I spotted this story in The Times over the weekend. A new report from the Institute of Fiscal Studies has shown the effect of tax and benefit measures imposed by the Labour government (taking the measures in the pre-budget report into account), and it does not make happy reading.
According to the IFS's calculations:
- By 2012, an average dual-earner couple with no children is set to be £2,208 a year worse off than they were in 1997.
- A single earning couple with no children will be £1,684 worse off.
- A dual-earner couple with children will be £1,466 worse off.
- Employed single people will be £1,281 worse off.
- The groups that will have benefited most from Labour's tax and benefit changes are no-earning couples with children (£2,901) and unemployed single parents (£2,491).
These figures speak for themselves: most of us have paid a high price for Labour government. Of course, they would probably just argue that these higher taxes have led to an extraordinary rise in standards in health and education, a better deal for pensioners, and more 'social justice' for the deprived. But I don't think that's true.
Certainly, people with children and little or no income get more money now (although perhaps this has had unintended consequences) and many pensioners are financially better off (not the ones who had private pensions though). But British schools have slipped down international league tables, and a massive increase in health spending has brought only marginal improvements. Meanwhile, we have seen no great regeneration of Britain's transport infrastructure.
Here's a thought experiment: what if we hadn't had a government since 1997, and everything had just been run as it was then? We would probably have eliminated the budget deficit and paid off most national debt. We would have considerably lower taxes. We would have the best private pensions system in Europe. The EU Social Chapter would not have effect in the UK (so no EU labour laws or health and safety nonsense). And we'd have fully-fledged internal markets in health and education. In short, it wouldn't be a perfect country, but it would be a lot better than it is now.
Can I have my money back, Gordon?