Magazine article Public Finance

Giving Up the Day Job

Magazine article Public Finance

Giving Up the Day Job

Article excerpt

Barring a political earthquake, Gordon Brown will be prime minister in six months' time.

His legacy as chancellor is clear: despite recent 'record' inflation of 3%, the country has enjoyed unprecedented stability, unbroken growth, historically low inflation and record employment.

But how will he fare as PM? He is reputed to want to hit the ground running during his first 100 days. However, as he found out during a trip to India last week, when he became embroiled in the Celebrity Big Brother racism row, events can quickly overtake even the best planned strategy.

And there's a newly confident Conservative party to deal with under David Cameron.

Brown has talked about building an enabling state, one that gives people opportunities rather than trying to provide for them. To deliver this vision though, he will have to tackle four main challenges in those first 100 days.

The first is ending child poverty. It was a national scandal in 1997 that one in three children lived in poverty in one of the most affluent countries in the world, their life chances ended before they even reached primary school. Child poverty has been cut significantly and all three major parties are now committed to ending it - a remarkable political consensus. But cutting poverty is getting harder and the government missed its latest target (albeit narrowly).

So what can Brown do? Increases in Child Tax Credit and child benefit are essential, but cannot be the sole solution. Peter Mandelson once famously said that New Labour was 'intensely relaxed about people getting filthy rich'.

But Brown will have to recognise that you can't achieve Scandinavian levels of child poverty with US levels of income inequality.

So, as well as 'raising the floor', by increasing the minimum wage and Child Tax Credit, he will need to think about 'lowering the ceiling', although he should avoid the siren voices calling for an increase in the top rate of income tax.

Also essential are long-term measures to close the gap, such as increased investment in education and skills and greater use of parenting classes.

The second challenge is improving public services. The government has invested heavily and made some headway - but not enough to meet rising public expectations. There is a clear rationale for giving citizens more 'choice', but Brown needs to do a better job of selling it.

Too often, choice has been seen as the enemy of the poor, pursued dogmatically. It should be about improving guality by letting go of central control and giving the poorest in society the choice that the richest have always had. …

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