Magazine article Public Finance

Heed the Irish and Be Open on Cuts, Warns Economist

Magazine article Public Finance

Heed the Irish and Be Open on Cuts, Warns Economist

Article excerpt

The UK government must fully inform the public about the economy and the need for cuts to win political consent for spending reductions and tax rises, a leading economist told the CIPFA conference in Harrogate last week.

CoIm McCarthy, who advised the Irish government on its financial crisis, said that spending and pay cuts in that country went through with relatively little public opposition because ministers were open.

'The process is important - the Irish government published information and encouraged public debate and laid out all the options,' he said on June 10.

'By December 2009, it cut public sector pay and social welfare payments in a way that would have been unimaginable a few years earlier, but the provision of information to the public meant it went through with less opposition than might have been expected.'

He said the Irish government had acted decisively to stop its budget being devoured by interest payments.

He said: 'If the UK government decided tomorrow that it would tackle the deficit in ten years, instead of three or four, interest rates would shoot up. …

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