The Brexit roadblock is causing a laissez-faire crisis of government

Bruce Dear
Triggering Article 50 - City Of London
Right now, the government is spending all its political capital on Brexit (Source: Getty)

Brexit is a near-religious obsession in Westminster and the press.

In their Brexit bubble, the elite (both Leave and Remain) debate their beliefs like detached theologians.

Meanwhile, in real world UK, inequality grows, the population ages, and shortages beset social care.

Read more: Businesses desperately need unity on Brexit

These issues are well-known and deepening. But the UK, bushwhacked by “Brexistential” angst, lacks the time and resources to deal with them. Implementing the referendum result has swamped the UK state apparatus, unleashing a colossal and inadvertent laissez-faire experiment.

This suits some “Brextremists”, who often believe government just constrains the creativity of a captive people. But such laissez-faire ideology was born centuries ago, when many problems were self-curing and governments could stand aloof with impunity. There were fewer people then, and they lived shorter lives. Inequality was accepted as natural, and complex infrastructure did not exist.

It is now 2017, not 1817. Unlike our ancestors, we are globalised, longer-lived, and dependent on technology. Our times require more sophisticated solutions than stark bonfires of taxes and tariffs. We need a mixed economy. Neither a laissez-faire nor command economy will do.

Perplexed by the challenges of the present, our politicians exhume the ideas of the past. On the right, Brexit is lionised as the consummation of the Thatcherite revolution. On the left, Tony Benn’s protegees want to leave Europe to build Bennism in one country.

This Top Trumps of 1980s ideas highlights an even more uncomfortable truth. Our short-termist oppositional politics cannot solve long term problems. This is the real British disease. The fault is not in the EU, but in ourselves that we have never addressed the UK’s historic trends in housing, infrastructure, and ageing demographics.

The UK has too many structural challenges for one article. However, the ageing population provides one example of how new thinking could break our Brexit-beset binary bind.

By 2050, it is estimated that 50 per cent of the UK population will be over 65, and the retired will outnumber the working three to one. Sensible suggestions to deal with this challenge (such as Theresa May’s manifesto social care policy) get shouted down as “dementia taxes”. Punch and Judy politics will never provide a coherent solution to it.

To break this stalemate, the government should appoint a new Royal Commission with a two-year brief to examine every aspect of our ageing population dilemma. The government could promise to implement the Commission’s depoliticised, evidenced-based findings, and invite opposition parties to do the same.

The Commission will have to think unthinkable things. Ultimately, the only way to deal with our ageing population is through higher taxes, targeted (not universal) state provision, and by obliging better-off pensioners to partly pay for their care out of their own assets. We must recognise that our ageing population cannot be cared for by income tax alone. Working people will be too few, and the retired too many.

The over-50s currently own 69.7 per cent of UK household wealth. General pensioner poverty has been eliminated, although many in retirement are still sadly poor. They should obviously get all the support they need.

But this should not mean helping every rich pensioner as though they were poor. It is not fair to subsidise wealthy pensioners using the income tax of other people’s children. That is both unjust and just plain daft.

Tax rises, curbing universal benefits, and adult conversations about house prices are electoral measles. No one votes for politicians spotted with them. Even more reason to give these issues to a Royal Commission and to seek a cross-party, fact-based consensus on them. The alternative is reactive government by crisis, as the elderly inevitably crush the tax base.

Right now, the government is spending all its political capital on Brexit, with no reserves left for actually governing. Similar Royal Commissions could provide an antidote to our Brexit-fixated politics by identifying objective solutions to the other intractable problems our zero-sum political games struggle to address.

We cannot let Brexit roadblock Westminster for the next five years. Our twenty-first century problems will not be solved by accidentally resurrecting nineteenth century laissez-faire.

Read more: US financial sector "nervous" about hard Brexit, claims City of London Corporation

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

Related articles