Clarke moves more levers and we slither further down the slope

DO YOU believe in government? Fifteen years after the death of social democracy in Britain, that is no longer a daft question. Instead, it has become a subversive one. There are a lot of suspects about now who believe in the possibility of government which intervenes to protect the weak and to force society to invest in its own future. And one day, sooner than most of them expect, they will win.

After so many years of one- party rule, there are mental barriers to break through. Can you say 'The purpose of government is to spend money]' without feeling that you have said something callow and obscene? Repeat it one more time, loudly, with more conviction. There] It feels better now because, as you begin to recognise, it is simply true.

Kenneth Clarke's Budget made many people feel unhinged because, literally and figuratively, it did not add up. On the one hand, more money was being spent in some places, despite the need to reduce the deficit. On the other, government departments were being redefined as agencies whose job was not to spend money but to save it. Wasting public money is wrong, and there must always be accounts committees to control the spending of bureaucracies. But a department of state does not exist in order to do less and spend less until it vanishes, like an old gas-light, with a faint pop and a bad-eggs smell.

For this reason, even cases of disgraceful public spending can cheer me up. The Welsh Office, it turns out, cannot account for pounds 209m, and says that it would not be 'cost effective' to find what happened to a particular sum of pounds 37m because it 'cannot be located without extensive additional effort'. When the manager of the Greater Glasgow Health Board was removed after a dispute with his chairman, the Scottish Office appointed him special projects director of its health service management team - because the NHS would otherwise have incurred the costs of litigation and possible compensation for unfair dismissal. Once, Botany Bay or a logging camp in Yakutia would have seemed too good for mandarins who devised a solution like that. Now, to my surprise, I feel a stab of admiration. Sound, defensive play]

It is important to understand what last week's Budget was doing to public expenditure. On the face of it, the Treasury was making economies in order to reduce the enormous deficit. But this was not just one more round of cuts. The Budget did not merely reduce, but in several cases irreversibly tied off public spending on social services.

Mr Clarke, in other words, was making a start on the long and crafty process so long foretold by Tory ideologists: transferring the basic cost and responsibility of social insurance to means-tested individuals. At the end of that process, the Welfare State will be no more than a fence to keep the poor from grungeing up private casualty wards. It will amount to a state- funded Medicare and dole culture for the 'underclass' minority: carrot soup in plastic buckets, free condoms, Bosnian war-surplus vitamins for babies . . .

Those who believe in government, and also believe that vigorous public spending can smite home like the hammer of justice, were not surprised by this. They had listened to the Tory party conference at Blackpool. But they had also listened to the uproar over Ros Hepplewhite and her Child Support Agency, and what interested them was not so much the CSA's injustice to absent fathers and second wives as Ms Hepplewhite's salary.

As chief executive of a semi- privatised civil service agency, her pay depends on how far the agency reaches or surpasses targets laid down by the minister. Since 1992, that has been normal in these agencies. But the CSA target happens to be a sum of money: pounds 530m to be saved for the Treasury because it has been taken from the pockets of fathers rather than paid out in benefit to single mothers. In other words, the income of a state servant is determined by the amount of money she can extract from private citizens.

In the Middle Ages, this sort of thing was called tax farming. Some royal henchman paid the Crown a flat sum for the tax of a province, and whatever he could extort above that sum he kept. It was a detestable system then, and it is detestable now, and why an intelligent woman like Ms Hepplewhite allowed herself to be lured into such a trap must remain a mystery. But, of course, it shows with lurid clarity what is happening to Britain. Not only public expenditure but public income is being privatised. At the end of this track, Avis and Hertz will have bought the state concession to raise what they can through the sale of vehicle licences, Barratt Homes will have the franchise to collect council tax, and Securicor will be rolling its armoured cars down Acacia Avenue to collect income tax from those who have not paid up.

To believe in government is to believe that an elected authority should raise money directly from a consenting public and spend money directly for public benefit. A country which is turned into a concession territory, in which government only exists to sell licences to exploit the population, is no better than the old Congo Free State. In that hell on earth, concessionaires for wild rubber would prove their civic credentials with bunches of dried human hands, collected from those who fell behind with their rubber quotas. And it is worth remembering that King Leopold II of the Belgians persuaded the whole world to recognise and support his Congo Free State by arguing that it brought the benefits of a free-trade area to central Africa.

Britain needs government in a special way. This is an old post-imperial state which, like a boulder abandoned by a glacier, has come to rest on a slope. Progress therefore requires engineering: all the levers and wedges that public expenditure can provide to get the boulder inching uphill. Correspondingly, Britain without government tends to slither back down the slope. A force of gravity always drags Britain back towards the same familiar set of nadir values: gross inequality ossified by educational apartheid into a caste system; regional economic imbalances between south-eastern overheating and peripheral abandonment; the evil triad of low wages, low skills and low motivation; a wretchedly weak productivity which can only be concealed as long as unemployment keeps rising.

The Clarke Budget set about pulling out more of the levers and wedges, the expenditures which have kept Britain in place as a reasonably humane country offering some prospects to its inhabitants. The slither, already perceptible, will now accelerate. Back down the slope, back to the days of Queen Victoria (as the makers of the rather similar 1931 Depression Budget hoped), back to basics. And then, when the great backslide is complete, those who believe in government will sigh and mark out the sites for public spending and start once more on the work of Sisyphus.