Brilliant, but More Devious Than He Looks; ON A FORMIDABLE POLITICIAN MILLENNIUM BUDGET

Daily Mail (London), March 10, 1999 | Go to article overview
Save to active project

Brilliant, but More Devious Than He Looks; ON A FORMIDABLE POLITICIAN MILLENNIUM BUDGET


Byline: PAUL JOHNSON

YOU HAVE to hand it to Gordon Brown - he is a formidable politician.

When Tony Blair tells me 'We are lucky to have Gordon', he is telling the strict truth - if by 'we' you mean the Labour Government.

This is Brown's third Budget, Labour has been in power for nearly two years and we still have not had a major financial crisis.

That has never happened under a Labour government before. Better than that, while a quarter of the world is in deep recession and most of Europe is struggling, Britain has managed to keep itself out of trouble.

The overall news is good. Unemployment is going down. More British people have jobs than ever before in our history.

Inflation has stabilised at 2.5 pc and is unlikely to go higher. As recently as the Eighties it was as high as 21 pc.

In those days we had 15 pc interest rates.

When Brown took over, rates were still 7 pc. They are now down to 5.5 pc and long-term interest rates, at 4.5 pc, are the lowest for 40 years. That is bad news for savers but good for homebuyers, industry and the economy as a whole, A budget deficit of [pounds sterling]28 billion has been transformed into a surplus, which means a welcome cut in interest payments. We are heading for a series of surpluses, peaking at [pounds sterling]11 billion in five years. Whereas debt doubled under the luckless John Major, it is now down as a proportion of national income from 44 pc to 37 pc.

These are solid improvements in our position and they testify to the wisdom of Gordon Brown in handing over much of his responsibility to the Bank of England - whose Governor, Eddie George, is emerging as a financial wizard.

Boast In his new Budget, Brown claims that he has struck the right balance between promoting enterprise and wealth-creation on the one hand, and being fair to the poor on the other. This is not an empty boast, either.

He has now got corporation tax down to 30 pc for all firms and to 20 pc for small business - indeed, the smallest start at only 10p in the pound.

These are the lowest figures in Europe.

This success is accompanied by a variety of helpful measures, such as [pounds sterling]150 million tax credits for research and development, an extra [pounds sterling]100 million for business studies in universities, targeted tax cuts for industry, a new competition policy, lower starting rates for capital gains tax, raised thresholds for inheritance tax, cuts in National Insurance contributions and tax-free employee share schemes.

All of these moves should encourage both savings and investment.

On the fairness front, Brown introduces the new 10 pc rate for the lowest-paid and promises to cut the standard rate next year.

It was a splendid moment for Brown to be able to announce that 10 pc was now the starting rate on income tax, corporation tax and capital gains tax. I noticed that Tony Blair flashed his famous smile at that point in the speech - and no wonder.

Why, then, do I call Brown a formidable politician, rather than an outstanding statesman? There are four reasons.

First, although Brown says he is cutting taxation, he has actually increased it by at least [pounds sterling]20 billion a year. His 'taxation by stealth' policy is the real key to his financial juggling. It means that, over a period, he can pump an extra [pounds sterling]40 billion into education, health and other public services and still report a budget surplus.

Indeed, he was able to increase public sector spending still more yesterday: a pro-gramme of free computers for schools, more for hospitals, more for pensioners and more for children. But don't be deceived - we are already, or soon will be, paying for all of it.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Notes
Cite this article

Cited article

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Brilliant, but More Devious Than He Looks; ON A FORMIDABLE POLITICIAN MILLENNIUM BUDGET
Settings

Settings

Typeface
Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Style
Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?