2nd opinion: These are taxing times

It's budget time. Well, actually it's a bit past it. If the Treasury has not had your submission by now, forget it. Taxes, reliefs, amendments to stamp duty legislation – most of the detail will have been settled well before next month's despatch box performance by chancellor Gordon Brown.

Budget talk so far has focused on the aggregates (although – and perhaps I am mistaken – but don't I detect a growing number of references to such places as Keighley and Wakefield? Could it be that Ed Balls, the chancellor's chief economic advisor, has become a Tyke? Could it also be that a certain safe parliamentary seat in West Yorkshire is beckoning him – with consequences for his boss?). Revenue is falling short, which is why the chancellor had to run the gauntlet in Brussels last week, getting slapped by holier-than-thou Spaniards for the impending size of the UK budget deficit. To fund it, he either has to borrow or increase tax.

When she was prime minister, Margaret Thatcher used to like to compare stewardship of the public finances to household budgeting. She intended the comparison to favour tight, annually balanced accounts. In fact, on her watch, UK households wallowed in debt, just as they have again recently. One of the ironies of Brown's stint at the Treasury is how his own prudence (the ratio of government debt to GDP is still falling) allowed the cost of household borrowing to fall and the orgy to (re)commence.

But maybe, during the next few weeks, we will have time for a wider debate about the extent and incidence of taxes. By "we" I mean taxpayers (including those whose national insurance will rise in April) together with all those – tenants, registered social landlords, local authorities, users of infrastructure investment – who benefit from public spending.

Richard Whiting of Leeds University makes an interesting argument about the Blair era. The prime minister's moralism (which the chancellor largely shares, even if his Scottish provenance makes it sound different) emphasises community obligation; this, says Whiting, surely stokes the case for higher levels of direct taxation to be paid progressively by the better-off. Tax isn't just a matter of ensuring the state's books balance; it is an expression of belonging and caring and willingness to share … or not, as the polls tend to say.

Last week I went to the launch of the new book by Professors Anne Powers and Katherine Mumford on North-South and all that. Boom and abandonment specifies not just different patterns of public expenditure but more, especially in the North.

During the Iraq crisis, many people have taken their eye off the domestic ball. But the pitch is as uneven as it ever was, life chances unequally divided

Nothing wrong with that: most housing activists share a social-democratic view of the world. Whatever they think about configuration of government, they tend to believe the public sector deserves more money. Even the most enthusiastic exponents of RSLs turning into autonomous entrepreneurial actors do not lose sight of the need for subsidy and public assistance: support for tenants (without which the attractions of the sector for British capitalism would disappear overnight); grants for roads, rail, parks, schools and physical renewal.

But here's a puzzle. As dar as I am aware, the social housing sector has not been lobbying for more tax; and RSLs have not been using their – not inconsiderable – influence to soften up the public. How about a joint letter by the chairs of leading housing associations to The Times, say, making the case for 2p or 3p on income tax? No, they might cry, that's far too political. But isn't the receipt of social housing grant – let alone the indirect receipt of housing benefit – just as political and just as dependent on the willingness of political leaders to tax in order to spend?

Tory housing spokesman, David Davis, was featured in Housing Today just the other week (HT 30 January, page 36). He still believes that state spending should be cut to, say, 35% of GDP. Taxes could then be cut. But it must follow that social spending would also diminish. There would be less for upgrading the rail line to Manchester, which Power and many others consider a precondition of regional revival; less for housing market renewal, which has only just begun in terms of the resources that will eventually be needed; and less for the schools without which new housing – South or North – will never turn into "place".

During the Iraq crisis, many people have taken their eye off the domestic ball. But the pitch is as uneven as it ever was, life chances unequally divided. It's not just "out" social democrats who believe public money can diminish inequality – it's everyone connected with social housing.