Chris Huhne writes for The Guardian today:
There are clear dangers in managing the public finances over the next few years, but nothing merits the sort of intemperate scaremongering that Cameron and George Osborne have been whipping up. Cameron said on Monday: “We ought now to be cutting people’s taxes to put money back into the economy, but we can’t because they’ve got the biggest budget deficit in the modern industrial world.” And in his big economic speech last Friday: “[Brown] borrowed and borrowed and borrowed, and racked up the biggest government deficit in the developed world.”
This is just wrong, plain and simple. There is no conceivable way in which the UK budget deficit – whether measured in cash, as a percentage of GDP, or in cowrie shells – is the biggest in the developed world. In cash terms, both the US and Japan outborrow Britain by billions. Sized by each economy, the UK deficit looks entirely unexceptional.
But if Cameron is wrong about deficits, is he at least right to warn about the public “debt time bomb”? The latest comparable figures from the OECD show that general government debt relative to national output is lower in Britain than in every other member of the G7 leading industrial countries and lower than the developed country average. None of this means we can or should ignore the risks of serious damage to the public finances, but if Matilda calls the fire brigade now, they will not come when we really need them…
And why is Cameron making these claims? Read Chris Huhne’s full piece to find out.
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2 Comments
“Grown up” are the words that leap to mind when reading this piece. I’m not really qualified to judge the detailed analysis (indeed, I guess rather few people are), but I can tell when I’m hearing from someone who knows what they’re talking about.
It was good to see the reference to Ken Clarke – just about the only grown-up Tory around, now forced to sit and watch while his “superiors” paddle around in the shallows and soundbites. Gordon did get one thing right, this is not the time for the novices!
Stupid comment. If you cut peoples taxes they will not spend money. I understand why they want to do it. But it will simply not work and shows their naivety and stupidity.
Excellent article and well said Chris.