Government should abandon ring-fencing

IEA signs joint letter to the Telegraph

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.