It's important to be reminded what right-wing thinking about Britain really is every now and again. The reason is that in recent decades, where right-wing think tanks have pointed, is where policy has subsequently gone. So, a new paper from Policy Exchange entitled 'Beyond our Means', which has the sole purpose of suggesting that the UK state is too big and must be shrunk as a result, whatever the human cost is is worth looking at.
The authors of the report claim that the UK faces a twin fiscal crisis that has been created by what they claim to be government debt fast approaching 100% of GDP and rising interest costs. That, of course, debt is not 100% of GDP because around 25% of all government debt is still owned by the Bank of England, is a point the authors fail to note.
They also ignore the fact that easy options to cut interest costs (ending quantitative tightening, cutting interest in reserves, and just cutting base rates) are available. Why would they want to waste their supposedly good story on a narrative based on facts, after all?
So, they claim that reducing public spending is the only credible route to lowering both debt and taxes, although why that is a necessary goal is not clearly explained.
They then suggest how this goal can be achieved, with this long list of cuts:
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State Pensions: Freeze for three years. Raise the retirement age to 70 by 2040. Replace the triple lock with earnings or inflation linkage only.
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Means-Test Pensioner Benefits: Restrict free passes/prescriptions to those on Pension Credit.
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Welfare: Freeze working-age benefits for 3 years; tighten eligibility, especially around disability.
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NHS: Introduce a £20 GP charge; end national pay bargaining; charge for “luxury” hospital accommodation; move toward an insurance-based model long term.
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Civil Service: 25% cut in administrative costs and staff; restructure and merge arm's-length bodies.
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Public Sector Pensions: Move from defined benefit to defined contribution schemes (10% employer contribution); recycle one-third of savings into staff pay.
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Green Subsidies: Scrap Great British Energy, EV and boiler subsidies, and public sector decarbonisation schemes.
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International Development: Cut overseas aid to 0.1% of GDP.
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Free School Meals: End universal infant entitlement; target low-income families only.
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Post-18 Education: Cut university places by 30%; reinvest half savings in FE/apprenticeships.
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Childcare: Replace “free” childcare with flexible vouchers; deregulate and reduce Ofsted oversight.
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SEND: Restrict EHCPs to special schools; move to a budget-led funding model.
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Asylum: Half the current £6bn annual cost through deterrence and efficiency.
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Housing Benefit: Tighten eligibility; reduce Local Housing Allowance; expand housebuilding.
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Barnett Consequentials: Apply savings formula to devolved administrations.
Note what is not mentioned:
- New taxes on the wealthy.
- Reductions in inequality.
- Moves to reduce tax abuse.
- Funding for HMRC to collect tax, for example, from the 40% of small companies that do not now pay the corporation tax that they owe.
- The multiplier effect of these proposals.
The last is particularly important when it is noted that the report suggests:
By 2030, total savings would be redistributed:
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50% to deficit reduction
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25% to defence, policing, courts, and prisons
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25% to tax cuts
To contextualise this, first of all, the aim of this whole piece of work is to reduce spending by:
- The poorest
- The disabled
- Pensioners
- Those on low pay in the state sector
- Students and those who work in the communities that host them
- Those who rely most on state support
Most of these people have the highest multiplier effect from their earnings. It follows that the proposed cuts in their income and the increase in costs - such as those for healthcare, where what is proposed will take the form of deeply regressive taxation - will have massive negative multiplier effects, reducing growth and national income by more than the amounts supposedly saved.
Then note that the supposed savings to the state will be saved by giving tax cuts to the wealthy, who will simply increase their idle wealth, and by cutting deficits, which necessarily reduces private well-being whilst also reducing demand in the economy, further reducing prospects for growth.
This report was clearly written in that case by people with:
- No understanding of macroeconomics
- A visceral hatred of children, young people, those with disabilities, those with neurodivergence, the elderly, the sick and the homeless.
- Those who they think come from outside the UK.
- A total lack of awareness of climate change and its consequences.
- A love for law and order, and enforcing it on those who might object to their plans.
As a recipe for chaos, disorder, disruption, economic decline, and a failing private sector due to a lack of demand from those who are now its customers, this takes some beating. But that is what Policy Exchange, usually one of the less extreme of the right-wing think tanks, is now proposing. It is, in short, a recipe for exomic madness, all of it proposed because:
- They hate the state.
- They think shrinking it will make the private sector bigger, when there is no sign that it has any real desire to grow, let alone any ideas as to how to.
- They loathe 'ordinary people'.
- They want to privilege a few.
- They think those few can more than make up for the economic losses arising to the many, without ever having to worry about the consequences for distribution of well-being, spending power, saving and investment within the state, or the massive impacts of the economic lags that will suppress demand that they build into their ideas.
I could believe a sixth-form Conservative society at a public school could have come up with something as crude as this. That a supposedly serious think tank has is frankly quite scary. That a former director of the Office for Budget Responsibility and Institute for Fiscal Studies wrote the foreword is more worrying still, revealing how rotten the state of economic thinking is in both those places.
And this is probably the best of right-wing thinking right now, and almost half the people in the UK indicate in recent polls that they might support either Reform or the Tories, both of whom might subscribe to this. We are in deep trouble.
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It’s the sort of proposals that you might expect from a bug eyed Trot who has infiltrated the organisation in order to start a violent revolt
Why do Policy EX want to shrink the economy and make people poorer?
One of the former tories now Deform MP was spouting trash like this (PE report) yesterday.
https://www.theguardian.com/politics/2025/oct/28/reform-uk-let-ministers-ignore-international-law-danny-kruger
(I wonder if he is related to Freddy?)
It is probable that Policy Exchange is providing ammo to Deform and the Krugers of this world (begs the question – who funds Policy Ex?)
All grist to the media mill, which least we forget, is non-literate wrt matters economic (ref BBC report on the subject covering its own staff).
Which in turn means that trash like the PE report is given an uncritical reception.
Long term devious planning according to George Monbiot :
No 10 and the secretly funded lobby groups intent on undermining democracy
https://www.theguardian.com/commentisfree/2020/sep/01/no-10-lobby-groups-democracy-policy-exchange
Right-wing thinking is stronly influenced by Neoliberalism which has 3 goals:
1. Privatisation of public services 2. Reduction of regulations 3. Cuts to social spending.
Read: The Shock Doctrine: The Rise of Disaster Capitalism by Naomi Klein, https://amzn.eu/d/6MlIdTf
Video documentary: https://www.youtube.com/watch?v=aL3XGZ5rreE
just to offer a slight correction,
Neoliberalism is very strongly influenced by Right Wing Thinking.
In fact entirely derived from it, any academic rigour that may exist in it is merely attempting to justify the “right wing” notions it is built on.
In this thinking, people are supposed to become internally strong and able to prosper in the external world. Those who don’t prosper must be undisciplined, immoral and deserve their poverty, by the same thinking the rich must be disciplined, strong and moral and deserve their wealth and therefore doing anything to reduce it is immoral.
“Those who don’t prosper must be undisciplined, immoral and deserve their poverty, by the same thinking the rich must be disciplined, strong and moral and deserve their wealth and therefore doing anything to reduce it is immoral.”
It sounds exactly like the language which informed the 1834 Poor Law.
The poor were moral defectives who couldn’t be bothered to work for a living so life in the workouses had to be worse than self sufficiency.
Maggie Downie says: It sounds exactly like the language which informed the 1834 Poor Law.
It is, conservative morality has not changed, polices and presentation can change but it is the moral code on which conservationism is built. Not just the Tory Party either, the Whigs used the same reasoning not to interfere in the Irish famine and allowed food to be exported from Ireland while people starved. The previous Tory administration did provide aid and there were relatively few deaths in that period (1845/46), in keeping with Tory morality it was primarily aid in exchange for work (discipline), not simply handed out, but nonetheless, at that time Tory conservatism was softer than Whig conservatism.
Agreed
Many years ago we all laughed at Not the nine o’clock news and their fake budget. https://www.youtube.com/watch?v=BI7fudmO7FY
However today it is a manifesto for these right wing thinkers. They want to freeze state pensions! One of the lowest pensions in developed countries. I could go on but listening to them on Radio 5 now and my blood pressure is raising to dangerous levels.
Very good
They promise a Dickensian, dystopian future, no doubt with man of the people, Nigel “Scrooge” Farage, at the helm.
I don’t know why they just don’t add “voluntary euthanasia” to their list. Anyone who just wants to be done with all the sh-t of neoliberalism can just “opt-out”. It’s quick, cost-effective, and efficient — a very right wing answer to a problem. That would solve the pension crisis, because, let’s be honest, millions will not survive on a state pension, given neoliberalism’s direction of travel.
It’s only a matter of time before we get a return to the Poor Law, no doubt wrapped up in some cosy, modern jargon, with all the benefits it would bring.
I think the right have a fetish about making people suffer. Most of them seem to be narcissists, sociopaths, or psychopaths.
Is there anything about their political and economic agenda that wants to make life better for people?
Policy Exchange= utter bastards.
What a sickening paper – there’s no section of the UK public that wouldn’t be badly affected by these heartless bastards.
They seem to think that £20 to see a GP is a “small charge” – try telling that to a family who struggle to eat and heat.
I’m surprised that they want the retirement age to rise to only 70 by 2040 – I would expect the PE to want to raise it to 80 by 2030!
Savings in Barnett Consequentials of billions. No mention of how Scotland’s wealth built London and feathered various nests whilst Scots lived in squalor or, indeed, how much the Treasury steals from Scotland daily – just what scraps are handed back to us and how it can be further reduced – and we Scots are meant to be grateful for the handouts!
Well we’re not bloody grateful.
It’s a paper, not about the UK, but about England; the other 3 countries get little mention except a few words and a table about Barnett Consequentials and how to shaft them further to reduce England’s debt burden.
Has the Policy Exchange’s rather lopsided team (out of 60 in their ‘Meet the Team’ website page, 52 are men) ever written a paper about what happens to England when Scotland, Wales and Northern Ireland leave the UK?
There’s no acknowledgement from the PE that the “UK” may not exist soon. I’d like to read PE’s paper on that.
Much to agree with
I missed this in my rant: “there’s no section of the UK public that wouldn’t be badly affected by these heartless bastards.”
I should have qualified that phrase by adding “with the exception of their rich backers and pals.”
Well said.
That proposed £20 charge to see the doctor shows how much these people are out of touch with reality.
I read a great quote worth repeating the other day. It stated: “The right always begin from a point of dishonesty; they they try to push the concerns of the elite as if they are the concerns of everyone”.
But who amongst our very compromised political leaders has the sheer noise to lead us out of this current morass?
Nil desperandum!
We have now entered the Right Wing theatre of the absurd for sure.
Those 15 ‘ideas’ (ha ha ha) will shrink the economy, not grow it.
I’m beginning to wonder how close we are to the use of the ‘c’ word being a legitimate label for people who advocate tosh like this (and I’m not talking about the word ‘crap’ either).
If you are offended by my comment then the only excuse I can offer is that deep down I am just a base working class lad allowed into university by mistake who is really, really angry that there are ‘c’s prepared to keep trotting out crap like that and hurting me and many others. I have to say that my Mum would not be very happy (although she was a convert to Mirage near the end of her days).
The only thing I can say in mitigation with any working class pride is that I know who it is who is shafting me and how. That’s more than can be said for those falling for Mirage, Stymied and Came Behind OK (an anagram of Kemi Badenoch, which she certainly did). I don’t need to be told whom to hate by this lot. I know who is responsible for all this, and I hold this tripartite bunch of wankers in nothing but contempt.
I’m currently reading Bill Mitchell’s “Reclaiming The State” which maps out the history of neoliberalism and puts forward an alternative vision of the state.
It is obvious now, after 40-50 years of neoliberalism, that “mainstream” economics has been completely brainwashed.
As have the politicians, right and left, who peddle these ideas as if they were written in stone.
It is genuinely time for a new politics and we are not going to get it from this Labour Government.
Keir Starmer is a sorry excuse for a Prime Minister, more concerned about financial predators than about a healthy economy or the people he serves.
Hopefully the new message will grow in strength, providing an antidote to the bile peddled by Reform and the media.
Lets consider the logic and consequences of reducing government spending.
Less government spending means that less taxes will be collected, this will increase the debt.
Less government spending will cause a recession, people will save money which will reduce taxes and increase the debt further.
When will the pitch forks come out?
“As an educational charity our mission is to develop and promote new policy ideas which deliver better public services, a stronger society and a more dynamic economy.”
I suggest any organisation that numbers Charles Moore, Nick Timothy and other prominent figures from the Telegraph and the right generally as scholars and fellows, as Policy Exchange does, is not interested in better public services.
Agreed, entirely.
The Policy Exchange never reveal their funding. They don’t need to because it’s fairly obvious who pays the wages of people writing this stuff. It’s wealthy people who really are fools to themselves, if they only knew it. Their wealth wasn’t built on a frugal state; it was accumulated in a mixed economy with the main spender being the state and workers on moderate wages. Yet, amazingly they want to reduce this spending out of spite. They will gain nothing from any of their recommendations, so why do it?
I too am at a loss to see why they are suggesting such potty and destructive policies. What on earth do they think would be achieved? The whole approach is not just ill thought out but positively evil.
Presumably they don’t realise if they cut pensions in the public sector, then they would fail to attract people to work there? I have considered public sector work before and on a lower salary because of the better pension. People do factor it in. If for example the NHS dropped to 10% contributions it would amount to a roughly 13% pay cut for everyone in the service and those who would consider working for it.
It doesn’t seem a very smart idea when skilled nurses are already preferring checkout work in supermarkets.
They do not understand the public sector, or those who work in it, full stop.
Agree. I worked in the public sector for 40 years and almost all my colleagues factored the pension into their income, it was much discussed. Also important for many was a real desire to help people in some way. Discussions were often about the balance between the two.
You say ‘right wing’ thinking Richard – but as some here have said – it is main stream thinking. There was a ‘Briefing Room’ radio 4 programme recently which discussed
‘Should the government worry about debt?’, and also programmes today discussing the history of the OBR and options for the Reeves budget. Although couched in much more detached and ‘objective terms than the PE paper – the discussions are shot through with the same assumptions and perspective. ‘Balancing the books’ is never queried – what does it actually mean? – what are its implications? . ‘Borrowing’ is never queried – from whom did we ‘borrow’ the pandemic QE etc etc. Its sheer Chomsky ‘managing consent’ , where the debate seems to be in depth but is conducted within very narrow tramlines – that its the financial markets who define what government can or cannot do.
There are plenty of economists / political economists who would take a different view: Murphy. , Mazzucato, Varoufakis, Kelton etc etc – rarely if ever asked to contribute. That almost gives the game away – they don’t want people to hear it .
I think I read somewhere that Labour were still taking advice from IEA and/or PE.
Sadly, you are right.
Mustn’t forget those immortal words of J K Galbraith: “The modern conservative is engaged in one of man’s oldest exercises in moral philosophy; that is, the search for a superior moral justification for selfishness.”
In this day and aged, however, any reference to the “search for a superior moral justification” is something that doesn’t compute for neoclassical economics or economists.
Agreed
I would love to see a prime time debate between you and these clowns. Every few years, the UK’s right-wing policy machine rolls out another blueprint to shrink the state and shift wealth upward. The latest — Policy Exchange’s Beyond Our Means — is a striking example of how ideology dresses itself up as fiscal responsibility.
Push more people into destitution, minimise the proportion who are financially secure, accelerate the existing pathway towards revolution.
The elite think they want this path for now, but history says that if they continue along the path too far then they won’t like the result.