Promising a new health tax is brave. Labour must show that courage

Ed Miliband

Like it or loathe it, Ed Miliband has a voter-friendly offer for 2015. But if he is to win and govern with purpose, he needs to discover qualities of political bravery.

His opposition Labour party promises a shift in the burden of austerity from low- and middle-income Britain to the wealthy. To become prime minister next May, however, the Labour leader doesn't just require the populist touch. He needs that precious electoral commodity: governing credibility coupled with an ability to be politically bold. Miliband has to convince the electorate he has a coherent strategy acknowledging the painful choices that lie ahead, starting with a radical funding solution for the NHS.

That is far from easy. In a tightly fought contest, conceivably the closest election in postwar history, the temptation for Labour will be to hunker down, saying as little as possible. Miliband's strategists will remind the leader that oppositions don't win elections – governments invariably lose them. And the coalition is unpopular across swaths of Britain, having spent four years cutting into the social fabric while reversing tax rises for the rich.

That said, for Miliband, a "safety first" strategy would be a costly error. For one, Labour must show it is capable of making tough choices if voters are to trust its economic management credentials six years on from the crash. There is little future as a fight-the-cuts party that will magically wish the misery away. Voters aren't stupid. They can tell a false governing prospectus when they see one. An instinct to be open and transparent with citizens is crucial to maintaining trust. The long-term threat to centre-left politics is the continuing decline of confidence in collective action, reflected in plummeting electoral participation among the young, the economically marginalised and the politically disaffected.

Miliband has decreed that he wants to win on the strength of Labour's ideas. Aside from this week's momentous vote on Scotland's future, the UK in 2015 will face strategic challenges of unprecedented scope and complexity. The first evidently concerns the task of deficit reduction and managing public spending in a climate of constraint. A second relates to long-term threats to the UK's growth potential, given emerging markets, automation, global competition, and the outsourcing of middle-class jobs. But the most politically potent challenge is the financial sustainability of Britain's NHS and social care system.

In 2010, 11,000 people in the UK lived to the age of 100. By the end of the century, it will be 1.1 million. In the meantime, the working-age population is declining as ageing trends kick in, further depleting tax revenues. New systems for integrating care and improving productivity will have to be found. But the question of long-term funding cannot be avoided.

Doubtless, few politicians will rush to address issues like NHS funding ahead of an election. They involve unenviable trade-offs and dilemmas. There are few "quick wins" for leaders desperate to claim credit for success while avoiding blame for failure. But if voters are to entrust it with the keys to 10 Downing Street, Mr Miliband's party must demonstrate it is capable of facing up to long-term challenges and being brave, not just telling voters what they want to hear.

On the NHS and social care, Labour should be bold. A solution to financing a universal, 'free at the point of use' system has to be found for a society where as people get richer, they want greater quality from public services. At the next election, Labour should propose a hypothecated insurance fund to finance the NHS and social care so voters can see a direct link between the earmarked taxes they pay, and investment in a prized national institution. Taxpayers could be issued with an annual statement, detailing precisely how their money has been used.

The discussion in Scotland last week underlines that the threat to the NHS has become a pivotal issue in the independence debate. If Labour were to commit to a long-term financing solution for the NHS ahead of the general election, the promise to revitalise Britain's unique system of socialised medicine could provide further glue to bind the UK together.

Patrick Diamond is a lecturer in public policy at Queen Mary, University of London and former adviser to Tony Blair and Gordon Brown

Powered by article was written by Patrick Diamond, for on Sunday 14th September 2014 00.05 Europe/London © Guardian News and Media Limited 2010