The Week, 15 July 2022

15 July 2022
By Charlotte Pickles
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And then there were five. As we wait for this evening’s debate between the remaining Conservative leadership challengers, here are some of the questions we at Reform would ask…

For those promising tax cuts, please explain how you will fund them (no, they won’t simply fund themselves) — will you borrow more or cut public service spending? And for those promising both sizeable tax cuts and big rises in defence spending, I’m looking at you Liz and Tom, how are you squaring that fiscal circle?

For context, departmental spending envelopes, set back in the October 2021 Spending Review, are already under immense pressure. At that point, CPI inflation was expected to peak at 4.4% this year. It is now expected to peak above 10%. Many of the big spending departments — such as DWP, DHSC, DfE – have large estates, which means spiralling fuel bills. They also have huge workforces, which, subject to pay negotiations, means a big jump in the pay bill… assuming none of the candidates are intending to cut nurse or teacher or work coach numbers. What, then, are candidates going to ask departments to stop doing to absorb these rising costs — or do they have a plan to boost public sector productivity (because we would be delighted if so)? Oh, and Tom and Liz, if you’re reversing the NI rise, are you cutting the NHS budget by £10 billion a year?

Also, just to check, are you planning on doing anything more on the cost of living crisis, what with the fact that when the last package of support was announced back in May we were expecting the October energy price cap to be £2,800, and now it’s looking like it will be closer to £3,200? If that is the case, then, for example, for a single household on means-test benefits, the actual value of that £650 payment is only £250, and the value of the £400 energy bill grant has been wiped out. I’m afraid further cuts to fuel duties, and cutting VAT on energy bills (which is 5% on domestic bills), just isn’t going to do it. Kemi, your pledge to bring forward benefit uprating rather than wait until April 2023 appears the only real commitment to help the poorest (and we fully support that pledge).

Which brings me on to long-term strategies to achieve energy security — what are they? Global volatility isn’t going away any time soon, which means we need a plan to insulate Britain from the impulses of autocrats. And seeing as, so far, there appears a distinct lack of ideas on how to drive growth, we would welcome your thoughts on how energy security and achieving Net Zero might also boost the economy. Aside from Tom, who has committed to coming up with a plan to transition to clean energy, does anyone else have any thoughts on this?

Now to public services. Let’s be frank, the model isn’t working — even before we entered the era of backlog Britain the shortcomings of our welfare state were evident. NHS wait lists haven’t been below 3.5 million since early 2016, we perform in the bottom half of the OECD on metrics such as infant mortality and lung cancer survival rates, and one in five year 6 children are clinically obese. Even before the cost of living crisis, almost a third of children were living in poverty, and 11 million people were deemed to have low financial resilience. More than a quarter of adults in England lack even basic numeracy and/or literacy skills, and on current trends, two thirds of the UK workforce will be lacking basic digital skills by 2030. The attainment gap between disadvantaged pupils and their peers is in the bottom half of developed nations. The post-war approaches and institutions are no longer fit for purpose. Radical reform is needed, but where are your bold ideas?

Our future prosperity depends on us becoming a more healthy, skilled and equitable nation — that’s going to take more than lifting the ban on grammar schools (tl;dr, likely to widen the attainment gap) or breaking up the Treasury (possibly useful, not yet clear). The challenges facing the country are huge, it’s all very well to say you want a smaller State, but can you tell me what you want it to achieve?

In hopeful anticipation of a clear vision for the country,

Charlie

Director