I made a return visit to Canary Wharf on Wednesday after being asked to write a leader on the budget for the Daily Telegraph. An editorial is, of course, the view of a newspaper, not of the individual who has written it. Nevertheless, I agree with it. In doing the research, I was struck most of all by the figure for the current income tax allowance in Poland. Unlike the British government, the Polish does not seem to believe in taxing the poor. The leader is here.
What astonished me yesterday – and again today – is the respect in which Gordon Brown is held. The Daily Mail, a newspaper I generally admire, is against the Labour Party yet still is in thrall to Mr Brown. The leader in it yesterday called him “awesome” while at the same time being highly critical of the statist society he stands for. Very curious. Meanwhile the poll in today’s Telegraph show that Mr Brown is widely respected and admired among the populace. Yet this is the man who, in 1993, said he wanted to end means-testing for the elderly and has proceeded to make half the pensioner population entitled to means-testing. He has undermined saving, thus reducing the incomes of millions of people in their old age. He has increased welfare dependency. He took a country with the some of the best savings for old age and destroyed that inheritance. His social security policies have been ignorant and damaging. Beveridge would have scorned him. Frank Field does – and wrote a book to that effect, comparing him unfavourably with Lloyd George.
Yes, he had one big success in handing over control of interest rates to a monetary policy committee. But he has been wholly inconsistent. He came to power thinking he could improve the public services without extra spending. That was the mandate and the promise. He failed. So he resorted to the Old Labour technique, in 2000, of throwing more and more money at the public services. This sudden infusion of money has not been used efficiently and productively. Brown opposed the reforms in the NHS which have had some modest success. In the course of his spending, he has increased the taxes on the poor. The personal allowance next year will still be less than £5000. If it had been increased in line with earning, it would be over £5,500. So more poor people are liable to tax on more of their income. True, there are tax credits. But by definition they have three disadvantages:
1. People have to fill in forms to get them which, at best, is a waste of their time
2. A large minority – usually the most vulnerable and least literate – don’t fill in the forms and so don’t get the money.
3. If you are not entitled to one of the tax credits, you get taxed. For example, a non-pensioner who does not have children. If you are poor, bad luck. Under Brown, you are not one of the favoured groups. You are taxed heavily even though, according to Brown himself, you are in ‘poverty’.
The spending goes on, pushing public expenditure as a percentage of national income back towards the level it was in the early 1980′s and before. Public spending is less productive than private spending. Huge amounts of money are wasted. He is gradually undermining Britain’s capacity for growth, just as the socialists did in Germany.
He is the most overrated Chancellor of the Exchequer of my lifetime – and that is saying something considering we had Lord Barber setting off the inflation of the 1970s.
"A known liar should be outlawed in a well-ordered government"
Lord Halifax, 1633-95.
"A splendid book. It's a devastating critique of the welfare state. A page-turner, yet also extensively sourced. Demonstrates how attempts to achieve good intentions have led to horrible results -- increasing crime and violence, worsened conditions of the very poor, an extraordinary deterioration in the quality and character of British life.
Milton Friedman, Nobel Prize-winner.
Read The Book
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Before the welfare state
The Greycoat Hospital
The Greycoat Hospital was once a workhouse. It has since been a hospital and a school. It has a very long welfare history. It has now been taken over by the state. No related posts.
- The Greycoat Hospital
Education and State
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