s accidental booby trap has perfectly ensnared a Tory party that has lost its philosophical bearings.

This is the nightmarish context of Sunak’s premiership. The Prime Minister’s room for manoeuvre is extraordinarily constrained by the budget deficit, the hangover from Covid, inflationary monetary policy blunders, the energy crisis, the Tory party’s nimbyism and aversion to any form of fiscal discipline, and his own choices. He has blocked fracking and supply-side reforms, so faster growth won’t rescue him. He will extract better value for money from the NHS: Steve Barclay, the Health Secretary, will impose better management, and the Treasury empowered to crack down on waste more broadly.

But while there are many daft projects to be cancelled, the worst of them all, HS2, will be preserved, a monument to contemporary stupidity. And what will happen to foreign aid? With the NHS, pensions and welfare gobbling up so much cash, defence, policing, the courts and real, value-adding infrastructure projects that genuinely deserve more money risk being cut too much, as was the case in the 2010s. Salami-slicing isn’t the answer to our bloated state: a radical restructuring is, but that is taboo.

Sunak will thus continue to raid our pockets. The tax take was as low as 28 per cent of GDP in the mid-1990s. Tony Blair and Gordon Brown ruined this happy picture, launching our rapid transformation into a European-style, low-growth social democracy. Partly because he was bequeathed Labour’s bills, and partly to avoid cuts, George Osborne further hammered the taxpayer. Taxes reached 34.0 per cent of GDP in 2016-17, the highest level since 1981-82, the OBR calculated at the time.

Boris Johnson went further. The OBR predicted in March that the tax burden would reach 36.3 per cent of GDP by 2026-27, its highest level since the late 1940s. Since then, the national insurance increase has been cancelled, but Jeremy Hunt will hit taxpayers again next month, even though lower gilt yields will bolster the public finances somewhat.

Yet Sunak knows that he cannot afford to govern purely as a neo-Cameron, a technocrat delivering a mix of austerity, the Civil Service’s agenda and the odd reform. There is no majority for that position in today’s Britain, and there wasn’t even one in the very different pre-Brexit, pre-Covid era. David Cameron failed to gain a majority in 2010, despite Brown’s disastrous record, and only just achieved one in 2015, helped by a last-ditch attempt at wooing Eurosceptics and a successful attempt at reminding English voters of the dangers of Scottish nationalists.

In any case, Cameron wasn’t as centrist as today's nostalgics like to pretend. It is worth rereading the 2015 Tory manifesto: its “vibes” are well to the Right of today’s Remainer, “one nation” consensus. The green agenda wasn’t as radical. On tax, all of the emphasis was on reductions, including to income and inheritance. Many Southern voters worried about Labour’s mansion tax. The manifesto promised an EU renegotiation, tougher controls on immigration, and a referendum. Despite all of that, the Tories eeked out just 36.8 per cent of the vote, and Ukip grabbed 12.6 per cent.

Sunak knows that he could easily face his own revolt on the Right. One basic, bare bones manifesto tested by More in Common found that 10 per cent of the electorate might be tempted; a more sophisticated Left-Right populist mishmash would appeal to a lot more.

This is why he has decided to compensate for what he will see as an unavoidable Left-wards shift on tax and spend by tacking Right on cultural issues, and remaining firm on Brexit. His reappointment of Suella Braverman to the Home Office was an inspired choice, contra the Left’s demented hysterics, as was Kemi Badenoch’s promotion to minister for equalities. But he will have to back them to the hilt if he is serious about seeking to maintain a workable electoral coalition. How can Braverman tackle Channel crossings if she isn’t allowed to ditch the European Convention on Human Rights? Will Badenoch be empowered to truly wage war on the wokerati?

There is scant good news for Thatcherites at the moment, but at least Sunak seems to know that he cannot rule as the caricature neo-Cameron that Twitter would so love him to be.