George Osborne will stand up today and tell the House of Commons that there's "no alternative" to the pain of his cuts. Every time he does so, he's lying.
George Osborne will stand up today and tell the House of Commons that there’s “no alternative” to the pain of his cuts. Every time he does so, he’s lying.
The alternatives available to George Osborne are twofold: (i) go slower, and/or (ii) put more emphasis on taxation. Both approaches reduce the impact of the fiscal consolidation on growth in a manner which more than offsets the additional debt interest payments. The OBR (Table C13) is clear that the difference between eliminating the deficit this Parliament and halving it in four years is just £4.2 billion – a small fraction of the overall deficit.
In September, Left Foot Forward set out a ‘responsible deficit reduction‘ plan which stuck to Alistair Darling’s timetable and adopted a 50:50 split between tax and spend. Last week, the Institute for Public Policy Research think tank published their own alternative plan. They clearly showed how departmental cuts could be reduced by following an approach that:
• reduces the underlying deficit more slowly, in six years rather than four;
• delivers a 65:35 ratio between spending cuts and taxes; and
• maintains investment on capital projects such as transport and housing at 1.8% of GDP, as this “will promote economic growth and higher employment.”
Alongside the “no alternative” fallacy watch out today for Mr Osborne:
• breaking David Cameron’s promise that there would be “no cuts to frontline services under a Tory government“;
• claiming that public spending will rise in cash terms – a dangerous argument which has drawn scorn from left and right;
• appearing to reduce the size of departmental cuts by shifting pain to welfare recipients – there may be some modest changes that are acceptable but the vulnerable will lose most; and
• claiming that the cuts are “tough but fair” – we’ve heard that one before.
Whatever the chopper Chancellor announces today, don’t be fooled.
UPDATE 11.25:
Next Left have an excellent blog looking at the key questions posed by today’s CSR including the democratic deficit of the Tory’s approach.
Meanwhile, Martin Wolf in the FT (£) calls Osborne’s plan “excessive” and estimates that it will reduce growth by “between 1 and 2 per cent of GDP, each year.”
49 Responses to “There is an alternative”
adrian
women will have to work an extra six years? how do you work that out?
women will have to work longer than they would have done under the present sexist regime. that’s all.
Judy Dickinson
Sam – The markets, the credit rating agencies, the IMF, 35 major business leaders, the EU are all the groups that were disastrously wrong in 2007/2008 so can hardly be said to be less knowledgeable than Left leaning economists.
Mr. Sensible
Will whilst I don’t agree necesarily with all the specific suggestions I agree with the main point of your argument.
There is an alternative, and these cuts have no real electoral mandate.
Peter Dixon
RT @leftfootfwd: There is an alternative http://bit.ly/9nT8Ms