Michael Brown: You are wrong, Mr Blair - people are not willing to pay more tax

'I urged "my Rt Hon friend to tax, tax and tax again". The avalanche of mail was one of the worst I received'
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The Independent Online

So we are all now willing to pay higher taxes in return for a shiny new health service. Pull the other one Gordon. Even the Tory shadow Chancellor, Michael Howard, seemed to have fallen for this new supposed public mood, last week, when he pre-empted the Chancellor's pre-Budget statement, saying that Tory tax cuts would play second fiddle to the demands for better public services.

According to some ministers, the last nail has finally been driven into the coffin of the Thatcherite low-tax agenda. Utterly, utterly wrong. It may well be that we are content to pay current levels of tax, after two decades of reductions, but the idea that most are ready to pay more is completely wide of the mark.

Sure, it may be true that opinion poll and focus group evidence occasionally suggests that some of us are prepared to pay "a bit more" but what happens when they visit the polling station still suggests otherwise. Just look what happened in Bristol recently when council taxpayers were presented with a referendum on the options of increasing service provision or reducing the council tax. I refuse to believe that the voters of Bristol are anything other than typical of the rest of the country. They opted for the latter with the consequences that services are having to be cut. By all means ask the voters what they want in opinion polls, but never pose them such a question at the ballot box. They will never vote for tax rises.

Take a look at the section that deals with environmental issues in this week's publication of the annual survey of British Social Attitudes. We were all told, a decade ago, that protecting the environment was the flavour of the month. But after high-profile issues such as genetically modified food, BSE in cattle and the transport crisis created by problems on the railways, people are less willing than ever to pay higher prices. According to the survey the number of people prepared to pay higher prices has fallen from 46 per cent in 1993 to 43 per cent today. Those willing to pay "much higher taxes" has fallen from 37 per cent to 31 per cent.

It is true that the public may be willing to reject tax cuts (as they did when they rejected the Tories' offer of £8bn). But tax rises are quite another matter. Mr Howard was simply shaking the previous Hague-Portillo regime's mud from his boots. Everyone could see the lack of logic in a policy of cutting tax while claiming to support increases in public expenditure. And Mr Howard may well be right that tax cuts are, today, off the public's agenda. But by the time of the next election he should reserve his position and be prepared to address the fact that the public simply will not wear tax rises.

At the recent general election even Mr Blair and Mr Brown went out of their way, in the Labour manifesto, to re-state that there were no plans to increase the basic or top rate of tax. Any hint that they might have been contemplating increasing National Insurance contributions was met with resistance and denial – even though it may have been in their mind. But all these promises look dangerously compromised by this week's announcement. Estimates of the cost of Mr Brown's proposals range from the equivalent of 5p to 13p on the standard rate. And the options of sneaky stealth taxes bring their own political whirlwinds – as we saw during the protests against fuel tax.

Of course, it is quite possible that Mr Brown may be exaggerating the implications of his pre-Budget report. Chancellors are sometimes adept at creating the impression that the pain of their decisions will be worse than the actual outcome. It is entirely possible that he does not actually intend to give as much to the health service as he seems to be implying. But on this occasion I doubt it and I do not think he is playing games. We are now going back to the classic Labour years of tax and spend.

I have etched on my memory the foolish – although in my view totally honest – speech I made in the House of Commons during a Treasury debate in 1993 when Michael Portillo was Chief Secretary. (I was then Tory MP for Brigg & Cleethorpes). He was addressing the last occasion a government had allowed the public finances to run into deficit. Fearful of cuts in public expenditure because the deficit had reached £40bn, I believed that the only honest way to cover this was to increase taxation. I urged "my Rt Hon friend to tax, tax and tax again". Denis Healey would have been proud of me but I stopped only just short of calling on the minister to squeeze the rich until the pips squeaked.

The avalanche of mail from constituents was one of the worst I ever received. When I defended myself with reference to my worries about the implications of not increasing taxes for local public services I got pretty short shrift – ironically from those who regularly protested about hospital waiting lists. But most of all I was bombarded with the Tory promises, only a year earlier, at the 1992 general election, not to increase tax.

One day someone is going to have to face the fact that it may simply be beyond the state to provide a National Health Service free, at the point of use, funded out of general – or even hypothecated – taxation. In their hearts the Tories probably know that this is true. In their heads even some Labour ministers probably also know that this is true.

If we want to face the public with the real truth, it is not that taxes need to rise in order to pay for the health service. It is, rather, that only we can pay our own health costs in the same way that only we pay for our own costs of food and shelter.

No one has ever suggested that the state should be responsible for providing a national food service. Even the national public housing service has all but been abolished with the sale of council houses. By all means provide the poor with direct payments to fund their treatment in private hospitals. But the poor are no excuse to maintain the whole panoply of nationalised health care.

Until we learn to provide for our own health care without assistance from government and taxation we shall forever be in the current mess. Someone once said they wanted the operation they wanted, at the time they wanted performed by the doctor they wanted. Now who was that? Let's scrap the NHS because we will never be prepared to pay for it to work properly out of increased taxation.