GORDON BROWN'S pre-Budget statement was more like a half-term report on his progress. Naturally, he awarded the government high marks for achievement - the next election is probably less than two years away, after all. But there was also a stern message that the British economy could do better. And that included all those who prefer the dole to pulling their own weight. Achievements so far are substantial, with the promise of further improvement in tackling unemployment and poverty. But more work is needed to clean up the tax system. Above all, Mr Brown must not throw away the gains he has made on the public finances. If he does, the full assessment at the next election could be more severe than now seems likely.
BROWN IS confident enough to come forward with a radical and to some extent experimental reforming agenda. Economic stability has given him the chance. He must now use his authority and energy to ensure that the nation's entrepreneurs and bureaucrats, who must implement a complex range of measures, are fully prepared to meet his challenge.
THE BEST that can be said about Mr Brown's tax breaks for enterprise is that they will not cost much: the subsidy for corporate venturing will cost pounds 100m, one third of the amount to be spent on this year's populist gimmick, free TV licences for the over-75s. The best way of encouraging investment is not to subsidise it, but to do what Mr Brown has done so far in macroeconomics: keep the economy and the public finances on a steady course. Without the clever-dick subsidies, business investment, as a share of GDP, has lately risen to 15 per cent, compared with 12 per cent in the 1980s boom. The message for Mr Brown? You're doing fine without the meddling.
HYPOTHECATION IS as ugly a word as the concept it describes, which is perhaps why the Chancellor avoided it on Tuesday, when he pledged that extra money raised from yet more taxes on smokers and drivers would be earmarked for the National Health Service and transport respectively. In practice, this will make no difference whatever to spending on health and roads, since the extra is a tiny part of the total, which will be determined by the usual horse-trading between the Treasury and the spending ministers. Neither will this pretended hypothecation make any difference to taxpayers: pacifists cannot choose not to pay that part of their tax which goes to building tanks. Unfortunately, such meaningless gimmicks are only too typical of the Prestidigitating Chancellor. He could have used his pre-Budget speech as an opportunity to inform an audience whose attention span is usually no longer than a sound bite. Instead, he gabbled through a series of crowd-pleasing points, many of which managed to convey an impression which the small print of the pre-Budget report quite contradicted.
FREE TV licences for anyone aged over 75 will be welcomed by everyone. Every pound a pensioner doesn't have to spend on a licence is money that can go on essentials like food and heat. There is something very fair about Brown's plan to put revenue from increased tax on cigarettes straight into the NHS. Smokers will be helping to pay part of the cost of treating them. It is right, too, that extra tax on petrol will be spent on road building. The Chancellor's moves to encourage more people to buy shares in their company and make it harder for people in the black economy to slip through the tax net are long overdue. Brown wants Britain to be more like America, where half the population owns shares and it is much easier and more profitable to start your own business. If this is headline grabbing, let's have more of it.
WE ELECTED a Labour Government to run the economy properly and give to those in most need. Mr Brown has listened to those who felt things were not right and has not been frightened of admitting they have a point. True, there is still an awful lot he needs to do. More for health, more for education, more for pensioners and more for public transport. It will come - but only when Mr Brown is convinced the money is there. Meanwhile he is directing it where it is most needed. Nothing more can be asked of any Labour Chancellor.Reuse content