The Bankrupt Britain report prompts in me the same sense of urgency I think I would feel if I was staring down the barrel of a loaded gun in the hands of a mad man. Except it's not me - it's Britain as a whole and we all know who is holding the gun.
If the Conservatives are elected the worst sort of poison chalice inheritance will be ours. So too will be the hardest of decisions. Previously I estimated looking at earlier tough times that taxes would need to rise some £75 Billion. Or £3,000 a family a year. Things have got even worse. This authoratative report says it will be necessary to cut public spending by £100 Billion. People may be concerned by bank bonuses, but that's a sideshow to the real deal we have to face together as a nation. Looking at public spending, welfare costs some £200 Billion - a third of the total. Yet it doesn't have a profile that matches its size. It keep growing like topsy and spawns social failure. I'd be really interested to know how CentreRight readers think we should reform the welfare system and what a reformed welfare system would look like.
And here's why we need to think carefully. We simply can't raise taxes by large amounts. It's simply not going to be acceptable. Moreover, we will need to get the economy growing again and put Britain back on track as the earth will have been scorched. Taking more wealth out of ordinary families will slow that recovery and make it even harder for people to get by and pay their bills. We can't borrow any more - it'll probably soon be a gilt strike levels. In fact, we need to work out how to rein in public borrowing before we have to go cap in hand to whoever has got some cash. That leaves one thing. Public expenditure is at unsustainable levels. The Bankrupt Britain report makes that absolutely clear.
So what can we do? Slashing public expenditure by £100 Billion just like that is not going to be practical. Yet there does need to be a hard headed look at what Government should be doing and areas that Government should not be involved with. And it's necessary to look at wider reforms of the welfare system. In Britain, the cost of welfare has risen sharply during the good years, while elsewhere it has been falling.
The reform of welfare is an essential - yet it is not about leaving people in penury, starving in the streets. It is about opportunities, the realisation of potential, the improvement of skills and the incentivisation to work. There are 5 million people in Britain who could work yet do not. What right does Government have to stunt their potential? Not only are we failing these people, yet the deadweight costs of this social failure holds everyone back. Now, I don't have all the answers, but I have a sense of the direction we should travel. This is why it is so important to have David Freud on board. This also seems another area that Iain Duncan Smith and his brilliant Centre for Social Justice should look into (and I hope they already are!). More generally, I'd be really interested to know how Centre Right readers think we should reform the welfare system and what a reformed welfare system would look like.