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06

November

By Robert Palmer, Executive Director of TaxJustice UK

There’s an increasing debate about the resources that our public services will need in the future. This is most apparent in discussions about how much funding the NHS should get in order to meet the public’s expectations of decent, universal health care. With an ageing population, and a health service that is treating more people than ever, it is likely that the health budget will have to increase, even if we simply want to maintain the current level of service provision. This has led to a political debate between the Chancellor and the Health Secretary about how much extra money can be provided.

As welcome as this debate is, in the long term we need to find sustainable ways of paying for the NHS and other services (earlier this year, the IFS and Health Foundation have claimed that each household will have to pay an extra £2000 a year). The current pattern – from governments of all stripes – is often to allow services to reach crisis point before pumping in last-minute cash. This is repeated in health, prisons and other areas of public life. It’s deeply inefficient.

It is in this context that the Policy Institute at Kings has kicked off an important conversation about the public’s expectations of public services and how we pay for them. As Tony Travers, the director of LSE London said, if we do nothing, the UK risks having “a public sector consists of little more than a health service and nuclear warheads”.

The options to address this issue facing the government include raising more money through taxation, drastically cutting expectations of the services that the state provides, or finding some way of getting the public to share the cost of service provision.

The good news is there is evidence the public supports well funded public services, and understands that this needs to be backed by appropriate levels of taxation. Focus group research from 2015 by the Fabians found that across the political spectrum, people are proud of the UK’s public services and are proud to contribute to them through taxation. The Fabians report argued that public opinion shouldn’t be seen as instinctively hostile to any discussion of targeted tax changes to fund services. The public want to know where public money is being spent and need to feel that they get value for money.

Last year, the British Social Attitudes Survey found that for the first time in almost a decade, there is a majority in favour of increasing taxation to fund more public spending. It’s likely that given where we are in the political and economic cycle, this pressure for more public spending will increase.

There is also growing support for change from people within both major parties. Labour has proposed some rises in taxes on companies and the wealthy. And earlier this year, the Conservative peer David Willetts said that “the age of tax cuts is over” and called for targeted taxes on wealth and property to fund decent social care for the elderly and a sustainable NHS.

My organisation, Tax Justice UK, has been set up to ensure that everyone in the UK benefits from a fair and effective tax system. We will be making the positive case for the role that tax can play in creating the sort of society that most of us want to live in – one where decent public services are funded through a fair tax system.