01 August 2003
The Centre for Policy Studies has published a pamphlet by Keith Marsden, an economist who has acted as a consultant to several UN agencies, which accuses Chancellor Gordon Brown of failing to meet his economic goals.
Marsden warns that lower-than-expected economic growth and the government's commitment to huge spending increases in public services means taxes will have to go up further, even though Labour pledged to establish 'a new trust on tax with the British people' in its 1997 election manifesto. His conclusion echoes that of a number of other experts, such as the Institute for Fiscal Studies.
But Marsden questions the value of the extra investment, arguing that it has led to high inflation in the public sector.
'Average prices, or costs, of public sector consumption – that is, of government services including health and education – have risen six times as fast as the prices of all forms of consumer expenditure since 1999.
'Public sector inflation is the inevitable result of a sudden acceleration in government expenditure.'
His pamphlet, published on July 28, warns that costs are likely to rise further, 'thus limiting the real benefits that consumers of public services will receive from their higher tax bills'.
PFaug2003
