Who pays for public services? Can the government energise its supporters and secure a third Labour term – around ‘big ideas’ such as a major expansion of childcare and ‘early years’ provision – as the spending environment becomes tighter? Has this (very quietly) redistributive government already breached the limits of any public appetite for tax increases?
The ‘bubbling under’ debate about ‘co-payments’ suggests one way to square the circle – that increased provision in public services will require those who benefit to pay a greater share of the costs. But is this politically plausible? After tuition fees, won’t Labour rebels resist again? Why would a general public resistant to tax be happier to pay more another way instead?
So any debate about co-payments risks becoming neurotic and entrenched before it begins. But what are the principles that lie behind it? Here are five rules for reformers that could help to begin a more constructive debate.
First, talk in a language that people can understand. ‘Co-payment’ is among the worst examples of wonk-speak – and will not resonate at all beyond the think-tank seminar room or the pages of Progress. ‘User charges’ has the virtue of telling voters what we are talking about, although ministers may prefer to try the more touchy-feely ‘shared contributions’ as part of a broader story about renewing the social contract between the citizen and the state.
Those who argue that the government’s agenda often appears too managerial and technocratic are not saying that competence doesn’t matter. But this government has often been better at policy than politics – and left-of-centre politicians can never be satisfied simply running a competent administration. While Margaret Thatcher had a strong story about the individual, captured in flagship policies from council house sales to privatisation, ‘third way’ progressives have not been able to emulate this clarity in telling voters where they fit in to the ‘vision thing’.
Second, win the debate about general taxation first – and with two different audiences. The reflex of some on the left-of-centre will always be for funding from general taxation over any form of user contribution. We need a clearer and more honest debate about spending priorities and the choices between different desirable outcomes.
Meanwhile, the general public might see user charges as the latest ‘stealth tax’. Many will ask, ‘so what’s all my tax for then?’ if they have to pay again for those services they use: this risks fuelling the various myths that most public spending is wasted on pen-pushers, dole cheats or asylum seekers. Progressives have to be more transparent about tax if we want to take on Michael Howard’s libertarian, minimal state agenda. Adopting the Fabian Tax Commission’s proposals on making tax transparent – including a ‘tax contract’ for every citizen – could help to make the tax ‘deal’ between citizen and the state more legitimate.
Third, deliver clear and tangible added benefits. People might pay more for something new. They will resist paying again for something they have already got. The government won the argument on tuition fees within the PLP in the final weeks only because a credible case was made for the need for extra money to finance expansion of universities. It would not have been possible to make the same case if student numbers were static (and opposition was loudest among the middle classes, who already go).
So parents who can get the good, affordable childcare they want for the first time would be prepared to share some of the costs – shared contributions in that case might well be both legitimate and popular. User charges may be used creatively as much to change behaviour as to raise revenue – but road charging to prevent gridlock, like London’s congestion charge, will only be legitimate if the package seems a fair one and if the benefits delivered are clear.
Fourth, set clear boundaries and baselines. The Fabian tax contract approach – including the ring-fencing of core services already provided out of general taxation – should help to police an approach of applying co-payments only to new services or expanded provision.
A sensible debate about co-payments requires clarity about what they are not. The government seems keenly aware of this – hence Tony Blair’s speech ruling out the adoption of user charges in the NHS. This may well be politically prudent – to avoid this agenda being caricatured as one of marketisation of core public services. But it is difficult to see what the objection of principle would be – when co-payments including prescription charges have long played a role in the NHS – to absolutely protecting clinical priorities but raising additional resources by, for example, offering additional choice such as individual rooms rather than shared wards to be made available to patients.
Fifth, broaden the horizons of the debate. The conservatism of much British public debate is underpinned by its insularity. The different ways of good social democrats and democratic socialists in Sweden, the Netherlands, France and elsewhere ought to lead to an honest acknowledgement that there are a great many ways of organising and delivering public services, each with their own strengths and weaknesses.