Spending review: economists and other experts respond

Mark Littlewood's reaction to the CSR appears in the Guardian's round-up

Mark Littlewood: 'Easy targets for spending reductions were missed'

The coalition is on the way to getting the public finances under some kind of control. Intriguingly, though, the pledged spending increases are detailed and specific, while the targeted spending reductions remain rather aspirational. The deficit needs to be tackled not just on a spreadsheet in Whitehall but in the real world. Ensuring the pledged cuts actually happen is an administrative, not merely, a political challenge.

Some easy targets for spending reductions were missed. Ending child benefits for over-16s and stopping elderly, affluent people from receiving free bus passes, winter fuel payments and free TV licences would have helped. The coalition government has already – and wisely – gone far beyond the manifesto commitments of either the Tories or Lib Dems. Further departures from promises made in the election campaign would have made good economic sense, without extracting too high a political price.

The real challenge for the government is to now devise a strategy for growth. They may well have undertaken some of the necessary surgery, but the British economy needs a serious fitness programme, too. Sweeping reductions in red tape, a major assault on the regulatory burden and a radical simplification of the taxation system should be high priorities. The private sector can be the engine of economic growth and the provider of increasing employment, but the government needs to set it free.

Read the full article on the Guardian website

 

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