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HomeNewsNick Wood: Time for Osborne to count the cost of social liberalism

Nick Wood: Time for Osborne to count the cost of social liberalism


More than a decade ago, when we were working for William Hague, I remember George Osborne summarising his political philosophy for the benefit of a Notting Hill dinner party. He was an economic liberal – and a social liberal to boot.

It did not prove a particularly contentious remark that evening. Economic liberalism has been a Conservative orthodoxy since the triumph of Thatcherism in the 1980s. And, after a long, low-level civil war in Tory ranks, among MPs of the Osborne and Cameron generation, social liberalism has emerged as the dominant force in the party’s thinking.

From the eager embrace of the costly global warming agenda and Harriet Harman’s Equality Act,  to gay marriage and backing for an expensive State takeover of caring for children, the Conservative leadership has become almost indistinguishable from its Liberal Democrat bedfellows and Labour in pursuing an activist social liberal agenda.

The inconvenient fact that it has helped to fracture the Tory Right and fuel the rise of the UKIP breakaway faction has been brushed aside. Nothing, not even the prospect of an election defeat brought about by the split on the Right, has been allowed to get in the way of the Conservative lurch to the liberal Left.

The Budget is less than a fortnight away now and no doubt Osborne is now putting the final touches to his tax and spending plans over the next few years. True, the economy has returned to growth after the longest and deepest recession for a century. As a result, the Chancellor can talk with some plausibility about eliminating the deficit by 2017/18 and getting our projected £1.5 trillion of debt (80 per cent of national output) on a downward trajectory at around the same time.

But these figures are still grim. We are not yet half way through the austerity programme begun by Osborne in 2010, which for all the wailing and gnashing of teeth on the Left, has so far amounted to an average real terms cut of less than one per cent per annum. Far more  hair-shirts are to be worn to achieve any kind of progress. Any future economic slowdown, let alone a shock, would knock all these numbers into a very ugly cocked hat.

The Institute of Fiscal Studies says we will only achieve a budget surplus in 2018 by imposing an extra 30 per cent of cuts on unprotected areas of spending, which exclude schools and health.

It is against this background that Mr Osborne might choose to ruminate on his lofty devotion to social liberalism. It makes him sound like a nice, caring, tolerant sort of fellow. But It comes at a price – a very high price, but one that British politicians, across the political spectrum, are generally incapable of computing.

Well, not all politicians. Last week, Lord Freud, a junior minister in the Department of Work and Pensions, became one of the few members of the Government, to make the link between social liberalism and our bankrupt, debt-ridden public finances.

Speaking in the Lords, Freud conceded that family breakdown – now endemic in Britain with families headed by married couples set to be minority by 2050 – imposed immediate costs on the taxpayer, such as £9 billion a year in benefits for lone parents. But as Freud went on to say, the real bill is much higher – perhaps, according to research by the Relationships Foundation, £46 billion a year after the wider social impact of collateral damage, such as higher crime and educational failure, are taken into account.

The Minister went on to highlight the stability marriage brings to family life and to claim that the Government was doing its best to overcome the “major societal changes” that underpinned the collapse of the nuclear family.

It fell to the Bishop of Chester, the Rt Rev Peter Forster, to make the point more sharply. The task the Government faced in cutting welfare spending while family breakdown remains high was like trying to fix a roof when leaks were springing up around the house.

“This isn’t just about bishops constantly banging on about moral ideals, it actually hits people’s pockets. We are trying to keep the welfare budget under control but relationship breakdown has caused the welfare budget to spiral out of control,” he said.

That £46 billion price tag for family breakdown equates to 9p in the pound of the basic rate of income tax. Put another way, if we could eliminate family breakdown, we could almost halve taxes.

Of course, the £46 billion a year is almost certainly a gross underestimate of the true financial costs of family breakdown and comes nowhere near computing the wider costs of the social liberalism that the Chancellor so proudly advocates. Just think of the bills the taxpayer picks up as a result of educational failure, soft criminal justice policies, lax immigration controls  and the rampant lawyer and bureaucrat dominated culture of political correctness that pervades the public sector and is increasingly infecting private industry.

The true costs of social liberalism must run into hundreds of billions a year.

As many on the Right have argued, culture trumps politics. It trumps economics as well. Economic liberalism and social liberalism are not comrades in arms. They are mortal foes.

As Osborne sweats over national accounts swimming in a sea of red ink, he might like to reflect on that.

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Nick Wood
Nick Wood
Chief Executive of Media Intelligence Partners

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