The UK needs to spend a lot of money in order to deal with its collapsing public sector. There are daily reports of crumbling schools, poor transport infrastructure, shortages of staff and beds in the NHS and so on. Any new government is going to face the problem of where the money to restore public services will come from.
The question of how to pay for better public services is a much more acute one today than it was a generation ago when Tony Blair came to power. Partly because of this, the present Labour Party sounds almost fatalistic in its lack of ambition. The Shadow Chancellor, Rachel Reeves, talks of funding additional expenditure out of economic growth – but what growth is she talking about? She may well not inherit any growth at all if and when Labour comes to power. So Labour ministers avoid talking about any new spending commitments at all. ‘Wait and see till we’re in government’ tends to be their approach. Is that why we’re meant to vote for them? So we can wait and see what happens if we do?
In fact, it is difficult to see how a future Labour government, whatever the extra money brought in by measures like going for the non-doms, can afford to do very much. It is already giving up ending the two-child benefit cap, watering down its plans for a green revolution and refusing to say that it will spend more on education. But to be fair to Labour, what choice does it have? Isn’t the question of where money for new spending is going come from a real one?
Should the Lib Dems revisit a policy which they were the only party to advocate in 2001 (and which arguably did no harm to their electoral chances at the time), namely a small increase in the basic rate of taxation? As the recent Lib Dem conference recognised, there is a problem here. In 2001, when people were doing relatively well, promising to raise taxes a little was acceptable to a lot of people. In 2023, when there is arguably a more urgent need to spend more and public services are in a state of collapse, it is easy to understand why people might see an extra tax burden as the straw that breaks the camel’s back. Haven’t they just had to deal with inflation and rising mortgage rates? Is the government really going to take away even more of their money? It’s when a tax rise is most needed that it’s least acceptable.