Ed Miliband is right to claim the Tories have their priorities wrong. But Labour needs to choose some, too.
That the Conservative party is so focused on the abolition of the 50p tax rate is, as Ed Miliband says in his interview with Progress this month, evidence that the political debate is in the wrong place, and that the chancellor and prime minister have the wrong priorities.
Indeed, in the very same week that 20 economists wrote to the Financial Times arguing that the top rate of tax was ‘doing lasting damage’ to the UK economy and erroneously claiming that it gave the country one of the highest personal tax regimes in the industrialised world, the Daycare Trust published new research on the cost of childcare in Britain.
While any evidence that tax rates are hitting Britain’s competitiveness should be fully examined, it is important, too, that the impact of taxation on people at the other end of the income spectrum receives equal weight. As the Daycare Trust suggested: ‘The cut to the working tax credit has dealt a massive blow to hard-working families struggling in severe poverty with four in 10 of those affected considering giving up work because they will no longer earn enough to cover the childcare bill. The cut has added on average £500 per year on to the childcare bill of low-income families.’ Indeed, parents in the UK spend almost a third of their incomes on childcare – more than anywhere else in the world.
Tackling the ‘care crunch’ – the high costs of childcare and social care for the elderly – is the focus of one of The Purple Book’s must-read chapters by shadow health minister Liz Kendall. In it, she demonstrates why affordable, high-quality childcare is so important in terms of boosting employment levels among women, promoting social mobility, cutting child poverty and supporting the long-term sustainability of the welfare state. Similarly, social care services which promote the health, independence and wellbeing of older people have important wider outcomes in terms of delivering significant savings in NHS spending.
Kendall’s goal is ambitious: to ‘secure high-quality care from cradle to grave, transforming childcare and elderly care into universal public services that are as integral to our country and the social fabric of our communities as schools and the NHS’.
But she also recognises that to aspire to govern is to choose, arguing that, while Labour was right in government to champion investment in schools and hospitals, ‘there are compelling reasons why Labour should now place a greater emphasis on championing childcare and care for the elderly’. Labour will need, for instance, to ‘consider how to strike a better balance between funding for tax credits and benefits, and funding for services like childcare and care for the elderly.’
The implications of such a debate will not be easy but a progressive case can be made for them. Prioritising funding for childcare and primary education over and above universities, for instance, can be argued for on the basis that they are crucial to whether young people from disadvantaged backgrounds get into higher education in the first place. Similarly, redirecting expenditure from wealthier pensioners – like winter fuel payments, for instance – to help fund universal social care will help meet the challenge of an ageing population.
Labour’s leader is right that the Tories have the wrong priorities. His challenge now, however, is to begin to give the country a flavour of what Labour’s are. Universal childcare, with all the tough decisions that may involve, would be a wise first choice.