Five years ago, Gordon Brown’s 2003 Budget forecast that the current budget would now be in surplus by £9 billion. That might have allowed the new Chancellor to cut taxes for the lowest-paid, or to invest more money in our third world infrastructure.
In fact, the budget never got into surplus at all. Brown conceded a year ago that the deficit this March would be £4 billion. In October Alistair Darling increased that to £8.3 billion. The City fears it will turn out even higher.
The good years have been wasted. The budget is now forecast to reach surplus by 2010, four years later than originally planned. Overall debt today is £541 billion, £69 billion higher than planned five years ago.
Who pays for these mistakes? We all do. Debt interest now costs as much as the entire defence budget. Northern Rock adds even more.
The biggest burden falls on those at the bottom. The lowest paid who must pay twice as much tax as those earning the same in Ireland. The pensioner struggling to pay ever-increasing council tax from a fixed income. Small businesses whose tax rate is going up this year.
In government, we cannot, should not, must not “match” this failure. Proper spending control is the key to fairer, lower taxes.
Michael Fallon is MP for Sevenoaks and the senior Conservative on the Treasury Select Committee.