'Remember the competitive, entrepreneurial Britain of which Cabinet members boasted for so long? State spending now accounts for more than half of Britain's economy, for the first time since OECD records began. Money from Whitehall and town halls made up 52 per cent of Gross Domestic Product last year, and the proportion is certain to rise. If Tony Benn had been Prime Minister in the 1970s, even he would have been hard pressed to engineer this intensity of state dependency – though he would have been delighted if he had.
When Labour came to power in 1997, government spending accounted for 40 per cent of GDP. That was a respectable figure, comparable to that of the United States. Now Britain has overtaken most European countries in state spending. Admittedly, the recession accounts for the big jump from 47.5 per cent a year ago. But the long-term trend has been shaped by Labour's eye-watering spending increases over a decade, cynically designed to build up and reward a public-sector workforce that could be relied upon to return the favour at election times.
The figure of 52 per cent should be at the forefront of our minds when Alistair Darling, the Chancellor of the Exchequer, delivers his Budget on Wednesday. We should also note that, according to the OECD, state spending will account for more than 53 per cent of GDP in 2010 and 2011. This tells us something important. Whatever Mr Darling announces this week, the damage has already been done. Gordon Brown is a believer in "back loading" – announcing harsh (and bad) policies that do not take effect for a long time. He lit a long fuse on National Insurance increases and penal 50 per cent taxation; many useless social engineering projects are just beginning. Perhaps the Prime Minister guessed that someone else would have to clear up the mess. There is a whiff of scorched earth in the air. '
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