Through the late 1970s, 1980s and early 1990s, the social democrat model in Sweden went along the route of increasing public expenditure faster than the economy's growth rate. In the 1960s and 1970s, Sweden was the third or fourth richest country in the world. Today, it is the 19th richest, and that is the direct consequence of higher taxation. The studies that I mentioned argue that, if it had maintained a sensible and Conservative policy, its private sector would be three times as large as it is today. In the Chancellor, that vice has become an addiction.
Social engineering is so detailed and complex that it is now social micro-engineering.
The greatest help that we can give the poor is to provide better jobs and better choices and give them the right to keep more of their money. Those would all be better than the Chancellor's cold charity and would all delivered by a vibrant low-tax economy. The Government's strategy is tax a lot, spend more than we can afford, pretend prudence by the unnecessary payment of debt and ignore the long-term consequences for growth. They rightly intend to focus much of that benefit on cutting taxes on savings. Indeed, Treasury forecasting is so far off that I am beginning to believe that it is a deliberate attempt to persuade the world that tax cuts are not possible.