Competing on tax rates

It's Sunday and on his way to work Dr Grumble listened to that religious programme on Radio 4. The BBC have original names for their programmes: it is called Sunday.

Dr Grumble likes Sunday. Like it or not religion determines quite a lot of what goes on in this world. Whether it is problems close to home in Northern Ireland or the breakdown of law and order in Iraq, often there appears to be some underlying religious dispute. And, most amazingly, in these two examples the conflicts are between people of essentially the same religion.

You might think that religions should favour tolerance but it seems that often they don't. Some might say that the Church of England is amongst the most tolerant of churches yet we find that there is conflict over gay priests and even women bishops. Any outsider aware of the teachings of Christ would be baffled. When it comes to loving ones neighbour as oneself the secular world leads the way. Which is odd.

But one cannot get away from the fact that the basic tenets of many religions are sound. And, although the secular world may be ahead of most religions in trying to achieve equality for women and gays, the malign influence of big business on our society has put the focus on making money, looking after oneself rather than others, and treating oneself to whatever pleasures life has to offer. As Grumble writes this he can almost hear some of his readers wondering whatever could be wrong with that.

But, you know, there is something wrong. We really should not be buying things we do not really need just because, as the advertising mantra goes, "you deserve it". There are more important things than these quick purchases of evanescent happiness. Religion used to teach us that.

Where has the lack of traditional religious teaching led us? It has led to a world where those of us earning a living are told we can no longer afford the taxes to pay for our youngsters to study at university. It has led to a world where those of us in employment can no longer afford pensions for the elderly. It has led to a world where if you want something you must pay for it yourself directly. Yet, when the developed world was a poorer place and the UK was struggling to recover from the Second World War, we could manage all of these things.

Of course they will tell you various reasons why doing things the way we did are no longer possible. There are more students than ever before. The elderly are living far too long. And, thanks to our government encouraging banking in preference to manufacturing, we have run out of money. But it is only partly true. What is the difference between students taking out loans and paying them back and the taxpayer subsidising their studies? One way those earning a good living pay for the next generation. The other way students get saddled with debt at the time when they are likely to be having children and wanting to buy a home. The taxpayer and the grown-up student are the same people separated only by a few decades. Which method of payment would you prefer? Would you like to start life with a debt or would you like to be taxed a bit more when you grow up? And who will benefit most from the new way of doing things? Will it be the student from the comprehensive or the old Etonian? The answer is all too clear.


So why are the ruling Etonians so insistent that we must do it this way? Grumble's suspicion is that it is about competition over tax rates. We are now in a global village. Many of the people society most needs can take jobs anywhere in the world. Even doctors, who have to jump through regulatory hoops to be allowed to practise abroad, move around. Businessmen and entrepreneurs can move even more freely. The ruling class see this as a problem and perhaps they are right.

Where is all this going to lead? Our students will suffer. Our researchers will be paralysed. Pensions will be delayed and slashed. The elderly will suffer and the defence of the realm will be put under threat. And we haven't yet heard what other horrors the ConDems have in store for us.

Could we do things differently? Could we tax more and avoid saddling our students with debt? Could we tax more and ensure the elderly are looked after? Could we tax more and ensure that the realm is adequately defended? Or do we have to compete on tax rates to retain the people we need? Because, if we do have to do things this way, there is the inevitability of progressively fewer public services as public spending is slashed to minimise taxation. Is that what we want? Is anybody offering an alternative way forward?

Is it too much to hope that people might want to come and work here despite high taxes because we have built a fair and just society?