44.1% should be a chilling statistic for all those Tories who proudly think that Margaret Thatcher transformed the British economy for good. Steadily, stealthily, suffocatingly the transformation is being undone by a massive expansion of the state. Today’s Daily Mail quotes the Centre for Economics and Business Research‘s finding that the British public sector will be bigger than Germany’s this year because of a £56bn spending splurge by Gordon Brown since 2000. 44.1% of the British national income will soon be allocated by the state. The Berlin establishment has seen the consequences of a nation that became too dependent upon the state and is now seeking to move to another economic model. Britain, in contrast, is becoming more and more like the European economies that have been in the economic doldrums for the last decade.
"Germany was long held up as the example of a high spending, high
taxing approach that we didn’t want to follow here. Now our tax levels
are passing Germany and so too are our spending levels and the real
tragedy is that no one trusts Gordon Brown to deliver value for money."
Margaret Thatcher needed to be the iron lady to bring the British state under control. David Cameron and George Osborne will themselves need steely determination to slow the growth of the state and to bring British tax rates down below those of our competitors. George Osborne’s get-tough approach to public spending has attracted surprisingly little attention and supply-siders are still hoping that the ‘sharing-the-proceeds-of-growth’ formulation will mean that a Tory government will be a tax-cutting government.
Editor’s comment: "Increasing economic competition will be the reality of the next few years and British jobs are vulnerable to competition from tax cutting nations like Ireland where Bertie Ahern has just won re-election on the back of the Celtic Tiger he helped to create. This is a dangerous time for Conservatives to be advocating a "a shift from an econocentric paradigm to a sociocentric paradigm." Social issues are, of course, vitally important – not just because of the human costs involved but because social breakdown slows the economy through higher welfare costs and its failure to produce the most economically productive citizens. Conservatives must keep ideas for sustained economic growth front and centre, however, if we are to persuade Britain’s voters that we can meet their expectations of a rising standard of living."