Making the case for higher taxation
Last Thursday’s local elections covered all 27 of the English counties, in eight unitary authorities and one Welsh authority, as well as two mayoral elections in Doncaster and North Tyneside. The results of these elections in 2009 were overwhelmingly Conservative dominated, but with mounting Con-Dem unpopularity and a huge surge in UKIP support, the local elections have made the political headlines for the past week.
On Question Time the week before the election representatives from the Conservatives, the Greens, Labour, the Lib Dems and UKIP were all given the opportunity to set out their stall and compete for people’s votes in the local elections. Out of all of them, it was UKIP’s Farage who stuck in the mind, his face reddening from pink to puce as he elucidated on his party’s populist policies. This included a spur-of-the-moment promise to cut taxes, announcing a change in party policy away from an eye-wateringly regressive flat rate system of taxation towards a low-rate banded system (which even the most skilful of spin doctors would struggle to describe as ‘progressive’).
What was striking wasn’t his unapologetically Thatcherite agenda, or for that matter his on-air policy U-turn. What was notable was the absolute unwillingness of the others on the panel – when challenging Farage to balance the budget whilst simultaneously cutting tax – to grasp the nettle of using tax rises as a possible alternative to increased borrowing or yet more austerity. The possibility of increasing taxation has become so unpalatable to many that it is virtual political suicide to suggest it might be the right thing to do. However the left must not shy away from pushing for a more progressive tax agenda that takes more from the rich, takes far less from the poor and provides for all.
As is often the case, the difficulty lies in selling this idea to the public. Ever since Thatcher donned the mantle of Mrs Beeton and compared running a nation’s economy to managing a household budget, received wisdom has held that the right’s greatest strength is its ability to use analogies and narratives that are easy to relate to in order to spin their policies. Meanwhile the left falls to regurgitating tedious facts and figures like a boring geography teacher. And so what follows can be seen as an attempt to forge a narrative justifying higher taxes in terms which reach beyond the traditional rhetoric of the left, and may (just) chime with those same patriotic conservatives Farage is hoping to sway away from the Tories today.
While confidence in government may be at an all time low, “Brand Britain” is currently riding high. Why people are enamoured of the nation is subject to as many different interpretations as there are people living here today. For some it might be our institutions and values: the beloved NHS, the BBC, the welfare state, our tolerance towards difference. For others it could just be cricket on the village green, or fish and chips and warm ale. For me, it has to be whisky, haggis, neeps and tatties, the eightsome reel and British jazz. For a period in the 1990s, the British even managed to relax their stiff upper lips, shed the veneer of unemotional stoicism, and learned to outwardly love themselves under the guise of ‘Cool Britannia’. As demonstrated by the recent wave of national confidence engendered by the Olympics and the Queen’s Diamond Jubilee, this overarching sense of pride in Britain has not yet vanished entirely into a recessionary black-hole.
I say this not to indulge in triumphalism, indeed as a Scot I feel alien from much of patriotism which infects public discourse. But I can see that, for all its many failings, life in Britain remains a life of relative privilege. It is a life that millions of people across the globe aspire to lead, hoping to come for a life free from persecution, war, poverty and disease. In many parts of the world – despite our illegal wars and neo-imperialistic tendencies – all things British still shine with an enviable lustre. The old cliché of a British accent abroad eliciting giggles of desire from women and gasps of envy from men is perhaps not too far from the truth (quite what they make of my Scottish burr and offal chomping tendencies is harder to say).
Great Britain is what business studies students call a ‘value added brand’ and is viewed internationally as a mark of quality. Not only do people want to live here, but they want to do business with us too. In a recent edition of BBC Radio 4’s consumer affairs programme, You and Yours, a representative from the China Britain Business Council discussed the appeal British-made products hold for Chinese consumers, who are willing to pay “double or triple the price” for luxury British branded goods.
You expect to pay top dollar when you buy a luxury brand, be it a Rolls Royce car or a Rolex watch, an Apple computer or an Armani suit. And so it’s only right that, if it’s within your means, you should expect to pay a premium rate to live in a top-notch country. Indeed it’s the very fact that we pay taxes that allows Britain to go on being top-notch. Tax revenue allows us to construct a socially cohesive country which is desirable to live in, not only providing a safety net for the disadvantaged, but a host of benefits for the comfortably-off as well.
Similarly, businesses must accept that when they operate in Britain they are tapping into a premium market – the sixth largest economy in the world – and for that privilege they ought to pay more. And we must ensure that they actually do pay their taxes. Whichever way corporations dress up tax avoidance, their behaviour is the moral equivalent of going to a Michelin starred restaurant, eating a four course meal with a vintage bottle of fizz, before scrambling out the back door without paying the bill; they take the good stuff and don’t give anything in return. To those who claim that higher taxes would spark a mass exodus (an outcome that doesn’t seem particularly plausible in the first place), the flippant, but reasonable, response is that those who want to leave simply don’t know high quality when they’re slap bang in the middle of it.
We must not undervalue our worth as a country and knowingly undersell ourselves. It is perfectly reasonable to ask people to pay a tax rate that reflects the country they want to live in, and perfectly reasonable to ask businesses to pay a tax rate that reflects the market they operate within. It’s time to kill the myth that a low tax economy can produce quality for more than the very few.