British policymakers are inclined to tot up the prospective bill for Brexit in terms of lost investment or reduced access to EU markets. Even before it has left the Union, however, the UK is facing a heavy opportunity cost. The political battles and administrative burden of EU disengagement are soaking up energy and resources. Pressing domestic issues have been sidelined. The danger is that this will only add further to the deep public disenchantment with the political class that contributed to the Brexit vote.
Ministers and civil servants complain the scale and complexity of leaving the EU allows them no time for anything else. The Brexit paralysis at Westminster scarcely helps. For all that, it would be a serious mistake to ignore the pressing need to rebuild trust and confidence in government. The answer is to focus efforts on a handful of urgent policy challenges that have a direct impact on the everyday lives of citizens. Three priorities come to mind for 2019 — housing, social care and crime.
No one doubts that Britain is suffering an acute shortage of housing and, especially, of homes available at affordable rents for those on low incomes. The government now spends more than £20bn every year through its housing benefit budget, most allocated to subsiding private rentals. The past few years have also seen a plethora of tax incentives for first-time buyers. The big problem, however, remains an acute shortage of social housing. In 2017 Britain built about 215,000 new homes. Housing charities and local authority experts think the figure needs to be closer to 300,000 annually for a decade or more.
Theresa May’s government has eased some of the financial restrictions on local authorities and housing associations. A bolder plan is needed — combining the removal of the remaining borrowing and spending caps with legislation to allow local authorities to “capture” increases in land value that accompany planning permission. With the cost of public borrowing at close to zero, investment in low rent housing makes economic as well as social sense.
The case for new arrangements to underpin social care for the elderly — repeatedly promised but still undelivered by the prime minister — is equally compelling. The absence of such care is a big part of the explanation for recurring crises in the NHS, which is drained of resources by the “bed-blocking” of elderly patients.
The answer — a scheme to pool risk through a contributory insurance system — is also obvious. There are various models on offer, including additional National Insurance payments for the over-40s or one-off “premiums” paid at the age of 65.
What is required from the government is the political courage to implement such a scheme in the face of likely opportunistic sniping from the Labour opposition. Once again, much of the benefit would be felt in Britain’s more deprived areas — the left-behinds of the 2016 referendum campaign.
Finally, the government must act to reverse the trend of rising crime rates. Sharp increases in violent crimes — particularly incidents among young people involving knives — along with evidence that police forces are “screening out” without investigation less serious crimes badly undermine confidence in the criminal justice system.
Cuts of about 20 per cent in police budgets across England and Wales during the past seven years is a big part of the explanation. But more also needs to be done to restore social support for deprived teenagers. The government complains there are competing priorities for limited funds. The security of its citizens is the first duty of the state.
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