Osborne's surprise defence of 50p tax

New tax rate will help create "a more equal society", says shadow chancellor

In a typically pugnacious column, Simon Heffer urges the Tories to junk Labour's 50p tax rate as soon as they take power. They won't, of course, for largely pragmatic reasons. At a time of recession, it would be politically toxic for the Tories to be seen to favour the rich in this area. Appearing on the Daily Politics today, Philip Hammond trotted out the party line when he said the decision was primarily a political move intended to "signal that everybody must pay their share".

But I was struck by the reply George Osborne gave on Sky News this morning when asked to justify the tax:

We do need a more equal society. We need a fairer society, particularly in what we've got to go through in the next few years -- which is a period of very difficult fiscal tightening. It's important for everyone to understand there aren't going to be exemptions from that.

His assertion that we "need a more equal society" is a principled rather than a pragmatic defence of the tax rate. Osborne also appears to accept the premise that redistributive taxation has a critical role to play in achieving greater fairness. Whether he's sincere or not, his words are certainly at odds with the position David Cameron has taken.

George Eaton is political editor of the New Statesman.

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The big problem for the NHS? Local government cuts

Even a U-Turn on planned cuts to the service itself will still leave the NHS under heavy pressure. 

38Degrees has uncovered a series of grisly plans for the NHS over the coming years. Among the highlights: severe cuts to frontline services at the Midland Metropolitan Hospital, including but limited to the closure of its Accident and Emergency department. Elsewhere, one of three hospitals in Leicester, Leicestershire and Rutland are to be shuttered, while there will be cuts to acute services in Suffolk and North East Essex.

These cuts come despite an additional £8bn annual cash injection into the NHS, characterised as the bare minimum needed by Simon Stevens, the head of NHS England.

The cuts are outlined in draft sustainability and transformation plans (STP) that will be approved in October before kicking off a period of wider consultation.

The problem for the NHS is twofold: although its funding remains ringfenced, healthcare inflation means that in reality, the health service requires above-inflation increases to stand still. But the second, bigger problem aren’t cuts to the NHS but to the rest of government spending, particularly local government cuts.

That has seen more pressure on hospital beds as outpatients who require further non-emergency care have nowhere to go, increasing lifestyle problems as cash-strapped councils either close or increase prices at subsidised local authority gyms, build on green space to make the best out of Britain’s booming property market, and cut other corners to manage the growing backlog of devolved cuts.

All of which means even a bigger supply of cash for the NHS than the £8bn promised at the last election – even the bonanza pledged by Vote Leave in the referendum, in fact – will still find itself disappearing down the cracks left by cuts elsewhere. 

Stephen Bush is special correspondent at the New Statesman. He usually writes about politics.