Many theorists believe that the growth of the State is an inevitable feature of governance, curbed only by the occasional revolution. Lord Acton’s famous maxim that power tends to corrupt would lend credence to this fatalistic view.

I disagree. I think that the state can be beaten back, as it was in the 1980s in the West and 1990s in the former Soviet bloc. Let’s discuss a few ways this might be done:

1. A Transparent Tax System

People won’t realise the true costs of the State unless it’s less disguised than it now is. We now have Income Tax, National Insurance (another tax on income), Value Added Tax on consumption, Inheritance Tax, Corporation Tax, et cetera ad nauseam. Under Labour, thousands of stealth taxes and fees add to the price of almost everything. The opacity of the tax system makes us forget that the money Government spends is our money, curbing our outrage at waste.

As an interim measure, I would propose replacing most current taxes with a single Income or Consumption tax in a revenue neutral manner. Suddenly, people would see exactly how much of their money goes to the State, and I doubt many of them would be happy about it. I would expect this to lead to demands for the shrinking of the state and falling tax rates – a good thing.

(I would exclude Pigouvian taxes from this rule, since their purpose is beyond raising revenue)

2. Transparent Spending

The second transparency reform I would enact would be to include an itemised spending overview on tax returns. If someone sees that Government is spending £X,000 of their money on a programme, it is likely to provoke debate as to whether that could be done better on one’s own or, even if Government does do it, whether it could be done less wastefully. Just highlighting the cost of the Welfare State to each of us might revive debate as to whether some aspects could be done better by private charity.

It might also be worth requiring Spending bills to be more detailed about how much is appropriated for particular things. A civil servant might approve tens of thousands of pounds on the Potted Plants budget – an accountable Parliament would not. Similarly, the scandal of over-generous public sector pensions should be admitted by including unfunded liabilities in the National Debt.

On that note -

3. Debt Awareness

The National Debt is far too high. Labour plans to cut the deficit – the rate of increase in debt – but hasn’t got a clue how to deal with the capital.

The first thing we need to do is make it clear what this means to taxpayers. It means that, at some point, the Government will have to take thousands of pounds from you to repay creditors, either in tax or by reducing the value of the pound in your pocket. It means that, no matter how prudent you are with your own finances, you are about £20,000  in the red. I would require HMRC to print the total national debt and each person’s share on tax returns.

The next thing I would do is require that Budgets contain a plan to pay off the National Debt, if only in the extremely long term. We expect that indebted households work out how to get back in the black – why not government?

4. Choice

For Schooling, I would strongly advocate a local pilot scheme whereby the State gives a voucher for a certain amount of funding to each pupil who can then spend it at any school he or she chooses. I would expect that state schools would be forced to improve or lose students. It’s Assisted Places on steroids. I would permit selection on any grounds.

For the NHS, I’d advocate something similar – make it a single payer system with independent hospitals paid per procedure/result. Most of the bureaucracy disappears, and there’s finally competition.

That’s all for now. Feel free to comment on my suggestions or add your own ideas.