The evidence is all around us. Nothing seems to be working any more, whether it be the railways, our water companies, our treasured NHS or our education system. Our schools are crumbling and so is our country.
How can we save our public services?
We surely also all know why this is happening. If we want decent public services, then two things need to be in place. There needs to be enough money spent on them and they need to be in public ownership. It really is that simple, but sadly in far too many of what we call our public services, neither of these things are in situ.
Where is all the money?
There is plenty of money around and we have seen that governments can always find it when they want to. But too much of it is in the hands of a very small number of people.
It has been noted by the Equality Trust that the UK has a very high level of income inequality compared to other developed countries. The Equality Trust go on to note that, “the poorest fifth of society has only 8% of the total income, whereas the top fifth has 36%”.
When you look at the top 1% the situation is even more unequal. According to the Guardian last year, citing figures released by the Office for National Statistics, the richest 1% of families in the UK today each have fortunes of at least £3.6mn, while the same news report noted that, “the poorest 10% of households have just £15,400 or less, with almost half burdened with more debts than they had in assets”.
Spending money and public ownership
We know that public services need to be rebuilt and that it’s going to take serious spending to do that. We also know that the economy is not in the same buoyant state that it was for example in 1997, when Labour last returned to power. But it is equally clear just where any future government can find the money.
We also need to take our basic public services back into our hands. Too many of our public services belong to a small number of shareholders, including many companies based abroad, for example many of our railway companies.
Every time you pay over the odds for a railway ticket in this country, remember it is because you are subsidising the rail travel for people in Germany or Spain.
So much for the benefits of Brexit, so much for ‘taking back control’.
Is France doing things better?
Indeed, if we look to Europe, we can see just how Britain could be mended. It has been noted by Will Hutton, that in France, for example, public investment has run at a level half as high as ours again for the past 20 years. Consequently France, unlike Britain, works.
There is mandatory enrolment of three-year-olds in nursery schools, which are not crumbling, while its high-speed train network belongs to the people of France and works. In a reminder to us of the days when our public services worked and there was less inequality in Britain, there are sector-wide collective bargaining arrangements and a generous welfare system. As a result of this, France has much less poverty than Britain.
France also has the investment in research and development in its society and its economy, which we sorely lack in this country and this is also paying off, with twice as many patents registered in France as we are able to achieve. All this means that France has more companies in the global top 100 than any other European country.
Not all is perfect of course; conditions in some banlieues in the large cities are very difficult the tax to GDP ratio is 45%. However, while we remember in the Northeast how we were promised a gigafactory in Blyth, which never materialised, it is a sobering thought that France has four new battery gigafactories in its own Northeast.
It would seem therefore, especially in light of Liz Truss’s disastrous tax-cutting budget a year ago, that the road to prosperity is not through lower taxes, but through higher taxes, which can give is infrastructure, fairness, research and development and high skills we so desperately need.
How about taxing the rich?
Consequently, we desperately need a wealth tax on those whose income is over £200,000 a year and a Labour government prepared to bring it in. We also need to tax unearned income at least as much as earned income, especially if we want to raise productivity. Why should wealthy landlords not pay national insurance contributions on their unearned income?
Capital gains tax could also be raised, while the very wealthy financial services industry could also lose their exemption from VAT.
There can be no doubt that we need to rebuild our broken public services. There should also be no doubts that to do so, we need more tax revenue from those who can most afford to pay it and we need our public services back in our hands.
Any other remedies won’t work.