Was the spending review really 'promising'?

housing, community, town, city, society
 (Photo: Getty/iStock)

The Church of England’s lead bishop for economics and business, Helen-Ann Hartley, and the Bishop of Manchester, David Walker, have broadly welcomed the government's latest spending review, describing it as “promising”.

In particular the bishops praised the government’s decision to put more money into housebuilding and the NHS, adding that they hoped the government's aim of distributing wealth and opportunity around the country would indeed come to fruition.

It’s perfectly understandable for a Christian bishop, and indeed the ordinary man and woman on the street, to be in favour of houses and hospitals for everyone, but I have to question if simply throwing money at an issue really is the best solution.

Let’s take housing as an example. If you watch a programme like BBC Question Time and the issue of house prices comes up, the argument typically goes like this: the left-winger on the panel would likely say that the problem is not enough houses being built, while the right-winger would say the issue is something like too much migration.

Basic economics tells us that the price of something, be it a house or a bar of soap, is determined by supply and demand. The left-winger is right when he says there are not enough houses - the supply is too low. The right-winger is also right when he says there are too many immigrants - the demand is too high.

Last year net migration to the United Kingdom was over 400,000 people. In the final years of the Tory government, it was nearly a million a year. Can any government build that many houses annually? Would it be desirable, even if it were possible?

If we move on to NHS funding. Every year, for as long as I can remember governments of both parties have continued pouring money into the NHS with no discernible signs of improvement.

One Thatcher-era Tory minister is alleged to have remarked on one occasion that if the extra cash poured into the NHS for a given year was publicly burned, it would both please the public (as extra investment!) and would be just as effective as if it had actually been used by the NHS.

If we want better health outcomes in this country, it might be time to consider whether sticking with a model designed for 1940s Britain is really the most effective way of taking care of our people - especially given Britain's eye-watering debt levels. 

One area where the bishops were less effusive in their praise was the government’s plan to scale up arms manufacturing, suggesting instead for greater emphasis on development and diplomacy.

“We should not neglect our duty of care to some of the poorest people in the world, including many within the Anglican Communion.”

The bishops are right to note that the government has a responsibility to safeguard national security. I would go further than that to say that the job of the British government is first and foremost to protect the interests of the British people. But undoubtedly a militarily secure Britain is in a better position to care for the poorest people in the world and help countries like, say, Ukraine. Defence spending may not be popular but opposing injustice on this scale is not cheap and can only happen when we ourselves have the military capacity to do so. 

The bishops are right to argue that some of the government's priority must lie in addressing the root causes of conflict through development and diplomacy. As we have seen in recent years, there is a limit to how many incomers even wealthy and relatively stable developed countries can absorb. We simply cannot take in unlimited numbers of people - no matter how much we may feel for their plight - without fracturing the fabric of our own society, a situation that leaves nobody better off. 

One final point. Britain’s total government debt is around £2.8 trillion, representing around 100% of GDP - compare that with the 2000s when it was below 40% of GDP. At some point this money will have to be paid back. We cannot continue spending money we do not have indefinitely. 

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Was the spending review really 'promising'?
Was the spending review really 'promising'?

Church of England bishops have described the spending review as “promising”.