100 DAYS OF AUSTERITY ECONOMICS – THE CON/DEM COALITION’S GAMBLE WITH GROWTH AND JOBS

The Government is embarking on an extremely risky gamble with the British economy, and Britain’s public services.

They have rejected a sensible, balanced approach to economic policy, instead choosing to take a gamble with their economics of austerity. That has resulted in independent experts and institutions predicting a worse picture for growth, jobs and unemployment in the next few years.

1) Slowing Growth
Before the election, David Cameron said that his first Budget would be “a Budget that goes for growth”.1 But in fact his Budget slows down growth. The Government’s own economic forecaster, the Office for Budget Responsibility, has downgraded its growth forecast for this year from 1.3% to 1.2%, and for next year from 2.6% to 2.3% as a direct result of measures taken in George Osborne’s June Budget.

2) Holding back job creation
George Osborne has said that unemployment is “never a price worth paying”,2 but his actions mean less people in work, and less support for those who have lost their jobs.

3) Making the deficit more difficult to reduce
By hitting growth and undermining private sector confidence, the Government will make
deficit reduction more painful and difficult. If the Government raises less tax and spends more on unemployment benefits, it will take bigger cuts to public services or further tax increases to reduce the deficit.

4) Putting the burden on the most vulnerable
We are already seeing some aspects of that pain, with measure hitting the poorest that neither the Lib Dems or the Conservatives gave any warning of before the election – a VAT rise without any compensation for pensioners, cuts to Child Tax Credits for families with household incomes well below £30,000 and changes to housing benefit that will hit some of the poorest and most vulnerable members of our communities.

5) Taking expensive risks with public services And – while the public finances are severely constrained – the Government is embarking on expensive experiments in schools and the NHS. Instead of providing guaranteed treatment times or rebuilding schools, the Government will be left picking up the bill for the cost of these
reorganisations – likely to run into billions of pounds.