Let’s be honest about economic growth and spending cuts

Christopher Moxon 5.12pm

GDP figures were released today showing a 0.5 per cent improvement in economic activity against the last quarter. Labour has reacted with heckles about a ‘flatlined’ economy brought to its knees by spending ‘cuts’.

I write ‘cuts’ in quotes because, of course, they aren’t really cuts - rather they are lower spending increases than those announced by the last Labour government. It is true that unemployment has risen and it is true that borrowing remains high. But we need to be honest about why the spending cuts are happening. Being able to service our debt is an important reason but not the only one. In some respects Labour has a point when saying that some cuts have a detrimental effect by pushing up welfare dependency (in the short-term).

Yet the real reasons for the spending cuts are desperately expensive practices such as the colossal waste by the public sector and contractors, council bosses on high salaries (see Nik’s article in February) and the unbelievable procurement processes in Government departments.

This should resonate with the whole population, especially those who themselves are affected by the higher costs of living and lower (if any) salaries.

So let’s hear the next bit of commentary from Mr Balls reflecting the multi-dimensional factors of the spending cuts, instead of continuing the tired and bankrupt connection of government spending and economic growth.

After all, the economy has actually grown in the last few months, just after the ‘cuts’ have started to bite.

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