Saturday, 20 September 2008

To cut or not cut??

. Tax cuts are great. They are brilliant, everybody would like them and to promise them is surely a good idea? My main reason for not being particularly sure about offering them are mainly practical;

  • As things stand they are largely uncosted. It is commonly accepted that the economy is in recession and that public debt is high. The natural question thus arises where is the elbow room for £20 billion worth of tax cuts from the public purse?? It may well be that at the time of election the economic climate will be different but in current climate it is surely not the case that you will in practice have to cut more than £20 billion from public expenditure. The question then becomes where are these savings are coming from and the above cold, hard economic facts surely calls into question whether they can be achieved without impacting frontline services.
  • It follows that during economic contraction spending on frontline services will rise, not fall. So, the above points apply with equal force unless the cut's themselves are expected to stimulate growth which their is little evidence they will; these are questions that need to be answered before a informed descision can be made so I remain on the fence.

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