7th September 2021
Another late-night revelation about our current government-by-essay-crisis:
More detail on tomorrow’s manifesto-busting national insurance increase:
* The hike will be branded a health & social care levy
* It will be ‘legally ringfenced’ to prevent it being siphoned off by future govts
* Unlike normal NI it will also be paid by working pensioners— Jason Groves (@JasonGroves1) September 6, 2021
The phrase ‘legally ringfenced’ is a legal and political nonsense.
It is a legal nonsense because nothing in the United Kingdom can, in any meaningful way, be ‘legally ringfenced’ .
This is because of the doctrine of parliamentary supremacy, which means a parliament can make or unmake any act of parliament.
Nothing – to use a similar dishonest phrase – can be ‘enshrined in law’.
Even if there were a provision put in a statute – with super-duper protections intended to prevent its repeal or amendment – the provision and all those super-duper protections could be repealed or amended with a simple parliamentary majority.
And it is a political nonsense for it is a trick that that has been played before and which has been exposed as trick before.
The international aid budget was, supposedly, legally ringfenced.
The fixed-term parliaments act was, supposedly, enshrined in law.
The current triple-lock on pensions likewise, and so on.
And so on.
But still politicians use this trickery – and still too many nod-along by these impressive sounding phrases.
The claims ‘legally ringfenced’ and ‘enshrined in law’ do have a rhetorical purpose, of course.
They invoke the majesty of law to charge up what would otherwise be a banal political utterance.
An utterance intended to reassure waverers or even win over somebody who would otherwise be opposed.
And in that way, it is perhaps slightly significant that politicians still feel law has sufficient respect so that political statements can be framed as grand legal announcements.
But it is trickery all the same.
Any politician who uses the phrases ‘legally ringfenced’ and ‘enshrined in law’ is a knave – and a knave taking you to be a fool.
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The ‘no Parliament can bind its successors’ principle has been both a strength and a weakness of the British (English?) constitution. On the once hand, as I think you have often pointed out, it allows Parliament, and so the government, to adapt to changing circumstances without the performance issues that the US, to take the obvious example, faces. On the other, it means that each successive government is an elective dictatorship constrained only by the House of Lords, which has its own issues and priorities, and the courts – which are subordinate (as I understand it) to the Crown. Therefore, when the ‘Good Chap’ theory of government fails, for lack of good chaps, there is no protection.
Having worked in an administration run on very strong legal boundaries (the EU) I have seen these advantages and drawbacks in contrast to the lawyer-dominated EU procedures. While I would not want to condemn my British colleagues to the often niggling details and procedures (for example the famous ‘whereas’s that must precede any legal instrument) the written constitution does strengthen the arm of those who wish to apply caution to the wilder imaginations of politicians and – at least in theory – could enable ‘legally ringfenced’ provisions to be literally written into the constitution and so not changed without a more laborious procedure. Would this be worthwhile? We may doubt it, and conclude that government cannot be better than the men and women exercising it, but the current failure of ‘Good Chap’ government suggests that we could do better than we are.
There is a defence against the lack of “Good chaps”, because the “Good chap” relies on the presumption that good chaps can be trusted by the public, and it is an abuse of that trust to be anything less than that presumption.
Abuse of the public’s trust by chaps in public office is a criminal offence and the answer is to prosecute for it.
An example of “ring-fenced” funds later being taken back by a government to spend as it chooses is the 2008 nationalisation of private pension funds in Argentina.
In 1994 in Argentina, in a much copied move, began to require people to pay their compulsory national pension contributions into private pension funds. It “ring-fenced” the money to fund later pay-out of pensions. You could see the money. The government couldn’t touch it. A comfort in a country where the government repeatedly bankrupted itself. It even survived – just – Argentina’s worst financial crisis in 1998-2002 when the government bankrupted itself again.
But come Argentina’s next financial crisis in 2007-8, Cristina Fernández-Kirchner nationalised the private pension funds. The proximate excuse was that the private funds were profiteering by charging excessive admin costs (a feature similar to what happened in many of Argentina’s over-business-friendly privatisations, many would suggest corruptly so). Other less extreme solutions were available and should have been implemented years before.
The money was handed over to the National Social Security Administration (ANSES), which administers a variety of social benefits. The money was no longer segregated and managed actuarially like a private pension fund. It was available to be spent on immediate liabilities. Very useful in a crisis. And Argentina continues to have further financial crises.
There is even more inanity in this concept. The service covered by these “legally ringfenced” funds is already a core part of the government’s activity. If a future government wants to cut back on its expenditure, it can siphon off the element outside the fence and still maintain that it has honoured the ringfence promise.
In its crass attempt to fool the public it’s a bit like freezing personal tax allowances instead of increasing them with inflation, and claiming that there has been no increase in taxation.
I agree that the term is a legal nonsense, but I am not so sure that it is a political nonsense: while a government might easily trample down a ring-fence, they cannot do it without a little embarrasment…
Unless of course, they have a compliant media and no sense of self awareness.
In other words, ringfencing any funds would prevent a future Labour government from spending it… though some might argue that they may as well guard against unicorns.
More importantly though, it is not a political nonsense because there is no shortage of fools who will accept it at face value.
Given that UK public health spending was about £225 billion in 2019, and estimated at £269 billion in 2020, and this announcement will add around £10 billion a year from 2022-23, it is meaningless to talk about it being ringfenced (even if such a thing were legally possible).
What does it mean to “ringfence” the cherry on a cake, but leave the cake vulnerable to having huge bites taken out of it?
That these phrases are meaningless seems obvious – strictly for the tabloids.
Indeed I want our government to have a fairly free hand – so long as I can see it. What is the point of hiring managers if they cannot act in what they claim is ‘our best interests’. At least we can in theory chuck them out now and again. But over many cycles of ‘this useless bunch/that useless bunch’, elections seem like a change of TV channel – more of the same rubbish.
I suppose nice that politicians feel law has more respect than they do. Kudos to your profession, David.
Can I assume that ‘legally ringfenced’ might come into its own if applied to local government?
Or am I out of date and that check-and-balance has also been dismantled?
I ask because I was once a local borough councillor and came across an agency set up with Regeneration money. I read the relevant powers and raised it with the then Chief Executive . “Oops. Yes. mistake.” They stopped the scheme. No sanctions. Of course.
Another time the Parking Service was clearly operating in a way which breached the rules and also, it seemed, issued PCNs so as to generate as large a profit as possible. With the claim that was okay because all was ringfenced.
I got my 12 seconds on TV calling it Highway Robbery. (I had one line and said it twice. Nervously fluffing the first take.)
“Oops” said the borough again. But never paid anyone back.
The lemmings who believed the ringfencing of the triple lock will still vote for these charlatans. When will political gravity be reinstated?