CITY AND SUBURBAN
The Gladstone test making wealth fructify in the pockets of the people
CHRISTOPHER FILDES
Chancellors measure themselves against William Ewart Gladstone. He sought to let wealth fructify in the pockets of the people, he remitted the taxes on knowledge, and his reform of the excise duties put claret on middle-class tables. Next week Kenneth Clarke comes to the test, and I can help him. After the Glad- stone clarets, the Clarke single malts. I shall open them up in a moment. First, though, he and I must apply ourselves to the wealth — far too much of it borrowed — in the pockets of the state, where it is not fructifying at all. That is as plain now as it was on 16 March, when the Chancellor of the day looked it in the eye and flinched, and as plain as it was two months later, when a new Chancellor took over. What had to be done was evident. What was needed was a Chancellor with the will and clout to do it. Now Mr Clarke must try his luck. The greatest mistake (and not just because it is proposed by the Confedera- tion of British Industry) would be to put off the day of reckoning for one more year, in the hope that next year we shall be stronger. One year on we shall be deeper in debt, and be borrowing to service it, and therefore weaker. At least Mr Clarke has made matters easier by bringing interest rates down. They were still where his pre- decessor (prompted by a sharp nudge from the Prime Minister) set them as long ago as 26 January. The torpid state of the money supply, the banks advertising for borrowers, the shops cutting prices, the inflation rate suddenly falling — all tell the same story. He has ample scope for the next cut. In fact, he needs it if he is to redress the bal- ance between monetary policy, far too tight for far too long, and fiscal policy, so laid back as to be supine. At this point in his speech, the Chancellor should take a pull from his tumbler and quote Churchill: 'I am fortifying the revenue.'
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