Michael White 

Clashing realities of cutting the deficit

Michael White: As the government is quickly discovering, the money it tries to claw back with one hand it is often forced to spend with the other
  
  

Aricept, the Alzheimer's drug
The National Institute for Health and Clinical Excellence decision to revise its guidelines on Aricept and similar drugs is not without financial cost. Photograph: Cate Gillon/Getty Images Photograph: Cate Gillon/Getty

The 2010 party conference season is over. But do we awake this morning to a sigh of relief all round? Not at all. The coalition goes straight into the next round of cuts drama – John Hutton's plan for public sector pensions is today's item – to the familiar sound of clashing realities.

Such as? Well, the Mail, always a Commonwealth medallist in the having your cake and eating it contest, devotes its front page to a renewed assault on the child benefit cut and a self-congratulatory splash over free access to early-stage Alzheimer's drugs.

What's the connection? Why, money of course. It's good news that the admirable National Institute for Health and Clinical Excellence (Nice) has decided to revise its guidelines to doctors. As a result, Aricept and similar drugs – previously available only to moderate stage Alzheimer sufferers – will now be free on the NHS to people in the early stages.

Splendid, and it "only" costs £2.50 a day. But hang on. My frail maths tell me that is £17.50 a week, not far short of the £20.30 a week paid to the mothers of first-born children (£13.40 for subsequent children). We're talking up to £1,000-a-year habits here.

So what the government claws back with one hand it is forced – not least by a Mail-backed campaign – to hand back with the other. What are the numbers involved? Well, around half a million people in Britain (and their families) struggle with Alzheimer's, with 60,000 fresh cases diagnosed each year.

At a fringe meeting I chaired in the "health hotel" – a neat bit of conference packaging by health campaigners – this week, I heard Roy Lilley, a combative NHS veteran of some distinction, warn that this country faces a "dementia epidemic" (I know it's not exactly the same thing) which could overwhelm local authorities, as well as families.

He wants pharmaceutical companies to be given whatever tax write-offs (that costs money too) it takes to find a solution in double-quick time.

And higher-rate tax payers whose child benefit is at risk? Early estimates suggested 1.2 million middle class earners above the £43,875 threshold. But the Mail reports that George Osborne effectively cut the threshold for higher rate taxes in his June budget – to ease it for lower rate ones — so there may just be an extra 200,000 families caught in his net by 2013, when the new rules come into effect.

It's not clear, except to say that rule changes always throw up anomalies and unfairness. But then it's always like that in real life. I enjoyed David Cameron's conference speech yesterday – witty and confident, that's always good – but wholesome optimism is never enough, certainly not in our current circumstances.

Today's FT reports officials in the Treasury hinting that some cuts and some tax rises – £23bn of the former, £9bn of the latter due in 2011-12 – may have to be delayed, despite the coalition's tough rhetoric, restated by Cameron yesterday.

Why so? Well, life is complicated and ministers are realising that cancelling contracts or shelling out on redundancy is costly. We knew that, didn't we?

Labour discovered all this the hard way. I remember Gordon Brown, even before he was chancellor, wanted to take child benefit away from richer families whose kids were older but found it difficult. Osborne is reported to be thinking about the same idea.

There is a solid case for the principle of universality, that services provided only for the poor become poor services, that the middle and even upper classes need to feel tangible benefits for the taxes they pay. As I have written before, belted earls love their free bus pass. I love mine, too, but fear I may be about to lose it.

In hard times, I recognise that modest sacrifice – mine must be worth around that £1,000 a year figure too – may be necessary if we are to be "all in this together".

I like my bus pass, but I choose to use the bus, just as middle class parents choose to have kids, one of life's great joys and a contribution to the general good of wider society.

They deserve our collective support, but how much and in what form? More support than Alzheimer's victims? Often we're talking about the same people, juggling their kids and their ageing parents. Tricky, isn't it? As Cameron said only the other day, "to govern is to choose".

 

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