GEORGE Osborne will embark on a fresh round of austerity measures when he unveils his Budget on Wednesday.
He is expected to say a further 0.5 per cent reduction in public spending is necessary, but will also try to reassure us this is “not a huge amount in the scheme of things”.
Tell that to the people who have lost their jobs or had their welfare benefits slashed as a result of previous rounds of “savings”.
There is one thing that is absolutely clear: austerity is hurting, and it’s hurting not the well-off, but those on lower incomes. The last five years have seen an explosion in the number of people forced to go to food banks as well as millions more children living in poverty.
But it’s also becoming increasingly evident that the policy is simply not working.
Osborne has already received a number of warnings that his economic policy is not creating the growth he needs and is in fact proving counter-productive.
In November, the Office for Budget Responsibility reported the Chancellor was on course to miss his borrowing target by as much as £10 billion, while a previous critical assessment from the leading economist Professor Simon Wren-Lewis, of Oxford University, suggested austerity may have cost the UK economy £100bn.
The respected Institute for Fiscal Studies has also outlined that running a financial surplus is not necessary, especially if it damages growth.
For some time now, the SNP has been urging the Chancellor to take a different approach, for instance by investing in capital projects and planning for the longer term.
John Swinney, the Finance Secretary, yesterday again urged Osborne to end the “damaging and needlessly restrictive” adherence to his fiscal rules, and set out measures to stimulate the economy.
He believes the Scottish Government’s different approach, which he states would balance the current budget and release about £150bn for investment, would be a better alternative – and we believe it must indeed be worth the Chancellor’s consideration.
George Osborne warns of more austerity as £18bn hole looms
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