The Centre for Policy Studies' Tim Knox has joined together with five other centre-right think-tank chiefs to call for an end to ring-fencing, ahead of the Coalition Government's upcoming spending review. In a letter to the Daily Telegraph, co-signed with Mark Littlewood (IEA), Sheila Lawlor (Politeia), Philip Blond (Respublica), Simon Walker (Institute of Directors) and Matthew Sinclair (Taxpayers' Alliance), Knox explains that it makes no sense to implicity and explicitly protect vast swathes of government spending in areas which saw large increases under the New Labour government, espeically when deficit reduction has plateaued.
The full letter:
SIR – The Government is struggling desperately in its stated desire to eliminate the budget deficit. It is presiding over an extraordinary ballooning of the national debt.
In light of this we call on the Chancellor of the Exchequer to abandon the Government’s policy of implicit and explicit ring-fencing of certain areas of spending. In this spending review, areas such as health, overseas aid and development, and non-contributory benefits for older people should all be considered as areas in which savings can be made. Many of these ring-fenced areas saw substantial spending increases under New Labour.
It is, of course, acceptable to prioritise certain areas of spending above others. But it is not sensible to define certain areas as sacrosanct, beyond any form of questioning.
Ring-fencing certain spending areas as a device for sending a political message or as a means of positioning a political party is no substitute for proper sustainable reform.
We need to accept that, to cure the deficit, no area of government spending should be considered off limits. It is time that politicians of all stripes came to realise that the need to balance the books should be a national priority.
Institute of Economic Affairs
Centre for Policy Studies
Institute of Directors
In a surprising display of consensus, representatives of IPPR and Demos also called the wisdom of the current ring-fencing arrangements into quesiton, whilst Carl Emmerson from the Institute for Fiscal Studies explained how the current arrangements might lead to a very tight squeeze on other areas of public expenditure.