Like a lot of people, I was very interested in the Institute for Fiscal Studies’ criticisms of the parties’ policy proposals – given that the latter would no more than somewhat ease the position of our severely cash-strapped health and social care services (Report, 27 May). Could the IFS now do us all a favour before this election gets underway and tell us once and for all what they think it would cost to “fully meet our public care needs” (viz, the figure which would meet all major needs, fully cover ongoing costs, and ultimately repay borrowing for associated capital expenditure) – as, for example, “a percentage increase on existing direct tax rates”. Would, say, another 10% in all rates (2p on the 20% rate, 4p on 40% and 4.5p on the 45% rate) meet the bill? Or would the figure be more like 20% on all rates? Or some yet higher figure?
At least we would then reach square one in deciding what we should do to fully sort this out, at and beyond this election: pay the estimated direct tax increases; find other ways of raising revenue; get people to take out more private insurance; or contemplate continued strain on our ill and our frail old people till kingdom come?. I’m surprised that none of the reporters at the IFS presentation actually raised this. Come to think of it, the Guardian’s own economic commentators may have their own estimates. In any event could someone, somewhere please enlighten us, preferably before we take to the booths?
Bernard Cummings
Erith, Kent
• The Institute for Fiscal Studies’ critique of the Conservative and Labour manifestos reported by Larry Elliott(Financial, 27 May) has added to my confusion over their plans for the NHS. During the next five years the Conservatives promise to spend an extra £8bn and Labour promises an extra £30bn on the English NHS. According to the King’s Fund, current annual spending on the English NHS is £123.7bn, which means that, without any increase, and ignoring inflation, total spending over five years will be £618.5bn. Against this vast sum the extra expenditure promised by both parties is derisory and the IFS’s statement that the Conservative promise represents an annual real-term increase of 1.2% per annum is impossible to understand. It is clear that the Labour promise is nearly four times greater than that of the Conservatives, but is still totally inadequate. The funding of the NHS has hardly been discussed by politicians or the media during the election campaign so far and this fills me with great concern for the future of this precious institution.
PE Anderson
St Albans, Hertfordshire
• You report the claim by the IFS that Labour’s plans “will not work” and would require taxing across the population because to tax the rich and corporations would not generate sufficient revenue. What is missing from the current election debate and almost all media coverage is a statement of how much wealth there is in the UK and its intense concentration in the top 10% of society. The most modest estimate of this is that over £5tn is owned by this group; by comparison the entire national debt is just £1.7tn. Labour is proposing to raise £48.6bn in new taxes. The IFS should concede that this is peanuts compared to actual level of wealth which exists.
Professor Greg Philo
Glasgow University Media Group
• There is a swelling tide of recognition that business practices have to change fundamentally if “free” market, shareholder-value-driven capitalism isn’t to implode. Theresa May began her time in office with talk of building an inclusive economy, commissioning a review into mission-led business, and publishing two white papers on corporate governance and industrial strategy. An investor as respected as Larry Fink of Blackrock is making public statements on the urgency for change; academia and the public are all expressing increasing scepticism in the established business model.
However, Felicity Lawrence demonstrates (Who’ll pay for the multi-national tax grab? We all will, 26 May) that for many multinationals, and their professional advisors, either the message is not getting through, or is regarded as irrelevant. Clearly their claims are not consistent with the intent behind the relevant legislation, and no fundamental hardship was caused to them by the application of the laws as they were commonly understood to apply at the time. The ideal would be for the corporations voluntarily to state that, notwithstanding the technical merits of their case, they can see that they will do greater good to their wider stakeholder base by not depleting the public purse for the sake of a temporary boost to their bottom line. If that shift in perception is beyond those in charge, the government could seek to impose a one-off windfall tax, of an equivalent amount, on those businesses accepting the tax rebate. And if we cannot rely on business to do the right thing, or government to direct it to be done, then it falls on each of us to boycott the offending corporations to demonstrate there are consequences to such greed and venality, even when the law appears to condone it.
Dave Hunter
Bristol
• Your article by Patrick Collinson (27 May) showing broadly similar tax rates across developed economies is somewhat misleading since it ignores the impact of the very high rates of local taxation in the UK that are used by government to mask the overall tax rates. By way of comparison, the Swedes, for example, pay no local taxes whatsoever, so the tax rates are all up front, not disingenuously disguised. Oh, and every Swedish citizen’s tax return is a matter of public record as well.
Peter Fellows
Bradford
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