Tax, spend, elect
THE DEPARTMENTS have been here before. They will start from where they have been told to finish. If necessary they will use the Beggar's Sore technique, putting on a show of poverty and misery to shame the Treasury into loosening up. Over and over again, chancellors have had to fall for it. This Chancellor must think that he knows better. Until further notice he pro- poses to keep two-fifths of the British econ- omy away from the forces of the market, treating it as a command economy, the plans to be approved by him and the finance provided by the rest of us. That mind-set helped to make the National Health Service what it is, which is why he will now treat its sores with a more lavish anointment of money. He has made the great leap backwards into the economics of an earlier day, and left New Labour looking like the old Democratic party of America: `We'll tax and tax and spend and spend and elect and elect.' Perhaps he has come to think that it is all too easy. Ever since he arrived the economy has been steaming along and the taxes have been rolling in. He likes to say that there will be no more boom and bust. That is to tempt Providence. A wiser chancellor would say that the econo- my will always have its ups and downs but that he would try not to make them worse. The risk this Chancellor runs is that the economy will turn down while spending carries straight on upwards. He need not look back a hundred years to see what hap- pens then. It happened to the two chancel- lors who followed Nigel Lawson and let spending run out of control. They learned, and the Treasury remembered, that when the public finances go wrong nothing else will go right.
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