One issue that you can guarantee won’t be debated in this coming election dominated by cuts, cuts, cuts is: what kind of public services do we want in this country and how should be paid for?   The Audit Commission has made a stab at this, but come up with rather trite (and Tory) conclusions – devolve them to local level and farm them out to voluntary, charitable or community organisations.   That would produce very uneven services across the country (postcode lottery) and return to the post-war Lady Bountiful in place of universal rights and entitlements.   Back to the 1930s – any takers?

A more constructive approach is to identify what our social objectives are and then to examine how they might be funded.   Prof. Howard Glennerster from the LSE has just published a report offering his (very reasonable) proposals.   Within the next 20 years he believes that an extra 1.3% of GDP will be needed for the NHS (noting that each 1% of GDP amounts to some £15bn), a further 1% for public sector pensions, 0.5% for State pensions (surely an under-estimate?), 1.5% to tackle child poverty, 0.5% to counter climate change, and 1.7% for free personal care for the elderly.

That would take Government spending to 45% of GDP by 2020.   Is that justified by the benefits it would generate (a very contentious political question, but I would answer strongly, yes)?   And if so, how should it be funded, bearing in mind that the whole package could cost up to £80bn a year?   Clearly that would demand a very different tax structure from that which we have today.   That might include:

*  a switch to land value tax in place of Council Tax,

*  a tax on (unearned) property price gains,

*  a financial transactions tax in the City of London,

*  a removal of the cap on NICs at 1.5 times national average earnings,

*  a determined assault on tax havens,

*  a more progressive income tax, with a 50% rate at £100,000 and a 65% rate above £250,000.

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