Brown looks at poll with dream budget

By Thomas Abraham

LONDON, MARCH. 22. Previous Labour Governments in Britain have had to call in the IMF for an economic bailout after two-and-a- half years in power. It is an indication of how much the party has changed that the Chancellor of the Exchequer, Mr. Gordon Brown was able to present what any Finance Minister would see as a dream budget: significant increases in spending on public services like health and education without a rise in taxes or creating an inflationary budget deficit.

Mr. Brown, who is the economic brain behind the Labour party's centrist politics, has been able to pull it off for two reasons: he maintained a tight reign on government spending during its first two years in office and he was helped by a bouyant economy that has been growing streadily at nearly three per cent a year. The outcome: overflowing revenues and a budget surplus of 17 billion pounds. He has used this money with an eye on the next election, increasing spending on public services which will please Labour voters while at the same time keeping a tight control on public spending to ensure that inflation is kept in check and investors and businesses are reassured. Mr. Brown announced yesterday that he would release an additional 4 billion pounds into the public services, largely into the beleaguered National Health Service which provides free medical care to the population. Education is to receive an extra 1 billion pounds while transport and the police will receive smaller amounts.

The budget, which has received mostly favourable reviews, illustrates what new Labour's centrist political philosophy is all about. While traditional parties of the left have tried to create more equal societies through redistributive taxation which channels resources from the rich to the poor, new Labour and the other ``Third Way'' parties like the German Social Democrats and the Democratic Party in the U.S., have taken it for granted that high taxation is no longer an option in a globalised economy. They try to create equality of opportunity rather than equality of outcome. They have done this by trying to pump in more money into public services so that all citizens will have access to high quality education, health and other services. Parties like the Labour argue that social justice today can be achieved not through a mechanical levelling down of society but by creating opportunities for all.

Critics say this approach is a little different from what centre- right parties like the British Conservatives follow and that there is little difference between Mr. Blair's new Labour and the Conservatives under Mr. William Hague. Though there is clearly a convergence between left and right, there is still one significant difference. The right are ideologically committed to cutting taxes and believe that it is not the responsibility of the Government to spend large amounts of money on public services. Given the kind of budget surplus that Mr. Brown enjoyed, the Conservative response would have been to cut taxes and allow individuals to keep a larger share of what they earned. The idea of using public money to reduce social disparities is alien to right-wing ideologues.

While the ideology of a tax-cutting free enterprise Government was the vogue in the 1980s when Ms. Thatcher ruled the roost, the pendulum has now swung back towards the centre and public opinion in most Western countries supports government investment in the public services. As Mr. Brown said in his budget speech, this was necessary to create ``a stronger, fairer Britain.''

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Section  : International
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