Melanie Phillips

7 April 2003

The Chancellor's budgetary black hole.

Published in: Daily Mail

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Millions of people will have woken up this morning feeling distinctly poorer. Yesterday, the long-threatened rise in national insurance kicked in. This comes on top of swingeing increases in council tax bills up and down the country, not to mention assorted other financial penalties which disproportionately raid the pockets of the middle classes.

In two days' time, Gordon Brown will present his latest Budget. The burden of his remarks is unlikely to restore the good temper of the public. The fact that the nation's attention is distracted by the war in Iraq cannot disguise the unhappy prospect that the Chancellor's estrangement from his long-abused better half, Prudence, will almost certainly be confirmed on Wednesday as an unequivocal divorce.

For UK plc is plunging into the red. A widening gap has yawned between tax revenues and the Chancellor's hugely ambitious public spending plans. Mr Brown is expected to cover his embarrassment not by raising taxes but by substantially increasing public borrowing.

He is likely to blame this shortfall on everything but himself - maybe on the European downturn, or the falls on the stock market, or even the war. He will brush aside these difficulties as a temporary blip, insisting that the basic economy is sound.

But any such excuses will ring hollow. After all, he has bored us all rigid with the obsessive mantra that all his calculations were based on prudence, allowing specifically for unforeseen acts of fate. He cannot now turn round and blame those very same acts of fate without provoking a hollow guffaw.

Moreover, he was amply warned that his enormous rises in public spending -- particularly on health and education -- were a reckless gamble since they made assumptions which might well not be borne out.

The reason he has got into these difficulties is because he is presiding over a political philosophy that has simply crumbled into pieces. Not only is he refusing to admit he is clinging to the wreckage, but he is proposing to add yet more piles of debris to the ruins - and make us pay through the nose for the privilege.

His massive expansion of public spending was predicated on the belief that the public had suddenly learned to love tax rises (not enough to raise taxes honestly, mind you; it all had to be done through sleights of hand like National Insurance, but that's another story). This was because, it was thought, voters had finally realised that good public services had to be paid for.

This was to underestimate the public's ability -- so mysterious to Labour politicians --to actually see what is really going on. Yes, people want better public services; and yes, they know that these require higher spending. But they can also see that despite the unparalleled largesse Mr Brown has been pouring into these services, they are scarcely improving; indeed, in many respects, the more money going in, the worse the outcomes.

Opinion polls show that, presented with the claim that yet more billions of their money will do the trick -- along with the related idea that Mr Brown's policies will improve the state of the economy -- people tend to remark on pink objects with trotters and curly tails whizzing through the upper hemisphere.

What the public has twigged is that the old model of public service delivery -- by which taxes are raised and money dished out on public services by central government - has failed. The root of this failure lies in the centralised control of these services for political purposes. The incessant meddling and manipulation by politicians of both main parties has destroyed education and the health service, driven out in despair many fine teachers, lecturers, doctors and nurses, and all but paralysed the police.

Mr Brown has now tested this philosophy of central control to destruction. Through his barrage of targets and performance indicators, he has effectively tried to run the public services from the Treasury. Any attempt to wrest some of this control away - as in the very limited experiment of foundation hospitals - is ferociously resisted.

The results are shocking. Roughly one in five children leaves school functionally illiterate or innumerate. Britain has some of the worst cancer survival rates and longest treatment waiting lists in Europe. It also suffers more violent crime than Europe, and six times as many people are mugged in London as in New York.

Even worse, the stock of information has been corrupted by a culture of propaganda and bamboozlement to enable ministers to lie to the public that things are getting better. So now the crime statistics have become all but unintelligible, hospital waiting lists distorted beyond recognition, and educational achievement made increasingly meaningless by exam grade inflation and fiddled school test results.

It's no better in local government, where council tax bills are not matched by corresponding improvements in services. More and more is being spent on wages, self-serving bureaucracies and ever more grotesque and useless posts.

Voting thus becomes an act of self-flagellation. No wonder there is now such a dangerous democratic deficit, with such widespread cynicism and political inertia.

To restore faith in democracy, what's needed - paradoxically -- is to take politics out of the public services, radically decentralise them and give their users leverage and choice.

A report issued today by the think-tank Reform - which is holding a conference to discuss it -- is on the right lines. On education, it suggests vouchers to allow parents to buy into the school of their choice in both public and private sectors. On health, it says at the very least patients should be able to select their treatment, and maybe there should be a new system of funding through compulsory insurance. And police forces should be made accountable to police chiefs and to the public rather than to central government.

The Tories are treading cautiously in this direction. But the Labour party can't go down this route. At least while Mr Brown is Chancellor, it is giving full rein to its illiberal desire to reshape society, nationalise the family and trap more and more in dependency on the state.

The party remains hung up on 'equality' and on redistributing wealth from the better off to the poor. The result is that real people are sacrificed to an impossible idea. So health service money is redistributed from the 'rich' south to the 'poor' north, thus grotesquely penalising the poor of the south who are forced to subsidise both the poor and [ital] the better-off of the north.

Labour party reactionaries who defend this approach know full well that those who can afford to do so will increasingly opt out, thus offering yet further opportunities to penalise them, confiscate their money and destroy the life chances of their children, while doing absolutely nothing to alleviate the abandonment and misery of the people at the bottom of the heap.

Mr Brown's redistributive agenda has nothing to do with social justice and everything to do with controlling people's lives. This week's Budget will provide further evidence of how he has bet the whole shop to do so.

About Melanie

Melanie Phillips is a British journalist and author. She is best known for her controversial column about political and social issues which currently appears in the Daily Mail. Awarded the Orwell Prize for journalism in 1996, she is the author of All Must Have Prizes, an acclaimed study of Britain's educational and moral crisis, which provoked the fury of educationists and the delight and relief of parents.

Read full biography

Books

  • The World Turned Upside Down
  • Londonistan
  • The Ascent of Woman
  • America's Social Revolution

Contact Melanie

Melanie Phillips
Daily Mail
Northcliffe House
2 Derry Street
London W8 5TT

Contact Melanie