There is no such thing as a ‘free’ government service

Is there a word more abused in the English language than ‘free’?

Even if you just stick to the financial use of the word, the list of its misuse is never-ending. There are the BOGOF offers in supermarkets. There are the ‘free’ gifts given out by companies as incentives to buy.

I write in the magazine this week about the providers of a new with-profits fund who are giving out ‘free’ M&S vouchers to those who buy in – yet its annual fee comes in at around 1.5% a year, compared to a nice tracker for under 0.2% and the top performing Baillie Gifford managed fund for 0.4%.

But the most maddening use of the word free at the moment comes from the ‘Yes’ campaign in the Scottish referendum. The Twitter account run by Yes Scotland is a particular culprit.

Here are a few samples.

“Independence gives Scotland powers to help families, enabling us to tackle rising energy bills and increase free childcare.”

“With a Yes we can deliver a huge increase in free childcare for Scotland, to help mums like Amy.”

“A Yes means we can deliver a transformational shift in free childcare, saving families thousands a year.”

“With Yes, we can deliver better jobs and quality public services like more free childcare for Scots families.”

You get the picture.

The Yes campaign are obsessed with childcare (it’s all about getting the female vote) but they also endlessly confuse ‘free’ with ‘taxpayer-funded’. This really matters.

All spending comes with opportunity cost – so when a government decides that a service will be entirely taxpayer-funded, another service has to be less taxpayer-funded. It’s all about choices.

So ‘free’ university places in Scotland actually mean fewer university grants to children from poor families in Scotland.

‘Free’ prescriptions mean less spent on the NHS in other areas in Scotland (might this be why I have waited three months for a letter telling me when I might get a hospital appointment for my son?)

And more ‘free childcare’ will mean cutbacks in some other areas (assuming the SNP doesn’t actually have a money tree).

Using the word free suggests that there is no opportunity cost – that no choices have to be made. That’s just not true. The savings of thousands to some families mentioned above are costs of thousands to other families. There is no such thing as a ‘free’ government service.

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3 Responses

  1. 17/07/2014, Mombers wrote

    I agree with you on many points but childcare is not a good example in my opinion. Absent free childcare, working would be impossible for the vast majority of mothers. That would mean fewer working people and a smaller economy. Also, many people would simply choose not to have children given the greater opportunity cost. Unless the welfare state significantly reduced handouts to the elderly, the economy would collapse within a generation.

  2. 17/07/2014, Merryn wrote

    @Mombers I think you missed by point slightly. I am not commenting on whether offering childcare is good idea or not. I am saying that it isn’t free. It is taxpayer funded and in that sense takes money from something else. So the honest question to ask an electorate is not “Do you want free childcare?” but “Do you want the nation’s tax revenues to pay for more of your childcare even though it means diverting resources from the NHS or perhaps from primary education?” The answer might be yes in both cases but the second question must be asked.

  3. 21/07/2014, Clive wrote

    ‘Free’ childcare solves nothing.

    Sure, it gives families with kids more money. They might think that’s a good thing, but having lots of families with more money than they’d otherwise have allows/encourages house prices etc to be higher than they would otherwise be. Also, tax has to go up to pay for the ‘free’ childcare. Put it all together and most families are back to square one, paying more tax, having no more spare income.

    If their was no ‘free’ childcare, there’d be less money in the economy, so house prices etc. couldn’t reach such silly levels.

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