Editorial Wednesday 15 July 2014: Baudelaire, the Devil's finest trick and tax rises in the next Parliament

"The devil's finest trick is to persuade you that he does not exist" - Charles Baudelaire, Paris Spleen

It is depressing that as we approach next May's general election, the main parties' debate on taxation is currently so dishonest. No party is promising to increase income taxation in the next Parliament to help address the pressures on public services. (I am ignoring Labour's proposed 50p tax rate reintroduction on incomes over £150,000, simply because it's easy to forestall or defer for a while and doesn't raise hugely significant sums anyway.)

Voters who have followed the output of the Office for Budget Responsibility and the Institute for Fiscal Studies might reasonably conclude that the leaders of the main parties are simply not telling us the truth, and waiting until crossing the Downing Street threshold before finding that 'everything is much worse than anticipated'.

Such voters will be wondering, probably with a certain frustration, which bunch of liars should get our vote. It's not quite the tactic I'd use to restore trust in politics and politicians.

Nor is it reassuring that the political debate over taxation and public spending is so poor. There have been fine efforts by such first-class bloggers as Flip Chart Rick (he of the Fairy Tales), whose nice Venn diagram of the proposed effect of spending pledges on public services is a vital read, and Giles Wilkes (former SpAd to financial crisis prophet Vince Cable), agreeing with this point, also crunched the data on the main Westminster parties' spending plans to lively effect.

Politics by Baudelaire - 'The Flowers Of Evil'
Frenchman and author Charles Baudelaire (in the quote above) suggests that the Devil's greatest trick is to convince you he doesn't exist. It seems that the main Westminster parties are trying to pull a Baudelairesque move over the possibility of tax rises: that it, too, does not exist.

This is quite odd, because the public may be ahead of them. Opinion polls suggest, as I previously noted, that the public's sense of the NHS as an important issue in deciding their vote is increasing.

Indeed, Ipsos MORI polling data for the Foundation Trust Network (COI declaration - for whom I do some communications work) reveals a clear majority of respondents favouring an increase in the basic rate of income tax to address the NHS funding challenge.

There is a further factor that I suspect the political class haven't considered. It is a simple one: during the New Labour decade 2000-10, when the public spending taps were turned on, the infrastructure, quantity and quality of most public services rose significantly. This was most notably marked by the 2010 British Social Attitudes Survey, but other markers exist.

To state this is not to defend everything New Labour did - in health as elsewhere, there were big and small mistakes. Rather, it is to point out that if there is a clear legacy of New Labour, it is that through winning three general elections and keeping the spending going, they were able to show the British people what a properly resourced public sector looks like.

Having seen this, and in many cases felt it (or knowing someone who did), it is certainly plausible that there will be limited popular appetite for a return to the kind of gross underinvestment in the public sector relative to need which leads to poor and squalid services: A&E waits measured in days and waiting lists to get on waiting lists measured in years. See The Wanless Review, for the NHS catch-up spending data.

It's also worth remembering that average UK incomes are not sufficient to allow the vast majority of the population to opt out of using public services, even if they want to do so.

Our economy is still smaller than it was at the start of what was a global financial crisis in 2008. A return to massive spending increases is not credible.

However, plans to eliminate the remaining deficit by or just before 2020 without tax increases is at risk as, in the IFS's words, "whoever forms the next government might be unwilling (or unable) to deliver the currently planned cuts to public spending. Even with the Chancellor’s mooted £12 billion of further cuts to social security benefits, the implied cuts to public services from 2010–11 to 2018–19 would mean departments facing budget cuts of 17.1% on average. If ‘protection’ for schools, the NHS and aid spending were continued through to 2018–19, other ‘unprotected’ departments would be facing average cuts of 31.2%.

"The spending squeeze will be exacerbated by the £6 billion a year of additional commitments made by the government for the years after 2015–16. In addition, a growing and ageing population will increase pressures. The ONS projects that the overall population will grow by about 3.5 million between 2010 and 2018, with the population aged 65 and over growing by 2.0 million. One implication of this is that, even if NHS spending were ‘protected’ and frozen in real terms between 2010–11 and 2018–19, real age-adjusted per capita spending on the NHS would be 9.1% lower in 2018–19 than in 2010–11".

This is wonk-speak for 'dream on, daddio'.

We are going to have to pay more taxes - and also, at the same time, have to increase public sector quality and efficiency significantly, as I wrote here.

We may as well wake up and smell Les Fleurs Du Mal.

Which will be the first political leader to tell us this truth?

Mmmmmmm.

Don't hold your breath, eh?