As The Resolution Foundation Points Out, The Welfare State Isn’t Affordable


Every time someone says that we need to raise taxes to pay for elder health care, or pensions, or the effects of an ageing population, we should throw back at them the insistence that we knew the welfare state couldn’t be afforded. For that’s what an insistence on more taxation is – an agreement that we cannot afford what has been promised under the taxation levels we’ve now got. Which is, of course, what all of us out here have been saying for decades, isn’t it? We cannot afford the promises of the welfare state given the taxes that are being paid.

This being what the Resolution Foundation are saying:

Giving older generations the health and care they need in the coming decades will
not come cheap – but it is the right thing to do. However, asking younger working
adults to pay that bill in its entirety risks undermining rather than strengthening
the intergenerational contract. A better starting point is to recognise that Britain’s
booming stock of wealth is increasingly concentrated in older generations and that it
is also increasingly lightly taxed.

All those promises that were made cannot be funded out of the level of taxation that is currently paid. Exactly what many have been saying of course:

Make earnings of those above state pension age subject to National Insurance contributions

To pay for it we should be taxing everyone more. Exactly what we were saying needed to be done. Or, of course, cut back on the generosity of those promises. The actual calculation that has been done being that we’ll grudgingly cough up the cash rather than go through the pain of the promises not being met. That after all those decades of being told that we were wrong or even lying in our insistence that the welfare state promises could not be paid for.

To be honest once, just once, we’d like to see a report which recommended cutting spending, not raising taxes. Just for the value of the variety if nothing else.

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