THE BLOG
06/03/2018 12:28 GMT | Updated 06/03/2018 12:28 GMT

If Britain Wants Nordic Public Services, It Will Have To Pay For Them

Although much political oxygen has been consumed by Brexit, it will be each parties’ domestic agenda which will shape the battlefield for the next General Election

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Most indicators appear to suggest that the public’s mind has changed little over the question of Brexit. I continue to believe that the correct course is for Britain to carve out a role for itself as the leader of a newly defined outer European sphere of some kind. However only time will the debate will change sufficiently for that to be a viable option to pursue.

Although much political oxygen has been consumed by Brexit, it will be each parties’ domestic agenda which will shape the battlefield for the next General Election. In Scotland, we found the post-independence referendum environment had changed politics into a question over pro-independence versus pro-union. In the wider UK, and if history is any guide, it is unlikely that politics will turn on Remain versus Leave. Britain will be divided over how to run and finance its public services.

Britain has decided it wants a fully funded, free at the point of use National Health Service. People seem to want railways operated not for profit but, rather, with all proceeds reinvested in the network as Transport for London does. The public appears to believe that markets should be tamed with intervention when, for instance, energy prices are seen to be unfairly high (especially when consumer prices are expensive relative to the wholesale cost).

In short, most Britons want to see substantial investment in public services. The debate is not, then, about these choices (although it is a separate question whether it should be). That seems decided. The question is over how you fund these choices. Here is where things are more uncertain.

A progressive tax system is popular but the evidence suggests taxing much beyond the current marginal income tax rates will yield little to no extra income. Reevaluating properties for the purposes of council tax remains a political non-starter, not least when ministers consider the problems recently caused by changing business rates. New methods of paying for services such as social care for the elderly funded from the lifetime accumulation of wealth seem equally unappealing if the last General Election is a guide.

My view is that Labour and the Conservatives will not fight the next General Election on the question of Europe. Europe remains important, and our eventual deal will be far more fundamental to the debate about domestic policy than most voters realize, but all the same I can’t see it animating the electorate.

The Conservatives could choose to don their teachers hats and attempt to lecture the public about the implications of their choices. Labour, for its part, is more focused on explaining the virtues of its high public spending approach.

Therefore, it seems to me that the crucial question at the next election will be how we fund choices that require higher public spending. That means tax raises. The question the parties need to get to, and quite quickly, is over which taxes and how much to raise.