Public borrowing high because government's plan is flawed



Government approach to cutting the deficit has ignored all
 economic evidence

Responding to the latest ONS figures, Philip Booth, Editorial and Programme Director at the Institute of Economic Affairs, said:

"The government's approach to cutting the deficit has ignored all the
 economic evidence and is not working. The front-loaded tax increases 
have failed to generate sufficient revenue to reduce borrowing. This is
 exactly what should have been expected given the high level of taxes in 
the UK.



"At the same time, the coalition back-loaded spending cuts - even though 
government spending had risen to half of national income by 2010. 
Government spending is currently rising at twice the rate of inflation
 and widening the deficit.



"Clearly, the government must reduce spending rapidly in order to ensure
 both a credible deficit reduction plan and tax cuts before the end of 
this parliament. Other supply-side measures are also essential to raise 
economic growth without which deficit reduction will be that much more 
painful."




Notes to editors:

To arrange an interview with an IEA spokesperson, please contact Stephanie Lis, Communications Officer on 020 7799 8909 or 07766 221 268.

Public spending 5.1% higher in July 2012, than July 2011, see 
http://www.ons.gov.uk/ons/dcp171778_276550.pdf.


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.

IEA Brexit prize

Invest in the IEA. We are the catalyst for changing consensus and influencing public debate.

Donate now

Thank you for
your support

Subscribe to
publications

Subscribe

eNEWSLETTER