Discgate: what does it mean for Brown?
Nov 23, 2007
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“Discgate”, as several papers have dubbed it, is the latest in a series of financial disasters threatening to make Chancellor Alistair Darling’s tenure one of the shortest in recent history.
Half of the UK population has been put on fraud alert after two discs containing the personal and bank details of 25 million child benefit claimants got lost between HM Revenue & Customs and the National Audit Office. The slip up cost HMRC chief Paul Gray his job, and capped a disastrous week for the Chancellor.
Only the day before, he had told the Commons that the public sector is heading for a deficit of £40bn this year, far worse than anything he’d signalled in his pre-budget report. You could at least argue that there was an upside to Discgate – the Government will have a hard time pushing its half-baked ID card scheme on the British public now – but there is no escaping the grim state of the public finances. The Government has borrowed to the hilt, just as tax revenues are falling and growth is expected to weaken.
But the real dark cloud for Darling is Northern Rock. The Government has staked up to £40bn on propping up the bank in the hope that someone will take it off its hands. Darling is like Nick Leeson, says Hugo Dixon on Breakingviews – unable to admit his losses over the bank, he’s prolonging the agony in the hope things will swing in his favour. But the chances of taxpayers seeing their money repaid any time soon diminish with every bid.
We shouldn’t just be pointing at Darling for this string of mishaps, says Hamish McRae in The Independent. It was Gordon Brown’s decision to merge Inland Revenue and Customs & Excise that has piled pressure on the department – lumping it with an overly complex tax system to execute and unrealistic revenue targets. “It was a disaster waiting to happen,” says McRae.
And Darling hasn’t racked up that massive tax bill in the few months he’s been in office. Brown will be in no mood to sack him – losing a Chancellor usually spells the beginning of the end, notes Jonathan Freedland in The Guardian – but the PM will have to do a lot better if he’s to avoid the humiliation of being the next John Major.
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