Borrowing figures demonstrate government needs to change course
23 April 2013
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The government's policy of slow fiscal consolidation has failed
Commenting on the latest ONS borrowing figures, Professor Philip Booth, Editorial Director at the Institute of Economic Affairs, said:
“The government’s lacklustre attempts to cut the deficit are reflected in today’s dismal ONS figures. The latest borrowing figures demonstrate that the policy of slow fiscal consolidation led by tax rises has been a mistake. There needs to be a greater effort to reduce government spending – including in ring-fenced areas – in order to reduce borrowing more rapidly and create room for tax cuts.
“Calls from the opposition and the IMF to increase planned government borrowing would simply exacerbate the problem. The experience of Japan demonstrates that simply accumulating more debt will not return a country to growth – it simply delays the return to growth. With a public debt now at £1.2 trillion, it is clear we urgently need a more radical plan to boost our flatlining economy.”
Notes to editors:
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer: 0207 799 8900 or 07766 221 268.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
“The government’s lacklustre attempts to cut the deficit are reflected in today’s dismal ONS figures. The latest borrowing figures demonstrate that the policy of slow fiscal consolidation led by tax rises has been a mistake. There needs to be a greater effort to reduce government spending – including in ring-fenced areas – in order to reduce borrowing more rapidly and create room for tax cuts.
“Calls from the opposition and the IMF to increase planned government borrowing would simply exacerbate the problem. The experience of Japan demonstrates that simply accumulating more debt will not return a country to growth – it simply delays the return to growth. With a public debt now at £1.2 trillion, it is clear we urgently need a more radical plan to boost our flatlining economy.”
Notes to editors:
To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer: 0207 799 8900 or 07766 221 268.
The mission of the Institute of Economic Affairs is to improve understanding of the fundamental institutions of a free society by analysing and expounding the role of markets in solving economic and social problems.
The IEA is a registered educational charity and independent of all political parties.
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