NHS and Social Care: Winter Service Delivery — House of Lords, 2018-01-25
Topic: Macroeconomics
Meghnad Desai (Labour, Centre-left): My Lords, I welcome this debate. Thankfully, much of what I wanted to say has been said by the noble Lord, Lord Macpherson of Earl’s Court. I wish that more Treasury mandarins like him retired, came here and became progressive. We would welcome that However, at the bottom of this crisis, which is not new but occurs perennially, is the fact that we have undertaxed ourselves and refused to raise the resources necessary to enable a civilised society to look after itself. We have not taken on board the seriously high cost of living longer. Our pension systems have been wrecked by that because, when we started them, we thought that people generally lived about 10 years beyond retirement. However, if people live 30 years beyond retirement, the pension system is wrecked. I agree with the noble Lord, Lord Macpherson—indeed, I do so because I proposed this measure—that there should be a hypothecated tax system and national insurance contribution, as he said, with much stiffer taxation for self-employment, which I think is a species of fraud practised upon the tax system. Indeed, in the Budget before last, the Chancellor tried to tackle that problem but he was shot down in no uncertain terms. We have to stop believing that tax cuts are great, borrowing is bad and that somehow in between we can finance a welfare state. Therefore, we should definitely have a hypothecated tax We should also tackle the financing of local councils. We have a tax, the council tax, which is, of course, regressive. But worse than that, it is frozen at old levels of house prices. We proudly proclaim how much house prices have gone up but for many years we have not taxed the capital gains that home owners have made. It is time that we tackled that question. Some noble Lords will remember that it was when we had to revalue properties in the light of the rise in prices way back in the Thatcher Administration that the entire fiasco of poll tax happened because of the timidity of that Government in revaluing property. Again and again, Governments have not revalued property and therefore council finances have suffered. It makes no sense whatever. We need a serious revaluation of private properties. You may keep the council tax rate the same, just move the bands up. A lot of people would move up the bands: that is the reality. If people pay the appropriate tax, they will receive good social care in return, so they would not lose anything. As I say, we need a hypothecated tax and we need a revaluation of council tax Something was revealed to me last week in a report of the National Audit Office on the PFI and all those things. The Carillion disaster has coincided with some early nights so I read that. When PFIs were proposed, it was quite clear that it was a piece of imaginative accounting and the Government could borrow off the balance sheets and pretend that they were being fiscally responsible but at the same time hiving off a huge debt. The important point is that that borrowing was very fruitful for the NHS. We need that kind of borrowing to expand hospital capacity and the health and social care infrastructure. Whether you do that kind of borrowing under a PFI or openly is a question we can go into. But given that currently the rates of borrowing are very low, now would be a chance—perhaps the last chance very soon—to borrow a lot of money dedicated to improving the health and social care sector. We cannot go on complaining about winter deaths and not pretend that it is the lack of resources which is causing this problem. So we need more taxation. I was sacked twice from the shadow Front Bench for proposing more taxation, and that was in the Labour Party before new Labour. I do not want to get anyone sacked but I think it is still worth saying that we are an undertaxed nation and we are paying the price for that.