RIGHT-WING THINKING IS GOING TO RESCUE OUR LIVING STANDARDS

None of this is true any more. That Asian economic miracle has changed China and India. Their populations now have the buying power to demand all the trappings of a consumer lifestyle. As a result commodity prices are running out of control. Oil, gas, foodstuffs and mineral prices are high and going higher. And mortgage rates have gone up as well. The impact on the cost of living in Britain has been devastating. Everybody is feeling the pinch.

As Bank of England Governor Mervyn King puts it: “The higher level of energy and food prices is a genuine reduction in our standard of living.”

Most of us have managed to make savings. But with gas, electricity, petrol and food bills carrying on upwards, soon there will be no more fat to be trimmed. Progressive impoverishment beckons. A study by the Centre for Economics and Business Research shows this is already happening, with disposable incomes falling by 3.2 per cent in 2007.

We can do almost nothing to counter the global commodities price boom. Fortunately, there is one area of domestic spending ripe for radical pruning: the £600billion public sector.

A new survey by the TaxPayers’ Alliance shows that families are now paying an average £20,700 a year to support the activities of the State – a 51 per cent real terms rise over the past 11 years. Voters are now painfully aware that most of this extra spending of £8,500 per year per household has been wasted.

Groups of workers, including doctors and teachers, have been paid much more to do much less. Armies of pen-pushers have been recruited by local authorities. Private sector pension funds have been plundered by the taxman but excruciatingly expensive public sector schemes have been left intact.

Last week Terence Grange, the 58-year-old former chief constable of Dyfed-Powys, was reported to be on an annual pension of £80,000. If he lives another 20 years that’s a bill of £1.6million for just one retired public servant.

In almost every major public service, from health to education and the police, provision remains organised around the wishes of the workforce rather than the needs of consumers. Days lost to strikes are massively higher than in the private sector, as are absentee rates. Projects such as the Olympics spend money like water.

The output of the public sector is, in addition, recklessly shared out among layabouts and freeloading foreigners rather than being limited to the taxpayers who fund it.

A sector that accounts for 40 per cent of everybody’s income is crying out to be reformed. As far as enhancing British living standards goes, this task will be the biggest show in town for many years ahead.

Gordon Brown’s Labour Party is sinking in the polls because it fails to recognise this. Bankrolled by the public sector unions, it has become the protector of a vested interest rather than a vehicle for pursuing the national interest.

Every week in Prime Minister’s Questions, Mr Brown still boasts about how much more of our money he is spending.

Last week he bragged: “We have allocated over the next three years £1.7billion for infrastructure in growth areas and new growth points,” as if that settled an argument about town planning.

The new breed of successful British politician will understand that the era of regarding aggregate public spending as a virility test is at an end.

It will not be easy. There are unions to be faced down and strikes to be broken, but the future belongs to whoever can deliver a cut-price public sector and put money back in the pockets of the British people.