Belfast Telegraph

Northern Ireland must accept tax rises or watch our public services being slashed

By David Gordon

Since when was a tax rise automatically a bad idea? That seems to be the state of affairs we have reached in politics. And that will have serious implications for the future shape of our public services.

Last week Chancellor Philip Hammond announced a screeching U-turn, scrapping newly announced plans to increase national insurance contributions for the self-employed.

The sight of a Tory minister being so publicly embarrassed is unlikely to trouble too many of us; it could even be called enjoyable.

But the climbdown flags up a wider problem within the political debate about taxation generally.

It fell to the Financial Times - not normally a bastion of old-fashioned tax and spend socialism - to point this out. It said: "If the Conservative Party cannot stomach a modest taxation change such as this, how will it cope with the other policy challenges of the coming years? Demographic facts mean that on health, housing and education, spending demands are only going to increase. There is little fat left to cut."

Of course, a central problem for the Tories was that they had fought the last general election promising not to increase national insurance or income tax.

So was the real mistake to make this sweeping pledge? Or is the guilty secret that the Conservatives believe that promise was central to them staying in power?

The vast majority of us value public services - the schools that educate our children, the hospitals that make us better, the roads and public transport systems that keep us moving in our daily lives. But just how much we are prepared to pay for them through taxation is seemingly a more complicated matter.

Let's take two examples close to home.

The current waiting lists in our health service are unacceptable. So would you happily accept a modest increase in your household rates to help fund a major push to eradicate those waiting times? Perhaps £10 a month extra? £15? Higher? Lower?

What about transport, and the recurring problem of gridlock around Belfast city centre?

It would seem that only a massive investment in both public transport and the road network can satisfactorily address that issue.

Would you pay more rates for that? What about road tolls or a congestion charge?

The chances are that any such proposal would be met with uproar - including from the middle classes who happily pay tolls on their way to Dublin Airport or "the rugger" at the Aviva.

It now seems to be one of the natural laws in politics - don't increase taxes if you want to win elections. So be it. If that's the case, then it is going to come with a price.

There are some really serious pressures on public spending building up.

When we finally get a Stormont budget for 2017/18, it's not going to contain much in the way of good news.

That isn't a state secret.

Our slice of the cake being dished out from Westminster is not overly generous in the next few years. On top of these current pressures comes demography - one of the biggest and scariest challenges facing policy makers.

Here's a quote from last October's Bengoa report on Health and Social Care (HSC) in Northern Ireland:

"In 2013 there were estimated to be 279,000 people aged 65 and over, with 33,000 of them over 85 years. This is projected to increase considerably in the next 20 years to 456,000 and 79,000 respectively."

People living longer is a good news story. However, it will also add significantly to the demands on public services.

Older age brings what Bengoa described as "an increased likelihood of some degree of disability, dependency and illness".

The report also said: "The rate of disability among those aged over 85 is 67% compared with only 5% among young adults. Dementia is also a growing issue for our older population, with 60,000 people projected to be suffering from the condition by 2051."

Have you had enough disturbing statistics yet?

Here's Bengoa again: "In terms of costs, users aged over 65 account for more than two-fifths of HSC spending - 42%, compared to their population share of 14%. Whereas the average cost of treating a 55-59 year old stands at £1,970 per head, this rises to over £6,000 for 75-79 year olds and £14,000 for the over 85s."

Bengoa was principally about the need for radical surgery for our health service, to make it fit for these future challenges.

But it's clear significant investment will also be needed - and not just in health.

That's why we urgently need a frank debate about our willingness to pay more in taxation. If the consensus is that we're not, then we should at least be honest about the consequences.

Like deciding what current Government functions and services we want to see slashed or axed altogether.

  • David Gordon is a former Stormont Press Secretary

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