Magazine article Public Finance

Man with a Plan?

Magazine article Public Finance

Man with a Plan?

Article excerpt

Britain has a plan and we're sticking to if, George Osborne declared in his Budget statement on March 23.

The plan is pretty straightforward. Clear the structural deficit by the end of this Parliament while stimulating private sector growth and jobs. Hence the Budget's adoption of enterprise zones, lower corporation tax and new apprenticeships.

Whether die chancellor will be able to achieve his goal, however, is another matter. Concern is so strong that economists and commentators - including the influential Institute for Fiscal Studies - have been queuing up to ask Vhere's Plan B?'.

The coalition is pushing through unprecedented spending cuts at a time when the economy is on a knife-edge. Growth is fragile - the Office for Budget Responsibility has had to downgrade its estimates for both 2011 and 2012 - unemployment is at a 17-year high and CPI inflation is more than twice the government's target.

What if it all goes wrong and we end up with a double-dip recession? Shouldn't the government consider the option of easing up on the fiscal pain if the economy falters and essential services are threatened?

Osborne refuses to address this issue because it would undermine his credibility with the public, the markets and the Conservative Party faithful. …

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