By Stephen MacAvoy
The forthcoming election is being fought with all three main parties committed to unprecedented cuts in public spending. As the Institute for Fiscal Studies has recently described, the Conservatives’ plans for public spending from this year onwards would make it the “tightest five-year period since (at least) World War Two” whilst Liberal Democrat and Labour plans would see the “tightest four-year period since April 1976”. The Financial Times has outlined various scenarios of what this will mean for the population here.
This consensus on cutting spending needs to be opposed by the widest possible coalition. Not only will these cuts unleash serious attacks on living standards of the population but they will undermine the restoring of economic growth, as the TUC has recently noted. Given that the recession has been driven by a collapse in investment and the government budget deficit is overwhelmingly a product of the falling tax receipts caused by the recession, the priority should be to increase investment.