Tax will have to be taxing

 For forty years, payers of income tax have profited from the Thatcher-Lawson revolution. The cost has been in the loss of control of basic utilities and the downgrading of social services and benefits. Chancellor Jeremy Hunt, HM Treasury and its advisors have now realised that the ideology that persisted through the Blair-Brown years and sadly those of the coalition, is unsustainable if the UK is to remain a first-world country. Former Labour adviser Andrew Fisher writes today in the i:

A confluence of demographic, ecological and political factors are slaughtering low-tax ideology on the altar of reality. [...] The biggest problem facing a likely incoming Labour government is that people want change. New research by the Fairness Foundation shows that people have growing expectations of what the state should deliver. A large majority of voters want government provision of a range of services, including social care, early years education and childcare, public transport and housing. More generous social security also has widescale backing. 

[...]

Tinkering around the edges will not be sufficient. Labour is likely to inherit significant backlogs in the NHS, courts and asylum system, massive staff shortages in the NHS and schools, [...] Taxes are going up and staying up. The real debate is: who bears the burden?

Nigel Lawson has died knowing that the tide has turned in his own party against the concept of low-tax, small-state government, even though the free-market wing of the Conservatives, exemplified by Liz Truss and Kwasi Kwarteng, is still very noisy. However, he will have been satisfied that there is unlikely to be any real action to curb the use of fossil fuels nor to replace the pseudo-market in energy which has proved so costly to ordinary consumers over the last year. Sir Keir seems to be following in the conservative tradition of Tony Blair. Nor is Sir Ed Davey likely to propose a radical change to the path he followed while in government.

It is ironic that the supposedly elephantine central control of electricity supply could be more flexible in its selection of sources and thus provide lower prices to consumers than the present system in which price is tied to the most expensive source, currently gas. It is clear that if we switched to an average price regime, the operators of gas-fired power stations would simply shut down leading to likely blackouts at time of peak demand. And the consumer has no more choice than under national control.

The energy emergency has led to the government pumping taxpayers' and borrowed money into the market in order to keep prices within reason. But this will eventually have to be paid for - out of tax.