Government accused of 'alarming complacency' over UK deficit
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Your support makes all the difference.The Government came under heavy fire from experts today over the lack of a "clear and credible" plan to tackle the dire state of the public finances.
In a letter to the Sunday Times, a group of 11 economists said ministers were guilty of "alarming complacency" after failing to set out detailed proposals to address the ballooning deficit in the Pre-Budget Report earlier this month.
"The absence of even the rudiments of a convincing plan to reduce Britain's structural budget deficit... was highly irresponsible and risks damaging the economy," the letter said.
The signatories - which include several members of the Institute of Economic Affairs' shadow monetary policy committee - said the failure to address the issue meant a "heightened risk" the UK would lose its gold-plated AAA sovereign credit rating.
This would add to the cost of servicing the UK's borrowing burden, which is set to rise to a record £178 billion in the current financial year.
The longest recession since official records began has hammered tax revenues, while spending on social benefits and stimulus measures such as the temporary VAT cut has soared.
Despite Bank of England Governor Mervyn King's call for a "credible" plan on the public finances, the Government had not provided one "and looks as if it has no intention of doing so for reasons of political expediency", the economists said.
Chancellor Alistair Darling's Fiscal Responsibility Bill - putting the Government's commitment to halving the deficit within four years on a legal footing - did not go far enough.
It said the priority should be to cut public spending in the medium term and warned that tax hikes "risk undermining competitiveness and long-term growth".
The economists called on the Conservatives to lay out detailed plans to tackle the problem before next year's general election.
"This would give voters and markets a clear choice between a governing party prepared to indulge in risky procrastination about the scale of Britain's fiscal problems and an opposition prepared to take the necessary action," the letter said.
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