You could forgive George Osborne and his Treasury team for breathing a collective sigh of relief this morning. The economy grew by 0.3% in the first quarter of 2013, avoiding a triple-dip recession. But on closer inspection there is still cause for concern. Whilst this growth may be welcome, it is insignificant and merely avoiding a triple-dip is not good enough.
The Chancellor cannot endlessly postpone his plan to get the deficit under control. In the name of so-called austerity, George Osborne is actually going to add £600 billion more to the national debt by the end of this parliament. That is equivalent to £4,000 a year for each and every household in the country. This is far from a programme of austerity. We are, in fact, still living well beyond our means.
With a budget deficit larger than that of Greece, a reduction in public spending is essential if the government wants to achieve sustainable and continuing economic growth. But the ring-fencing of areas of very high government spending has made it much harder for the Chancellor to come remotely close to balancing the books.
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