Budget 17: Tax Is The Biggest Elephant In The Room

We just have to talk about tax.

For a brief moment it looked like we were going to cross the Rubicon into a sensible discussion.  Surrey County Council’s plan to put proposals for a 15% increase in council tax – in order to pay for social care – to a local referendum seemed to be a break-through moment.

But in one blink it was gone. The “blink” seemed to be central  government’s,  whose so-called “sweetheart deal” on extra funding has been revealed by clandestine recordings of a meeting of the council’s ruling Conservative group.

Once again a debate on tax was dragged back into the political never-never land.

Until yesterday, when the Chancellor’s decision to raise National Insurance contributions for the self-employed catapulted tax back into the spotlight.  Outrage has followed.

Howe dare such a dirty trick – allegedly breaking a manifesto commitment –   be played on our “wealth creators,” who because they are self-employed are particularly vulnerable.

This furore is over a modest increase – from 9% to eventually 11%, meaning on average £240 per annum extra, with exemptions for the lowest earners and still below the Class 2 (or employee) rate of 12%. 

All this points to the inability to have a sensible, rational reasoned debate on taxation as being the biggest elephant in a room full of these beasts.

In fact, you can’t move in the room for elephants on taxation. Huge great issues that dare not speak their name.

Desperate under-funding of adult social care is one. Endemic tax avoidance is another (not much from the Taxpayers’ Alliance  on this, strangely).   The inescapable fact that for some things there is no free-market solution (take your pick from the Armed Forces to a national high-speed broadband network). We just pretend that they are not there because the discussion would have to involve talking about tax.

The latest row is indeed both symptomatic and depressing. A large slew of tax avoidance activity surrounds so-called bogus self-employment.  As finance journalist Paul Lewis quipped “Set yourself up as a company and take dividends:  low tax and no NICs at all.”

And significant  workers in the  ever-expanding “gig”  economy,  are effectively told  to  be self-employed as a  condition of getting the irregular jobs  they do.

But the bottom line is that the government needs money to run public services and things that the private sector either can’t or doesn’t want to do.  That money comes predominantly from taxation in one form or another.  To have turned taxation into the most sacred of all sacred cows is an act of supreme folly and self-delusion. We cheat ourselves by not talking about tax or condemning those who do.

This piece also appears in The Huffington Post



NHS and Social Care: A Political Constipation That Fails Us All

NHS hospitals have big and fundamental challenges, it is true.  It’s partly a regular-as-clockwork winter peak.  Partly desperate and wrong-headed underfunding. Partly a consequence of pressure on GP services, despite more money recently being promised.

But a huge and often overlooked factor is the impact of dreadful social care provision. This is what led the Red Cross to grab headlines and court controversy with claims of a humanitarian crisis.

The Red Cross have for many many years assisted hospitals look after patients when they are discharged and return home. It has always been a constructive and valuable partnership.  These trained volunteers are part of what used to be known by some as the “big society.”

There are some areas of our life where there is an argument for state provision, but actually, collectively, we are happier pitching in and doing it for ourselves.  The Red Cross is one such example, The RNLI is another. The National Trust is a third (though, of course, you’d have to pay to be a member).

So the Red Cross is not a replacement for the NHS, and nor is it an emergency relief.  And their concerns need to be seen in that context.  In the area of patient discharge and domestic return/resettlement, the Red Cross has hit the red button.

Patients medically ready for discharge but not being “signed out” for hours – thus blocking much needed beds. Care plans not being drawn up or properly supported so that when patients return home they are vulnerable.  Insufficient home support exacerbates that vulnerability. The chance of people in this position requiring re-hospitalisation is clearly and greatly increased as a result.

So we have a vicious circle of poor social care leading to stretched-to-breaking point medical care.

And of course this is not the only source of tension.  In amongst funding and seasonal spikes in ill-health, it is worth looking at the use of hospital services: 2m non-urgent visits to A & E in 2014.  So you can see why Jeremy Hunt is trying to filter these out of the wait-time statistics.  Partly it is because they are the only places open for health care on a 24 hour basis and, also unlike your GP, you don’t need to make an appointment.  The NHS “111” helpline seems to have a low thresh-hold for directing callers to hospital (and you can understand why). On-site, out of hours services, such as Walk-in Centres or Minor Injuries Units undoubtedly help (with  7m attendances a year, according to official  figures), but coverage is uneven and reducing.

As a society we have conspired to heap intense pressure on hospital services. Is it really a surprise when they threaten to fall over?

And it is an old trick – set something up to fail and then say it can’t work, and that we need an alternative.  And is this context we know what that private-sector, run-for-profit, alternative would be.  So we need to take great care in the language we use, lest we create a self-fulfilling prophecy.

However, there is still a huge national consensus in favour of care provided free at the point of delivery and the principle of the NHS itself.  Why then the gap between what we say we want and what we are prepared to pay for?

Could it be that we simply do not want to acknowledge the fundamental economic importance of social care, or that it is an essential component of a functional society, not an optional add-on?  Politicians do not want to engage  with the unavoidable need  to  raise taxation and possibly we do not want  to embrace the inevitability  of  us and our families needing  care, especially as  we/they become older and more frail.

And that is why, serious as it is, it is not the NHS that is most exposed in this real and difficult set of circumstances.  It is society itself.  You can’t have a mantra of sharing when you’re in denial about what makes society work. You can’t provide leadership without having a grown up discussion about tax and social care. That’s the mother of all crises.