This week has witnessed the unmasking of the Chancellor. The unkind might say it was the dearest leadership bid in British political history. Gordon Brown decided to curry favour with the party's activists and leftwards inclining MPs. Unfortunately it will be all of us paying the bills for years to come.

The New Labour story was simple. John Major's government was wrong, they said, to increase taxes after 1992. The money had gone on welfare, “the costs of economic failure”. Labour would bring economic success, radical reform of welfare, and much lower welfare bills. These savings would pay for better health and education. There was no need for any rise in taxes, just better management all round.

Five years on the government has admitted that this script was bunkum. For the first Parliament they struggled to keep the impression of a low tax regime and claimed to be wrestling with welfare reform. In practise it was a tax and spend first parliament. The burden of taxation increased substantially, as the Chancellor became a dab hand at introducing Stealth taxes. Remember the pensions tax, which would be paid for out of magic money made by funds invested in a rising stock market? Or the auction of telecoms licences, raising £22 billion harmlessly in one go from a successful industry? Or the green taxes on motorists and hauliers, that would mysteriously give us integrated transport?

It was very similar to the last five years of the Conservative government. John Major supervised the recovery from the 1992 ERM recession with a mixture of higher taxes and higher spending on health and education as well as welfare. Labour inherited a strong and growing economy. Gordon Brown did the same thing, increasing welfare spending as well as the other social programmes. In 1996-7 paid £270 billion in tax. By last year this reached £370 billion, a stunning £100 billion extra from a government that said it was not in the tax raising business. No longer called the price of economic failure, Social security powered ahead to £111 billion from £76 billion in 1996-7. The NHS moved up by less from £34 billion to £50 billion.

It just goes to show the power of spin that Gordon Brown got away with most of this most of the time with most commentators.

This budget has changed all that. Because the government has come out fighting, saying that we need higher taxes to pay for better services, people have now been prepared to look at what really has happened over the last five years – indeed over the last ten. Throughout that period taxes have gone up, and spending has risen, both on health and welfare.

So people are rightly asking, what are we getting for our money? We can all see we are paying more – more Stamp duty if we move home, more petrol tax if we travel, more tax when we save, and now more tax if we work. But where are the extra policemen on the beat, nurses in the ward, doctors in the consulting room and teachers in the secondary school classrooms that we thought we would get for the tax? Why have we instead watched helpless as £1 billion was poured down the Dome? Do we need a whole new class of politicians and officials in regional government? Is it helpful that the number of Administrators has overtaken the number of beds in our hospitals? Are we pleased with the numerous new quangos set up to do ministers jobs for them? Is it a good idea for central government to turn itself into a publishing house and advertising agency ? It's not so much a tax and spend government, as a tax and waste government.

Keeping taxes low and few in number is the best way to make a people well off. Cutting taxes and tax rates can increase total revenue, because it is likely to increase the overall prosperity of the society promoting those lower taxes. Labour is discovering the hard way what hiking taxes can do.

Their Stealth tax on pensions looked like a winner. No individual paid the taxes directly. We were told by the Chancellor that we would not notice them, because Stock markets were rising. What we lost to the Inland Revenue we more than make up from capital gains.

It worked for the first year or so. Then markets took a tumble and have not yet recovered. The Chancellor did not say sorry, or remove the tax. Instead the government expressed surprise when employer after employer decided they could not afford to keep their funds going, and opted instead to shut them down.

Next their auction for telecoms licences was proposed as another victimless tax. We are still living with the consequences. The industry could not afford to give £22 billion to the Treasury at a time of international slow down in the industry. Bankruptcies and redundancies were the result.

They attacked the haulier and the motorist. As petrol and diesel prices climbed, with the taxman taking most of the money, protest mounted. Hauliers were going out of business or being driven to set up abroad. The Chancellor had to accept this was a Stealth tax too far – he had been rumbled. Every petrol pump in the land was a monument to his greed. He backed off a little.

So now he's trying a tax on jobs. Did he think about the impact the tax would have on all the public services not enjoying the Health cash bonanza? Unhappy public sector workers are calculating how much extra they will have to pay, whilst some of the employers are saying they will have to cut staff numbers to balance the books. The Chancellor will learn that National insurance is no soft touch. If you raise the cost of employing people, fewer will be employed than if you had left well alone.

So what sort of budget was it? It was a leadership bid that could backfire. The public does not really want to pay more tax, and will be bitterly disappointed if the NHS stubbornly refuses to respond to the treatment. Meanwhile we have to hope that this Chancellor's jobs tax is not as damaging as his pension, telephone and motoring taxes have proved. It would be so much better if he really had a go at curbing welfare costs, and the costs of government, which are spiralling out of control. Instead, we await with misgivings the arrival of a new army of health auditors and a new health quango who are meant to ensure this time the extra money buys shorter waiting times.

This government is the dependency government, driving more and more people and industries into dependence on state subsidy and support. 38% of British families will now be receiving a means tested benefit. The railway industry is on state subsidy , NATS has been bailed out and local Councils are being forced to apply for specific grants. The man in Whitehall thinks he knows best. The results are predictably poor. We need a government that believes in freedom, and allows people and businesses to keep more of their own money, so they need less from the state.