Taxation & the Welfare State

I have just watched "Scandinavia" with Simon Reeve. https://www.bbc.co.uk/programmes/m002cg5l He is a travel journalist I admire far more than any celebrity travellers, because he is actually quite brave in facing difficult issues & situations. He is always informative & interesting.

Scandinavian countries are credited as being better run than the UK. Probably because of a combination of factors - a more robust welfare state, lower income inequality, & a focus on work life balance. These countries generally have higher levels of social trust, lower corruption, and stronger social safety nets. Universal access to healthcare, education, and social security is funded by higher taxes, but the benefits are widely distributed. There are shorter working hours, generous parental leave, and a strong emphasis on leisure and family time. 

The crux of success seems to be attitude, to eachother & to the government. There is a sense of communal welfare & willingness to pay for that through taxes. As a lifelong liberal socialist I would expect those values to be present in a Labour government. But the UK is not like Scandinavia. We have lost our way. 

We did not do what Norway did when oil & gas gave them a windfall. They established a substantial sovereign wealth fund. Instead of investing our profits for long-term benefit as they did, we used the revenue to fund tax cuts & government spending. We didn't diversify the economy and develop new industries. We privatized many state-owned assets, including those related to oil and gas, rather than retaining them for long-term national benefit. Thatcher's government inherited the emerging riches of North Sea oil & pioneered 'carbon neoliberalism' – a model of managing public goods for private interests. 

Nothing has changed as the recent 13 years of conservative government showed. 

I believe that the conservatives are responsible for the financial "black hole" we are in. They have decimated public services through cuts & underfunding. Privatisation has not worked. This was the inheritance bequeathed to Labour. 

But we need to accept that we choose our governments. We should be all prepared to pay higher taxes if we have a good income. The wealthy should be prepared to pay an equivalent proportion of their income to ordinary working people, rather than taking advantage of tax havens around the world. Data from the Office for National Statistics 2024 showed that the poorest 10% of households in the UK are still paying a higher proportion of their income in tax than the richest. 

The poorest 10% of households paid on average 48% of their income in tax in 2022/23

The richest 10% of households, however, paid on average just 39% of their income in tax

It's about fairness & community. It's about caring for the disadvantaged & providing equal opportunity for all. The UK has got a lot to catch up to, but we all need to be paddling in the same direction for the good of all.